On Libertarianism and Statecraft, Part II: Property and Liability

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Author’s note: The main themes of this series will be further expounded upon in my upcoming book Anarcho-Monarchism, which will be available in April.

Stateless Statecraft

At the end of Part I, I posited that statecraft would best function and flourish without a state. This is an assertion that could seem oddly self-defeating unless the meanings of state and statecraft are clarified. Statecraft is by definition simply good governance of the internal and external affairs of a political body. The state is a group of people who exercise a monopoly on initiatory force within a geographical territory. Although the word ‘statecraft’ directly refers to the state, there is no philosophical reason for why statecraft would disappear if there were no state. When we consider the implications of governance on the free market, the abolition of the state would lead to the largest amount of statecraft possible. To explain why this is so, it is necessary to formulate a theory of property.

Absolute Property

Each person who owns property in a libertarian social order is the absolute monarch over his own property. They are not bound by the constraints of an overarching state that weakens the rights they have to their property. The landowner can decide the laws that apply within his property, who can enter his property, and how to use all of the resources on his property. The owner also reaps the benefits when renting the property that he owns. A society built around property is a society in which each person can rule absolutely over his own property without external interference. Decentralization involves a centralization of power for each individual and family, thus increasing power rather than decreasing it.

One can view a worldwide anarcho-capitalist society as millions or even billions of monarchies co-existing. (This is ignoring any other associations and any potential use of force, which will be dealt with in Part III.) Since property ownership makes each person into a monarch, each person will need to manage one’s property using the utmost care. This is especially relevant with regard to social relations, as social interaction involves multiple individual monarchs managing their property in unison. Furthermore, each of these monarchies has to fully internalize the costs they impose on others, and will therefore be held completely responsible for everything they do. Before formulating a wider theory of society, it is important to address this issue of externalities.

Externalities

Since completely decentralized monarchies need to internalize all costs they create, they cannot be formed or sustained as coercive political systems. Any failure to internalize these costs goes against the libertarian social order. Therefore, these monarchies must be value-productive to avoid being sold off. Property cannot be sustained if it is not actively producing value. Each property owner is thus burdened with ensuring that the property they hold is producing value. The more property one has, the larger one’s domain grows. Each person can hold a domain as large as one can utilize while producing value. This constrains the amount of property one can hold, as attempting to enlarge one’s property beyond one’s managerial capacity will be unprofitable.

Dishonesty, fraud, and theft will only ensure that the owners of property have an unsustainable relationship with their own property. They cannot produce profits, and the way in which they acquired their property will ensure that the property will soon become a great burden. The only way that this can be temporarily feasible is if the owners of this property convince the society to subsidize them through propaganda. It is always ultimately unsustainable and will create a chaotic relationship with property and/or society.

There is no central entity that decides what each of these monarchs does with their own property, so they are completely sovereign within their property. This sovereignty can only be individual and not corporate, as corporate structures only exist insofar as the state is willing to create and enable legal fiction. This means that each private person has to be subject to an individually sovereign monarch or be a monarch himself. Each person is forced to either obtain property, live on the property of another, or leave society altogether. The necessity of sovereignty creates an extreme necessity for statecraft, ensuring that statecraft would be rapidly developed beyond its current practice.

Holding property involves an increase in responsibility. As each property owner is a sovereign monarch in a libertarian social order, each person needs to govern their property in the most effective manner. Failure to do so will result in the economic necessity to relinquish property in order to pay past debts and/or future costs. The ultimate meritocracy is produced, and each owner can realize his full potential in terms of governance. As long as aggressive violence is prevented, there will not be a chaotic society or freely acting individuals with no regard for societal well-being. There will instead be a society in which all people who own property are burdened with governance to far greater extents than they currently are.

Property as a Liability

The socialist conception of property that is steeped into our culture says that owning property is a beneficial and wholly positive fact within the life of each individual person. This is the notion that capital simply produces money from money. It assumes that all people would rather own property than not, and the ownership of property is not constrained by anything other than simply not relinquishing that property. It can easily seem as if owning property only adds to the net worth of an individual without any associated downsides, but this is true only insofar as the property is subsidized by the state and organic human interaction cannot take shape. The best example of this is the multinational corporation, which is entirely formed through the partnership of a company and many states. When the control one has over one’s own property is limited, one is subject to the whims of the state. They will also have the protection of the state, such as it is. People are relatively insulated against the true effects that owning property has on them. Property owners need to ensure that their property is value-productive in order to not consume their resources and the resources of society. This is because property requires constant investment and the only way to avoid this is to give up property.

The Burden of Property

Since all property depreciates in value when it is used, keeping property well-maintained is a huge effort. To demonstrate this, we need to consider the most common examples: owning a house and owning a factory. When a person owns a house in a statist system, they are largely not responsible for most of what happens to that house. The state provides military and police protection while ensuring that the house is connected to most utilities. The state also increases the burden of the house with property taxes, but theft cannot be classified with other burdens of property. When a house is owned in a libertarian society, the matter at hand becomes much more complicated. The factors that ensure that a house can function as a suitable home are all put into the hands of the homeowner.

Even with the state being involved, it is difficult to maintain the aesthetic qualities of a house, the functionality of the utilities, and the maintenance of appliances. This is alongside all comforts that are vital for a house to be inhabitable. Without the state subsidizing property, it becomes the duty of everyone who owns a house to ensure that they are able to use roads and utilities. In a libertarian society, the person burdened with owning the house can no longer externalize the costs of setting up the systems required to make the house a functional and comfortable place to live. Furthermore, if there is no state provision of security, each person would have to ensure that their property is secured without having defense subsidized by the state. This will result in a larger burden of costs when it comes to maintaining property.

Commercial Property

Property ownership gets more complicated with a house that is used for collecting rent. In addition to the aforementioned burdens, the person owning rental property has to ensure that the renters of that property will take proper care of it. The rental property also has to provide a good return on investment. The task of finding good real estate and preserving its value in order to benefit the distant future is immense. The burden of extensive economic calculation rests on the shoulders of the individually sovereign absolute monarch who owns that property.

This is even worse in the case of a factory, which is property that only has value insofar as it is engaged in production. A factory cannot serve as a habitable home in the first world, each individual employee needs to get paid, and all machinery needs to be maintained. Costs need to be reduced and demand needs to be properly met in order to avoid losses due to shortages or overproduction. Additionally, a factory will inherently have capital consumption. It is very easy to be in a financial state of loss upon starting an enterprise, and a lot of businesses will never bring in a profit and will always be a burden to the owner of that enterprise. Thus, it is of paramount importance to the owner of the enterprise to govern it properly and to take the best care possible of his property.

Conclusion

Property may be burdensome, but this immense burden of property does not have to be put upon one person, and in any real situation it will not be. What is fundamentally vital for the ownership of property is that the burden of property can be shouldered collectively to benefit from co-operation and economies of scale. This increases the degree of governance necessary. In Part III, I will discuss how this theory of property is conducive to statecraft and how we can formulate a theory of stateless governance using this framework. I will also address the issue of war and conflict in a private property society.

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Agreeing With Statists For The Wrong Reasons: Conscription

Conscription of individuals for civil or military service has been practiced since the dawn of statism, and has expanded to include almost all men since the French Revolution. The practice goes by many names: levying, impressment, national service, call-up, and the draft, to name a few. Though many states no longer use it, relying instead upon professional soldiers that enlist voluntarily, most claim a right to resume conscription if they cannot preserve themselves or achieve their foreign policy goals otherwise. This policy is controversial on religious, political, and philosophical grounds. Libertarians object to conscription as a violation of self-ownership, the root of all libertarian philosophy. As Ayn Rand explains,

“It negates man’s fundamental right—the right to life—and establishes the fundamental principle of statism: that a man’s life belongs to the state, and the state may claim it by compelling him to sacrifice it in battle.”[1]

According to Ron Paul,

“Conscription is wrongly associated with patriotism, when it really represents slavery and involuntary servitude.”[2]

The philosophical libertarian case against conscription is beyond reproach, but the perverse nature of statist systems of governance can make almost any deontologically indefensible policy into a useful strategy for libertarians. Let us see how conscription can backfire on the states that make use of it, and thus why one might agree with statists for the wrong reasons.

By forcing people to engage in an activity, the state provokes feelings of resentment and rebellion. With regard to conscription, this has a variety of effects that undermine the state. First, conscription fuels anti-war movements. Look at the unrest in America during the Vietnam War. Resistance to the draft played a major part in the protest movement, as people burned draft cards, evaded conscription by fleeing to Canada, and attacked draft board offices.[3] Similar examples go all the way back to the time of Hammurabi (r. 1791–1750 BC), when people avoided ilkum (the ancient Babylonian conscription system) by hiring substitutes to fight in their stead, leaving town, or selling property that had ilkum obligations attached to its ownership. These behaviors were outlawed by the Code of Hammurabi, but were widely practiced regardless.[4]

When Milton Friedman convinced the Nixon administration to end the draft in 1973, it knocked the bottom out of the anti-war movement, showing it to really be an anti-draft movement. The deep, unpleasant truth here is that many people do not care that the state is prosecuting a murderous war of aggression unless they feel personally inconvenienced by it. Thanks to central banking, fiat currency, and the monetary policies they enable, governments are able to hide the true cost of war from their citizens. Although the post-war recession always comes eventually, many people lack the economic literacy to connect the dots. A sufficiently strong military can keep the enemy from causing damage at home, and anyone who suggests that whatever terrorist attacks do get through are a retaliation for military misadventures overseas can be labeled a kook and run out of polite society by establishment politicians and pundits. But few things will inconvenience the citizenry more than receiving notice that they are to drop everything and report for basic training, after which they will get a one-way ticket to a war zone.

The feelings of resentment toward conscription also have an impact on performance. An unwilling workforce is very inefficient, as they lack the passion and work ethic for work that one enjoys or at least finds voluntarily acceptable. This has the effect of making the state’s forces less capable, which libertarians should seek to do, especially if those forces are deployed in wars of aggression abroad or suppressing dissidents at home. If the state is going to do such things, it is better that they be done by people who do not want to be doing them. They will lack the barbaric enthusiasm necessary to commit the worst atrocities. Some may even sabotage such efforts, raising the cost of imperialist expansion and domestic oppression so that they may become unfeasible.

Speaking of raising costs, conscription increases the number of soldiers, so it necessarily increases the number of future veterans. Since most governments have programs which are designed especially for veterans, to either take care of injuries sustained while in service or help them transition to a civilian life, these programs have to expand to meet the needs of more people. This has a similar effect on the national budget to growing the welfare state, and while libertarians should be trying to do the opposite at face value, any realistic assessment of political reality will find this to be impossible. The more practical strategy is to overload and collapse such programs, and using veterans programs instead of the welfare state for this purpose will be more effective. Welfare parasites are likely to engage in aimless riots if their programs are cut, as they will simply switch to direct theft of resources to fuel their unproductive lifestyle if the indirect theft of the state ceases to supply them. Veterans, on the other hand, will have an ax to grind with the state in particular, as they will feel that the state is in breach of a contract with them after they risked their lives to defend it. As happened with the Bonus Army incident in 1932, this can lead to civil unrest. A large movement of disgruntled former military personnel is one of the most dangerous domestic challenges that a ruling elite can face. Opposing such a movement will contradict their own propaganda and promises about military service. Cutting veterans benefits will turn the youth against serving the state. Using the current state forces to suppress the former state forces has the potential to foment rebellion. There are no good answers for the elite if they cannot keep their promises to military veterans.

On the subject of revolution, the aspect of conscription that undermines the state the most is that it gives training, experience, camaraderie, and organizational skills to potential rivals. This cannot be avoided because the alternative is to have inept conscripts, which defeats the purpose. A famous example of this dynamic is the Mamluks, children who were kidnapped from non-Muslim Iranian and Turkish families to serve as soldiers in Muslim caliphates and sultanates beginning in the 9th century. They became a powerful warrior caste over time, eventually seizing power for themselves in Egypt in 1250, forming the Bahri and Burji dynasties that ruled until 1517.[5] Though modern conscripts are not generally imported slaves or child soldiers, they still have the potential to become the paramilitary wing of a political movement capable of seizing power.

Finally, let us make use of the neoreactionary concept of formalism. This is the idea that in human affairs, official reality should match actual reality, the underlying power dynamics should be brought into the open, and accounting practices should be honest. The actual reality is that any state would conscript its citizens if the alternative were a collapse of the regime and/or conquest by a foreign power. Official reality should therefore refrain from denying this fact, so let us stop the deceit of saying that conscription is abolished.

To conclude, conscription is a terrible policy for any state to implement, full of perverse incentives and rights violations. But because those harm the state while breeding resistance to it, one may agree with statists for the wrong reasons when they advocate for conscription.

References:

  1. Rand, Ayn (1967). Capitalism: The Unknown Ideal. Signet. p. 226.
  2. Paul, Ron (2003, Jan. 14). “Conscription Is Slavery”. Antiwar.com
  3. Zinn, Howard (2003). A People’s History of the United States. HarperCollins Publishers. p. 483–501.
  4. Postgate, J.N. (1992). Early Mesopotamia Society and Economy at the Dawn of History. Routledge. p. 242–43.
  5. McGregor, Andrew James (2006). A Military History of Modern Egypt: From the Ottoman Conquest to the Ramadan War. Greenwood Publishing Group. p. 15.

Book Review: Reactionary Liberty

Reactionary Liberty is a book about libertarian philosophy by Robert Taylor that approaches this and related subjects from a reactionary perspective. The book is divided into fifteen chapters, with a short introduction preceding.

Taylor begins with a four-page introduction in which he explains his motivations for writing the book. Mostly, this involves the decisive leftward shift in American libertarianism since the Ron Paul presidential campaigns of 2008 and 2012, including a notorious open letter to Paul read at the 2015 International Students for Liberty conference and Gary Johnson’s disastrous presentation in 2016. He briefly explains what is wrong with left-libertarianism and gives an outline of the structure of the book.

In the first chapter, Taylor begins with the non-aggression principle (NAP), self-ownership, and private property rights. Although Taylor notes the important distinction between just property and currently-held property, he fails to properly account for the role of conquest in determining property rights over the long term. Taylor goes on to explain the social and economic difficulties that arise without secure property rights. The failures of central planning are discussed, as are the differences between negative and positive rights. He lays out the history of natural law in Western philosophy, beginning with early Christian thinkers, continuing through Enlightenment philosophers, and culminating in Hans-Hermann Hoppe’s argumentation ethics. Taylor contrasts this with the state, which routinely violates natural law and rights. He details the many crimes of nation-states, war and debt slavery being chief among them. Taylor concludes by proposing an alternative to Marxist class theory which vilifies the state rather than the capitalist, and elevates the producer rather than the parasite.

The second chapter deals with the Austrian School perspective on the subject. Taylor takes the reader through praxeology, the action axiom, marginal utility, and the role of prices in efficiently allocating resources. Next, he explains why government and central bank interference with prices is so destructive. The section on money deals with the history of money according to the regression theorem, beginning with barter and commodity money, then progressing to precious metals and receipts for those metals. Taylor shows the reader that modern fiat currencies are a corruption of these receipts into instruments of inflation and debt slavery that facilitate unduly risky financial behavior, state largesse, and wars. In the Austrian view, these behaviors fuel the business cycle of booms and busts by distorting interest rates, which leads investors astray.

Spontaneous order and free markets are the subjects of the third chapter. Taylor begins with the economic calculation problem, the knowledge problem, and public choice theory, showing that central planning cannot succeed because it cannot calculate prices without the market and is further hampered by cynical concerns. He then covers the concept of spontaneous order, making the important and oft-overlooked observation that “there is no such thing as an unregulated market; the issue is, rather, who is doing the regulating.” These regulations take the form of trust, reputation, and freedom to dissociate, unless the state interferes by imposing its coercive regulations. Taylor frames the difference between state and market in terms of who gets profits and who suffers losses. The state privatizes profits and socializes losses, while the market does the opposite. Next, Taylor proposes the term marketization to describe the proper procedures for converting state monopolies into free-market entities, as privatization has acquired the meaning of turning over state monopolies to politically-connected oligarchs, as happened in Russia when the Soviet Union collapsed. He concludes the chapter by providing an outline of how businesses may function in a purely libertarian market while noting that the particulars can only be observed in the future, not precisely predicted in the present.

The fourth chapter offers a much-needed treatment of Cultural Marxism, a concept often (and incorrectly) dismissed by leftists as a conspiracy theory. Taylor traces its roots to the failure of political and economic Marxism in Europe after World War I, at which time Antonio Gramsci and Georg Lukacs resolved to apply Marxism to culture and use it to destroy traditional Western culture, which they faulted for the failure of communism to take root in most of the West. Taylor traces the ‘long march through the institutions’ from its beginnings in the 1930s all the way to its modern manifestations of identity politics and campus craziness. He calls on libertarians to refute Marxism’s cultural application, just as they defeated its economic application. The next section begins to do this by making the case against egalitarianism, showing it to be both impossible and self-defeating in practice. The second half of the chapter traverses more dubious ground in the form of r/K selection theory. This is an interesting analogy for attempting to understand political dynamics, but it places too much emphasis on nature instead of nurture and encourages dichotomous thinking in complex problems. That being said, it correctly suggests that some authoritarian leftists are beyond reason. The chapter ends with an explanation of the necessity of traditional social and sexual norms, as well as how and why Cultural Marxists have attacked them.

Decentralization is the focus of the fifth chapter. Taylor gives the reader a history lesson in the creation of Western traditions and common law through decentralized institutions after the fall of the Roman Empire. He blames centralization elsewhere in the world for preventing those peoples from enjoying the liberty and prosperity of Europeans. Turning to America, these two descriptions show the difference between what the United States was supposed to be and what it has become. As a remedy, Taylor proposes breaking up the US into at least 100 smaller territories. He concludes the chapter by praising those who have taken a strong stand for decentralization in the face of oppressive state power.

The sixth chapter attacks state power as a concept. Taylor explains how people are ruled indirectly through propaganda and mythology rather than directly by force, as the masses are sufficiently numerous and armed to defeat such an effort. He discusses the role of government schooling in indoctrinating the masses to accept such an arrangement, as well as the insufficient efforts to resist the imposition of compulsory indoctrination in the 19th century. The concept of situational Leninism comes next, followed by an overview of famous psychological experiments that demonstrate the willingness of people to obey authority toward reprehensible ends. After this, the role of language control and thought policing in maintaining authoritarian leftist control is examined. Taylor finishes the chapter with Ludwig von Mises’ concept of statolatry, in which statism becomes a sort of secular religion.

The attack continues in the next chapter, as Taylor turns to the flawed ideas of minarchism. He returns to the American example to show how limited government does not stay limited. He explains that the Constitution was not actually written to limit government, contrary to popular belief. It gave the federal government more power than it had under the Articles of Confederation, which Taylor praises in relative terms. He shows how Americans of the time were deceived, taking the reader through the tax rebellions of the 1780s-90s and the Alien and Sedition Acts. In the next section, he contrasts traditional monarchies with modern democracies, finding the former to be far less limited and more destructive due to inherent incentive structures. The chapter concludes with a strong explanation of why democracy grows the state and harms the cause of liberty.

In the eighth chapter, Taylor addresses police statism and what Samuel Francis termed ‘anarcho-tyranny’, a situation in which real crime goes unpunished while those who try to defend themselves are attacked by the state. He begins by noting the difference between a peace officer and an agent of the state. His description of several US Supreme Court cases is accurate, but misses the larger point that a coercive monopoly has no enforceable obligations because no one can enforce obligations against them, regardless of any court rulings. Taylor reviews Cultural Marxism through the lens of anarcho-tyranny, then explains some of the more obnoxious leftist behaviors in terms of Saul Alinsky’s Rules for Radicals. The successes of the alt-right are explained in terms of their willingness to use the left’s tactics against them, unlike conventional conservatives. Next, he covers the origin of modern policing in the UK and the US, then proposes a private alternative to state police forces. The last section contemplates violent resistance against the state, though not with nearly the length and depth that the topic deserves.

While the eighth chapter considers the enforcers, Chapter 9 is concerned with what they enforce. Taylor begins by illustrating just how much poorer everyone is today as a result of lost economic growth due to regulations. Next, he refutes the progressive narrative about the antebellum South and the industrial captains of the 19th century, showing the negative aspects of both to be the result of government intervention rather than its absence. He then profiles James J. Hill, a largely forgotten hero of free-market capitalism in the late 19th century. Hill’s good deeds are contrasted with those who used the state to get undue favors and suppress competition. Taylor also corrects the record on John D. Rockefeller. The following section covers the history of expanding regulations after the Civil War, through the Progressive Era, and on to the present. He accuses those who point to regulations as the cause of improvements in safety and reductions in pollution of committing the broken window fallacy and ignoring the fact that some regulations have made people less healthy. The chapter concludes with many examples of faulty regulations that do more harm than good.

The transition from voluntary mutual aid to coercive welfare statism is the subject of the tenth chapter. Taylor introduces the subject with the age-old statist question, “Without government, who would take care of the poor?” Of course, one must begin by pointing out that government does no such thing, as Taylor does. He spends the first part of the chapter educating the reader about mutual aid societies, which were common before the Progressive Era but were destroyed by government intervention into the healthcare and insurance industries. Taylor shows how the state has reduced the supply of medical care, thus increasing its cost and decreasing its availability. Unfortunately, Taylor’s approach ignores the Social Darwinist perspective that natural selection should be allowed to remove the least successful humans from the gene pool. The second half of the chapter debunks at length the myth of Scandinavian socialism.

The eleventh chapter deals with civil disobedience. Here, Taylor stumbles in the way that most libertarians do, in that he fails to understand raw power, celebrates small victories that will not occur on a large scale, and confuses the downfall of a particular regime with ending the state itself. He does this even while reciting the history of preparedness for the use of force among civil rights leaders and noting what the state has done to leaders of nonviolent resistance efforts. Taylor also manages to celebrate the effects of Western degeneracy among Middle Eastern youth. His encouragement of government agents to refuse unjust orders, leak information detailing abuses to the public, and otherwise engage in whistleblowing is more on point, though he notes the powerful incentive structure against doing so. The second half of the chapter details a plethora of private alternatives to services which have long been monopolized and/or heavily regulated by the state.

The growth of cryptocurrency and other peer-to-peer technologies is the focus of Chapter 12. Taylor provides a decent layperson’s overview of Bitcoin, then moves on to practical applications of cryptocurrency, such as funding dissidents suppressed by legacy financial networks, evading capital controls, and engaging in commercial activities forbidden by the state. Next, he covers the P2P revolution, which has greatly expanded liberty and privacy online and in the physical world. The remainder of the chapter runs through various examples of how P2P and blockchain technologies have solved problems and exposed corruption.

In the thirteenth chapter, Taylor addresses the open-borders dogma held by many libertarians. He demonstrates that open borders and forced integration are a form of the aforementioned anarcho-tyranny, with closed state borders being sub-optimal but less evil. The role of forced diversity in creating internal conflicts that lead to less liberty is considered, as is the biological phenomenon of kin selection in creating cohesive groups. Taylor makes the case that open borders are contrary to private property rights because in order to have open borders, the state must override the wishes of property owners who do not want migrants to enter. He then examines the history of US immigration policy from 1790 to the present, noting the shift in demographics admitted after 1965. The contention that the real problem is the welfare state rather than demographic shifts is rebutted both on the practical grounds of American politics and with the counterexample of European nations surviving socialism but falling into turmoil due to migrants.

The fourteenth chapter furthers the themes from Chapter 11 by discussing secession, nullification, and political migration. Taylor notes the myriad benefits of secession, but only briefly mentions the history of larger states violently suppressing such movements. Next, he covers the history of both legislative and jury nullification in opposing unjust laws. Taylor’s exploration of political migration is rather America-centric, but it can be adapted to other situations. His praise for the Free State Project comes off as overzealous, given the thoroughly leftist nature of that organization. He finishes the chapter with a concept called the Benedict Option, in which those who wish to preserve a tradition and begin a restoration retreat from the public and urban life of a degenerate culture.

The final chapter of the book is an argument against democratic government. This reads much like Hoppe’s Democracy: The God That Failed, quoting and borrowing from it extensively as Taylor explains the perverse incentive structures inherent in democracy and makes the case that monarchy has a superior incentive structure. But unlike Hoppe, Taylor contemplates physical removal as a means of achieving a libertarian social order in addition to a means of maintenance. As Taylor writes on page 283, “Economics teaches us that there is no such thing as a free lunch. But in order to achieve and maintain a libertarian social order, there will be free helicopter rides.” His defense of Augusto Pinochet’s actions in Chile and Lee Kuan Yew’s rule in Singapore as better than the alternatives is common in right-libertarian circles, but his defense of Francisco Franco goes a bit too far. Taylor ends with an exhortation to and description of a libertarian revolution, but this is, as before, too brief.

Overall, the book is good, but not great. For a book called Reactionary Liberty, it could have used more reaction in the form of lengthy explanations of traditional norms and power dynamics. Taylor seemed to lack an editor and proofreader, as some typos survived in very unfortunate places that render a few sentences absurd. A few chapters can become tedious when Taylor features a laundry list of examples. That being said, it is a strong presentation of right-libertarianism that is impeccably sourced.

Rating: 4/5

On Leftist Academics, Respectable Opinion, and Civil War

In recent times, there is a burgeoning industry in popular books on academic subjects aimed at the layperson or the educated person who is not an expert in the field discussed in a certain book. Most of these books, particularly in the fields of politics, economics, and sociology, are written by authors who have a leftist bias. This is to be expected, as academia has long been dominated by such people. But this bias seems to consistently impair such authors whenever they attempt to understand perspectives which are fundamentally different from their own. Three examples of this can be found in books that were reviewed here at Zeroth Position in the past fortmoon. The shortcomings therein are evidence of a much broader and more serious problem. We will consider extant theories which describe this problem. Next, we will posit some potential origins for this phenomenon, as well as some possible solutions. Finally, we will consider the potential negative consequences of leaving the problem unsolved.

Good Guys With Guns

This is a book about concealed firearms, the culture around them, and their effects on society by sociologist Angela Stroud, reviewed here on December 12, 2016. True to leftist thought, the roles of gender, race, and class in firearm ownership are major themes of the book. The series of interviews included in the book illuminate many interesting aspects of firearm ownership which are not adequately discussed elsewhere, and Stroud makes a genuine effort to understand people who disagree with her. But she commits a multitude of errors which are common among leftists and sociologists, and seems to be unable to keep herself from doing so. Her most egregious and oft-repeated fallacies include the broken window fallacy, confusing objective reality with subjective social constructs, false dilemmas, accusing people of contradicting themselves when they do not, and conflating society with the state. She also does a poor job of recognizing and assessing potential threats, ignores information which undermines her case, blames free-market capitalism and patriarchy when they were not in use, assumes that any inequality is the result of institutional oppression, and blames white people for problems caused by non-whites.

While there are many insightful points made in the book, Stroud commits far too many fallacies along the way for the book to be enjoyable or read smoothly. What could have been an excellent work on an important topic is instead bogged down by postmodern discourse, social justice rhetoric, and shoddy reasoning.

Islamic Exceptionalism

This is a book about the relationship between Islam and the modern nation-state, the role that Islam has played in the development of the Middle East, and the currently ongoing conflicts there by Brookings Institution senior fellow Shadi Hamid, reviewed here on April 30, 2017. Hamid’s explorations of these subjects leads him to question the mainstream liberal narrative of Whig historiography, democratic supremacy, and progressive determinism, though he never quite manages to reject this narrative. He provides an informative history of Islam from the beginning, illuminating several points that frequently elude Westerners. But when Hamid interviews youths who wish to break the Westphalian order of nation-states and are willing to use violence to achieve political goals, he seems unable to truly understand them.

That being said, of the three authors discussed, Hamid is the most perceptive of the lot. He correctly recognized ISIS as a state at the time of writing because it had a monopoly on initiatory force within a geographical area while providing the common functions of a state. He knows that moderates tend to lose in civil wars and revolutions because they lack both the fervor and resolve to do what the extremists on all sides will do. He understands that there are no such things as universal values in practice. But the Western liberal democratic biases of the author are inescapable. Hamid is unable to process the possibility that democracy is inferior to the older pre-Westphalian order, especially for the Muslim world. This is especially irksome, given the amount of evidence that he himself finds for this possibility.

The Euro

This is a book about the shortcomings of the eurozone currency project, the faulty policies pursued by European leaders thus far, and several potential alternatives by American economist Joseph Stiglitz, reviewed here on December 11, 2017. He is perhaps the worst of the three, in that while the others have difficulties in understanding right-wing thought, Stiglitz tends to either show no awareness of its existence, dismiss it out of hand, or mischaracterize it in ways which can only be deliberate for someone of his caliber. His Keynesian approach to economics is apparent from the beginning, as is his thoroughly statist worldview. He never mentions the Austrian School and ignores many practical possibilities for true economic and political liberty. The Chicago School earns nothing but contempt from him, as he recites the leftist caricature of Chile under Pinochet and derides monetarism. Meanwhile, he repeatedly blames markets for the 2008 crisis when they were only responding to the perverse incentives created by governments and central banks. He also blames austerity for Europe’s recent troubles when very little austerity has actually occurred.

Like Stroud, Stiglitz confuses collective action with state action. Stiglitz’s faith in democracy is even stronger than Hamid’s, as he never questions whether anything is wrong with democracy itself, even as he argues against incentive structures which are necessarily part of any democracy, advocates for a new monetary system which could offer states tyrannical control over their citizens, and denounces anti-immigrant groups in Europe which resist demographic replacement by a ruling class that they did not ask to replace them. Though Stiglitz does not appear to argue in bad faith, one could be forgiven for thinking that he does.

Current Theories

Before attempting to analyze the above examples, it is necessary to lay some groundwork concerning meta-politics. In political discourse, there is a range of opinions which are considered to be socially acceptable to varying degrees, with extremes on one or both sides of each issue regarded as anywhere from unfashionable at best to worthy of violent response at worst. This concept has been given various names; Hallin’s second sphere, the Overton Window, and the index card of allowable opinion, to name a few. Hallin’s analysis divides the world of political discourse into three spheres according to how the media covers various subjects. The first sphere is the sphere of consensus. This contains topics on which agreement is assumed. Hallin writes that for such topics, “Journalists feel free to invoke a generalized ‘we’ and to take for granted shared values and shared assumptions. …Journalists do not feel compelled to present an opposing viewpoint or to remain disinterested observers.”[1] The second sphere is the sphere of legitimate controversy. This sphere consists of matters on which rational, informed people have disagreements. Journalists are expected to be disinterested observers and reporters for topics in this sphere, not overtly supporting one position over another. The third sphere is the sphere of deviance. This contains topics which are believed to be outside the bounds of legitimate discussion. Hallin writes that in this sphere, “Journalists depart from standard norms of objective reporting and feel authorized to treat as marginal, laughable, dangerous, or ridiculous individuals and groups who fall far outside a range of variation taken as legitimate.”[1] Those who dispute the content of the sphere of consensus tend to find themselves here, as do those who lack sufficient influence to merit news coverage or are known for making baseless and outlandish claims. The boundaries of the spheres shift with changes in public opinion, journalistic standards, and media ownership, as well as advances in reason, science, and technology.

Joseph Overton’s conception of political discourse posits a range of ideas which are tolerated in public discourse. Whereas Hallin’s spheres describe media coverage, the Overton window describes voter sentiment and politician stances. Overton contends that the political viability of an idea depends on whether the idea is within the window or outside of it. Politicians who recommend too many policies which are outside of the window will be considered too extreme to be elected or re-elected. Most of the theory about the Overton Window is concerned with how to move it or keep it from moving, depending on whether the goal is to advance policies which are currently outside or inside of the window, respectively. Application of the door-in-the-face technique to Overton’s theory results in the deliberate promotion of ideas that are far outside of the window in order to shift the window toward ideas which are slightly outside of it. (This makes as much sense in ideological space as it does in physical space; one cannot push an object while one is standing on it, as such a force is both self-defeating and lacking in leverage.)

Tom Woods refers to this phenomenon as the index card of allowable opinion. Woods’ description combines the insights of Hallin and Overton, as the establishment media uses Hallin’s spheres while playing a large role in deciding where the frame of the Overton Window lies. Woods writes,

“On the left, sites like ThinkProgress and Media Matters smear and attack those uppity peons who stray from the ideological plantation that the Washington Post and the New York Times oversee. On the right, it’s neoconservative sites like the Free Beacon, who have built a nice little cabin on that plantation, and who rat out anyone who tries to run away.”[2]

One could easily add National Review and several others to the list of sites on the right (such as it is in modern America), as well as note such a presence in libertarian circles, denounced here as cuckertarians. The purpose of maintaining this range of allowable opinion is to prevent people from realizing the need for a radical change from the status quo by saturating them with ideas which never stray too far from the establishment narrative and presenting them with the illusion that they have meaningful choices in the current system. As Noam Chomsky writes,

“The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum—even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate.”[3]

The behavioral pattern that Woods notes later is the subject of the next section. He continues:

“The respectables of left and right do not deign to show where we’re wrong, of course. The very fact that we’ve strayed from the approved spectrum is refutation enough. …Once in a while they do try to show where we’re wrong, but they can almost never manage even to state our position correctly, much less muster an effective argument against it. [The] purpose of these alleged replies is not to shed light, but to demonize libertarians in the public mind.”[2]

Mechanisms and Remedies

The range of allowable opinion has the effect of a feedback loop on academia. The range of allowable opinion agreed upon by one generation of academics influences the next generation, limiting the range of ideas to which they are exposed in sufficient depth to truly understand them. Whereas true rightist thought is rigid, rationalist, and timeless while leftist thought is flexible, empiricist, and novel, it is no surprise that this process gradually pulls the Overton window leftward. There are several mechanisms by which this occurs, and if the problem is to be resolved, each requires its own remedy.

Whig History

Whig historiography views the past as an inevitable march of progress toward greater knowledge and freedom, culminating in liberal democracy and constitutionally limited monarchy. The name comes from the British Whigs, who supported the power of Parliament over the power of the monarch, thus opposing the Tories, who did the opposite. The term has acquired a pejorative use for good reason. Whiggism bears resemblance to Marxism, which follows the same narrative to a different end, namely that of a classless, egalitarian, communist utopia. It assumes without evidence that there will be no further progress past liberal democracy and limited monarchy toward greater knowledge and freedom. This explains why its adherents attack libertarians, as they propose further advances in freedom, which are disallowed by the Whig narrative. Indeed, Whiggism errs in assuming that history is necessarily goal-oriented at all, as this would require some collective unconscious and/or divine plan that is not proven to exist.

The present-mindedness of the Whig approach leads its adherents to believe that current ideals were held in the past, which ends up producing a great amount of ignorant eisegesis when historical figures are examined in a context that they would find to be alien. It keeps one from investigating the real causes of historical change by providing the false answer that the cause was the march toward progress.[4] Whiggism also motivates the sanctification of past leaders who advanced this progress and the vilification of those who worked against it[5] that is omnipresent in contemporary politics, for if an inevitable march toward progress is assumed, it follows that conservatives and reactionaries are engaged in a revolt against nature. As Allan Greer writes,

“They lost because they had to lose; they were not simply overwhelmed by superior force, they were justly chastised by the God of History.”[6]

The ongoing influence of Whiggism partly explains why leftist academics seem unable to grasp rightist thought. An inevitable march toward progress combined with the generally leftist nature of progress means that they view a rigorous understanding of and debate with rightist thought as unnecessary; we have progressed past it, never to return. Among the less academically inclined, this explains the “Its the current year!” response that is widely mocked among rightists.

The most potent antidote to Whig history is to relentlessly attack its fallacies while advocating alternatives such as cyclical history (a repeating cycle of ascent and decline) and agnostic history (the view that no such grand narrative can be known). Butterfield proposed a methodological remedy “to evoke a certain sensibility towards the past, the sensibility which studies the past ‘for the sake of the past’, which delights in the concrete and the complex, which ‘goes out to meet the past’, which searches for ‘unlikenesses between past and present.’”[7]

Filter Bubbles, Echo Chambers, and the Mirror-Image Fallacy

While Whig historiography can lead leftist academics to dismiss rightist thought as an unworthy opponent best left unengaged, other phenomena can leave them unaware of its existence. A filter bubble is a form of intellectual isolation that can occur when websites use algorithms to guess what a user wants to see based on the user’s history and other personal information. This keeps people from finding information that is presented from different viewpoints, thus trapping them in a cultural or ideological bubble.[8] This leaves them ill-equipped to deal with those who are unlike themselves. The term was coined by Internet activist Eli Pariser and discussed in his 2011 book of the same name. Pariser formally defined the concept of a filter bubble as “that personal ecosystem of information that’s been catered by these algorithms.”[9] The filter bubble is the technological manifestation of the echo chamber, a term describing the tendency of legacy media as well as one’s social and professional circles to create similar limitations in thinking and perception. Pariser notes that filter bubbles can harm a society by undermining civic discourse, creating confirmation bias, and increasing vulnerability to propaganda and other manipulations of public opinion.[10]

Although the extent of the effect of filter bubbles remains in contention[11], and some of the effect comes from user choice that emanates from and reinforces echo chambers in the physical world[12], the influence of exposure to only one’s own side of political issues is guaranteed to distort one’s perception of reality. In the worst cases, this can lead people to believe that everyone thinks and views the world as they do, a condition which Charles Krauthammer describes as the mirror-image fallacy. He writes:

“The mirror-image fantasy is not as crazy as it seems. Fundamentally, it is a radical denial of the otherness of others. Or to put it another way, a blinding belief in ‘common humanity,’ in the triumph of human commonality over human differences. …Its central axiom is that if one burrows deep enough beneath the Mao jacket, the shapka, or the chador, one discovers that people everywhere are essentially the same.”[13]

This predictably causes serious problems. Krauthammer continues:

“If the whole world is like me, then certain conflicts become incomprehensible; the very notion of intractability becomes paradoxical. …The more alien the sentiment, the less seriously it is taken. Diplomatic fiascoes follow… To gloss over contradictory interests, incompatible ideologies, and opposing cultures is more than anti-political. It is dangerous.”[13]

A more realistic approach is thus required, as Krauthammer describes:

“Ultimately to say that people all share the same hopes and fears, are all born and love and suffer and die alike, is to say very little. For it is after commonalities are accounted for that politics becomes necessary. It is only when values, ideologies, cultures, and interests clash that politics even begins. At only the most trivial level can it be said that people want the same things. Take peace. The North Vietnamese wanted it, but apparently they wanted to conquer all of Indochina first. The Salvadoran right and left both want it, but only after making a desert of the other. The Reagan administration wants it, but not if it has to pay for it with pieces of Central America.

And even if one admits universal ends, one still has said nothing about means, about what people will risk, will permit, will commit in order to banish their (common) fears and pursue their (common) hopes. One would think that after the experience of this [20th] century the belief that a harmony must prevail between peoples who share a love of children and small dogs would be considered evidence of a most grotesque historical amnesia.”[13]

The problem of echo chambers and filter bubbles is more difficult to solve than that of Whig historiography. This is not to say that solutions do not exist; one can make a conscious effort to look for these conditions and actively seek alternative viewpoints. Several websites have been created to aid people in that purpose, as have several browser plugins and smartphone applications.[14] In meatspace, this process is not as simple as installing a few programs, but there are a multitude of social clubs that one can join to meet new people with different perspectives. The difficulty lies in actually implementing the solutions. Just as the incompetent can lack the expertise to recognize their own incompetence, so too can those within an echo chamber fail to realize that they have a problem. In many cases, it will be necessary for people who are outside of such echo chambers to make an active effort to reach in.

Virtue Signalling

Whig historiography and echo chambers, while important factors, are only proximate causes of the intellectual limitations of leftists. A more fundamental source comes from the dynamics of social coordination and is known as virtue signalling. Virtue signalling is a conspicuous and/or invidious expression of one’s opinion on a moral issue done primarily to maintain or enhance one’s social status. The term originates from signalling theory, a body of work in evolutionary biology that examines communication between organisms. For example, a large mane on a male lion is a status signal that declares his fitness, as a less fit lion would lose contests with other males and have his hair torn out. The term later found use in economics, as an impressive building for a firm or a resume full of extraneous qualifications for a job-seeker declare financial and intellectual fitness, respectively. Less successful firms and less competent people would be unable to achieve such results.[15] Religious traditions frequently include rituals that serve a similar function for the purpose of aiding in-group cohesion.[16][17][18]

Beginning in the late 2000s, ‘virtue signalling’ came to be defined differently in various Internet forums. The newer meaning refers to superficial support for political views with the primary purpose of maintaining an appearance of respectability, as well as a focus on appearing to act rather than actually taking action.[19][20] As James Bartholomew writes,

“When David Cameron defends maintaining spending 0.7 per cent of GDP on foreign aid, he is telling us that the Tory party, or at least he himself — as a rather wonderful, non-toxic part of it — cares about the poor in the developing world. The actual effectiveness or otherwise of foreign aid in achieving this aim is irrelevant.”[21]

Notably, virtue signalling tends to involve expressions of hatred of the other, of the out-group. Bartholomew continues:

“It’s noticeable how often virtue signalling consists of saying you hate things. It is camouflage. The emphasis on hate distracts from the fact you are really saying how good you are. If you were frank and said, ‘I care about the environment more than most people do’ or ‘I care about the poor more than others’, your vanity and self-aggrandisement would be obvious… Anger and outrage disguise your boastfulness.

One of the occasions when expressions of hate are not used is when people say they are passionate believers in the NHS. Note the use of the word ‘belief’. This is to shift the issue away from evidence about which healthcare system results in the greatest benefit for the greatest number of people. The speaker does not want to get into facts or evidence. He or she wishes to demonstrate kindness — the desire that all people, notably the poor, should have access to ‘the best’ healthcare. The virtue lies in the wish. But hatred waits in reserve even with the NHS. ‘The Tories want to privatise the NHS!’ you assert angrily. Gosh, you must be virtuous to be so cross!”[21]

This ends up being counterproductive, in that it can harm the very people that those who are truly virtuous and not just signalling would desire to help. Bartholomew writes,

“No one actually has to do anything. …There was a time in the distant past when people thought you could only be virtuous by doing things: by helping the blind man across the road; looking after your elderly parents instead of dumping them in a home; staying in a not-wholly-perfect marriage for the sake of the children. These things involve effort and self-sacrifice. That sounds hard! Much more convenient to achieve virtue by expressing hatred of those who think the health service could be improved by introducing competition. …Virtue-signalling battles can soon take leave of any genuine concern for the low-paid or suffering. Indeed they can become highly damaging. The low-skilled whose abilities simply cannot command an absurdly high minimum wage become unemployable.”[21]

Virtue signalling is also responsible for the problem of Error Push, in which a factually incorrect position is advanced because a hated enemy is factually correct about a certain issue, and virtue signalling becomes more important to people than correct knowledge or telling the truth.

Fortunately, there are two powerful remedies against this sort of behavior. First, one may engage in the opposite behavior, known as counter-signalling or vice signalling. This should be followed by mercilessly criticizing the virtue signallers for their fallacious discourse when they resort to ad hominems instead of making appropriate counter-arguments. The purpose of this tactic is to show their support to be superficial and insincere, as a person with deeply-held, sincere beliefs should be able to defend them in rational discourse. Resorting to angry name-calling against a calm opponent who makes reasoned arguments is also damaging to the appearance of respectability that the virtue signaller so desires.

Second, one may take meaningful action concerning the subjects of the virtue signals. A person who supports minimum wage hikes and social programs for the poor may appear virtuous to the economically illiterate, but a person who directly helps the poor to become upwardly mobile is actually virtuous. A person who supports tougher environmental regulations against polluters may appear virtuous to those who do not understand regulatory capture, but a person who invents new technologies or uses capitalist principles to reduce pollution is actually virtuous. With “effort and self-sacrifice,” one can take the wind out of the sails of virtue signallers by acting while they talk. In the long run, the golden will defeat the merely gilded.

The Overton Bubble and Civil War

So far, we have considered examples of leftist failures to understand rightist thought, potential causes for this phenomenon, and possible remedies for each. Now, we will explore what may happen if this problem is not remedied. When the Overton window is combined with an ideological echo chamber and reinforced by copious amounts of virtue signalling, it can become thick and opaque, hardening into an ideological pocket universe which can only be entered or re-entered with great difficulty. This Overton Bubble, as neoreactionaries call it, can form when the establishment effectively controls the Overton window and uses this control to maintain political power. When the range of respectable opinion is policed with sufficient rigor, having an accurate understanding of opinions outside of that range is enough to make oneself the target of a political witch hunt.

When combined with the phenomenon of error push described in the previous section, an Overton bubble can leave a society in general and its elites in particular incapable of solving problems. As Neal Devers writes,

“If some thoughts are unthinkable and unspeakable, and the truth happens in some case to fall outside of polite consensus, then [the] ruling elite and their society will run into situations [that] they simply [cannot] handle.”[22]

It follows that wise elites would be exceedingly careful about allowing such a ‘polite consensus’ to form; in fact, they would take active steps to suppress the formation of such holiness spirals. Unfortunately, the perverse incentives inherent in political democracy ensure that the elite almost universally will be both unwise and insecure, thus perpetually goading them into destructive behaviors such as blowing Overton bubbles.

The problems that such an elite simply cannot handle may be domestic or foreign in origin. If foreign, then the typical result is conquest and subjugation under a power that would have no capability to assume control had a healthy system of governance and defense been in place. The particular dynamics of such events are outside the scope of this essay. Here, we are primarily concerned with political disputes within one society.

For centuries, the establishment exercised tight control over public discourse, burning heresies along with their authors. After such brutality fell out of favor in the West, the elites still managed to expel from official positions those who did not kowtow to the official narrative. Such exiles lacked the means to mount an effective counter-movement, so ‘point deer make horse’ was a favorite tactic of political control. Modern technology fundamentally alters this dynamic; being forced out of the Overton bubble is no longer fatal to one’s influence or career prospects, and as time marches on, existing inside the bubble will become a less and less attractive option for those starting out in life. But those who have established academic, media, and/or political careers inside the bubble will fail to understand the social dynamics in play, for gaining such an understanding would result in them being purged.

The trouble that lies ahead is thus clear. A leftist establishment that cannot peacefully engage with anything non-leftist and a non-leftist opposition that finally has the strength to organize an effective challenge existing in the same physical space is a recipe for violent conflict. Foreshocks of this political earthquake have already occurred in Chicago, Berkeley, and Charlottesville, to name a few. It is quickly becoming technologically impossible for the establishment to put the genie of opinion-making back into their bottle. Abolishing democracy, breaking up the institutions inside the Overton bubble, and secession into smaller, more politically uniform territories are considered unthinkable both by those inside the bubble and many of the people outside of it.

The immediate options will thus eventually reduce to the two options that all of us have in our personal lives: reason or force, words or weapons, truth or consequences, peace or utter destruction. Whereas it is not certain that the former set will be chosen over the latter set, and a civil war is always the most disastrous kind, it is necessary to de-escalate the situation before it reaches that point using the methods described in the previous sections. Only then can saner ideas be brought back into the realm of public discourse with a goal of either reaching a governing consensus or achieving an amicable geographic separation along political lines.

Conclusion

It may seem that we have traveled a long way from discussing three books to discussing civil war and its prevention. But the books were only meant to serve as small examples of a much larger problem. The formation of Overton bubbles is controlled by several key factors: a range of respectable opinion, the lingering influence of Whig historiography, filter bubbles in digital space, echo chambers in physical space, the plural solipsism caused by the previous two factors, virtue signalling, and the destructive incentives inherent in democracy. The civilization-destroying potential of our present bubble can still be thwarted if enough of these contributing factors are dismantled, but time is short and growing shorter.

References:

  1. Hallin, Daniel (1986). The Uncensored War: The Media and Vietnam. New York: Oxford University Press. p.116–118.
  2. Woods, Thomas (2014, Oct. 16). “How To Shred The Index Card Of Allowable Opinion”. Lew Rockwell.
  3. Chomsky, Noam (1998). The Common Good. Odonian Press. p. 43.
  4. Butterfield, Herbert (1965). The Whig Interpretation of History. New York: W. W. Norton. p.12.
  5. J. Hart. “Nineteenth-Century Social Reform: A Tory Interpretation of History”. Past & Present 1965 31(1):39–61.
  6. Greer, Allan. “1837-38: Rebellion reconsidered”. Canadian Historical Review (1995) 76#1:1–18, at p. 3.
  7. Ashplant, T.G.; Wilson, Adrian. “Whig History and Present-Centred History”. The Historical Journal, 31 (1988):1–16, at p. 10.
  8. Bozdag, Engin (2013, June 23). “Bias in algorithmic filtering and personalization”. Ethics and Information Technology 15(3):209–227.
  9. Parramore, Lynn (2010, Oct. 10). “The Filter Bubble”. The Atlantic.
  10. Weisberg, Jacob (2011, June 10). “Bubble Trouble: Is Web personalization turning us into solipsistic twits?”. Slate.
  11. Pariser, Eli (2015, May 7). “Fun facts from the new Facebook filter bubble study”. Medium.
  12. West, Joshua Bleiberg; Darrell M. (2017, May 24). “Political polarization on Facebook”. Brookings Institution.
  13. Krauthammer, Charles (1983, Aug. 15). “The Mirror-Image Fallacy”. Time.
  14. “5 Questions with Eli Pariser, Author of The Filter Bubble”. Time. ISSN 0040-781X.
  15. Bowman, S. (2016). “Stop Saying ‘Virtue Signalling’” Adam Smith Institute.
  16. Bulbulia, Joseph; Schjoedt, Uffe (2010). “Religious Culture and Cooperative Prediction under Risk: Perspectives from Social Neuroscience”. Religion, Economy, and Cooperation. p. 37–39. ISBN 3110246333.
  17. Steadman, L.; Palmer, C. (2008). The Supernatural and Natural Selection: Religion and Evolutionary Success. Paradigm.
  18. Irons, W. (2001) “Religion as a hard-to-fake sign of commitment”. The Evolution of Commitment, Randolph Nesse (ed.) New York: Russell Sage Foundation. p. 292–309.
  19. Yudkowsky, Eliezer (2009, Feb. 17). “Cynical About Cynicism”. LessWrong.
  20. Yudkowsky, Eliezer (2009, Mar. 20). “Why Our Kind Can’t Cooperate”. LessWrong.
  21. Bartholemew, James (2015, Apr. 18). “The awful rise of ‘virtue signalling’”. Spectator.
  22. Devers, Neal (2016, Nov. 24). “The Overton Bubble”. The Future Primaeval.

The Not-So-Current Year: 2017 In Review

Though the specific demarcation of the passage from one year into another is a rather arbitrary social construct, it does provide a useful annual period for self-examination and remembrance. Now that 2017 has entered the history books, let us take a look back at a year’s worth of essays and review the not-so-current year.

We begin, of course, with last year’s article of the same kind. Some articles in this list are sequels to articles in that list. Aside from that, we may move on.

I began 2017 by addressing a recurring story throughout the 2016 election campaign; that of Russia hacking the DNC and phishing Hillary Clinton campaign chairman John Podesta’s email system. I argued that Russia would have been justified in doing not only this, but in actually altering the election to cause Donald Trump to win. I would later use this piece as an example in a guide on how to argue more sharply in order to throw opponents out of their comfort zones. The story lingered on, so I published a sequel detailing the benefits of a Trump-Russia conspiracy. The left’s activities after the election became ridiculous, so I decided to give them some free advice.

My first list of 25 statist propaganda phrases and some concise rebuttals was a major hit, so I started planning a sequel. I had no intention of taking almost two years to compile 25 more statist propaganda phrases to refute, but better late than never, I suppose.

Donald Trump became the 45th President of the United States, which of course meant that Gary Johnson did not. I explored in detail what was wrong with Johnson’s campaign that made him not only lose, but fail to earn 5 percent of the vote against two of the least popular major-party candidates ever to seek the Presidency. Once Trump was in office, the responses to his trade policies among mainstream analysts led me to explain why many of them are politically autistic.

Book reviews have long been a part of my intellectual output, but I decided to start doing more of them in late 2016. This trend continued throughout 2017, as I read and reviewed The Invention of Russia, The Age of Jihad, In Our Own Image, Come And Take It, Against Empathy, Level Up Your Life, Islamic Exceptionalism, The Science of Selling, Closing The Courthouse Door, Open To Debate, Calculating the Cosmos, The Art of Invisibility, Libertarian Reaction, and The Euro.

Antifa grew from a nuisance that rarely affected anyone other than neo-Nazis into a serious threat to anyone who is politically right of center and/or libertarian who wishes to speak in a public venue. A comprehensive strategy to defeat them was necessary, and I was happy to provide one. Kyle Chapman grew weary of Antifa’s antics and led the effort to take up arms against them, becoming known as Based Stickman. I praised him in song. After the events of February, April, and May Day, I revised the strategy.

The Walking Dead comic series and the television show based on it contain many themes which are of interest to the student of libertarian philosophy. I explored the many ways in which Negan’s group resembles a state apparatus. The first part covers the sixth season of the show, and the second part covers the first half of the seventh season. At least three more parts will come next year.

‘No Particular Order-ism’, or the belief that libertarians should take whatever reduction in the size and scope of government they can get, has become common among the more radical members of the Libertarian Party. I explained why this approach is misguided.

White nationalist and alt-right leader Richard Spencer was present in the bar of the Marriott hotel that hosted the International Students For Liberty conference. This did not go over well with Jeffrey Tucker, who loudly denounced Spencer, after which security removed everyone from the bar. I wrote about the incident and the philosophical underpinnings of it.

Sometimes, the lens of examination is best turned inward to correct one’s own missteps. Such was the case for an article I wrote in 2014 about the nature of fake libertarianism, so I published a revision.

Theories concerning the creation, acquisition, trade, inheritance, and defense of private property form much of libertarian philosophy. The role of conquest in the determination of property rights had gone largely unexplored, so I decided to remedy the situation.

Terrorism struck in London on the anniversary of the Brussels attacks. I wrote a list of observations on the event.

I argued against more amendments to the United States Constitution, namely the Second and the Eleventh.

A chemical weapon attack occurred in Syria, which led to US intervention via a cruise missile strike. I wrote a list of observations on the event.

Keynesians and others who support fiat currency and central banking frequently claim that there is not enough gold in the world to back the quantity of currency in existence, and thus returning to gold would set off a deflationary spiral while destroying several industries that depend on gold. I debunked that claim.

On the anniversary of the Oklahoma City bombing, I applied ethical theories to the event to gain a deeper perspective of what happened and the aftermath of the event.

The primary aim of politically active libertarians is to limit and reduce the size and scope of government, as well as to eliminate as much state power as possible. I made the case that in order to do this, it may be necessary to temporarily do the opposite.

On May 8, Fritz Pendleton published an article at Social Matter in which he argued that liberty is best preserved by authority rather than anarchy. He then proceeded to launch a misguided attack against libertarianism, all while misunderstanding authority, anarchy, liberty, and the nature of a libertarian social order. I rebutted Pendleton’s case on a point-by-point basis.

Fashion trends can be a useful barometer of the health of a society. I explained how the trend of clothing that is designed to mimic the appearance of wear and work for those who think themselves above the sorts of activities that would produce these effects naturally indicates that a revolution may come soon.

Memorial Day provides an opportunity to promote statist propaganda concerning the nature of service and the provision of defense. I decided to do the opposite.

The immediate danger standard says that using force against someone who is not presenting a physical threat at the exact moment that force is used constitutes aggression, and it has become far too commonly advocated in libertarian circles. I explained why it is wrong and why it has gained prevalence.

On June 14, James Hodgkinson opened fire on several Republican members of Congress and their staffers while they were practicing for the annual Congressional Baseball Game for Charity. I wrote a list of observations on the event.

The Supreme Court ruled against the stays on Trump’s travel ban, but he missed a greater opportunity by letting them decide rather than ignoring the courts. I explained how and why.

Political rhetoric has grown increasingly heated, with violence erupting as a result. I showed how democracy is the root of this problem and how abolishing democracy is the solution.

The meme of throwing one’s political rivals out of helicopters has become popular among certain right-wing and libertarian groups in recent years. Unfortunately, people from all over the political spectrum tend to misunderstand the historical context of the meme, and thus interpret it incorrectly. I wrote an overview of this context and explained why helicopter rides may not be the best option.

I welcomed Insula Qui, the first additional writer for Zeroth Position, in July. He provided two articles to keep the site going while I was preparing for, participating in, and recovering from the Corax conference in Malta. A piece describing the problems that led to the call for net neutrality and recommending against more state inteference in the Internet came first, followed by a critique of common libertarian strategies to date. Speaking of the Corax conference, a revised version of my talk may be found here, as they own the rights to the original. A topic that came up in the talk that needed further comment is that in the discussion of proper behavior beyond the basics of libertarian theory, right-libertarians in general and libertarian reactionaries in particular will use the term ‘degeneracy,’ but they do not always properly define the term. I attempted to do so.

In the August 2 episode of the Tom Woods Show, he asserted that libertarians and fascists are completely contradictory political perspectives and could never be combined, and that when one embraces fascism, one must have relinquished one’s libertarianism, as there is no other solution that would make sense. Qui countered these assertions and delved deeper into the relationship between libertarianism and fascism than I had previously, which is not as inimical as one might think.

An alt-right rally in Charlottesville, Va. on August 11-12 turned violent, with three deaths and about 20 injuries. I wrote a list of observations on the events. In response, the large technology companies of Silicon Valley, which have become increasingly hostile to right-wing and libertarian content creators over the past decade, ramped up their censorship efforts. I proposed a novel and radical plan to deal with this problem so as to avoid public utility regulation.

I welcomed Benjamin Welton, our second additional writer, in September. I had meant to write an article about using the historical concept of outlawry to deal with violent illegal aliens myself, but time constraints led me to outsource the project. He then explored several historical examples of private military defense, finding that something novel must be created in order to defeat the state and maintain a libertarian social order.

In the wake of two major hurricanes, the usual complaints about price gouging were made yet again. I explained why price gouging is actually beneficial.

Qui wrote a piece about the limits of the applicability of libertarian philosophy, explaining that humans can fall into the categories of personhood or savagery, and that it is important to deal with each accordingly.

Catalonia held a referendum to secede from Spain and become an independent nation on October 1. This was met with force, and much hostility ensued. I wrote a list of observations on the events.

Qui examined the role of the modern concept of citizenship in advancing a particularly insidious form of totalitarianism.

On October 5, the New York Times published an opinion column by Michael Shermer in which he argued that the rule of law is a bulwark against tyranny, but guns are not. I thoroughly rebutted his arguments.

Welton explored the history of judicial corporal punishment, then made a case for restoring its use as a replacement for imprisoning lesser criminals.

The debt ceiling became a political issue again. As it incites financial panic for no good reason and hides important truths from common view, I advocated for its elimination on formalist grounds.

Capitalism and consumerism are distinct phenomena, with the latter caused by high time preference, which in turn is caused by the flaws inherent in modernity. Qui explained this at length.

I welcomed Nathan Dempsey, our third additional writer, in November. He runs a project called Liberty Minecraft, and wrote an introduction to the project.

The relationship between libertarianism and racial politics has become a controversial issue in recent years. Views on the issue run the gamut from complete opposition to imperative alliance, with nearly every conceivable position between being advocated by someone noteworthy. Many libertarians either provide the wrong answer or are afraid to address the question, so I decided to address libertarianism and support for ethnic nationalism.

Black Friday is revered by most libertarians as a celebration of free-market capitalism. I updated my explanation of why this reverence is misplaced. I weighed in on holiday shopping again due to some misguided criticism of computer programs designed to scalp popular gifts. Finally, I detailed the problems with Santa Claus.

Qui offered a message of hope in dark times by demonstrating how the socialists and anti-capitalists of today are not usually as fanatical as those that the early libertarians opposed, then offered advice on how to argue against them. He quickly followed this with an explanation of his concept of autostatism, which closely echoed one of the other presentations from the Corax conference. He then dealt with traditional views on degenerate behavior, and how a compassionate, non-enabling approach is necessary.

Due to surging exchange rates, the opening of Bitcoin futures, and the likelihood of Bitcoin exchange-traded funds in the near future, there is renewed mainstream interest in Bitcoin and other cryptocurrencies. There are benefits of cryptocurrencies which will be cheered by political outsiders to the chagrin of the establishment, and I listed eight of them.

Qui finished out the year by explaining why individualism and nationalism are not as incompatible as many people believe.

All in all, it was an interesting year full of occasions to make sharp libertarian and reactionary arguments. May 2018 bring more and better. Happy New Year!

The Problems With Santa Claus

Every year on Christmas Eve, children throughout Christendom eagerly await a visit from Santa Claus. Most children are told that he visits the homes of children to place gifts under Christmas trees for good children and bring coal or sticks for bad children. While many parents may believe that this is a harmless “white lie,” there is a case to be made that the myth of Santa Claus is actually very harmful to children. Let us examine the origins of these customs and consider their ill effects.

Santa’s Origin

The original form of Santa Claus was nothing like his common appearance today, which is largely a product of Thomas Nast’s cartoons (shown above), the poetry of Clement Clark Moore, and Coca-Cola advertisements. The custom of a mythical figure placing presents under a tree dates back to the mother/child cult of Semiramis and Nimrod in ancient Babylon. The mythology says that Nimrod married his mother, setting her up as the “queen of heaven” and himself up as the “divine son of heaven.” The two of them had a son named Tammuz, a god of food and vegetation worshiped in Sumer, Akkad, Assyria, and Babylonia. Upon Nimrod’s death, Semiramis claimed to see an evergreen tree spring up to full size overnight, symbolizing the “new life of Nimrod.” She then taught Tammuz to go into forests and make offerings to his father on the day that is December 25 in the Gregorian calendar (the origin of the date of Christmas), who was now worshiped as the sun god Ba’al, the false god mentioned numerous times in the Old Testament of the Bible. The custom was known to the authors of the book of Jeremiah, which includes the following:

“Do not learn the way of the Gentiles; do not be dismayed at the signs of heaven, for the Gentiles are dismayed at them. For the customs of the peoples are futile; for one cuts a tree from the forest, the work of the hands of the workman, with the ax. They decorate it with silver and gold; they fasten it with nails and hammers so that it will not topple. They are upright, like a palm tree, and they cannot speak; they must be carried, because they cannot go by themselves. Do not be afraid of them, for they cannot do evil, nor can they do any good.”[1]

The book of Jeremiah is believed to have been written between 627 and 586 BC—six centuries before the time of Jesus—disproving any assertions that the customs surrounding Christmas were an invention of Christians. Nimrod was also known as Santa throughout Asia Minor.[2] Another name for Nimrod used in Greece was Nikolaos. This name is a combination of the Greek words nikos and laos, which together mean “victory over the laity” or “conqueror of common people.” These customs inform certain practices within Christianity, such as the focus on Mary and Jesus together. Thus, the gift-bearing portion of the Santa Claus or Saint Nicholas story is ultimately a manifestation of the ancient cults of Babylon.

Krampus Confluence

With Santa’s gifts explained, let us turn to the coal and sticks. These come from a pre-Christian tradition in Eastern Europe involving a figure named Krampus. This being, whose portrayal resembles that of Satan, is said to come on December 5 (Krampusnacht) to punish bad children. He may leave coal or sticks, beat children with sticks, kidnap and throw them into water, or take them directly to Hell in the worst cases. In places where Krampusnacht is observed, children get presents on December 6. Families with unruly children hang gold-painted bundles of birch sticks in their homes throughout the year as a functional décor to remind the children of the threat that Krampus may beat or abduct them.

Krampusnacht celebrations involve parades of people wearing Krampus costumes, running through the streets and beating people. The masks involved can be valuable items of folk art, especially if they are antiques. Though Krampus was of Norse origin—said to be the son of Hel, the god of death and the underworld who lends her name to the Hell of Christianity—he has been linked to Santa since the 17th century. Though Krampus was banned under fascist rule in the 1930s, the custom resumed once those governments fell.

Ill Effects

To adults, all of this may seem like a harmless bit of fun. But when children are taught to believe in such beings as Santa Claus and Krampus, several detrimental effects may occur. First, parents who lie about Santa and/or Krampus are weakening their trust and credibility. Children will someday realize that their parents have lied to them, and this will lead them to question other statements that their parents have made. This can lead to trust issues that persist even into adult life, as well as damage a fundamental and irreplaceable relationship in a young person’s life.

Second, the Krampus story encourages violent parenting. A multitude of studies show that physically abusing and verbally threatening children is counterproductive to their development. The idea that a demon may take a child away from home forever into a place of punishment can inflict lasting feelings of trauma and insecurity on a young mind, and being hit with sticks is not much better for a child’s physical health. If children are capable of understanding reason, then it is better to use reason. If children are incapable of understanding reason, then they cannot understand the reasons why their elders are striking or threatening them. Moreover, the desire to escape punishment is the lowest of Kohlberg’s six stages of ethical development[3], and the desire to obtain rewards is the next lowest. Myths like those about Santa and Krampus can keep people from progressing past these lower stages of ethical thinking.

Third, these myths teach children to believe in entities whose existence and efficacy are not supported by credible evidence. A scientific analysis of what Santa Claus and his flying reindeer would have to do to fulfill the conditions set for him shows that he would have to endure G-forces more than 1,000 times beyond what is lethal. The idea of gifts and punishments coming seemingly out of nowhere, deus or diabolus ex machina style, to those who deserve them, requires a supernatural violation of physics as well as economics. If a child can be taught to believe in Santa or Krampus in the absence of credible evidence, then it will be easier for them to fall prey to religious cults or confidence schemes later on. On a related note, such traditions undermine the religious teachings that parents may wish to pass on to their children. Once children reason their way to the conclusion that Santa Claus is not real, they may apply similar thinking to the Christian God and become atheists, which a Christian parent would presumably not wish to see.

Fourth, the focus on gifts that is encouraged by belief in Santa Claus contributes to a culture of degenerate consumerism. This leads many people to spend money they do not have on items they do not need, then take the rest of the year to pay off the debts they incur during the holiday season. This runs counter to Christian teaching, which encourages both economic frugality and an emphasis on long-term planning over immediate gratification.

But perhaps the most damaging aspect of the Santa Claus myth relates to the similarities between the Santa/Krampus duo and the institution of the state. The lyrics to a popular Christmas song say,

“He sees you when you’re sleeping,
He knows when you’re awake,
He knows if you’ve been bad or good,
So be good for goodness sake!”[4]

The idea of a benevolent gift-giver who regularly violates everyone’s privacy and will bring punishment to those whom he deems to be bad people is a close approximation of the ideals of the current political establishment. The story of Santa makes the citizenry easier to control by making people comfortable with a state apparatus that frequently violates their rights and threatens them with punishment from a young age.

Conclusion

All things considered, the stories of Santa Claus and Krampus have the effects of destroying trust in the family, healthy personal development, acceptance of reason and science, maintenance of other traditions, and the desire for liberty in the mind of a child. For these reasons, it is fair to say that lying to children about Santa Claus and/or Krampus does far more harm than good. It is best to be honest about such customs and tell children that these are merely stories rather than real entities so that they will not develop resentment, irrationality, and statist tendencies.

References:

  1. Jeremiah 10:2-5 (NKJV)
  2. Langer, William L. (1940); Stearns, Peter N. (ed. 2001). The Encyclopedia of World History: Ancient, Medieval, and Modern, chronologically arranged. Houghton Mifflin. p. 37.
  3. Kohlberg, Lawrence (1976). “Moral stages and moralization: The cognitive-developmental approach”. In Lickona, T. Moral Development and Behavior: Theory, Research and Social Issues. Holt, NY: Rinehart and Winston.
  4. Coots, John Frederick and Gillespie, Haven (1934). Santa Claus Is Comin’ to Town.

Eight Politically Incorrect Benefits of Cryptocurrency

Due to surging exchange rates in the past few months, the opening of Bitcoin futures, and the likelihood of Bitcoin exchange-traded funds in the near future, there is renewed mainstream interest in Bitcoin and other cryptocurrencies. Mainstream investors tend to be attracted to the profit potential, portfolio diversification, and technological curiosities of cryptocurrency. But there are other benefits of cryptocurrencies which may scare away the average investor. Let us consider eight activities which can be performed with or aided by Bitcoin and its alternatives that will be cheered by political outsiders to the chagrin of the establishment.

1. Tax Evasion

Charles Stross famously complained that Bitcoin

“looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens’ financial transactions.”

The problem is that he views this as a negative. From a moral standpoint, taxation is armed robbery, slavery, racketeering, trespassing, communicating threats, receiving stolen money, and conspiracy to commit the aforementioned crimes. If anyone dared to challenge the state’s monopoly on tax collection, they could face any of these criminal charges. By doing business in cryptocurrencies and taking additional steps to protect one’s identity (Bitcoin is pseudonymous rather than anonymous, though other cryptocurrencies are fully anonymous), one can keep part or all of one’s income and stored wealth away from Leviathan’s watchful eye. Establishment politicians and pundits will decry tax evasion as immoral. But as Murray Rothbard writes,

“Just as no one is morally required to answer a robber truthfully when he asks if there are any valuables in one’s house, so no one can be morally required to answer truthfully similar questions asked by the State, e.g., when filling out income tax returns.”[1]

The weapon of cryptocurrency is thus more of a shield than a sword, though it may be employed in an offensive posture (see #8).

2. Agorism

One way to reduce the size and scope of the state is to starve it of funds. Agorism is a strategy introduced by Samuel Konkin for reducing and eventually eliminating state power by expanding the size and scope of gray and black markets. As more people rely on the informal economy to a greater extent, they will develop a culture of resistance against state power while depriving governments of revenue by keeping their taxable income out of official records. This will incense people who believe that the state is necessary for the provision of essential services such as military defense and legal systems, but those services could be performed by private entities if they were not forcibly stopped from doing so by state monopolies. It will also worry those who believe that governments must take care of the poor and down-trodden, but private charity is quite capable of solving the problem, especially with tax burdens removed.

3. Undermining Prohibition

From the beginning of the original Silk Road, cryptocurrency has played a role in helping people to obtain goods and services that are prohibited by state laws. Though that site was shuttered by government intervention, this had more to do with the incompetence of Ross Ulbricht than with any inherent flaw in Silk Road or Bitcoin. Since then, many other sites have been created to serve the same purpose. This is a terrifying prospect for drug warriors and gun control advocates, who believe that strict laws against the sale of such goods are necessary to keep communities safe. But the available evidence suggests that state bans only raise the prices of banned goods while increasing the violence involved in their trade. Thankfully, online black markets will continue to undermine prohibitionist policies while reducing the amount of violence involved in both law enforcement and black market disputes.

4. Circumventing Child Labor Laws

Most developed countries prohibit children under a certain age from working. Proponents of child labor legislation believe that it is necessary to protect children from exploitation and lack of education. However, in most places where child labor is still prevalent, it is better than the alternatives of lackluster schooling, child prostitution, or starvation. In more developed countries, child labor laws prevent children from earning income, learning useful trade skills, building a work ethic, and avoiding indoctrination by the state. Cryptocurrencies provide a framework to allow people to hire and pay children outside of official channels (see #2), while smart contracts on a cryptocurrency blockchain can prevent wage theft and other exploitation.

5. Circumventing Capital Controls

In many countries, there are laws that forbid carrying more than a certain amount of money or goods out of the country. Such laws are easy to enforce when currencies are centralized in a specific country, and when money and goods must take physical form, as precious metals and cash do. But cryptocurrencies are not particular to any physical location and do not require a physical form. This allows a person to trade one’s fiat currency or precious metal in one country for cryptocurrency, travel to another country, and either sell the cryptocurrency for fiat currency or precious metal in the other country or use the cryptocurrency directly. Economic protectionists may argue that this weakens the economy of the nation that experiences capital flight, but capital flight would not be occurring if the nation experiencing it had a more responsible government that was not creating adverse economic conditions.

6. Financing Disapproved Activism

Political dissidents and the causes they support are frequently rejected by the legacy financial system. Banks, credit cards, Paypal, and other money handlers have a long history of closing accounts and denying service to people and groups that oppose the current power structure with sufficient ardency and effectiveness. This occurs partly because these companies tend to be controlled by virtue-signaling members of the establishment, and partly because government regulators can make business difficult or impossible for companies that refuse to crack down on dissidents. If there were no other options, then the establishment would be able to effectively eliminate its opposition by starving them out. But ever since Wikileaks came to depend on Bitcoin donations for funding, cryptocurrencies have provided an alternative financial system that allows activists to make a living, engage in commerce, and perform their activism despite the disapproval of ruling elites.

7. Thwarting Monetary Policy

Ever since Keynesian economics became prevalent among policymakers, central bankers have sought to manipulate interest rates and the money supply to stimulate the economy. But in practice, this only distorts the economy further, encouraging those with capital to make malinvestments. True to the Austrian business cycle theory, this forms yet another economic bubble that then breaks, after which misguided commentators blame markets and call for yet more intervention. Over the long term, central banks also destroy the purchasing power of a currency, with the US dollar losing 96 percent of its value since the Federal Reserve was formed in 1913. In order to continue to function, central banks must have a critical mass of economic transactions occur in the currency that they manipulate. Should enough people make the switch away from state-backed fiat currencies, monetary policy will lose its effectiveness. Cryptocurrencies threaten this critical mass by offering an alternative to people who wish to opt out of the scam of central banking and own an asset that appreciates over time.

8. Assassination Markets

Perhaps the most controversial application for cryptocurrencies is known as a death pool or an assassination market. First theorized by Tim May and fleshed out by Jim Bell in the 1990s, assassination markets predict the date on which a particular person will die and provide payment to those who guess correctly. This incentivizes an assassin to bet on a certain date and kill the person on that date. The original proposal was made long before cryptocurrencies were invented, and thus called for the use of anonymous remailers. Cryptocurrencies render remailers obsolete, as they better serve the purpose of compensating the assassin without leaving evidence that law enforcement can use to discover the identity of the assassin and/or the crowdfunders. The goal is to increase the level of occupational hazard for being a politician or minion thereof to such an extent that the benefits of wielding state power are no longer worth the cost. The theoretical result is that if politicians, central bankers, enforcers, and other such people suddenly become frequent targets of assassination, then these occupations will cease to exist due to a lack of interest in assuming such roles. Although the establishment will only ever view such an approach as murderous, and cryptocurrency enthusiasts are deeply divided over the concept, there will almost certainly be many attempts to create assassination markets in the coming years.

References:

  1. Rothbard, Murray (1982). The Ethics of Liberty. Humanities Press. p. 183

Book Review: The Euro

The Euro is a book about the shortcomings of the eurozone currency project by American economist Joseph Stiglitz. The book makes a case against many of the policies pursued by European leaders thus far and recommends several alternatives, including further integration, a flexible euro, and the exit of one or more members. The book is divided into twelve chapters which explore different aspects of the problem and possible solutions.

A short preface details Stiglitz’s view of the economic problems of Europe as being largely attributable to the creation of a single currency zone without the creation of other institutions that are found in other such places elsewhere in the world. He compares the euro to the gold standard, repeating the flawed mainstream view that deflation is bad. His Keynesian approach to economics and thoroughly statist worldview is apparent from the beginning. That being said, Stiglitz appears to want to solve problems and correctly identifies some people and institutions as being uninterested in doing so.

The opening section begins with a chapter that expands upon the preface and outlines the rest of the book. There is little here that is not covered in greater detail later, so let us move on. In Chapter 2, Stiglitz argues that the poor results of the euro should have been expected because economic integration of this sort cannot come before political integration. Here, he contends that military might no longer shapes outcomes as it once did, but this is dubious because nothing short of a nuclear exchange that no one wants could have stopped the United States from conquering and colonizing Iraq if that had been the intention and American leadership had used its full power. So too for Russia in Ukraine and Crimea. His responses to other arguments for a single currency make more sense. He states the fallacious mainstream position on public goods, claiming without logic or evidence that it is impossible for markets to provide basic research and common utilities. This amounts to a confusion of collective action with state action. Even so, Stiglitz does recognize that localization is better than central planning from afar, though his disdain for German policies makes him inconsistent on this point. He then turns to economic integration, discussing the importance of German history with hyperinflation and its prominent role in modern Europe for understanding the European Central Bank. Next, Stiglitz writes about effect that a shared currency has on economic integration, which is mixed. Like many Keynesians, he accuses the market of failure when this is actually impossible; such events are actually failures of government, resources, or individual people. He also regards economics as scientific, even though the scientific method cannot be applied to subjects in which counterfactuals are so important but also unobservable. As usual, the word ‘neoliberal’ says more about the person using it than anything else. He concludes by arguing that there is a democratic deficit in Europe, even though he argues elsewhere in the book against incentive structures which are necessarily part of any democracy.

Europe’s lackluster economic performance since the 2008 crisis is the subject of the third chapter. Stiglitz begins by claiming that Keynesianism is a success because it has lengthened business cycles and shortened downturns, but it has also made the downturns that do occur so much worse that markets were better off before such interventionism. Much of the chapter consists of empirical data for Europe since 2007. When discussing unemployment, he seems not to recognize that unemployment benefits subsidize a negative behavior and will thus produce more of that behavior. Stiglitz relies upon the Gini coefficient when discussing inequality, which is a faulty metric because it measures pre-tax income rather than after-tax consumption. This causes it to exaggerate the amount of income inequality. His detailing of the long-term adverse effects of recession in terms of destroyed human capital is largely correct, but he again recommends interventionism that tends to worsen such problems. He also takes the position that the state should protect those at the economic bottom, though almost every economist would avoid social Darwinism on this front. Stiglitz then commits a fixed pie fallacy by arguing that trade surpluses necessarily cause trade deficits elsewhere, when the reality is quite different. He concludes by correctly noting that the counterfactuals help critics of the euro, and that there is no better explanation for many of Europe’s troubles than sharing a common currency across uncommon societies and economies.

The second section argues that the euro suffers from a flawed initial design. In Chapter 4, the requirements for a single currency region to be successful are considered. Here, Stiglitz uplifts full employment and market stability as goals while denouncing those who favor economic freedom as a “lunatic fringe.” This leads him to contemplate a false dilemma between national control of money and supranational control. He blames market fundamentalism (which he calls neoliberalism) for the crisis of 2008, despite the fact that markets were altered by central bankers in such a way as to cause the crash, which he all but says elsewhere. In explaining the differences between the United States and the eurozone, Stiglitz highlights the freer movement of Americans, the identity of Americans at the national level rather than the state level (at least in modern times), and the federal nature of monetary and fiscal stimulus. He is correct to say that there must either be “more Europe” or “less Europe,” but sides with the former. He describes the Keynesian theory of business cycles, but makes no mention of the Austrian theory. Stiglitz then repeats the tired fallacy that austerity caused the Great Depression and the current malaise, rather than central bank shenanigans and tariff policies. His blame for the gold standard is similarly misguided. He somewhat fixes an error from the previous chapter by clarifying that trade imbalances are not a problem if currency exchange rates can change to compensate for them. He straw-mans the laissez-faire position on unemployment by saying that it views unemployment due to market adjustments as good rather than as simply necessary. Stiglitz then gets a few points correct: low wages undermine worker morale and productivity, falling wages may not amount to falling prices if firms are worried about their solvency, and monetary stimulus has a breaking point at which interest rates cannot be lowered further. But he again blames the private sector for being excessive when it is only reacting to perverse incentives created by governments and central banks. There is little to fault in Stiglitz’s explanation of why currency areas are prone to crisis except for the preceding error, but it never occurs to him to simply not have such an area. The chapter ends by repeating many of the fallacious arguments from the previous chapter concerning trade surpluses and deficits.

The fifth chapter considers the economic divergence of the eurozone countries. Stiglitz argues in favor of institutional frameworks to prevent the need for bailouts, as well as funds to make depositors whole and provide bailouts. This ignores the moral hazard created by such a regime that causes bankers to take excessive risks, as well as the powerful incentives that an absence of protection would have on depositors to act responsibly and hold bankers accountable. His view of regulation is starry-eyed, missing the entire concept of regulatory capture. This is especially striking, given his focus on institutional capture in the following chapter. Stiglitz rightly complains of capitalized gains and socialized losses among bankers. In his consideration of other sources of divergence, he again fails to consider the possibility of turning over infrastructure to private development, instead proposing expansion of the European Investment Bank, which is certain to become another statist boondoggle. His view of knowledge markets is flawed in the same manner as his view of economies; it fails to account for the distortions that statism necessarily causes which lead to various types of failure. He concludes the chapter by showing how policies in the eurozone have caused greater instability, but cannot seem to avoid blaming the private sector for responding to the incentives imposed upon it.

In Chapter 6, Stiglitz examines the European Central Bank. He begins by saying that open markets and free competition can efficiently allocate resources only in the presence of adequate government regulation. This is a contradiction because an absence of government regulation defines an open market with free competition. His arguments concerning the inflation-only mandate of the ECB and the problems it causes would be much stronger if the Austrian business cycle theory were anywhere to be found in the book. His description of events in Chile under Pinochet does not agree with the long-term result of economic prosperity relative to the rest of South America and neglects how much worse conditions would have been under Salvador Allende. His claim that markets are supposed to be efficient and stable are a straw man; instability in the form of creative destruction and inefficiency by some metrics rather than others are inherent in a market economy. Stiglitz correctly writes that monetary policy is always a political question, pitting creditors against debtors for control of the central bank. But he leaves unclear how democracy is supposed to hold central bankers accountable. He also must not know any libertarians, or he would know that some people have proposed taking away spending power from governments to ensure that they do not misbehave. The chapter ends with a history of fashionable central bank policies over time and what was wrong with them from a Keynesian perspective.

The next two chapters delve into the Greek situation in particular, as Greece has suffered a more severe economic crisis than any other eurozone country. The seventh chapter explores the effect that the Troika’s policies had on countries in crisis. Stiglitz accuses some European leaders of acting in bad faith by purposefully attempting to punish governments with different political views from their own, which may be accurate. He continues his misguided attack on austerity, though it has more merit against what Europeans have actually done than against real austerity. He correctly explains the problem with primary surpluses, but then commits the broken window fallacy by embracing Keynesian multipliers. Stiglitz accurately diagnoses the problems of increasing taxes, but seeks to aid governments in collecting them rather than encourage economic freedom and stronger property rights. He describes his ideal system of property taxation in the same tone that a proud and unrepentant thief might use to boast of his crimes. Although he is correct to say that particular moves toward privatization and economic freedom may produce adverse results in particular contexts, this is a justification not for state intervention, but for undoing even more statism so as to remove the problematic context. Stiglitz notes that the hegemony of American military power has put Europe into a Pax Romana problem in which it cannot fend for itself against a real threat, but advises that this problem be worsened in the name of fiscal restraint. He compares reductions in pensions to wage theft when the two are clearly different. It is the responsibility of workers to figure out that they are being offered terms which may be impossible for the employer to meet in the future and practice caveat emptor. As for bank bailouts and debt restructuring, Stiglitz describes the situation well except for his faulty view of austerity.

Chapter 8 delves into structural reforms in Greece that made matters worse. Again, Stiglitz’s views of austerity and democracy corrupt an otherwise sound analysis of trivial and counterproductive actions taken by the Troika. He claims without proof that industrial policies are required to advance countries that are lagging behind in technological development, neglecting that markets are not doing this because they are either disallowed from doing so or are assuming that the state will do this for them. He criticizes intergenerational transmission of advantage and seeks to use the state against it, when it should be championed as both eugenic and important for maintaining a natural aristocracy. Stiglitz argues for a price on carbon emissions and claims that the private sector will not address climate change, when again the state has kept this from happening. He finishes by discussing counterfactuals, which is interesting given his empiricist thinking on economics.

The final four chapters deal with various proposals going forward. In the ninth chapter, Stiglitz offers his advice for fixing the eurozone. As before, he embraces what Henry Hazlitt called “the fetish of full employment” as the goal of his policy proposals. Much of the content of the chapter rehashes proposals from previous chapters. He seeks to create common deposit insurance and common resolution while abolishing place-based debt within the EU. This will create moral hazards and work against people who wish to escape debt slavery inflicted upon them by their ancestors. He calls for wages to be raised in countries with surpluses, which will lead to unemployment in those countries as workers whose labor is not worth higher wages are laid off. He fundamentally misunderstands precious metals, failing to understand their role as a store of value and medium of exchange, even if no longer officially used in such capacities. Stiglitz seeks to make the financial sector and other corporations serve society, but fails to recognize that the organs of a statist social order inherently and irrevocably serve themselves at the expense of the society. The shortsightedness of markets of which he complains is actually caused by the institutions that he seeks to use to solve the problem. One of the few sound recommendations made in this chapter is the creation of a super-Chapter 11 bankruptcy procedure to quickly restructure debt. He goes on to propose that EU taxes be based on citizenship, and that some of the proceeds be used for foreign aid or resettlement of migrants, further impoverishing and culturally endangering Europeans.

Chapter 10 examines the possibility of what Stiglitz calls “an amicable divorce,” in which countries exit the eurozone. He considers the example of Grexit, or Greece returning to its own currency that he calls the Greek-euro but would probably be called the drachma, as it was before the euro. He proposes that Greece create a new electronic currency to ease concerns over producing coins and banknotes, stop tax avoidance, bring everyone into the financial system, and facilitate the ability of central banks to create credit. Stiglitz fails to consider that people are likely to reject such a system in favor of cryptocurrencies, which have all of the benefits of such a system without most of the drawbacks, and that such a system could offer states tyrannical control over their citizens. His view of credit indicates magical thinking, although this is quite common in modern financial circles. He again blames the private sector for problems caused by politicians and central bankers, while ignoring peer-to-peer lending as a substitute for modern credit systems. Stiglitz describes a potential system of credit auctions which could be abused with much the same ease as the current system. He admits and supports what should be abhorrent to any decent person: that fiat currencies are ultimately given value by extortion in the form of taxation. Stiglitz correctly says that a new Greek currency would enable them to devalue it to correct trade imbalances, but his proposed system of trade tokens for the same purpose would be redundant. He equates deflation with a deficiency of aggregate demand, neglecting the possibilities of an abundance of supply or improvements in efficiency and/or quality. His description of currency change as a debt restructuring is insightful. To end the chapter, Stiglitz considers the alternative of Germany leaving the eurozone, though it is unlikely that they would give up their current position of power so willingly. This segues into the topic of the next chapter, which is a flexible euro consisting of several subdivisions.

Stiglitz uses Finland as a counterexample against those who claim that profligacy in southern Europe is to blame, rather than the structure of the eurozone. Most of his argument here is correct, except for his view of austerity. His proposal in this chapter is to have several eurozones with fluctuating exchange rates, which could be brought closer together over time as political integration occurs, eventually resulting in economic integration. The details are borrowed from the previous two chapters. Though more likely to succeed than the proposals in those chapters, it is also the least likely to be adopted. Stiglitz correctly recognizes that having a single currency area is an interference in the market in and of itself, monopolizing exchange and interest rates in the area, but cannot seem to fathom that his flexible euro proposal also does this on a smaller scale. He claims that it can be better not to simply rely on prices for the allocation of resources, but does not explain how to solve the local knowledge problem or the economic calculation problem in a superior manner. He also says that history shows free banking to be a disaster, when the truth is quite the opposite.

The final chapter sees Stiglitz review many themes from previous chapters, but he also covers topics which are barely mentioned elsewhere. He denounces anti-immigrant groups in Europe, which are only trying to resist demographic replacement by a ruling class that they did not ask to replace them. So much for the “democratic accountability” that Stiglitz extols in the same breath. He blames right-wing economic ideology for rising inequality in the United States beginning with the Reagan administration, but incomes really began to diverge ten years earlier, when Nixon ended the gold standard. Stiglitz expresses a desire to preserve the Enlightenment values of Europe, but cannot comprehend how letting in migrants with distinctly anti-Enlightenment values will jeopardize that mission. On the issue of trade policy, he understands that free trade is not always best for all parties involved, as it can destroy important societal arrangements that prevent conflict. But then Stiglitz incredulously asks how one could have expected that Europe’s leaders would create such economic dysfunction, with massive unemployment and lack of economic security. The answer is that a proper amount of cynicism would require such an expectation.

Overall, the best thing that can be said for the book is that it is not an effort made in bad faith. Stiglitz correctly identifies many of the problems with the current state of affairs in Europe and seems to want to help, but his proposed solutions are thoroughly misguided. Despite his palpable disdain for Milton Friedman and other Chicago School monetarists, he suffers from one of the worst of their faults: a desire to solve the immediate problems set before him combined with a lack of broader perspective. This leads him to propose a banking system which could be used to terrible effect against political dissidents, tax collection schemes that would indicate criminal intent in any non-statist context, and forced political integration by means of stealth and subterfuge. He also seems to believe that everything would be fine if only state power were used by the right people to implement the right policies. It never occurs to him that the power itself might be the problem. The Euro is an interesting case study in leftist economic thought, but those looking for real solutions to Europe’s economic woes should keep looking.

Rating: 2.5/5

Praise The Grinch Bots

This week, outlets across the spectrum of establishment media were outraged at so-called ‘grinch bots.’ These are automated programs that make bulk purchases online so that scalpers can resell the items at higher prices. This has caused the prices of some toys to increase several-fold. For instance, a Barbie Hello Dreamhouse retails for $299.99, but on eBay, one reseller is asking for more than $4,600. This phenomenon has caught the attention of Sen. Chuck Schumer (D-NY), who said, “Grinch bots cannot be allowed to steal Christmas, or dollars, from the wallets of New Yorkers. …Parents have a real dilemma: either they can’t get the toy because the bots have scooped them up, or they have to pay an enormous price.” In a letter to the National Retail Federation and the Retail Industry Leaders Association, he wrote, “I am calling on your associations to immediately investigate how these dishonest software programs are being used on your members’ sites and take all available steps to thwart computer systems from cheating America’s consumers.”

Schumer’s comments illustrate an economic illiteracy that is all too common among politicians and pundits. Contrary to popular belief, scalpers perform an important function in an economy. In this case, they also provide other benefits that extend beyond economics and into culture. Let us examine these phenomena in order to see why grinch bots are good.

The Economic Role of Scalpers

When a manufacturer produces an item for sale, it is impossible to calculate the market clearing price in advance. The market clearing price is exactly what it appears to be: the maximum price at which the producer can sell all of the produced items. Any price above this level will result in unsold product, while any price below this level will invite people to buy up the items and resell them, also known as scalping. Whereas overproduction is the worst inefficiency in manufacturing, a producer would prefer to err on the low side of the market clearing price. This naturally produces excess demand, which in turn leads to higher prices. Part of this effect occurs naturally in retail businesses, but scalpers act as an additional market force to accelerate the price correction up to its proper level.

Scalpers also function as risk mitigators. If a scalper buys products and fails to resell them, then the scalper loses the entire cost of the item while the manufacturer, retailer, and everyone in between are reimbursed for their expenses. If the scalper does make sales, then he makes a profit and people find the products they want. The scalper is thus strongly incentivized to connect manufacturers and distributors with customers who want their goods. Note that the scalper is behaving like a retailer, in that he buys large amounts of finite, potentially scarce products and sells them for a profit to people who want them. Yet hatred of scalpers is common, while hatred of retailers is rare.

Some people will argue that scalpers are responsible for higher prices and lower availability, but this is merely a result of arithmetic, and would happen with or without dedicated scalpers speculating on Christmas toys. Suppose, for an example similar to the case at hand, that doll houses are selling for an average of about $300, there are 10,000 doll houses for sale every day, and 15,000 people want a doll house. To avoid distributing reservations without price rationing, which would result in reservations being made available in an arbitrary and discriminatory manner, prices must rise to a level where only 10,000 people still want them. This level may be around $450 in this case. How this $150 per doll house increase is distributed is what will vary, depending on how much scalping versus internal revaluation in retail stores is occurring.

Schumer makes two more especially ignorant claims which are worthy only of a cursory rebuttal. First, he contends that scalping harms the poor. This ignores the fact that scalping is an excellent economic opportunity for the poor, as they can make large returns by engaging in scalping. Second, he says that grinch bots are engaging in acts of theft and cheating. The idea that voluntarily purchasing a product at the offered price could constitute theft and cheating is simply bizarre.

Cultural Benefits

When scalpers buy up Christmas toys and fail to resell them, there are additional benefits which extend beyond economics and into culture. There is an enormous opportunity cost involved with the holiday shopping season, as people spend money they do not have on items they do not need, then spend even more money on getting out of debt. One way of preventing this is for attempted scalpers to raise prices and thus reduce demand. This will cause people who are on the margin of shopping versus not shopping to reconsider in favor of the latter. Those who make one reconsideration are more likely to make other, related reconsiderations, so people who cease engaging in holiday consumerism may come to some deeper personal or spiritual understanding, or at least develop more concerns beyond immediate gratification. Although a few grinch bots may play a minmal role in the grand scheme, any lowering of time preference coupled with greater focus on the virtues embodied in Christmas traditions would be a cultural improvement.

Conclusion

The attacks on the grinch bots are understandable; they are an obvious target for the economically illiterate, and going after them makes excellent political hay for a senator looking to expand the state’s regulatory powers. Which of these best describes Schumer is debatable, but the above analysis clearly demonstrates that scalpers in general and these computer programs in particular should be praised rather than denounced.

The Economic Fallacies of Black Friday: 2017 Edition

Today, shoppers across America will participate in the largest shopping day of the year: Black Friday. The National Retail Federation is estimating that 164 million customers will be shopping on Black Friday weekend. For the first time, their estimate includes Cyber Monday, which had previously been treated separately. The 2016 estimates were 137.4 million between Thanksgiving and Sunday, and 122.2 million on Monday. The actual result from 2016 was 154.4 million between Thanksgiving and Sunday. A similar adjustment to the predicted value for 2017 would mean an actual number of shoppers close to 184.3 million.

The NRF estimates that total sales for the holiday season will be between $678.75 billion and $682 billion, up from $658.3 billion in 2016. This would be an annual increase of 3.6 to 4.0 percent. The estimate for 2016 was $655.8 billion, suggesting that the total sales for 2017 may be around $683 billion. This year, the NRF estimates that retailers will hire between 500,000 and 550,000 seasonal employees, compared with the actual 575,000 they hired during the 2016 holiday season versus an estimate of 640,000 to 690,000. We may therefore expect that retailers will actually hire about 453,900 seasonal employees. On the surface, this may appear to be a marvelous celebration of free market capitalism. But let us look deeper through the lenses of the broken window fallacy and the idea of malinvestment.

To view holiday shopping as a boost to the economy ignores the fact that people could either be spending that money in other ways or saving it. In other words, such an approach is an example of the broken window fallacy because it focuses only on what is seen and ignores opportunity costs. If people would save their money rather than spending it on various holiday gifts, then this money would be invested in one thing or another. As Henry Hazlitt explains in Chapter 23 of Economics in One Lesson, saving is really just another form of spending, and one that has a greater tendency to allocate resources where they are most needed.

Per capita spending is predicted to be $967.13 in 2017, up from the 2016 estimate of $935.58. The above problems get even worse if people use credit cards to spend money that they do not currently have. With a current credit card interest rate of 16.72 percent and a minimum payment of 4.0 percent, a debt of $967.13 would take 5.5 years to pay off and would cost $1,372.85. This is $405.72 wasted on interest payments that could have been kept in one’s accounts or put toward a productive purpose. Multiply this by the 184.3 million shoppers predicted earlier, and the result is that as much as $74.8 billion could be spent on interest payments.

When people purchase unwanted gifts and/or buy gifts with money they do not currently have, their choices encourage malinvestments. A malinvestment is an investment in a line of production that is mistaken in terms of the real demands of the economy, which leads to wasted capital and economic losses. The holiday shopping season contains a subset of shopping which creates systematic and widespread mistakes in investment and production. Although the effect is not as severe as what occurs during an Austrian business cycle bust and is both caused and resolved in fundamentally different ways, there is a noticeable hangover effect on the economy. A look at the average monthly returns on the Standard and Poor’s 500 shows that while the worst month for investments is September, the next three worst months for investing are February, May, and March. (April would likely be bad as well if not for income tax returns providing an artificial economic boost.) An economic downturn occurs in the historical average following the holiday season, but as this has become an expected annual occurrence, many analysts simply do not look for an explanation of these results, as they are perceived to be natural. Even so, this appears to be a small-scale business cycle that repeats annually.

With these arguments in mind, would we all be better off if we just canceled the holiday shopping season? It is an open question, but the Austrian School of economics suggests that we could have a better economy if the burst of economic activity in late November and December were spread throughout the year and people did not spend money they do not have on items they do not need.