Questions and Answers

This is another in my series of responses to questions, queries, objections, challenges that have been put to me on libertarianism and Austrian economics. I don’t publish them all, only the interesting ones, and I maintain anonymity in virtually all cases for my correspondents.

All of these challenges, questions, comments, have been put to me. See my responses to them. The last response features the writing of an amazing Austrian economist autodidact. Her day job is that of airline pilot; she has no formal study in economics whatsoever. But, she has already made important contributions to Austrian economics and bodes well to continue down this magnificent path. Her contribution, here, is worth the full price of admission, such as it is.

Question #1 Ed Feser criticizes Murray Rothbard

I refer you to a critique of libertarianism written by (presumably) a conservative source (the author refers to conservative Ed Feser in his critique):

What do you make of Ed Feser’s criticisms of Rothbard? Could you link me to some effective criticisms of Feser’s analysis of Rothbard and libertarianism? And would you be willing to respond to this article?

Response #1

Happily, I have already responded to Feser’s attack on libertarianism – Rothbardianism:

Block, Walter E. 2010. “Libertarianism is unique; it belongs neither to the right nor the left: a critique of the views of Long, Holcombe, and Baden on the left, Hoppe, Feser and Paul on the right.” Journal of Libertarian Studies; Vol. 22: 127–70

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Comment #2 The president of Loyola U accuses me of supporting slavery

To Rev Kevin Wildes,

I am a Roman Catholic school educated K-8 Roman Catholic and Rutgers University graduate. I am also a proud Libertarian Christian because it’s philosophy reflects most closely the teachings of Jesus Christ especially as it pertains to the Non-Aggression Principle ( NAP ) that it is based upon. Do unto others as you would done unto you is a tenet of Catholic and for that matter all Christian faiths. It is with this in mind that I am writing you in support of  Walter Block who I believe has been unjustly transgressed by you and others. As a Catholic we are taught to speak the truth in all situations and stand up for justice no what the ramifications of doing so are as Jesus Christ did. I have been a reader of Walter Block for many years and I can not think of any contemporary person who has done more to spread the word of Peace, Justice and Liberty! It was understandable to be alarmed by the New York Times column that wrongly portrayed him as a supporter of slavery. Walter explained that he is not a supporter of slavery! As a Libertarian there is no way he can be. As Walter said he was using the example of slavery in trying to explain  Libertarian NAP principles. Libertarianism epitomizes many of the same principles of the Catholic faith taught to me by the Benedictine Sisters and Priests of St. Joseph’s R. C. School in Maplewood N.J. I believe that your actions and talk and that of others are similar to that of the high priests of the Jewish faith who conspired with Roman authorities to set in motion the actions to have Jesus Christ crucified. Do you believe in living the principles that the Catholic Church teaches and enunciated in your 1/22/16 speech in which you said that we should interpret other people’s statements in the most positive way possible and reasonable way giving a sympathetic interpretation  of what others say or write? I do not believe that you have done so to Walter Block and it’s time for you to rectify this serious transgression. I pray that you see the way to accept Walter’s explanation and publicly acknowledge it as I know Jesus Christ would.

https://www.lewrockwell.com/2016/02/walter-e-block/im-ruled-left-wing-jesuit/

Response #2

Dear R:

Thanks for your support. I greatly appreciate this.

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Question #3 Cultural Marxism rides again

Greetings Dr. Block.

Enjoyed your recent piece at Rockwell’s site titled “I’m ruled by a leftwing Jesuit.”

As a 1984 graduate of Loyola U. of Chicago, I’ve had a similar experience.

In receiving the alumni magazines over the years, I’ve noticed an extreme leftwing turn at the university of late.

To wit, a recent talk given by the former white house Marxist Van Jones at a university function, a starting of a ‘green initiative’ and ‘sustainability issues’ in the undergrad programs, and numerous articles on supporting ‘social justice’ in the undergrad programs.

As a result, a few months ago, I emailed the director of alumni relations and requested that she remove my name from the alumni mailing list because of the university’s clear support of Marxist ideals.

I’ve yet to receive a reply, and will be surprised if the next alumni newsletter arrives in the mail…or not.

Best Regards,

M

LTC, USA (Retired)

Ps.  I’ll be curious as to how long ROTC will remain at Loyola U. as well.

Response #3

Dear Joe:

Thanks. I greatly appreciate your support.

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Question/Comment #4  More support for me regarding slavery

I more than sympathize with your situation.  Given the educational poverty of the NYT reporters, and their prejudices, not to mention the prejudices of Jesuit university presidents, it becomes almost impossible to speak your mind without fear of misrepresentation and reprisal.  I have an article published in The Independent Review (summer 2015) dealing with, among other things, the death of the classical liberal virtue of toleration.  One thing modern academics esteem very little is true intellectual diversity, or just plain critical thinking.  The Latin below says, “Deans should be assessed as well as faculty).

PS Ceterum, ut perpenditur decanorum. Cato

Response #4

Dear Bill:

Thanks for your support.

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Question #5 Book on water capitalism; constant money supply?

I am very glad that your book on privatization of waters is out! I will look to get a copy soon.

By the way, the other day, Simon Lee (a founder of the Lion Rock Institute, Hong Kong’s only free-market think tank) and I came up with an idea: to develop a currency backed by a radioactive substance whose rate of radioactive decay is approximately canceled out by its rate of discovery, so that a more or less constant money supply can be maintained. Do you think there is any potential to this idea?  Thanks a lot!

Response #5

Dear A:

I disagree with that viewpoint.

It’s a Milton Friedman idea that the currency stock must be kept constant. (Well, he advocated increasing it by 2-3%, so that prices were stable.) But, we don’t want the quantity of carrots, shoes etc., to stay constant, nor their prices. We want their quantity to rise and their price to fall, no? Why should money be any different? Money is a good, in many (but not all) ways just like any other item or service.

To buttress this point, see:

Barnett, William II and Walter E. Block.  2005.  “Money: Capital Good, Consumers’ Good, or (Media of) Exchange Good?” Review of Austrian Economics. 18 (2): 179-194;

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Comment #6 Slavery and the civil rights act of 1964 I happen to agree with your statements on slavery and Civil Rights legislation, namely that: (1) If you take the coercion of out slavery, then it’s not such a bad thing. (

I happen to agree with your statements on slavery and Civil Rights legislation, namely that: (1) If you take the coercion of out slavery, then it’s not such a bad thing. (

(1) If you take the coercion of out slavery, then it’s not such a bad thing. (Actually it ceases to be slavery.) -and- (2) The Civil Rights legislation compels people to associate with others against their will — namely, in the example given, the Woolworth employees would be forced to associate with customers they might not want to associate with. And so, I see how the NYT and your University president have successively distorted your meaning. And you have given Dr. Wildes very ample opportunity to correct his defamatory letter. As I understand it, there has been no action on that front for a long time. Wildes’ offenses would seem to include (1) defamation; (2) creation of a hostile workplace environment; (3) workplace retaliation for

(2) The Civil Rights legislation compels people to associate with others against their will — namely, in the example given, the Woolworth employees would be forced to associate with customers they might not want to associate with. And so, I see how the NYT and your University president have successively distorted your meaning. And you have given Dr. Wildes very ample opportunity to correct his defamatory letter. As I understand it, there has been no action on that front for a long time. Wildes’ offenses would seem to include (1) defamation; (2) creation of a hostile workplace environment; (3) workplace retaliation for exercise of free speech outside the workplace. I hope you can nail him legally. Eugene Volokh is a brilliant libertarian law professor specializing in free speech issues. He is interested in your kind of situation. Maybe it would be worthwhile to ask his opinion about your legal options.

And so, I see how the NYT and your University president have successively distorted your meaning. And you have given Dr. Wildes very ample opportunity to correct his defamatory letter. As I understand it, there has been no action on that front for a long time. Wildes’ offenses would seem to include (1) defamation; (2) creation of a hostile workplace environment; (3) workplace retaliation for exercise of free speech outside the workplace. I hope you can nail him legally. Eugene Volokh is a brilliant libertarian law professor specializing in free speech issues. He is interested in your kind of situation. Maybe it would be worthwhile to ask his opinion about your legal options.

And you have given Dr. Wildes very ample opportunity to correct his defamatory letter. As I understand it, there has been no action on that front for a long time.

Wildes’ offenses would seem to include (1) defamation; (2) creation of a hostile workplace environment; (3) workplace retaliation for exercise of free speech outside the workplace. I hope you can nail him legally. Eugene Volokh is a brilliant libertarian law professor specializing in free speech issues. He is interested in your kind of situation. Maybe it would be worthwhile to ask his opinion about your legal options. http://www2.law.ucla.edu/volokh/ Another consideration (which your lawyers would presumably be on top of): If you defame someone and then apologize many years later, it seems to me that during the time between the defamation and the apology, the damage was on-going and cumulative. Could there be a penalty for the defamer taking his own sweet time while you are suffering from the effects of the defamation? (It’s the old theme: Justice delayed is justice denied.) My sense is that Wildes’ offense is a $ multi-million one. If I had to work at a university where the president told everyone that I was a supporter of slavery, etc., I would find it very hard going. I sympathize with your plight. Best of luck in obtaining justice in this case. R

Another consideration (which your lawyers would presumably be on top of): If you defame someone and then apologize many years later, it seems to me that during the time between the defamation and the apology, the damage was on-going and cumulative. Could there be a penalty for the defamer taking his own sweet time while you are suffering from the effects of the defamation? (It’s the old theme: Justice delayed is justice denied.) My sense is that Wildes’ offense is a $ multi-million one. If I had to work at a university where the president told everyone that I was a supporter of slavery, etc., I would find it very hard going. I sympathize with your plight. Best of luck in obtaining justice in this case. R

My sense is that Wildes’ offense is a $ multi-million one. If I had to work at a university where the president told everyone that I was a supporter of slavery, etc., I would find it very hard going. I sympathize with your plight. Best of luck in obtaining justice in this case. R

Best of luck in obtaining justice in this case. R

R

Response #6

Dear R:

Thanks. I did indeed get in touch with Mr. Volokh, but he was unable to help me

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Question #7 Should we accept social security payments from government?

I read your columns on LRC and FFF.  Both of you are very thoughtful when applying libertarian principles to unclear situations.  Would you please respond to the following:

I have reached Social Security eligibility.  I have been thinking about my options and how they fit into libertarian thought/principles.  I have two basic choices:

First.  Refuse to sign up for SS as it is an entitlement program (we do not need SS to make ends meet).  I understand there is no contractual right to receive SS.

Second.  Sign up for SS and take money from the government so it doesn’t use it for anything else.  My wife and I could use the money on ourselves or use it to help those less fortunate than ourselves.  I don’t think taking SS will change anything the government does nor will the choice of whether or not to take SS change government spending in any way.

Do you see any other options?  Which of these options fits libertarian principles and why?  Does anything change if my wife and I were destitute and needed SS to live on a daily basis?

Regards,

T

Response #7

I vote for your second option. I also see a third option: go get even more money from the government in any other (legal?!) way you can think of. Emulate my favorite character in Atlas Shrugged, Ragnar Daneskjold. See below for some references.

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Question #8 Should we accept unemployment payments from government?

I was just laid off from my upstream oil and gas job in Houston (3 years, 4 months). As an anarcho-capitalist, I’m torn as to whether I should file for unemployment. It literally goes against my beliefs. Of course, I’m already looking for another job, but I’m not quite sure what I should do in this regard. Thanks again for your thoughts.

Response #7, #8

I ORDER you to apply for Unemployment Insurance – Social Security (the same considerations apply to both). Better you should have this money than the state. See on this:

Block, Walter E. 1972. “The Polish Ham Question.” The Libertarian Forum. June-July, Vol. 4, No. 6-7, p. 5

Block, Walter E. 2002. “Accepting Government Subsidies,” Fraser Forum, February, p. 27;

Block, Walter E. 2004. “Radical Libertarianism: Applying Libertarian Principles to Dealing with the Unjust Government, Part I” Reason Papers, Vol. 27, Fall, pp. 117-133;

Block, Walter E. 2006. “Radical Libertarianism: Applying Libertarian Principles to Dealing with the Unjust Government, Part II” Reason Papers, Vol. 28, Spring, pp. 85-109

Block, Walter E. 2007. “Ron Paul and Matching Funds,” October 1;

Block, Walter E. 2008. “Replies to readers” September 23;

Block, Walter E. 2009A. “Libertarian punishment theory: working for, and donating to, the state” Libertarian Papers, Vol. 1

Block, Walter E. 2009B. “Toward a Libertarian Theory of Guilt and Punishment for the Crime of Statism” in Hulsmann, Jorg Guido and Stephan Kinsella, eds., Property, Freedom and Society: Essays in Honor of Hans-Hermann Hoppe, Auburn, AL: Ludwig von Mises Institute, pp. 137-148

Block, Walter E. 2010. “You are a rotten kid (rent control and libertarianism),” February 27;

Block, Walter E. 2011A. “It’s Ayn Rand Bashing Time, Once Again.” February 18;

Block, Walter E. 2011B. “May a Libertarian Take Money From the Government?” March 11;

Block, Walter E. 2011C. “Toward a Libertarian Theory of Guilt and Punishment for the Crime of Statism,” Journal of Libertarian Studies, Vol. 22; pp. 665-675;

Block, Walter E. 2011D. “Hoppe, Kinsella and Rothbard II on Immigration: A Critique.” Journal of Libertarian Studies; Vol. 22, pp. 593–623;

Block, Walter E. and Chris Arakaky. 2008. “Taking Government Money for Grad School?” May 23

Block, Walter E. and William Barnett II. 2008. “ContinuumsJournal Etica e Politica / Ethics & Politics, Vol. 1, pp. 151-166 June;

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Question #9 Rand Paul drops out

You must have learned of the sad news that Rand Paul has dropped out. If I may ask, what would you do with the 2016 presidential race at this point? I suppose this is also one of the things you will talk about at Princeton on 2/17/16, but I’m just curious. Thanks a lot!

Response #9

I’m disappointed that Rand Paul dropped out. His dad staying in until the bitter end in 08 and 12.

I’ll support Gary Johnson on the Libertarian Party ticket.

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Comment #10 On Fr. Wildes, SJ, President of Loyola University New Orleans

—–Original Message—– From: Lew Rockwell [mailto:lewrockwell@mac.com] Sent: Wednesday, February 03, 2016 9:50 PM To: Walter Block Subject: Fwd: I’m Ruled by a Left-Wing Jesuit – LewRockwell

From a brilliant young Catholic girl:

Dear Lew,

Dr. Block should suggest to Fr. Wildes that he and Bergoglio camp out together on an island somewhere.  They can get other Jesuits to join them.  They can have their own private liberal Catholic bullshit buzzword sessions together on their island every day (talking about the need for “dialogue” and “encounter,” and combatting racism).  And they can all stay there and leave the rest of us alone!

Response #10

Dear Lew:

Please forward this to her:

Dear BYCG:

Thanks for your support. However, I wouldn’t have put it quite so harshly. On the other hand, your version is probably more accurate than what I would have written.

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Comment #11 Hubert Jongen

It is long ago that we met  in person. It was at the ISIL-congress in DAX.

I thought to-day about you, because Hubert Jongen sent me an article about the fact that you are accused of  advocating slavery. This is a most horrendous matter which  tells us something about the character of the accuser.  It remains mysterious, why accuser does not issue a rectification. To  me it looks like a primitive  sort of  anti-libertarian  propaganda.

Speaking about Hubert Jongen I feel sad about the fact that you did not print his  story in a book about libertarians you published a few years ago.This really is a most deplorable matter, because of the pioneers role Hubert  has played and plays in the Netherlands  with his  unrelenting efforts to open the ears and the eyes of a public which is hostile to the libertarian cause. It is my understanding, that you did not print Hubert’s  story, because he  rightfully refused to get it censored and to drop something  very  significant about his catholic education. I can tell you one thing  about the Netherlands for sure. That is the very negative influence which the catholic church had and up to a certain extend still has in the Netherlands. To drop from his story his experience with the most terrible and  outright criminal influence of this church  would corrupt his  story in a completely  unacceptable way. It is my strong and sincere hope,  that  in case of a reprint of your book, this matter will be rectified and that Hubert will be done justice. It’s also  my hope, that you will  mention in this  new edition on which grounds you   decided not to carry his story in the first edition.

With kind personal regards,

Response #11

Hugo Jongen will always be considered one of the great libertarian lights in our entire history, and I greatly regret he was not included. Mea culpa.  Thanks for your support on that slavery business.

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Question #12 Pedophilia, Necrophilia

A friend of mine, A, believes necrophilia cannot be engaged in with the dead body of a person who would have opposed it if alive. (A, tell me if I’m wrong about my understanding of your viewpoint). This is my attack on him, or my defense of my view. A person can’t own or transfer any property before they’re conceived because their consciousness does not yet exist.

Therefore, since a person’s consciousness doesn’t exist after their death, they cannot own or transfer property once dead.

If a dead person cannot own or transfer property then wills should state the following,

One second before my death all my worldly possessions are transferred from me (X) to Y.

However, imagine no one else exists or that no one wants to take X’s property.

If that is the case then I’m sure you would agree that the body of X, along with the rest of his property enters into the abandoned property category.

If property is either virgin or abandoned anyone may homestead it and do whatever they like with the property they homestead.

This means a person could homestead an abandoned body and engage in necrophilia, even if the previous owner of the body would have objected.

Response #12

Pedophilia is sickening and disgusting. It amounts to child abuse, in my view. However, what about stories, or cartoons, of pedophilia, in which no actual children are involved. The only argument for prohibiting this, too, is that it will lead pedophiles into engaging in this despicable behavior. But, strictly speaking, libertarian law prohibits, only, actual rights violations, not potential ones. Lots of things that should be legal “lead” to other acts which should be prohibited. For example, a victory or defeat in the Superbowl might “lead” to a riot. Surely, we should not on that ground prohibit such sports events.

I hate to be repetitive, but necrophilia, too, is sickening and disgusting. But, I don’t see the problem you raise. Virtually all people will make a contract with a burial ground mandating that their bodies, after death, be placed in a coffin, and remain there, undisturbed. Some might leave their bodies to be studied by medical science, so as to cure disease. Any necrophiliac who violates these contracts would be a criminal. However, suppose someone leaves his body to a necrophiliac, to engage in despicable acts with that body. Would this be prohibited by libertarian law? Not in my opinion, since such an arrangement would not violate the non-aggression principle..

Pedophilia is pretty disgusting. I go further, it is despicable. It does not even come close to passing the “smell” test. In my view, even if it can be shown that there are no long time negative effects of this horrid practice, it still amounts to child abuse. See my debate with Stephan Molyneux on this matter.  Suppose it could be shown that severe whippings, thrashings, had no long time negative effects on children; it would still be child abuse, and thus contrary to libertarian theory in my view; it should still be punishable under libertarian law. I am delighted to learn of your research, which may well for all I know indicate that  pedophilia is not always harmful to children. I’m elated with this news, since so many children, all too many children, are subjected to this evil practice, and will not, or, may not, be as severely harmed by this as I had thought.

Let me argue by analogy. A rapes B. It is later proven that had A not abused B in this manner, B would have been hit by the proverbial bus and killed. Let us also stipulate, arguendo, that all rational people would rather be raped than killed. Thus, we can conclude, A did not “harm” B. Rather, A saved B’s life. Does this mean that A is no longer a criminal? Of course not. A is a rapist, and thus a criminal who should be punished, and would be punished under libertarian law. I think a similar analysis applies to the child-abusing pedophiliac. Even if, somehow, such abused children were made better off (don’t ask, work with me here) by being subjected to the attentions of such a person, he is still a criminal and deserves a very severe punishment.

I have done a lot of research since we last talked about pedophilia in relation to the NAP. If I remember correctly your objection to pedophilia legality was your view that pedophilia is almost always harmful to children who are involved in it. I have found a lot of purported evidence on both sides although I believe the following study by Bruce Rind, Robert Bauserman, and Philip Tromovitch shows that pedophilia is not inherently harmful to children. Their core findings were confirmed by The Scientific Review of Mental Health Practices. With the results of the review being that child sexual abuse does not necessarily lead to long term harm, and the original researchers results showing that adult-child sex does not normally lead to any major harm to children.

I know you are busy and probably don’t have time to do all the research to form a strong, informed decision on the matter, I just wanted to send you a starting point in the case that you do have some extra time and the inclination to do some reading for yourself.

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Response #13

Pedophilia is sickening and disgusting. It amounts to child abuse, in my view. However, what about stories, or cartoons, of pedophilia, in which no actual children are involved. The only argument for prohibiting this, too, is that it will lead pedophiles into engaging in this despicable behavior. But, strictly speaking, libertarian law prohibits, only, actual rights violations, not potential ones. Lots of things that should be legal “lead” to other acts which should be prohibited. For example, a victory or defeat in the Superbowl might “lead” to a riot. Surely, we should not on that ground prohibit such sports events.

I hate to be repetitive, but necrophilia, too, is sickening and disgusting. But, I don’t see the problem you raise. Virtually all people will make a contract with a burial ground mandating that their bodies, after death, be placed in a coffin, and remain there, undisturbed. Some might leave their bodies to be studied by medical science, so as to cure disease. Any necrophiliac who violates these contracts would be a criminal. However, suppose someone leaves his body to a necrophiliac, to engage in despicable acts with that body. Would this be prohibited by libertarian law? Not in my opinion, since such an arrangement would not violate the non aggression principle.

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Question #14 Gay rights?

Walking to and fro work where I live is a constant bombardment of underemployed college students – and college graduates – making an hourly wage peddling a clip board and petitioning signatures for any number of astroturf schemes: save the whales, gay rights, equality, basic income, etc… Politely, to myself, I never cease to wonder how people with college degrees are not humiliated and embarrassed by such a job. Anyways, the gay “rights” people are very persistent. I don’t know for sure the exact details of what they want but I believe its on the order of changing laws to grant themselves distribution of marriage registration benefits.

Some seem to think the libertarian position is to always deny such benefits because it is seen as welfare and welfare in relation to the collection of taxes violates the NAP. Other libertarians believe (like outrightuse.org) that since gays pay these taxes yet are barred from reclaiming what is justly theirs, it is correct they should lobby for government marriage benefits.

This reminds me of a debate I think you had with Bob Murphy. I believe the argument somewhere was you are justified in benefits as a way to reclaim stolen monies, but Murphy countered this would lead to sanctioning Social Security and all Welfare which is a violation of NAP, whereby you then counter-countered that it is not a violation of NAP as long as you are a libertarian, i.e., your actions didn’t promote or add to the continuation of taxes/welfare but contributed to its exhaustion.

So should a libertarian support gay “rights”? (“Rights” defined here above as equal entitlement to government marriage registration benefits as everyone else) Or should we oppose this as a welfare scheme ? If we oppose it, then to be consistent should we advocate for the repeal of marriage benefits for straight couples?

Response #14

You accurately summarize my debate with Bob Murphy.  Here it is:

Murphy, Robert P. 2006.  “A Note on Walter E. Block’s Defending the Undefendable: The Case of the ‘Heroic’ Counterfeiter,” American Journal of Economics and Sociology, April, Vol. 65 Issue 2, pp. 463 -467;

Block, Walter E. 2010. “In Defense of Counterfeiting Illegitimate Money: Rejoinder to Murphy and Machaj,” American Journal of Economics and Sociology, Vol. 69, No. 2, 867-880, April;

In my view, there should be a total separation between religion and state, between education and state, heck, between everything and state. Certainly, also, between marriage and state. Therefore, the government should not be making up any rules as to who may marry whom. Gay, straights, polygamists; the government should stay out of all such relationships.

However, I don’t think the government should discriminate between people on this basis. Since they allow, uphold, straight marriages, I think they ought to do the same thing for homosexual marriages, and for polygamous ones too.

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Question #15 Learning Austrian economics; taxation; Laffer curve

Can I learn the basics of Austrian economics from you tube etc.

Or is there a book you can recommend?

My mind is better at logic than maths.

A typical society bettering argument is that the big companies should pay more tax…

Does the Laffer curve represent company tax also?

I can see that big companies don’t pay much tax and could pay at least 10% more to make it up to personal income tax.

So I guess the Austrian objection to this is

1 it would create more welfare dependent people and further trap people in poverty

2 if all tax was abolished companies would be allowed to build big investment capital and they could be invested in extra production means… But I suppose they do that anyway to avoid profit / tax

Or is it more simple to say that even in an ideal socialist world they’d still not show a profit anyway and worse would leave for another country? I understand of course in a proper free market we wouldn’t have massive companies due to the cost curve.  But I’m seeking to frame it in a way that would logically disprove a socialist argument in the present day. I hope this makes sense. Only reply if you have time

R

Response #15

Yes, you can indeed learn a goodly bit of Austrian economics from the web. My favorite place to go is Mises.org. Just search for the topics that interest you.  Here are some introductory books in Austrian economics:

Mises, Ludwig von. 1988 [1958]. Liberty and Property

Rothbard, Murray N. 1963, 1985, 1990 What Has Government Done to Our Money? Auburn, AL.: Mises Institute

Mises, Ludwig von. 1969. Bureaucracy, New Rochelle, N.Y.: Arlington House

Rothbard, Murray N. 1969. “The Austrian Theory of the Trade Cycle,” p. 78-79, in Economic Depressions: Their Cause and Cure, Lansing, Michigan: Constitutional Alliance

Mises, Ludwig von. 1972. The Anti-Capitalist Mentality, South Holland, IL: Libertarian Press;;

Rothbard, Murray N. 1996. “Economic Depressions: Their Cause and Cure.” The Austrian Theory of the Trade Cycle and Other Essays. Auburn, AL: The Ludwig von Mises Institute, pp. 37-64.

Mises, Ludwig von. 1975[1933]. Economic Calculation in the Socialist Commonwealth

Rothbard, Murray N. 1994. The Case Against the Fed.  Auburn, AL: The Ludwig von Mises Institute

Mises, Ludwig von. 1952. Planning for Freedom.

Rothbard, Murray N. 1962. “The Case For a 100 Percent Gold Dollar.”  Leland Yeager (ed.), In Search of a Monetary Constitution.  Cambridge, MA: Harvard University Press, pp. 94‑136.  Reprinted as The Case For a 100 Percent Gold Dollar, Washington, DC: Libertarian Review Press, 1974.

Mises, Ludwig von. 1940[2004]. Interventionism.  Auburn, AL: The Mises Institute;

Second, the Laffer curve does not “represent company tax.” Rather, it shows the relationship between tax revenues and tax rates. You might find what I wrote on that of interest:

Barnett, William II and Walter E. Block. 2005. “On the Use and Misuse of the Laffer CurveJournal of Public Finance and Public Choice, Vol. XXIV, No. 3, pp. 139-152;

Third, Austrians have no view as to what level or rate taxes should be set at or tax revenues accrued. That is a normative economic (or libertarian) issue, not a positive economic question, the proper scope for Austrian economics. On the normative positive distinction, see this:  Block, Walter E. and Peter Cappelli. 2013. “Debate over the normative positive distinction in economics.” Economics, Management, and Financial Markets 8(1), pp. 11-19

For libertarians, taxes should be as low as possible, since they are rights violations. Austrians can only say that the lowest taxes (whether rates or revenues) will lead to the most robust economies. Nor in the free market can we say that firm size will be small. Companies like McDonalds, Microsoft, Wal-Mart are very big, based mainly on market activity, not crony capitalism. However, Murray Rothbard demonstrates in Man, Economy and State, under the heading of One Big Firm, that when a company gets very, very, very big, it will face problems similar to those faced by socialist planning bureaus.  Thus there is indeed a limit to firm size, but, still, they can be very large under laissez-faire capitalism.

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Question #16 Animal rights

If you believe we have the right to kill and enslave chimpanzees because their intelligence level is 10% that of humans, then you must also believe that if we encounter aliens that are 10 times more intelligent than us, they then have the right to kill and enslave humans.

Response #16

My response to your animal challenge is that we Rothbardian libertarians do not maintain that it is a matter of percentages. If we did, we would be vulnerable to your objection. Instead, it is our view that as long as an animal can petition for its rights, articulate them, promise to respect our rights and actually do so, then it would be a rights-bearing creature. Dolphins, apes, cannot do this. But, we could do so to superior alien beings. Thus, they should respect our rights. Think in terms of a threshold, not a percentage in terms of ability.

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This one I farmed out to my friend, colleague, debating partner and many time co author Laura Davidson.  I am delighted to report that this response of hers converted the questioner to the one true “faith” on this matter: fractional reserve banking is illicit

Question #17 Fractional reserve banking

“A bank sells banknotes with a face value of $1 for $2 of gold. Bob buys one note. The bank keeps $1 in a vault as promised and loans the $1 profit out. A while later, Bob returns and redeems his note with a face value of $1, but the bank teller gives him $2 instead. At first people wouldn’t buy banknotes from the bank due to the high price, but after learning that the bank almost always gives an extra $1 upon redemption, they start to buy banknotes. No gold is owned by two or more people at a time, although we have a de facto fractional reserve bank.”

Response #17

If both parties agree to this arrangement, then one way of looking at this is to say that the $1 note is like a lottery ticket, except the determinant of whether or not there is a payout is not some class-probability-driven event like the throw of a dice, but rather the non-occurrence of a bank run, for which the probability is not calculable. i.e. it is dependent on case probability. There’s nothing unethical about gambling on the outcome of events driven by case probability, like a football game, for example. But one has to ask why anyone would want to take this bet with the bank, given that the payout is only at par? If enough people take the deal, and assuming they’re not stupid or crazy, it can only be because they become convinced that it isn’t a bet at all, but rather a certainty or near-certainty that the bank will pay. And this is problematic in my opinion. Because then it means that their expectation is that this note, for which they paid $2, is not a lottery ticket at all, but rather represents a claim to $2. And moreover, if they always expect, or nearly always expect, the $2 to be paid at any time of their choosing, then ipso facto it means that it represents a demand deposit for $2, regardless of how the contractual arrangement is worded.

One might argue that if the bank pays interest, then this means the contract represents a true bet. But this argument isn’t good enough. This is because the outcome of the “bet” is dependent on the takers of the bet believing there won’t be a bank run. Which means any buyer of the note believes other people reason that $2 (plus interest) will always be there for them. Put another way, the buyer of the note doesn’t think other people think it is a gamble, and therefore he doesn’t either. Therefore, for all intents and purposes, it is on-demand for him, and for everyone else.

One final point I would add. Money does not “circulate.” It is always held in someone’s account. At any given time, money held in an account is either about to be spent or held in reserve. A person’s preference scales in this regard — i.e. their demand to hold money or to supply money — is dependent on what they believe they have in their money stock. This is one reason why FRB is so pernicious.

“I would like to ask the standard fractional reserve bank question to you, since Walter hasn’t been able to convince me maybe you will be able to.

Follow up to question #17:

What is wrong with a bank issuing a note, only partially backed, if it is stated so on the note.

Imagine the following text on a 10% backed note. WARNING, 10% FRACTIONAL RESERVE, POSSIBILITY OF NON-REDEEMABILITY USE AND TRUST AT YOUR OWN RISK”

Follow up response #17:

I think this is precisely the same kind of issue you raised earlier. Assuming people would actually use this as money (and wouldn’t discount the note to 10% of its supposed face value) it’s kind of like a lottery ticket, except the chances of winning (actually losing) are determined by what the other “lottery” ticket holders are thinking. It relies upon the fact that any one holder (depositor) believes that other depositors believe the money is perfectly secure, and there won’t be a run on the bank. But if people really do believe this, then clearly the “warning” isn’t working. The money is being treated as if it were “on demand” and perfectly secure, which it isn’t.

Isn’t that a problem with the patrons of the bank not the bank itself? If I sell cigarettes that state they are deadly and everyone ignore the warning I’m not at fault.

The question to ask is, what does the bank want its customers to think? Do they want them to think the notes are worth 10% of their face value? No. It wants people to think the notes can be used as money at full face value. And if it is successful in this regard, and people start to believe they really are worth their face value, then 90% of those notes have duplicate property titles. Whether the bank puts a warning on the notes or not, the ultimate goal of the bank — their intent — is to create a situation that violates the natural law. You can say the people are gullible, and therefore at fault, but doesn’t the bank bear the responsibility for having created the situation in the first place? With cigarettes, it’s like a simple roll of the dice. Maybe you get lung cancer, maybe not. But assuming you live — which presumably the cigarette company wants — their intent is not to create a situation that violates any law, natural or otherwise.

I think you’ve convinced me, let me dwell on it for a few days.