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Source link: http://archive.mises.org/9402/blogging-head-attacks-mises/

Blogging Head Attacks Mises

February 8, 2009 by

This is an enjoyable debate between James Pinkerton (who is ok in some ways but could be much better) and Jeff Madrick, author of The Case for Big Government. Somehow the argument keeps coming back to Mises and Hayek.

You will note that Pinkerton undermines his own argument often, and never makes the point that government’s great “achievements” really displaced what might have been better achievements by private markets. Actually, he sounds more like a moderate right-wing social democrat than a real free-market defender.

Meanwhile, Madrick attributes all failures of government to “anti-government ideology”–which reminds me of the great excuse that the Soviets used for 70 years in which every failure of socialism was put on those who don’t believe strongly enough in socialism.

{ 25 comments }

John David Fernandez February 8, 2009 at 9:43 pm

What baffling idiocy.

(The first blog post I influenced however. :-D)

Joe February 8, 2009 at 10:21 pm

I think the two men in the video miss the point. The way I see it, the arguement Mises and Heyak put forth isn’t that the Government isn’t smart enough to figure it out. The Government has figured it out and know what the end result of their Keynesian economic policies will be because it has been repeated time and time again throughout history. The problem the Government has is that for political reasons, they can not and will not allow any sort of pain to be felt by their citizens. When the pain starts to be felt in a particular sector the Government enacts even more Government sponsored programs to correct and reduce that pain. At some point though and as history has shown, the amount of Government promises and programs eventually surpasses in large margin what their economies can support.

What we have been witnessing for a long time is that both political parties, each represent one side of the same welfare/warfare coin. For the last eight years we have seen a large expansion of the warfare side of Government. Now, we are seeing the large expansion of the welfare side and yet neither side is ever willing to yield an inch so both sides continue to be increased at the taxpayers expense on a massive level. The only man to propose cutting both sides of Government massively was Dr. Ron Paul and he was shunned by both political parties for it. The pain needs to happen to correct the problems in the economy and Dr. Paul knew it.

Oil Shock February 8, 2009 at 10:53 pm

That was hardly a debate. Pinkerton didn’t do a good job.

josh m February 9, 2009 at 12:35 am

It seemed like there was something wrong with everything that guy was saying and almost none of it was properly addressed.

charleydan February 9, 2009 at 4:38 am

The point that markets will not seek morality and so government needs to regulate.

The same men that corrupt an open free market are the same men that will now do it with the law behind them.

This same point can be made for Christians or conservatism that buys into regulating morality in other areas. It does not work, it takes a changed heart.

Karlos February 9, 2009 at 4:47 am

Pro-government apologists often say that we have to have benevolent politicians regulating our lives because free-markets are not rational. This guy mentions it too and adds that Mises and Hayek ignore this argument. Is it really so and what do Mises and Hayek say to that?

Artisan February 9, 2009 at 4:56 am

It’s a question how you define free market I guess. According to Mises, it’s made of people eager to trade according to their free-will and their intimate goals or valuations. It’s not all rational but … is rationality more important than free-will?
Mises believes that human free-will is worth preserving.
Big government believes only the free will of a few “enlightened” should be preserved. A strange and hardly democratic philosophy.

Besides: the action of politics is not rational.

I Hate Taxes February 9, 2009 at 6:59 am

“The problem the Government has is that for political reasons, they can not and will not allow any sort of pain to be felt by their citizens.”

No, it’s not about citizen’s pain, it’s about the government’s pain. The reason we are in this crisis is because the government clings to it’s power and refuses to feel any pain. The government would rather make the citizens suffer if that’s what it takes to stay in power.

The real solution is laissez-faire but that would involve enormous pain for the government. The government would have to cut taxes, cut spending, cut the military, end the war on drugs, severely downsize etc.

The government is trying to get both sides, it’s trying to keep it’s power while minimizing the side-effets, this simply cannot work.

But clearly, the government has decided that it’s power is more important than it’s people’s well being.

The GREAT PAIN each and every voter is going to endure in the future will be legendary. And at this point even the government will endure pain.

I Hate Taxes February 9, 2009 at 7:02 am

Artisan,

Actually, people engaging into free trade using their free will, valuations etc. IS VERY RATIONAL.

This means that people will rationally trade for what they think is best for themselves, people always seek the best deal and always seek their own best interest.

What is IRRATIONAL is to pretend that one central planner can know what’s best for everybody.

This one size fits all mentality is the most irrational exuberance there is.

Inquisitor February 9, 2009 at 7:19 am

Irrational = contrary to my preferences. when it is mouthed out of a pro-government hack. If I hear this word “anti-government ideology” one more time, I will stuff Human Action down the throat out of the wretch that says it next.

Bill R February 9, 2009 at 7:20 am

Yeah, saw this too (big fan of BHTV btw and recommend to all). I was thinking of emailing it over to David Gordon or Thomas DiLorenzo to consider a review of the book. It may not be worth the effort …it’s something like #5 in Federal Jurisdiction…whatever that is. A single book purchase might put it to #4 ;)

However the leftists (the vast majority of BH viewers…or at least commenters) seem to be swooning over it. Take a look at this first comment and think “Politics as Religion”:

“What an awesome, awesome, diavlog. Thank you SO much Mr. Madrick, and you too, Jim, for bringing him to us. In my case he was preaching to the choir, but rarely, in fact never, have I ever encountered anyone who’s made the case for big government so clearly. To top it off, unlike every other economist I’ve heard as yet he gives a moving and sincere speech on the effects of this market on human lives… This is my favorite vlog in the 2+ years I’ve been coming to BloggingHeads. Thank you once more.”

It would be nice to have Austro-libertarian perch on BHTV though. They’ve got a good amount of other “libertarians” on… Pinkerton (he’s more of a paleocon though imo) and Wilkinson (fuzzy Hayekian) being the closest to our brand.

Perhaps we could start a letter writing campaign? I took the liberty of sending them a long email at the “comments and questions” email (http://bloggingheads.tv/about). I mentioned Walter Block, Bob Murphy, and Thomas Woods as possible bloggingheads. Maybe I’ll post the email I sent if people are interested in writing them and want some guidance.

Inquisitor February 9, 2009 at 7:20 am

these words*

Joe February 9, 2009 at 8:16 am

“The real solution is laissez-faire but that would involve enormous pain for the government. The government would have to cut taxes, cut spending, cut the military, end the war on drugs, severely downsize etc.”

I can’t argue with that and I agree, that is the solution. However, the pain I was refering to at the citizenry level is the pain felt by those if spending on welfare programs were cut, downsize the military etc. All of those citizens dependent on those programs for one reason or another usually tend to be for big Government. You can already hear the outcries from them. Attempt to cut any sort of Government welfare programs and the far left goes up in arms. Attempt to cut the military, the war on drugs, etc. and the far right raises hell. Those are the sort the Government listens to and they are just as equally part of the problem for supporting big Government as the Government itself.

fundamentalist February 9, 2009 at 8:24 am

Karlos: “Pro-government apologists often say that we have to have benevolent politicians regulating our lives because free-markets are not rational. This guy mentions it too and adds that Mises and Hayek ignore this argument. Is it really so and what do Mises and Hayek say to that?”

Good question! Hayek and Mises might say that the belief that politicians can regulate the economy better than the market can is a sign of arrogance. The economy is far too complex for even a group as large as Congress to have the knowledge necessary to regulate it well. The knowledge that makes the free market work efficiently is distributed among millions of people, each with just enough information to make his part work well.

If the state tries to ignore prices, it will coordinate resources inefficiently and destroy wealth. If it follows prices, then state intervention is unnecessary because that’s what the market does. If the state intervenes in the market, it will distort prices and cause private individuals to waste resources and destroy wealth.

And there is no reason to assume benevolance on the part of politicians, either. The assumption of benevolance is contradicted by history. Politicians respond to campaign contributors, not the welfare of the public.

As for markets being irrational, history has proven that markets coordinate resources better than any state. How is that irrational? What is irrational is the belief that the state can do a better job than the market when Nazi Germany, the USSR, China and many other nations have proven beyond reasonable doubt that it can not. What’s irrational is the belief that, even though all of those nations failed, the US can make state intervention in the economy work. It’s not only irrational, but arrogant. Someone has said that the definition of insanity is doing the same thing over and over again and expecting different results each time. I would suggest that those who advocate state intervention in the economy are either ignorant of history or insane.

A lot of people accuse the market of being irrational. Even Greenspan talked about “irrational exuberance.” But we do not live in a free market economy. The state controls most of it through taxation and regulation. We are much closer to socialism than to capitalism. Opponents of free markets naturally blame everything bad that happens on free markets, but anyone who cares about the truth knows that most of what appears to be irrational results from state intervention in the market, not from the natural workings of a free market.

fundamentalist February 9, 2009 at 8:46 am

PS, If the market is irrational and the state wise and benevolent, then why not end free markets altogether, what little we have left, and have the state take over all business in the country? Most people know enough 20th century history to realize that has been tried and failed. What people want is a “third way” with the optimum balance between the state and free markets. That optimum was found centuries ago in the West. It exists where the state protects property owners from theft, fraud, and violence and nothing more while leaving every other decision to the market. That is how the West became wealthy.

newson February 9, 2009 at 9:11 am

fundamentalist says:
“PS, If the market is irrational and the state wise and benevolent, then why not end free markets altogether, what little we have left, and have the state take over all business in the country?”

because everyone agrees that the state can’t cook edible meals. even socialists have palates.

Magnus February 9, 2009 at 9:35 am

The idea that free exchange is irrational, and the State is somehow moral and all-knowing and benevolent, is a lie so audacious, it makes me want to vomit.

There is no more powerful force in human relations than the power to define virtue. If the State’s activities are defined as the essence of virtue, then I suppose we have finally arrived in a world where up is down, black is white and Obama is a messiah.

The State is coercion. It is force. Its activities are a PERFECT MAP of what people DO NOT WANT to do. If people actually wanted massive freeways, a giant military machine, banker subsidies, etc., then they’d already be doing them. And the State would not have to collect taxes at the point of the gun to do them.

The State ONLY does what people do NOT want. And the level of force that the State uses to make people support the State’s atrocities is a perfect measurement of the quantum of resistance they have to doing them.

Here’s the Austrian take on what “rational” means — http://mises.org/daily/2249

There is no such thing as a perfect definition of what is rational other than what people freely choose. There are no all-knowing, benevolent super-men who will hand to society perfect goodness. If they were so wise and benevolent, then they could simply convince people to adopt their ways. They would be goodness-evangelists, and the overwhelming power of their truth-speaking would magically transform society by merely uttering it. They wouldn’t need SWAT teams to dispense their versions of truth and goodness and wisdom on their behalf.

The people who occupy or seek State office are a small cadre of self-interested criminals, liars, professional con-men. They use people’s innate desire for virtue and peace, and pervert it, using it to sell people on subsidies, price-fixing, prisons, freeways and war.

severin February 9, 2009 at 9:43 am

I hope at some point this guy is brave enough to face off against an Austrian.

The flaws here were so widespread it is hard to even know here to begin. Take an obvious example, he mentions trash disposal as one of the great achievements of government. In the US as many communities have private trash disposal as have government trash disposal and the private ones are either as good or better than the government ones.

He says California’s education problems are because of proposition 13. I don’t know much about that proposition, but it does lead me to the question “if that proposition is to blame for California’s education problems, what about the other 49 states?”

He makes the claim that financial markets are evidence that markets do not work, but does not mention all of the governments interventions in the financial and banking sectors in the first place that distort market indicators in these markets.

There were so many fallacies that it is hard to even remember them all.

Gene Berman February 9, 2009 at 10:34 am

Like the rest here, I was amazed at the sheer ignorance of Austrian (particularly Misesian) thought displayed on both sides, despite the fact that both seemed to be carrying on the discussion amicably and in good faith.

Though I couldn’t stomach more than a few minutes of Pinkerton’s stammering and the other guy’s well-expressed but erroneous interpretations and views, the whole could not have been any more useful.

With guys like Pinkerton supposedly involved in carrying the banner for free markets, I’d a whole lot rather get a few like his opponent to an honest exploration of what Mises had to say 50 and even 80 years ago.

Barry February 9, 2009 at 12:36 pm

Modern Liberalism at Wit’s End:

http://ABCDunlimited.com/ideas/modlib.html

Enjoy Every Sandwich February 9, 2009 at 3:14 pm

fundamentalist: If the market is irrational and the state wise and benevolent, then why not end free markets altogether, what little we have left, and have the state take over all business in the country?

I’ve wondered that too. My explanation is rather cynical, I’ll admit: I think that the purpose of the “third way” is to keep a facade of the free market so that the socialists will have it available as a scapegoat. They know they will need one.

fundamentalist February 9, 2009 at 4:22 pm

Enjoy Every Sandwich: “I think that the purpose of the “third way” is to keep a facade of the free market so that the socialists will have it available as a scapegoat.”

I think you’re on to something there. The interventionist attitude toward free markets is schizophrenic. They see markets as a necessary evil, much as some people view the state. They end up is a mass of contradictions and wildly alternating between supporting and hating markets.

josh m February 9, 2009 at 4:59 pm

Big Government Guy should have to go up against any of the great posters here–that’s the debate I would love to see. Thanks, everyone.

Chad Rushing February 9, 2009 at 6:27 pm

Inquisitor: “Irrational = contrary to my preferences.”

That’s the definition that should come to anyone’s mind whenever an individual promoting authoritarian measures (politicians, celebrity activists, etc.) uses the term “irrational” in public dialogue. Authoritarians are not able to make the “common people” conform to their “rational” preferences through voluntary persuasion, so they resort to governmental coercion to make it happen. It does not have to be that way, but it usually is.

Chad Rushing February 9, 2009 at 6:42 pm

fundamentalist: “If the market is irrational and the state wise and benevolent, then why not end free markets altogether, what little we have left, and have the state take over all business in the country?”

It is my guess that the full transformation to a socialistic/fascistic society has to be gradually executed in subtle baby steps, or those on Main Street might catch wind of it and try to stop it in its tracks; most Americans today are probably still individualistic enough to have a strong aversion to outright, absolute tyranny. The analogy of the frog in boiling water comes to mind along with the following quote:

“The American people will never knowingly adopt socialism. But, under the name of ‘liberalism,’ they will adopt every fragment of the socialist program, until one day America will be a socialist nation, without knowing how it happened.”
— Norman Thomas, U.S. Socialist Party presidential candidate in 1940, 1944 and 1948

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