Liberty & Power: Group Blog
Today the Gulf of Mexico crisis is helping to illuminate it.
An unnecessary and usually unexamined assumption by most classical liberals is that voluntary contractual processes generate patterns of resource allocation that reflect individual preferences. It is this belief that underlies a frequent argument, particularly by libertarians, that government is always inferior to the market in doing whatever the market can be said to do. Government, even democratic government, is supposedly intrinsically inferior to markets in reflecting and facilitating our desires.
This frequently encountered classical liberal belief stands in theoretical and practical tension with another even more basic argument by classical liberals: that feedback processes generated in spontaneous orders facilitate cooperation and coordination by simplifying the information people need to act effectively to attain their own goals. Prices make possible far more complex chains of cooperation than would otherwise be possible. Absent prices, economies would fall back on barter, and absent market generated prices the feedback signals economies generate would fail to coordinate different plans. This insight is central to classical liberals' devastating critique of socialist planning.
The Gulf crisis shows us why assuming these two arguments are compatible is wrong. The second insight is vitally true and the first is disastrously false.
Any simplification eliminates information. A useful simplification does not eliminate vital information. With market prices, all I need to know in making a transaction is its money cost and what I expect to gain from it. At the individual level this is often true, and when it is not true, it usually causes only limited difficulties that can be rectified by product differentiation (although too much differentiation eliminates much of the utility of prices).
As such, most prices reflect instrumental values: something’s value in terms of other things. As individuals we weigh instrumental value with non-instrumental values. My house may also be my home that I love, and so is “not for sale.” I may buy locally and not from a chain because I value a vital local community in which to live over a few dollars saved by buying elsewhere. Values like living in a prosperous community and having a home are difficult to express in money terms. When we exchange these kinds of values for money (someone offers a big enough inducement to sell my home) there is always a sense of loss that would not be the case if it had only instrumental value. For example, I grew up in this home, inherited it from my parents, and it is a storehouse of cherished memories. But the price I am offered is too good to pass up, perhaps because I need the money for medical bills.
Corporations are created to serve only market values, to generate money income for their shareholders. No other values matter. A CEO who sacrificed share value to preserve any other value would risk a hostile takeover. Thus, for a publicly held corporation EVERYTHING is instrumental, and ultimately is valued only in terms of the money it can generate. Were it a human being, a corporation would be appropriately classified as a sociopath: it is unable to sympathize with others, it has no conscience. Any damage it causes to others is evaluated only in terms of what it costs the company. It the damage brings in more money than the corporation has to pay out in recompense to its destructiveness to others, then so be it.
BP’s actions in the Gulf of Mexico are in perfect accord with corporate sociopathy, as this short talk by Kindra Arnesan, a Louisiana fisherman’s wife, makes crystal clear. http://www.youtube.com/watch?v=jkYJDI8pK9Y Assuming most of my readers will not speak with an accent similar to hers, you will have to listen closely. It will be worth the effort. BP’s actions are entirely in terms of saving money and whenever any more humane value intervenes, it is cast aside. As recent news from Massey Energy an Goldman Sachs indicates, BP is not along. We are dealing with systemic features of advanced market economies, not individual failings of bad managers.
The flaw in the usual classical liberal perspective is assuming that acting within systems of coordination has no impact on how our choices are translated into signals able to guide others in their plans. By translating our choices and their impact into prices, the market process enables them to help coordinate the exchange and production of instrumental values. This is a wonderful achievement.
But at the same time this makes non-instrumental values, the recognition of which are what makes us human, largely invisible except at the level of individual choice, where we take our own non-instrumental values into consideration when acting. When powerful organizations systemically unable to take non-instrumental values into consideration act on human beings, the results are inhuman, and when the organizations are powerful enough, ghastly.
Aeon J. Skoble
Jeffrey Rogers Hummel
I used that quotation in the Epilogue to Emancipating Slaves, Enslaving Free Men, with the following footnote:"I have been unable to find the source for this quotation attributed to John Emerich Edward Dalbert-Acton, 1st Baron, so it may be apocryphal. But if Acton did not actually say it, he should have. It is consistent with his thought and his other writings." I now have found a source that makes it highly unlikely that those were Acton's exact words but still leaves it somewhat uncertain whether he at some point made a similar reference to Rhadamanthus.
I initially found the quotation in an article by Murray Rothbard, who provided no supporting reference. Acton had said something related in his well-known correspondence with Bishop Mandell Creighton, which is also the source of Acton's oft-repeated maxim about power corrupting. Acton wrote with respect to the crimes of great men,"I would hang them higher than Haman, for reasons of quite obvious justice, still more, still higher, for the sake of historical science," but there is no reference to Rhadamanthus.
Only recently was I looking through the 1907 edition of Acton's Lectures on Modern History, edited by John Neville Figgis and Reginald Vere Laurence. Here is what the two editors write in their introduction about"Lord Acton as Professor" on p. iv:"For to Acton history was the master of political wisdom, not a pursuit but a passion, not a mere instrument but a holy calling, not Clio so much as Rhadamanthus, the avenger of innocent blood." So the reference to Rhadamanthus comes from them, although it is still possible that they are reporting on something Acton had previously said.
He makes me wonder if the man who told the Gestapo where Anne Frank was hiding also demanded better treatment from the Germans. This episode is telling, as it is plain America does harbor a robust minority of people who are more than willing to perform Stasi like functions for the parasitic political class.
May he rot in prison.
Click To Read The Bloomberg Article
David T. Beito
David T. Beito
Jane S. Shaw
Can anyone recommend a book that disputes claims that Roosevelt and Marshall deliberately withheld information about the pending attack from the Hawaii commanders? Roberta Wohlstetter's 1962 book is too old and Gordon Prange's book presumably does not include most of the information that Jimmy Carter de-classified in 1979. (Although At Dawn We Slept was published in 1982, Prange died in 1980 and two graduate students finished the book.)
Jeffrey Rogers Hummel
David Henderson comments here.
Charles W. Nuckolls
One sees the same thing in the United States today in our increasingly furtive efforts to breath life back into the American Dream -- a dream based on perpetual growth and unlimited, cheap fossil fuel. Of course it could be different. Americans could wake up to the fact that things can't go on like this forever. Or Obama could say, instead of merely hint, that peak oil is a matter of geophysics, not tax policy. Or, indeed, the Energy Deparment could announce that no combination of switch grass and used french-fry oil will ever come close to replacing the 20 million barrels of crude we use everyday.
But none of that will happen. And that is why I expect"revitilization" and ritual. In other words, what we are likely to see is the foredoomed but profoundly seductive attempt to make the physical world obey the desires of the majority of industrial humanity by means of ritual action. The Sarah Palin fans chanting “Drill, baby, drill,” as though drilling a hole in the ground magically obliged the Earth to put oil at the bottom of it, are taking tentative steps in that direction. So are the people who insist that we can keep on enjoying the trappings of the age of abundance if we only support a technology, or join a movement, or adopt an ideology, or – well, the list is already long, and it’s going to get much longer in the near future.
My guess is that we’ve got a couple of years at most before somebody puts the right ingredients together in the right way, and the first fully fledged revitalization movement begins attracting a mass following with its strident denunciations of the existing order of things and its promise of a bright future reached by what amounts to a sustained exercise in magic.
I’m not one to take on anybody over the subject of international law – I’m no expert – but I reserve the right to say that something disturbs the moral sense, and to follow the laws of" civilized" war that prohibits the assassination of the enemy’s political leadership is unjust and irrational. On this count I’m with W, Obama, and all the other bloodthirsty lunatics who have ruled America for the past half-century. While I disagree with their insatiable urge to meddle, bomb, and assassinate on a global scale, I am arguing my belief that their position on assassination is just, rational, and should be the primary tool of any nation at war.
Click To Read The Rest
Click To Read About the Exciting (Sort Of) World Cup!!!
I will be participating in an online discussion about the appropriate libertarian position on the 1964 Civil Rights Act as part of the Cato Unbound series. David Bernstein of George Mason University Law School has kicked it off with his essay here. My response will be posted Friday, followed by other responses to Bernstein from Jason Kuznicki of Cato and Jeffrey Miron of Harvard University. After that there will be a series of short comments by the participants, beginning with Bernstein's rebuttal.
It should be a lively discussion. So get started now.
The Left Version, of course, has been bombarding us for the past forty or fifty years mainly as a warning of imminent environmental catastrophe ― of near-term exhaustion of natural resources, terminal ruin of a hyper-polluted physical environment and, most recently, overheating of the earth’s atmosphere with countless attendant climatic disasters. Leftists who peddle this terrifying prospect seek to allay the threat by ceding totalitarian powers to government officials who in their copious wisdom will save the day, if only narrowly and at the cost of our liberties and our modern standard of living.
The Right Version has resided for decades more in the shadows cast by millenarians, goldbugs, and self-anointed financial gurus than in the bright media glow that has illuminated the leftists’ prophecies. Recently, however, many more people seem to have concluded that the only sane course is to forsake all hope for the continuation of socio-economic life as we have known it, and hence that preparation for a complete social and economic meltdown ― Greater-than-Great Depression, hyperinflation, dollar collapse ― obliges us to stock up on guns, ammo, gold, and a larder full of dried beans and other survivalist goodies.
It is interesting that although many people take an ominous forecast more or less seriously, they have embraced dramatically different conceptions of the nature of the impending doom. Are those who foresee the future so differently living in the same world? If so, how can they have come to such clashing conclusions about the events to come?
The answer, I believe, has to do with ideology, which I have long defined as a somewhat coherent, rather comprehensive belief system about social relations, noting that each such system has four distinct aspects: cognitive, moral, programmatic, and solidary. Ideologies permit people to understand, evaluate, and cope with a social world otherwise too vast and complicated to comprehend. If two persons embrace starkly different ideologies, they can easily arrive at starkly different visions of future developments, even when presented with the same information.
Can objective facts and established scientific theories cut through all of this ideological noise, substituting the pure, harmonious tones of truth for the cacophony of wild-eyed, mutually inconsistent ideologies? No, they cannot. In the determination of human beliefs, ideological outlooks and propensities have the power to override virtually any kind of inconsistent information or knowledge. Decades may pass, yet the Club of Rome remains as convinced as ever that environmental and natural-resource disasters are imminent. Stock markets may soar by multiples while confirmed “bears” never lose their faith that selling short is the road to financial paradise ― hedge-fund manager Michael Berger defrauded a multitude of trusting investors, not to mention tricking the government regulators, and drove his firm Manhattan Capital into bankruptcy because he could not surrender his bearish convictions even during a prolonged run-up in stock prices in the late 1990s.
So, the answer to my previous question is, yes, different sets of people in effect do live in different worlds, notwithstanding their physical coexistence on planet earth during extended time spans. And therefore you’ll have a devil of a time disabusing any of them of their cherished visions. Strange to say, many people fall in love even with their preferred brand of apocalypse. Doomster Paul Erlich might have lost his famous bet with Julian Simon, but he never “cried uncle.” As Ed Regis wrote in Wired:
A more perfect resolution of the Ehrlich-Simon debate could not be imagined. All of the former’s grim predictions had been decisively overturned by events. Ehrlich was wrong about higher natural resource prices, about “famines of unbelievable proportions” occurring by 1975, about “hundreds of millions of people starving to death” in the 1970s and ’80s, about the world “entering a genuine age of scarcity.”
In 1990, for his having promoted “greater public understanding of environmental problems,” Ehrlich received a MacArthur Foundation “genius” award.
And so it goes.
If you want to load up on gold, who am I to tell you that you’re making a bad bet? I don’t know what the price of gold, or anything else, will be in the future. (I also happen to believe that nobody else knows, or can know. Someone who knew the course of future prices could easily and quickly acquire the wealth of Croesus simply by making appropriate transactions in the futures markets.)
What I do know is that for thousands of years, some people have been telling their fellows that the end is near, and although some terrible things did happen from time to time, hardly ever did they prove to be as catastrophic as the prophets’ most foreboding warnings had foretold. The sky never rained blood, the oceans never boiled, the ground never rose up to crush squealing humanity between heaven and earth. Of course, as David Hume has taught us, this history is no guarantee that such an apocalypse won’t happen. Nevertheless, I am inclined to make my bets on the basis of a somewhat more temperate outlook.
David T. Beito
While she makes some valuable points about the role played by military contractors and waste in driving up costs, she could have said much about the giant elephant in the room: our world empire.