Stories by linden2015 on Medium

Libertarian movies

linden2015 — Sat, 15 Feb 2014 12:41:57 GMT

What happens to the losers in a free market?

linden2015 — Thu, 13 Feb 2014 15:03:34 GMT

What Happens To The Losers In a Free Market?

Providing value through entrepreneurship

In a free market there are people who are competing to provide value to consumers: entrepreneurs. These individuals attempt to achieve profits by buying goods and transforming them into goods for sale. If you can sell for more than you bought, then you make a profit. This means the society at large values higher what an entrepreneur made than the input factors in their prior state.

It’s always possible for someone to fail at this exercise, as they find out reality worked out differently than how they anticipated and end up with losses. Losses and bankruptcy can also come after a long period of profits. These losers in a free market go back to the rank of worker. They can work for an entrepreneur who is still profitable; meaning who is still organizing and transforming goods in a socially beneficial way.

Entrepreneurship is not easy. It requires a vision, dedication, good timing, and much more. So through this mechanism, there is a socially beneficial process of selecting for good entrepreneurs.

People can also go from being a worker to an entrepreneur by creating savings, and taking those savings and risking them (by yourself or with others) in entrepreneurship. In a free market anyone is free to make this attempt.

Partaking in production through labor

Is everybody able to be a worker? The division of labor provides a surplus for all participating in it. This means if I produce something and my neighbor produces something else, and then we trade, we will both be better off than if we both had to produce both things by ourselves. This surplus is also true if one of the two exchange partners is able to produce more or in a higher quality than the other. As long as they focus most of their energy at that which they are best at relative to each other, they stand to gain. In conclusion, every able bodied person, if he specializes enough to overcome the cost of trading, can be included in the division of labor; either as an entrepreneur or as a worker.

Expanding employment possibilities

There are also lesser-abled bodies, who have a certain physical impediment that makes them less productive. As a glasses-wearer I am such a person. I cannot see sharply very far without eye-correction, and I would be in big trouble in a hunter-gatherer society. In an advanced society glasses can help me overcome this problem, which allows me to be fully productive; except for a handful of professions where glasses are a problem. Through the productivity of a society, by way of the division of labor, savings and investment, and competitive markets that go through continual evolution, low costs and a wide variety of goods are brought about, so that more and more people can be included in the division of labor and contribute to the well-being of others; instead of having to rely on others to be given resources.

Sources of unemployment

So what of the people who are unemployed in today’s society? The first thing Austrian economists look for are impediments to this configuration of social production. Are there situations where there are people who believe they can benefit from production and then trade with each other, but are not allowed to do so? Examples of impediments are minimum wage laws, trade barriers between countries, non-market based licensing requirements, intellectual property, and so on.

Long-term effects of intervention

When resources are taken away from the productive members of society, then the society is made less productive; meaning higher prices and less products available. This means that some people then are no longer able to sustain themselves, because their costs have gone up while their productivity has not. Low prices are necessary for a society to generate savings. Savings are necessary for capital investment to have low prices in the future. Economies are complex interrelated systems and interventions will have medium and long term consequences.

Long-term effects of free markets

The free-er a market is, the easier it is to save for retirement or sickness. If you didn't have to pay for foreign adventures by the military nor for all kinds of government services which are not offered in a competitive environment, then your cost of living would be drastically lowered, which would make it easier to save and to take care of yourself. This means there would be a smaller amount of people who had no choice but to rely on others. And if people were generally richer, then it would be easier for them to take care of a person who was truly unable to be productive.

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Libertarianism is not ‘no gun in the room’

linden2015 — Tue, 11 Feb 2014 22:59:17 GMT

Stefan Molyneux has written:

“One of the most difficult — and essential — challenges faced by libertarians is the constant need to point out ‘the gun in the room.’ In political debates, it can be very hard to cut through the endless windy abstractions that are used to cover up the basic fact that the government uses guns to force people to do what they do not want to do, or prevent them from doing what they do want to do. … It is a wearying but essential task to keep reminding people that the state is nothing but an agency of violence. When someone talks about ‘the welfare state helping the poor,’ we must point out the gun in the room. When someone opposes the decriminalization of marijuana, we must point out the gun in the room. When someone supports the reduction of taxes, we must point out the gun in the room — even if one bullet has been taken out.”

It can be useful to point out the power structure that exists around people. Governmental laws and government social programs are indeed ultimately backed up by physical force, which is not always visible to many people.

The thing is though that all political systems (including all variants of libertarianism) are ultimately backed up by physical force. This means that the problem of political philosophy is not suddenly solved after finding out that governments have men with guns. Anarcho-capitalism, just like a modern democracy, functions through the majority using their power to institute a set of rules on those who do not agree with them. The difference between political systems is the kinds of rules that are supported; not the fact that there are rules, and that they are enforced.

Words like aggression, violence, and force have underlying to them ideas about property and social rules. When people have different beliefs about those underlying ideas, then the words themselves are not readily usable between those people, nor can invoking them be used to solve the argument. In other words, you need to go deeper.

What I try to do, as Ludwig von Mises did, is to show people how a different property system can benefit them. This requires explanations about economics, the Austrian version of which most people are not yet familiar with.

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Robert Murphy and ‘reason is not enough’

linden2015 — Tue, 28 Jan 2014 17:06:14 GMT

In an article discussing the motives for libertarian activity, Robert Murphy criticizes Ludwig von Mises’ arguments from rational self-interest.

He starts out giving some credence to the fact that economic life is not like a non-repeating game. I've written an article elaborating on this: David Gordon and the cash register thought experiment. There’s also this related lecture by Lucas Engelhardt: Entrepreneurs vs. Game Theory.

Murphy moves on to his next argument:

Is it really true that a secular humanist, armed with all the knowledge of economics, could convince a David Rockefeller or a Henry Paulson that his standard of living would be improved by abiding by the tenets of classical liberalism? If those examples leave the reader unsure, what about Kim Jong-il? If Ayn Rand were locked in a room with the North Korean leader, could she really convince him that the value of his own life would be enhanced by refraining from looting others?

I agree that one is unlikely to change the mind of a person whose entire life is built around a different ideology. I don’t however believe that in order to achieve change in society it is necessary to change the minds of the people in power. The people in power derive that power from their subjects’ belief, and beliefs change all the time. Young people and those not fully embedded in the status quo are more likely to take an interest in alternative ideas, as Ron Paul would tell you. When Murphy makes arguments opposing Paul Krugman, is it to convince Krugman?

“I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer; then you will behold him, like a great Colossus whose pedestal has been pulled away, fall of his own weight and break into pieces.” — Étienne de La Boétie

Murphy continues:

Again, it is true that if the whole world embraced laissez-faire capitalism, even current despots would probably end up living with greater material prosperity. But that is not the choice any current despot faces. He looks at the options at his disposal, and the likely choices that others (including despots) will make during his lifetime.

Despots be despotting, indeed. I don’t concern myself with them, similarly how I don’t concern myself with politicians, the political theater, or voting.

If we consider a more average person, for example someone who has a desk job for a government privileged corporation. If he were to understand Austrian economics, then he could be persuaded to support free markets (the division of labor, competition, etc) for everybody else. And if a significant portion of the population would support free markets for industries other than where they may have some handout or privilege, then that would amount to a significant combined pressure for change.

Another effect of looking through the lens of Austrian economics is realizing the effect government policies have on your work environment. Taking the same worker again as example, he would understand why his work is so bureaucratic, not intellectually stimulating, not focused towards consumer value and consumer respect, why he is not surrounded by people who have a very interesting view on society, etc. He may just quit for something more personally pleasing; it’s not all about dollars and cents.

Murphy:

We can go further. If the foundation of morality really were a rationalist calculation of the actions promoting one’s self-interest, some of the most heroic defenders of liberty would be fools. Consider the dissidents under a thug such as Chile’s Pinochet. Many of them chronicled his abuses so that future generations would know the extent of his crimes, knowing full well that they would likely be murdered for daring to oppose his regime. Under the Misesian and especially the Randian framework, these rebels all behaved foolishly — indeed they arguably behaved immorally.

I find heroism a very dangerous social meme and I don’t think risking your life, unless absolutely necessary, is something to be praised. I also question whether heroism/self-sacrifice is necessary to achieve or keep liberty. I expect moral nihilists to be more resourceful and strategic, and thus harder to control.

Murphy:

So why do even secular humanists cheer such heroes? Because they view themselves not as simply maximizing the chance of material prosperity, but as engaged in a battle of ideas. Many of today’s libertarians would rather live on the streets than become an IRS agent. Surely this decision wouldn't be driven merely by an estimate of the likely long-run earnings from either career path (where other libertarians perhaps punish the person for seeking IRS employment and temporarily earning a higher paycheck). No, there is a much deeper sense among many secular libertarians that working for the IRS is just plain wrong and therefore it’s not even an option.

As I have pointed out, there are many aspects to a human being’s value system. It is not necessary to jump to the (allegedly existing) realm of universal law to see why a libertarian would not want to work for the IRS.

Murphy:

The theist who believes in a just and omnipotent God does not suffer from the above inconsistencies. He can justify his passionate and heroic defense of liberty. Even if he dies, he knows he has done the right thing — where “right thing” is not defined as a set of strategies to maximize the likelihood of achieving earthly happiness. Belief in the God of the Bible gives one hope in the ultimate triumph of good over evil.

A moral nihilists doesn't believe in evil. He’s not worried about having to fight it in the first place.

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A reply to Murphy regarding money and Menger

linden2015 — Wed, 22 Jan 2014 21:59:48 GMT

Robert Murphy writes:

Some in the Bitcoin controversies asked me to read this essay (by Niels L). They claimed that Rothbard botched things, and needed to go back to Menger, when it came to understanding the demand for media of exchange. The only real issue I see in this article, is the claim that when a commodity comes to be demanded as a medium of exchange, this wouldn’t actually increase the total demand for it. (In the standard Rothbardian treatment, there is a snowball effect as more and more people increase their demand for it.) The reason, according to van der Linden, is that you would just be substituting one person’s demand for another. For example, if I acquire a goat not because I want to consume it, but because I will trade it away down the road, then sure, my demand went up by “one goat” but then the person to whom I trade it will now reduce his demand from the rest of the community by “one goat” (since he’s getting the goat from me).

I see what the issue is here, but I don’t think it works. [1] People hold media of exchange for a length of time, and sometimes not having specific future exchanges in mind. [2] Think of it this way: If the whole community is walking around with gold coins in their pockets, and this was facilitated in part because there are a fraction of them who wear gold as necklaces, it is nonetheless true that the community is holding more total gold than would have been the case had gold not been adopted as money. [3] It’s not the case that each gold coin is merely a shifting forward of that gold’s destiny as a commodity.

[1] Any good that you accept as a medium of exchange is speculative, in that you do not know with certainty what you will be able to get for it. Market conditions change and prices change. Any time a good is accepted as a medium of exchange, individuals have specific goals in mind with it. Their goal is to trade it away for something they actually want to consume (or give it away to someone they care about). During the time that they kept it it was not consumed and remained consumable by others.

[2] I would agree that more people would hold a good if it were used as medium of exchange, but I don’t see how they would necessarily hold more total amount of the good because it is used in such a way.

A good that is used as a medium of exchange is a good that has a low cost of retaining its value compared to other goods (example: gold doesn't rust when exposed to air). Therefore such a good tends to also be suitable for building up a reserve (unlike bananas) if it’s cost effective to produce considering its future value. Sending a space mission to extract gold from another planet is momentarily not cost effective, but some mining initiatives may be.

After looking at some numbers it appears the yearly amount of gold produced versus consumed is in the same range, and there is somewhere around 1-to-40 of yearly gold production versus total gold available for consumption (of which 20-25% held by governments).

Gold has not been used as money for quite a few decades. If it had, would the ratio of yearly production versus available keep growing? More and more people would buy it, irrespective of the amount used in production?
According to my theory that wouldn't be the case, but according to Murphy I am wrong [3]. If he has praxeological reasons for it, I would like to know (and understand), but I don’t believe simply stating hypotheticals that assume it furthers the problem.

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Rules require a ruler?

linden2015 — Sun, 24 Nov 2013 19:49:13 GMT

Rules Do Not Require a Ruler

Exploring the power of reputation

Suppose there is an island with 8 people on it, who live together peacefully. Now A arrives on the island who hasn't yet learned the advantages of economic cooperation.

A makes a trade with B: A’s bag of sugar for a pair of primitive shoes from B. After A has left, B finds out that the bag contains mostly sand. B has been defrauded.

A number of consequences ensue:

B writes up an account of what happened and gives it to the others on the island. The others on the island now know to be wary of A. They have a high certainty of the truthfulness of this claim, because B stakes his reputation on it, and B has always been a trusted member of the society.
The others on the island now no longer give A any leeway. This means that they will not give him a loan or do him any favors. If A wants to trade with anyone he will have to pay upfront in full.
A will have to pay much higher prices because it is riskier for people to deal with a criminal.
A will not be hired because it is too risky to let him have any responsibilities. He may end up costing people more than he can deliver. Or he is only given work for very low pay, as the demand for his labor is extremely low.
He will be encouraged by everyone to pay B back.

A can restore his reputation if he pays back B and demonstrates that he can be trusted again. This can take a while, but all signs of goodwill will allow him more benefits from the society. For example, if he pays back B whatever he can and agrees on a payment plan for the remainder, B can announce this resolution publicly and that way A can get back on the road to recovery.

You can see that in this society, through the use of reputation and sharing of experiences, prevention of crime and resolution of incidents are the main goals.

Alternatively, B could consider getting his property back by force. There are risks involved in using force, but he may think it is worth it. B has to consider the consequences for his own reputation. If he acts unreasonable he may end up being treated differently himself by the rest of society.

In either of these cases, this society has no ruler. But it does have rules:

Don’t harm other people or their property.
Respect agreements.
Act proportional.
No person rules another person and..
..there are no taxes.

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So you want to be a programmer & minimum wage laws

linden2015 — Sat, 02 Nov 2013 17:41:02 GMT

The article Teach Yourself Programming in Ten Years (by Peter Norvig), which talks about the path to become a professional programmer, underscores that it takes a significant amount of time to become proficient. It also highlights that the keys to learning programming are doing actual programming, acquiring skills as you go along, and learning from other programmers and programs.

Program. The best kind of learning is learning by doing. To put it more technically, “the maximal level of performance for individuals in a given domain is not attained automatically as a function of extended experience, but the level of performance can be increased even by highly experienced individuals as a result of deliberate efforts to improve.” (p. 366) and “the most effective learning requires a well-defined task with an appropriate difficulty level for the particular individual, informative feedback, and opportunities for repetition and corrections of errors.” …

Talk with other programmers; read other programs. This is more important than any book or training course.

If you want, put in four years at a college (or more at a graduate school). This will give you access to some jobs that require credentials, and it will give you a deeper understanding of the field, but if you don’t enjoy school, you can (with some dedication) get similar experience on your own or on the job. In any case, book learning alone won’t be enough. “Computer science education cannot make anybody an expert programmer any more than studying brushes and pigment can make somebody an expert painter” says Eric Raymond, author of The New Hacker’s Dictionary.

All of this relates to minimum wage laws in that your productivity in the beginning months or years is low, but that’s not where you remain.

Being able to work with low productivity is an opportunity that allows you to become an actual professional.

If you are only legally allowed to be hired at a cost above your productivity then employers have to take a high risk in employing you (in the hopes that your productivity will go up quickly), which means they will be less likely to do so and instead be much more selective (which brings about further costs).

It also means that some people have no option but to go into debt in order to acquire sufficient skills. Some people, if they had the choice, would prefer not to go into debt and to work for below minimum wage wages, and make cost-cutting living decisions while trying to work their way up.

The article also illustrates that going the college+debt route is not necessarily an efficient path to become a good programmer. Learning in the field could end up with the person reaching higher capability in the same amount of time.

Going into debt for a career choice also brings with it the significant risk about what working options actually end up being available after four or more years of study.

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A critique of Murray Rothbard’s “Why Be Libertarian”

linden2015 — Wed, 30 Oct 2013 21:41:55 GMT

Murray Rothbard in ‘Why Be Libertarian?’, a chapter from ‘Egalitarianism As a Revolt Against Nature’:

“Why be libertarian, anyway? By this we mean, what’s the point of the whole thing? Why engage in a deep and lifelong commitment to the principle and the goal of individual liberty? …

Ideas, and especially radical ideas, do not advance in the world in and by themselves, as it were in a vacuum; they can only be advanced by people and, therefore, the development and advancement of such people — and therefore of a ‘movement’ — becomes a prime task for the libertarian who is really serious about advancing his goals. …

..we must also see that utilitarianism — the common ground of free-market economists — is unsatisfactory for developing a flourishing libertarian movement. While it is true and valuable to know that a free market would bring far greater abundance and a healthier economy to everyone, rich and poor alike, a critical problem is whether this knowledge is enough to bring many people to a lifelong dedication to liberty.

In short, how many people will man the barricades and endure the many sacrifices that a consistent devotion to liberty entails, merely so that umpteen percent more people will have better bathtubs? Will they not rather set up for an easy life and forget the umpteen percent bathtubs? Ultimately, then, utilitarian economics, while indispensable in the developed structure of libertarian thought and action, is almost as unsatisfactory a basic ground work for the movement as those opportunists who simply seek a short-range profit.

It is our view that a flourishing libertarian movement, a lifelong dedication to liberty can only be grounded on a passion for justice. Here must be the mainspring of our drive, the armor that will sustain us in all the storms ahead, not the search for a quick buck, the playing of intellectual games or the cool calculation of general economic gains. And, to have a passion for justice, one must have a theory of what justice and injustice are — in short, a set of ethical principles of justice and injustice, which cannot be provided by utilitarian economics.

It is because we see the world reeking with injustices piled one on another to the very heavens that we are impelled to do all that we can to seek a world in which these and other injustices will be eradicated.”

The market of economic cooperation is a means to human ends. Why do I support ownership of the farm by the farmer? Because I believe it is in my own interest (more explanation here, here and here). Rothbard here creates a bad interpretation of Misesian utilitarianism. It is not the attainment of a single good by other people that is concerned; it is the attainment (psychic profit) of one’s own value scale that is concerned. That value scale can be concerned with everything under the sun, including friendship, peace, beauty, joy, spirituality, computer games, and yes, a clean bath.

The difference between economic cooperation and fighting is not more or less bathtubs; it is between bathtubs and death. The difference between a Western-style government and a free market is not a few more bathtubs; it is so life changing it can hardly be described. I could perhaps say “a hundred Hong Kongs”. And for people not in a first world country, the change in life opportunities would be even larger.

If the consequences of economic cooperation are properly understood, then each individual can make his own estimation of what is and is not considered a sacrifice for him. If something is considered an overall sacrifice, why should he make it? If individuals are no longer willing to sacrifice themselves for something they do not expect to benefit from, how is that a bad thing? A notion of ‘justice’ that is not derived from personal human ends is one of the big problems in the world today.

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For Tom Woods: are rights a human construction or do they exist?

linden2015 — Wed, 30 Oct 2013 19:38:22 GMT

In a recent video, Tom Woods brings up secession. He says:

“The question of secession is basically raising this issue: is it possible that the political unit could become so large as to be, even by government standards, dysfunctional?” [..]

“Why would it be that the number of square feet in the United States is like a heaven-sent number? Like ‘it’s this many square feet; and if you want it to be slightly fewer square feet then there’s something wrong with you..’

The union is supposed to be a practical thing. It’s supposed to be a means to an end; not an end in itself. The union is not something we’re supposed to get down and worship, or wave incense before.. It’s a practical thing and yet the hysterics about secession.. the hysterics who have been criticizing people who consider this idea, are treating the union as if it were an object of religious veneration. This is bizarre and creepy.”

If the union is to be evaluated according to means and ends, then what about the states themselves, and then what about (libertarian) property rights? Mises and Hazlitt understood property rights as (the culmination of) chosen means by specific individuals for the achievement of their personally desired ends.

In an earlier video, ‘Where Do Rights Come From?’, Tom said:

“The fact that we can make this argument from numerous angles, and yet it leads us to the same basic conclusion of the existence of natural rights.. I don’t think that’s a weakness, I think that’s a strength. I think that shows that it’s a truth that, that albeit perhaps from somewhat different angles, we are all approaching.. from different ways.”

It seems like Tom is trying to have it both ways: have rights be something that exists, and (at least at the level of larger political organization) have it be a constructed human means for a human end.

In his video, Tom speaks highly of Rothbard and Hoppe. Both of them have, however, written negatively on Mises’ view of subjective means and ends regarding the rules of society (link 1, link 2).

Tom speaks of ‘treating the union as an object of religious veneration’, but I believe that is the way many libertarians treat rights as.

Innovation in the gaming, music and software business models

linden2015 — Wed, 30 Oct 2013 18:01:48 GMT

Libertarians do it without IP protection

Intellectual property advocates say that the use of information needs to be protected by law. But even in today’s world, where this protection exists, there are commercial developers who are trying business models that are relying less and less on that protection.

The latest example is the Humble Indie Bundle 3. For short periods, they offer a bundle of games with no copy protection, and the customer decides how much to pay. You can pay as little as 1 cent to get the bundle. So actually, these aren't purchases but instead donations for games that can be gotten for free and shared with friends and family without any problems. The average amount per downloader that is actually given is over $5 (Linux users average more than double that). They've raised 1.6 million dollars as of writing and there are still 4 days left in the promotion.

So why are people giving more than a penny? People appreciate what is being offered, and they like to reward that. And when you reward a developer of an enjoyable game, that is offered under favorable terms, then this serves as a signal for that developer to keep doing this work in the future, so that the consumers will have new games to enjoy when they’re done playing the current ones. Essentially, when you donate to a developer, you’re saying: “Please keep doing what you’re doing”.

Music: Pomplamoose

You can see something close to this model occurring in music. The musical duo Pomplamoose release all of their songs in high quality on YouTube. One of their innovations is the VideoSong, which means that even though their songs are often highly mixed, when you hear a sound you will also see them performing it (as it was done live). This makes it more intimate and open.

But because all of their songs can be listened to without limit and downloaded with simple tools, when you purchase their songs (as with the Humble Bundle), it’s practically a donation. So here too, when you donate to them, you’re asking them to keep doing what they’re doing, and giving them the means to do it.

Software: Ardour

The next step up in a business model that doesn't rely on intellectual property protection is showcased by the free and open source ‘digital audio workstation’ software Ardour (for Linux and Mac). They currently have 252 people with a donation subscription. And they have ‘bug bounties’ where people can pledge money to have specific problems fixed.

Let’s hope that instead of the old ways, these business models will be copied and improved upon, because it clearly works.

patreon.com/vforvoluntary

Stories by linden2015 on Medium

Libertarian movies

12 Angry Men (1957)

A Bug’s Life (1998)

Antz (1998)

Brazil (1985)

Chicken Run (2000)

Daddy Day Care (2003)

District 9 (2009)

Dr. Strangelove (1964)

Equilibrium (2002)

Fahrenheit 451 (1966)

How to Train Your Dragon (2010)

Ikiru (1952)

Interstate 60 (2002)

Kiki’s Delivery Service (1989)

Logan’s Run (1976)

Megamind (2010)

Moonrise Kingdom (2012)

My Little Pony: Friendship Is Magic — Episode: Over a Barrel (2011)

Nausicaä of the Valley of the Wind (1984)

ParaNorman (2012)

Pleasantville (1998)

Porco Rosso (1992)

Serenity (2005)

Sophie Scholl — The Final Days (2005)

The 400 Blows (1959)

The Castle (1997)

The Iron Giant (1999)

The Island (2005)

The Lego Movie (2014)

The Lives of Others (2006)

The Matrix (1999)

The Mouse That Roared (1959)

The Truman Show (1998)

Whisper of the Heart (1995)

What happens to the losers in a free market?

What Happens To The Losers In a Free Market?

Providing value through entrepreneurship

Partaking in production through labor

Expanding employment possibilities

Sources of unemployment

Long-term effects of intervention

Long-term effects of free markets

Libertarianism is not ‘no gun in the room’

Robert Murphy and ‘reason is not enough’

A reply to Murphy regarding money and Menger

Rules require a ruler?

Rules Do Not Require a Ruler

Exploring the power of reputation

So you want to be a programmer & minimum wage laws

A critique of Murray Rothbard’s “Why Be Libertarian”

For Tom Woods: are rights a human construction or do they exist?

Innovation in the gaming, music and software business models

Libertarians do it without IP protection

Music: Pomplamoose

Software: Ardour