“Binary” — well in finance, the issue is often binary. Default or live within your means. The State does live at the expense of the private sector.
Politically, what is the State? Force. What is the market? The way that consumers direct the allocation of resources, including each other’s labor. While that can get uncomfortable, politicians often try to avoid that discomfort by blaming “corporations” which for the most part are just the vehicles by which consumer choice plays out. Walmart, for example, did not set out to cause empty down town areas. They just set out to make money. The consumers wanted to shop in one place for everything, and at a lower price point, and that required that that one place be 15–20 miles outside of town, where the initial rent or real estate price was lower than in the down town area. It took a while for the down town areas to recover, specifically by not competing but offering a different product or catering to a different market — higher end items for shoppers who wanted to browse and then overpay for tea or lunch, specifically without the crowd, was one option.
I agree that Hayek showed more breadth, and connected economics to other disciplines like no other writer. He weaved together thinking from across the spectrum. He was one of few who have pointed out to the academic Left that the “good” ideas from other disciplines align with Austrian economics, and are antithetical to central planning. He especially loved Bergson. Spontaneous generation and creative evolution, for example. It’s not creative evolution if it’s centrally directed. That’s one of my points in The Beavers. Sartre as well — on two fronts. You need free will if we’re going to be judged based on our actions. One might be judged based on what we did in the face of force, but in the face of duplicity, such as a world of distorted prices, it is difficult to judge. Do you blame banks for making loans to people with 620 scores when delinquency rates were falling to record lows? Do you blame banks for making loans at 90% LTC when home prices were rising at 8% p.a. instead of 3%? Do you blame builders for overbuilding when their cost of capital had been cut in half and the price of their product was rising at 8% instead of 3%? Do you blame worker-consumer-savers for saving less and spending more when that’s the entire plan, implemented by altering the apparent trade-off between spending and saving, or between borrowing and saving? Maybe you still do, but certainly not to the same degree as otherwise, and certainly the realization that things were not as they seemed is a Mises moment, not a Minsky moment. The bubbles don’t start because suddenly every economic actor says “fuck the numbers” — they start because the numbers have been made to look as if they work. To stick with housing, after the rate cuts, a given level of income could support a lot more debt within traditional payment-to-income ratios, and so that debt was provided. Balance sheet leverage was never considered because it had never been considered because only when rates are manipulated to such an extreme degree (5 points in one year — from 5.25% to 1.25%!!!) would it matter, and that had never happened before.
As for ethics, libertarian thought recognizes that you’re reading and processing this alone — in your brain — and that the individual is the human atom. Libertarian thought recognizes that apart from the non-aggression-principle, there is no objective ethics — and that each individual has his own view of how the world ought to be. Libertarian thought does not require that everyone build his own wall and make his own corner the way he wants it, and ignore everyone else — though it allows that, which gives individuals bargaining power. It recognizes that humans are social, but recognizes also that cooperation is not the same thing as forcing others to go along. It recognizes that when force is used to compel others to go along, the result is not “social action” or “putting the whole ahead of the individual” but quite the opposite — it is subjecting the other individuals who make up the whole to the individual whose ideas are being imposed. As the memes point out, gang rape is not group sex. Cooperation is necessarily voluntary, and the threat of being able to walk away is what forces us to deal with each other, and to come to a mutually acceptable arrangement, which is the only way to arrive at a “common good” or “social action.” The market — spontaneous order — is the best description of unforced social action. Somehow the shelves contain what I want and what you want. Funny.
That’s intellectually honest and rigid, not bankrupt. It does not allow for short cuts. It does not allow for contradictions. It does not allow for one to redefine things, or incorporate internal contradictions, to arrive at an ideology in which one is allowed to impose upon others but others are not allowed to impose on him. It recognizes that all bases for such allowances are arbitrary, not objective. It is non-libertarians who are intellectually bankrupt because, apart from some Swiss, some Germans and a lot of Chinese (but only with the benefit of a lot of indoctrination and the power of forceful suggestion), everyone is a libertarian when it comes to what he wants to do. Everyone is pro-choice with respect to his own choices, and with respect to choices that he does not find distasteful. Most people are not willing to accept that others be allowed to exercise their own free will. Most people who are “pro choice” on abortion, for example, would not allow you to sell a kidney, and oppose the legalization of prostitution, as well as drug use. In some cases they dream up pseudo-intellectual excuses to paper over the contradiction, such as that nobody volunteers to be a prostitute — 100% of them are forced into it. But of course forcing them into it is already illegal, so there is still no point to outlawing the practice per se. It is merely a form of denial, of self-deception, and that is the height of intellectual bankruptcy.
Bankruptcy is also a funny word — to get to the original point, the US will suffer the fate of Puerto Rico, Venezuela, Greece etc… if it does not implement the ideas with which the Left has repeatedly tagged Paul Ryan. I doubt that Ryan has the political will to push for those ideas, and honestly I doubt that he even holds them. But we saw what happened at the national level with such programs, and we saw what happened at the corporate level, with defined benefit plans. It simply does not add up. Math kind of is binary that way. Free unlimited everything for everyone does not exist. It is not free. The bill is just sent to someone else. And with a fifth of the population already paying over four fifths of the income taxes, not only isn’t it “fair” to dump more of a burden on them, it is impossible to put all of it on them — which requires putting it, through debt, on future generations, consigning them to the fate of having no safety net at all, because the US is too big to bail out. That’s not compassionate — buying votes today by impoverishing a generation that is not old enough to vote yet, or perhaps has not been born. It is actually quite cynical.