In the case of the USA I would recommend the essay by Henry Giroux titled In the Twilight of the Social State. It is featured on numerous blogs.

Some of our union State Labour parties have demonstrated that we are degenerating into corruption like many other third world countries. Many African nations are rich in minerals but most are kept in abject poverty by corrupt African rulers. No one cares because the leaders are not white. Our turning away from the Christian heritage that made us so prosperous will and is our undoing.

A compendious apercu Dr C. I enjoyed reading your article

We all appear sitting in the same class room here. Democratic directions of the West are glaring in their obvious retrograde flight from social responsibility on a trajectory of “Economic Darwinism” tagged Neo-Liberal.

1. The welfare states are financially unsustainable and are on a collision course with reality. Their social security schemes are not "insurance", there is no fiduciary prudence, you have no "account", no moneys held in trust. If any private corporation practised such schemes on such representations by such accounting practices, the directors would be in prison for a very long time. Governments have simply taken the money from one group of people and spent it on another, without any way of performing the financial promises it has made to the millions of people whom it deprived of the means to provide for their own retirement. The USA, for example, is over $61 trillion in the red, most of which is unfunded social security (so-called) and medicare liabilities.

2. Seeing that they were spending more than they were taking in taxes, the welfare states turned to sophisticated versions of printing money. Their cheer-leaders the Keynesian high priests sang government-funded hymns that governments can magically create wealth for all by printing money. They can't, and it doesn’t matter who says we can. The scarcity of resources is imposed on man by nature. It is not a question of the correct "ideology". If it were, there would be no need for anyone to work. We would live in a cornucopia, a Land of Cockaigne. This infantile narcisissm is the essence of Keynesian, social democratic and statist economic theory - that we can get something for nothing by getting armed men to decree “Let it be so”. We can’t. All the redistributionist schemes are just cheating and theft by another name.

3. After WWII, the USA was able to shoe-horn the other nations into accepting the USD as the reserve currency of the world. This enabled the USA to vacuum wealth out of all the other nations of the world just by printing more money.

4. But that situation cannot last. Its creditors won’t continue to accept USD in return for real goods since the Yanks have started inflating in earnest.

(cont.) No other fiat currency is in a position to replace the USD. The only thing that can do that is gold or other precious metals.

Of course the inflationists: the good-time-guys and the born-to-rule elite (social democrat and conservative chapters) regard this as absolutely terrible. But gold is the little guys’ way of fighting back against Leviathan. It’s society’s age-old defence against the state.

5. Printing money not only *doesn’t* create wealth. It creates chronic intractable economic, social and moral problems. It creates the roller-coaster cycle of spiv boom and depressing crises. It disadvantages the poor most of all, creating millions of dependants. It creates crony capitalism, the corporatist state. It funds aggressive wars. Since money intermediates most exchanges and therefore social co-operation, perpetual inflation replaces the social values of responsibility, savings, work, and enterprise, with the statist vices of entitlement, instant grat, debt, claims of victimhood, and political parasitism.

6. The coming crisis in worldwide monetary policy has implications not just for monetary policy, but for the very idea of big government that the western states have inherited from the 20th century – the heyday of socialist experimentation.

7. I laugh when I see the cluelessness of socialists saying how “we” need to raise living standards by more taxes and entitlement schemes, or fretting that more freedom causes poverty. Dreaming of making the problem go away by more government grab-and-spend is just more of the “gimme-gimme-gimme” mentality, more of the idea that the poor Chinese, or poor Indians, or someone, owes us a living. They don’t.

Cry-babies who assume there *must* be titty out there somewhere, thinking the problem is one of “ideology”, and crying “neo-liberal” when they don’t get what they want, need to wake up and grow up. The emperor has no clothes. Far from being socially just, the entitlement/forced-redistribution mentality is anti-social and unjust. It is financially bankrupt *because* it is intellectually and morally bankrupt. The choice is between sound money, much less government and much more individual freedom and responsibility sooner, or much greater social destruction, injustice and social chaos not much later.

http://mises.org/

<Can Western societies remain fair and affluent?>

This is a trick question, right?
Since when have Western societies and affluence been "fair"? I mean, fair suck of the sav!
Tarriff's and protectionism are based on the maintenance of monopolies. "Fair" has never come into it, ever!

Peter Hume is quite right:
<The welfare states are financially unsustainable and are on a collision course with reality> there is no <titty out there somewhere>
100% correct, or at least it's drying up.
The present system has only ever been there for capitalists.
It blows my mind that people still don't get this!
Experiments with welfare were based on virtually virgin markets,unsustainable post-war booms and creative credit.
Those days are over. Which just goes to show that political economy (capitalism) has never been based on human society, but on drawing off profits (which, ironically, rely on human society for their currency).

Of course, in our world of economic fundamentalism, I'm talking complete mumbo jumbo.

So yes please, more austerity.
The masses need a cold shower!

Political Capitalism is Socialism of the Right; and as Peter had so stated, this is a fact that has existed for many many years; The System has not been corrupted to become as the third world, it has mutated and morphed into to fourth and fifth world ; or The State is out of control; - it has gone far beyond that point; Monopoly control, Mercantilism, State Institutions, and Industry for what is left of it in this country, are all of and are Political enterprises. And not of Free enterprise or Private property.

Run by Despotic Plunderers for their own purposes out of delusional Ideological perversity and only supported by Subversion , perversity and obscurantism with a Bias doctrine so lace in Criminal conspiracy that is tantamount to Treason. And is Treason.
You’re Governments. Three tiers of it. And then their minions in the millions.

And it will never recover due to level of predatory Mafia like theft and its State Created Poverty and Mendicancy , only to self justify its existence; - Billions of dollars debt compounding on more billions of dollars, but wait, there is more, Hundreds of Billions dollars of more debt, and still not a single product or potential for the future.
Just more robbery and theft.
There cannot be a future if this is how it is to be .

Peter,

Could you please give us a historical example for a functioning economy run along the lines you are championing. Your bullet points seem a little abstract.

PETER HUME:

My understanding of the current financial crisis (GFC) of the western democracies is not related to problems associated with failure of any welfare system attached to those democracies. I think you need to move out of your “tin shed” Peter. There certainly is a crisis in redistribution of wealth, though not as you seem to be alluding to: A cause of over-expectation of the citizens desire of a “free feed” and a life of ease at the expense of the beleaguered tax payer; a taxpayer by your apparent reasoning that should be non-existent. No, a crisis exists by way of the movement of wealth in the economy successfully migrated away from the bottom majority to the top minority in society and a manufacture of deliberate dependence on all who dwell in the chord of that bottom majority often referred to colloquially as “us” in order to sustain that unequal migration of wealth.

I venture to add from my personal observations of welfare recipients, the pennies thrown their way constitute an indemnity of hunger and a crisis of accommodation most undesirable; a group you deride as “damaging to the deserving” (Would you be John Howard by another name perchance)?

Diver Dan
“My understanding of the current financial crisis (GFC) of the western democracies is not related to problems associated with failure of any welfare system attached to those democracies.”

I think it’s both. The welfare liabilities are unsustainable in their own right, which goes to finance. Government controls the supply and price of money, which also goes to finance. They use their control of the money supply as a source of revenue, to partly fund whatever they want – whether industry handouts, corporate welfare and war for the right wing, or every kind of economic intervention, wealth-redistribution, and war for the left. Government spending, monetary policy, government economic “management” and the GFC are all related economic phenomena.

“No, a crisis exists by way of the movement of wealth in the economy successfully migrated away from the bottom majority to the top minority in society and a manufacture of deliberate dependence on all who dwell in the chord of that bottom majority often referred to colloquially as “us” in order to sustain that unequal migration of wealth.”

I agree. However remember it’s a majority-rule system of government. The unequal and unfair results are not the *intent*, but the *effects* of redistributionist policies. What many redistributionists are trying to achieve is a fairer, more just society. What they’re actually achieving is crony capitalism, bloated bureaucracies and a society of privilege.

Economics explains why. Total government control of the economy is not viable. Partial government control *must* produce the results we are seeing, and with which we are both dissatisfied.

“The pennies thrown their way constitute an indemnity of hunger”
Please don’t bore me with a presumption that you care more about people than I do. The question is whether more of the same will fix the problem; whether the means you favour are expedient to achieve the ends you aim at.

Besides it’s not “pennies”, it’s hundreds of billions of dollars per year and a major part of all production affecting everyone else’s livelihood, future, and all politics, but that’s not the point.

The point is that these problems of privilege and disadvantage do not just arise spontaneously out of unregulated capitalism, as social-democrats, conservatives, and Keynesians irrebuttably assume. We know so because the capitalism is not unregulated, is it? On the contrary, over 50 percent of everything everyone produces is confiscated to fund many coercive bureaucracies who produce a choking plethora of regulations and interventions forcing the price of everything, including and especially labour, to something other than it would be on an unhampered market.

Now the entire argument against these interventionist policies is that they will produce exactly the results that they are in fact producing, and that are worse from their own advocates’ standpoint.

Government illegalises and marginalises employment with more and more regulations every year and then has the effrontery to appear as the saviour of the unemployed by subsidising their miserable condition – all in the name of the greater good!

But the advocates of these policies, not understanding the economic connection between what they’re doing and the results they’re getting, keep hoping that more inflation and micro-management will make bread from stones, or make a fairer society. It won’t. The interventionists’ economic theory is wrong and government intervention is the main single factor causing the problems the interventionists are trying to fix with more government intervention.

“damaging to the deserving”
I didn’t say that, did I?

You have not established that crony capitalism and leviathan bureaucracy based on chaotic coercion, is in any way morally superior to more personal and economic freedom as a way to a better and fairer society.

PaulL
There are loads of examples but first what distinction do you make between state and economy?

The system is quite simple to understand;
There are Tax payers and then there are people who live of those taxes , and if by any definition it is argued to be a wealth distribution is nonsensical ; Working Poor is another Ideological fire brand ; Why are they Poor and working ;

They ,like many , pay more taxes from income than it is their means of income to live ; It would be reasonable to assume that there exists a fiscal handicap of about (conservatively ) 45% of Tax paid is consumed by The State Minions before One single dollar even if it is distributed to the supposed welfare recipient;

Who in turn lives better off than that of the Low income working poor who had been relieved of his limited resource by the State?
And now the State created mendicancy relies on the State, because it pays more than what they can earn; just remember TAX.

Even in the Ideological concept of Wealth distribution, it was argued that the results of such a proposal will indeed be worse to the population than the notion of what it is that you wish to achieve.

So it is not actually a complex conundrum to realise the basic fact that the Welfare state is but a concept that helps create the Illusion that You the People need the state to live and survive; But in economical and in mathematical fact; by its very nature is the destroyer and predatory parasitism that wipes out any economic or social activity;

Understand Social power and State Power
So it is an Anti Social institution. A bit different than what they would condition you to believe.

Peter Hume:

So after we dump out social service and any subsidy payments of any form to Industry (including farmers by way of drought or flood assistance and special welfare payments given free of the shackles ordinarily applied to the masses) or individuals which would come under the strict classification of welfare, what would be the next saving grace for poor beleaguered tax payers of this country of ours under your scheme of rectification.

Here is one of mine; Sack the Police force and allow the further unfettered progress to the black market already existing in this country who also refuse to pay tax and get away with the crime while distributing drugs and fire arms throughout our communities. Remember any activity that makes money gets the “nod” from Capitalism with your system: A system without controls has no bottom line. Another word for your deal is “Anarchy”

Yes, i am in general agreement with diver dan, although I do tend to express more sympathy for the contribution made by by centre-right parties. I feel all parties are important as we struggle for the right policy mix.

Even PM Howard backed down on some of his previous beliefs and accepted the need for some industry protection. Key is always balance.

I too would like some examples of successful govts or societies when govt completely gets out of the way

I know it is provocative however had the Europeans not arrived in Australia life expectancy and quality of life would be heaps and heaps lower. Thank God for advances brought about by hard work and true science. Thankfully Christians built schools and hospitals. If we regress to the Green faith it is only the 'elite' who want to live with the benefits brought to them by progress however they want to deny all others that opportunity to prosper.

<I know it is provocative however had the Europeans not arrived in Australia life expectancy and quality of life would be heaps and heaps lower. Thank God for advances brought about by hard work and true science. Thankfully Christians built schools and hospitals>

So tell me, Runner, how do you account for the miserable wretches we've made of the aborigines?
And you talk of "quality of life", what a joke! Consumerism is quality of life, is it? And "life expectancy"; it's an equation, isn't it? We live so much longer, ergo life's better. More is always better? The American Indians enjoyed are similar boon!
And yes, let's drag the Greens into it, the root of all evil, those who actually care for God's creation!

On the other topic, PH forgets that his precious free market also relies on broad-scale consumerism, which is only maintained by adequate welfare. The consumer base is as artificial as everything else in this noxious system. Welfare is what maintains the system, what forestalls revolution, what cannot be sustained. Nothing can "fix the system", PH, it's more a matter of whether we can survive the system!

Peter,

Given your rather voluble oposition to the current state and its economy I was interested in an example of a state, or an economy (either found together, or separately) where your philsosophy can be seen in action.

runner,
Strangely enough, I was reading something this afternoon that links with your post. It concerned the modern Christian stance of focusing entirely on man and his achievements. It turns away from the natural world to find transcendence....and underestimates the very fragile cyclic substance of nature that nourishes and gives symbol and meaning and to existence.
I'm with Squeers in asking what Christianity ever did for indigenous peoples, except to destroy their cultures without a second glance.
In fact, your post reminds me of the story of the big Australian mining firm that silted up a river in Papua New Guinea, destroying the livelihoods of the local indigenous people, but left them with a school and a hospital...things that they'd done without for millenia. Funnily enough, the one thing they couldn't do without was their river...but there you go...can't argue with progress, right?

Left wing anarchism is what you have, the hatred of everyone and everything; and as it may well be an utter surprise to some here, and that is Atheism.
Australia as far as European settlement was perhaps the less violent out of any in the History of Imperialism, and to romanticize about primitive man in nature is in essence an absurd consideration; people use the technologies of modern time, and the only institution of today that oppresses Aboriginal people is THE STATE; No matter how much pathological lies and absolute denials of the fact. It will never change.

And to answer what Christianity has ever done; It gave you the chance at reasoned civilization; But Atheism killed that notion by fatalistic dogmatism;
It is the same fatalism that existed in Socialist Germany in the pathological hatred for the Jews, Thus exacerbated more so here on this forum with many, Now aimed at Christianity;
Christian Dogma had never harmed or caused any harm to anyone; In fact , it has become more Anti Christian than some of the Marxian Atheists for they had followed the collectivist philosophy and accepted the Mental state of Dialectical Materialism , and near abandoned utilitarian Christian principles of reasoned theory. Just as the Atheistic despots do.

I would have a guess that the Ignorance of many would not actually know what Atheism is, or how it was that for it to come to fruition ; Clearly there is a robotic State indoctrination so spasmodic not even they know what they are saying.

All-

I wouldn't call myself an atheist - merely someone who, like many others is looking for meaning. Afterall, God is the "mysterium tremendum".

The question is how one perceives "God".
For some, that perception is realized in the notion that man is immersed in the natural world - and that this natural world reveals something of God...early Christianity was more inclined to this view of man's position.
Since the enlightenment, man (and Christianity) has viewed nature merely as a mechanistic entity and consequently he has treated nature not as a revelation of God - or meaning - but as something to be exploited for profitable ends.
It's all too simple to denigrate people with false assumptions in order to dismiss their arguments against unfettered progress.

Squeers

'So tell me, Runner, how do you account for the miserable wretches we've made of the aborigines?'

I think you would find that many of the early missionaries vehemently opposed allowing aborigines alcohol. Call it racism but it certainly would of saved many lives and stopped many a woman beating had the secularist not demanded their way. Maybe Christians also largely stopped 50 year old elders taking promised 12 year old girls. Secularism however with its moral relativism seem to have no problem with that sort of behaviour. Showing the aborigines also that some of their practices which would be banned mentioning here were not healthy was probably another good thing.

Funny enough many of the PNG people you refer to Poirot are doing very nicely here in Australia in the mining industry. They are actually extremely thankful to those who sacrificed their own lives to teach these guys to read and write.

My philosophy can be seen in action wherever there are consensual transactions. Nobody thinks we need government departments to decide who should fall in love with whom, how to make a salad, what the rules of grammar should be, what makes art beautiful, nor how best to make socks, pizza, a car, nor how best to shear sheep, grow wheat, make bread or tables or websites.

But imagine if we had a big government Department of Sexual Relations, or a Department of Food. Don’t laugh - it’s no less ridiculous than having a Department of Industrial Relations, or a Department of Water.

When the Soviets tried to nationalize food, the result was mass starvation. Now we have nationalized water, and the result is similar planned chaos, such as NSW Water recently dumping a Sydney-Harbour’s worth of water down the Murrumbidgee during flood times.

The argument is that a society based on consensual transactions produces processes and outcomes that are better in ethics and in practice than ones based on coercive transactions, and in particular, in rationalising the use of scarce resources to their most valued ends.

While the state does provide valuable services paid for by taxation, it is not true that only the state can provide those services, nor that the state provides them better, cheaper or more ethically.

Forcibly confiscating their revenue, or forcibly excluding competition, are no argument, but that’s all that the state has to prove its case – otherwise there’d be no need for force, would there?

We don’t have government “services” because it’s necessary or desirable for the government to provide them, we have them because it’s very difficult to stop people from trying to live at others’ expense using force and fraud whenever they can. The state is a machine for making it safe, that is all.

That is so true Poirot , But the last sentence you wrote is a near word for word for the Atheist Bias doctrine ; It is right because they say so, and any argument against progressives , it is wrong because they are.
And that is where the doctrine dictates to liquidate the dissenters , it is democratic , so it is good. Fatalistic Despotism used throughout history.
This part is more important because of the Industrial revolution. Who can get their hands on the new found wealth.
Marxism 101 Atheism and the self proclaimed God of Progressivism and the modern Mohammad ,Despotism , but under the guise of Science, Often called now days “Progressivism”.
It sounds more enticing than the reality of its dictates , for retrogression is what it is , and is the inevitable retrogression is the end result.

The Irony is that it was of then , as it is now , all the not so well intellectually endowed , and not so well to do , Aristocratic Overly indulgent gentry who proselytises such garbage ; Somehow has morphed to be the new Gods to save the Working man whilst robbing him and enslaving him at the same time.

And we are all meant to feel good about it.

So is it the Mises brand of libertianism you are talking about? becasuse it sounds a bit like your championing anarcho-capitalism?

Are you admitting any role for the state at all?

I hope some of the fundy fascists and neo-liberal fundamentalists loonies here listened to today's Science Show:
http://mpegmedia.abc.net.au/rn/podcast/2011/01/ssw_20110108.mp3

They're talking about you!

Demographics is destiny.

Affluent nations have failed to produce children and are suiciding with declining populations (apart from immigration).

Poor countries generally produce many more children than those that die and are growing strongly.

It's only a matter of time before these huge populations squeezed into resource-poor lands say 'it's not fair' and start invading.

It happens within wealthy nations too. In French maternity hospitals there are more babies being born to French muslims than there are to French French. The welfare-dependant have many children, as they receive big increases in income from welfare. Meanwhile the professionals can't afford the children they would like.

We need to stop giving moeny for kids and instead give genererous tax reductions.

We need to make divorce fair so men stop being 'commitment-phobic'.

Our 3rd world aid, instead of wells and hospitals, needs to fund free, long-lasting contraception, so they have a chance to grow prosperous instead of growing bigger and poorer

'They're talking about you!' Yea well Sqayueers I suppose they would not be talking about their idiotic global warming predictions now that they have to face the simple fact that the once 'science' is not settled.

It's fascinating, runner, the way your particular brand of religious zeal negates the absolute imperative that for an organism to thrive, it must live in balance with the environment that supports it.
In man's case, unrestrained progress not only threatens his physical surroundings, but stunts his spirituality as well - as he is lured instead to worship at the shrine of consumerism.
Man and his habitat - you can't separate the two...even with the invention of a sky cult.

There will come a time where Western democracies will revert to a combination of government intervention and free trade. They already do it in part via subsidies.

There can never be an even playing field in free trade unless there are uniform rules about wages, subsidies and other regulatory mechanisms in relation to food quality/toxicity and governance. But that is not going to happen anytime soon and quite frankly the West does not want it.

Why are we better off if we trade with a corrupt dictator even if the food or product is cheaper? We are complicit in supporting a corrupt regime that has no interest in the wellbeing and development of their people.

Nations do not do well when they hand over all their food security to another nation and lose all but a sliver of a manufacturing industry or when they sell their raw materials OS only to buy it back and greatly inflated prices. The citizens of Africa are kept poor by a combination of corrupt leaders and greedy corporations whose intent is profit (sometimes, but not always, at any environmental or human cost).

Western nations can deal more fairly with other nations and remain affluent. But how much affluence is enough? That is the real question and at what cost to developing nations. GDP is not always an accurate indicator of wealth and does not measure the wellbeing of the majority of citizens. So if the GDP of a developing nation is growing that does not mean this wealth is being evenly distributed nor does it show that the wealth achieved by a few can be at the expense of a majority especially in relation to food security.

partTimeParent
Yes,

“When goods don’t cross borders, armies will.”
Bastiat

The greens don’t seem to have thought through the security implications of locking up Australia’s great productive potential in parks that no-one visits.

Why, as a matter of fairness, should China with their hungry millions sit idly by, and look on this selfish anti-human stupidity?

If people want lands to be used to produce frogs or wombats (and I do), they should have to pay for this as much as, perhaps more than, people who want to use it to produce food.

PaulL
“Are you admitting any role for the state at all?”

In theory, I don’t know, and in practice I don’t concern myself with that question.

In practice, I think the problem is that our current big government does not make our society fairer or more affluent – on the contrary. And we are very far from any question of an absence of government. I’ve heard of a number of people from the old USSR saying that government is more intrusive, and life more minutely restricted in Australia than it was in the USSR, and I think that’s a disgrace to Australia.

It is a mystery to me why anyone would think it good to have an ever larger proportion of the Australian population in enforced idleness instead of working for a living at a higher income. Add the direct costs to everyone else, the destruction of employment and productive activity, and the dreadful bureaucracy invading civil society at every turn, and it seems to me a positive evil, and unnecessary.

I would like to see a reduction in government of at least 50 percent (it’s grown that much just in my lifetime). We could shrink it by 10 percent just by abolishing flex leave and above-market conditions for so-called public servants. No-one else gets paid for taking holidays and calling it work so I don’t see why the priviligentsia should. We could abolish income tax if we reduced government to the size it was in the Keating years. What’s not to like about it?

In theory, the objections to a stateless society are obvious. If the free market would be so much better at providing security services, then how come it keeps on getting out-competed by state monopolies? To say, because states have a monopoly on guns, is only to beg the question. And ‘nature abhors a vacuum’. In a completely free market for security services, in theory the biggest firm could become the biggest aggressor, monopolise, violate the common law, take over the commanding heights of society such as money and jurisdiction, and thus found a state.

Mind you, these objections do not show that states are *better* as a matter of ethics or practicality; nor that the state is necessary or beneficial – only that it is *no different* from a gang of thieves writ large.

The relevant theory is this. The Austrian school maintains that physics and nature impose certain limitations on human action and production, that these logically give rise to universally valid propositions of human action and to the possibility of economic science.

By contrast, the social democrats, channeling Marx, assert that there is only “ideology”, not economic science.

(That is why Squeers’ asserts that the argument, that we can’t make wealth out of thin air by printing money, is “fundamentalism”. In other words, there is no possibility of rationality, no such thing as economic reality; there is only the possibility of faith immune to disproof, and name-calling. It is why Squeers alleges “consumerism” – a meaningless slogan implying only that *other* people consume too much (Squeers doesn’t of course.) Presumably others should either not consume, or what they do consume should be politically decided by the would-be dictator in Squeers – typical socialist stuff.)

According to the social democratic orthodoxy, economics is socially-constructed, society means state, “we” means the police, and the common weal consists only of the political decision who shall be permitted to exploit whom and call it fairness.

The defining characteristic of human action is the very high degree of social co-operation. The renunciation of the possibility of economic science, and the embrace of the idea of the social construction of reality by the state, dove-tails perfectly with the unfalsifiable magic-pudding mentality of the Keynesian inflationists, and hence gives rise to the topic.

However Mises has exploded the economic theories on which the entire intellectual foundation of the welfare state rests, in “Economic Calculation in the Socialist Commonwealth” 1921: http://mises.org/econcalc.asp . This shows that public ownership of the means of production is incapable of economic calculation, in other words government is incapable of rationalizing scarce resources to their most highly valued uses, as it would need to be able to do for its economic interventions to be justified.

The social democrats and statists have not been able to advance one word of refutation against the devastation that Mises has wrought.

That being so, Chris Lewis’s assertion of a supposed need of a “balance” between governmental and private services is *completely and totally refuted* because it shows that government does not have the capacity to do what it would need to do, in order to be able to do what its adherents claim it should, or rather *assume* that it can do. Chris shows the standard leftist response of just ignoring the entire intellectual field and carrying on as if nothing relevant has happened.

I anticipate either no response, or the usual slogans and assuming what is in issue.

But if Chris, or any welfare statist, is able to:
- correctly represent the argument from economic calculation;
- show why it does not prove that the state functions advocates are incapable of allocating scarce resources to their most valued ends, all things considered;
then I will happily buy him a schooner of the finest beer, and perhaps fifteen.

But if not, then it is not the advocates of freedom who are fundamentalists, but those who erroneously advocate systematic aggression and planned chaos as the basis of a fair and prosperous society.

Peter,

I am currently writing a response to the various comments made about my article.

I don't see myself as a typical leftist statist, although I do note the importance of govt. I do not claim to have 'the' answers, but my faith is with liberal democracy to hopefully find an effective balance between national and international considerations. I observe politics from an understanding that we need a variety of political parties, with the public feeding off the strengths and weaknesses of both centre-left and centre-right parties, and others such as Greens or whovever.

I will see how I go with my next article which will explain my thoughts and understanding of politics, and then look forward to further comments from yourself and others.

"... although I do note the importance of govt."

Well that's assuming what's in issue, isn't it?

Peter,

Yes, I will stick to some of the basic tenants I believe are important to explaining policy trends, including the importance of govt, and you can stick to whatever you think is best.

Like I said previously, I will offer a response. If it agrees or disagrees with you, no sleep will be lost on my part, although I do respect your opinion.

Also, I am still waiting for you to offer an example of works without some govt intervention.

If you can find some, I may be able to respond to you.

Contra Peter Hume, what I believe in is a full participatory democracy whose constituents are motivated by ethical and civic principles, rather than by competitive self-interest. Our present representative democracy is a sham, a system of buck-passing wherein responsibility ultimately devolves to an anonymous and irresponsible mass. The affairs of government should rank as highly in importance to each one of us as should our own conduct. But we live in a system where "responsibility", private and public, for the choices we make, is not considered. Everything we do--no matter how harmful we may know it to be, as it ramifies in the world, or to ourselves, or however it offends against reason, or against that inner-voice that still troubles some of us in our excess--every indulgence is absolved by the market. Thus we will buy the house of a neighbour for half the value of her mortgage should she default. This is no occasion for sentiment, but an opportunity to gloat at the bargain. And our government conducts its affairs just as ruthlessly in the world on our behalf; indeed it must, as must we privately, according to the vicious global reality we've created and the dictates of the economic fundamentalism PH puts his Mephistophelian stamp on.
To do what, I wonder? Will it all settle down into the kind of harmony Adam Smith dreamed of? As an Enlightenment philosopher, Smith would be the first to condemn the mature monster he galvanised. Left to Ph and his maniacal petty deity, the miser Mises, humanity would remain in a state of primodial viciousness, an economic survival of the fittest. The free market would indeed resolve every issue in the end, including the problem of a profligate and unsustainable human race.
But I don't think it will come to that. People are already waking up and realising we have to take responsibility for our actions, personally, locally and globally, no matter what the degree of fiscal separation.
We have to take back our right of conscience and hold the government accountable as our representation in the world.

Peter,

Given that you argued cogently the case for the theory, I wonder if you can equally make the case for 'liberatrianism' as part of the 'big state' in actuality. Especially so since the 'big state' as you define it will NOT disappear in your lifetime.

What has the austrian school got to say about the correct economic policies in a 'big' state suffering from both State and Free market excesses.

In particular, given the fact of the 'big' state, I would be interested to hear how the "free market" was not working as advertised, when the unsupervised derivatives market led to the US banks getting 700 billion dollars in handouts? Contrast this with the experience of Australia's big banks during the GFC.

Squeers
I agree about the dissatisfactory state of government as is.

“The market” merely means consensual exchanges. It doesn’t absolve you from unreasonable, anti-social or unconscionable behaviour, and even if it did, how is substituting majoritarian monopoly legalized force or fraud – the only difference that democratic government can contribute - going to be any improvement on the original problem?

You deride theory you obviously haven’t read and don’t understand, on the basis of ideas from Keynesian and Marxian theory that you also haven’t read and cannot defend.

PaulL
I’m not making a case for libertarianism as part of the big state.

What the Austrian school has to say about correct economic policies, is that government’s economic interventions necessarily produce results that are worse from the standpoint of their own advocates.

You don’t identify what free market excesses you are referring to, but people often blame markets for problems originating in interventionism. For example the market didn’t give the banks a $700 billion handout with money taken unfairly from everyone else – the government did! Bailouts, stimulus packages, ‘too big to fail’ doctrines, illegalizing competition, privatizing profits and socializing losses, corporate welfare, and the cycle of boom and bust itself – these are the works of government, not the unhampered market, that’s the whole point.

The state claims the knowledge, capacity and disinterestedness to manage the economy by manipulating the money supply for the common good. The Austrians deny it can, and say these policies create a net total loss, not a net total gain for society; all they do is a mere taking from the majority of property-owners and giving to a minority of political favourites by inflation which causes the whole cycle of boom and bust with all its injustice and destruction. Then when the claims of the statists prove wrong, do they accept responsibility? No, they blame the free market which their entire function is to override and derange. Either way their theory is disproved.

By definition, a *derivative* is the wrong place to look for the *origin* of something. The function of derivative contracts is to hedge risk in the underlying contracts. The greater the risk in the underlying bubble, the greater will be the bubble in derivatives.

The *underlying* bubble is caused by increasing the supply of money and credit, which are controlled by monetary policy, in other words by government. This is because the recipients of the newly printed money (the unfair beneficiaries of monetary policy) are able to bid up prices in the receiving sector (e.g. housing). This attracts capital away from productive employments, to speculations based on rising prices. Since only paper money has been increased, not real capital, there is not enough real capital to complete all projects started. Eventually the boom must collapse. The bust washes out - liquidates - the systemic malinvestments caused by governments clever little trick of playing Santa Claus by inflating the money supply. The economic, social and moral havoc wreaked on society as a whole is devastating and for what benefit? Politicians get to extend their terms for a few years, and their pet favourites get their snout in the trough at everyone else’s expense.

The market price of anything tends to clear the market, i.e. to equilibrate supply and demand *at that price*. When the market price is forced to some other level than it would be on an unhampered market, we get surpluses and shortages in all the wrong places, of which the derivates bubble – and indeed the GFC – are classic examples. The *derivatives* bubble doesn’t just arise spontaneously out of unregulated markets. It is caused by manipulation of the money supply.

In a free market situation, what would happen is:
- price in any transaction determined by agreement of parties, not by decree
- fraud is illegal – no other regulation needed
- competition in supplying money – no government monopoly, no fiat currency
- no privatizing of profits and socializing of losses
- people free to choose what money they prefer; most probably based in precious metals

- freedom to deposit on terms of 100% backing in money, or on any other fraction (e.g. 95%, 70%, etc.)
- so the risk-averse could deposit their savings with 100% backing, no risk and no interest
- others could deposit, to be lent out for investment, at a higher or lower fraction of money backing in reserve as they choose, according to risk/return ratio
- regulation of fractional reserve is by profit and loss; not by commisariat robbing one group and favouring another
- banks that keep too low a reserve go broke if there’s a run on the bank. Since their depositors undertook the risk, for the prospect of higher returns, there would be no justifications for bailouts, unlike now where, being exposed to FRB involuntarily by government, they scream for government to protect them from loss, thus spreading moral hazard throughout the entire financial sector
- no-one could force anyone else to accept fractional reserve banking, as the government now does to the whole population.
- no great derivatives bubbles because no great underlying bubbles
- instead of vast amounts of capital being perpetually wasted in the roller-coaster cycle of boom and bust, capital would gradually accumulate at a compounding rate
- investment would be attracted into productive activity based on satisfying the public’s wants as judged by the public, not into politically-driven inflation-drawn bubbles.
- therefore productivity and living standards would gradually rise at a compounding rate
- money now spent on the arts of war would be spent on the arts of peace
- prices would show a gradual fall – your money would be worth more all the time, not less as it is now
- work, savings, enterprise, prudence would be rewarded
- unlike the compulsory fiat money and compulsory fractional reserve regime, which rewards speculation, debt, instant grat, parasitism, and jiggery-pokery.

Governmental “economic management” and control of the money supply are based on statist fairy tales, are unjust and destructive, and should be abolished.

PH:
<“The market” merely means consensual exchanges. It doesn’t absolve you from unreasonable, anti-social or unconscionable behaviour, and even if it did, how is substituting majoritarian monopoly legalized force or fraud – the only difference that democratic government can contribute - going to be any improvement on the original problem?

You deride theory you obviously haven’t read and don’t understand, on the basis of ideas from Keynesian and Marxian theory that you also haven’t read and cannot defend.>

Peter Hume,
Like nearly everyone, including you, I've mostly read "of" these theories and theorists, though I've gone rather deeply into Marx, and others you don't mention.
Despite their voluminousness (economists generally), their innovative thinking is modest and not that difficult to grasp, and only a pedant would dote on their every word (where are the female economists I wonder, btw?). Certainly I'm confident I'm better read and have a superior (more balanced) grasp than you do. But let's not compare penises.
<“The market” merely means consensual exchanges>
I would like to accuse you of naivety, but you are certainly not callow!
The market, as I suggested is, in your scheme of things the ultimate arbiter and overrules the whole spectrum of ethics, reducing it in fact to so much irrationality. Otherwise how is it that we exploit child labour, or import diminishing stands of Indonesian Mahogany, crudely wrought into furniture? Examples are too numerous to mention!
Exchanges are hardly consensual when the exploited party has no choice. Of course, those who sell their labour, their bodies, resources, culture, or whatever it is they have to sell, are always free to starve in the streets!
Sadly, I don't have the time to match your verbiage.

Squeers
Do you notice how, if we take away your personal remarks and assuming what is in issue, there’s nothing left?

All
No-one has given any reason to think that governmental interventions
a) can, or
b) do
make society more rather than less fair and affluent, as against the many reasons showing that it can't and doesn't.

Peter,
I responded to "your" personal remarks. You addressed nothing of substance to me, did you?
But yes, I agree and shall endeavour to be civil.

I've been dipping into Eric Hobsbawm's "Age of Extremes" today. He argues that "the Great Slump destroyed economic liberalism (lovely euphemism) for half a century".
Indeed the Great Depression is what sparked both the Left and Right wing radicalism of the 1930's, the left premised on socialism and the right on fascism. In economic terms fascism was predicated on protectionism, in social terms on nationalism. That is why I defend laissez faire (on OLO) "on principle", because its obverse degenerates into xenophobic extremism. The working classes are wont to dip into either camp, thus in Australia today there is a resurgent right-unionism cum nationalism fuelled by hatred of anything foreign.
But back to the free market; it was the driving force behind both fascism and Keynesianism, and it is doubtful that a free market is politically sustainable. But apart from the political upheaval it drives, have you considered that laissez faire also failed because the consumer base, being constantly pared away, was antithetical to growth, which is fundamental to capitalism? Full employment (and concomitant demand for goods), guaranteed by social welfare is what drove the postwar economic boom, by creating "consumerism". I do not use the term merely as an epithet, as you imply.
Laissez faire is politically and economically unsustainable without force [to say nothing of the ethics of economic survivalism], people resent starving to death. In any case, force is itself inefficient and a drain on profits (bear in mind too that evolution as dynamic, whatever the form, is a shockingly crude, inefficient and indifferent mechanism). On the other hand, social welfare is also no longer viable. And the new addition to the mix is resource-depletion/environmentalism.
Capitalism is facing the perfect storm.
Economic liberalism might work in the lab, but not in the real world.

I should have made clear that the religion of free marketism reigned supreme from the 1840's until the depression (at enormous human cost).
It's been the sporadic agenda of purists ever since.
I'm all for it.

I can certainly agree that it is time in memorial that any Government of any type can or will, let alone do anything that has not jeopardised and destroyed the public and society . That’s what predatory parasites do.

Paul and Squeers , you are mistaken in your historical definitions of actual events and its chronology .

But Here is a Book in Audio file format ; titled Chaos Theory; Easy listening and Narrated by Jock Coats from Oxford . That will give you in General terms examples of what Peter has mentioned. And more Advanced theories.

And before you jump to the conditioned conclusion of the actual content of the file , maintain Objectivity to Ideas before you launch into criticisms of them.
It is a fun and newly conceptual Thinking , Juxtaposed to the Status Quo ( Not the Rock Band ether )

ummmm, ok ; This will help ;
http://mises.org/media.aspx?action=category&ID=215

Squeers

“I responded to "your" personal remarks. You addressed nothing of substance to me, did you?”

I was only saying what you yourself had told me in an earlier post – that you hadn’t read Marx, although obviously channelling his and Keynesian theory. And it is obvious that you haven’t read and don’t understand Austrian theory. These are not insults, just factual observations.

And I did address substance to you. I showed reason why government’s attempts at manipulating the economy cannot and do not make society fairer or more affluent. They produce results that the interventionists themselves don’t want; only they blame them on the market as you do in the following paragraph, based on the same factually false premises.

‘Free market’ means only that the price in a transaction is determined by the agreement of the parties.

You do know, don’t you, that the Federal Reserve has existed since 1913, and its entire mission and function is to manipulate the supply and price of money? The libertarian critique of this, is that inflating the money supply falsifies price signals and therefore the market’s steering mechanism. It draws capital away from productive activities, as determined by the masses, and causes malinvestment in bubbles on the basis of rising prices. As a result, the capital structure is unsustainably distorted. When the artificial boom inevitably collapses, we get the bust, with massive social dislocation and injustice.

This is not the result of a “free market”, since the supply and price of money were controlled by government. I have shown above why this problem would and could not happen on a free market – because capitalism is a system of profit *and loss*.

Only government is able to legalise counterfeiting and fraud, and socialize losses. The GFC proves Keynesian theory wrong, and Austrian theory right. Government attempts at economic management just produced their predicted results, that’s all.

So it is not the free market that produced fascism and Keynesianism. As with communism and socialism, they're all produced by a belief in government economic management.

In theory, people could own private property and consume all they produce – no growth. Therefore it is not true that growth is fundamental to capitalism. Rather, growth is fundamental to *life*, *reproduction* and to *man’s endless desire to satisfy his wants*. Capitalism merely serves man's want to satisfy these drives of life, more than any other system.

Everything else you have laid against capitalism is Keynesian or Marxian. You depend on the assumption that unrestrained capitalism produced the Great Depression. As I have shown, this is factually false.

Thus you haven’t begun to join issue with the Austrian critique. You haven’t accounted for:
• the role of government in inflating the money supply
• how that, or its predicted economic consequences, can be attributed to a ‘free market’.

You haven’t shown why we should conclude that freedom, rather than ham-fisted interventionism, is unsustainable and anti-social.

Your allegation that capitalism is "force"-based is completely unsubstantiated.

And the idea that without government economic intervention, people would starve, is simply nonsense. The living standards of the masses have never been higher than under capitalism – and not because of inflation or the dole! The great famines were always caused not by nature but by government.

The difference between your approach and mine is, I actively seek out refutations. You actively ignore them.

If you can refute Austrian theory, by all means let’s hear it. But all you’ve given so far doesn’t even understand what the issues are.

And quite apart from all that, even if all the evils you allege against private ownership and individual freedom were conceded, which they’re not, you still haven’t begun to give any reason to think that government can do any better, all things considered.

Since all government revenue is confiscated from prior private production, it is mere backbiting to allege a “religious” belief in the efficacy of private production; on which all the parasitic and irrational dreams of the interventionists depend.

To identify "affluence" with inflation, and "fairness" with the dole, is all the interventionists' arguments amount to.

Peter,

You rave on with such certainty. Everyone else is a fool, and your beloved Austrian school is full of answers.

Well, I think the Austrian school is just another concept reflecting a certain bias.

At least Wolfgang Kasper, defending the Austrian school, praises the 'can do' mentality of China as an example upholding Schumpeter; you just tell everyone how poor we are with our responses although we are all waiting for policy examples from you.

To you, we are all marxist or keynesisans. What an insult your beloved Austrian school offers to the efforts from both sides of politics over many years to try and get the balance right in terms of upholding national and international considerations.

I mean do you run your own life perfectly with no hiccups?, but you suspect Western leadership to easily accommodate democratic demands and international considerations easily.

And remember this. The Austrian school has been around for decades, but I don't know of any Western society that has ever considered living by its rules. Even the US has continued to expand social welfare in recent decades.

Yes, we need to change our ways, but I suspect it will not be in accordance to the ideas of the Austrian school, as put forward by neo-Austrians like Peter Schiff.

It will be pragmatic politics as usual, at best, rather than a commitment to another imperfect concept, as offered by the Austrian school.

PH:
<I was only saying what you yourself had told me in an earlier post – that you hadn’t read Marx, although obviously channelling his and Keynesian theory>
I’ve read Marx “deeply” I said; who, btw, could have known nothing about Keynes. Had Keynes even been born, his compromise policies would not have satisfied Marx.

I have not argued in favour of protectionism, but that it like laissez faire is unsustainable. Capitalism is unsustainable. That is my point. I think outside the paradigm you put absolute faith in.

<You do know, don’t you, that the Federal Reserve has existed since 1913>?

When I mentioned the 90 year reign of free trade, I was referring primarily to Britain (not the US) which only halted its liberal policies in 1931, mainly because of political unrest, but also because Keynsian policies promised capitalism a life-extension. The US, btw, passed its social security act in 1935 (right after the slump!), mainly as a bulwark against social/political unrest. Thus began the welfare revolution and human husbandry.
The free market most certainly precipitated fascism, socialism and Keynsianism.

PH:
<In theory, people could own private property and consume all they produce – no growth. Therefore it is not true that growth is fundamental to capitalism. Rather, growth is fundamental to *life*, *reproduction* and to *man’s endless desire to satisfy his wants*. Capitalism merely serves man's want to satisfy these drives of life, more than any other system.>

Pure sophistry!
Capitalism is based on endless growth and not on man's endless appetite! How is that the great religions are based more on renunciation and asceticism?
<You depend on the assumption that unrestrained capitalism produced the Great Depression. As I have shown, this is factually false>
I've made no such claim. "Capitalism" is productive of all recessions, I made no distinction as to modalities.
Economic fundamentalism is politically/socially unsustainable and economically reprehensible. It certainly isn't productive of "freedom", but entrapment! Your kind of "freedom" is what continues to keep the US (deep south) backwards. But it's frontier freedom (the freedom to refuse healthcare) is both vicious and delusionary. While their pride might be respected, would they be free in any qualitative sense? And who would want to live in the wild that they cherish? Hobbes and Locke’s state of brutish nature!

<Your allegation that capitalism is "force"-based is completely unsubstantiated>
Not what I said, but does anyone have a choice? Is there a landmass available to me gratis where I can set-up my utopia?

I am not defending protectionism, it was a band-aid measure that is coming off. But the free-market is also unsustainable--politically, socially, ethically, environmentally and economically.

Even were it tenable, how do you stop the natural tendency to monopolies that even Smith foresaw?

Both of your arguments consist only of
a) personal argument, and
b) assuming what is in issue,
as I have pointed out before.

For example I have shown why capitalism does not necessarily involve growth. Squeers replies that that is "pure sophistry". But he doesn't say *why*, what reason? He just reverts to ing his original bald assertion, which I have just disproved, without offering any proof, reason or explanation.

It's like being an evolutionist arguing with a creationist.

To be rational, you need to say:
a) *why* any other system will not be faced with exactly the same problems of growth arising from human life, reproduction and want-satisfaction, and
b) if it doesn't provide for them, *how* are you to decide which human wants must go unsatisfied, and why, and how you're going to stop them?

Similarly, I have shown why government's economic interventions cannot and do not make society fairer or more affluent, and why they actively make matters worse. Neither Chris or Squeers have said a word to refute this. All we get is wild hyperbole from Squeers about starvation that rests on assumptions that are not factually correct, and assertions from Keynesianism that he makes no attempt to prove.

Chris has not been able to prove his argument or refute mine, or even demonstrate that he understands the issues. All he has done is shoot the messenger - treat all issues as personal to me!

Thus your arguments do not even reach the threshold of being logically valid. The problem is not that reasonable people can differ in their opinions of the same thing. It is not that you guys have a valid alternative theory of the politics, economics, or ethics. It's that you argumentation is at the level of schoolyard taunts and magic pudding fables, and you need to prior basic learning in logical thought that is so far lacking.

Peter, you state

"Similarly, I have shown why government's economic interventions cannot and do not make society fairer or more affluent, and why they actively make matters worse".

Please remind me, I have not noticed anything of substance yet that I can respond to.

Again, I ask you to give me an example from history.

Peter,

forget history. Just give me an explanation about how the Austrian school can work in today's situation.

Believe me, I am open to any good ideas.

PH,
you're tone and "argument" are no less personally inflected than mine. I merely reciprocate.
And how have you "shown why capitalism does not necessarily involve growth"? All you've offered is a "theoretical" model that doesn't bear scrutiny.
The fact is we have experienced exponential growth since the industrial revolution and all empirical evidence (and numerous theorists) attests that capitalist economies grow or contract. Contractions are know as "depressions" and "crises", both "great" and garden varieties.
Can you point out one capitalist country predicated on or aiming for zero economic growth, let alone negative growth, despite the manifest limits to growth? Growth is the absolute prerequisite of profit and prosperity in the current paradigm (a fool's paradise).
Granted there are any number of theories of capitalism without growth, but there are no working models and no one is serious about trying it.
Indeed I have no doubt that you yourself see growth as an unalloyed good, despite the physical limits to growth. You pontificate for the sake of argument and in a desperate attempt to validate the world view your credibility is invested in.
This admittedly cuts both ways, but the weight of evidence is against you: AGW, GFC. BTW, you do concede that a free market means the transposition of power and wealth from West to East, or else a corporate no-man's land?
The reason another system, based on genuine "economy", would not realise "exactly the same problems of growth" (which you acknowledge after all?) is first that it would not have to realise a "profit" above and beyond subsistence, and second, hopefully, that it would be based on sufficiency, restraint and husbandry rather than profligacy.
Keep your Austrian School in the rumpus room with your train sets.

Okay, thank you.

Before I discuss the Austrian solution, we need to clear the ground as to the problem.

The Keynesians believe that
a) economic depressions arise spontaneously out of unregulated capitalism, and
b) by printing money, governments can make society as a whole wealthier.

The Austrians argue that
a) economic depressions arise from inflating the supply of money which sends false price signals setting off an artificial boom followed by an inevitable depression or recession, and
b) printing money make society as a whole poorer not richer. It is an act of wealth redistribution, not wealth creation.
c) There is nothing about the wealth redistribution that is fair. It takes money from the masses, especially the poor, the working class, the aged, people who save money and the young. It transfers it to billionaire bankers and whoever else government decides to favour, for example, major corporations, foreign dictatorships, and real estate developers.

The Austrian solution would work by abolishing government’s control of the money supply.

The result would be to end the cycle of speculative booms and depressing divisive busts. The economy would be more stable and fairer. Investment would be rewarded by productive activity rather than mere rising prices. No more bailouts for billionaires, no more handouts for big corporations, no more sneak tax on the poor and workers to pay for the financially sophisticated.

The result of the abolition would be money keeping its value, gradually compounding capital accumulation, therefore gradually compounding productivity, therefore gradually compounding living standards; and gradually falling prices. Everyone including the financially unsophisticated could provide for their retirement by *saving*. They can’t do that now because it gets inflated away. It would be easier for the young and poor to enter the housing market, because prices wouldn't be constantly rising.

How’s that for a start?

Squeers

You're just assuming what's in issue - again!

For example, define 'genuine economy', (other than by reference to 'hope'). What's that supposed to mean?

Capitalism means the private ownership of the means of production (Marx's definition). I live on a farm, and each year it produces product, and some of that we consume, and some of it we plough back in. Same with virtually all businesses, savings, investment. We consume less than we produce.

Now the point is, for many hundreds of thousands of years, people didn't do that. They consumed everything they produced, just like the Aborigines did, with very little surplus being saved for producing capital goods.

But we don't have to consume less than we produce. We can consume everything we produce. And many people do that.

But of course if we *all* did it, the rate of capital accumulation would go down. And therefore so would the benefit of capital accumulation, which is greater productivity.

So just as in history, the process of capital accumulation has gone: digging stick, shovel, bulldozer, the process of consuming all we produce would send the process into reverse. As you indicate, life would be lived at "subsistence". There would be no "profligacy" like blogging on the internet by electric light.

Your collectivist, aggregate thinking is clouding your understanding. The reason "capitalism" doesn't stop growing is because "people don't want to do it!*.

*You* don't want to live at subsistence level - why should anyone else?

Similarly, profit just requires that the price of the final product be more than the price of the factors of production. It does *not* necessarily require growth. People *can and do* still make a profit in a contracting economy.

Therefore you are wrong in saying that capitalism requires growth - rather, human nature desires economic growth.

Your economic understanding is just a garbled mishmash of Marxist slogans and Keynesian fables which you make no attempt to define or prove, and when you do, you go down in a screaming heap of embarassing ignorance.

You still haven't proved governement interventions make society fair or affluent.

PH:
<The Keynesians believe that
a) economic depressions arise spontaneously out of unregulated capitalism, and
b) by printing money, governments can make society as a whole wealthier>

This is nonsense.

I realise you are not addressing moi, PH, but as I've tried to point out above, Keynesianism was more a solution to "political" rather than economic instability, though there is no doubt it breathed life into the terminal liberalism that preceded 2 world wars and the great depression.
The political damage though was far more telling, driving Fascist nationalism, the logical extreme of protectionism, almost global after the Depression (but particularly in Germany thanks to impossible "reparation" debts imposed by the victors). Indeed, as Hobsbawm says,
"it may be worth reminding ourselves that in this period the threat to liberal institutions came "exclusively" from the political right, for between 1945 and 1989 it was assumed, almost as a matter of course, that it came essentially from communism" (my emphasis).
So as a rider to all the red necks out there drunk on moonshine, you were duped for half a century. The real threat to freedom came from the great democracies!
There's a real chance that history is about to repeat itself.

Peter,

You will find that my response, should it be published, is sympathetic to a lot the Austrian school says. After all, logical points are just that. I do believe that the reliance on such high levels of debt, especially by the US, is a mistake. I have sort of indicated this in previous articles.

However, as squeers suggests, political aspects are always just as important as economic. I suppose that is what I focus on more; i am more interested in policy possibilities and limitations to shape my writing.

For the second reason, focusing on political aspects, you will probably disagree with my reponse when it comes.

But I am making considerable effort to address the points made by fans of the Austrian school, notably Wolfgang Kasper.

The following is faithfully taken from Hobsbawm’s “Age of Extremes”:

"Post-war capitalism was unquestionably … a system reformed out of all recognition or, … a ‘new’ version of the old system. What happened was far more than a return of the system from some avoidable interwar ‘errors’ to its ‘normal’ record of ‘both . . . maintaining a high level of employment and . . . enjoying some non-negligible rate of economic growth. Essentially it was a sort of marriage between economic liberalism and social democracy, with substantial borrowings from the USSR, which had pioneered the idea of economic planning. That is why the reaction against it by the THEOLOGICAL FREE-MARKETEERS was to be so impassioned in the 1970’s and 1980’s, when the policies based on this marriage were no longer protected by economic success. Men like the Austrian economist Friedrich von Hayek had never been pragmatists, ready (if reluctant) to be persuaded that economic activities which interfered with laissez-faire worked; though of course they denied, with subtle arguments, that they could work. They were believers in the equation “Free Market = Freedom of the Individual” and consequently condemned any departure from it. … They had stood by the purity of the market in the Great Slump. They continued to condemn the policies which made the Golden Age golden, as the world grew richer and capitalism (plus political liberalism) flourished again on the basis of mixing markets and governments. But between the 1940s and the 1970s nobody listened to such Old Believers.
Nor could we doubt that capitalism was deliberately reformed, largely by the the men who were in a position to do so in the USA and Britain, during the last war years. It is a mistake to suppose that people never learn from history. The inter-war experience, and especially the Great Slump, had been so catastrophic that nobody could possibly dream, as plenty of men in public life had done after the First World War, of returning as soon as possible to the time before the air-raid sirens had begun to sound".

continued when permitted..

..cont. (thought I'd have to wait):

"All the men (women were hardy yet accepted into the first division of public life) who sketched out what they hoped would be the post-war principles of the world economy and the future of the global economic order, had lived through the Great Slump. Some, like Keynes, had been in public life since before 1914. And if the economic memory of the 1930’s was not enough to sharpen their appetite for reforming capitalism, the fatal political risks of not doing so were patent to all who had fought Hitler’s Germany, the child of the Great Slump, and were confronted with the prospect of communism and Soviet power advancing westwards across the ruins of capitalist economies that did not work.
Four things seemed clear to these decision-makers. The inter-war catastrophe, which must on no account be allowed to return, had been due largely to the breakdown of the global trading and financial system and the consequent fragmentation of the world into would-be autarchic national economies or empires. The global system had once been stabalised by the hegemony, or at least the centrality of the British economy and its currency, the pound sterling. Between the wars Britain and sterling were no longer strong enough to carry this load, which could now only be taken over by the USA and the dollar. Third, THE GREAT SLUMP HAD BEEN DUE TO THE FAILURE OF THE UNRESTRICTED FREE MARKET. Henceforth the market would have to be supplemented by, or to work within the framework of, public planning and economic management. Finally, for SOCIAL AND POLITICAL REASONS, MASS UNEMPLOYMENT MUST NOT BE ALLOWED TO RETURN" (my emphasis).

Sorry, Chris, that I haven't engaged more with your position.
As I've stated, I contend that even our reformed capitalism is unsustainable as well as being predicated on general exploitation

squeers, you could be right, but I try to remain an optimist as best as I can.

Chris
I agree that what is politically possible defines the pragmatic and to me that depends on public opinion. On the other hand, it is also a mistake to think that the truth is whatever the majority believe. If they think rain dances or communism make society fairer and richer, it is not more pragmatic to humour them, but to explain the truth.

Squeers
You declare that my representation of Keynesianism is “nonsense”, and then show that *you yourself and Hobsbawm whom you cite to disprove me*, agree with what I said!

a) “economic depressions arise spontaneously out of unregulated capitalism”

“They had stood by the purity of the market in the Great Slump”

“The inter-war experience, and especially the Great Slump, had been so catastrophic that nobody could possibly dream, as plenty of men in public life had done after the First World War, of returning [to unregulated capitalism]

"And if the economic memory of the 1930’s was not enough to sharpen their appetite for reforming capitalism"

These quotes show that Hobsbawm and you share the Keynesian belief that the Great Depression was caused by capitalism – rather than by government inflating the money supply.

Prove it.

b) “by printing money, governments can make society as a whole “wealthier>

“They continued to condemn the policies which made the Golden Age golden”

(ie Hobsbawm believes government interventionist *policies* – including monetary policy - made the Golden Age golden, i.e. he believes printing money can make society as a whole wealthier)

Third, THE GREAT SLUMP HAD BEEN DUE TO THE FAILURE OF THE UNRESTRICTED FREE MARKET. For SOCIAL AND POLITICAL REASONS, MASS UNEMPLOYMENT MUST NOT BE ALLOWED TO RETURN

[ie Hobsbawm and you believe that capitalism caused the great depression and mass unemployment, and that government policies – by preventing depression – make society as a whole richer].

Thus you
1. have swallowed the Keynesian beliefs whole
2. have the gall to accuse me of “nonsense” when I correctly represent Keynes *and your* beliefs
3. quote your own disproof of your own argument under the confused impression you are disproving mine!

All you’ve done is assume - without proving it - that the Great Depression was caused by unregulated capitalism rather than by government inflating the money supply.

Prove it.

This means you’re going to have to prove that government was *not* controlling the money supply and lowering interest rates leading into, and during the Great Depression.

Go ahead, I’m looking forward to this.

“…capitalism is … predicated on … exploitation”

Prove it.

And please make sure you don’t make the elementary mistake of logic – which you have made in every post so far – of assuming in your premises what is to be proved in your conclusion. If you do, you must buy me a year’s supply of beer.

Also, I’m – fairly - using the term capitalism as Marx defined it, to mean ‘the private ownership of the means of production’. Thus I take, and disprove, my opposition on their own ground.

You and Hobsbawm use the term capitalism – unfairly – to mean anything you don’t like, disregarding or confusing the critical distinction between the means of production that are privately owned or controlled, and those that are publicly owned or controlled.

It is unfair because
a) in failing to make the distinction, you accuse capitalism of faults that derive from government, not private ownership of the means of production; and
b) you even blame capitalism for interventionist policies explicitly intended to override it
c) thus you misrepresent your opposition’s case, and
d) use a double standard to count the resulting confusion in your own favour, whereas it should count against.

Also by this means, your argument is unfalsifiable, thus again failing to meet the basic requirements of logical thought. You need to show the conditions in which your claims could be proved false, as I can and do.

PH,
Anybody who reads what I’ve written or quoted closely, and then reads your representation, would raise their eyebrows, even laugh out loud.
None of the simplistic logic you ascribe to me (or Hobsbawm) is valid, though granted, it is amusing.
<Hobsbawm and you believe that capitalism caused the great depression and mass unemployment, and that government policies – by preventing depression – make society as a whole richer>
I made no such dogmatic assertion (Hobsbawm, btw, says “unregulated” capitalism caused the Great Depression) . I am a sceptic in all things. Have I not merely deferred to Hobsbawm (a renowned historian) on this contentious issue, as nothing I say impresses you? Indeed, even he does not deal in absolutes; towards the end of his long book (one of a trilogy) he says:
“The battle between Keynesians and neo-liberals was neither a purely technical confrontation between professional economists, nor a search for ways of dealing with novel and troubling economic problems. It was a war of incompatible ideologies. Yet economics in both cases rationalized an ideological commitment, an a priori view of human society [what you call “assuming in your premises what is to be proved in your conclusion”]. Neo-liberals distrusted and disliked social-democratic Sweden, a spectacular economic success story of the twentieth century … because it was based on ‘the famed Swedish economic model with its collectivist values of equality and solidarity’. Conversely Mrs Thatcher’s government in Britain was unpopular on the Left, even during its years of economic success, because it was based on a-social, indeed anti-social egoism”.
Admirably even-handed don’t you think?
In my view capitalism (left and right) has demeaned and is demeaning human potential. I believe we are capable of great humanity.
But that is academic, as in our current mercenary state of development we are rapidly proving to be the means of our own destruction--so we’ll probably never know.
Such talk is bound to turn the stomach of any self-respecting (actually self-loathing) neo-liberal, so I’ll leave it at that, satisfied in the knowledge that I’ve said nothing that will give you a moment’s pause.

>>Hobsbawm and you believe that capitalism caused the great depression and mass unemployment, and that government policies – by preventing depression – make society as a whole richer>

>“I made no such dogmatic assertion”

Yes you did. You said

"Capitalism" is productive of all recessions…”
and
“…but the weight of evidence is against you: AGW, GFC...”

You have explicitly attributed the Great Depression and the GFC to capitalism so don’t try and squirm out of it.

“Hobsbawm, btw, says “unregulated” capitalism caused the Great Depression."

Right. And Hobsbawn was WRONG because:
• the supply and price of money *was* regulated at all relevant times
• the price of money is the nerve centre of financial markets, and
• both the GD and the GFC originated in the financial markets, which *monetary policy* controlled.

“I am a sceptic in all things.”

No you’re not. You are inflexibly committed to the belief that capitalism causes economic recessions, despite the evidence showing it was government.

“Have I not merely deferred to Hobsbawm (a renowned historian) on this contentious issue…?”

Yes you have, which proves that you’re not a skeptic in all things. And as we have established that he was wrong, and you’re deferring to his authority, it follows that you’re wrong.

Far from being a skeptic, you have an unshakeable commitment to Keynesian and Marxian fallacies that are demonstrably wrong and that you are completely unable to defend.

You have been completely unable to refute, or even to accurately represent, the Austrian theory showing you and Hobsbawm are wrong;.

You have been completely unable to prove what you keep reasserting: that
1. capitalism caused the GD and GFC
2. that printing money makes society richer – else how did it supposedly remedy the depression?
3. that capitalism is exploitative.

Go ahead: prove it

Chris, may I suggest you try a new approach to the same issues. Ask how society could be made better by reducing government.

The problem with asking the question as an issue of policy is that it implies the solution is policy - more governmental controls.

There are two main problems with presuming pragmatism requires rejecting smaller government.

Firstly it means you would be at risk of prejudging all issues in favour of big, and bigger government, even if it is demonstrably worse, as with monetary policy.

Secondly the truth is not just a matter of opinion.

It is true that this fact raises vexed questions of epistemology - how we are to know that propositions of social science are true such as the ones agitated above.

But that still doesn't mean the truth is a matter of opinion, and it doesn't mean we can create benefits by passing laws, as the ‘policy’ approach wrongly assumes.

As obvious as these truths may sound, they are exactly what the intelligentsia deny en masse under the influence of Keynesian theory which teaches that we can reverse recessions - in other words become rich - by printing money; and of Marxian theory, which teaches there is no such thing as economic science - it is all ideology.

But when we chase all the rabbits down all the burrows, these two belief systems cannot be logically defending. They both end up with their protagonists either self-contradicting, or defending factually or logically false propositions, as Squeers has ended up.

Thus as complex as the socio-economic issues may be, nevertheless, there is still such a thing as truth, and logic still applies to human action, and can and does refute the claims of the interventionists.

This following radical claim at least deserves unbiased consideration, not to be flatly ignored. We don't have economic interventions because they make society fairer or richer, or because government is representative of the greater social good. We have them because once we have compulsory confiscation and arbitrary redistribution of property, we have an essentially predatory institution which it is difficult to stop from channelling funds to benefit those who control it and their favourites. They are able to profit at others’ expense while the whole system tends downhill both ethically and economically, making society less, not more fair and affluent.

The question we should ask is, how could we make society fairer and more affluent by reducing government by ten or twenty percent? There are lots of ways, there are probably many constructive suggestions people would make, and considering the many social and economic problems actively exacerbated by government, this would be a more fruitful discussion than figuring out how to expand or add to existing bureaucracies.

Peter,

I am surprised you have not picked my theme over time that argues that western government will have to get smaller, at least in the social welfare sector, and how this may help battlers if a number of policy domains are linked.

I have suggested this because Western societies have budgetary difficulties and need to become more competitive.

My only plea is that social welfare remains targeted to the most needy and so on as we make the necessary reform.

It is just that the detail of solutions is hard to offer. Henc,e that is why you do not hear many real solutions capable of winning across the board political support.

Nevertheless, at this atage of my learning in my life, I still think there will have to be some careful balance between govt intervention and market forces given the pragmatic nature of western politics.

What would satisfy you that these interventions cannot achieve their intended purpose, of taking from those who have too much and giving to those have too little, but must necessarily cause socio-economic problems worse than those they were intended to solve?

Peter,

There are clear differences between national approaches. Take the social welfare responses of Aust v the US. One is clearly superior to the other for a variety of reasons.

Also, the US is more market-oriented than the US in many ways, although its govt debt is much greater.

I will always be for a decent social welfare system, although any system can be improved and tightened in the fairest way. The latter is none point I am hardly likely to back down on, at least until someone advises me of relevant evidence.

What evidence would satisfy you?

I think Squeers and Chris have had some Ideas slightly confused; simply applying the wrong label to the problem as they see it or perhaps mislead in the process of analytical facts.

The obvious State Capitalism Oligopolies and Monopolies Control can only exist if, and granted by The State, and Sanctioned by the State; the question that ought to be put is why? The answer is Obvious.

It is Far from the theory of private enterprise and free market capitalism; Monopoly control in a free market cannot exist, I thought that was obvious.

Take the Banking Industry for the best Monopoly control example , then Introduce Centralised Banking; it is the fabrication of alleged wealth by simply plucking it out of nowhere; so added to the counterfeit money and valueless paper or plastic of billions of dollars, this is another source they did not have to print anything other than a Cheque ; Then Loan it out at six times
; they create further valueless nothing out of nothing but equal billions in Phantom wealth. Just by plucking it out of the air and lending it out as capitol.

That sounds like an extensive Criminal Monopoly network to me, and that is Centralise GOVERNMENT all over the world.
And has been for many years.
Political Capitol is all that it is and Fascism - Socialism of the right.

Peter,

any evidence that demonstrates that a society is better off without some redistribution than with.

It could be indicators of wealth, education, crime rates, env damge, lifespan, health, whatever.

So in other words, from the fact that violent interventions exist, you conclude that they always increase the fairness and affluence of a society? If someone points out that they are not in fact fair but cause problems of social injustice that you yourself don't like, and that they do not in fact increase the affluence of a society but reduce it, you respond by reasoning that the fact that government exists, proves that its interventions increase the fairness and affluence of society.

Can you see that that is a completely circular belief? How is it falsifiable?

Peter, the implication of govt doing wrong is a bit simplistic given that the people give support for such policies election after election.

To a large degree, you are attacking democracy itself. It is simly not enough to attack the messenger.

AS I will demonstrate in my response, even the Howard govt had little interest in upholding the ideals of Hayek over pragmatic politics.

It is not that they are criminals, but that this is the way of the world and modern politics from a realist understanding. Most Aust's s and Westerners do believe in a certain way of life. Rent-seeking, or whatever you want to call it, is part of that trade-off in democratic politics.

That is why we have different political parties and interest groups who can expose strengths and weaknesses as best as a liberal democracy can.

There is no model for a perfect society in a world where we will continue to compete for resources and the influence of certain ideas.

Anyway, I will leave the rest to my coming response.

In other words, your belief is unfalsifiable.

The very fact that government exists proves to you irrebutably that its actions increase fairness and affluence. So I can point out cases where policies actually reduce fairness and affluence, and you can agree, but then you just recirculate back to your unfalsifiable belief that the government must be right.

If that were true, then your original question is not genuine, since *any* policy, being done by government, would automatically mean that society was made fairer and more affluent thereby.

It's circular. It’s completely illogical. And after this is pointed out to you, you still persist in it.

Your argument would only make sense if the prime value were democracy rather than fairness or affluence, and if the truth was whatever the majority said it was.

But this is nonsense. Reality exists, it imposes real limitations on human actions, we can’t increase crop fertility by sacrificing virgins, and we can’t increase fairness and prosperity by printing money, no matter how many people vote for it.

“AS I will demonstrate in my response, even the Howard govt had little interest in upholding the ideals of Hayek over pragmatic politics."

All that proves is that Howard also embraced policies that made society less fair and affluent, on the same rationale that the truth doesn’t matter so long as one can get one’s snout in the trough.

It is only intellectually honest to call something pragmatic if it is capable of acting as a means to the end it is intended to achieve.

“Fighting for peace is like f**cking for virginity.” It is either confused or intellectually dishonest to acknowledge that printing money does not in fact make society fairer or more affluent, and then claim that it is “pragmatic” to do it in order to make society fairer or more affluent.

“If we value the pursuit of knowledge, we must be free to follow wherever that search may lead us.”
Adlai Stevenson

Peter, You appear upset that I am not coming around to your view. Well, you have not convinced me, although you have sound points.

Also, you need to convince the vast majority why they are all wrong.
I don't think you have.

Yes, printing money is hardly a real solution, but what is your solution for Western societies. Is it communist China, as Wolfgang Kasper states.

f there is any change, it will be gradual in a pragmatic way.

"Also, you need to convince the vast majority why they are all wrong."

No I don't. They will continue to get the inevitable results of interventionist policies, whether or not they believe that they will get fairness and affluence from them.

And like you, seeing the inevitable corruption and social injustice that results from them, they will externalise the blame.

My solution for western societies is a lot more freedom, on the ground that:
1. it makes society both fairer and more affluent
2. the criticisms of personal and economic freedom cannot sustain critical analysis and derive, like yours and Squeers, from irrational beliefs
3. no-one has been able to show how the dole or inflation, or any other coerced interventions, make society fairer or more affluent.

The very fact that you know your beliefs are false, or at least cannot defend them from rational criticism, and persist in them anyway, just says all that needs to be said about the welfare/warfare state. Belef in the godlike magicality of the state is just a modern version of the old mediaeval belief in the divine provenance and supernatural mediation of the Catholic church.

Peter Hume is the one that is wrong. On an ideological bender that no amount of reasoning can dissuade.

As Hobsbawm says: "THE GREAT SLUMP HAD BEEN DUE TO THE FAILURE OF THE UNRESTRICTED FREE MARKET"
But PH doesn't let a little thing like facts get in the way!

Even were free market capitalism economically sound, and it has proven it is not, its policies amount to political and social anarchy.
That's why I'm in favour of it!
Social welfare on the other hand preserves the benighted masses in a consumerist dream that they actually take for reality---at least except in their quieter moments when they must fend off dark thoughts and panic attacks.
Capitalism of any stamp is irredeemable.

As Hobsbawm says: "THE GREAT SLUMP HAD BEEN DUE TO THE FAILURE OF THE UNRESTRICTED FREE MARKET"
But PH doesn't let a little thing like facts get in the way!

The fact that Hobsbawm says something doesn't make it a fact.

The central banks of all relevant countries at all relevant times controlled the price and supply of money, thus disproving Hobsbawm's claim that the great slump was due to the failure of the unrestricted free market.

I have already pointed this out and you, completely unable to advance one word in refutation of it, just go back to your old tired circular incantation.

You haven't been able to prove any of your claims, and seem to think that economic understanding progresses by quoting wrong historians.

You still haven't done anything to prove that capitalism is exploitative as you keep alleging.

The claim of "ideology" is a mere back-bite. Since you have shown only that your own intellectual consists of invincible cirularity, you apparently assume that everyone else proceeds by the same method.

The difference is, I can show how my arguments can be falsified, whereas you and Chris Lewis can't.

That's why you pop back up again re-running the same arguments that have just been disproved. You would rather cling to your opinion knowing it has been disproved, than re-think your original claims.

PH:
<The fact that Hobsbawm says something doesn't make it a fact>

Agreed.

It is a FACT, however, that the great slump followed decades of free market ideology put into practice.

You accuse me of being "unable" to refute your propositions, but the FACT is, I cannot spare the time, especially when I know it will be futile.
BTW, how can I "have an unshakeable commitment to Keynesian and Marxian fallacies"?

In fact, my real objection to capitalism is not to a system of economics per se, but to its human and material impacts. And that's another topic.

Chris,
I look forward to reading your next article.

Squeers,

I have struggled with these sort of issues (government intervention v market, national v international) for a long time.

I hope my next piece reflects this struggle and much of what I have learned, although it will be from my own liberal democratic perspective.

Chris, Peter and Squeers,

I came across this article (adapted from a lecture) by Tony Judt on social democracy - worth a read, I think.
http://www.nybooks.com/articles/archives/2009/dec/17/what-is-living-and-what-is-dead-in-social-democrac/

It's hard to go past Squeers' assertion that capitalism has flourished and only survives with the provision of adequate social welfare mechanisms

Many thanks, Poirot, for the link to that splendid essay. I have Judt's "Postwar" and am a big fan. It's hard to argue with his moderate stance and I agree that perfection and utopias are unattainable. There are other problematic implications that Judt doesn't mention, however, the prime one being consumerism, the commodification of culture, that Keynes helped to institute and which has demeaned human life; there must be a better way than industry geared to nurture, adapt-to and exploit every passing fancy that idleness can conceive.
But the prime problem, for the whole, remains the raison d'etra of unlimited profit and the unsustainabity of the endless economic growth it demands.
In my view the only hope for democratic socialism is that it impose a wealth cap on every individual, notwithstanding that s/he might own a zillion dollar industry. There should not merely be a wealth cap, but also a luxury cap. There should be no private jets or palaces or any other outrageous luxuries that do nothing to improve quality of life and are merely primitive expressions of superiority. I'm not saying no to wealth and luxury, but there should be limits and moderation in all things. I'm not suggesting, therefore, a new age of puritanism--I like my creature comforts--just that we live sustainably and salubriously. That is, stop worshipping Mammon, putting obscene wealth on a pedestal, as if it were the ultimate goal in life. This is in fact the tacit ideology with which we infuse the sensibilities of every succeeding generation and ultimately ruin their lives. We may individually profess one or the other of the ideologies that run counter to the spirit of capitalism, but these are on the wane, or indeed they're grist for the mill--just something else to commodify. Empty materialism dominates and ultimately we will be judged (by posterity) as a whole and condemned according to the indifferent dictates of nature.

Poirot, yes a good read.

Poirot
We have already seen that Squeers reasoning depends on an underlying circularity.

Furthermore the idea that unregulated capitalism causes economic recessions ignores the fact that government was at all times regulating the price and supply of money. These recessions didn’t arise in the pizza, sock, food or clothing markets which were unregulated. They arose in the financial markets, which government was steering.

Chris
Liberal democracy means a belief in limited government. But you believe that anything government does automatically proves that it is representative of the greater good. You say you have struggled with the issues of public versus private, and no wonder, because your approach provides no way of distinguishing legitimate from illegitimate, abusive from non-abusive, action of government.

Squeers
Just because A comes before B, doesn’t prove that A causes B, does it?

And the alleged free market ideology obviously wasn’t so prevalent as to prevent the founding of the Federal Reserve in 1913, whose function is to do nothing but override the market pricing of money, and thus to take over the steering mechanism of the financial markets.

Your citing of a socialist historian to prove economic propositions is really funny, keep it up.

What you’re not understanding is this. If government inflates the money supply, we will get an artificial boom, followed by a bust, slump, recession, depression, whatever you want to call it. This has got nothing to do with ideology. We could have a Catholic, a libertarian, a communist, or a Calathumpian ideology, we could have an ideology – like Keynes’s and yours – that credit expansion works the miracle of making bread out of stones – and we will still have the same result.

All
I have shown that your beliefs are based on logical fallacies or factual falsehoods, which you cannot defend, or refute my proofs, or show in what circumstances your beliefs would be proved false.

Thus the deep structure of your beliefs is no different than belief in the Tooth Fairy.

"It is curious that people tend to regard government as a
quasi-divine, selfless, Santa Claus organization. Government
was constructed neither for ability nor for the exercise of loving
care; government was built for the use of force and for necessarily
demagogic appeals for votes...It is absurd to say that they will be
served better by a coercive, demagogic apparatus."
Rothbard “Man, Economy and State” at 1302
http://mises.org/books/mespm.pdf

Peter,

Of course govts are not perfect. I do not think any sane observer would think otherwise. After all, they are made up of ordinary men and women. That is why we have elections, courts, oppositions, and so on, to keep them accountable

PH,
you just keep bouncing back like a punch-drunk boxer:

<Just because A comes before B, doesn’t prove that A causes B, does it?>

Well considering you had as close to laboratory conditions for testing laissez faire, I would say yes, the free market failed!

Of course your next point is that the market wasn't free enough, the economics not quite pure.

Well guess what, we're not here to serve the God of economics!

Indeed the term derives, like most thoughtful things, from the ancient Greeks, who distinguished economy from "chrematistics".
Economics properly concerns itself with the rules of the household, or "oikos", that is the home and hearth. In this originary sense, economics concerned itself with the "fair trade" ethos that one good turn deserves another (how quaint). Economics was inseparable from virtue, in fact "equalising justice".
This was juxtaposed by "chrematistic techne" or "money making", which Aristotle deemed improper to ethical life and "alien" to human nature...
But what would Aristotle know?

Well the Greeks structured all our thinking.
As far as I know, he wasn't a socialist!

What "you" fail to understand is I'm not defending left "or" right capitalism. I agree that we can't run a household on creative credit. You accuse me of "ideology", "like Keynes’s and yours", you say, yet from the beginning I've said the welfare state is unsustainable!
Moreover it's unethical at best (that is in the global context.. How else do we define "Human" rights?), and fascistic at worst.
Economics is properly the science of equitably tending distaff, and just as there is no such thing as no-maintenance gardening, or the perfect system at the track, there is no such thing as an infallible economic programme!
Economics is about living responsibly, responsively and ethically; about cutting the coat according to the cloth.
If economics has anything to do with science, it's a social science, and not the science of profit!

Squeers
“Aristotle was born of an aristocratic family .. and entered Plato's
Academy as a student at the age of 17... There he remained until
Plato's death 20 years later, after which he left Athens and eventually returned to Macedonia, where he joined the court of King Philip and tutored the young future world conqueror, Alexander the Great… Their aristocratic bent and their lives within the matrix of an oligarchic polis had a greater impact on the thought of the Socratics than Plato's various excursions into theoretical right-wing collectivist Utopias or in his students' practical attempts at establishing tyranny. For the social status and political
bent of the Socratics coloured their ethical and political philosophies and their economic views. Thus, for both Plato and Aristotle, 'the good' for man was not something to be pursued by the individual, and neither was the individual a person with rights that were not to be abridged or invaded by his fellows. For Plato and Aristotle, 'the good' was naturally not to be pursued by the individual but by the polis. Virtue and the good life were polis- rather than individual-oriented. All this means that Plato's and Aristotle's thought was statist and elitist to the core, a statism which unfortunately permeated 'classical' (Greek and Roman) philosophy as well as heavily influencing Christian and medieval thought. Classical 'natural law' philosophy therefore
never arrived at the later elaboration, first in the Middle Ages and then in the seventeenth and eighteenth centuries, of the 'natural rights' of the individual which may not be invaded by man or by government.

"In the more strictly economic realm, the statism of the Greeks means the usual aristocratic exaltation of the alleged virtues of the military arts and of agriculture, as well as a pervasive contempt for labour and for trade, and consequently of money-making and the seeking and earning of profit. Thus Socrates, openly despising labour as unhealthy and vulgar, quotes the king of Persia to the effect that by far the noblest arts are agriculture and war."

… And Aristotle wrote that no good citizens 'should be permitted to exercise any low
mechanical employment or traffic, as being ignoble and destructive to virtue.'”

Murrary Rotbhard “Economic Thought Before Adam Smith”
http://mises.org/books/histofthought1.pdf

So it was all very well for the aristocratic Aristotle to despise the productive activity on which the elite feed, which they continue to this day to do, even while it is the source of all the socialists’ hope-for redistributions. But this does not prove that coerced expropriation and redistributions based on demagoguery are more virtuous, or better at economizing scarce resources to their more urgent or important uses, than voluntary production and exchange.

It’s like you don’t understand the economic issues, or think they can be resolved by assuming them away. Even if you had established your case against free markets, which you haven’t, nothing you have said even begins to provides any justification for the idea that government could do any better, all things considered. You have not made the slightest attempt to refute the fact that it was governments, not the market, who controlled the price and supply of money leading into the GD and GFC, from which the disproof of your own Keynesian economic assumptions necessarily follows. Endlessly repeating a false assumption, or appealing to others doing the same, does not make it true.

It’s you bouncing back up like a one of those biased punching clown because I’m actually joining issue and proving my case – you’re not.

Economics is a social science, but that doesn’t mean you can just make up whatever you want, in defiance of fact or reason.

Peter Hume,
thanks for the Greek Philosophy 101.
Plato and Aristotle did agonise over the problem of slavery, but honestly couldn't see a way around the problem, just as we in the West couldn't not so long ago, and others still can't today.
Can you not see the correlation with our own purblindness?
The greatest problem modern humanity is confronted with is conceiving an alternative system to capitalism, of getting "outside the whale" as Orwell put it. It gets to the point, as it did with the Greeks, that one cannot think outside calcified intellectual formations. And yet future generations will look back at history and ask, "why did they keep it going so long when it was clearly a destructive failure?"
It's like a rotten marriage; one despairs but cannot him/herself to take the decisive step. Yet later, when it's fait accompli, one ponders, "why didn't I act sooner?"
I wasn't suggesting we emulate the Grecian polis, but that doesn't meaning we can't learn from their experience, which had longer to ferment than ours has and does, as I said, structure our thinking to this day.
I have to say, it's disingenuous of you to say that "Economics is a social science", when all you're really talking about is fiscal evolution, eugenics.
<It’s like you don’t understand the economic issues, or think they can be resolved by assuming them away>
I sympathise here as I feel the same way about you. I don't see the prevailing dispensation as natural law.

Now for heaven's sake, stay down!

I am not certain Peter how it is that you may have concluded, what I had mentioned is at the bottom of the garden with the tooth fairies; or you did not read it and attributed your remarks by error and a mistaken entity.

Your assertion that economics is in some way , the end result of Social sciences is quite far removed from fact that it must be another error in interpretation – for you would already know and realise what the Social Sciences is , Both in History and or at the very least in Modern times. Collectivist pseudo Sciences powered by the metaphysics of Zeitgeist; almost likened to a superficial dose of Marijuana and heroin in the Ideological impregnation to cook people’s brains, and you would be aware of the Authors of that. That is a priori.

Utilitarianism is responsible for the total social co operation we so know as Economics; Utilitarianism is the philosophical table of ethical conduct wholly attributed to Individualism and social co operation and the finest tool in Christian Ethics – and nothing what so ever to do with Totalitarian or Collectivist creeds of any description- That by definition ought to be obvious also.

That is why it is of the utmost importance to convey absolute truths about Economics and not deviate or confuse it. It ought to be Obvious why Collectivist Ideology wish to control it and by any means , and become the beneficiaries of it.
It gives us Civilizations, but it also creates havens for parasitic predation who then become autocratic Government and The State.

Albert Jay Nock;
Our Enemy the State; http://mises.org/books/Our_Enemy_The_State_Nock.pdf
The new definition of Slavery.

“Plato and Aristotle … couldn't see a way around the problem [of slavery], just as we in the West couldn't not so long ago, and others still can't today.”

And just as you can’t see a way around the problem of taking people’s labour by coercion – taxation – which is ethically indistinguishable from slavery or theft, and which Chris and you try to justify today for all the same reasons as the defenders of slavery defended slavery.

“Can you not see the correlation with our own purblindness?”

You haven’t established any purblidness you fool, you just keep circularly repeating beliefs that I have proved false and have done NOTHING to prove your assertions, except add lies – oh and quote a socialist historian as proof of economic propositions BWAHAHAHAHAHAHAHA.

“The greatest problem modern humanity is confronted with is conceiving an alternative system to capitalism…”

"It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance." Rothbard

The basic problem is that you don’t understand what you’re talking about, think quoting untruths from socialist academics proves something relevant, and then have the gall to blame capitalism for your own failure to think straight. You have offered nothing but sheer blind calcified prejudice from beginning to end.

You BELIEVE without reason that natural scarcity can be conjured away by forcibly rearranging property titles, that violence is the basis of co-operation, that unreality is an option; that truth means ideology. A complete conceptual jumble.

“It gets to the point… that one cannot think outside calcified intellectual formations.”

Speak for yourself - you’re the one who proffers non-facts and logical fallacies, and responds to disproofs with dishonesty.

Got that proof that government WASN’T controlling the money supply and price into and during the GD and GFC yet?

No? Then either admit you were lying, or didn’t understand what you were talking about.

Oh dear, Peter, you've been drinking again...
You always start bawling when you drink.
Clearly you're too deep for me, as I don't recall your "proving" anything??

I hope you appreciate that due to time constraints I've held back considerably.

Happy Australia Day.

Got that proof yet that the market for money was unregulated before, during and after the GD and GFC?

Your contribution only makes sense if you don't care whether or not what you say is true.

Peter Hume:
<Got that proof yet that the market for money was unregulated before, during and after the GD and GFC?>

I majored in history and took a particular interest in historical theory, enough to know that there is no proof, or truth, or any historical account that can overcome the problem of perspective. The "history wars", or post-modernism generally, whose leader is, appropriately Herodotus, the father of history, bear me out.
I've already made the assertion, via Hobsbawm, that laissez faire reigned for Britain between 1840 and 1930, baring in mind that Britain was "the" industrial and ergo capitalist power for most of that time. You haven't refuted this, though as I've said above, your refutation could only be along the lines that it wasn't free enough. Hence all my comments about laboratory conditions. The capitalism you and the Austrian crowd dream about is not possible in the real world. You're never going to have a pure free market--but on the bright side, it means you can go on asserting that if only...
Laissez brought the Western empire to the brink of either a fascist dictatorship (only prevented by the Soviets and the US, but mainly the former) or communism (a rank outsider).
The free market failed both economically and socially. It was never concerned with the latter of course, yet it can only function among stable societies (can I ask you to please address that: how does the free market create stability, I mean apart from attrition--death and misery?).
Next question: how do you account for the postwar boom if it wasn't thanks to Keynesianism and consumerism?

Apropos your question again. Please recall that I've never claimed Keynesianism is sustainable, or even humane; it merely "farms" humanity and will take us to the brink just the same, probably a lot quicker than a genuine free market would. It is also what has prevented a genuine revolution.
As for "proof", for anything, there ain't no such animal.
One final question:
would you still be in favour of free markets if you were a bottom feeder?

The Article adequately appraises our concerns over schizoid US currency printing and 'UGH-boot-manipulations' undermining free trade platforms while professing to be free trade leaders..

But be carefull!

Hands off immigration Mr Lewis.

Immigrants are grateful to we politicians and NOT the communities in which they live. This gives us and our wealthy corporate citizenry the voting edge we need to overcome those ungrateful voting vacillatiors in key electorates who have proven so damaging to Labor objectives.

We are not amused, for example at suggestions that immigrants pay a $300,000 per person infrastructure levy to return justice to capital city cost of living standards. We don't want existing Australians to get a fair go. They've had their chance and failed us. Now its the turn of NEW Labor obligated and voting immigrants to take over. And if necessary tail-gate weaker Aussy citizens out of the economic and social picture.

Besides we can get better tennis, soccer and cricket players with immigration and that, along with beer and other Oprah style circuses alone makes immigration worthwhile to Aussy pride.

So dumb Aussy citizens get pushed out of work and can't afford a place to live or electricity to enhance their thermodynamic well being! So what? It's a small price for the power and fiscal autonomy we politicians get. It's a small price for building a great Nation of superior human beings whilst offering opportunities to eliminate the dead wood in our communities by humane Labor party attrition.

Hands off immigration! Just watch our new million a year immigration policy and our new 20% GST swan-song and weep. Because Labor is going $places$ as we forge a new Global Australia.

We may even get the bomb! Oh the POWER!

Ghoulia Jillard

Prime Minister.

That is a good and relevant point; so let’s examine the term; “Government” Thoroughly and through proper ratiocination; Using Rational Utilitarian tools and not the used Empirical Utilitarian methodology; and the apodictic truths will take on a whole different dimension of what is Government, much different than the Professed Zeitgeist driven theologies of what it is.
We can use this as a guide; and it will sound very familiar.
Written in 1884 by Herbert Spencer;

“The Great Political Superstition”; a part. http://mises.org/media/4555
All of a sudden , it sounds like a very different entity to what it proclaims to be ; and answers some questions we already have known , but did not know how to put it to words to explain it.
And for the whole book;
http://mises.org/media.aspx?action=category&ID=221

Squeers
You are only confirming my first remarks. You think there is no structure to reality, no such thing as truth, and no such thing as proof. Everything is just a matter of “ideology” and “perspective”.

But that being so, of course you have no basis for claiming your own assertions are true.

BTW what about Pythagoras’s theorem? Is that capable of proof? Or not?

You say you majored in “historical theory”… and concluded that nothing could be proved? Some theory!

What is theory but explanation of cause and effect? But how could we even conceive cause and effect if everything is subject to historical contingency and mere difference of opinion? One person could claim we can get wealthier by rain dances or sacrificing virgins or printing money and there would be NO WAY OF KNOWING whether these propositions are true or not. They could be true in different cultures, or classes, or circumstances WHICH IS ESSENTIALLY WHAT YOU ARE REDUCED TO ARGUING.

If what you are saying were true, not only would there be no economic laws, there wouldn’t be any physical laws limiting human action. We also wouldn’t be capable of communicating with each other. The world would be a senseless jumble without logic.

The very fact that you engage in argument necessarily implies that we are capable of knowing, communicating and logically proving or disproving cause and effect.
But if that is not true, then what are you doing talking about it?

Contrary to your anti-reality, anti-truth, anti-logic, anti-scientific tribalism, both physics and logic impose real limitations on human action, and these have knowable consequences. We can’t get rich by printing money AND IT DOESN’T MATTER WHO BELIEVES WE CAN.

You said I have proved nothing. However you said, and Hobsbawm asserted, that the unregulated market caused the GD. I proved that the markets weren’t unregulated by pointing out the simple fact that they were regulated – by the central banks.

THEREFORE I have proved you wrong.

A free market simply means the price in a transaction is determined by the agreement of the parties.

So it’s not true that there is or can be no such thing as a purely free market.

This also refutes your assertion that laissez-faire reigned – if government is controlling the price of something *by definition* it’s not a free market. And money affects every single transaction, so stop blaming unregulated capitalism, and start blaming government interventions.

“The free market failed both economically and socially.”
This relies on your disproved claim that unregulated capitalism, free markets etc. produced the GD.

Intellectual honesty requires that you RE-THINK YOUR CLAIMS thus: “Since my claim that unregulated capitalism led to the GD is factually wrong, what might have been the economic effect of government inflating the money supply?”.

Don’t just react with inflexible prejudice – actually THINK about it.

“how does the free market create stability, I mean apart from attrition--death and misery”
Your question is dripping with bigorty and ignorance, but what do you mean “stability”?

The division of labour increases the wealth of everyone who participates in it – that’s why people do it!

“Laissez [–faire] brought the Western empire to the brink of either a fascist dictatorship”
This assertion depends the above false assumptions which I have disproved.

The Austrian argument is that:
a) inflating the money supply creates the cycle of speculative boom and unjust depression
b) government economic intervention actively worsens the conditions it is supposed to improve
c) protectionism leads to war
d) interventionism leads to fascism.

You observations all along confirm the truth of Austrian theory, and the incorrectness of your own theory, so would you care to RE-THINK YOUR CLAIMS, and actually join the discussion instead of just circularly repeating your demonstrably false assumptions and inflexible prejudices?

“how do you account for the postwar boom if it wasn't thanks to Keynesianism and consumerism?”

Define consumerism.

A boom can either come about by the economic way – capital accumulation – or the political way - inflating the money supply.

In the economic way, people consume less than they produce, and devote the savings to investment. They do this because they prefer the hope ..

…of a greater future good to the certainty of a lesser present good. Profitable (not loss-making) investment increases productivity – output per unit of input. This produces gradually compounding levels of capital, productivity and standards of living. This does not produce the cycle of boom and bust.

The political way is to inflate the money supply either by printing money or lowering interest rates. This produces an artificial boom. It works by diverting real capital away from activities that are profitable – in other words that best serve the wants of the masses as judged by THEM, not by YOU. Inflation misallocates capital into the bubble on the basis of illusory profits based on rising prices. The artificial boom inevitably collapses, causing economic depression. This POLITICAL MANIPULATION OF THE MONEY SUPPLY - not “unregulated capitalism”, is what causes the cycle of boom and bust.

Similarly, inflation promotes CONSUMPTION NOW over investment for the future. Stop blaming “capitalism” for socialist and interventionist economic policies.

I think the postwar boom is partly due to capital accumulation, and partly due to Keynesianism. Keynesianism is corrupt in many ways – it robs savers and everyone who uses money to favour the priviligentsia in big banks and corporations and government; it causes the boom and bust; it is used to fund aggressive war – in fact everything that the anti-capitalist ignoramuses blame on “capitalism”.

“would you still be in favour of free markets if you were a bottom feeder?”
You imply the Marxist premise that free markets make people poorer. This is demonstrably wrong in theory and practice. In theory Marxism depends on the labour theory of value, which is flatly incorrect.

People – including the poorest of the poor – have never been as rich as under capitalism. Contrary to statist fables based on DISPROVED beliefs, the improved condition of the masses under capitalism is not *because of* but *despite* government’s interventions.

Would you rather be one of the tens of millions who starved to death under Mao, or who have left the rice-paddies and are employed now in private businesses in modernising China?

Peter Hume:

<Squeers
You are only confirming my first remarks. You think there is no structure to reality, no such thing as truth, and no such thing as proof. Everything is just a matter of “ideology” and “perspective”>

PH,
apologies for the delay.

This is unfair. To begin with, I'm a materialist (well, sort of), though I am dubious about reality; certainly it has structure, "form", though it seems terribly flimsy, or certainly finite. What is the nature of such an unstable reality I wonder?
But putting that to one side..
I didn't know you were a deist! Though you're an economist, which amounts to the same thing. Do you really think there is an ultimate "truth" about anything? Or that you can prove anything outside a certain context?
Your truths and proofs are no more transcendent than the futures market, they are merely the vulgar currency economists deal in.

Of course I realise I'm just giving you ammunition--well, "caps" anyway.
Obviously I was talking about ultimate truths, or at least truths and possibilities that might go beyond your fiscal reality.
But Peter, you clearly have more time on your hands than I do. Sorry I can't do a point by point.

You've evaded my question btw: “would you still be in favour of free markets if you were a bottom feeder?” Say from sub-Saharan Africa?

"What is the nature of such an unstable reality I wonder?"

Well that's the question, isn't it?

"But putting that to one side..."

We can't; we have to follow where it leads to resolve the issue, because it's about reality.

The social reality is connected to the physical reality.

There is no question of “ultimate” truth, in the deist sense in which runner or AlGoreIsRich believe in God.

It is enough to find objective truth, that is,
a) axiomatic or
b) validly deduced from an axiom, and
c) consistent with the evidence.

By axiomatic I mean either there is no issue since either we all agree, or those who disagree contradict themselves. For example, if the economic proposition is “Human action always involves preferring A to B”. Even those who disagree: “No it doesn’t!” must prefer A to B in order to contest the proposition. Thus they perform a self-contradiction and by their actions affirm the original proposition. So it’s an axiom.

For example Pythagoras’s theorem satisfies that definition of objective truth. There is no need to believe in God to believe it's true.

But the same cannot be said your belief that unregulated markets caused the GD, or that capitalism is exploitative. Your argument does not satisfy any of those three criteria.

Austrian theory satisfies all of them.

The material truths must result in economic truths. For example, we can’t just increase the fertility of land by putting ever more fertiliser on it. This limitation is not caused by “capitalism”, it’s caused by physics and chemistry. Nature imposes limitations on human action and therefore on production possibilities.

That’s precisely the argument against Marxism and Keynesianism. There is not one realm of truth for physical realities, and another one for fiscal realities. The original scarcity of resources can’t be solved by abolishing private property (Marx), by printing more money (Keynes), by forced redistributions (Chris Lewis), or by circularly insisting that capitalism is terrible (you). To say so is not to engage in deism. It is the statists who are the conjurers, the supernatural mystics.

Just because one is ignorant of the truths of economics doesn’t mean they cease to describe human action. Just as the facts of gravitation, or time, affect all human action, so do the principles of economics, which are only the logical implications of the axiom that human beings take purposive action.

Conceitedly and circularly thinking that you are morally superior to everyone else on the planet does not prove the principles of economics false.

Your condemnation of capitalism depends on:
o a non-fact, namely, that unregulated markets caused the GF and GFC. Every one of the arguments you have relied on involves assuming what is in issue, and is therefore a logical fallacy.
You need to deal with the argument on its own terms: to disprove the argument that inflating the money supply causes the cycle of boom and recessions that you are blaming on capitalism.
o Your assertion that capitalism is exploitative. When I asked you to prove it, you said it would be “futile”, claiming to know that I could never be persuaded. This is mind-reading, which is a logical fallacy.
You need to deal with the argument on its own terms: consensual transactions increase the satisfaction of human wants, coerced ones reduce it.

You have marked out an intellectual boundary in which nothing can be proved or disproved but by arbitrary assertion and counter-assertion, larded with a liberal serving of logical fallacy such as Hobsbawm’s assuming what is in issue.

By contrast, the Austrian school of theory provides much surer ground in which things can be actually proved or disproved.

I respectfully commend Chapter 1 of Rothbard to you: http://mises.org/books/mespm.pdf
“Fundamentals of Human Action”

Go ahead - read it. It won’t hurt. Since you claim to disagree with it, see if you can find anything in the theory of it that you disagree with.

P.S.
What’s “bottom-feeder” supposed to mean? A term from your circular economic theory is it? Just check to see you’re not assuming what’s in issue will you?

Peter Hume,
your reasoning, "Even those who disagree" are committed to the reality because they acknowledge the question, is identical to the logic of Althusser (a Marxist, sorry), and is not too remote from what I was hinting at.
My deist allusion pointed toward the economic paradigm you treat as a given--we all have no choice but to recognise as reality. Our reality is an economic reality, not reality per se, or the only possible reality. Nevertheless this economic reality structures our thinking such that we only "hypothesise" outside it, and that with great difficulty. Our economic reality is an epoch wherein, as you say, the logic is axiomatic. Axiomatic to that "language game", as Wittgenstein would insist, though it was Marx who postulated an alternative reality by concretising or inverting Hegel's dialectic. That alternative reality is not available to us to assess (which is fair enough since it doesn't exist) but we can possibly infer its alternative validity by conducting an "immanent critique" of our present reality that structures human life.
Austrian Theory, and protectionism, are obsessed with "this" reality, the best of all possible worlds, but as Marx said, the point is not to explain the world, but to change it.
So your "The material truths must result in economic truths" is back to front.
So ironically I agree with you that economics "do" "describe human action", but they don't have to, or at least the economics can change. This is what we've lost sight of. Our economic reality is not axiomatic in the larger context.
Once again, capitalism "is" exploitative, of a finite planet to begin with, but of human "potential" which can never be realised, perhaps, as things stand.
Thanks for the link, I'll have a look asap.

Am just looking at the parade for the link you provided...it takes a while to download (love the graphics! maybe we should have a game of chess to resolve this. Do you require a board?)
Holy sh!t, it's nearly 1400 pages long! I've read War and Peace twice, but that was interesting!
I'll get back to you, this will take at least an evening..

Sorry, pawn to king 4 (I'm white since I'm on the side of good)

Not the whole tome, just the first part. It's in plain language.

There are three problems with your last rejoinder.

Firstly, human economic relations don't determine the physical nature of the universe: it’s the other way around.

Secondly, you haven’t even begun to establish the premises on which your argument against capitalism depends. If it’s not sustainable in that the planet is finite, so what? This is no more a charge against capitalism than it is against life in general. If capitalism’s fault is that more people live, then you are a) inconsistent and b) anti-human.

The socialists spent the first century after Marx arguing, as you do, that capitalism grinds the faces of the poor, and now at the same time they argue that it makes the masses unsustainably rich. These two criticisms cancel each other.

You also have not begun to establish that capitalism is exploitative. Marx’s theory was predicated on the labour theory of value, which is easily disproved. If it was right, no business would ever go broke. If you spent $10 million on labour digging up an ounce of gold, the gold would be worth $10 million. A painting by Van Gogh would be worth what it was when he completed his labour on it – nothing.

According to the LTV, the workers are morally entitled to the entire value of the price of the final product. But since they didn’t contribute all that value, they are not morally entitled to it.

Thirdly, no socialist has ever explained how a society based on the common ownership of the means of production would *be possible*. Mises showed that, without private ownership, there would be no market for capital goods and therefore no prices for them. Without prices for capital goods, there could be no economic calculation. There could only be economic chaos and political totalitarianism, which is exactly what happened when socialism was attempted.

As for the development of human potential, please don’t make us laugh with the grotesque idea that this would be better done by centralized coercive bureaucracies according to uniform rules and regulations, than by individual freedom and co-operation subject to a rule against aggression.

Peter, individual and collective themes are both important in society. That is why I support liberal democracy, and why liberalism is still my favorite concept to address both national and international considerations.

However, I have never been convinced of the merit of either extreme left or right wing economic arguments.

I have downloaded your book, and will read the first chapter when i get some spare time.

"I have downloaded your book, and will read the first chapter when i get some spare time."

Oh good. I'm asking specifically whether you can find anything in the first part that you disagree with.

"Peter, individual and collective themes are both important in society."

There is no disputing that. The issue is not between individual and collective themes, it's between voluntary and involuntary themes. What has to be proved or disproved is whether the coercive sector is more or better representative of society's collective interest than the voluntary sector. The ethical and economic argument is, in a nutshell, that voluntary transactions increase human welfare, coerced ones reduce it.

I should not have to say that the methodology of assuming what is in issue should be beneath you. You need to actually join issue, to prove what is in dispute, not just assume it in your favour and deal with any objection by name-calling.

When slavery was common, abolitionists were rightly considered extremists. So what? The true or the good doesn't necessarily lie half-way between existing extremes.

Peter,

As far as your request that i agree or disagree with chapter one, no I do not disagree with what is said.

It is a long read, but well argued, at least in accordance to my limited exposure and understanding of such terminology and writing in terms of subject matter.

I had another text on my desktop I have to absorb, truly daunting, that I mistook for yours and read several pages of before I tweeked: "The Waning of Materialism", but yours is much more accessible:

“We could not conceive of human
beings who do not act purposefully, who have no ends in view
that they desire and attempt to attain”.

Yes, but this predicated action depends on the context, what provokes action.

“Things that did not act,
that did not behave purposefully, would no longer be classified
as human”.

Why not? It’s not enough to make a statement, it has to be explained and made compelling. Moreover, who does the classifying? This sounds like there’s some ultimate classification of what’s human, but that’s not established..
And yet we go from this baseless, though high-sounding, assertion to “axiomatic truth”, without any elaboration of why it’s axiomatic:
“The fact that men act by virtue of their being human is indisputable and incontrovertible”.
Why? In any case I beg to differ. Since Mises’s antediluvian days the whole concept of human nature has been thrown into question--indeed I'm having a hard time trying to defend it at the academic level.

cont...

...cont.

“the absence of motivated behavior—would apply only to plants and inorganic matter”.

Unsubstantiated hyperbole. What is behaviour motivated by? Who’s to say that behaviour is motivated by anything essentially human, and not by cultural programming?

“The first truth to be discovered about human action is that it
can be undertaken only by individual “actors.” Only individuals have
ends and can act to attain them”.

And here we go (did Thatcher write this?)! Barely two pages into it and the ideology of individualism, the mainspring, long since sprung, of liberalism is tabled without a shred of anything but hubris to back it up! We are “told”, not persuaded, but an appeal to vanity, of the first “truth”, that only the “individual” is this or that, without any consideration of what “individual” even signifies.

“There are no such things as ends
of or actions by “groups,” “collectives,” or “States,” which do not
take place as actions by various specific individuals. “Societies” or “groups” have no independent existence aside from the actions
of their individual members.” Blah blah blah.

Peter, seriously, you blow me away! I had thought you perhaps had an academic history, but surely that cannot be!
This is about as compelling as Euclid without the geometry to back him up.
I shall look at more of this as time permits.

Please be assured I’m sincere. I have no ideological agenda to defend, indeed I would be delighted to be confronted by something truly challenging on this front, but so far this is laughable!

Oh Bravo! I feel you’ve joined issue at last.

“We could not conceive of human
beings who do not act purposefully…”.

“Yes, but this predicated action depends on the context, what provokes action.”

That's true, but it doesn’t disprove the statement. It remains universally valid and axiomatic and thus gives a good root for logic to get a purchase on.

““Things that did not act,
that did not behave purposefully, would no longer be classified
as human”.”

“Why not? It’s not enough to make a statement, it has to be explained and made compelling.”

It is shown why, it is explained and made compelling, by the fact that the statement
a) is true and you don’t deny it
b) is universally valid (the author excludes involuntary action like the knee-jerk reflex),
c) cannot be denied without performing a self-contradiction, and
d) is therefore axiomatic.

The rest of the book explains it: it is enough at the outset to identify the building blocks on which the logical process is to operate.

(But your theory doesn’t even do that – it doesn’t provide any way for anyone – including you – to know whether or not anything is true!)

“This sounds like there’s some ultimate classification of what’s human, but that’s not established..”

On the contrary, he’s merely pointing out what we all observe and know from being human – when you see someone doing something, he’s acting to achieve a purpose – and which you cannot deny without proving the statement. That’s good enough to make it an axiom, and you haven’t shown why it doesn’t.

““The fact that men act by virtue of their being human is indisputable and incontrovertible”.
Why?

I don’t even understand your question. What else could it be? By virtue of their being dolphins? Ducks?

““the absence of motivated behavior—would apply only to plants and inorganic matter”.

“Unsubstantiated hyperbole.”

It’s substantiated by the fact that you prove it in arguing the point.

“What is behaviour motivated by?”

That’s a different question. It’s *different* for different actions. But all conscious action has *in common* that it’s motivated.

Please answer this question: how else could it be? Are people automatons?

“Who’s to say that behaviour is motivated by anything essentially human, and not by cultural programming?”

Question doesn’t make sense. Are you implying that cultural programming is not essentially human?

““There are no such things as ends
of or actions by “groups,” “collectives,” or “States,” which do not
take place as actions by various specific individuals. “Societies” or “groups” have no independent existence aside from the actions
of their individual members.”

“Peter, seriously, you blow me away!”

Well give us an example of any group action that does not take place as actions by various specific individuals.

“without any consideration of what “individual” even signifies”

What do you mean? Even a person acting on a cultural norm or as part of a group is still acting as an individual.

Now bear in mind that you are running your argument from a position that nothing can be proved.

Therefore you have not shown
• any reason disproving that it is axiomatic that human action is purposive;
• why the above is “ideology” – presumably meaning in the Marxist sense, an economic belief dictated by economic class and acting as a justification for class interests - but if not then please define what you mean by this term, on which your entire argument depends
• how you would be able to prove or know anything.

As you would say, it’s not enough to make a statement, you have to explain it and make it compelling.

You yourself engage in motivated behaviour in denying Rothbard’s argument and thereby prove him correct.

The same can’t be said of my denying your argument that nothing can be proved.

Thus you both prove my argument and disprove your own.

You may *believe* that Rothbard’s statement is not axiomatic, but you haven’t *proved* why, except by your usual method of appeal to absent authority (someone somewhere knows that it’s all nothing but ideology whatever that’s supposed to mean).

BTW you still haven’t justified any government interventions.

PH,

I was only saying that no "ultimate" is possible, ergo nothing is "axionatic". I don't require ultimate truth, of course, and the only hypostasised axiom I prefer to observe is a human system based on co-operative and sustainable co-existence. This would be better acheived for me if the competitive element were removed and the sustainably available means of existent were distributed according to reasonable need. This precludes the ideology of the free market.
I've commented a little on individuality a little elsewhere lately, where I likened it to a snowflake, all unique but still just snow. Of course we are all individuals biologically.

Much as I would love to engage with you in all this in depth, I must apologise that for at least the next 12 months that's impossible for me. I hope you're still around in a year or so, certainly these issues will be.
But for now, all I can allow myself on OLO are bagatelles.

Peter,

Just briefly - What purpose and motivation can an individual have outside of a human social construct? Doesn't the human collective define the purpose and motivation of the individual?

Poirot
“What purpose and motivation can an individual have outside of a human social construct?”

There is not an issue as between motivation-by-social-construct eg desire to wear fashionable clothes, versus motivations by not-social-construct e.g. a motivation to drink water because thirsty.

Any human action is motivated by a desire to exchange a less satisfactory state for a more satisfactory state as judged by the individual taking the action. This fact, and logical deductions therefrom, are all that’s needed to derive the science of human action which applies *whatever* purpose motivates the action, that’s the whole point.

“Doesn't the human collective define the purpose and motivation of the individual?”

Briefly, no. Human society is just co-operation by another name. It could only have arisen from increasingly suspending the principle of violence, in favour of the principle of consent.

It’s not about individual versus collective. It’s about consent-based versus coercion-based social co-operation.

Squeers
“… ergo nothing is "axionatic".

So, back to ‘nothing can be proved’.

So…. can Pythagoras’s theorem be proved? Or not?

You don’t need an “ultimate” truth – a God - to prove something logically. You only need an axiom, and formally valid deductions therefrom.

“[…] a … system … would be better acheived for me if the competitive element were removed”

By force?

Fighting for peace…

“and the sustainably available means of existent were distributed according to reasonable need.”

…made sustainably available by coercive bureaucracy…how? “Might is right” would decide what’s reasonable?

You also assume your ideal is possible in practice. How would it work without the possibility of economic calculation? And without ever-increasing government to try to solve the problems caused by past interventions? What would stop it descending into more and more government intervention?

“This precludes the ideology of the free market.”

There you are, back to ‘everything’s only ideology’ without defining it. Everyone else has to struggle with the reality of rationalizing natural scarcity, but not the divine State, which makes available magic pudding.

It’s not science, it’s religion.

“But for now, all I can allow myself on OLO are bagatelles.”

French breadsticks, right?

Thus there are three major classes of error in the belief that government economic interventions make society fairer or richer:
1. in blaming capitalism for problems caused by interventionism; or blaming capitalism for problems caused by nature and which would affect all alternative systems just as much (unless they killed large numbers of people, which is hardly a recommendation!)
2. in assuming without proving that coercive bureaucracies could provide a better alternative, despite the fact this is obviously false, and
3. in the shamefully blatantly illogical intellectual methods used - no better than the mediaeval belief in the church and the selling of indulgences.

Imagine if someone said we could have a fairer and richer society by using slavery, AND DIDN’T EVEN REALISE THIS WAS A PROBLEMATIC THING TO SAY.

That’s the intellectual level at which the statists are operating: A COMPLETE NON-RECOGNITION OF THE ETHICAL OR ECONOMIC DIFFICULTIES THEY ARE INVOLVED IN.