Why Price Gouging Is Good

When a natural disaster strikes, it is almost guaranteed that there will be yet another uproar about price gouging. Media pundits will take to the airwaves to virtue signal against people who would dare to exploit disaster victims. Government officials will use the crisis to score political points by portraying themselves as defenders of the common people against greedy capitalists. But how accurately does this reflect reality? Let us explore the nature of price gouging to see the economics of such a situation and explain the behavior of journalists and state agents.

Economic Forces

In order to intelligently approach the concept of price gouging, one must first define it. Price gouging is a sudden, sharp increase in prices that occurs in response to a disaster or other civil emergency. Though this defines the act well, it does not explain the mechanisms behind it. When a disaster approaches, there are certain goods that people wish to acquire in greater quantities than normal, such as clean drinking water, non-perishable foods, wooden boards for protecting windows, and so on. If supply is held constant, then this sudden increase in demand for such goods will produce a sudden increase in their prices.

If left unhindered by the state, this upward pressure on prices will produce important benefits. First, it serves as a signal to producers and distributors of those goods that more supply is needed. The producers and distributors thus learn where their goods are most urgently in demand, allowing them to engage in mutually beneficial transactions with disaster victims. This is how free markets are supposed to function in order to meet the needs of customers.

Second, price gouging encourages proactive preparations. A potential business model for a firm is to invest in equipment that allows it to operate when a disaster would otherwise force it to close, and use the proceeds from price gouging to amortize the cost of the equipment. This helps consumers by allowing them to purchase goods at higher prices rather than be left without essential items during a crisis.

Third, price gouging provides an important benefit by conserving the fixed amount of resources which are present before more deliveries can be made to the disaster area. The higher cost of scarce goods disincentivizes people from buying up supplies that other people need, thus helping to keep the items in stock. This keeps scarce resources from being wasted on marginal uses, directing them toward their most valued uses and the people who most need them instead.

Markets And Malice

Unfortunately, not every instance of price gouging is so benevolent. Business owners who seek to exploit vulnerable people in order to make money do exist. But engaging in such behavior in a free market produces a short-term gain followed by a long-term loss. In a pure capitalist environment, reputation is everything for a business. Whatever profits may come from gouging disaster victims in the present will be more than outweighed by the sales that one will lose in the future because of the damage that this does to one’s brand. After all, most people would view such behavior as adding insult to injury and vote against it with their wallets. Though it is impossible to accurately count sales that do not happen, to dismiss this effect as nonexistent is to commit the broken window fallacy.

Enter The State

Most people are economically illiterate, so they tend to focus on the malevolent type of price gouging and be unaware of the benevolent type. In a democratic state, this has predictable results. Politicians and other government agents will frown upon price gouging and seek to punish anyone who they believe to be engaging in it. But it can be difficult to distinguish the natural effects of demand spikes and limited supplies upon price from the efforts of greedy exploiters of disaster victims, especially for government officials who are too far removed from the disaster area to be intimately familiar with the economic dynamics there. Thus, all price gouging is suppressed by the state, and while this may protect a few people from exploitation, it causes more harm than good by disrupting the market signals which would have informed producers and distributors that their goods need to be sent to the disaster area. The end result is that scarce goods are depleted and not replaced, leading people to once more blame the market for failing them when the actual cause of their shortage was a government failure.

Suppression of price gouging has several deleterious effects. First, by placing price controls on goods, the state deprives entrepreneurs of the profit motive to bring additional supply to the disaster area. Without state inteference, people who live outside of the disaster area and are willing to travel there in order to bring supplies could charge enough for their goods to recover their travel costs and be compensated for the inconvenience of spending time in a disaster area, all while making enough profit to make such a venture more attractive than other economic opportunities. Price gouging laws remove such action, leaving only state agencies and altruistic private groups to provide aid. Note that like all government regulations, price gouging laws are subject to regulatory capture by the largest businesses.

Second, removing the incentive for proactive preparations makes untenable the business model for operating during a disaster described above. Third, removing the conservation effect of price gouging forces business owners to sell goods below their market-clearing price. This incentivizes hoarders to buy more than they need and scalpers to buy goods for resale. The existence of scalpers also makes desired goods more difficult to find, as resellers will be more difficult to locate than established stores. Thus, laws against price gouging do not eliminate the practice, but rather shift it from primary markets to secondary markets and cause a different set of people to profit. Taken together, these effects result in artificial scarcity that makes conditions in a disaster area even worse.

A Pair of Razors

Given the clear case in favor of price gouging, one may wonder why so many people in positions of political power rail against it. Reece’s razor suggests that we look for the most cynical explanation when attempting to determine a motive for state policy. No other possibility prioritizes the self-interest of politicians and their minions over the lives and properties of citizens quite like the idea that government officials want to suppress the natural response of markets in order to make government disaster relief agencies look effective and necessary, thus justifying their existence and expansion, so Reece’s razor selects it.

However, it is not in the rational self-interest of elected officials to increase the suffering of disaster victims who are capable of removing them from office in the next election. A better explanation is offered by Hanlon’s razor, which says that one should not attribute to malice what can be explained by stupidity. In this view, government officials are not trying to increase the harm done during a disaster; they simply know no better because they are just as economically illiterate as the electorate, if not more so. This razor is a better fit for the available logic and evidence.

Conclusion

It is clear that price gouging has an important economic role in ensuring that goods both go to those who need them most and remain available in times of emergency. Market prices are important signals that tell producers and distributors where their goods are most urgently needed. When the state interferes with this process by imposing price controls, it turns off the signal and incentives for market actors to send aid, encourages hoarding and scalping, and discourages conservation and farsightedness. These effects mean that laws against price gouging harm the very people that they are ostensibly supposed to help. Therefore, price gouging should not be punished by the state or demonized by the press.

On The Relationship Between Libertarianism and Fascism

In the August 2, 2017 episode of the Tom Woods Show, Woods talks about the moral outrage of left-libertarians and their tendency to call other libertarians fascists, Nazis, or whatever other insults they can muster. To follow up these complaints, he asserted that libertarians and fascists are completely contradictory political perspectives and could never be combined, alluding to the “libertarian fascists” and libertarians with fascist sympathies. He also said that when one embraces fascism, one must have relinquished one’s libertarianism, as there is no other solution that would make sense. In the historical sense of fascism, libertarian fascism is a contradictory term. A person who is a libertarian cannot actually and fully consider themselves a fascist in that sense, or vice versa. However, we can treat libertarian fascism as a placeholder term for a broader ideological shift toward a synthesis of libertarianism and fascism. We may also consider how a private property owner in a libertarian society could have a fascist structure within the bounds of private property.

Examining Premises

The first mistake that Woods (and many other libertarians) make is to assume that the combination of different ideological perspectives is dependent on policy and not the fundamentals of their philosophy. From this, Woods implies that fascism is about centralization and boundless idealism, while libertarians accept people as they are and favor decentralization. Some more simple-minded people also think that fascism is about authority and state power while libertarianism is the complete opposite. This may be true when we look at policy proposals, but policy cannot be the arbiter of ideological coherence or ideologies themselves. We need to analyze the premises of different ideologies if we are to analyze how compatible these ideologies are. This is necessary because ideologies are fundamentally systems of thought and analysis flowing from basic premises. A person using an ideology is a person looking at the world in a certain way and proposing policy positions from that set of value judgments.

To illustrate this, let us consider the example of Milton Friedman. Milton Friedman is claimed by both libertarians and neoliberals as representing their ideologies. This means that both libertarians and neoliberals see Friedman as using their methods of analysis and looking at the world in the same manner that they do. But here we find a contradiction; there appears to be a problem if we are to place neoliberalism and libertarianism on a scale of politics. First, we have to establish that there is a connection between Rothbard and Friedman when it comes to libertarianism; that is, that one could draw a straight line from Rothbard to Friedman and it would naturally follow from their ideological positions. This may be done; one can see that both men respect property rights, advocate for reducing the size of the state, and wish to increase the freedom of the market. But one must also draw a line from Hillary Clinton to Friedman, as they are both neoliberals. Both are cosmopolitan, fairly progressive, and advocate for a sort of economy that is not only free but also open. Although they differ in their degree of state intervention, one can ideologically connect Friedman and Clinton.

But there is a problem, in that no such connection is present between Rothbard and Clinton. There is no consistent line that could connect Rothbardian thought with Clintonian thought. Their philosophies and perspectives are mutually exclusive. There is no principled alliance or synthesis between them; only alliances of convenience may exist. However, when it comes to Friedman, there may be a synthesis between these ideologies. Both Rothbardians and Clintonians will have their criticisms of Friedmanites, but Friedman’s position is palatable for both neoliberals and libertarians. This is because Friedman used both the premises of neoliberalism and the premises of libertarianism. He analyzed the world in a way that followed from the neoliberal desire for openness and personal freedom and the libertarian desire for self-determination and liberty. We can boil down these two positions to this: the neoliberals want looseness while libertarians want property. Neoliberals tend to favor whatever makes national identity, economic policy, or social cohesion looser. Libertarians tend to favor whatever makes property rights stronger, whether it be self-ownership, non-aggression, or property rights in external objects. Coming from both perspectives, one would both appreciate property rights and self-determination but also a loose society without national identity or strong social norms, and this explains the desires of left-libertarians. Friedman was first and foremost an economist, so we see more of the propertarian side of him, but he was also a neoliberal.

The Premises of Fascism

We have already established that the libertarian premises are self-ownership, non-aggression, and property rights. Libertarians tend to favor whatever increases the power of the property owner over his justly owned property. But what do the fascists take as their premises? Contrary to popular belief, it is not opposition to property or to personal liberty. No fascist regime has ever gotten rid of property and the personal liberty question has only been a policy proposal, not something most fascists believe in strongly. There are some fascists who are against property, but they are few and far between and have never had a strong presence in a notable fascist government. In fact, most fascist governments suppress these left-wing variants. In fiction, some fascists are opposed to personal liberty on principle, but these are not reflected in reality; the closest real approximation are people who believe that control is necessary for virtue. But in that case, the premise is virtue rather than control, as the fascist does not want control for the sake of control. To really understand the fascists, we need to look at fascist movements.

In Italy, there were the national syndicalists that eventually became the fascists. They believed in creating a pseudo-syndicalist economy that combines worker interests and business interests to reduce class conflict. They also believed in strengthening Italian society and creating an incredibly traditionalist social order. The Nazis shared the second point, but they wanted an economy where there is comparatively stronger property and there are more capitalistic structures, but on the condition that these structures benefit the nation. In this form, national socialists treat property owners as trustees given property by the nation to take care of the wealth and resources of the nation. We can see many other movements that hold themselves to be both anti-communist and anti-capitalist, but eventually, end up with what we would call a fascist economic policy.

Other movements were somewhat different. The Francoists come from the more orthodox Falangist position, and they are outliers because Franco eventually liberalized the economy and created a more free market than many people would have favored originally. Though Hitler privatized multiple industries, this was nothing compared to the Spanish miracle. The Greek military coup lead by Papadopoulos constantly referred to their movement as being explicitly temporary, however, the attempts of liberalization by Papadopoulos were shut down by other people within the government. It is impossible to know how Greece would have developed if these liberalizations had occurred, but the government was overthrown and Greece eventually became a leftist mess.

One could include Pinochet and use the Chilean miracle as another example of success, but fascists often consider Pinochet to be a sellout, and it is not entirely clear whether Pinochet was actually a fascist or simply a paid CIA operative; an anti-communist or globalist agent. Finally, one can look at the American Nazi party. They are certainly fascists, but they are also constitutionalists. They want to return to the founding documents of the United States, and support sound money and free markets. This contradicts the common image of fascism, and thus may befuddle any libertarian who has not analyzed the premises of fascism.

The Conclusions of Fascism

What all these movements had in common was the ultimate goal of creating a better nation. This meant creating a world where the destructive forces that were threatening to the nation could not take hold and the nation could prosper. They all wanted a society and an economy based around the nation, which they believed would create a better life for the people within that nation. One can see how the policies of all these movements actually follow from the nationalism that fascists take as their ultimate premise. Many say that fascists have no coherent economic policy, but this is untrue. The economic policy of fascists is and always has been to strengthen the nation. The 20th century was marked by a struggle between Marxist world socialism and liberal world capitalism. The Marxists agitated the workers while the liberals agitated the middle and upper classes, creating an immense class conflict that fueled revolution and chaos. The fascists in the early 20th century came along and attempted to create an economy that would work both for the upper and the lower classes, an economy where the workers would get what they think they deserve while the capitalists could keep their capital and use it productively. To do this, they wanted the state to have control of the economy to make sure that no one is exploited (at least, by any entity other than the state) and that everyone will work for the nation to ensure a lack of parasitism for greedy or materialistic purposes (again, outside of the state itself). When this was shown to be unsustainable, the smart fascists shifted to a policy of privatization. This happened under Hitler and Franco to various degrees; they ultimately let go of some state property and handed it to people who used it productively. The Nazis were not ready to give up their desires for the aesthetic advancement of the German people, so they needed to expand their empire to fuel their faulty economy, but some privatization still took place.

The social policy of fascist regimes has always been to make sure that the nation is sustainable and that the nation does not slide into degeneracy. From this follow positions against promiscuity, homosexuality, drug use, and whatever else people do in order to derive hedonistic pleasure at the expense of a healthy society. It also has a strong connection to the view that traditional family structures should be the basis of society, meaning that incentivizing motherhood and the creation of strong men to take care of the women is proper for sustaining the nation. This explains the ethnic element of fascism, as all nations are ultimately determined by the genetic stock of their people and the historical condition where the people have developed. Furthermore, this explains why anti-Semitism is present in historical fascist movements, as fascists tend to view Jews as a hostile minority with disproportionate influence that works to undermine the nation with moral degeneracy and financial manipulation while refusing to assimilate into the host nation.

Libertarianism and Fascism

First, from the premises of libertarianism, fascism is a lesser evil than left-wing socialism. Fascism undoubtedly preserves property more than left-wing socialism does, thus fascist sympathies cannot be construed as completely anti-libertarian. But one cannot take as ultimate goals both nation and property, as the conflicts between these goals would have to be solved by means of arbitrary decision. This means that libertarianism and fascism cannot be combined as ideologies because their premises are different. One may combine republicanism, minarchism, monarchism, anarcho-capitalism, etc. into a broad political movement, as the premises of these positions are sufficiently similar. But there is no way to create a big tent movement that can accurately represent the interests of both fascists and libertarians; the premises come into too much conflict.

Second, there is some value in the notion of being a fascist politically while being a libertarian philosophically. This is a position that some people are becoming more and more sympathetic towards. Left-libertarians like to refer to these people as “helicopterists,” so we can use that term to describe this position. What these people tend to believe is that a military dictatorship is necessary or beneficial if we are to establish a libertarian social order and that we cannot simply transition to absolute liberty without first making sure that policies are implemented to push society toward that goals. These people often argue for violent suppression of leftists, which is not what libertarians traditionally favor, and for a general purge within society that would result in favorable conditions for the formation of a libertarian society.

Third, libertarians may take nationalism as a premise and fascists may take property as a premise, even thought these cannot be their ultimate premises due to the aforementioned conflicts. Fascists may advocate for free-market economics insofar as it increases the health of the nation, while libertarians may advocate for nationalism insofar as it strengthens self-ownership, private property, and non-aggression. In this manner, libertarians and fascists can find common ground by using common premises, and they can create a compromise that is palatable for both fascists and libertarians. We touched upon Milton Friedman earlier to show that it is theoretically and practically possible to embrace different premises even though the policy proposals may contradict themselves. Although there can be a degree of collaboration between libertarians who value the nation and fascists who value property, they will still ultimately be fascists and libertarians, respectively. The priority between property and nation determines with which camp people identify.

Finally, it is possible for a private property owner to administer one’s holdings according to the structure of a fascist dictatorship. Being the owner of property means having a right to exclusive control over it, including its governance structure. However, libertarian standards do not permit forcing non-aggressive people to come into such a structure or remain there against their will, so a libertarian running a fascist governance structure within private property will have to be far less oppressive than statist fascists in order to keep a regime populated. This kind of governance, which offers people no voice and free exit, has proven best at limiting state power throughout history. It would also be best for limiting the tyranny of the private property owner that so concerns critics of libertarianism.

A Consideration Of Helicopter Rides

In recent years, the meme of throwing one’s political rivals out of helicopters has become popular among certain right-wing and libertarian groups. Unfortunately, people from all over the political spectrum tend to misunderstand the historical context of the meme, and thus interpret it incorrectly. Let us consider the backstory of helicopter rides in order to better understand their use, ethics, and utility.

Socialism in Chile

In 1970, Socialist candidate Salvador Allende became President of Chile, winning a plurality of votes and allying with the third-place Christian Democrats to gain the necessary majority to rule. He was the first openly Marxist head of state in a Latin American country to come to power through democratic means. The CIA and KGB both spent significant amounts of money to interfere in the election.

Once in power, Allende’s government took over control of large-scale industries, health care, and education. He expanded government theft and redistribution of land initiated by his predecessor Eduardo Frei Montalva, such that no estate exceeded 80 hectares (198 acres) by the end of 1972.[1] Payment of pensions and grants resumed, and social programs were greatly expanded. The arts became funded by the state. Diplomatic relations with Cuba were restored, and political prisoners were released. Price fixing for bread, wages, and rent occurred. Taxes on small incomes and property were eliminated. College was made tuition-free. The voting age was lowered to eighteen and literacy requirements were removed. Between October 1970 and July 1971, purchasing power increased 28 percent.[2] In that year, inflation fell from 36.1 percent to 22.1 percent, while average real wages rose 22.3 percent.[3]

Like all socialist experiments, the short-term results were good. But as Margaret Thatcher would later observe, “Socialist governments…always run out of other people’s money.” Government spending increased 36 percent from 1970 to 1971.[3] The national debt soared and foreign reserves declined. Declining prices in copper, Chile’s chief export commodity, only worsened matters. Black markets in staple foods emerged as rice, beans, sugar, and flour disappeared from store shelves. The Allende government announced its intent to default on debts owed to international creditors, including foreign governments. Strikes began in 1972, to which Allende responded by nationalizing trucks to keep truckers from halting the economic life of the nation. The courts intervened and made Allende return the trucks to their owners.

By the summer of 1973, Allende’s government was ripe for overthrow. On June 29, Colonel Roberto Souper surrounded the presidential palace with a tank regiment but did not succeed in overthrowing Allende. In May and again in August, the Supreme Court of Chile complained that the Allende government was not enforcing the law. The Chamber of Deputies accused Allende of refusing to act on approved constitutional amendments that would limit his socialist plans, and called on the military to restore order. Following embarassment and public protest, General Carlos Prats resigned as defense minister and commander-in-chief of the army, being replaced in the latter post by General Augusto Pinochet. Allende accused the Congress of sedition and obstruction, and argued that the accusations were false.

The Chilean Coup

On September 11, 1973, the Chilean Navy captured Valparaiso by 7:00 a.m. They closed radio and television networks in the central coast. Allende was informed of this, and went to the presidential palace. By 8:00, the army closed most broadcast stations in the capital of Santiago, while the Air Force bombed the remaining active stations. Admiral Montero, the Navy commander and an Allende loyalist, was cut off from communication. Leadership of the Navy was transferred to Jose Toribio Merino, who worked with Pinochet and Air Force General Gustavo Leigh in the coup. The leaders of the police and detectives went to the palace with their forces to protect Allende. Allende learned the full extent of the rebellion at 8:30 but refused to resign. By 9:00, the armed forces controlled all but the city center in Santiago. The military declared that they would bomb the palace if Allende resisted. Allende gave a farewell speech, and Pinochet advanced armor and infantry toward the palace. Allende’s bodyguards fired at them with sniper rifles, and General Sergio Arellano Stark called in helicopter gunships to counter them. The palace was bombed once Air Force units arrived. At 2:30, the defenders surrendered and Allende was found dead by his own hand.

Following the coup, the military killed around 3,000 leftists and imprisoned 40,000 political enemies in the National Stadium of Chile. Ninety-seven of those killed were eliminated by the Caravan of Death, a Chilean Army death squad that flew by helicopters in October 1973. The squad, led by General Stark, would travel between prisons, ordering and carrying out executions. The victims were buried in unmarked graves. This is one origin of the meme of helicopter rides, though squads other than Stark’s were responsible for the literal act referenced, having thrown 120 civilians from helicopters into the ocean, rivers, and lakes of Chile.

Peronism in Argentina

In 1946, Juan Perón of the Labor Party became President of Argentina. The majority of the Radical Civic Union, the Socialist Party, the Communist Party, and the conservative National Autonomist Party had formed an unusual alliance against him, but lost by 10 percent. His two stated goals upon becoming President were economic independence and social justice, but he had no serious plans to achieve those goals other than to attempt to hire the right advisors and underlings while refusing to side with the US or the USSR in the Cold War. Perón was intolerant of both leftist and rightist opposition, firing more than 1,500 university faculty who opposed him[4], shuttering opposition media companies, and imprisoning or exiling dissident artists and cultural figures.

Perón’s appointees encouraged labor strikes in order to obtain reforms for workers, which aligned large business interests against the Peronists. Upper-class Argentine’s resented Perón’s reforms, feeling that they upset traditional class roles. He nationalized the central bank, the railroads, public transport, utilities, universities, and merchant marine. He created the Institute for the Promotion of Trade (IAPI), which was a state monopoly for purchasing foodstuffs for export. Average real wages rose by 35 percent from 1945 to 1949,[5] while during that same period, labor’s share of national income rose from 40 percent to 49 percent.[6] Healthcare and social security were made nearly universal during Perón’s first term. GDP expanded by over 25 percent during this time,[4] which was largely due to spending the $1.7 billion in reserves from surpluses from World War II.

The economic success of Perón’s reforms would not last. The subsidized growth led to an import wave that erased the surplus by 1948. A debt of roughly $650 million owed by Great Britain to Argentina went mostly unpaid, further complicating matters.[4] The Argentine peso was devalued 70 percent between 1948 and 1950, leading to declining imports and recession. Labor strikes began to work against Perón, who responded by expelling the organizers from the unions and calling for a constitutional reform in 1949.

Perón faced no serious opponent for his 1951 re-election campaign, despite being unable to run with his wife Eva, who had fallen ill and would die the following year. Exports fell as low as $700 million in 1952, producing a $500 million trade deficit. Divisions among Peronists grew, and many of Perón’s allies resigned. He accelerated construction projects and increased rank and pay to top generals in an effort to reduce tensions. After Eva’s death, opposition to Perón intensified. On April 15, 1953, terrorists bombed a public rally of Perón supporters, killing seven and injuring 95. He responded by asking the crowd to retaliate. They responded by burning down the Jockey Club building and the Socialist Party headquarters.

In March 1954, Perón had to replace his Vice President, and his preferred choice won in a landslide. This, combined with stabilized inflation rates, motivated him to create new economic and social policies. This brought in foreign investment from automakers FIAT, Kaiser, and Daimler-Benz, as well as from Standard Oil of California. But Perón’s legalization of divorce and prostitution turned the Roman Catholic Church against him, which excommunicated him in June 1955. Perón responded by holding a public rally, and for the second time it was bombed, this time by Navy jets that fled to Uruguay afterward. 364 people were killed, and Peronists again carried out reprisals by attacking eleven churches. This led to the coup that ousted Perón on September 16, performed by nationalist Catholics in the Army and Navy led by General Eduardo Lonardi, General Pedro E. Aramburu, and Admiral Isaac Rojas. Perón barely escaped to Paraguay.

Resistance, Return, and Repression

Shortly afterward, Peronist resistance movements began organizing among disgruntled workers. Democratic rule was partially restored, but political expression for Peronists was still suppressed, so guerrilla groups began operating in the 1960s. Early efforts were small and quickly quashed, but more successful movements formed toward the end of the decade. The Peronist Armed Forces (FAP), Marxist–Leninist-Peronist Revolutionary Armed Forces (FAR), and the Marxist–Leninist Armed Forces of Liberation (FAL) were the three major players before 1973. The FAR joined an urban group of students and intellectuals called the Montoneros, while the FAL and FAP merged into the Marxist People’s Revolutionary Army (ERP).

In 1970, the Montoneros captured and killed Pedro Eugenio Aramburu, a military leader in the 1955 coup. In a few years, such events happened on a weekly basis, as did bombings of military and police buildings. Some civilian and non-government buildings were also bombed. Juan Perón returned from exile and became President again in 1973, and sided with the right-Peronists and the government against the left-Peronists. He withdrew support of the Montoneros before his death in 1974. His widow Isabel Martinez de Perón became President after his death, and she signed a number of decrees in 1975 to empower the military and police to defeat the ERP and other such groups. The right-wing death squad known as Argentine Anticommunist Alliance emerged at this time. Isabel was ousted by a coup in 1976, and the military took power. Up to this time, leftists had killed 16,000 people in their guerrilla efforts. The United States government financially backed the Argentine military, while the Cuban government backed the left-wing terror groups.

The juntas that held power between 1976 and 1983 repressed leftist dissidents, being responsible for arresting, torturing, and/or killing between 7,000 and 30,000 people. Many were Montoneros and ERP combatants, but others were civilians, students, left-wing activists, journalists, intellectuals, and labor organizers. Some of those executed were thrown from airplanes to their deaths in the Atlantic Ocean, providing another basis for the meme of helicopter rides. The worst repression reportedly occurred in 1977, after the guerrillas were largely defeated. The junta justified its action by exaggerating the threat and staging attacks to be blamed on guerrillas.

The “National Reorganization Process,” as it was called, failed in its efforts to suppress the left. As the roundup was overbroad, it sowed resentment. Some of those arrested had done nothing other than witness others being arrested in public places. Severe economic problems only added to civil unrest. The military tried to regain popularity by occupying the Falkland Islands, but their defeat by Britain in the Falklands War led them to step aside in disgrace and restore democracy.

Aftermath in Chile

In Chile, Pinochet remained in power until 1990. His 1980 constitution remains in effect, though significantly amended in 1989 and 2005 and slightly amended on eleven other occasions. In the 1990 elections, a coalition of democratic and socialist parties with the Christian Democrat Patricio Aylwin at the head was successful. Eduardo Frei Ruiz-Tagle, the son of Allende’s predecessor, led the coalition from 1994 to 2000. The Socialist Party and Party for Democracy led the coalition from 2000 to 2010. The center-right National Renewal won in 2010, but the Socialist Party regained power in 2014.

During Pinochet’s rule, Chicago School economists influenced the regime to adopt free market policies. Despite the prevalence of leftists in power since Pinochet’s rule ended, many of his economic reforms have remained in place and the economy is among the freest in the world. Aylwin and Ruiz-Tagle increased spending on social programs and reformed taxes, but avoided radical changes. Chile managed to avoid serious impact from the Mexican peso crisis of 1994 by using capital controls.

Aftermath in Argentina

In Argentina, voters elected Raul Alfonsin of the center-left Radical Civic Union once democracy was restored in 1983. He both created a commission to investigate forced disappearances and passed an amnesty law that stopped the investigations until 2005. His administration was unstable due to friction with the military and economic issues, leaving office early to let Peronist candidate Carlos Menem take office early after winning in 1989. Though he privatized many industries that Perón nationalized, he expanded both executive power and the role of the state in the economy. He won again in 1995, but the Radical Civic Union was growing and a new alliance called FrePaSo formed. By 1999, all three major parties supported free market economics. UCR and FrePaSo allied behind Fernando de la Rua to defeat Peronist Eduardo Duhalde. After some resignations and turmoil, Duhalde would get his chance in 2002. He managed to bring inflation under control, then called for elections in 2003. This brought another Peronist, Nestor Kirchner, to power. He overturned the 1986 amnesty for members of the military dictatorship and oversaw a strong economic recovery. His wife, Cristina Fernandez de Kirchner, took over in 2007. She distanced herself from traditional Peronism after Nestor’s death in 2010, favoring instead the La Campora movement that reveres the Montoneros guerrilla group. In 2015, her party lost to Mauricio Macri and his Republican Proposal party, which was allied with the Radical Civic Union.

The governments from the 1930s to the 1970s used import substitution to increase industrial growth, but this came at the expense of agricultural production. Import substitution was ended in 1976, but growth in government spending, inefficient production, and rising national debt led to inflation problems in the 1980s. The government responded to inflation in the 1990s by auctioning state-owned companies and pegging the Argentine peso to the US dollar. De la Rua followed an IMF-sponsored economic plan to deal with the government budget deficit, but an economic collapse occurred at the end of 2001. The peso was devalued again, and recovery occurred by 2005. A judicial ruling in 2012 led to a selective default in 2014 that was resolved in 2016.

Contemporary Application

Now that the context from which the meme of helicopter rides emerges is understood, we may consider its potential application against contemporary leftist rulers and agitators. Helicopter rides for political enemies are a form of ultraviolence, which is the use of force in an excessive and brutal manner as a public display to make an example out of a particular person or group. This is done for the purpose of establishing dominance and suppressing rivals within a territory, from which peace and order may follow. Utilized correctly, this will break the spirit of resistance movements and solidify one’s hold on power, which will prevent further death and destruction that would otherwise occur from terrorism and civil war. If misused, whether by subjecting overbroad numbers of people to cruel punishment or by utilizing methods that the population deems to be completely beyond the pale, ultraviolence will create resentment that will resurface later as another, stronger resistance movement. Misuse will also have a negative psychological impact on the perpetrators, causing them to lose their humanity through the commission of needless atrocities.

The above examples of Chile and Argentina suggest that ultraviolence by rightists against leftists appears to be insufficient to counter the leftward slide that naturally occurs in politics over time. One possible reason for this is that a continual march leftward is the political variant of entropy, the physical process by which the universe becomes increasingly disordered and chaotic over time. If so, this would explain why all great civilizations eventually fall and all attempts by right-wing movements to use the state to advance their agendas fail to produce lasting change. Another potential explanation is that the state is an inherently leftist institution, in that the nature of the state is to allow some people to do with impunity that which would be considered criminal if anyone else behaved identically, and the nature of the left is to disrespect individual rights in favor of their view of the collective good. This meshes well with Robert Conquest’s second law of politics; any organization not explicitly right-wing sooner or later becomes left-wing. A third explanation is that power does what it wants due to its inherent lack of accountability, meaning that a military junta has no real incentive to limit its removal of leftists to those whom have actually committed crimes. Thus, the use of helicopter rides naturally becomes overbroad when coupled with the state, and the distrust and resentment that fuels a revolution against the military government naturally follow.

Many alt-rightists who suggest the use of helicopter rides to eliminate their political rivals do not understand the above context with sufficient clarity. This leads them to long for the day when they get to pilot a massive fleet of helicopters that drops their enemies from staggering heights. For their stated goals, helicopter rides are a tool not fit for purpose, as the cost of helicopters, fuel, and pilots far exceeds that of other methods of physical removal. Helicopter rides as historically practiced also fail at performing ultraviolence, as rumors of helicopter rides pale in comparison to theatrical executions carried out in the public square on live television. The obvious retort that the victims should be dropped onto a hard surface in the public square is likely to fail by being too gruesome for the public to stomach. And ultimately, no matter how many leftists are killed, their ideas and the state apparatus to implement them remain. Overall, the alt-right approach fails because its adherents seek to use the ultimate enemy (the state) against the proximate enemy (the left) without any intention or plan to eliminate the ultimate enemy afterward, which results in long-term losses for short-term gains.

Moral Issues

While the alt-right seeks to misuse the practice of helicopter rides, libertarians and leftists tend to decry the idea as mass murder. The leftists will typically assert that the use of deadly force against someone who does not pose a deadly threat at the moment is murder. But the immediate danger doctrine, as it is known in legal circles, is a standard used by the state to perpetuate itself by creating an artificial demand for its functions of legislation, security, criminal justice, and dispute resolution while rendering the population dependent and irresponsible. Such a standard is not provable from first principles and is clearly at odds with libertarian theory on the use of force.

Libertarian theory allows one to use any amount of force necessary to not only defend oneself against aggressors, but to make people who refuse to perform restitution do so, to stop people who recklessly endanger bystanders, to reclaim stolen property, and to eliminate crime bosses and other unrepentant aggressors. While this does not allow for the full extent of the helicopter rides given by the militaries of Chile and Argentina, it can allow for statists who held power and those who carried out certain acts of aggression on their orders to be executed. Of course, rightists who wield state power (or libertarians who wield private power) in an overzealous manner against leftists would also be legitimate targets for helicopter rides if they kill people who have not committed crimes worthy of death.

A more appropriate libertarian use of helicopters is not to execute anti-libertarians by throwing them out, but to transport them out of a libertarian-controlled territory and warn them not to return. Exile and ostracism, after all, are perfectly legitimate exercises of property rights and freedom of association. Furthermore, removing people who advocate against the norms of a libertarian social order from a libertarian community is a necessary preservation mechanism, but such removal need not be fatal unless all reasonable efforts that do not involve deadly force have been tried without success.

Conclusion

There is a rich historical context behind the idea of helicopter rides for leftist agitators. Unfortunately, most modern advocates of such methods do not understand this context, which leads them to make recommendations which do not align with reality. Though leftists and some libertarians decry all uses of helicopter rides as murder, there are cases in which such acts are morally justifiable.

References:

  1. Collier, Simon; Sater, William F. (2004). A History of Chile, 1808–2002. Cambridge University Press.
  2. Zipper, Ricardo Israel (1989). Politics and Ideology in Allende’s Chile. Arizona State University, Center for Latin American Studies.
  3. Larrain, Felipe; Meller, Patricio (1991). The Socialist-Populist Chilean Experience, 1970-1973. University of Chicago Press.
  4. Rock, David (1987). Argentina, 1516–1982. University of California Press.
  5. Dufty, Norman Francis (1969). The Sociology of the Blue-collar Worker. E.J. Brill Publishing.
  6. Dornbusch, Rüdiger; Edwards, Sebastian (1991). The Macroeconomics of populism in Latin America. University of Chicago Press.

Book Review: The Science Of Selling

The Science of Selling is a book about how science can improve the field of sales by American sales trainer David Hoffeld. The book explains what research in psychology says about each aspect of the sales process, as well as how to sell in accordance with how the brain makes buying decisions. The book is divided into ten chapters, which comprise three sections that focus on different aspects of the business of sales.

Hoffeld begins by discussing some of his background and what made him decide to use science to improve his sales performance. He then explains why sales is not an obsolete profession and why science works to improve sales performance. The remainder of the introduction lays out the framework of the rest of the book.

The first chapter explores why salespeople are struggling. The suggested remedy is to adjust sales techniques to conform to the manner in which the human brain makes buying decisions. The second chapter covers the functionality of influence. The peripheral route is explained first, in terms of building trust and understanding the heuristics that most people use when making decisions. The central route is explained next, which involves the actual message of the salesperson. What this message should contain is the primary focus of the third chapter. Hoffeld uses a proprietary method called the Six Whys combined with attending to the buyer’s emotional state in order to address a buyer’s questions and get the buyer to feel like buying. These questions allow a salesperson to understand a buyer’s needs and convince a buyer to purchase a good or service now from a particular company. The fourth chapter focuses on the role of emotions in decision making and how salespeople can alter a buyer’s emotional state away from negativity.

The second section, composed of the next five chapters, begins with a study of questions. Many types of questions are analyzed, along with their role in the course of securing a sale. These are used to gain a basic understanding of a subject, then prompt potential buyers to think through an idea, then get potential buyers to disclose their dominant motives. The sixth chapter delves into primary buying motivators to explain why buyers buy from particular providers, then turns to buying requirements. Advice for dealing with decision makers and those who influence them come next, followed by how to learn a buyer’s decision criteria concerning what they need, how soon they need it, and how much they can pay for it.

Hoffeld deals with value creation and countering obstacles to making a sale in the seventh chapter. He uses social exchange theory to explain how a salesperson can help buyers to see value in the product being sold. Next, inoculation theory as a means of neutralizing competitors is discussed. After this, Hoffeld returns to the Six Whys and positive emotional states when considering how to address objections. In the eighth chapter, Hoffeld shares his approach to closing a deal. The Six Whys factor in again, as he views the close as a commitment that follows from a series of commitments throughout the sales process. This is supported by evidence from psychology that shows the power of the desire to be consistent. The use of trial closes to guide buyers into making a decision to purchase are covered next. Hoffeld suggests handling non-commitments by addressing objections and reinforcing the commitments that the potential customer has already made. With that done, the only thing left to do is to make a closing statement or ask a closing question to finish a deal.

The ninth chapter is about the design of sales presentations. The experiment Hoffeld mentions with jam selections in a grocery store to show that more choices can reduce sales is illuminating in the field of sales and far beyond. The strategies of setting anchors that portray one’s product as superior to an alternative, activating a customer’s mirror neurons by exhibiting their body language, using visuals instead of words only, and the use of stories and testimonials are recommended for effective sales presentations.

Hoffeld closes with a final section/chapter concerning the future of sales and what changes he believes will occur in the coming years. The prediction that a scientific approach will take over an anecdotal approach almost has to be correct, as all of the incentives mandate it. This necessarily validates his second prediction, that sales research will blossom. The final prediction that sales hiring practices will improve is probably true, but likely to take longer.

The Science of Selling is an excellent resource for salespeople, as the strategies therein are more effective than the trial-and-error and guesswork that is commonly practiced today. However, I must admit to reading this book at three levels in addition to face value: how a jobseeker may sell oneself to employers, how a philosopher may persuade the public of one’s ideas, and how a political activist may succeed in advancing one’s agendas. At the jobseeker level, this book explains why certain people fail to get job interviews and/or fail in job interviews. At the philosopher and political activist levels, this book explains why certain people are unpersuasive, why certain political systems are constructed as they are, and why logical fallacies seem to work in the real world. Thus, this book is useful not only to its intended audience, but far beyond it as well.

Rating: 5/5

Fashion As A Harbinger Of Revolution

There are many barometers for the health of a society, from economic prosperity to beliefs concerning social issues. One such barometer may be found in the fashion that is being promoted in that culture. The advocacy of modest clothing in good condition indicates a healthy society. Clothing that is deliberately ill-fitting, whether wasteful in material or skimpy in coverage, is a sign of degeneracy. A new clothing trend has developed in America that is symptomatic of the sort of cultural decay that foreshadows a revolution; that 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.

Current Examples

There are many instances of this, but four examples will serve to illustrate the point. First, let us consider Nordstrom’s Barracuda Straight Leg Jeans. The product description calls them “Heavily distressed medium-blue denim jeans in a comfortable straight-leg fit embody rugged, Americana workwear that’s seen some hard-working action with a crackled, caked-on muddy coating that shows you’re not afraid to get down and dirty.” These pants, available for $425, have fake mud and wear marks added to them. (They must be machine washed cold, lest these dubious decorations break off and leave one with an improved pair of pants.)

Another offering, the Damiana Splatter Paint Stretch Woven Jogger Pants, are described as “Slouchy, tapered-fit joggers crafted from extremely durable, destroyed stretch cotton appear as though they stepped straight out of the art studio, creating a disheveled style masterpiece that’s both one-of-a-kind and unafraid to play dirty.“ For $300, you can avoid the excruciating work of wielding a paintbrush and wear pants with fake paint splatters on them in order to pose as an artist or painter.

Third, there are the Maison Margiela Future Destroyed High Top Sneakers available at Neiman Marcus. The non-destroyed version is available for $995, but for the low, low price of $1425, you can have a pair that looks like they went through a car crusher. Multiple gashes, a mostly missing tongue, and inner layers hanging out are marketed as “deconstruction” and “heavy distressing.” As of this writing, they are on sale for $997, so perhaps there is hope in the fact that too few people were willing to pay so much more for an inferior product.

Finally, the fashion of intentional damage is not reserved for men only. Golden Goose offers women a multitude of sneaker designs, and one of them is designed to look like it has been through hundreds of miles of use. Scuff marks abound and the leather is crackled to simulate wear, though it looks more like it is covered in two paints which are incompatible. The $425 price tag is comparable to other offerings which do not always look new, but are not designed to look worn out.

Why It Matters

Some people may wonder why this is important. Why focus on fashion when there are so many greater problems in the world? It is true that fashion is a non-issue in and of itself when compared with the primary problems facing humanity. However, the concern is not with fashion in and of itself, but with what fashion says about the people who create, market, sell, and wear it. Moreover, there are fashion trends which indicate cultural trends, which in turn can serve as an early warning signal that the present system of governance has its days numbered.

Worse, some libertarians and conservatives might wonder why such fashions should not be celebrated. Is this not an instance of the market meeting a demand and freeing people from menial tasks to engage in other, greater labors? This view is misguided because the issue is not primarily one of economics, but of cultural attitudes concerning economic matters. A healthy culture has a strong correlation with liberty. A healthy culture celebrates work; an unhealthy culture mocks it and tries to avoid it whenever possible. A healthy culture values authenticity and living life; an unhealthy culture seeks a hollow and vicarious existence. A healthy culture venerates the ideal; an unhealthy culture worships the idol. The market is fundamentally amoral; its participants meet consumer demand as best they can in order to make profits. If that demand is degenerate in nature, then the goods and services produced will be as well. In other words, garbage in, garbage out. It is also worth noting that freeing people from having to wear a clothing item repeatedly and perform various activities in it so as to produce wear and tear naturally does not provide the increased utility that comes from labor-saving machines. One must still wear clothes to comply with societal norms, whereas one need not keep using older methods of performing tasks.

Mocking The Masses

The four products discussed above are designed to create the illusion of work. The prices of hundreds of dollars per pair of pants or shoes puts them outside the budget of most people who make a living in a trade that involves getting mud or paint on themselves. The end result is a class of products made for wealthier people that let them impersonate the masses beneath them while remaining oblivious as to why those who really engage in such dirty jobs might be angered. If this were done affectionately, then it might not be so bad, as imitation can be the sincerest form of flattery. However, the implications are more of mockery.

The idea of the wealthy imitating the poor for fun is nothing new. A famous example is the Petit Hameau, a mock farm area built in the gardens of the Petit Trianon in 1783 for Marie Antoinette. While visiting this area, Marie Antoinette and her attendants would wear dresses of simple gauze tied with satin ribbons and pretend to care for farm animals. The farmhouse interior, of course, was fully equipped with the luxuries expected by royalty of the time. The Petit Hameau was a reflection of France’s culture and moral values, but its artificial nature and lack of necessity made it a mockery of the daily grind of many French people. The exorbitant cost of her amusements did not help her case with critics of the ancien regime, and the public sentiment stemming from her lavish expenditures contributed to her execution by guillotine in 1793.

Though we are probably far from the masses shedding the blood of their economic betters and using their obliviousness and mockery as a pretext, there is no a priori reason why circumstances in America cannot eventually deteriorate to that point. After all, Marie Antoinette likely had no conception of her eventual fate back in 1783. Even if those who wear the items discussed above never meet a nasty demise at the hands of an angry proletariat, the sort of mockery once conducted by Marie Antoinette and now conducted by certain fashion designers and their customers indicates the sort of cultural illness that prefigures a mass uprising.

Inauthenticity

That there is a demand for clothes that come purposefully damaged and covered in fake signs of use says that people have not only lost the sense of dignity that comes from a hard day’s work, but have lost respect for that sense of dignity as well. Instead, a significant number of people prefer the illusion of effort, believe that physical labor is beneath them, and see nothing wrong with taking credit for another’s work. The illusion of effort is troublesome because it can lead people to prefer laziness over diligence. Should this sentiment become widespread, important work will go undone and the infrastructure necessary for civilization will decay.

This leads into the second problem, the sense that physical labor is somehow undignified. For the wealthy, physical labors can be hired out to others. For the intelligent, there is more money to be made in fields which are only accessible to them. But for many people, physical labor is their method for doing honest work for honest wages so that they do not have to live parasitically at another’s expense. It is no shame to work in a blue-collar profession; some people just have more lucrative options. The proper response from elites, then, is not to sneer at blue-collar workers but to be thankful for and respectful of them. The alternative response leads to a widening cultural gap and greater alienation between rich and poor, which cannot continue forever.

This, in turn, leads to the third concern, that of taking credit for another person’s work. By wearing clothes which show the signs of work that one has not only not done, but has paid someone else to create the illusion of having done, this is the effective signal that one is sending. The state is partly to blame for this, as its intellectual monopoly laws have come to serve as the basis for enforcing norms of giving credit where it is due. But such laws attempt to apply the norms of property ownership to that which is not scarce, is not rivalrous, and has no particular form in physical reality. As people realize the nonsensical nature of patents and copyrights, they tend to throw the baby out with the bathwater and come to reject all notions of giving credit where it is due. This undermines the respect between persons that is necessary for a stable social order.

Inverted Class Incentives

In a healthy society, those who are on the lower rungs of the economic latter seek to imitate the appearance and emulate the virtues of those near the top, so as to engage in the behaviors that allowed those who are near the top to climb up there. Conversely, the clothing items discussed above serve as evidence that the opposite is occurring. Those near the top have been made to feel guilty about their station in life by social justice warriors who condemn them as being ‘privileged’ and tell them to check themselves. While these fashions are primarily, in the words of Mike Rowe, “a costume for wealthy people who see work as ironic rather than iconic,” the shaming of wealth has led many affluent people to signal lower economic status in order to avoid harassment by the moral busybodies of the progressive left. Wearing such clothes is one means of doing this. Thus, we have high imitating low, and if this goes on with sufficient magnitude for enough time, it will lead the rich to poverty while leaving the poor without a good example to follow.

Conclusion

Fashion may seem an innocent playground for leftist elites and detached from the harsh realities of life in middle America, but it can serve as a warning signal that something is deeply wrong with the culture that produces it. The four clothing items discussed above indicate many problems which, if left untreated, will lead to a revolution. These problems have been present for decades, and may persist for a decade or two longer before they provoke an uprising, but that which cannot continue will eventually stop.

The Political Autism of Anti-Protectionism

There is a certain species of policy analysis which exhibits many of the symptoms which are commonly found among high-functioning autistic people. Among these symptoms are an inability to understand context, a troubling need for routines, an obsession with particular topics, difficulty with abstract thinking, difficulty in understanding other perspectives, a lack of empathy, an inability to process social cues, repetitive use of set phrases, and an inability to identify or think about groups or shared interests. Analysis that suffers from some (or even all) of these shortcomings can be found all over the political spectrum, but it seems to come disproportionately from libertarian thinkers.

The rise of Donald Trump has brought a protectionist view of trade policy back to the forefront for the first time in decades. Naturally, this gives libertarians pause, as protectionism violates individual liberties, is economically inefficient, and gives more money and power to the state. In a textbook-style vacuum, free trade is both more libertarian and more beneficial than protectionism. But to stop there and fail to address the relevant current conditions would be politically autistic by way of context denial. Thus, it is necessary to examine how protectionist policies can make sense in certain contexts, as well as the problems with supporting a policy of free trade in all circumstances.

On January 26, White House Press Secretary Sean Spicer floated the idea of a 20 percent import tariff on goods coming from Mexico as a means of funding a border wall. This prompted outrage from the establishment media, along with claims and analysis showing that Americans would pay the tariff rather than Mexico because Mexican products would be more expensive for American consumers as a result. This would be true if all else were equal, but this is not the case.

The Context

Mexico already has import tariffs which can be as high as 140.4 percent and average 13.97 percent. For Mexico to tariff US goods while the US does not tariff Mexican goods puts American companies at a disadvantage. While the libertarian may note that smuggling to evade the tariff would be a morally acceptable response, this is not feasible on the level necessary to conduct a national economy. Revolution to abolish the governments that impose the tariffs would also be morally acceptable, but this is likewise unfeasible, at least for the immediate future. Eliminating government interference in the economy that makes it harder to do business domestically is another option which is better than protective tariffs, but doing so to the extent and with the quickness which would be necessary is unlikely. The next best option, then, is for the US government to respond with an equivalent counter-tariff to attempt to even out the discrepancies caused by another state’s tariffs, with an aim toward negotiating abolition of the tariff on both sides.1 Given that 81.2 percent of Mexican exports for a worth of $309.2 billion go to the United States and 15.7 percent of US exports for $236.4 billion go to Mexico, the threat of a trade war clearly gives leverage to the United States. Peter Navarro, who heads the White House National Trade Council, said as much to CNNMoney:

“The tariff is not an end game, it’s a strategy…to renegotiate trade deals. Tariffs wouldn’t put U.S. jobs at risk.”

It is important to remember that much like nuclear weapons, the primary purpose of tariffs is not to be directly utilized, but to alter the behavior of other states by serving as a deterrent. The threat of a trade war by way of tariffs and counter-tariffs helps to keep the economic peace, just as peace through mutually assured destruction does with nuclear weapons. A response to another nation’s tariff to gain leverage against it is the secondary purpose, as explained earlier. Those who fail to account for this are exhibiting political autism by engaging in context denial.

The Analysis

A 20 percent tariff would discourage Americans from buying Mexican products. This would also raise the cost of goods which are currently provided at the lowest cost by Mexicans. The increase would not necessarily be 20 percent; to illustrate this, let us consider a simple example. Suppose that avocados from Mexico currently cost $1 each, while equivalent avocados grown in California cost $1.10 each. The tariff makes it so that initially, the Mexican avocados increase to $1.20 while the California avocados remain at $1.10. Initially, the American consumer pays 10 percent more but switches to the California source as much as possible. This diversion of funds from Mexico to California allows the Californian producers to make investments to improve their techniques and expand their operations, which will lower the cost of their products over time, potentially even below the $1 level that consumers originally paid to Mexico.

Whether this is a superior outcome for the American consumer depends upon a variety of factors, such as the available farmland in each location, the weather patterns over the next several years, the intelligence of American agriculturalists versus Mexican agriculturalists, and so on. What is known is that as few Americans as possible will be paying the tariff to the US government, and as many as possible will instead pay only part of it to American producers. This will not create net jobs, but it will have influence over where jobs will be created, which will give some American consumers more money to spend. The inability to think abstractly to get beyond the basic free trade position is an example of political autism.

Rationalism, Not Empiricism

Many economists will attempt to argue for free trade on empirical grounds, but this is a flawed approach. Economics is not a science, but an a priori discipline akin to logic and mathematics. The logical truths of economics can be illustrated by using empirical examples, but the discipline itself is not data-driven.

Most empirical cases for free trade rely upon David Ricardo’s theory of comparative advantage. But comparative advantage makes several starting assumptions which are not always true, such as non-diminishing returns, the presence of multiple trade commodities, inelastic demand, domestically mobile labor, and internationally immobile labor. Although the available evidence suggests that free trade raises living standards, increases purchasing power, and accelerates economic development, these studies suffer from both the cum hoc ergo propter hoc fallacy and the absence of counterfactuals for each case. This is not cause for dismissal, but it is cause for suspicion. A proper case for free trade must rest on logic, not observation.

Although free trade usually provides more net benefit than protectionism in the long run, people do not live in the long run; they live their lives and feel economic pain here and now. Furthermore, a net benefit does not mean that each individual person benefits; only that the sum of all benefits and malefits is greater than zero. It may be the case that a minority sees great gains while a majority suffers somewhat smaller losses, and this would explain why a democratic system would produce protectionist policies. Political autism manifests here in the form of the lack of empathy for those who are harmed by free trade in the short-term, the difficulty of understanding their perspective, and the inability to think properly about individuals versus groups.

Trump And Adaptation

The desire for protective tariffs among Trump supporters fits into a larger picture. Following Trump’s election, many leftists have criticized Trump supporters as being unwilling or unable to adapt to a changing world, and Trumpism as a reaction to that changing world. But an organism faced with a changing environment has three options: fail, adapt itself to the environment, or adapt the environment to itself. Most species are almost exclusively capable of the former two options, but humans are uniquely capable of the latter option. In seeking to reverse unfavorable societal trends, Trump supporters are doing something uniquely human and perfectly understandable. A libertarian may question their methods, but their motives make sense. Those who oppose Trump but express a desire to understand the other side would do well to consider this point.

Conclusion

There are good reasons to oppose protectionism in the abstract, but to simply state these reasons and fail to appreciate the context in which protectionism is advocated is an example of political autism. In theory, there are better courses of action, but these options are not always feasible. The threat of tariffs as a means to deter other states from imposing tariffs is an important tool for deterring trade wars, and a nation that refuses to consider such a deterrent is at a disadvantage against other nations that have no such scruples. The empirical case for free trade, while intriguing, is not true for all people in all circumstances, and does nothing to help those who have lost their livelihoods to foreign competition. In a perfect world, no protectionism would be justifiable, but that is neither this world nor the world of the immediate future.

Footnotes:

  1. Note that the use of barriers to free trade as a negotiating tactic is nothing new in US-Mexico trade relations. When Mexico tried exporting avocados to the US in the 1990s, the US government resisted at first, but gave in when Mexico started erecting barriers to US corn exports. The end result of using counter-barriers against barriers to free trade in this case was freer trade.

The Not-So-Current Year: 2016 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 2016 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.

My first article proper of 2016 was A Case Against the Nineteenth Amendment. It was intended to come out before the New Year, but I was not satisfied with it until January 3. If I were to rewrite this article, I would say more about biological differences between the sexes and why these make the entrance of women into democratic politics a danger to the stability and sustainability of a society. I took down the First Amendment later in the year.

The Bundy standoff at the Malheur National Wildlife Preserve began. I made nine observations on the event. Their later acquittal on several felony charges after the standoff ended in what was essentially an instance of jury nullification was cause for celebration.

As usual, leftists called for more gun restrictions and an end to gun violence without seeing that the former would both cause and be enforced by gun violence or the threat thereof. Rather than take the usual path of reductio ad absurdum, I argued the sharper point that gun deaths can be a good thing. This did not sit well with the editors at Examiner.com, who pulled the article. Given a long and contentious history with the site, I decided to part ways with them and start my own site. This proved to be a wise choice, as Examiner gave up the ghost less than six months later, with all content disappearing into the aether. My next task was to choose a name for the site and explain its meaning.

Christopher Cantwell argued the libertarian case for Donald Trump, and I gave him some pushback. Shortly afterward, Rand Paul suspended his campaign, and I wrote a list of observations on the event.

‘No victim means no crime’ is a common saying among libertarians, but an altogether too reductionist one. I explained why.

A Russian film crew flew a drone over the city of Homs and recorded the aftermath of Assad’s forces besieging the city. I rarely get emotional, but seeing the wanton destruction was quite triggering for me. Aleppo was conquered later in the year, and I wrote a list of observations on the event.

I decided to take an educated guess at whether Ron Paul could have defeated Barack Obama if he had been the Republican nominee in 2012. I believe he would have done so easily.

Twitter decided to give in to government and social justice warrior requests to censor their enemies. Unsurprisingly, this tanked their stock prices. I proposed several remedies for the situation, and Twitter has of course used none of them.

Jason Brennan published an article arguing that arguments made by libertarians against open borders have disturbing implications that said libertarians almost never address, so I addressed them and showed on a point-by-point basis that some such implications are not only not so scary, but are actually vitally important to the maintenance of a libertarian social order.

Charlotte City Council approved an expansion of its anti-discrimination ordinance to include transgender people, which I denounced as a violation of private property, freedom of association, public safety, and freedom of religion. Governor Pat McCrory and the state legislature responded with House Bill 2, and the controversy has brewed for almost a year.

An author known as Mr. Underhill published an article arguing that violent revolution is not the appropriate method for achieving liberty. I took the opposite view, which led to a lengthy exchange of four more articles on my part and four more on his part. Following this exchange, I decided to write about how I choose who to debate and for how long, which made me realize that I had entertained Mr. Underhill for far too long. Later in the year, I covered political violence more generally to argue that we need more of it as well.

When examining the intellectual foundation for private property rights, I noticed an unexplored quirk which turned into an original proviso. A critique in the comments section led to another article defending the proviso.

Islamic terrorists attacked the airport and a subway station in Brussels, killing 31 people and injuring 300 others. I wrote a list of observations on the event.

Social justice warriors seem to have their own language which is distinct from both the dictionary definitions and the common understanding of words by most of the general population. I created a glossary to help normal people better understand SJW rhetoric.

Donald Trump suggested that women could be punished for getting an abortion, which outraged both sides of the mainstream abortion debate. I weighed in with a view which did the same.

Having addressed water ownership and pollution in two articles in 2015, I decided to lay out a libertarian theory on air ownership and pollution.

Puerto Rico reached new lows of fiscal irresponsibility, and I explained why it is best to cut them loose from the United States to become an independent country.

The rise of neoreaction and the alt-right has brought reactionary thought back to the forefront. I deemed my first attempt at examining its relationship to libertarianism to be inadequate, so I took a second stab at it. A Jeffrey Tucker article prompted a third effort, and I made a fourth effort later in the year in response to a pro-Trump neoreactionary article by Michael Perilloux.

Peter Weber published an opinion piece arguing that the institution of the American Presidency is being delegitimized, and that this is a dangerous direction. I argued that this is actually a welcome and even glorious development.

Having already explained my decisions about debating other authors, I wrote two more articles explaining my lack of profanity and lack of satirical content.

Many incorrect arguments concerning libertarianism and punishment began to appear, so I laid out a theory of libertarianism and punishment which utilized heavy doses of Rothbard.

The Libertarian Party held its nominating convention, and it was a disaster from beginning to end. The Republican convention was not much better in terms of substance.

Many people have noticed a correlation between weightlifting and libertarianism. I explored this correlation and found many reasons for it.

A terrorist who pledged allegiance to the Islamic State attacked a gay nightclub in Orlando, Fla., killing 49 people and injuring 53 others. I wrote a list of observations on the event, but missed a major point in doing so. Democracy is partly responsible for terrorism because it gives the common person a political voice, which makes them viable targets in a way that absolute monarchies or stateless societies would not.

When the Supreme Court ruled against Abigail Fisher in her anti-white racism case, the Internet cheered. I did not, realizing that the decision was a rejection of pure meritocracy.

Against all predictions, the vote to remove the United Kingdom from the European Union succeeded. I wrote a list of observations on the event.

In my most controversial article to date, I argued the most extreme position in the gun control debate: a private individual has a right to own nuclear weapons, and this would be beneficial for liberty. The troll brigades were out in force making typical leftist non-arguments, and I thank them for granting me a then-record in daily page views (and thus advertising money). A few did raise legitimate criticisms which will require an addendum to be written in the future.

As the major-party presidential nominations were secured, the establishment media wasted an inordinate amount of time engaging in speculation about who would be the running mate of each candidate. When discussing the potential benefits that each potential vice presidential pick could have, they neglected the aspect of assassination insurance.

Several recent problems with the criminal justice system demonstrated that government will not hold government accountable, and that a market alternative is required.

Five police officers were killed by a sniper in Dallas. I used the event to argue that those who kill government agents now are not cowardly murderers perpetrating senseless violence, but neither are they heroic or helpful to the cause of liberty.

A certain type of policy analysis exhibits many symptoms which are also found in high-functioning autistic people. This is more common among libertarians than among people of other political persuasions, so I decided to address the phenomenon.

A significant portion of the media coverage leading up to the Republican convention focused on the possibility of violence on the streets involving leftist protesters and rightist counter-protesters. This possibility went unrealized for reasons which were covered up by the establishment media.

Hillary Clinton said that she was “adamantly opposed to anyone bringing religion into our political process” and that it is “just absolutely wrong and unacceptable.” I argued the opposite case.

Gardening is an enjoyable hobby and a useful metaphor for many things, a libertarian social order included.

Trump hinted at the assassination of Clinton should she win and threaten gun rights. Predictably, every element of the establishment went apoplectic. I argued that political assassinations are ethically acceptable, though not usually the wisest practical move.

Since the beginning of the Black Lives Matter movement, libertarians have had strong differences concerning how to engage with it. I explained the differences between their intentions and libertarian goals.

The 2016 Summer Olympics took place in Rio de Janeiro, Brazil. I wrote a list of observations on the event.

Whenever disasters impact an area in modern times, governments play a large role in the cleanup and recovery efforts. But this causes a behavioral problem in the population, not unlike that caused by the Pax Romana.

The Commission on Presidential Debates decided to exclude third-party candidates yet again. I made cases for peaceful and violent protest of this policy, and longed for a future candidate who might actually motivate people to engage in meaningful resistance.

Liberty Mutual created more advertisements that contain economic fallacies, so I did another round of debunking.

The establishment media tells us that every election is the most important of our lifetime. I proved that this cannot be the case, then psychoanalyzed the establishment media to explain why they keep repeating this, as if to convince themselves.

Argumentation ethics has been controversial since its introduction, but Roderick Long’s criticisms of it had gone unanswered. I remedied this state of affairs.

Rioters plagued Charlotte for three nights in response to a police shooting, which happened to involve a black officer and a black suspect. I wrote a list of observations on the event.

Congress voted to override President Obama’s veto of a bill that allows relatives of the victims of the 9/11 terrorist attacks to sue Saudi Arabia for any role in the plot. Though some libertarians argued against the bill, I celebrated it for chipping away at the anti-libertarian idea of sovereign immunity, giving victims of American foreign policy a peaceful means of addressing their grievances, and possibly revealing clandestine activities to the American people about which they have a need to know.

Having heard libertarians argue in favor of every presidential candidate except Hillary Clinton, I decided to give it a shot. Only a bootlegger’s case was possible, and it was rather grim.

The idea of market failure is a widely believed misconception which has found widespread use in statist propaganda for the purpose of justifying government intervention in the private sector. I gave the idea perhaps its most thorough debunking to date.

In the last quarter of the year, I began reading more books, which resulted in several book reviews. I can strongly recommend The Essential Guide to Freelance Writing and Our Sister Republics; The West Point History of the Civil War somewhat less so. Good Guys With Guns, on the other hand, is a disaster.

The month before the election presented several opportunities for rebuttals. Milo Yiannopoulos demonstrated both a misunderstanding of and an enmity toward libertarianism, and I rebutted his assertions, which gained a surprising amount of attention. Jeffrey Tucker tried to defend democracy as a superior alternative to monarchy or political violence, and I showed why this is misguided. Penn Jillette argued in favor of vote swapping, and I argued against it.

Finally, the 2016 election came and went, which presented many observations to be made.

Black Friday is revered by most libertarians as a celebration of free-market capitalism. I updated my explanation of why this reverence is somewhat misplaced.

Finally, Otto Warmbier spent all of 2016 detained in North Korea. I made the unpopular case that he should be left there.

All in all, it was an interesting year full of occasions to make sharp libertarian arguments. May 2017 bring more of the same. Happy New Year!

Book Review: Our Sister Republics

Our Sister Republics is a book about the history of the United States and its relations with Central and South America in the early 19th century by history professor Caitlin Fitz. The book discusses the popular sentiment in favor of revolutions against Spanish and Portuguese control in Latin America following the War of 1812, which turned sour after 1826 as the new republics suffered civil unrest and incompetent governance while the United States turned toward racialist nationalism.

Fitz first presents a map of the Americas as they were in 1825, to which the reader should continually refer while reading through the book in order to have a better sense of the involved geography. In the introduction, she explains her terminology, briefly covers American history from the Revolutionary War to the War of 1812, and gives a short overview of what she covers at length in the rest of the book.

The opening chapter explains the context in which Americans first came to look fondly upon South America. Early references to Christopher Columbus would lead to the concept of a liberty-loving Columbia. Spain’s distractions with European wars resulted in less trade restrictions between the US and Spanish America. These factors led to affinities for Spanish America once they began to revolt against their colonial masters. Even then, there were some reservations about the ability of South Americans to form republican governments. From 1810 until the mid-1820s, these reservations came to be expressed only when revolutionaries faltered. It helped that the US fought a second war for independence while the South Americans were fighting their first.

The second chapter discusses the agents of revolution who came to the US to foster support for South American rebels. Occasionally exceeding neutrality laws and frequently using American presses for propaganda purposes, they helped provide revolutionaries with the materiel they needed to secure independence. Fitz shows that this was a colorful cast of characters in more ways than one, and illustrates the undercurrent of race which would eventually come to the forefront.

The third chapter gives an overview of the activities of the press in the 1810s, showing how they affected (and sometimes manipulated) public opinion in favor of the revolutionaries. There were occasional dissenters, but they would be marginalized and rebutted until some years into the 1820s. Fitz demonstrates that then as now, there is no such thing as objective journalism because editors are more likely to publish and treat favorably that which they support.

The fourth chapter is about Simon Bolivar and the perception of him in the US. Fitz shows through toasts and baby names that Bolivar gained much admiration in the US, even as Bolivar did not respond in kind. Both whites and blacks found something to like in Bolivar, even though these aspects were quite different. Whites saw republican unity; blacks saw an abolitionist leader.

In the fifth chapter, Fitz discusses the US government’s actions toward South America at the time. Some black and white pictures augment the chapter, and would have improved the book elsewhere had they been included in other chapters. The role of merchants in financing and supplying revolutionaries is examined, along with the activities of privateers and filibusterers. Many Americans today would be surprised to know how many in those days volunteered to serve in foreign militaries. The second half of the chapter focuses on the important American political personalities of the time: Henry Clay, James Monroe, and John Quincy Adams, but finally the rise of William Smith and those like him who eagerly defended racism and slavery.

The sixth chapter begins with the election of 1824 and the “corrupt bargain” that awarded the Presidency to John Quincy Adams instead of electoral vote leader Andrew Jackson. This event set the stage not only for the Whig versus Democrat party system, but for the turning of the tide in relations with South America. Fitz explains how the passivity of the egalitarian sentiments of the time left them vulnerable to growing slavery in the southern US and the arguments in favor of it. The controversy over the Panama Congress of 1826 furthered the shift in American views toward their southern neighbors. Though Clay, Adams, and Bolivar had high hopes, the congress was a disaster. It is interesting to note that some themes have been constant throughout American history; the Democrats’ antebellum platform of limited government, nationalism, racism, opposition to social reform, and economic populism has much in common with the views of the alt-right. And as always, when rhetoric and reality depart from one another, reality always wins in the long run.

The conclusion looks forward to the 1830s and beyond, showing how the sentiment of the 1810s and its reversal in the 1820s manifested going forward. Fitz ends the book by wondering how America could have turned out differently and for the better had the sentiments of the 1810s not been overthrown. The second half of the book shows how American exceptionalism originated as a pro-slavery, white supremacist idea, and how the US came to be a foe of anti-colonial movements in the 20th century.

Fitz’s appendix and notes demonstrate that she certainly did an appropriate amount of research for the project. Overall, this is an excellent book that covers an oft-neglected aspect of early US history in a manner which engages the reader much better than the average history book.

Rating: 5/5

Neoreactionaries Are Off Their Heads About Trump

In a November 11 article at Social Matter, Michael Perilloux analyzed the election of Donald Trump with respect to its meaning for the neoreactionary movement, speaking in the voice of all neoreactionaries. In this much, he is mostly correct. But there is much to be criticized about the goals discussed therein as well as the means of reaching them. Let us examine what is wrong with the neoreactionary project and their thoughts on Trump through a libertarian reactionary examination of Perilloux’s article.

Hailing Trump

Perilloux begins with a statement of support and hope for President-elect Trump which would not be out of place in a mainstream conservative publication. Though it is debatable whether a Trump presidency or a Clinton presidency would have been better for liberty and/or Western civilization over the long term, Trump has positioned himself as an enemy of many enemies of liberty and Western decline while showing a willingness to boldly engage issues that other candidates would not touch with a ten-foot pole. For those who believe that there is hope for working within the system, this view of Trump’s victory is understandable.

However, as Perilloux correctly observes, being “a good president in the current system…will not halt the decline of America, and it will not truly Make America Great Again. If just being a good president is his game, there is no reason for us to get excited.” The neoreactionaries have a much different vision of what they hope Trump can do. But as we will see, this is where they lose their heads.

Understanding The Problem

The neoreactionary diagnosis of the problem is much like the libertarian reactionary diagnosis: the way that power works in liberal democracies is fundamentally flawed. The notions of division of power and checks and balances are false because the power is divided not among different societal organs (let alone competing non-monopolized service providers in a free market), but among different branches of the same organ. Just as one would not let one’s legs quarrel with one another lest one fall over, those who run a state apparatus have a powerful incentive not to diminish the effectiveness of said apparatus by setting different parts of it against each other. The incentives in a liberal democracy are particularly damaging; whereas a king owns the capital stock of his country and has an incentive to leave a good inheritance to one heirs, an elected official with limited terms controls only the usufruct of public lands and has an incentive to take what he can while he can. Rather than accept donations from and grant favor to special interests that help the society, elected officials are incentivized to do what is best for themselves at the expense of the citizens they are ostensibly representing. The citizens themselves are also subject to perverse incentives in a democracy, as they can vote themselves handouts from the public treasury, conflicting their personal interest with that of the nation. The citizens can also use state power to attack each other by using the ballot box to impose their criminal intent upon their fellow citizens without suffering the normal criminal penalties for engaging in such behavior oneself. The end result of subjecting everything to a vote is well described by Nick Land:

“[T]he politically awakened masses [are] a howling irrational mob, …the dynamics of democratization [are] fundamentally degenerative: systematically consolidating and exacerbating private vices, resentments, and deficiencies until they reach the level of collective criminality and comprehensive social corruption. The democratic politician and the electorate are bound together by a circuit of reciprocal incitement, in which each side drives the other to ever more shameless extremities of hooting, prancing cannibalism, until the only alternative to shouting is being eaten.”

Of course, kings can be bad and elected officials can behave better, but the incentive structures favor good monarchs and corrupt elected officials. But in either case, it is in the interest of the state to grow, so long as it does not interfere with private commerce to a sufficient extent to choke off its supply lines of tax revenue. There is nothing counter-intuitive about this, but it does require an intuition which is outside the realm of modern mainstream political thought. When we see government tyranny and deliberate cultural destruction, one need not choose between thinking that state power is bad in and of itself or asking why it is doing such things. In fact, contrary to neoreactionary thought, a thorough study of the latter leads to the former conclusion.

Two Different Ills

While it is true that elites damage and/or weaponize the civilized structure of society because it helps them to acquire and maintain power, this problem is present in monarchies as well. A truthful and inquisitive press may uncover and report embarrassing details about the king’s activities. A powerful economy that provides great wealth and options to the citizenry while creating a strong middle class may cause the public to question the king’s necessity, as occurred with the classical anarchists of the 19th century. Strong communities with strong virtuous culture may also question the need for a king to rule over them, viewing him as superfluous at best and malicious at worst. Big old families and religious leaders may challenge the king’s power and lead a rebellion against him on secular or religious grounds, respectively. A strong belief in free association can lead to anarchy, as people may seek to stop associating with the state apparatus. A strong belief in law and order can also lead to anarchy, as people may seek to hold agents of the state to the same moral standards as everyone else. The most important difference, then, is that monarchists would be more inclined to damage these societal organs while democrats would be more inclined to weaponize them. But both monarchy and democracy produce these ill effects to one degree or another, so both are enemies of liberty and restoration.1

Overthrow The Crown

In his examination of absolute monarchy, Perilloux demonstrates a complete ignorance of how challenges to monarchical power occur and succeed. When people are denied a voice and are either unable or unwilling to exit, they effect change by revolt. The royal military is generally unfit to deal with a hostile populace, as it is meant to protect the realm from foreign centralized threats, not the sort of decentralized but violent revolution which could depose a monarch by rendering his lands ungovernable. As long as the dissidents do not make the mistake of attempting to fight Goliath on Goliath’s terms, they can create a nightmare for the Crown through the use of guerrilla tactics and disappear back into the general population before they present a target to the royal military. Though the royal military has powerful weapons which are denied to the public, the use of these weapons will destroy the lives and properties of innocent people, as well as infrastructure that the Crown needs. This will only anger the public and cause fence-sitters to side with the rebels.

There was a time period in which adept rulers could shut down or co-opt conspiratorial challengers, but technology has made this all but impossible, and further technological development is both unstoppable and more helpful to rebels than to the Crown. Should one king decide to crack down, his subjects will either seek to move to a less restrictive state or, if this option is denied them, begin to revolt. If a large interest of some kind gets out of hand and the Crown tries to nationalize it, the people in charge of that interest could resist in a multitude of ways. They could shutter their business and blame the Crown, thus denying people of beloved goods and services while raising their ire against the king. They could move their headquarters to another country, thus presenting the Crown with the option of banning their products, which again raises the ire of the public. If they were desperate, they could attempt to assassinate the king to protect their business interests. Though this option was rarely used in history, it could make sense if there is nowhere to run or hide.

Though it is true that the Crown could relax and let civilization flourish as long as it maintains a decisive lead in political power, it is also trivial because advances in technology and philosophy have made divine right monarchy impossible in all but the most backward of societies (e.g. North Korea, and even that is debatable). Therefore, the libertarian reactionary must ask, given that monarchists are at a structural disadvantage against democrats, what protects your shiny new monarchy from the next wave of democratic revolutions?

Historical Errors

Perilloux writes:

“So this is the king-pill: that power we shall always have with us, and that it is thus much better for everyone to kneel, hail, and do the King’s will than to wear ourselves out in endless political conflict at the expense of our civilization.”

It is important to be careful with the word ‘always,’ for it denotes a very, very long time. The king-pill is a poison to those who swallow it, trapping them in an outlook of historical determinism that lacks both intellectual courage and imagination. This is one of the most notable quirks of neoreaction; neoreactionaries frequently show great intellectual courage and imagination on other questions, but imagine that the future must be like the past and present with regard to the presence of state power. Though there are many reasons to prefer monarchy over democracy, both are inferior to the sort of stateless propertarian social order favored by libertarian reactionaries. This possibility breaks the false dilemma between kneeling to a king and wearing ourselves out in endless political conflict.

Perilloux responds to a likely objection by democrats by asserting that the eras of history in which power was consolidated and secure were eras in which conflict was eliminated and society was the finest. To the contrary, violent conflict was exported to the edges of the realm, which were in constant need of expansion in order to obtain the plunder necessary to sustain imperial growth. Inside the empire, violent conflict was replaced with less destructive forms of exploitation, such as taxation and conscription for public works, but these are a lesser evil rather than a good. The plunder from foreign conquests disproportionately made their way into the coffers of elites, resulting in public resentment and populist uprisings. Once those empires fell, they left many people in a condition of helplessness, as they had monopolized essential services and left their subjects unable to provide those services for themselves. Finally, it is quite strange to suggest that life was finer in the Roman Empire or the Mongol Empire than it is in contemporary Western countries, at least in terms of knowledge, wealth, life expectancy, and respect for individual rights.

Bad Kings

Unlike the neoreactionary, the libertarian reactionary has no concern with a bad king, as a stateless propertarian society has no political power to accumulate, and thus no king to worry about. Instead, the power vacuum is artificially maintained through the continuous application of defensive force. Just as matter is forcefully expelled from a vacuum chamber, the state must be forcefully expelled from a libertarian-controlled area. Once this is done, there will be attempts by government agents, warlords, terrorists, mafiosos, and lone wolf criminals to re-enter the resulting stateless society in order to establish a new coercive enterprise, just as atoms attempt to re-enter a vacuum chamber and restore atmospheric pressure. These people must be physically separated and removed from the society, just as atoms must be continually pumped out of the vacuum chamber.2

Perilloux claims that a king should turn his will toward “the improvement of our race, the betterment of our civilization, and the glory of God” without any discussion of what that means. It is unfortunate that he does not dial this in because it could mean almost anything, as race is a social construct, betterment is partly subjective, and God is not proven to exist. Hopefully, the king would have a correct understanding of genetic differences between population groups, a proper sense of what betterment means, and an eutheistic concept of God. To his credit, Perilloux does understand that it is unlikely for elites who have gained power in the current system to meet these criteria.

Libertarian reactionaries agree with neoreactionaries that “[w]ithout democracy, [the elites] would either consolidate power and refocus on the problem of how to run a civilization, or they would find themselves replaced by someone who could.” The difference is that the replacement process in a neoreactionary monarchy or oligarchy is likely to be violent, while the same process in a stateless propertarian society need only involve people choosing to do business with different service providers who are more efficient and responsive to consumer demand, with mutually assured destruction between private defense agencies and the possibility of competitors gaining market share keeping the peace.

To leave the problem of whether a proposed king would have the right vision for future generations is not only a cop-out, but an impossibility. As Friedrich Hayek explained, no central planner can have the necessary knowledge and foresight to have a proper vision for the future because a central planner does not have access to all of the decentralized information in the market economy. All that could be hoped for is a king who would oppose degenerate behaviors and ideas while keeping his hands off the market. Unlike neoreactionaries, libertarian reactionaries would not consider Trump to be good enough in this regard. Much of his core platform was abandoned by other political factions many decades ago not because elites wished to bring about decline by moving in a different direction (though this certainly motivated many of their other actions), but because protectionism and welfare statism are bad economic policies. Also, should the king’s vision be sufficiently wrong, the neoreactionary project will come to a screeching halt as the king is overthrown and democracy restored by an angry citizenry.

Statist Pathologies

Though libertarian reactionaries may sympathize with the neoreactionary view of democracy as cancer, the libertarian reactionary view is that if society is an entire human body, then any kind of state apparatus is a malignant cancer. Cancer is a corruption of healthy cells and functions, it grows at the expense of healthy cells, it can kill the body if it becomes too prominent, and it can come back with a vengeance following an unsuccessful attempt at removal. All of these aspects are true of governments as well. The effect of democracy might be better compared to the effect of HIV in humans, in that it weakens a society’s natural defenses against mob chaos, correlates strongly with degenerate behaviors, and accelerates the course of other societal ills.

What Trump Can Do

Perilloux’s assessment of Trump’s potential is generally correct. Trump does not have the “very strong, sufficiently large, and ideologically conditioned organization to pull off any serious change in Washington,” if serious change is defined as fundamentally altering the system rather than just being a breath of fresh air within it. Given his loss of the popular vote, the historical antipathy of the American people toward monarchy, the rather desolate intellectual foundation of Trumpism, and the dearth of competent statesmen who could assist him in building a new governance structure and/or dismantling the current one, there is no way that Trump could elevate himself from President to King by normal means. Even if a crisis occurs and Trump is able to convince people to entrust him with singular executive power, the tolerance of the American people for a king would not outlast whatever crisis prompted them to grant him such power. Like the dictators of the Roman Republic, Trump would be expected to divest himself of such power once the crisis has passed. In sum, he will only be able to prepare the way for someone in the future. As Perilloux suggests, Trump can do this through his deal-making abilities as long as he refrains from kicking leftists too much while they are down and engaging in sideshows which have temporarily derailed his efforts on numerous occasions thus far.

What Trump Should Do

The libertarian reactionary view of what Trump could accomplish is much different from the neoreactionary view. The neoreactionaries seek to secure a responsible long-term elite coalition, and would have us make peace with leftists in order to accomplish this goal, even if it means “mov[ing] left on key causes like economics and health care.” The libertarian reactionary understands that no such long-term coalition is possible because the elites in a natural order will not be static and the current elites are too invested in the current system to make for useful allies in a transition to a new order. Making peace with the left is exactly what the right has done for decades, and anger at the resulting decline is what allowed Trump rise to power in the first place. If he does the same, it would signal to Trump’s supporters that he has abandoned them and is just another phony politician who will say anything to get elected. That, combined with the radicalization of the Democratic base carried out by Bernie Sanders and his fellow-travelers, would make Trump a one-term President and lead the right away from both democracy and neoreaction.3

While it is true that the left will be radicalized by an overzealous Trump administration, respond by “working overtime in the areas he doesn’t directly control” now, and create more chaos and division when they regain power, this is not necessarily a negative in the long-term. The neoreactionaries seek to have the cup of violent revolution pass from them, but the libertarian reactionary understands that liberty requires revolution. For it is not only the leftist elite which must be purged, but the rank and file as well. As Hoppe so wisely said,

“There can be no tolerance toward democrats and communists in a libertarian social order. They will have to be physically separated and removed from society.”

Better to let the leftists fully reveal themselves in opposition to Trump so that we have a better idea of who must be purged. The backlash is thus not something to be avoided, but something to be encouraged.

Perilloux’s other suggestions for Trump are to

  1. rebuild the Republican Party,
  2. expose, purge, and destroy all the crooks and radicals, including non-governmental actors like the foundations and Soros,
  3. strategically change immigration policy,
  4. deconstruct leftist ideological propaganda and disable their propaganda organs and speech controls,
  5. build the wall,
  6. get the universities and media to play nice,
  7. sow dissent among the enemy, and
  8. weaken democracy.

The second, third, fourth, seventh, and eighth objectives are well worth doing and merit no critique. However, rebuilding the Republican Party is largely unnecessary at this point, unless Perilloux means to rebuild it in Trump’s image rather than being content with defending the significant majority of governorships and state legislators. Building the wall is largely infeasible and counterproductive; should matters get worse, such a barrier will be used to keep us in. There is also no way to make Mexico pay for it; the best Trump can do is to garnish their foreign aid, which means only that American taxpayers will be forced to fund one project instead of another. The immigration restrictions which are necessary to prevent Americans from being overrun by people who are demographically hostile to liberty can be accomplished through other means, such as E-verify, harsher penalties, and denying federal funds to sanctuary cities. Finally, the mainstream press and universities are never going to play nice with the right, as they are fundamentally left-wing institutions at present, and Trump has not the time or resources to alter this. All Trump will be able to do on the education front is to extricate the federal government from the student loan and grant business, encourage would-be college students to consider trade and technical alternatives, and possibly abolish the federal Department of Education. Trump can do more against the media, in the form of revoking media credentials of establishment news outlets and instead relying upon alternative media, independent journalists, and direct communication with the American people via social media to deliver his messages.

Conclusion

Perilloux writes:

“But whatever happens, it’s not going to be enough. Democracy and communism will not be defeated this time, and when Trump is done, if democracy still stands, all the worst of the modern world will come crawling back to us. …Trump will not end democracy and bring about the coming golden age…because no one was ready with a männerbund of a thousand virtuous statesmen with a full vision and plan. Therefore, if that’s going to happen, while Trump and company labor valiantly in the Potomac swamp, someone has to be building that intellectual and human infrastructure for the true Restoration in the future.

It is not immediate power we need for the long game, but wisdom, vision, virtue, and solidarity. We will not get these from Trump’s administration. These things can only be built without the distractions of power. The men of the Trump administration will be busy playing anti-communist whack-a-mole and thinking about a very different set of strategic considerations than a long-term Restoration-focused research team must be. Their work will be valuable I’m sure, but they will not have the time or attention to think about the long game.”

In this much, he is correct, but it is libertarian reactionaries rather than neoreactionaries who must build said infrastructure. We must build private alternatives to government services which succeed where governments have failed. We must create black markets to deprive the state of revenue and lessen its ability to harm the economy. We must infiltrate the halls of power to obstruct government functions from within. We must protest and practice jury nullification to obstruct government functions from without. We must educate people to understand the necessity of eliminating the state apparatus by any means necessary, as well as the need to rely on oneself and one’s community instead of the state. Perhaps most importantly, we must train ourselves to be competent in the use of defensive force and irregular tactics.

If we accomplish these tasks well in the coming years, we will be prepared for the task of defeating the current state and keeping a new state from filling a power vacuum. Nothing less than this will allow us to end democracy, monarchy, and every other parasitism upon innocent and productive people. The neoreactionaries, on the other hand, would restore the Crown, and much like the mainstream conservatives who would restore the Republic, will only condemn our descendants to re-fight our battles for liberty.

Footnotes:

  1. This may help to explain why democracies largely replaced monarchies through the 19th and early 20th centuries, as weaponized, less-damaged institutions have a combative advantage against non-weaponized, more-damaged institutions.
  2. Notably, libertarian reactionaries have two advantages over the physicist using a vacuum pump. First, a vacuum pump cannot destroy atoms, but a libertarian reactionary can kill an aggressor. Second, the physicist will never turn the entire universe outside of the vacuum chamber into a vacuum, but libertarian reactionaries can come close enough to turning the entire world into a libertarian-controlled area to be able to live all but free from aggressive violence while standing by to eliminate any new threat.
  3. This could provide the impetus for the necessary violent revolution, so perhaps Perilloux is accidentally correct on this point.

Read the entire article at ZerothPosition.com

On Market Failure

The idea of market failure is a widely believed misconception which has found widespread use in statist propaganda for the purpose of justifying government intervention in the private sector. Though the term itself has only been in use since 1958, the concept can be traced back to Henry Sidgwick. It is used to describe a situation in which the allocation of goods and services is Pareto inefficient. This occurs when the rational self-interest of individuals is at odds with the optimal outcome for a collective. Such a situation is frequently blamed on conflicts of interest, factor immobility, information asymmetry, monopolies, negative externalities, public goods, and/or time-inconsistent preferences. Among these, monopolies, negative externalities, and public goods receive the most attention from mainstream economists.

But let us pause to consider what a market is. A market is a structure that allows buyers and sellers to exchange goods, services, and information. The participants in the market for a particular commodity consist of everyone who influences the price of that commodity. To say that a market has failed is to say that this process of assembling the information about a commodity which is reflected in its price and its change over time has failed. But the causes listed above are either inconsistent with a free market or unresolvable by interventions which bind the market. Let us explore this in detail.

Monopolies

While monopolies are frequently blamed for market failures, a monopoly in a particular market is typically the result of government intervention which has raised barriers to entry in that market. Through a vicious cycle of regulatory capture, larger businesses can put smaller competitors out of business by bribing politicians and regulators to favor the former and harm the latter. This continues until a market is effectively monopolized. Therefore, this type of monopoly is actually a government failure rather than a market failure.

Another type of monopoly can occur when there are natural barriers to entry, such as the need to build vast amounts of infrastructure in order to provide a good or service. This can give the first entrant into a market an insurmountable advantage. Consumers may then complain that this monopolist is abusing them rather than show gratitude that they are getting a service which was formerly nonexistent. But if the monopolist were really overcharging, then it would become feasible for another provider to either challenge the monopoly directly or provide an alternative service. This type of monopoly is actually a market signal that a particular good or service would be better provided by another means, and entrepreneurs should look for those means.

Third, a monopoly can arise in a free market if one business satisfies all consumers of a good or service to such an extent that no one cares to compete against them. This kind of monopoly is not a market failure, but an astonishing market success.

This leaves only the ‘public goods’ argument, which merits its own section.

Public Goods

Public goods and services are those whose consumption cannot be limited to paying customers. It is frequently argued that this produces waste in the form of unnecessary duplication and excess costs born by those who are not free riders. There is also the matter that non-excludable and rivalrous resources in a commons may be depleted without intervention. The latter can only be fully resolved by eliminating the commons, as restoring exclusive control to the resource is the only method of eliminating the perverse incentives created by a commons. The concerns over free riding and unnecessary duplication ignore incentives, prove too much, and commit the broken window fallacy.

If we wish to have a rational discussion, it is essential to define terms. A problem is an undesirable situation which can be remedied. This is because a situation which is not undesirable presents no problem to solve, and an undesirable situation which has no remedy is just a fact which must be tolerated. The free rider “problem” is a situation of the latter type, as it is impractical to make sure that everyone pays exactly what they should pay for the amount of public goods that they consume. That government monopolies destroy competition, and thus the market price system, makes the free rider “problem” impossible to solve, as the information needed to determine how much each person should pay for the amount of public goods that they consume is destroyed beyond repair.

If taken to its logical conclusion, the idea that no one should be able to consume more than or pay for less than their fair share of a public good means that the state should be eliminated, as the very presence of a state means that some people are consuming more than and paying for less than their fair share of the total wealth in the economy, as states are funded by coercive means which violate private property rights. Those who receive government welfare payments, bailouts, grants, or any other form of government funding are free riding upon the backs of taxpayers and anyone else who uses currency printed by a government’s central bank. The latter group of people are forced riders who are required to pay for public goods from which they receive insufficient benefit. Charity would also be unjustifiable if the concept of the free rider problem is taken to its logical conclusion, as those who receive charity are not paying the full cost for what they are using.

But suppose we ignore this as well. If we accept for the sake of argument that there are public goods and that no one should be able to consume more than or pay for less than their fair share of a public good, then the result will be a massive distortion of the economy, as both the state and private charity must go. While the demise of statism is nothing to lament, the absence of any form of private charity would lead to the very sort of Hobbesian war that statists fear and think that they are preventing. It must also be noted that the money for payments for public goods which are now being made was once being put toward another purpose. Whether that purpose was spending on other goods and services or investment (which is really just another form of spending), the diversion of spending away from these purposes and toward public goods will eliminate some other economic activities that were occurring.

Nearly all competitive production involves supposedly wasteful duplication, in that each provider must have the infrastructure necessary to produce that which is being provided. But if the duplication is truly wasteful, the market signals this by rendering the wasteful duplication unprofitable. Government intervention interferes with such signals, and government control over an industry completely eliminates them, leading to far worse government failures than any failure of the market.

Externalities

A problem related to public goods is the problem of externalities, in which costs or benefits affect a party who did not choose to incur those costs or benefits. When firms do not pay the full cost of production, each unit costs less to produce than it should, resulting in overproduction.

The most frequent examples given are pollution, traffic congestion, and overuse of natural resources, but all of these contain externalities because the market has been prevented by governments from internalizing the costs. Air and water pollution are externalities because government intervention on behalf of polluters has eliminated the common law system of private property rights with regard to pollution. Before the Industrial Revolution, pollution was correctly viewed as an act of aggression against people and their property. Those victimized could sue for damages and obtain injunctions against further pollution. Polluters and victims can also bargain to reach an optimal level of both production and pollution. Additionally, the victims would be justified in using violence in self-defense against polluters, though this is an historical rarity. But government monopolization of environmental regulation has prevented these market solutions from being implemented. Therefore, pollution is a government failure rather than a market failure.

Traffic congestion is another tragedy of the commons that causes externalities in the form of pollution, wasted fuel, and lost time. But this is another case in which governments have monopolized a good and produced it out of accordance with market demand. Without competing private firms to build different traffic systems in search of more efficient ones and without private property rights determining location and control over the transportation system, we are left with a non-excludable good that is incentivized toward overuse. Attempted solutions of congestion pricing, mass transit, and tolls mitigate some effects, but not to the extent that private service providers might implement such methods. Again, we have government failure at work.

A third example of externalities occurs with overuse of natural resources, such as fish and lumber. But once more, we see government intervention against private property mechanisms creating problems. Because state personnel in modern democracies do not personally benefit from maintaining the value of state-controlled property and work almost solely with the usufruct thereof, they are incentivized to engage in bribery and corruption. When states sell only the resource rights but not the territory itself, they get a renewable source of income. But firms that harvest renewable resources can abuse this system, stripping the resource bare then vanishing when it is time to replenish. These ‘fly-by-night’ lumber companies, fishers, and other such exploiters lead to the fast demise of resources which were harvested and preserved for centuries prior to state intervention. In short, government fails yet again.

Before moving on, a quick word about positive externalities is in order. This is another way of talking about the free rider problem, so the same criticisms discussed above apply. But we should also consider the benefits of free riders. Although some people will argue that free riders are responsible for higher costs, they are actually signaling that a good or service is overpriced. While degenerate freeloaders do exist, most free riders who are aware of their free riding are willing to pay for what they are receiving but believe that said goods or services are overpriced. In the state-enforced absence of another provider, they choose to “pirate” the public goods rather than pay the cost which they believe to be too expensive. If there are rational, knowledgeable people in charge of a public good that has many free riders, then they will respond by lowering the cost to convince more people to contribute, which can actually raise the total contribution.

The above result is rare, of course, as rational, knowledgeable people tend to be productive rather than become part of the state apparatus. The more useful role of free riders is to crash government programs which cannot be ended by normal political means. Most government programs help a few people by a large magnitude while harming a much larger number of people by a much smaller amount. This means that an irate and tireless minority will work to keep their sacred cow from being gored, while the majority is not being harmed enough to take action to end the harm. Thus, there is nothing more permanent than a temporary government program, and it is politically impossible to abolish entitlement and welfare programs. While the strategy of overloading such programs was first proposed by leftists who wished to replace them with far more expansive redistributions of wealth, it could also be used by libertarian-minded people who wish to replace such programs with nothing.

Other Culprits

The less-discussed causes of market failure are conflicts of interest, factor immobility, information asymmetry, and time-inconsistent preferences. This is mostly because government intervention is more widely known to either cause these problems or fail to solve them. Conflicts of interest typically occur when an agent has a self-interest which is at odds with the principal that the agent is supposed to serve. For example, a lawyer may advise his client to enter protracted legal proceedings not because it is best for the client, but because it will generate more income for the lawyer. A politician may vote for a law not because it is in the best interest of the people in her district, but because she was bribed by lobbyists who support the law. The only solution to a conflict of interest is to recuse oneself from the conflict, and government offers no answer, especially since it inherently operates on conflict of interest.

Factor immobility occurs when factors of production, such as land, capital, and labor, cannot easily move between one area of the economy and another. This sometimes occurs due to malinvestment caused by government distortions of the economy; in other cases, it results from technological advancement that puts an industry into obsolescence. In any event, government regulations frequently make it more difficult to change occupations and maneuver capital than it would be in a free market. Interventions to help workers in a declining field typically fall victim to the knowledge problem; it cannot accurately retrain workers or educate future workers because it cannot know what the economy will need by the time the retraining or education is complete.

Information asymmetry occurs when some parties in a transaction has more and/or better information than others. This creates a power disparity which is sometimes called a market failure in the worst cases. Common sub-types of information asymmetry include adverse selection and moral hazard. Adverse selection occurs when one party lacks information while negotiating a contract, while moral hazard involves a lack of information about performance or an inability to obtain appropriate relief for a breach of contract. These cases are made worse by government laws, as laws can lead to both adverse selection and moral hazard. For example, an insurance firm that is legally disallowed from discriminating against high-risk customers is itself put at a higher risk through no fault or will of its own, being unable to turn away those who cost the most to insure or cancel insurance policies for reckless behavior by the insured. Fortunately, there are market methods for resolving informational asymmetries, such as rating agencies.

Time-inconsistent preferences occur when people make decisions which are inconsistent with expected utility. For example, one might choose to have ten ounces of gold today rather than eleven ounces tomorrow. Time preferences are expressed economically through interest rates, in that interest rates are the premium placed upon having something now rather than waiting for it. Governments interfere with interest rates through central bank monetary policies, leading to alterations of time preference that can be inconsistent. This is still another example of government failure rather than market failure.

Resource Failure

Another possibility for market failure which is rarely discussed is that of resource failure. If an economy becomes dependent upon a certain non-renewable resource, that resource becomes scarce, and there is no viable alternative, the result can be devastating not only to markets, but to peoples’ lives as a whole. For example, if peak oil occurs and there is no alternative energy source available to meet the energy demands fulfilled by fossil fuels, a market failure will occur due to resource failure. Another historical example is the destruction of trees on Easter Island. Resource failure is generally not amenable to government policy, and may be exacerbated by it if subsidies alter the market to keep it from finding the best solution to a resource shortage.

Complainer Failure

The last type of failure is not a market failure at all, but a failure by a critic to understand the nature of the market. Consumer demand does not drive the economy; capital investment does. The over-reliance on gross domestic product (GDP) as a measure of economic output has fooled many people into believing otherwise, but GDP neglects intermediate production at the commodity, manufacturing, and wholesale stages of production. As such, consumer demand and spending are an effect of a healthy economy and not the cause.

With this in mind, the idea that the market has somehow failed when it does not produce everything that a particular person might want and deliver it exactly where they want it for a cost that the person finds agreeable is ridiculous. A person levying this criticism should be advised to check their hubris. If a certain good or service is not produced in a free market, it is because such production is not sufficiently worthwhile for anyone to make a living through doing so. The fact that everyone gets by without that good or service indicates that no failure has taken place. Those who desire that good or service so much should make an effort to provide it so that they can have it.

Standards

The entire idea of market failures is based on Pareto efficiency. But there is no reason why we must choose Pareto efficiency as the measure of market success. One could just as well define market efficiency as the degree to which it permits its participants to achieve their individual goals. (Note that these are equivalent if the conditions of the first welfare theorem are met.) Another possible standard is that of productive efficiency, which is optimized when no additional production can occur without increasing the amount of resources, time, and/or labor involved in production. An economy with maximum productive efficiency cannot produce more of one good without producing less of another good.

Conclusion

In every case, that which appears to be a market failure is actually a failure of government policy, natural resource management, or economic understanding. We may therefore reject the very idea of market failure as yet another form of statist propaganda.