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Source link: http://archive.mises.org/9354/do-you-austrians-have-a-better-idea/

“Do You Austrians Have a Better Idea?”

February 2, 2009 by

After a good Austrian bashing of the latest call to steal taxpayer money and waste it on something that will make a given problem worse, the stumped critics will often shout, “Oh yeah? Well do you guys have a better idea?” Even though “nothing” would be much, much better than all of the alleged remedies being bandied about, the Austrians actually do have concrete proposals for President Obama. FULL ARTICLE

{ 74 comments }

I Hate Fundamentalists February 3, 2009 at 9:34 am

Fundamentalist,

Please explain to me how you will bring “justice” at gunpoint ?

How is it “just” to STEAL from hard working individuals through TAXES.

You have to force someone to give you money to redistribute it to someone else.

Your “justice” is true oppression and true evil, far worse than any private entity could ever imagine.

Your ideas and teachings spread much more evil than you can imagine.

Oh Yea, I HATE TAXES !

Lou Ohls February 3, 2009 at 10:21 am

I am probably too simple to add much here, but there seems to be one basic flaw in economic theory. When a starving man and well fed man negotiate, the well fed man always has the advantage. But as soon as the starving man gets a few meals, he wants to re-negotiate, and the well fed man wants to keep the original contract. A truly open marketplace would allow them to re-negotiate. But to keep the old contract, the well fed man feels compelled to pay taxes to government and hire me, a cop, to protect a contract which is no longer voluntary. Thanks for a very nice living, and you can stop whining any time, nobody is listening.

Joe Stoutenburg February 3, 2009 at 11:06 am

SweetLiberty:

Thank you for responding to my request. We need to sound more cogent than the drinking buddies that you described. The fact is, no matter what ideas we present, some people will find reason to criticize. If you water down your ideas to the point at which they are widely accepted, then you have probably abandoned your central principles.

In my opinion, the “serious” ideas that pass for policy are of the quality of the drinking buddies: “Ya know what weshud do?” “Le’s prin’ up a whole bunch o’ money and dump it outta a helicopter!” Should we lower the quality of our ideas in order to gain wide acceptance?

I think that the mission of Austrian economists should be to raise the level of thinking. We should be ever focused on education. Expecting policy makers to do anything but marginalize us is probably naive. On the other hand, trying to push through more palatable policies opens us up to criticism. If the policies pass but the economy continues to go through turmoil (because we have only scratched the surface), our opponents may be able to discredit our policies.

Joe Stoutenburg February 3, 2009 at 11:14 am

Lou Ohls:

Your analysis is based upon the supposition that the amount of wealth is fixed. However, both men may cooperate to produce new wealth. If the less fortunate man is able to be productive and save, he can better his position despite the less favorable contract. And surely there will be opportunities for future cooperation in which he may negotiate better contracts.

I do think that free market economists are sometimes a bit naive about the non-market means that the wealthy use to maintain their privilege. However, as long as market exchanges remain on voluntary, mutually beneficial basis, the problems that you describe are passing.

Enjoy Every Sandwich February 3, 2009 at 11:15 am

Libertarians may be many things, but “utopian” is not one of them. Indeed, the very reason we are so disliked is that we refuse to buy into the “Government is Good” fairytale. We know that the State can’t run the economy or eliminate poverty or end terrorism or (on and on and on…), and we say so. The State cannot create Better Humans and only causes trouble when it tries to.

Yeah, we say “blowitallup”. Because it doesn’t work, and it can’t work, and we can either blow it up ourselves in a controlled blast, or somebody else will do it for us in a wild orgy of destruction. Granted, the latter may not happen in our lifetimes but that doesn’t make it right.

Joe Stoutenburg February 3, 2009 at 11:18 am

Enjoy Every Sandwich:

Good point. We should counter arguments that we utopian by reversing the charges. The idea is utopian that coercive institutions can solve all of our ills.

David Ch February 3, 2009 at 11:20 am

Joe SOutenburg said:

‘Headway is being made. I am one person who has been swayed only in the past several years. I believe that Austrian ideas are making progress in the minds of many people. This is a movement that is occuring despite any proposal are actions of any kind from political leaders.

Unfortunately, we may be quite a ways from having the critical mass necessary to make bottom-up action feasible….’

Response: you may be right about a subtle osmotic penetration, but it took your comment to bring that home to me.

ON th eone hand, I am most of the time despondent that the mainstream press ( including the Financial Times and The Economist which really should know better) gives hardly any space to the Austrian perspective except very rarely.

However, in my country, Trevor manuel , the Finance Minister (Himself from a very leftist revolutionary pedigree and representing a party that itself has far more left than right in its mishmash of policy ecelecticism), is on record just yesterday as saying that he does not agree with this worldwide race to drive interest rates down to zero, and he posed the question: ‘If interest rates are forced down to nothing, where is the next wave of saving going to come from to fund investment?’ Its not much, granted, but it is a comment that could have come from any bona fide aUSTRIAN. dare I hope that, deep in the heart of a former Marxist revolutionary and current Statist policymaker, a glimmer of enlightenment is in progress?

Joe Stoutenburg February 3, 2009 at 12:06 pm

David Ch:

You’re right that powerful and influential people do not typically espouse Austrian thinking. Why would they? The Austrian ideals of individual, voluntary action would explode their positions of power and influence.

The actions and interests of policy makers may be analyzed using familiar economic principles. In a world of scarcity, they have chosen means to provide wealth to themselves. While some of them may be convinced that their methods are beneficial to the commonwealth, it must be recognized that they receive personal benefit – both in the satisfaction of weilding power and in accumulating personal wealth.

In the words of Upton Sinclair, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

It is thinking such as this that prompts me to be critical of attempts to influence policy makers. Rather, in the spirit of individual human action, I espouse the idea that we act without waiting for mandates from these people who have no rational reason to act.

In a sense, I envision (vainly, you might say – I hope not) a sort of proletarian uprising the like of which Marx envisioned. However, in deep contrast to Marx, we should rise up, not to abolish property, but to restore it.

My optimism that you quote is hardly substantiated. It is only from personal and anecdotal experience. All that we can do is to adopt correct principles in our lives and stand for them. Let the chips fall where they may.

fundamentalist February 3, 2009 at 12:06 pm

Hate: “Please explain to me how you will bring “justice” at gunpoint ?”

I realize that from an anarchist standpoint that is impossible. I was referring to the attitude that people had about the role of the state after the Protestant Reformation, an attitude that was necessary for the establishment of capitalism. Not being an anarchist, I think it is still possible for the state to bring about justice, possible, but not likely today.

Lou Ohls: “But as soon as the starving man gets a few meals, he wants to re-negotiate, and the well fed man wants to keep the original contract.”

I assume than in your illustration you intended that the contract is unfair to the starving man. Don’t let the left fool you into thinking that free markets are about lawlessness or a lack of charity. Free markets can only work in the context of the rule of law enforcing property rights, and common law would prohibit some types of contract, such as selling oneself into slavery. Charity would also exist so that starving people would not be at the mercy of unscrupulous people. Finally, in a free market job opportunities would be plentiful so that should a person find himself starving he would have opportunities other than signing a bad contract.

SweetLiberty: “But that opportunity will close quickly if we can’t get a rational voice of reason to lead the country, as opposed to an angry drunk shouting “blowitallup!” from a soapbox.”

You make some good points. Libertarians can be unrealistic at times which keeps them from getting a serious hearing. When Democrats and Republicans as for ideas, they mean ideas that fit within the existing paradigm. That’s hard for Libertarians to do since we oppose just about everything about the existing paradigm. You offer some sound suggestions for immediate steps, but I think you’ll find that even those small steps horrify the left and many people in the middle. The left is convinced that only the state has the power to defeat the hordes of capitalists who would enslave us all. With that attitude, it will be difficult to wrench any power from the state.

Matt February 3, 2009 at 12:29 pm

The below was written by Eric, he is on the right track.

“Can anyone name a time in history that an empire rolled itself back without their first being a catastrophe? And even with 10% unemployment, I don’t see that as a qualification for catastrophe. I don’t know how bad it has to get, but government is like a religion in this country. Until that faith is truly shaken, nothing will change. So, all this talk of ours (Austrians I assume) will likely do nothing until it gets really really bad.

What is really bad? Well, maybe the next super bowl is canceled because nobody can afford to go or too little advertising revenue is available. Maybe when there are no more cars to buy, no food to eat something could change.”

In the mean time we will muddle along the same course of collectivism until it gets really really bad.

fundamentalist February 3, 2009 at 1:57 pm

Eric: “Can anyone name a time in history that an empire rolled itself back without their first being a catastrophe?”

If you take the long view of history, that is from earliest recorded history until today, you’ll see that Capitalism has been a flash in the pan. According to Douglass North of the New Institutional school, until modern times traditional states were organized with a king at the top who maintained power by giving a small group of nobility the right to plunder the rest of the population. The nobility couldn’t steal from each other, but they could steal all they wanted from the masses. That kept them loyal to the king.

Capitalism didn’t begin until at least the Republic of Venice, but more likely the Dutch Republic of the 16th century, and at that time it was limited to one small country. It spread to the US and England and by the end of the 19th century it encompassed just North America and Western Europe, both of which abandoned Capitalism in the early 20th century. A few Asian countries joined the ranks of as at least semi-capitalist nations in the last half of the 20th century, but the West continued its march toward socialism. Just as the 20th century reversed the progess made in the two centuries before it, the 21st century will probably see more regression to the traditional form of government.

I Hate Fundamentalists February 3, 2009 at 2:41 pm

Hey, Fundy,

Looks alot like this today, are you saying we are not into modern times yet ? Replace the king by the president and the nobles by the bureaucrats and you get the same result.

“According to Douglass North of the New Institutional school, until modern times traditional states were organized with a king at the top who maintained power by giving a small group of nobility the right to plunder the rest of the population. The nobility couldn’t steal from each other, but they could steal all they wanted from the masses. That kept them loyal to the king.”

I Hate Taxes February 3, 2009 at 2:43 pm

Hey Fundy,

The opposite of oppression is not anarchy nor chaos. Don’t try to belittle libertarians by calling them anarchist.

Listen, even from an archist standpoint, you can’t rob people. We could still have a minimalist government without the need to rob Paul to pay Peter.

“I realize that from an anarchist standpoint that is impossible.”

I Hate Taxes February 3, 2009 at 2:47 pm

Hey Fundy,

It’s funny that you think that the state can bring justice, given that the state is the biggest criminal enterprise of all times, robbing people of their hard work through taxes, destroying their savings through inflation, waging savage wars, building nuclear weapons, confiscating real estate on drug charges, summary executions and arrests, behaving like thugs etc.

So, you really think that the wolf can gard the lamb herd ? LOL !

I don’t want the government to “bring” justice, I just want it to stop committing all those crimes, that would be a very good start.

“Not being an anarchist, I think it is still possible for the state to bring about justice, possible, but not likely today. “

fundamentalist February 3, 2009 at 5:00 pm

Hate: “It’s funny that you think that the state can bring justice, given that the state is the biggest criminal enterprise of all times…”

The state is a criminal only according to the Rothbard/Hoppe ethic. If one doesn’t subscribe to that ethic, then the state isn’t a criminal organization. I happen to subscribe to the original natural law ethic that makes room for the state as a provider of justice, as did Mises and Hayek.

"iprint" Inventor February 3, 2009 at 8:57 pm

If I woke up one day and found myself drowning in debt I think the best thing to do would be to engage in a serious and determined study of the art of counterfeiting.

Not wanting to be a hypocrite, I will therefore refrain from passing judgment on our government officials but I would like to make the suggestion that if Obama really wants to get the American public behind him, all he has to do is provide every American with his own printing machine, call it the “iprint”.

I am pretty busy, but because I am such a patriotic American and desire to help every citizen of our 50 United States, I am considering offering the US Govt 305 million “iprint” machines at the sacrificial price of $29.95 (no tax).

If anyone would like to financially back this patriotic enterprise, please me a message and a small pot of gold.

Andrew February 3, 2009 at 11:23 pm

9. Allow unrestricted immigration so long as the incoming folks had a secure job in which the employer (a) paid three years in advance on any state and local taxes that would accrue from the employment and (b) bought at least a $100,000 house for the immigrant and his or her family. (Yes, yes, the last point is silly, but it will help sell the package.)

Absolutely insane with current entitlement programs, the current way infrastructure is paid for, current state funded schooling and laws requiring medical care at hospitals. Without changes to all of these BEFORE This idea was implemented, this would bankrupt hospitals, raise property taxes astronomically, destroy our infrastructure and worst of all get the absolute worst politicians elected all over the country. Yes, yes we have bad politicians but not all of them and they are all not the worst that comes out of desperately poor areas. This sort of idea would lead to politicians being elected that would impose massive statism to placate their base of uneducated voters. I don’t understand how you cannot see this.

fundamentalist February 4, 2009 at 8:08 am

Libertarians get upset when the left battles with a straw man of their own making and calls it Libertarian. In the same way, we are often guilty of fighting our own straw men we call socialism. Socialism and statism is far more than just a power grab by unscrupulous people. As Mises wrote, it is a religion. It is not like a religion in the sense that devotees of statism refuse to listen to reason, it is literally a religion in the sense that it has its own world view that selects what is reasonable and what is not. The essence of that world view is the socialist view of the nature of man, the cause of evil, and the role of the state in restoring the innocense of mankind. If one accepts that world view, then socialism make perfect sense and capitalism is the ultimate evil. Libertarians will never make any progress against socialism by ignoring this world view and attacking it as just another power grab.

Michael A. Clem February 4, 2009 at 10:40 am

Without changes to all of these BEFORE This idea was implemented, this would bankrupt hospitals, raise property taxes astronomically, destroy our infrastructure and worst of all get the absolute worst politicians elected all over the country.
The old “keep immigration restrictions until after welfare is removed” argument? Has it occurred to you that welfare will not be ended wilingly by our politicians, and that “bankrupting” the system might be the only way to end it?

I Hate Taxes February 4, 2009 at 12:32 pm

Fundamentalist:

“The state is a criminal only according to the Rothbard/Hoppe ethic. If one doesn’t subscribe to that ethic, then the state isn’t a criminal organization.”

So, as long as I think robbing others is okay, I can rob them of their hard earned money and call it justice ?

I find your ethics quite slack to say the least. It’s funny how people think taxes are fine but don’t want to get robbed my a mugger on the street. That’s pure hypocrisy.

If it’s a crime to invade someone’s property and take his money by force, it’s a crime to tax.

No matter what your “ethics” are, a crime is a crime.

But if you think stealing is okay then please leave me your address and I will happily take away your belongings.

fundamentalist February 4, 2009 at 5:07 pm

Hate: “No matter what your “ethics” are, a crime is a crime.”

Neither Mises nor Hayek considered the state to be criminal or taxation to be theft. In fact, Mises wrote that the state was necessary and good for civilization because it limited criminal activity.

You don’t have the authority to decide that the state is criminal and taxation is theft. You can use Rothbard’s ethical reasoning to demonstrate it, but I am under no obligation to accept it. I don’t accept it because 1) it begins with the arbitrary choice of property as the guiding principle, whereas traditional natural law began with the right to life and 2) it makes property an absolute, for which there is no reasonable justification.

Natural law considered the state a legit institution with the right to tax for centuries. Mises and Hayek agreed with it. I see no reason to disagree with them.

Sally C. February 5, 2009 at 4:28 am

As long as kids in American schools have to pledge allegiance to the flag there is no chance that the majority of American adults will ever question the actions of the government enough to stand up to it. In theory, you have created the ideal conditions for the nightmare world of ’1984′! The only saving grace is the two term limit for U.S. Presidents.

Leon Haller February 6, 2009 at 9:08 pm

I am a long-time follower of Mises, Rothbard, and the rest of the Austrians, and believe their economics is correct, even if ‘radical’ by conventional standards. Their politics is quite another matter. There is nothing philosophically dispositive about libertarianism, however persuasive Misesian praxeology. One can be an Austrian without worshipping the Market God (as so many on this site do), or exalting homo economicus to some privileged position above all other human types and aspirational categories.

These truths are always brought home to me whenever libertarians idiotically start pontificating on areas about which they so often either are clearly ignorant, or otherwise blinded by ideology. Foreign policy is one such area. While I share much of the libertarian critique of imperialism and the threat it has historically posed to domestic liberty and tranquility, a nation’s security interests can hardly be satisfied simply with endless reiterations of “do nothing”. If many libertarians had their way, national defense would be reduced to civilian militias, desperately hoping that a non-interventionist foreign policy of peace and free trade with all, entangling alliances with none, would somehow so charm the rest of the planet that no hostile powers, coveting the immense wealth of our desired retro-capitalist system, would emerge to threaten us. The naivete of this view, in a world of predatory states and nuclear weaponry, is mind-boggling, evincing the complete triumph of obsessional ideology over any awareness of history and the really existing world order.

Immigration is another area of libertarian utopianism and flight from reality. I’ve enjoyed many of Robert Murphy’s articles, but if he is serious that we should allow UNRESTRICTED immigration (his usage @#9 above), then I must call into question the value of all of his earlier work that I had thought was enlightening. Throwing open America’s already hemmoraghing borders, an act of world-historically pathological stupidity, would result in the virtual overnight extirpation of the United States, the literal foreign conquest of America. Does Murphy have ANY understanding of: 1) evolutionary biology; 2) the history of interethnic relations; 3) global demographics; 4) international wealth disparities; 5) infectious disease epidemiology; 6) the American welfare state structure; 7) American anti-discrimination law; 8) geopolitical relations; 9) military security issues; or 10) American ethnographic electoral patterns, and political realities? In a word, outside of some tiny specialty in Austrian economics, does Murphy have any knowledge of any discipline relevant to formulating immigration policy? In advocating “open borders” the answer is, embarrassingly not.

Immigration is the great disaster of our time, not just for traditional Americans, who are losing their country to this peaceful invasion, but for liberty, too. Immigration strengthens the hand of government in dozens of ways, but I will emphasize just one. 99% of immigrants are racial ‘minorities’. Here is the racial minority vote for Obama in 2008 (admittedly, I wrote-in Ron Paul, but third party voting is still rare; the vast bulk of pro-private property voters are registered Republicans): blacks 95%, Hispanics about 70%, Asians 62% (and Jews, incidentally, voted 81% for Obama). These electoral demographic imbalances have been remarkably stable over the past four decades. Why would we want to increase the numbers of minority voters ten-fold virtually overnight?

Open immigration would spell the immediate end of private property and the free market in America, and usher in an era of total wealth confiscations for old-stock Americans. Advocating such destruction is not funny or “tongue-in-cheek”; it is treasonous (and per Hoppe, it is not even libertarian, at least not necessarily so).

If Mr. Murphy and other libertarians indeed wish to emerge from their little ideological ghetto, and have their views (at least the correct ones, those dealing with the economy) taken seriously by sober men, they need to jettison their non-economic nonsense. Note that the one libertarian doing something in the real world, Rep. Ron Paul (Republican), is staunchly opposed to the immigration invasion, and wants are borders sealed, not cast aside.

TokyoTom March 5, 2009 at 9:45 am

Bob, you and others fail to give any serious attention to the underlying cause of the plague of irresponsibility that lies at the core of our capitialist system – the state grant of limited liability to shareholders. Glassman and Nolan in the WSJ recently, Joe Nocera in the Time Magazine and Michael Lewis all get close to this, in the context of risk-taking by Wall Street.

My take on it at the post linked at my name above [linked deleted here to get past spam filter]

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