Break time is over

Sorry guys but I did make an unannounced break. This does not mean that I haven’t been keeping track in what has been going on in the blogosphere, especially when the ones I tend to view as personal favorites. And also this of course does not mean that I took a break on economics or political science.

I finished reading His Excellency: George Washington (2004) by Joseph Ellis, The Age of Turbulence (2007) by Alan Greenspan, and book 1 of the Wealth of Nations (2003 [1776]) by Adam Smith a couple of weeks ago.

Ellis’ book on Washington was a decent read for me. I actually did not know much of Washington, so his book was decent for me because it was a quick and easy read. But I did get the feeling that it was too quick of a read, and thus, left a lot out of what one would expect in a standard biography. I think I will have to read Ron Chernow’s book for a more detailed account of the life of Washington.

Greenspan’s book is an autobiography in where he discusses mostly his work life. I’ll be quite frank, I picked up Greenspan’s book thinking he is a “know-it-all” and ended up thinking the same thing. It is hard to find Greenspan admitting to error. Though, if one can ignore his ego, this book has some interesting things. He discusses his conflict with Bush Sr. regarding inflation (2007: 113), his admiration towards Nixon and Clinton, calling them the smartest presidents so far (2007: 58; 144), and his theory of economics, which is generally covered from chapter 12 to 25, highly appealing to the view of markets as self correcting and regarding Ayn Rand (2007: 40-1), Adam Smith (2007: 260-6), and Joseph Schumpeter (2007: 48) as main influences.

A quick note on Smith book 1. Just because he introduces the concept of the division of labor and from there shows how the market determines prices and wages without mentioning government’s role does not mean that he considers government irrelevant in economic concerns. He is clearly trying to introduce concepts from an elementary level and working his way to a more complicated level as the read goes on. Book 1 basically goes over a detailed account of the division of labor, since the division of labor is highly stressed in economics, there is not much to learn from book 1 if one is already familiar to the concept.

There are three books which I am currently reading: The Theory of the Leisure Class (1899) by Thorstein Veblen, Alexander Hamilton (2004) by Ron Chernow, and The Federalist Papers by Alexander Hamilton, James Madison, and John Jay.

While I am sure that I can benefit from Veblen’s book, I am somewhat skeptical of its thesis, which revolves around the study that individuals tend to purchase items not necessarily for the need of an item but to one’s self look higher up in society. So, for example, instead of buying a set of X, many tend to buy a more expensive set of X even though the ‘utility’ would remain the same. People tend to buy expensive items to ‘show off’ to society of their class. Thus, we have grown to a society that does not necessarily produce items for need and thus increase utility but instead produce items simply to show off and thus ignore the adding on of utility in the face of looking nice.

I do not really see a problem with this, why does Veblen call it conspicuous consumption, I do not know, though please note that I only have read one chapter of the book. But does Veblen vision a society where people wear the same clothes, have houses that look the same and have the same appliances, have the exact same cars, etc? It almost seems like Veblen is criticizing the creative part of capitalism, which I can only see as an advantage to society. Also Veblen criticizes specific activities as a disadvantage since there is some activity that we perform that does not seem to go towards earning a living, he calls this conspicuous leisure. It seems to Veblen to be a problem that a carpenter to learn philosophy, since the subject would probably not contribute to his job as a carpenter. So not only does Veblen theory seems to vision a society with similar goods, but also visions a society that limits one to study liberal arts such as fine arts or philosophy. So this, so far, only seems to me that Veblen sees a problem with the creative aspect of society, what that problem is, I do not know, since I have not read too much of his book.

Chernow’s book on Hamilton is a grand book so far. I am currently on page 320 and I can not seem to put it down. If I was to describe his reason to write such a book it would be to show that Hamilton is a great man AND a great American, contra to what Woodrow Wilson claimed* (Chernow 2004: 3). In fact, it is shown that Hamilton did everything in his power in trying to become both. He was a supporter of the Boston Tea Party protest, a fierce early Revolutionary writer that made some harsh criticisms towards Britain, a Revolutionary soldier, captain, then favorite aide to Washington (which then he was promoted to Lt. Colonel), a supporter of the Constitution (he wrote the majority of the Federalist Papers, which were papers to convince people to support the Constitution). The only problem I seem to have in this book is that Chernow often claims that Hamilton is fighting for a democratic state, or has a democratic appeal. I think Chernow’s book refutes Chernow in this claim. Hamilton was clearly one who was skeptical of having all people vote, since there are many who do not have the political knowledge to make such an opinion. Obviously, Hamilton visioned a Republic in which only a selected crowd was put to vote and influence important changes in government. In Hamilton’s view, the selected crowd would be those who have the knowledge of affairs, not necessarily those who have a certain amount of wealth. Generally, Hamilton is seen as an aristocrat from his critics, but Chernow shows that this seems like a strange label to put on Hamilton, since he was born poor, criticized the British aristocracy, and was against slavery (and activity promoted abolition). I can only imagine that Chernow would conclude the book by saying that Hamilton seems to be the founding father who set in stone the environment in which made capitalism possible.

* Wilson claimed that Hamilton was “a very great man, but not a great American.”

I’ll update my References later, since I do not have all of my books on me

References

Chernow, Ron. 2004. Alexander Hamilton. New York:The Penguin Press.

Ellis, Joseph J. 2004. His Excellency: George Washington. New York: Knopf.

Greenspan, Alan. 2007. The Age of Turbulence. New York: Penguin Group.

Hamilton, Alexander, John Jay, and James Madison. [1787] The Federalist Papers. New York: The Modern Library

Smith, Adam. 2003 [1776]. The Wealth of Nations. New York: Bantam Dell.

Veblen, Thorstein. 1934 [1899]. The Theory of the Leisure Class. New York: The Modern Library.

Woods -v- Keiser: A Comment

I, for one, was not aware of the debate between Max Keiser and Tom Woods, if so I would have commented on this a long time ago. But Keiser makes an interesting point by saying that Austrians have moved further from the Mengerian vision, accusing Mises as the person who first started this separation. Keep in mind though that this is a debate of views on political economy where political views are worth considering. Woods makes the assertion that private individuals take care of property better than government officials, and assumes Menger supports this, and he asks Keiser for a Menger source to dispute this assertion.

Well if we are talking about poltical economy here, given we are talking about what Menger advocated in government policy -vs- what ‘Misesian’ Austrians (and also presumably the Rothbardian Austrians too) advocate in policy, I have to say, there is a difference… how big of difference, I dont know, this is totally subjective so I leave it up to you to decide how big of difference this was.

1) First, it is clear that in Menger’s 1909 article “Geld”, Menger called for government to be the sole supplier of coinage.In 2002 this article was translated by Leland Yeager and Erich Streissler and put in the book Carl Menger and the Evolution of Payments Systems: From Barter to Electronic Money*. Here is Menger:

Like other social institutions, the institution of intermediaries of exchange, which serve the common good in the fullest sense of the term, may, as I shall explain later, emerge or be prompted, but also impeded, in its automatic development by the influence of authority (for example, public or religious) and especially by legislation. This manner of emergence of media of exchange, however, is neither the only nor the earliest one. Here, a relation exits similar to that between statute law and common law: media of exchange originally emerged and eventually, through progressive imitation, became generally used not by way of law or agreement but by way of custom, that is, through similar actions, corresponding to similar subjective impulses and similar intellectual progress, of individuals living together in society (as the unreflective result of specific individual strivings of the members of society) – a circumstance which subsequently, as with other institutions that arose in like manner, does not rule out, of course, their being established or influenced by government.

Here we at least see that the automatic system, which is spontaneous order, is not so absolute to Menger for it does not make its further establishment to be influenced by government. Menger hints that his explanation goes further later in the article, and indeed it does.

But experiences on the markets of those peoples who, up to most recent times, had not yet achieved an orderly system of coins show us how inadequately the disadvantages inherent in the circulation of uncoined metals were overcome by the above automatic development. The test of weight and especially of fineness by the assayers active on these markets prove unreliable and, seeing how easily the stamps of these functionaries may be counterfeited, have to be repeated, as a rule, with every transaction, a circumstance that make payments highly time-consuming and costly.

This was seriously a disadvantage to private coinage according to Menger, thus Menger might be hinting something here…what was the solution? Maybe a government monopoly on coinage to prevent these disadvantages… Menger states further, which I thought it was a great quote and shows that Menger saw a limitation to spontaneous order, ” An advanced economy’s demands on the monetary system are not to be met by a system such as develops automatically.” In the same page:

Above all, wide experience has shown that coining the monetary metals, as soon as and insofar as this proves necessary for the economy, makes government intervention more and more inevitable. The costly supplying of the markets with coined metals appropriate (in kind and quantity) to the requirements of the economy is certainly in the interest of both individuals and the economy as a whole; but, as experience shows, it cannot be expected from a country’s individual economic units, which are under the pressure of competition and are dependent on and oriented toward profit. Accordingly, even in recent times, private coinage have met the general requirements of trade only imperfectly.

So according to Menger, as the coinage process goes on, it makes government more involved, he even criticizes private individuals to supply coinage because they are dependent on profit! It is quite clear that the whole point of his article “Geld”, that because of the disadvantages of the private supply coinage system, that government only must supply coinage.

2) Milton Friedman has this story of Mises how at the first Mont Pelerin meeting, while discussing progressive income taxes and some giving potential justification, Mises stood up and said, “You’re all a bunch of socialists.” I don’t know if this is true or not, but if it is, then Mises indirectly called Carl Menger a socialist too, given that he was a supporter of a progressive income tax. In “Transcript of Finanz-Wissenschaft von Prof. Carl Menger” translated by Takeshi Mizobata:

If one says that only those people who can pay the money can send their children to school, it is diametrically opposed to the essence of the state. There are many people in the country who cannot pay this tax… With increase in income, one feels less sacrifice, even if the loss is the same amount. For this reason, we must not tax with the same proportion; but with increase in income, the percent rate must be also increased. This means that the percent rate must be progressive as in income tax

3) Lastly, we can look at Carl Menger’s Lectures to Crown Prince Rudolf of Austria, in which Hulsmann looks at it as a strong laissez faire piece in his book Mises:The Last Knight of Liberalism, Menger mentions things such as deforestation regulation even when the forest was on private property (p 131-3), workers’ condition regulation (in fear that if nothing was done to provide this regulation, workers would revolt)(p 127), and some public works (p 121).

I think one can also look up Menger’s second edition to Principles as further differences between his writings and modern Austrians, but I have just started to do research on Menger’s second edition and I do not feel confident in quoting from it yet. Lord Keynes is quite right when he states that Menger needs to be rescued from the Austrians and I think this was Keiser’s general point too. Though I disagree with Keiser in that since there is differences between  Menger and modern Austrians, that they aren’t ‘true’ Austrians. This reminds me of a recent debate where one makes the claim that if we don’t strictly follow the praxeological method, as advocated by Mises, they aren’t Austrians**. Jon Catalan responds quite well in that Mises is not the ‘end all, be all’ of Austrian economics. The same is true of Menger, he is not the ‘end all, be all’ of Austrian economics, but nevertheless, what Menger thought of policy is still worth considering and his works are still worth to research to find out what Menger’s vision was. While I admit, generally speaking, Menger did think private individuals handled property better than government, I think it is safe to say that Menger thought there was exceptions to this, and important ones too if we wanted to see the economy progress.

* I have the book and have read the article but I do not have it with me at the moment. Though this paper has a lot of citations from the book which I cite from, given that I don’t have the book atm. I might update this later on to provide more citations.

** This is NOT to say that praxeology is irrelevant to the Austrian framework.

Carl Menger, Founder of the Austrian School, A Socialist!

At least according to this person after I ask if Menger advocating specific regulation makes him socialist:

Also, I will say that such policies are certainly socialist. So, if Menger did indeed make such statements, then he certainly was recommending socialist policies in such an instance. However, that would be a separate issue from Menger’s work on theory and methodology.

Seriously?! This is simply clear ignorance of an Internet Austrian. Sure the policies advocated are separate from theory, but it is clear that Menger’s theory is one that doesn’t see markets as pure spontaneous order, indeed he notes several times that as great as the automatic system is (spontaneous order), there are indeed limits, and development must be expanded via government. Most Austrians only see the spontaneous order part of Menger and completely forget to flip the other side of the coin, for it is a picture they refuse to accept. The same commenter questions a source in which provides a lot of Menger’s views on policy:

In any case, the source in question is the notes of Crown Prince Rudolf from when Menger was one of his tutors. This is pretty shoddy, because we don’t know if these are the words of Menger, or of Rudolf, nor do we know that these aren’t the words of another of Rudolf’s tutors. In fact, the entire collection is from a classical perspective, and is in fact very Smithian. Further, there is no mention of Menger’s subjectivity, monetary theory, or any of his methodological work at all. That seems a bit strange, doesn’t it? Menger could very well have been instructed to teach Rudolf from a particular perspective. Or, none of those words could be Menger’s. It could be Rudolf’s ode to Smith.

This is really a bad critique on Rudolf’s notes. As noted in these series of lectures, while Rudolf did write the majority of these lectures by memory, Menger revised and corrected the lectures, in other words, these are the final revised lectures. So misrepresentation of Menger’s views is of (very) low possibility. Actually as Oscar Jaszi notes in his The Dissolution of the Habsburg Monarchy (published in 1929 btw) , the lectures by Menger and his student were used to some extent to dismantle the aristocracy in Austria (p 152).

Thus, Menger’s appreciation for Smith, advocacy of forest regulations (p 131-3), government to improve workers’ conditions (p 127), and government to build roads, schools, railroads, canals (p 121) were Menger’s views, this is not a “shoddy” claim, unless one is going to take the position that Menger sucks at revising and correcting his student’s notes on lectures by Menger himself.

This isn’t the only source of Menger’s policy views. In his article “Geld” (the latest edition is the one of 1909), Menger makes it clear that he supports government monopoly of coinage.

In Transcript of Finanz-Wissenschaft von Prof. Carl Menger translated by Mizobata, Menger claims to advocate progressive income tax (p 52).

Why didn’t the lectures have Mengerian issues like subjectivism, I don’t know and I am not going to speculate a reason. The point though is that there is evidence to show Menger’s views and the validity of the lectures. Menger truly was an ideal figure for classical liberalism, his lectures show the importance to stress the limitations of government, while still demonstrating a role for the state, one that goes beyond providing security, courts, and laws. If others want to interpret this as socialistic, go ahead, I am not going to get myself involved into a semantics debate too heavily. I just don’t get why one advocating for an active role of government makes one a socialist, maybe I will never get it, given that I have probably been brainwashed by the socialistic public school system!

How Many Economists Can Say They Read Adam Smith?

I have always wondered about this. Adam Smith is by far one of the most popular economists in history. But who has actually read Smith?

We are told that Smith was the first, or at least the one that popularized, the view that self interest, sometimes interpreted as selfishness leads to benefiting the common good. This is shown usually by referring to this passage:

…every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good.

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.

This, of course, has some truth… Entrepreneurs seeking for profit, and does this by producing goods and employment does indeed benefit society, but should we really take what Smith states about self interest as absolute? Gavin Kennedy, a person who takes great interest in understanding Smith, thinks not, and he is right to take such a claim. Smith, for example, thought that some merchants shouted for protectionist polices only to benefit themselves, this is to say, they wanted to reduce competition and also increase their prices . Kennedy goes on in another post to defend what self interest actually means to Smith. Unlike the standard interpretation that self interest = greed or selfishness, Kennedy points out that Smith’s notion of self interest has a very moral substance to it. Self interest is obviously important, and quite obvious to see in everyday life, but if we wish to cooperate in society, we must also keep in mind the interests of others. Or as Kennedy states, ” [T]he nature of each bargain is summed by the expression “Give me this that I want and you shall have that which you want”. (In modern negotiating, I express this as “IF you do this for me, THEN I shall do that for you”).” This is quite a radical view. We are given the invisible hand metaphor and self interest examples of Smith as proof that Smith was this liberal fighting for hands free government markets! Kennedy blames the standard invisible hand metaphor as something that Paul Samuelson popularized.

The blame shouldn’t all be going to Samuelson though. Carl Menger, the founder of the Austrian School, also fought in favor for Smith against the standard government free interpretation of Smith that was popular in Germany at the time. The German Historical School, with the exception of Karl Knies, did not particularly like Smith, for they held that Smith was an economist fighting for laissez faire economics, an economist fighting for the interest of the rich over the worker, etc. So the German Historical School, like Samuelson, also misinterprets Smith. Menger wrote an article with a purpose to clear up misconceptions that the historical school had about Smith*. Here is Menger:

In all cases of conflict of interest between the rich and the poor, A. Smith stands without exception on the side of the latter. I use the phrase ‘ without exception’ very carefully. There are no places in The Wealth of Nations where A. Smith represents the interest of the rich and powerful against the poor and weak. While A. Smith quite positively recognizes the free initiative of individualism in economic matters, he supports in all the cases state intervention where the matter relates to the abolition of laws, and the application thereof, that suppress the poor and weak for the sake of the rich and powerful.

It is not true, indeed it is a forgery of history, to say that A. Smith was a dogmatic advocate of the ‘ laisser faire, laisser aller’ principle and that he believed that the completely free play of individual interests would lead to the economic cure of society. In various parts of his work, he admits that the efforts and interests of individuals and entire social classes stand in direct opposition to public interests. Not only did he accept state intervention in most cases, but he believed it to be an order of humanity considering the public welfare.

One can find the similarities between Kennedy’s and Menger’s interpretation of Smith. the biggest one being that Smith’s concept of self interest is incompatible with interpretations of greed or selfishness.

This, once again, raises questions on how radical of a liberal Menger was. People that study Menger’s life realize that he sees Smith has a big influence, probably his biggest influence. His concept of spontaneous order (which is also misinterpreted by a lot of Austrians) is arguably the same as Smith’s concept of the invisible hand.

Personally, I have always been skeptical of the standard interpretation of what the invisible hand implies, especially after reading Vaughn’s book Austrian economics in America

Nevertheless, classical liberalism, at least back then, saw an active state indeed. Modern libertarians need to realize this. They seem to only be concerned about what things classical liberals criticized the State for, and yet forget to look at the other side of the coin. In other words, classical liberals went far beyond just looking at a state to provide basic public needs (roads, security, law) and advocated interventions, which modern libertarians would look at as being anti market.

* I use this paper for passages

A Passage By Carl Menger on The State

“Why Mises (and not Hayek)?” by Hoppe is probably one of the worst articles at Mises.org. The whole point of the article is to show that Mises is above Hayek because of his views on the State. Mises is seen as the ‘true’ classical liberal, while Hayek is seen as a social democrat.

First off, I really don’t get why advocating public works beyond basic defense, court systems, etc. makes one a social democrat. Keep in mind that Hoppe uses some of Hayek’s Constitution of Liberty to ‘prove’ that Hayek was a social democrat, even though Mises thought the same book was a work that resulted from Hayek’s studies in the philosophy of freedom, and said nothing negative about it. Second, Mises thought the State as a necessary institution, and one that goes beyond providing basic defense.

But I really don’t want to continue on criticizing Hoppe’s horrible article. The title of this post implies a passage by Menger on the State, one that I haven’t provided yet. So here is Menger from one of his lectures* :

Important roads, railways and canals that improve the general well-being by improving traffic and communication are special examples of this kind of enterprise and lasting evidence of the concern of the state for the well-being of its parts and thereby its own power; at the same time, they are/constitute major prerequisites for the prosperity of a modern state. The building of schools, too, is a suitable field for government to prove its concern with the success of its citizens’ economic efforts. (p 121)

Are we to assume, by using the same Hoppeian logic, that Menger, the founder of the Austrian school, is a social democrat too?

The truth of the matter is is that while classical liberalism may critique certain aspects of the State, this does not necessarily mean that all classical liberals are critical of all it’s interventions, in fact, as Menger states, some it’s interventions “constitute major prerequisites for the prosperity of a modern state.” a modern state in which Menger never wanted to see its abolition in. Keep in mind that later on in the lecture, he provides his justification for intervention to prevent deforestation (p 131-133) and also laws to improve worker conditions (in fear that if workers weren’t happy in the job they are in, that this would result into a communist type rebellion) (p 127).

So in light of the debate between Kuehn and Murphy over what a ‘free market’ label entails, was Menger a free market economist, given what he states about the State and it’s role in society?

*Carl Menger’s Lectures to Crown Prince Rudolf of Austria

My Views on Government

I have received a couple emails from different people criticizing me, for lack of a better term, because I fail to give a nice clean version of what I think Government should do as far as policy is concerned. Do I believe in small government, big, free trade or protectionism, do I believe in social programs etc. Let me first start by saying that I have not really blogged about this kind of stuff because explaining government policy is not my main concern as a studying economics student. At the moment, I am much more interested in ‘how’ to think about economics than ‘what’ to think, this is to say, I am interested in methodological issues at the moment and I want to expand those ideas to critique more of the neoclassical economics that we see today. Another reason why I have refrained from explicitly expressing my views on the topic is that I only generally know what I think government should do. I really do not have an ideal amount of government I want, and ideally, what programs I see my ideal government having. But because I have been asked to say something about my thoughts on government, I will express my general views on government.

First off, I believe a government is necessary. I am not an anarchist or an anti-statist and I do think it is really hard to justify that position.  Sure, they can point to certain points in history of societies where they thought it was anarchist with some capitalistic aspects (and we can see some of the failures, even in their own literature (look at the conclusion of ‘Not So Wild Wild West‘)) , but what of modern times where we have complex financial systems? It seems like these anarcho types ignore this capitalistic aspect of the economy when theorizing their anarcho society. I leave what I have to say about anarcho types at this, for it is not the purpose of this post to critique anarcho types.

So what policies do I believe a government should pursue? I do agree that in a recession, a government needs to spend and decrease taxes. How much or how little of each, I do not know. At the same time though, I do think in all times, whether recession or  not, to cut inefficient government programs. I believe in this because I do not believe in creating programs because the program in itself creates jobs, I believe in programs because of the possibility that it will benefit society.

For example, one of my greatest influences is my grandfather, who worked for social security for decades. During the Clinton administration, there was some type of bill that basically forced government programs to hire certain unemployed people, like low income people or former Armed Forces people. Well many of those new people he hired made his social security office more inefficient because most of these people did not do anything, and my grandpa, as a head, couldn’t fire these people, as it was very difficult to fire people that got jobs because of this bill. The only thing he could do was to tell these people to stay out of the way and stay in their cubicle. So while we did increase employment here, these newly employed made the office less efficient and the end result was a waste of government money because they were paying these people for doing nothing! This is wrong, in my opinion and we cannot just increase the size of social programs because we need to increase employment.

Another example of absurd social program polices is section 8 housing, especially in Dallas, which is where I am from. I was raised in what I consider lower middle class. I lived ok but I lived in a one bedroom/one study apartment with my mother in Dallas. I really cannot say we lived paycheck to paycheck, since we had some money to spare for some entertainment on occasions, but we lived close to it. What always angered me though were the section 8 houses a few blocks down.  Most, if not all, these places had relatively new renovations and the spaces were huge (in Dallas there are several two story houses/town homes that are part of section 8). This to me, is absurd. Here is my mother and me, both working and me going to school too, and not part of social programs where the government paid certain stuff for us (aside for my Pell Grant), and we lived in a one bedroom apartment, while there are people across the street that may not have jobs (highly possible actually), are not tax payers, and just brings property value  down and crime up and at the same time, get nice housing paid for by government.

I am not saying I consider these programs to be illegitimate, but that there needs to be some restructuring in these programs. Take the section 8 housing for example,… do these people really need two story houses and newly renovated equipment, or just a basic place to live? Benefits shouldn’t increase because of lack of responsibility, this is to say for example, one should receive a bigger home or more money because they up’d their family size by one. Housing provided by the government is not so poor people can live in luxury, it is so they can have basic shelter.

How big would I like to see government? I don’t know. I generally see myself as a classical liberal, thus implying that I believe in a limited government but how limited, I do not know. Obviously, I do not want a government so limited that it cannot engage in policies to help in recession or the marketplace. That said though, I put the same amount  of uncertainty to the government as I do in markets. Post keynesians, at least most of them, agree that governments reduce uncertainty, but I do not see that as true, at least in a theoretical perspective. If we look at the markets, we both can agree that there is ontological uncertainty and is non-ergodic. But to me anyway, this applies to governments as well, thus they both have similar problems because of reality. And thus, I do not see how governments limit uncertainty, especially in a world of change. The post Keynesians essentially fall into the same trap as (some) Austrians when they claim that increase of knowledge = less uncertainty. (more on this by a ‘post’ austrian, here and here )

One thing I completely agree with libertarians is how government should treat social issues. Stuff like marriage, what kind of dog breed you can own, what you can or cannot see on the internet, abortions, requirements for adoptions, etc. are stuff that government shouldn’t get involved in. And if there are things that people do not like about the government, they should have the right to protest about it and practice civil disobedience (though there can be limits on civil disobedience. )

So hopefully by this, at least some of you will get where I am coming from. Again, I tried not to put too much detail into this because I do not really have a set in stone ideal picture of government, nor is it currently something that I am putting a lot of time into because as I said, I want to discuss methodological issues than policies, this of course is not to say that I wont do research on policies, it is just that I wont do it at this time.

-Isaac Marmolejo

Government Working Around It’s Own System

Not too long ago, the Department of Justice (DoJ) sued a 90+ year old lady for failing to report the sale of a product (in this case suicide kits) in her taxes. Keep in mind the DoJ has made it clear that they are not suing her because of the sale of the suicide kits. But I think it is clear that the main reason that the DoJ sued this lady is because she is selling something that the government feels wrong to sell. The police department in San Diego know of at least four people in the last year that have committed suicide using these kits and one of them happens to be a 19 year old kid. This at least provides the incentive for government officials to get this product off the streets, even though it is not illegal to sell suicide kits.

But then one might say to me so far, “Well you are just being suspicious of the government. Clearly, she has done something wrong (not reporting the sales in her taxes) and she has to pay for it. The government just wants the taxes, nothing more, nothing less.” And I would agree with this criticism, maybe the government only wants the tax money and could care less about the product she is selling, if it wasn’t for the court’s ruling on this case. The court’s ruling states that she has to work for the IRS to pay back her debt, and she has to agree that she would not sell these suicide kits again. The first part of the ruling is pretty common in cases like these, ‘ You fail to pay your taxes, so you have to work to pay back the debt you owe us,’ but the second part is clearly not, ‘You failed to report the sale of suicide kits in your taxes, so you must agree to never sell these suicide kits ever again!’ Clearly the government wanted these suicide kits off the streets, and since there is no law restricting people to sell such objects, they have to work around the system. Wow, the system working around its own system, how ironic.

This is even more absurd if we were to substitute other objects instead of suicide kits For example:

  • ‘You failed to report the sale of used televisions in your store, therefore you must pay back your debt, and agree to never sell used televisions again’
  • You failed to report the sale of homemade candles at this swap meet, therefore you must pay back your debt, and agree to never sell your candles again!’

This is an obvious case of the government breaking its own laws. Don’t get me wrong, I want a government, I believe that in order to have a stable decent society, the society must have a government (which I know my ideas of the government differs from those of other libertarians, maybe it is more correct to call me a classical liberal), but I want a government that knows its laws and is consistent in how it looks after its society.

- Isaac Marmolejo