A critique of Stefan Molyneux’s “Consequentialist arguments don’t work”

Benjamin Powell (see some of his videos here) says:

“I think consequentialist arguments are important to address, because most people don’t have the same burning passion that you all do and some of us in the room do, about abolishing the state; which just doesn't resonate with them, and they’re scared of a world that they don’t know, and [..]”

Stefan Molyneux responds:

“I can’t agree with that just because.. there are a couple of things that all economists agree on: minimum wage destroys jobs, tariffs suppress trade.. There are a couple of things that 90% of economists agree on. ..and these arguments have been made for the last 400 years, and we have very high minimum wages, and we have incredibly high tariffs, and we have unbelievable interferences in trade. And everyone knows, when you have free trade you get division of labor, you get .. price mechanism working well, for efficiency, you get all of these great things. Consequentialist arguments don’t work. Economics.. 400 years they've been trying to get the free market to work, and we've had a less free market now than when they first started. This would be one example of many. Consequentialist arguments don’t work.”

I first want to establish what Molyneux is arguing against. What is a consequentialist argument? It is an argument comprised of the consequence of the action in question. I can look at the consequence of an isolated action: “If I eat all my marshmallows now, how will I feel?”. I can also look at the consequences of an action done by another person to yet another person: “If Paul stops Roger from using a pattern that Paul used first, how will that affect me?”. This is the category of social rules. In deciding which social rules to support, I take in consideration my goals and all of the effects of those rules, in reality. (more information here, here and here)

Molyneux here wants to make it appear as though there is currently a near unanimous belief about the effects of the different kinds of social rules, but that for some reason, people aren't putting their support behind it.

On Wikipedia, I did find the following statement: “According to a 1978 article in the American Economic Review, 90 percent of the economists surveyed agreed that the minimum wage increases unemployment among low-skilled workers.” But then it also lists a 2000 survey where “27.9% agreed with provisos, and 26.5% disagreed”. There are actually many different schools of economic thought, with different methodologies and widely differing conclusions about the effects of different social rules.

The only school who consistently applies the insights from the division of labor and trade, competition and the price mechanism is the Austrian school. This school is considered to be founded in 1871 by Carl Menger with his book (in German) Principles of Economics, where he gives his marginal theory of subjective value as well as its relation to both price formation and the formation of money goods. Before Menger, the French liberal school was quite close to that understanding and the conclusions it leads to. Even though all these people had their influence, they were pioneers and were not suddenly accepted by everyone in their field, let alone by the masses; who as Etienne de la Boetie, Mises and Hoppe have pointed out, are who really determine the course of things.

To contrast, Adam Smith (born in 1723) had a far different belief about economics. He favored the state production of roads, bridges, canals, harbors, coinage, a postal service, hallmarking of gold and silver, quality regulation of wool- and linen cloth, regulation of paper money notes, regulation of bank trades, public and compulsory education, protection of intellectual property, and more.

And if we actually travel back 400 years (1612 on Wikipedia), we find:

  • April 11 — Edward Wightman, a radical Anabaptist, is the last person to be executed for heresy in England, by burning at the stake in Lichfield.
  • May 23–May 25 — A Sicilian–Neapolitan galley fleet defeats the Tunisians at La Goulette
  • July 22 — Four women and one man are hanged following the Northamptonshire Witch Trials in Northampton, England
  • August 20 — Ten ‘Pendle witches’ are hanged having been found guilty of practising witchcraft in Lancashire, England
  • August 26 — A Scottish mercenary force is destroyed in Norway at the Battle of Kringen
  • November 30 — Battle of Swally: Forces of the British East India Company and Portugal engage off the coast of India, resulting in a British victory

I wouldn't call that much of a free market, certainly not for many around the world.

So what’s actually going on is more nuanced. The world of ideas is in a constant state of flux. Ideas spread and evolve and spread further and evolve further. Since WWII, the West has been relatively peaceful, permitting ideas to flow, and since the dawn of personal computers and the internet (with hyper two-way communication), the evolution of ideas is happening faster than ever before. For example: because religion relies on localism, the internet has been deemed the place “Where religion comes to die” (video).

To show that consequentialism (the kind that I have described here, which is the same kind that Ludwig von Mises and Henry Hazlitt espoused) doesn't work, there must first have been a more real agreement about economic ideas.

Molyneux (continuing):
“Consequentialists’ arguments are people’s way of saying ‘I want to avoid the ethical dimension to your question, so I’m going to pretend it’s about moving stuff and people around’.”

As I have explained above, I understand ethics to be the social rules that I support, which depend on my goals and my understanding of the consequences of social rules. So if we are not talking about my goals or the science of economics, then what dimension is being avoided?

I realize that there are many people who have adopted a sacrificial mentality, where they've learned to give up on their own goals for the sake of something external. I wish to help people give up any sort of thinking like that.

Molyneux (continuing):
“I don’t care about the state; I could care less about the state. I want human beings to recognize that violence is immoral, in all of its forms; not just in the state, but in the family, in parenting, everywhere. Violence is immoral, and it leads to short term gains for a select number of people and long term catastrophes for everyone. I think the consequentialist argument is saying: ‘I don’t want to face that simple bare bold moral truth: that there’s a gun in the room which we should damn well put down if we want to call ourselves a civilized society.’ So I’m not mad at you, I’m just mad at the idea. And, so, people want to avoid that. The argument is so simple: taxation is force. Done.”

Gains and catastrophes are economic consequences.

Also, Libertarianism Is Not ‘No Gun In The Room’. The only political philosophy without a conception of property is pacifism. All other political philosophies, from state communism to anarcho-capitalism, want to use majority social pressure backed by force (guns) to enact their favored conception of property. So the argument does not end there, and it’s misleading to pretend to.

Molyneux (continuing):
“But people want to create all these complications about, well okay.. but if somebody has a contract with some DRO agency, and that DRO agency has another cross-contract with some other DRO agency and nobody wants to pay for the roads, and maybe there’s defense agen.. ; forget all of that stuff, the violence is immoral. I don’t care who picks the cotton after we end slavery. We just have to keep thundering that slavery is immoral. That’s how these things are won. Nobody said “well, who’s gonna cook, when will women have the right to have jobs?”. That’s not how they won, no, they said “no, we want to be free and equal”. That’s moral and that’s right, and you gotta keep thundering that. I think that’s the route of what we have to go through.”

If a person does not have the insight of the division of labor, nor had the ability to think through many aspects of it, to call them ‘evil’ is nonsensical, and more than likely will cause a person to respond negatively. Why would they support something which they don’t understand has beneficial consequences for themselves and others? To demand to accept such a thing makes the person pushing for that an ideologue. Why not be nice (as opposed to thundering) and try to answer their questions or point them to good resources?

As I said in another article:

Reaching your own ideology has involved a lot of learning and evaluating. People who haven’t arrived at your ideology will likely not have come across the same ideas as you have, nor had the time to evaluate it. It is also possible that they have had different life experiences that made it harder for them to accept your ideology. For both cases, it is important to keep the discrepancies in experiences in mind.

So when you are questioned on your ideas, that means you have an opportunity to tell them something they may have never heard before. If your ideas are good, then they must be able to be transferred in a manner that does not involve pressure or other forms of manipulation.

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