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Wednesday
November 23, 2011

The Keynesian Non-Answer by Tibor R. Machan

I have never managed to appreciate why these people keep assuming that the judgments and actions of government officials are superior to those of the citizenry throughout the world where these Keynesian proposals are being made and followed routinely. I keep asking, “Who are these people whom we can trust with such tasks as running a country’s economic affairs?” Somehow thousands of intellectuals who would never entrust government with tasks such as censoring literature and newspapers nevertheless have no compunction about entrusting them with the very delicate and idiosyncratic tasks of directing people’s economic affairs. (Read more...)
Discuss this Article (29 messages)

Thursday, November 24, 2011 - 5:43am

Fact is government can't regulate the economy in any constructive way.
Every attempt to do so always ends up having the opposite effect compounded with their creed to bleed more taxes from an already hemorrhaged beast that their next self inflicted emergency created in the first place.

One can draw some semblance of hope in that more people are waking up and crying out against their policies that have been grinding the economy into the dirt.

Perhaps those in power should actually read the constitution and understand the morality and spirit that it was created from.

Thursday, November 24, 2011 - 11:59am

Investing in public works is a complete illusion--most of such spending by government is directed politically; it’s nearly always graft, and what else could it be since government officials haven’t the faintest clue as to what the money they have extorted from the citizenry should be spent on. So the spending will be a response to the pleas of lobbyists and others who can be of help in reelecting the politicians.

Excellent point. I've just started reading a book called "Throw Them All Out" which highlights this aspect of reality with concrete examples.

Ed

(Edited by Ed Thompson on 11/24, 12:01pm)

Friday, November 25, 2011 - 8:13am

The errors are deep and many. I just posted this to my blog, Necessary Facts.

In Economics 101, the Supply curve and the Demand curve are displayed. The point where they intersect is called “equilibrium” where the most efficient allocation of resources is claimed to occur. This ignores the fact that every point on either curve represents a choice, an exchange of a lower valued good (or service) for one of higher value. [...] The danger – the tragedy – is that claiming that the intersection of these two curves indicates a special equilibrium causes those in political control to believe that they should or must force all supplies and demands to be at this point. Interest rates are raised or lowered; money is created (rarely destroyed); tax laws are written or rewritten. In some societies criminal penalties are enacted and enforced for prices other than the approved one.

Saturday, November 26, 2011 - 3:58pm

Whose? Which?

Sunday, November 27, 2011 - 6:19am

Under regulations that took effect on Nov. 22, the government can fix the price of 15,000 goods in an attempt to slow inflation that reached 26.9 percent in October, the highest in the Western Hemisphere. Chavez immediately ordered a freeze on the price of 18 personal care items ranging from toothpaste to deodorant until mid-January to prevent monopolies from “ransacking the people.”

Chavez Price Caps Spark Panic Buying of Coffee, Toilet Paper in Venezuela
Posted by Dean Michael Gores on 11/26, 11:24pm

Chavez is at war with scarcity! He must battle the hoarders who keep on buying the last goods that will ever make it to the shelves! Will he succeed?

(Edited by Michael E. Marotta on 11/27, 6:24am)

Sunday, November 27, 2011 - 12:16pm

Essayist writes:
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nvesting in public works is a complete illusion--most of such spending by government is directed politically; it’s nearly always graft, and what else could it be since government officials haven’t the faintest clue as to what the money they have extorted from the citizenry should be spent on. So the spending will be a response to the pleas of lobbyists and others who can be of help in reelecting the politicians.
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Illusion? When you take the interstate and drive over the Hoover Dam, you don't fall into the river. It's real. It's public works. Rural electrification, jump starting arpnet to become the internet, and tons of other projects are far from illusions.

Are they tainted by political pressure, are they the most optimal way of producing these projects are an open question. Let's talk about the output of the military industrial complex, and differentiate that from those projects such as I mentioned that were effective, and were real, and shaped our country.

If we don't differentiate useful public works such as I described with building more aircraft carriers, which are worse than waste and may actually be a self fulfilling prophecy leading to war (see State vs Defense by S. Glain) little is gained. Public spending is a sizable part of our economy. We are addicted to it, meaning going cold turkey would destroy the organism, in this case the country.

But, indulging in hyperbole doesn't advance the effort to evaluate what is legitimate public works, and what is not. And I know the story of radical libertarians who would not have free public highways, or tax supported public schools. Ironically, the argument was almost reasonable during the golden years of 1950 to 1980, when income disparity was a tenth of what it was now and we were insanely prosperous.

But no more.

Sunday, November 27, 2011 - 3:08pm

Al, you're taking the wrong approach because you misunderstand the objections. Radical libertarians like me will never be swayed by your descriptions of how great a deal certain public works can be. Sure, the Hoover Dam is great. It benefits lots of people. I like the internet too. While it's easy to complain that the vast majority of so-called "public works" projects are white elephants, I must admit that once in awhile even the government gets it right. That isn't the issue though. The issue is whether it's ok for us to force someone to buy something they don't value, even if we think it's a great deal. You can give the greatest sales pitch in the world. You can offer to sell me the moon for a dollar. In the end, if I don't want the moon, or if I think the moon is only worth a quarter, you have to either walk away without a sale or else offer a justification for taking my dollar through force or threat of force and then giving me something I didn't want in return.

The fact that government generally screws up everything it touches is only a side story. If you want to convince libertarians of your views, then be honest enough to tell them why they should be forced to buy something they will hate rather than something like the internet that pretty much everyone likes. Better yet, tell me why I should force you to buy something you hate. Take your aircraft carriers as an example. You say you would rather not have them at any cost because they are a "self-fulfilling" prophecy of war. Fair enough. Just be sure that you REALLY REALLY hate them and think they are an extreme danger to the future of our nation, your freedom, and your way of life. Now tell me why it's ok for me to use force or threat of force to make you buy them anyway.

That's the tack to take if you even want to start a decent, honest debate with an extremist like me :) Cheers!

Sunday, November 27, 2011 - 3:16pm

PMH:

You beat me to a similar posting again.

Al:

When you take the interstate and drive over the Hoover Dam, you don't fall into the river. It's real. It's public works. Rural electrification, jump starting arpnet to become the internet, and tons of other projects are far from illusions.

Just because you don't fall into the river doesn't mean that the Hoover dam was a proper and socially responsible way to spend public money.

... indulging in hyperbole doesn't advance the effort to evaluate what is (sic) legitimate public works.

If you subscribe to the libertarian tenet that coercion in any form isn't acceptable, as I do, then all government funded public works is anathema.

And I know the story of radical libertarians who would not have free public highways, or tax supported public schools.

What, pray tell, is radical about libertarians opposing free public highways and tax supported schools? If a libertarian would support them then he's not a libertarian. What is the story you know?

Sam

Sunday, November 27, 2011 - 3:22pm

Regarding the argument that a large and strong defensive military causes war, this amounts to saying that a large and strong insurance company causes fires. Yes, some scam artists do manage to trick insurance companies into paying bogus claims for unprovable arsons. But this fact does not negate the validity of insurance -- or a defensive military.

Sunday, November 27, 2011 - 6:27pm

... the golden years of 1950 to 1980, when income disparity was a tenth of what it was now and we were insanely prosperous.

Ah, yes, before government grew to huge proportions, before the Fed had damaged the dollar, back some 500,000 or so pages of added regulations. It is crony capitalism, combined with big government, that creates income disparity - not a free market which will generate a middle class.
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This shows the growth in government spending but because GDP includes government spending, it has the effect of understating the effect.

In 2010 the total Federal, State and Local spending hit $5.799 Trillion. That's $18,782 a person, or $58,977 per family. (It will be much higher in 2011)

Compare that with $70.3 Billion in 1950. Which was $460 per person even though the population was about half of todays. Or about $1,555 per family.

(Note: In case you are thinking that all that difference between 1950 and 2010 government cost is due to inflation, it's not. If you adjust the $1,555 per family cost of government in 1950 to reflect 2010 dollars you get $14,602. Big increase, but still far short of $58,977.)
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As to public works... why would anyone want any government schools when the cost per student for private is less while giving a far, far superior education? Do we have to see the quality of American education drop still further? Why do we think that the same people who gave us the DMV would be the right people to put in charge of educating the next generation?

I'm with Professor Machan. Why would anyone think that the people in government know better how to use our money, our time, our resources than we would making choices in a free market?
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[Edited, removed statement that graph doesn't include state and local government spending as per Merlin's post below.]
(Edited by Steve Wolfer on 11/28, 9:09am)

Sunday, November 27, 2011 - 10:07pm

I'm 71 years old, and only now having doubts about many of the verities I've long believed in. I'm on this site not because I accept objectivism, or any ideology.

I have great interest in human group behavior, and see the power that it has over how we think. While I think Hayek was an important thinker, beyond his economics, I value very much the views of Karl Mannheim, who posited that group affiliation is so important that it skews thinking, even among true intellectuals.

So, there is no hope of changing anyones thinking that is part of the glue that provides cohesion. And don't take this as denigration, because it is universal. There are two groups that believe in the possibility of time travel, mystics and theoretical physicists. And the community of those with Ph.Ds from MIT and Harvard will not deviate from their distortions.

If this happens in this field it can happen in Global Warming and other areas. So if this is to be a useful site for me, I can't engage in whether government, and taxation has value, is legitimate. I believe that it is, and is necessary. The legitimate question is how much, what are the inefficiencies that must be tolerated,

I wrote more extensively against the Affordable Health Care act on Dailykos, for loosely libertarian grounds, than anyone of the hundred thousand members of Dailykos. I still have them there that can be found under my user name ARODB.

This took more effort than preaching to the choir, yet I had a good number who heard my voice, and agreed with me. Politics is not a theoretical subject, it is an applied art. It is useless to fight over ideal states of existence, as we can never achieve them. We talk about the possible, but informed by ideals, one of which is the freedom from coercion that libertarians focus on.

Maybe this will be the place to explore some of the issues that are taboo on other sites. From scanning some of the subject that are raised here such as race, abortion there is hope that this could be the audience that is stimulating and open for discussion.

Monday, November 28, 2011 - 2:03am

Al,

While you say you do not accept any ideology, you yourself must have your own ideology. Whether you hold many contradictory views, or consistent, or even if you don't assert firmly that any one thing is true, you still have an ideology. Generally you should feel free to post in the dissent area. I'm not pleased with your lack of academic interest in Rand's writings. Its much faster to learn by reading and integrating what others figured out than to figuring things out by yourself. Rand figured out an incredible wealth of valid philosophical ideas. Even if you want to steal from others through government or any other means, the philosophy is still hugely applicable.

I am a capitalist with rational & scientific (anti-faith) metaphysics. I have no idea what your background is. Potentially you could save yourself some debating time by exploring http://capitalism.org and the 5 branches of philosophy from an Objectivist's point of view at http://objectivism101.com/IOP.

Monday, November 28, 2011 - 5:47am

Steve wrote (post 9):
It also doesn't have state and local government spending.
On a technical note, the graph does include state and local government spending. See here, which shows 40.35% for 2010 versus the graph showing about 44%. The numbers differ likely because they are estimates and updated occasionally. Regardless, federal spending is less than 30%.

Monday, November 28, 2011 - 7:27am

Al,

Dean's right. Even a dogmatic aversion from ideology is, itself, an ideology. Even relativists have to believe that relativism is something that is true for everyone (i.e., the correct way to look at the world). Your only choice on the matter is whether you can adequately validate your positions with (some) logic applied to (some) truth.

Also, what you say about "group-think" -- though interesting -- is a potential smear tactic. It rhetorically insulates you from the philosophical positions of others, whenever 2 or more people come together to hold the same opinion in contradistinction to you. If 2 people are arguing with you, you can always say:

Well, I can't trust you 2 people, because you are 2 people, and so group-think has maligned your ability to think straight. Only people who hold opinions in complete isolation from others -- ahem, such as myself -- can be trusted to be correct.

:-)

Alternatively, you could accidentally take it too far and say that any interaction with other people maligns your ability to think straight (rather than refines your ideas by bouncing them off of others' opinions, etc). On this logical extension of what you said, even your very announcement -- that group-think thwarts truth-finding -- becomes suspect, because you announced it in a public forum (in a "group"). If you counter that, in order for group-think to obscure truth-finding, one must first be a part of a group for an ample amount of time (i.e., that newcomers, for a while, can still find truth) -- then you couldn't validate that by stating the amount of time required in a group, before one loses their ability to think straight.

You would end up picking an arbitrary amount of time spent in a given group (a day, a week, a month, a year) to use as a threshold for when one loses their ability to think straight.

Ed
(Edited by Ed Thompson on 11/28, 7:33am)

Monday, November 28, 2011 - 8:52am

I'm enjoying the wolves of logic tearing apart the sheep of the irrational...does this make me a bad man?

Monday, November 28, 2011 - 9:12am

Thanks, Merlin. The first chart I was going to use didn't include state and local expenditures and I neglected to change my wording when I found a chart I liked better. I've edited the post to remove the error.

Monday, November 28, 2011 - 9:42am

Al,

You wrote, "...there is no hope of changing anyones thinking that is part of the glue that provides cohesion."

The 'Group Think' phenomena is real, as are many other reasons people cling to shaky old beliefs... but the capacity to change one's mind, even if it happens rarely, does exist. It too is real. You have changed your opinions and flown in the face of the Group on occasion and are the proof that reason can set one on a solitary path for no good reason but that it seems to be the one that is true.
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You wrote, "Politics is not a theoretical subject, it is an applied art. It is useless to fight over ideal states of existence, as we can never achieve them. We talk about the possible, but informed by ideals, one of which is the freedom from coercion that libertarians focus on."

I like where you went with that... saying that informed by our ideals we should focus on the freedom from coercion that is possible. Here, at RoR we are very concerned with the theoretical... we chew on different principles as a way of better understanding our ideals. Our debates over "ideal states of existence" are part of the process of understanding what the basic principles are. Sometimes they are like arguments about the number of angeles that can dance on the head of a pin, and sometimes they help a person get a better grasp on complex subject matter, and sometimes they are probably like reading good science-fiction in that they let one live for a moment in the future that is being sought... and refuel emotionally.

The best way to use this forum differs from person to person. You get to participate in the way that best suits what you want to explore. Coming from a very different political background it would be easy for you to argue against this or that principle, but that wouldn't necessarily give you the best return for your time. I think that you will be surprised at how much those verities you now doubt have given you underlying substance that isn't lost as you make friends with new ideas.

Those who aren't bold enough to explore new ideas don't deserve the excitement and adventure involved in discovering new worlds.

Monday, November 28, 2011 - 9:53am

Groupthink among scientists happens to be in the news these days. One of the choicer quotes from Climategate 2.0 is “I am not convinced that the ‘truth’ is always worth reaching if it is at the cost of damaged personal relationships.”

Monday, November 28, 2011 - 8:25pm

Al,

When you first posted here, you were worried about being censored. You asked if the site was "open" or not. But now, you say this:

I have great interest in human group behavior, and see the power that it has over how we think. While I think Hayek was an important thinker, beyond his economics, I value very much the views of Karl Mannheim, who posited that group affiliation is so important that it skews thinking, even among true intellectuals.

So, there is no hope of changing anyones thinking that is part of the glue that provides cohesion.

Do you personally believe in censorship or in free speech? I just finished reading a book that links this kind of thinking in your quote above -- the kind of thinking of a "Karl Mannheim" -- with a postmodernist argument for censorship. The book is called: "Explaining Postmodernism" and what follows are some quotes from pages 234-8. I would be interested in your reaction to these quotes:

Traditionally, speech has been seen as an individual cognitive act. The postmodern view, by contrast, is that speech is formed socially in the individual. And since what we think is a function of what we learn linguistically, our thinking processes are constructed socially, depending on the linguistic habits of the groups we belong to. From this epistemological perspective, the notion that individuals can teach themselves or go their own way is a myth. Also, the notion that we can take someone who has been constructed as a racist and simply teach him to unlearn his bad habits, or teach a whole group to unlearn its bad habits, by appealing to their reason--that also is a myth. ...

We are constructed socially, the postmoderns argue, and we are, even as adults, not aware of the social construction that underlies the speech we are engaging in. ...

Catherine MacKinnon applies this point to the special case of women and men, in making her case for censoring pornography. ... She argues that pornography is a major part of the social discourse that is constructing all of us. It makes men what they are in the first place and it makes women what they are in the first place. So we are culturally constructed by porn as a form of language to adopt certain sex roles and so forth(10).

As a result of this, the postmoderns infer there is no distinction between speech and action, a distinction that liberals have traditionally prized. According to postmodernists, speech is itself something that is powerful because it constructs who we are and underlies all of the actions that we engage in. And as a form of action, it can and does cause harm to other people. Liberals, say postmodernists, should accept that any form of harmful action must be constrained. Therefore, they must accept censorship. ...

Postmodern speech codes, therefore, are not censorship but a form of liberation--they liberate the subordinated groups from the punishing and silencing effects of the powerful groups' speech, and they provide an atmosphere in which the previously subordinated groups can express themselves. Speech codes equalize the playing field. ...

Herbert Marcuse first articulated it in a broader form when he said: "Liberating tolerance, then, would mean intolerance against movements from the Right, and toleration of movements from the Left."(12)

What do you think of these quotes, Al? Also, what do you think of Herbert Marcuse?

Ed

(Edited by Ed Thompson on 11/28, 8:26pm)

Wednesday, November 30, 2011 - 3:13am

Short, pithy columns aren't hyperbole! And public works are a myth since "public" is false. Hoover dam isn't a public project except in so far as we are all coerced into funding it. It is a project for those who use it! As are all so called "public" projects--actually private ones that the all of us are forced to support. That's the myth, that these are bona fide public.