Category Archives: Statist Myths

Think Different, Think Free

It is a peculiar characteristic of US anti-trust law (Sherman Anti-Trust Act) that competition itself can be characterized as “anti-competitive”. The recent e-book price-fixing case against Apple (in which Apple was ruled against on July 10) is a prime example. The case is rather “weedy” so I will provide a pared down synopsis, however for those interested in the details please see this article for an excellent summary. Prior to Apple’s entry into the e-book market in 2010, Amazon was in a monopsony position in the wholesale e-book market and a monopoly position in the retail e-book market. No, I did not misspell “monopoly” – monopsony is a situation where a market has just one buyer (as opposed to just one seller with monopolies). In this case Amazon was the only (over 90% market share) buyer of e-books from the “Big 6” publishing houses. As such it was in a position where it could dictate the terms of sale to the publishers. Amazon sold every e-book for $9.99 and often lost money on these sales. The publishing houses were not happy with this situation as they felt Amazon’s low prices tended to devalue hardcopy books in the consumer’s mind and thereby potentially weaken their sales position further in retail book outlets (as people balked at paying high prices for print copies when e-books could be had for so much less).

In comes Apple to save the day. It’s a win-win situation for Apple and the publishing houses. Apple wants to chip away at Amazon’s dominance in the e-book market and the publishers want to have an alternate buyer for their e-book wares. So the upshot of all this? E-book prices went up, Amazon made more money (due to not losing money anymore), the publishers made less money (due to decreased sales resulting from higher prices) and Apple got a foothold into the e-book market. Unfortunately the judge ruled against Apple, citing that “depriv[ing] a monopolist of some of its market power is [not] pro-competitive” merely because some e-book prices rose after the fact. In other words, for competition to be permissible in this country it must fall into a narrow and arbitrarily subjective standard of behavior. If you enter a market and cause prices to rise too much then you are a monopolist. If you enter a market and causes prices to fall too much then you are a ‘predator’. And finally, if you enter a market and charge the same price as everyone else, then you are a cartelist.

The irony is that government should be the one prosecuting supposed anti-competitive behavior when it is government itself that is the sole source of monopolies and anti-competitive behavior. For example, this country still engages in New Deal era agricultural price controls intended to prop up prices by limiting production. Tariffs, subsidies, grants, regulations, certificates of need, insurance commissions, utility boards, public schools – all are either outright government granted monopolies or are examples of policies that have the direct effect of limiting market entrance or production and thus raising prices and stifling competition.

All “anti-trust” legislation should be abolished. Such legislation is akin to anti-witch legislation; a pointless attempt to prevent something that cannot nor did exist prior to enactment in 1890, myths of “Robber Baron” monopolies notwithstanding. Trusts, cartels, and monopolies – such things cannot exist in a free market for any appreciable length of time as long as competition is not short-circuited by arbitrary government edicts. To the extent a monopoly could exist in a free market it would be a testament to the degree to which such an entity is satisfying the preferences and demands of its consumers.

The government has spent millions of dollars prosecuting Apple over its behavior in a market for a luxury good that did not even exist 5 years ago. Perhaps it never occurred to anyone that if e-book prices were too high then people would simply stop buying them? Ultimately it is the consumer, exercising control over the purse, that dictates what will and will not succeed in the market. Government “anti-trust” witch hunts do nothing but harm the consumer by scaring off potential competitors who fear censure for not competing in precisely the manner prescribed by our wise overlords.

The libertarian war over the Civil War

My comments on this recent Washington Post article concerning the kerfuffle over Jack Hunter.

Full article is here.

This piece perpetuates the myth that there is some embarrassing subset of libertarians, so called “neo-confederates” that embrace slavery as being “ok” and that still pine for a CSA. This is absolutely total hogwash. There are no “neo-confederates” (whatever that neologism is supposed to mean) – nobody who calls themselves a libertarian is pro-slavery, pro-racism or pro-CSA. Nobody. The term “neo-confederate” is just a made up term that attempts to smear libertarianism by conjuring guilt-by-association imagery (“my, my that word has “confederate” in it – so those people must think just as the confederates did”). For example the author states “There are contrarians who criticize Lincoln’s use of federal power and argue that the South had a right to secede — but have no love for slavery or the Confederacy.” – so – this then implies that the “contrarians” exclusively hold this position and thus obviously the “neo-confderates” do not hold this position and therefore they must have a love for slavery. In point of fact this is the exact same position held by those commonly referred to as “neo-confederates”

Concluding that those libertarians who denounce Lincoln and his methods of waging war must somehow be the intellectual hiers of the confederacy and therefore must support all the things the confederacy stood for is as absurd as concluding that libertarians approve of prostitution and drug use because they call for repeal of laws that criminalize such behavior. Yes, I realize people do conclude that, but it is an intellectually bankrupt argument. 
To see the fallacy here, turn it around, let’s suppose the north had wanted to secede because they no longer wanted to be part of a union that included slavery – and then suppose the south had said “no” you may not leave, waged war, and kept the union intact. In both cases the putative goal of the war – “save the union” would have been achieved. So to say one war is good and one war is bad implies the validity of the civil war was not based on “preservation of the union” but rather on the legitimacy of slavery. So if that is the case, then it is quite odd indeed that Lincoln did not “free” the slaves until after 2 years into the war – and even then only in the seceded states – ironically he did not free any slaves in union states that had not seceded. Can you say hypocrite? Had the war truly been about “freedom” Lincoln would have freed all slaves everywhere in all American territories first and then that would have precipitated war. Slavery was nothing more than a tactical weapon in the arsenal of the north. Slavery was the industrial strength of the south and freeing the slaves was an attempt to undermine that strength, nothing more. Slavery may have been the political irritant that engendered sectional tensions and ultimately secession, however, make no mistake, the war was not about abolishing slavery, it was about preserving the union, i.e. not permitting an independent political body to break away, which is the most common cause of war throughout history.
 
So you’ll have to excuse me if I find it difficult to take seriously the cartoonish image of Lincoln we are taught in school as some sort of Don Quixote-esque crusader for truth, justice and freedom.

On Voluntaryism, Stateless Societies and Contract Slavery

Recently I got involved an interesting philosophical discussion on Facebook (where else!) concerning taxation and the proposition that if you don’t pay your taxes men with guns will come and take you to jail or kill you (all true). One participant brought some focus to the conversation by distilling down the core argument to one of a) should we have government (b) how shall we pay for it (c) constitutions are like contracts. All good points, however embedded in each one is either a false choice or a fallacious assumption. So below I will reproduce his post and then my follow up as I address some of the main fallacies. 

here is the quoted content from the post I will be responding to:

This conversation, and every conversation about the scope of govt comes back to the same place. The first division is you are either an anarchist or you want some kind of law. The moment you say you want some kind of law, you are agreeing that at some point in the process of enforcing the law, a dude from the govt with a gun will come take you away. And I am okay with that – no point in pretending we have laws if they are not going to be enforced.I am willing to listen to discussion, but anarchy is probably not for me, or most of us. So then it’s like the old joke about the prostitute – we’ve already established what you are (pro-govt of some kind), now we’re just haggling over price. Where is the line in the sand as far as your philosophy of the proper scope of the law?I would suggest that the only useful argument by a libertarian about government is that it ought only exist to prevent one adult from using force or fraud to gain from another adult – whether that gain is via money or to forward an agenda. Situations involving children and the mentally impaired are naturally given to tighter governance.So to me, the idea that we’re arguing over whether or not you must / ought pay federal taxes so the govt can fund its activities is a little pointless. The only real argument for strict Constitutionalists or libertarians ought to be about the USE of the money, not the government’s right to take it. The law of tooth and claw was used to appropriate the land upon which I sit and afterward to create the govt that exists here – the RIGHT is almost irrelevant. Were I to be successful in dissolving this (formerly) useful govt, it is most likely a worse govt would take its place. There is no perfect freedom on this side of heaven, so the notion that no entity can curb my inclinations or bind my freedom is almost childish.We can get into a lot of philosophical discussions about man being created free and whatnot, but the fact is that there will be some govt, and we enter into “contracts” (the Constitution, say) with other free people to create these govts that will enforce our individual rights to property and to secure freedom from invasion, etc. With our ancestors having agreed to some form of these contracts, and most of us agreeing that they ought to exist in one form or another, we should be focused on the quality of the contracts, not the terms of enforcement.

Here is my response:

Your points I think have helped to focus the discussion, however the underlying assumptions simply reinforce the false dichotomous choice that is beaten into us from day one (by our educators, our literature and the state media) – namely that one has a choice of either being ruled by others (in the form of this thing we call government) OR absolute and total chaos with no laws or order whatsoever. Obviously with a choice like that who would pick the latter? And to an extent I think part of the failure for the proper alternative being made understood falls at the feat of us libertarians – we (or some of us) throw the word “anarchy” around and do not explain at all what is intended by the use of that phrase. I personally prefer “voluntaryism” – it’s enough of a neologism that it carries none of the associated emotional baggage of “anarchy”. We want the freedom of choice. Not the freedom to state our choice and have it vetoed by a “majority”, but to actually be allowed to execute our choice.


When we libertarians speak of “freedom from government” we do not intend a lawless, chaotic, anything goes sort of wild west world. Far from it. We want government. We want order. It’s just that we want to pick our own government to associate with. And we do not believe that simply because I happen to live next door to you and you want to associate with a government that establishes rules that promote Ideology A and I want to associate with one that promotes Ideology B, your choice should have any bearing on my choice. 

Think about it for a minute. I’m proposing something no more controversial than what we currently practice today – freedom of religion. If I’m Catholic and I live in a town full of Baptists it would seem ludicrous to anyone to suggest that “well since a majority of people who live here are Baptist, well, you have to be Baptist too, or at the least you have to do all the things the Baptists require” – and that if I didn’t comply I would be throw in jail. That’s insane – and rightly so, and everyone would agree that that would be insane. And so it is no different with government. This type of governance is not unknown. It is sometimes referred to as a “clan” system. In more “primitive” stateless societies families had a self-interest in protecting each other. They came to each other’s defense and helped each other in times of need. In time it became customary for non-family members to join a family or clan for such protection purposes (voluntarily paying or contributing something in return – i.e. truly voluntary “taxation”). However all members of the clan were responsible for the behavior of its members. If one member injured someone in another clan then all members must make restitution. They then obviously had a self-interest in preventing such behavior from those they knew to be the most troublesome. Eventually if a member behaved badly enough consistently enough they were thrown out of the clan and thus had no protection of any kind from any group. They were an “outlaw” – which meant that anyone could kill them, rob them whatever without any consequence whatsoever. That’s a pretty big incentive to not become an outlaw and behave as directed by the customs and laws of your clan. (For a brief discussion of this system in Ireland please see this interview with Gerard Casey by Tom Woods ). In order for all clans to get along they tended to adopt the same basic “common laws” against violence, theft, rape, etc. So in this way we can see how “law” can exist without an over arching state. Everybody is against rape and murder. But not everyone might be for space exploration, or green energy, etc. Essentially each clan is a government, the only difference being they did not have specific geographical boundaries. Members of multiple clans could all live in the same city and get along just fine. There is no reason such a system could not operate today on a larger scale, one where entities very similar to insurance carriers took the place of the role of government in dispute resolution, restitution, crime mitigation (less crime, less to pay out in losses). If such an entity does not provide what people want, they will go elsewhere. Without a barrier to entry imposed by outside regulations no one could ever “take over” such an industry, the market would always be providing those that could do it better, faster, cheaper, etc.

This has gotten a lot longer than I intended, but let me just touch on another point you made. The one of contracts is germane, however you again accept the “party line” that the fact that our ancestors freely entered into a contract (the Constitution) somehow morally binds us to that same contractual obligation in perpetuity. How can it? Are we bound by the contracts our parents sign? If your parents had a huge amount of debt and then died would you want to suddenly be saddled with that? What if I could vote myself out of the contract, but my siblings wanted to remain party to it, and thus I was then bound by their vote – why should I be bound by their choice? There really is no difference between that and the idea that we are all still adhering (or pretending to adhere) to a contractual document signed by people that have all been dead for nearly 200 years. I talk about this idea of contractual slavery more here

The Magic of Democracy

Jon Stewart (The Daily Show) had a humorous take on the recent IRS scandals (see clip here) however what I found most interesting in his monologue is what I believe may be the most succinct summation of the core belief system of all progressives/socialists:

“I believe…that good government has the power to improve people’s lives and that the people have the power to restrain its excesses.”

Within this statement are two fallacies. Let’s deal with the first one. Although government can in theory improve people’s lives, the fallacy is in the unspoken assumption that government is the only agent in society that can accomplish such goals. Using government to improve people’s lives is like using a hammer to drive in a screw – it can get the job done eventually but there are far more efficient ways to accomplish the task.

The second half of the statement, however, yields the much more interesting and widely held fallacy. It embodies the fatal naiveté of those who believe democracy is the most perfect form of government. Democracy provides us with the comfortable illusion of self-determination and control while in reality providing no such thing. As we ride the majority wave we delude ourselves into thinking we control the wave, but we do not. One second we are high on the surf, the next we are plunging downward as we are pulled out to sea against our will. We do not control the mob, the mob controls us.

No system is perfect but monopoly governance short circuits the natural feedback mechanisms that would otherwise eliminate abuses. To naively believe “reform” can fix our present woes is to ignore man’s basic instinct to obtain more with less effort. When this instinct is set loose in monopoly government the result is cronyism, when set loose in the market the result is innovations and efficiency improvements.

Some believe the government feedback is not broken, that it is the polling booth that provides this check on abuse. This does seem plausible – “vote the bums out” as they say. Unfortunately, this feedback fails to effect change as long as only a minority is abused. The minority can never garner enough votes to “change” things and everyone else is indifferent as long as they are not being affected. The majority is pandered to by promises of favoritism at the expense of the minority. And so nothing changes. If businesses were run like government (wherein employees voted for the boss that promised them the biggest pay increase) is it not obvious such selfish self-interest would eventually lead to financial collapse? The size and scope of government debt serves as testament to the accumulation of just such abuse. A private entity could never have accumulated so much debt and would have been extinguished long ago.

Voting on who runs the government makes about as much sense as voting on who should run Publix. Publix sells us goods and services and so does government – why does Publix have to compete for our dollars but government does not? Why do we vote for government leaders but not Publix leaders? One word: taxes. Taxes are compulsory. Voting mollifies the masses into the delusion that they have chosen this compulsory state in much the same way a corralled animal chooses its path. A leashed animal is restless and fights the leash. But, remove the leash and allow it to roam free on fenced pasture and it will cease all resistance. The illusion of freedom is quite powerful.

Communal children?

One of the most oft-cited justifications for the state is the “what of the children!” plea. It employs what I call “the fallacy of the isolated example” and it goes something like this: parents are humans, humans are imperfect, therefore at any given time there will exist some set of human parents making imperfect choices, sometimes those choices will negatively impact their children, ipso facto these negative impacts can only be prevented by compelling the enlistment of others via that entity which possesses the exclusive legal right to engage in unilateral violence within a defined geographical region: the state. No other possible remedy is considered. Further, the state must intervene on behalf of ALL children, as we certainly can’t predict who might be harmed. This argument is fallacious because there always exists isolated negative cases in any system. In order to justify any action simply find a singular example you believe your “solution” will remedy.

Given the prevalence of this child-based state apologia it should come as no surprise that Melissa Harris-Perry (of MSNBC fame) last week uttered these words in an MSNBC promo: “We have never invested as much in public education as we should have because we’ve always had kind of a private notion of children: Your kid is yours and totally your responsibility. We haven’t had a very collective notion of these are our children. So part of it is we have to break through our kind of private idea that kids belong to their parents, or kids belong to their families, and recognize that kids belong to whole communities. Once it’s everybody’s responsibility… then we start making better investments”

Setting aside for the moment the bizarre notion that “communities” somehow have a non voluntary obligation in children within that community (most likely in order to establish a basis for that same community extracting its “fair share” of their earnings in the future) the listener is left to wonder exactly what dream world does Harris-Perry live in? She says, “we have never invested as much in public education as we should have…” As the kids say today “Are you serious?!?” We spend three-times the inflation adjusted amount on K-12 public education today as we did in 1970 with ZERO change in reading, math or science scores. If you pump air in a tire and the pressure does not increase, the problem isn’t the pump. Time to look elsewhere. She then says, “Once it’s everybody’s responsibility and not just the households…” Alas, it is already everyone’s responsibility. That’s what the “public” in “public education” means. Our collective (everybody’s) taxes pay for public education. Public education means it is incumbent upon the community to pay for the education of all the children, or more to the point, it is incumbent upon some people to pay the (inflated) educational costs of other people’s children, particularly the children of those who exercise no reproductive restraint as those parents bear little of the actual cost in raising them – that’s society’s job after all.

In a follow up statement over her original comments she says “This is about whether we as a society…have a right to impinge on individual freedoms in order to advance a common good.” On this she is correct – that is exactly the question we should be asking, because the answer to that question is a resounding NO. “No” must be the answer not merely for utilitarian reasons (i.e. competition would more effectively solve problems than a monopolistic government) but also for ethical reasons (a society that justifies theft because it might increase the “common good” is a fundamentally unjust and morally bankrupt society).

So as shocking as her comments were, they were merely a bolder rewording of our current public educational system, a system, I might add, both the left and right strongly support. If you took issue with the sentiments she expressed, then to be intellectually honest you must begin to question the legitimacy of any government having any hand in education at all. If you would like to take the next step on that journey I invite you to read Rothbard’s “Education: Free and Compulsory”.

The Debate that Never Happened

I was recently involved in the “Debate that Never Happened” at UGA through the Phi Kappa literary society where the question “Is full employment possible under capitalism?” was the topic. Unfortunately the audio is a bit low… if you turn it all the way up and sit in a quiet room I think you can just about make out what I’m saying. I guess if I get to do something like this again I’ll be sure to shout into the microphone 😉

The Debate That Never Happened from Phi Kappa Literary Society on Vimeo.

“Wimpy” Governance

“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean—neither more nor less.”

Words to live by for those in government. For example, the word “surplus” is supposed to denote the result of consuming less than one receives. But that is not the meaning employed by our wise overlords. Or rather, they choose to cherry-pick what constitutes “receive” and “consume” so that the difference between those terms can be any value they desire. It’s time for some myth busting: there was no Clinton surplus. The entire thing is a fabrication, an accounting sleight of hand. “Hogwash!” you’re thinking! Certainly if this had been the case the conservatives pundits would have been all over this, right? Wrong. Their collective silence speaks volumes in testament to the fact that the same “math” used to show a surplus under Clinton also shows smaller deficits under their guys (e.g. Bush Sr. claimed $1 trillion in deficits, but it was actually $1.5 trillion, likewise Clinton claimed a $62 billion surplus but actually had a $1.4 trillion deficit)

Here is the essence of the subterfuge:  Let us imagine a single mom, let’s call her, I don’t know, Julia. Julia earns $30,000 a year. She receives $5,000 a year from her ex-husband that is to be put into a savings account for her son’s education. However she has $32,000 a year in expenses and a $1,000 credit card debt. So she “borrows” $5,000 from the education account. $2,000 of it goes to the extra expenses, and $1,000 of it goes to pay off the credit card debt. Quite pleased with the situation she tells her friends she has paid off her credit cards and has a $2,000 surplus to boot! To celebrate she spends the “surplus” $2,000 on clothes and a new TV. She rationalizes owing the $5,000 to her son’s account with the idea that in the future she’ll make more money and pay it back later, but she needs it now for her and her son’s benefit, so that makes it ok. Fast forward 18 years and we find that although her pay has increased, so have her expenses, and she has continued to accumulate $5,000 IOU’s each year such that the account contains nothing but $90,000 in IOU’s. In any other arena except government this process is known as embezzlement.

One difference between what Julia did and what the government does is that the theft is legally mandated: all federal government trust funds (there are others besides social security) are required to turn over excess funds to the federal government by way of purchasing special government bonds (IOUs). The government then counts these “excess” funds as REVENUE, even though that money is obligated to future recipients. Let me repeat: the government is counting loaned money as income! That might balance cash flow but it is merely “Wimpy” can-kicking governance: “I’ll gladly pay you Tuesday for a hamburger today.” Guess what? Today is Tuesday.

“I’ll gladly pay you Tuesday for a hamburger today.”

The effect of this fake revenue is to decrease the gap between normal tax revenue and spending (the deficit), which is why every administration loves this technique. However even the government can’t hide from the effects of ignoring reality. Any money the government borrows from itself is added to the Intra-Government debt holdings account. The IG debt account is distinct from the “Public Debt” account (money lent to the government by non-government entities). The Public Debt went down under Clinton by using IG debt to pay it down (i.e. using credit card A to pay off credit card B). Adding these two numbers together reveals that total debt went up. If you don’t believe me, check for yourself; see the US Treasury data. Each and every year from 1992 to 2000 the “Historical Debt Outstanding” increases. Pundits can try and confuse the public with jargon, but at the end of the day it simply is a matter of checking just one number (total debt). If it goes up, there was a deficit, if it goes down, there was a surplus. End of story.