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Source link: http://archive.mises.org/14649/where-does-economic-growth-come-from/

Where Does Economic Growth Come From?

November 16, 2010 by

Janet Yellen, vice chairwoman of the Federal Reserve, told the Wall Street Journal that without massive printing of money “I’m having a hard time seeing where really robust growth can come from.”

Let’s see, just thinking out loud here: enterprise, entrepreneurship, the expansion of the division of labor, savings, investment, capital accumulation, trade, that sort of thing. There are some books variously published for the last 500 years that cover these sorts of issues.

A proposed rule: no one who does not understand how economies grow without money printing should be given any power over economic life.

{ 51 comments }

Bogart November 16, 2010 at 9:09 am

Amazing, not even the NYT believes that the stimulus will help. The most amusing part of this whole affair is the lack of economic understanding of the critics. They are mad that dollar debasement will damage their export business to the USA. How about damage the value of their current bond portfolios? How about they should cheer as the the citizens of the USA are now funding their economies through a back door tax.

Daniel Kuehn November 16, 2010 at 9:35 am

Do you honestly believe Yellen doesn’t agree with you on that list, Jeff? The assumption of ignorance on the part of fellow economists that you derive from a single sentence is really depressing.

The point – which you may disagree with her on – is that in a monetary economy the division of labor, entrepreneurship, enterprise, etc. are facilitated by an ample and adequate supply of the medium of exchange.

When you impute this sort of thing to others, nobody that doesn’t already agree with you has any incentive to engage with you. And I imagine that many who do tend to agree with you still don’t have an incentive to engage with you because of how disingenuously you approach the arguments of others. The Mises Institute has a reputation for this – even among other Austrians and libertarians.

J. Murray November 16, 2010 at 9:42 am

The only time the money supply isn’t ample enough is when the gold can no longer be flattened and split into small enough fractions to facilitate trade.

Daniel Kuehn November 16, 2010 at 9:50 am

You’re welcome to try to make that argument.

The point is, nobody that disagrees with you on the validity of that particular argument is of necessity suggesting that division of labor, entrepreneurship, etc. aren’t essential for economic growth. Indeed – the reason why people who worry about the money supply are worrying is that they are concerned about choking off the division of labor and entrepreneurship unnecessarily.

BioTube November 16, 2010 at 10:47 am

Except fiat currency has an advantage over commodity money in the area of subdivisibility: if the money supply’s genuinely getting tight enough to choke trade, it can be fixed by simply putting lower denominations into circulation(such as the mille for the dollar), which doesn’t have to involve rampant inflation.

Greg November 16, 2010 at 5:11 pm

And you cannot do this with currency backed by commodities because…?

Sprachethiklich November 16, 2010 at 11:45 am

It’s interesting that you try and divine her argument for her while completely missing the one she was actually making without your sort of awkward attempt. The point is, nobody that agrees with you on the validity if not choking off the division of labor and entrepreneurship unnecessarily are also not necessarily not embarrassingly ignorant in their views of economic growth. But, please, enlighten us about Ms. Yellen’s theories. I’ll be waiting.

Daniel Kuehn November 16, 2010 at 12:31 pm

I can read her mind no better than you can.I feel safe arguing that someone as celebrated as Yellen is not the dumb post that Jeff suggests.And I also feel safe submitting to you that if you think she’s really that dumb the burden is on you to back up the insult, and not on me to back up the simple assumption that a celebrated economics professor knows economics.

Sprachethiklich November 16, 2010 at 1:35 pm

Who is it up to, Daniel, to understand that “economics” isn’t a homogeneous blob of agreed upon science? (Answer: you. Don’t waste my time playing dumb, unless you’re not playing.) Her theatre of economics, being a “celebrated economics professor” (I do LOVE the argument by popularity, it’s ever so pathetic) has as one of its trademarks a childish reckoning of economic growth, entrepreneurship, and capital theory, among other things. So, I’m pretty sure the burden of proof is on her, being as she is a “celebrated economics professor”, after all. Nice try though, sport.

Inquisitor November 16, 2010 at 5:51 pm

*yawns*

Daniel is getting dull with his irrelevant, pointless commentary. Nothing to add to what Bob Kaercher said.

billwald November 16, 2010 at 2:12 pm

When the world was on the gold standard 80% of the population – the working class – never had any gold except a wedding band and maybe the gold in their teeth. None of my ancestors ever had any other gold.

When the post WW2 bubble began to deflate it was dumping the gold standard and giving the working class access to credit that kept the bubble inflated for another 25 years.

Richard November 17, 2010 at 9:22 pm

Your ancestors didn’t earn money, or use it?

And what is so great about a credit bubble?

Beefcake the Mighty November 16, 2010 at 12:04 pm

“The Mises Institute has a reputation for this – even among other Austrians and libertarians.”

Translation: Keynesian-friendly Austrians like Horwitz and Selgin don’t like the Mises Institute and attribute bad faith to the positions they take. Always good to have the lawyerly Daniel Kuehn provide a good dose of right-think.

Ben Ranson November 16, 2010 at 12:05 pm

Setting aside Mr. Tucker’s quotation, the Fed official quoted most frequently in the article gives us plenty of other gems of wisdom.

“William C. Dudley, president of the Federal Reserve Bank of New York, said that the Fed’s move was not intended to affect the value of the dollar… ‘We have no goal in terms of pushing the dollar up or down,’ Mr. Dudley said.”

“‘There is no long-term conflict between what the U.S. is trying to accomplish and what other countries are trying to accomplish,’ Mr. Dudley said.”

“Mr. Dudley rejected the idea that the Fed might be setting the stage for uncontrollable inflation in years to come. He said the Fed had tools for draining the bank reserves sitting on its balance sheet… ‘We are very, very confident that those tools will be completely effective at keeping inflation in check,’ he said. ‘We are completely willing to use those tools, when the time comes, to prevent an inflation problem.’”

“The economy was ‘vulnerable to a shock that could tip us into deflation,’ he said.” (Also Mr. Dudley.)

“It’s completely reasonable to expect that not everyone is going to see it exactly the same way, because these policies have not been used much on a historical basis.” (More Mr. Dudley)

Do you really believe that the Fed is not trying to push down the value of the dollar? Or that the quantitative easing would not negatively affect many foreigners doing business in the US? Or that the Fed will ever have the political will to start “draining the bank reserves”? Or that deflation poses any significant risk? Or that similar policies have not been used on a historical basis?

Why, when confronted with so much hogwash, should anyone give credence to the idea that these bureaucrats are otherwise well versed in economic science?

Jeffrey Tucker November 16, 2010 at 12:19 pm

Daniel, I gather you think there is an Austrian case for QE2? Funny.

Daniel Kuehn November 16, 2010 at 12:34 pm

You gather wrong… although I suppose there are some monetary disequilibrium Austrians who might come close to making a case.

I’m not arguing there is an Austrian case for it – I’m arguing that you can’t look at someone who disagrees with you on QE2 and assume they also disagree with you on the division of labor and entrepreneurship. These basic, classical insights are not insights that are exclusive to you guys.

Bob Kaercher November 16, 2010 at 1:06 pm

Where in Tucker’s brief can you infer that he’s implying that Yellen has no knowledge of things like entrepreneurship and the division of labor?

What he wrote was that “no one who does not understand how economies grow WITHOUT MONEY PRINTING should be given any power over economic life.” You could still assume that Yellen does indeed have “basic, classical insights” and translate her statement as “no one who does not understand how [the division of labor, savings, investment, capital accumulation, trade] grow without money printing should be given any power over economic life,” and Tucker’s point about her economic ignorance would still stand. In fact, that she most likely does have some understanding of such basic insights as entrepreneurship and the division of labor only magnifies the ignorance of her views on how money printing affects them.

Your criticism is about as relevant as a mouse’s fart in a hurricane.

Bob Kaercher November 16, 2010 at 1:13 pm

Oops, that was supposed to be “Tucker’s brief POST” in the first sentence and “translate HIS statement as…” in the second sentence, second paragraph. Arrggghhh….

Christopher November 16, 2010 at 12:36 pm

Very true. The banks are sitting on a huge amount of reserves where The Fed is paying them not to lend it. If The Fed had allowed the chosen WS banks to fail then the idea the of “needing” QE2 probably wouldn’t have been discussed.

GUILT November 16, 2010 at 5:20 pm

Indeed nothing would be needing discussion, as you would all be dead.

Richard November 16, 2010 at 12:44 pm

“When you impute this sort of thing to others, nobody that doesn’t already agree with you has any incentive to engage with you. And I imagine that many who do tend to agree with you still don’t have an incentive to engage with you because of how disingenuously you approach the arguments of others. The Mises Institute has a reputation for this – even among other Austrians and libertarians.”

Even if Jeff is being disengenuous (I am not sure how you ‘know’ this), and the MI has a ‘reputation’ for this sort of thing, why is this an incentive NOT to engage ? Other prominent economists have certainly misrepresented Austrian economic theories. Read Milton Friedman on Austrian methodology, or Paul Krugman on ABCT. Austrian economists have made great efforts to take issue with what has been (wrongly) said about their theories, and set the record straight. I am certainly glad they have, and did not lack incentive to do so because other economists are supposedly ‘disengenuous’.

Also, somehow I believe Ms. Yellen did not get to her position by not responding to ‘disengenuous’ challenges to her opinions. I am quite sure she is capable of handling such criticisms, wrong though she may be.

Donald Rowe November 16, 2010 at 9:41 am

“A proposed rule: no one …”
Jeffery, perhaps your humor is too subtle for some.

Cheers,
Don

Daniel Coleman November 16, 2010 at 9:59 am

Amazing that because she’s the appointed expert, her lack of imagination serves as an argument to damage and plunder the poor.

J. Murray November 16, 2010 at 10:19 am

Where Does Economic Growth Come From

Does this remind anyone of what we tell a four year old about where babies come from? Instead of getting the dirty but true story, we tell them fantasies about storks or cabbage patches. The Fed seems to be trying to do the same thing with the general public – just worse as they are actually trying to put the fantasy into practice.

Ohhh Henry November 16, 2010 at 10:51 am

The state must fail in order to expand. If they did their work efficiently and effectively then peace and prosperity would rule the day and the state would shrink and eventually disappear.

Bad economics is to Wall Street what bad diplomacy and incompetent wars are to the Pentagon – the means of enabling the expansion of power and financial clout.

The point – which you may disagree with her on – is that in a monetary economy the division of labor, entrepreneurship, enterprise, etc. are facilitated by an ample and adequate supply of the medium of exchange.

The “point” is ludicrous. It assumes that people are incapable of creating or using their own medium of exchange in order to facilitate trade, and that the state-created monopoly who would be given the power to create a medium of exchange would not abuse the privilege for their own benefit. It is these imputations, of ignorance on the part of entrepreneurs and consumers and of angelic beneficence on the part of those wielding power, which causes Misesians (or Mises.orgians) to treat so-called thinkers and pundits like Ms. Yellen with contempt.

It does not matter whether she is a knowledgeable and willing stooge or an innocent and well-meaning puppet. What matters is that she is telling blatant untruths which do not stand up to even one nanosecond of logical scrutiny. Or even a few minutes of empirical scrutiny, since it is clear that every single experiment with “facilitating an ample and adequate supply of the medium of exchange” in world history has ended in financial collapse, often accompanied by famine, war and genocide.

Capt Mike November 16, 2010 at 12:29 pm

@Ben
“He [Dudley] said the Fed had tools for draining the bank reserves sitting on its balance sheet… ‘We are very, very confident that those tools will be completely effective at keeping inflation in check,’ he said. ‘We are completely willing to use those tools, when the time comes, to prevent an inflation problem.’”

Oh, Man! What do you think those ‘tools’ are? War? Nuclear Blackmail?
Seriously, as a dilettante in econ, I would like your (or anyone’s) opinion on this. Sounds scary to me.

Ben Ranson November 16, 2010 at 2:06 pm

By “tools,” Mr. Dudley means that the Fed has the power to do a number of things that would reduce the money supply. For example, they can sell the various assets now in their portfolio, raise interest rates, or raise reserve requirements.

Capt Mike November 16, 2010 at 4:41 pm

Like Volcker?

Seattle November 16, 2010 at 5:28 pm

Does anyone seriously believe those will actually be used?

Walt D. November 16, 2010 at 1:57 pm

Where Does Economic Growth Come From? That’s an easy one – all we need to do is to raise taxes, create another football field of government regulations, unionize everything, and have the government borrow more money and spend it. :-)

billwald November 16, 2010 at 2:15 pm

Economic growth will not help anyone in my blue collar neighborhood as long as 80% of the profits of increased productivity is going to the top 10% of the food chain.

Walt D. November 16, 2010 at 4:06 pm

…So why don’t you start your own business?

Anthony November 16, 2010 at 6:07 pm

What about the other 20%, billwald? Won’t that help?

Phinn November 16, 2010 at 2:29 pm

Where Does Economic Growth Come From?

From the discharge of bad debt and the liquidation of other bad investments. You know, it comes as the result of the BANKS sustaining even more heavy losses than they already have.

The problem, as she sees it, is that these are the very same banks whose interests the Fed exists to serve. That’s why the Fed is paying banks not to lend — it’s a move to give bankers legal and political cover for their refusal to lend or buy other assets, other than padding their fat excess reserve accounts with the Fed.

The reason this dim bulb, toe-sucking servant of the political class doesn’t see a way out is because there is no way out that does not involve either: (a) stealing even more wealth from the non-banker population, or (b) letting the banks get what they deserve.

My guess is that she’s going to go for Option A, because to her, Option B is the unthinkable scenario that the Fed exists to prevent.

Martial Artist November 16, 2010 at 3:30 pm

Jeffrey,

I would propose an amendment to your proposed rule by the addtion of a second clause, to wit:

and even those who do understand understand how economies grow without money printing should be given only the most limited powers over economic life, if given any such powers at all.

Pax et bonum,
Keith Töpfer

Economic Freedom November 16, 2010 at 7:20 pm

“Do you honestly believe Yellen doesn’t agree with you on that list, Jeff?”

There’s no way to tell whether or not she does, given the context of the original quote.

“The assumption of ignorance on the part of fellow economists that you derive from a single sentence is really depressing.”

It’s not a difficult assumption to make, since most of the time it’s true.

“The point – which you may disagree with her on – is that in a monetary economy the division of labor, entrepreneurship, enterprise, etc. are facilitated by an ample and adequate supply of the medium of exchange.”

Uh, no. That’s YOUR point (which we may disagree with or not); that wasn’t HER point. You can prove otherwise by pointing to any words of hers demonstrating agreement and understanding on her part that “robust growth” (and what does that mean, precisely? FAST growth? or REAL growth?) is, in fact, the result of enterprise, entrepreneurship, the expansion of the division of labor, savings, investment, capital accumulation, trade, that sort of thing (in short: robust growth is the natural result of increasing capitalism and freedom in an economy); and that an increase in money — commodity or fiat — merely “facilitates” things.

Economic Freedom November 16, 2010 at 7:31 pm

“The state must fail in order to expand. If they did their work efficiently and effectively then peace and prosperity would rule the day and the state would shrink and eventually disappear.”

I don’t know if that is necessarily true, and frankly, it smacks of the same sort of pie-in-the-sky, Utopian “withering away of the state” nonsense that Marxism was guilty of.

Phinn November 16, 2010 at 8:30 pm

That’s a facile and superficial comparison. Actual economics (not the claptrap Marx spouted) tells us exactly how and why statist action (i.e., organized violence) always results in a net loss of overall wealth.

First, statist action is (by definition) done involuntarily, and thus at the expense of someone’s preferences, which means that the mutuality of benefit that’s inherent in voluntary, property-based interaction never occurs.

Also, statist action destroys economic information, which means that every economic decision is reduced to a guess, and the errors pile up, and there’s no informational feedback to inform the managers how to make corrective action. That’s why costs always spiral out of control, as quality goes down.

King George November 19, 2010 at 1:24 pm

I don’t think the state cares much so long as it results in an increase of relative wealth. The laws of human action did nothing to prevent Genghis Khan from slaughtering entire cities full of men, women, and children, and literally piling up mountains of heads of his conquered victims. He wasn’t even a state, he was simply a coercer, as was everyone else.

Economic Freedom November 16, 2010 at 9:19 pm

“That’s a facile and superficial comparison.”

But not an inaccurate or untrue one. Rothbardroids believe in a future “withering away of the state” by means of competing security companies promising to play fair with one another because they’ve signed agreements to that effect, rather than the presumed Marxian strategy of using education to mold a completely unselfish “new socialist man” who will work for the good of his fellow man. Both are nonsense.

Most of the old-line Austrians and Randroids — Mises, Rand, Hazlitt, Hayek, Reisman, Kirzner, et al. — had the good sense to embrace the classical liberal idea of limited government, and to reject as Utopianism the idea of “anarcho-capitalism.”

Phinn November 16, 2010 at 10:37 pm

Rothbardroids believe in a future “withering away of the state” by means of competing security companies promising to play fair with one another because they’ve signed agreements to that effect, rather than the presumed Marxian strategy of using education to mold a completely unselfish “new socialist man” who will work for the good of his fellow man. Both are nonsense.

Where are these benevolent agents of the State supposed to come from? Where are they now, by the way?

Statists are very odd. For some reason, you insist that the people who comprise this mythical limited government of yours are a rare form of noble idealist, the source of which has not been actually identified, and further that they exist in sufficient numbers to guide humanity to peace and prosperity, and yet when I deny them their precious presumption of governmental monopoly of authority and all of its special powers, somehow all of their nobility and idealism disappears, and without it society is expected to fall apart more or less instantly.

It’s as though you want me to believe that its only this monopoly of violence, carefully placed into the hands of this cadre of brave, selfless, brilliant, benevolent super-beings, that keeps us all from living out one of the Mad Max movies.

If you think that statism is ever either selfless or limited, once the population swallows its ridiculous lies, then you’re the nonsensical utopian.

(“If the natural tendencies of mankind are so bad that it is not safe to permit people to be free, how is it that the tendencies of these organizers are always good? Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?” — Bastiat)

King George November 19, 2010 at 1:26 pm

Rothbardians are just as odd for thinking that a society of voluntaryists will survive against coercers, and that there will be zero incentive to coerce in Rothbardia. All arguments are always justified with “well, the customers can always switch providers if anyone tries anything” which is a complete disregard of history and reality.

Economic Freedom November 17, 2010 at 12:02 am

“Where are these benevolent agents of the State supposed to come from? Where are they now, by the way?”

The usual straw-man mode of argumentation by Utopian anarcho-capitalist — I said nothing about benevolence.

“Statists are very odd.”

Probably. However, anarcho-capitalists are just plain kooks; and more importantly, Utopians — whether Rothbardian, Randian, or Marxian — are always dangerous.

“For some reason, you insist that the people who comprise this mythical limited government of yours are a rare form of noble idealist,”

Gee, I guess Mises, Hayek, and Hazlitt were really stupid, naive, people, since according to your lights, they must have assumed that about limited government. Anyway, I never said nor implied that. Read some classic limited government stuff before you say something silly like that. Read “Common Sense” (a short, fun read); then read “Liberalism” by Mises. 18th century or 20th century, no min-archist ever wrote about government being made up of noble idealists, nor did they find it necessary to make that assumption as some sort of condition for government.

“the source of which has not been actually identified, and further that they exist in sufficient numbers to guide humanity to peace and prosperity, and yet when I deny them their precious presumption of governmental monopoly of authority and all of its special powers, somehow all of their nobility and idealism disappears, and without it society is expected to fall apart more or less instantly.”

When you grow up and move out of Galt’s Gulch or Rothbardville, you’ll stop dreaming of Utopian societies and start thinking about the problem at hand, which is how to reduce the size and influence of government incrementally.

And thanks for quoting Bastiat. He would agree with me; he was a classical liberal — a limited government guy — not a Utopian anarchist.

Ohhh Henry November 17, 2010 at 10:07 am

Government (or lack of it) is not a steady state, it is a process. Anarchists know that every expression of government (a monopoly on violence in a given geographical area) is evil and corrupt, therefore they resist every expression of government and urge others to do the same. Complete anarchy is the goal but one does not live in Rothbardville. If you paid more attention to the articles and blog comments here you would realize that practically everyone you accuse of being an utopian anarcho-capitalist is in fact living in the real world and grappling with real problems. Anarchy is the pole star at which they are aiming, but mentally they do not reside in dreamland.

Also, anyone who has seriously considered anarcho-capitalism will tell you that it is not “utopia”. The urge to steal and kill will always form some part of human nature. In the absence of government however, those wishing to steal and kill would not be able to do so with utter impunity, and they would not be able to organize themselves or recruit others into orgies of mass theft and murder. Anarchy (whether absolute or relative) is not perfect, but it is far better than the alternative.

As for famous Austrians who conceded a role to limited government, it is a matter of speculation but I believe that they did so because to have followed their own logic to a final conclusion would have led to a kind of blacklisting from employment and social contacts which they were not prepared to accept.

Phinn November 17, 2010 at 10:50 am

>>>When you grow up and move out of Galt’s Gulch or Rothbardville, you’ll stop dreaming of Utopian societies and start thinking about the problem at hand, which is how to reduce the size and influence of government incrementally.”

How’s that working out for you? Had any luck lately supporting the state while simultaneously trying to limit the state? Feel like you are swimming against the tide? You are.

See, you have already lost. You conceded the whole argument against “excessive government” the instant you accepted the moral premise that statist action (which is really just organized crime with a veneer of bullsh*t layered over it, pretending to be respectable) can possibly improve complex social problems.

Anarchists are against statism because we are against aggression. That’s what statist action is. That’s what it does. You can label it however you want, and change the words from “theft” to “tax,” or “slavery” to “citizenship,” but the moral quality of the action is still the same. You can’t reduce violence and aggression in a society by forming and supporting an organized crime syndicate. That’s like trying to solve the problem of rape by implementing a program of ritualized, institutionalized rape. That’s not solving the problem. That’s just changing the labels.

Bastiat’s best quote on the subject is this: “How is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay … No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.”

That’s all anarchism is: opposing theft and murder and battery in all forms, including those acts that are perpetrated under the imaginary banner of the “state.”

As soon as you create this special category in your head that says that Person A gets to levy taxes on Person B, and B has no right to resist, and if he does resist then A gets to kill B, then what you have created is merely an organized crime syndicate that you are pretending is an agency for social good.

The problem, therefore, is inside your head. The crimes of your “limited state” are all around you. You just refuse to acknowledge the OBVIOUS, which Bastiat saw — no one gets a special privilege to take things from others, or do any of the other things that people do under the pretense of statist authority every day. If an act of taking money or property from people at the point of a gun is a crime when I do it, then it’s a crime when someone else does it while wearing a fancy uniform and carrying a little badge.

Economic Freedom November 17, 2010 at 3:44 pm

“As for famous Austrians who conceded a role to limited government, it is a matter of speculation but I believe that they did so because to have followed their own logic to a final conclusion would have led to a kind of blacklisting from employment and social contacts which they were not prepared to accept.”

Ah, yes, that must be it. No speculation is necessary. Block, Hoppe, et al., have no such fear of blacklisting from employment and social contacts; they all seem to be gainfully employed and have plenty of social contacts.

It couldn’t possibly be that the old-line Austrians and classical liberals found your position just plain silly and basically unworthy of serious thought or discussion, and actually agreed with the 18th century classical liberals that limited government might be an inherent evil but it is, nevertheless, a necessary evil, especially compared to the alternative you offer.

You’re right. Mises was simply an intellectual coward, afraid to follow the rigor of his own logic to its ineluctable conclusion; a fear that (thank God!) you do not suffer from, being made of intellectually more courageous and morally superior stuff. Mises, on whose head the Nazis had put a price for being a “dangerous radical”, and who escaped to Switzerland and later to New York, Mises — unafraid of Nazis — was afraid of writing something that “statists” in the U.S. would find offensive. He actually secretly agreed with you and Walter Block but couldn’t say so openly lest he blow that fantastically high-paid job he had at NYU.

Yes, I hadn’t thought of that. Thank you for demonstrating, once again, the razor-close reasoning of the anarcho-capitalist mind.

I’ll have to take down the framed photos I have of Mises, Hazlitt, and Rand (another intellectual coward afraid to follow an argument whither it may lead); cowards all. I’ll replace them with pictures of pure, true, strong political thinkers such as the great Walter Block and Hans Hoppe.

Phinn November 17, 2010 at 6:17 pm

A. I’m pretty sure Mises was afraid of the Nazis. And rightly so. That’s why he fled.

B. If all you have to offer is hero-worship and appeals to authority, you are a waste of time. We hardly do justice to them or ourselves by pretending they’re infallible.

C. There’s no such thing as a “necessary evil.”. As someone once said, we should not retreat from evil, but proceed ever more boldly against it.

Economic Freedom November 17, 2010 at 7:22 pm

A. I’m pretty sure Mises was afraid of the Nazis. And rightly so. That’s why he fled.

You’re “pretty sure” Mises was afraid of Nazis; you “speculate” that he was also afraid of the big-bad statists in the U.S. who (you “speculate”) threatened him with unemployment and social ostracism. Yet somehow, despite the obvious growth of government and those very same big-bad statists, Rothbard, Block, Hoppe, you, and other anarcho-capitalist Utopians manage to elude the big-bad statist authorities and remain employed, and enjoy a large circle of admiring friends. Yes, your argument makes sense.

B. If all you have to offer is hero-worship and appeals to authority, you are a waste of time. We hardly do justice to them or ourselves by pretending they’re infallible.

Isn’t that funny? We classical liberals also think that you anarcho-capitalist Utopians do nothing but engage in endless hero worship — mainly of Rothbard — and that you are a waste of time. Mises, Hayek, Rand, Reisman, Paine, Jefferson, Madison, Bastiat, Say, Smith, Hume, Ricardo, Whately, Mill, Hutt, Fetter, et al. thought so too.

C. There’s no such thing as a “necessary evil.”.
Apparently, you’re wrong. As usual when dealing with Utopians, you’re too busy contemplating the ideal society of your fantasies to look at reality. That’s precisely why Utopians of any stripe are potentially dangerous.

Fallon November 17, 2010 at 7:38 pm

From a logical standpoint it is the classic liberal with the Utopian outlook. Once investing in monopoly political power, to simultaneously insist that this monopoly will ensure justice and liberty is beyond whiggishness. This utopianism is built-in the conception of limited government, aprioristically speaking. Those in government already have a one-up on those out of government concerning property and, following, the rights derived from property.

Phinn November 17, 2010 at 8:34 pm

>>>That’s precisely why Utopians of any stripe are potentially dangerous.

Yes, I am dangerous. Do you have the urge to toss a few of us dangerous types in jail? What do you think you have the right to do with the people you’ve identified as “dangerous”? You didn’t pick that word for no reason, did you? You don’t shrink for your solemn duty to respond effectively to actual dangers, do you? What would your statist friends think of you if you didn’t have the moral courage to respond to dangers?

Economic Freedom November 17, 2010 at 9:45 pm

I said “potentially dangerous.” The history of the 20th century is littered with the bodies of dead people murdered in the name of ideal societies (“If only we got rid of all the Jews . . .”; “If only government had a monopoly on everything and the proletariet ran things”; Randians would have it thus: “If only we got rid of all religion and theists and worshipped ‘Man’ and ‘Reason’ instead”; Rothbardbots like it served up this way “If only there were no governments . . .”).

As long as you have no actual power to do harm — except, of course, side with the far left on many issues — anarcho-capitalism is just innocent goofiness.

Besides –

– I wouldn’t waste the limited jail space on kooks. We need it for terrorists (another breed of Utopian — “If only everyone converted to Islam and worshipped Allah, and the Caliphate ruled everywhere, and Jews and Christians agreed to live as second-class dhimmis and pay the jizya tax to their masters, and women were made to observe shariah law . . . “).

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