If we each have a boxed lunch with the same sandwich, chips, a pickle, and a cookie, why would we consider trading items? Perhaps I prefer chips and you prefer cookies. Maybe I’ll give you my cookie for your chips. Now both of us are happier with our lunches. This is one example of how exchange can make people better off even without increasing the total amount of wealth. Exchange helps correct mistakes in allocation and it makes everyone involved happier. Professor Michael C. Munger offers a few examples of how exchange can make people happier whether people have the same preferences or different preferences, the same stuff to start with or different stuff. The ability to make people better off by simple exchange may seem like magic, Munger says, but it’s just markets.
Markets are this amazing organic machine that sorts out what best fits where, how much do of what we need, how much each thing should cost and any other unknown we may have on an individual level.
This is because a market doesn’t need leadership or guidance or any form of planning or even creation or assembly of the market. It only requires participation. So long as there are enough parties that are willing to participate in exchange, the market will filter through all the information and coordinate the rest of the details. It sounds like magic, but it’s not. It’s logic.
This phenomenon is one of my favorite things to introduce to people who are knew to economics or free market theory. It totally blows their mind at first, almost to the point that they don’t believe it or even deny it.
Markets!
To the people who want to actively destroy government, I ask “Why turn to violence? Don’t even bother.” In the long run, every single government will inevitably destroy itself.
Yeah, you see, this is the same ‘historical inevitability’ argument that predicted capitalism will have ceased to exist thirty years ago.
The ability of the State to adapt to certain circumstances, to use force to protect itself from collapse, should be enough to drive you away from making these kinds of statements.
That’s because capitalism is the natural order of things. All else being equal, in the long run, humans always move towards laissez faire capitalism.
Capitalism being the natural order of things would be news to a lot of contemporary hunter-gatherer bands, as well as pretty much anyone living outside of Europe and North America until the 19th century. Capitalism being less than 300 years old, I think you’ll have a hard time justifying the statement “capitalism is the natural order of things.”
It’s also hard to explain physics to a caveman. Democracy is also a relatively new idea, if you prefer, we can all go back to being the slaves of ‘divine’ monarchs…
Progress does not depend on being understood by simpletons, thankfully.
I know your communist mind is much to simple to realize this but look at the three most predominant communist states; Russia, China, N. Korea. Russia learned long ago that it wasn’t working and it collapsed. China learned from Russia and is gradually migrating to capitalism and N. Korea is one of the worst shit holes on the planet.
Russia, China and North Korea have never once referred to themselves as communist. Ideologically, they may have once claimed to have been working toward bringing communism into existence, but none of them have been brazen enough to have claimed to have established communism at any point in time.
And a murderer doesn’t typically refer to themselves as such. Self recognition is of zero consequence. North Korea calls it’s self a “Democratic Republic”. All three are/were single-party communist states.
China, of course, learned nothing from Russia. The move toward market capitalism in China started in 1978, while markets were only reintroduced legally in Russia after the collapse of the USSR in 1991.
Because by 1978, the USSR was already failing. A complete black market had emerged within the state where the people would steal from factories and trade within communities. Essentially, the people, without the states participation or consent, were already migrating back towards a capitalistic market.
And thanks for acknowledging my previous point that all states, even those that are communist, will eventually evolve into laissez faire capitalism.
Nonetheless, as an anarchist-communist, I don’t find myself supporting the USSR, PRC or DPRK anyway. I don’t see them as communist, and I can’t imagine them as being able to bring communism into existence (the State being an autonomous institution with its own interests, namely, that of its own survival.) Your comment was just fucking ignorant, in multiple ways.
And anarcho-communist is calling me ignorant. Interesting. Send me half the money in your possession and then I’ll be willing to talk to you about the legitimacy of anarcho-communism. Until then, keep on banging your head on a wall.
To the people who want to actively destroy government, I ask “Why turn to violence? Don’t even bother.” In the long run, every single government will inevitably destroy itself.
to the people who want to actively destroy government im like okay but u wont also please go away
‘every single government will inevitably destroy itself’ lmao what a bold and weird claim to make
it’s a good statement, except that why should people have to wait for corruption and greed and repression to collapse on itself when we could cause its immediate collapse and be free from all those years of fascism and instability?
Why? Because using force is not the answer, especially when it’s the use of force that you are fighting.
A stateless society will be unstable and even unattainable unless the people are ready for it. Until the people are ready for it, you can’t force them to live in a stateless society simply because it fits your preferences, just like you don’t think they can force you to live under an oppressive state.
But the beauty of it is that everything since civilization first formed has been a movement from monarchy and absolute control by the few to less control or decentralized control and so long as the trend continues, the end result will be statelessness.
So why let it continue? Because that’s the natural order of things. You can’t force natures hand. Eliminate the state today and tomorrow you have chaos, not anarchy.
The people simply aren’t ready. This is obvious. They still believe they need government, they need to be taken care of. Until the people realize that they are capable themselves and their confidence grows, you can’t convince them to shed the state. Eliminate one state and another grows in its place.
But the goal and the hope is that enough people learn and grow, as individuals, that eventually when a state decays and is on the verge of elimination, the people don’t replace it and instead they move on.
It’s happening. Slowly, but the signs are there.
To the people who want to actively destroy government, I ask “Why turn to violence? Don’t even bother.” In the long run, every single government will inevitably destroy itself.
Free Market Solutions to GMO Labeling
People wonder what happens if we don’t have mandatory labeling of GMOs.
Freedom of choice is a two way street. As a consumer, you should have the ability to choose what you consume, but producers should also have the ability to choose what they produce and how they package it and introduce it to the market.
How would that work?
Those who choose to label their products do so and then the public decides if it cares enough to buy labeled products or it prefers the cheaper goods even if they know they are modified or they simply don’t care either way.
This is why you can’t force people’s hand. What if some people prefer GMO food? What if some people prefer the cheaper prices? What if you’re artificially increasing those prices by requiring labeling?
Why don’t we just take a step back and let the market decide exactly where it wants to go?
In the end, if the public prefers Non-GMO and also prefers it to be labeled, those producers who provide products that fit those preferences will win out and those that don’t change their products will be left with a smaller share of the market (or no share at all).
In the real world, it’s not mandatory to label GMOs, yet some stores, Whole Foods and Sprouts, do so. As do some manufacturers. What is more prominent in the market is not the labeling of GMOs but the labeling of Non-GMOs.
This is actually a better approach, since it doesn’t force anyone to label anything, but those that don’t use GMOs and want to notify the public can get on board and those that don’t want to notify the public don’t have to and can risk the public no longer purchasing their product.
Walk into a Whole Foods right now and you’ll find all kinds of products, from Non-GMOs to Organic to Naturals to regular foods. And everyone can shop their and everyone can buy the type of product that fits all of their preferences; both dietary and financial.
When we talk about choice, I think a lot of people only focus on a single side of the coin. They assume that choice in a marketplace only refers to the consumers choice. That’s only half of the picture. A truly free market has choices for both consumers and producers.
If producers want, they can supply goods that are contrary to the preferences of the consumers. They might be breaking through to a brand new market and revolutionize the industry or they might be headed for a cliff. Why not let them do what they want and let consumers buy what they want and the future of the industry will be determined by what new preferences consumers form by testing what’s available for them?
It is philosophically inconsistent to advocate for less government intervention yet want government to force the hand of producers. It’s also inconsistent to advocate for the freedom of choice for you and people in your group while also asking to limit the choices of a different group of people.
If you really want GMOs labeled or even gone for good, start by only buying Non-GMOs. If enough people agree and also buy Non-GMOs, the rest of the equation will solve itself.
Story time.
My grandfather, from my dad’s side, came from a very rich family in Turkey. They owned copper fields and where a major family in the Ottoman republic.
They were very connected in every way imaginable, from politicians to businessmen to villagers. Before the Armenian genocide, someone either informed them of the coming atrocities or my great grandfather just had an uneasy feeling, not sure which it was and I’ll get to why soon.
Anyway, my great grandfather began building “water” tanks with copper and started to ship them to Syria as if they were sold to clients. What he was really doing was smuggling his copper in the form of tanks and the tanks were filled with their other property. Gold, silver, books, etc.
He was only able to get so much out before the Turks began to slaughter people so he split from his family and took his wife and two children to Beirut. His brother(s) said they were going to France. The mines were supposed to be sold off or closed until the situation died down. Now this is where the story get’s blurry. I’m not sure how many brothers or sisters he had and neither is my dad because my grandfather was very young when they left and the family began to feud shortly after the fear of the genocide was over.
The part of the family that was supposed to go to France never sold the mines but they never returned my great grandfather’s share. He was the oldest son and he was entitled to take over the entire mine as tradition but he only wanted his fair share. But he was a peaceful man and just wrote it off as a loss. After all he had enough money and property. But his siblings never connected with him because they feared that he’d try and take back his claim one day.
Armenia, if you don’t know, was pulled into the Soviet Union as a desperate last-ditch move to stop the Turks from killing off every last Armenian. The Russians didn’t really care to help the Armenians, so they let the Turks carve up the country, the West to the Ottomans and the East to the USSR.
My grandfather and his sister grew up never knowing their cousins. My grandfather was very sickened by how his family had been torn apart and he was determined to move back to Armenia and free his motherland. My grandfather was a very well read man, from what I’ve been told. He had studied Marx and Smith and he despised communism and socialism. Liberty runs thick in my family, as you can tell.
Right after World War II ended, and Russia seemed crippled from the years of fighting, my grandfather and a dozen or so other men moved to Yerevan, Armenia in 1946 to try and start a revolution and free Armenia from the USSR. Needless to say, he was turned in by a KGB agent within a year and spent the next 11 years slaving in Siberian prisons.
When he returned, he was incapable of working or even walking and to make sure he’d have a hard time, he was blacklisted from working anyway. My grandmother was the OB/gyn at the hospital but the income was barely enough to raise 3 kids on. The next decade would be very difficult.
My grandfather encouraged my grandmother and their 3 children to flee the country. But that wasn’t an easy task. So they devised a plan. The family still had a considerable net worth, even in a communist country and my dad had a high position in the government (Head civil engineer for Yerevan). They used his connections and leveraged all of their assets to carry out the plan.
They would fake a divorce between my grandmother and grandfather and my grandfather would go and live with one of my grandmother’s nurses, posing as his girlfriend but still capable of taking care of him. They left her with more money than she needed and asked her to promise one thing, bury my grandfather in a specific grave that was already paid for. They’d then give away their house, in the Monument district (the Beverly Hills of Armenia) to a customs agent to ensure that they’d receive sufficient passes to “vacation” in Beirut (where my grandma’s family was living). This was their way out; to give up everything, including their husband and father, just for the chance to escape communism.
They fled in 1969 and found themselves in the middle of a civil war with not a single cent to their name. They got lucky twice. My grandmother’s family was well off and able to take them in and a family in Montebello, California was willing to sponsor them as refugees of communism and get them visas to America.
They’d visit my grandfather four more times before his death in 1976. My grandmother would pass in 2002 and as a promise to her they took all of us younger generation kids to Armenia to both see our roots and to visit my grandfathers grave site, something they had not done.
In 2003 my got on an Aerofloat flight, the worst airlines on the planet, and headed due East.
When we got to Armenia, there was an adventure awaiting us. An adventure we didn’t anticipate and one we were’t too happy to embark on. When we got to Armenia we discovered that my grandfather wasn’t buried where we thought he would be.
We had some good connections in Yerevan and we exhausted everyone of them. We had an ex-KGB agent, who was now the head of state department security search through records as well as other state department officials. Five men where on the hunt for official records of where my grandfather was laid to rest.
But there was one problem. A big problem. Armenia had burned all of their official records after the fall of the USSR. This was done to protect the identities of Armenians who worked for the KGB in secret. We were told that as much as 10% of the population worked for the KGB in Yerevan. Don’t know how much of an exaggeration that is but the figures I’ve seen for the Russia itself was something around a million KGB members with an unknown budget. Needless to say, these KGB members were responsible for the torture imprisonment and killing of thousands of Armenians. The newly constructed government of Armenia didn’t want any revenge killings or feuds so the first thing they did is destroy a huge part of their records, this included birth certificates, employment info and even death certificates.
The search carried on for the 2 weeks I was there and on the final day my dad and uncle proclaimed that they found the grave.I was 19 and didn’t believe anyone, I wasn’t about to believe them. So I asked when we can visit and they said we couldn’t. Now my distrust meter was pinned at 100.
As it turns out, they had actually found it, we just didn’t have time to visit. I’d return to Armenia a few more times and finally visit my grandfather’s grave.
My second time in Armenia, traveling with just my sister, I was instructed to visit an optometrists office and wait for an old man to come in and get his glasses adjusted. This was the man who knew where my grandfather’s grave was.
This man, who I’d never met, took me on a 1 hour drive. It was one of the most awkward drives I’ve been on. Here I was, 22, sitting in a car with a man I don’t, riding in a car I don’t trust, driving in a country I barely recognized, off to see the grave of a man I never met. Very surreal, yet very emotional.
If you want to know why I hate socialism, communism or abusive government, just read this story.
Bitcoin Investment and Profitability.
Bitcoin has been building up quite a head of steam lately and I’ve decided to pay attention. I’ve been doing a lot of reading and the idea seems sound, to a degree. I haven’t looked too much into the programming and I probably won’t since I don’t speak that specific dialect of nerd. But one thing I have looked into is the profitability or value of converting or at least investing in some Bitcoins.
Last night I was doing some crude math with bitcoin values just trying to see where bitcoin is and where it can end up. . It’s probably safer to assume that bitcoin, if successful, will only be one of a number of major currencies in use (I can best imagine a scenario or 3 or 4 different currencies at play). It’s also highly likely that bitcoin will fail. There are some programming or coding weaknesses, especially in privacy/anonymity, and other issues regarding government intervention and regulation, outlawing and so on. For simplicity’s sake, I’ve assumed that bitcoin will eventually replace the entire US currency system but not the entire world’s system. I’m sure if I my intrigue of bitcoin grows a little more, I’ll probably build a few models, factoring in growth, size and risk factors but for now just plain crude math.
Here’s some simple numbers:
- There will only ever be 21 million bitcoins created
- Each bitcoin is currently valued at around $75 a coin (3/25/2013)
- In 2009 there was about $8 trillion US dollars in existence.
- Since 2009, the Fed has significantly increased the world’s US Dollar supply, but I don’t know the exact number. Let’s leave this figure at $8 trillion for now.
I won’t try to calculate bitcoin’s value based on the world’s total money value because that would first of all be beyond optimistic, even more so than this post is already and secondly bitcoin is supposed to bring about a new revolution in money where people have competing, free market currencies, so it would be pointless to assume bitcoin will hold a monopoly on the world’s currency. It was never supposed to do such a thing.
So, what happens if bitcoin replaces the US dollar completely? Well, it would have to carry the weight of the value of those dollars, or come close to doing so. But for the sake of simplicity, let’s just say that it would have to replace the dollar completely.
This means that 21 million coins would have to hold a value of 8 trillion dollars.
That’s an absurd amount. How absurd?
Well, each bitcoin is currently worth about $75. There are 10 million or so coins currently in circulation. Let’s assume that the total value of bitcoins stays static until 21 million coins are released. Each coin would be worth about $36.
That’s about 0.01% of what a bitcoin would have to be worth for it to replace the US Dollar. If you’re not good at math, that means that each of the 21 million bitcoins would have to be valued at $358,000 each. That’s an increase of over 4,700%.
Just to bring some gravity to the situation, this is all calculated on extremely gracious assumptions. There are still very real risks in investing in bitcoin.
The price needs to stabilize for the currency to become something more than just an investment. If the price keeps climbing people will only invest and hoard bitcoin. Very few will be willing to pay with or trade bitcoins out of fear that they might lose out on the next price jump. Some of this is due to the fact that some “investors” still look at the dollar as their main currency and see bitcoins as investments. Others because bitcoin isn’t accepted as a payment method in the overall marketplace. Unless people start to openly accept bitcoin, there’s no real way to obtain or capitalize on the value of bitcoins short of “cashing out”.
Here’s where competing with governments hurts bitcoin. Governments can still step in and make it illegal to buy, sell or hold bitcoins. This would mean that unless you can use bitcoins to buy things, there’s no way to extract the value and the investment is now useless.
There are other real fears with bitcoin; The whole thing could be a big scheme by early adopters to pump and dump. The code can theoretically be hacked or manipulated at some point. Electronic records are much more potent that standard paper keeping. In the electric world no one is really anonymous, some just do a better job of hiding their tracks.
It’s safe to say that it’s probably worth investing $100, $500 and maybe even a $1,000 in bitcoins, if you can afford it just for the fun of it. It will make for a good story, if nothing else.
I’m personally still holding out but watching with a curious eye and a fist full of money to invest.
Hey libertarians
How does the free market rectify hyperinflation?
Through its existence. Free market = competing currencies.
Wait. This guy is seriously an…
So-called sticky prices are a result of intervention. It’s a concept that is basically meaningless in an actual free market.
And that’s where I disagree with “Austrians”.
Prices and wages are sticky for a lot of reasons but one of the major reasons is because people prefer stability and convenience.
No one wants to renegotiate their wage once a month, once a week or once an hour. It’s just easier to roll with the flow and renegotiate on predetermined intervals.
But that’s not stickiness, per se. Austrians understand that principle and lay it out in the ordinal ranking of subjective preferences and with regards to marginality. But stickiness is a persistence not a hesitation, and it is specifically an extra-market (meaning outside of the market) failure. That’s why “sticky” prices are almost always referencing wages - because of all of the governmental costs and “protections” involved. I think Bob Murphy has written some solid stuff on sticky prices.
Also, why scare quotes for Austrians? What’s that all about, bro?
It’s still stickiness. It unchanging prices even with the information as to why they should change being known.
There are a lot of reasons why stickiness occurs and one of the big ones is incomplete or unknown information.
I guess you can argue (and I’d agree) that if everyone had perfect information then they could in theory instantly eliminate stickiness, if they wanted. But ten our brains would also have to be able to adapt to all the complex math that would have to go into that.
And it’s not just “government costs and protections”. Free markets have contracts and agreements and those contracts carry set prices. Unless you make contracts completely flexible in pricing (price fixing is a major component of contracts, then what’s the point of contracts, really, other than guaranteeing delivery?).
Also, I know we separate wages because it’s the purchase of a specific and important type of good & service, but wages are prices. Wages are nothing more than the price of labor.
I’d love to read what Murphy wrote. I like his work and I think he’s got an advantage over others due to his dual education.
I put “Austrians” in quotes because of a few reasons. #1, it’s a title given to a group based on their overall theories, and not a reference to citizenship of a specific country. #2, not all Austrians share all the same beliefs on all topics and I was pointing out that this is one that I diverge from the mainstream on.
Another thing I diverge from the typical Austrian economist about is that Gold or Silver is the solution to currency manipulation (you can still have inflation or value dilution with a gold standard) or that gold & silver have intrinsic value (they don’t).
Anyway, price stickiness is very real and possible to eliminate but not probable. Humans themselves would practically have to evolve into quantum calculators to solve that issue. I know why Austrians think stickiness can be eliminated (In a perfect system with perfect info, blah blah blah), but isn’t the entire point of Austrian Economics the idea that it’s not a perfect system and that human action is the driving force and that humans are flawed and that we can’t always scientifically map or predict human action? Why all of a sudden flip the philosophy?
What I don’t get is why Austrian Economics just won’t let this one thing go. I don’t see why “unstickiness” is so important that they can’t just say, “yea, stuff is sticky because it’s easier that way. end of story, bros”.
Perhaps I’m just ignorant to how unsticky prices relates to the overall Austrian theory.
I never thought I would agree 100% with something you would say.
Wait, didn’t you once tell me that you believe in the quantity theory of money? You can’t believe in QTofM and also believe in price stickiness. They are completely contradictory ideas.
You Do Not Own Your Labor
“This line of argument is confused because of an over-reliance on vague metaphor. We have to stop thinking of contract as binding promises or obligations. We have to think of it, as Evers and Rothbard argue, as transfers of title to owned resources. And we have to recognize that these owned resources are only scarce, physical goods—not “labor.” You do not own your labor. You own your body. That gives you the right to perform actions (labor), but you do not own your actions. If I perform an action that you like, and pay me for, you do not own my action. You do not even “receive” my action. You simply prefer that I engage in it, for a variety of reasons.
In other words a labor contract may be viewed as an exchange only economically, but not legally. Economically, the employer gives up title to money, in “exchange” for you performing some action. But legally, it’s not an exchange at all, it’s just a one-way transfer of title: a conditional transfer of future title to future money, conditioned on the occurrence of a certain event happening (namely: that the “employee” does a certain action). That is, if you mow my lawn, then title to this gold coin transfers to you. Again, the transfer of title in this case is both expressly conditional and future-oriented. Title to the coin transfers only if the lawn is mowed, and I still own the coin.
The performance of the action triggers the transfer of money from the employer, but the action is not literally “sold” because the employee did not “own” his labor, and the employer does not own it after it is performed. We have to stop thinking sloppily and overusing metaphors.”
— Stephan Kinsella, A Libertarian Theory of Contract
Stephan Kinsella posted a link to this on his facebook page today and I responded there and I’ll post my response here, as well:
One caveat I would add is that employers pay you to perform an action and this is a one way transfer but they do so with the expectation that your performance will result in a 3rd party transferring them some sort of payment, and usually greater than the original payment for your action.
If that second transfer isn’t possible or relied on or there is no expectation of a reciprocating action/reaction then most, if not all, employers would not initiate the initial action of transferring payment to you in the first place.
The secondary action can even be a negative. For example if you pay someone to stand guard as security on your property, your expected reciprocation from 3rd parties is that they will NOT bother you or enter your property.
You’re therefore paying for an action and expecting non-action in return.
Even Anarchy should be voluntary.
I think that if you really think about and respect the idea of anarchism or voluntaryism then you are understanding of the idea that some people actually want government, despite the known downfalls and that if these people are willing and open to government then we have to accept that fact and allow them to have a government. Just like we accept that some people want to do drugs and do so much that they overdose. Their habit, their problem.
What I can’t accept, however, is when they try to push their love and dependence on government on to others who don’t want that coercive force in their life and try to force them to live under an unwanted system for the so-called “good of society”.
Likewise, the same theory can be applied to any and everything. For example, if people want public school or a Federal Reserve and they don’t mind a percentage of their income being taken for that purpose, we, as anarchists or voluntaryists shouldn’t have an adverse reaction to that. We should first ask if they know what the downfalls are, and if they do then we can only move on.
If we were to try and force them to give up their statism then we’d be no better than the statists who try and force people into government indoctrination. In other words, using force is wrong no matter what, even when trying to “free people”. They might have a completely different set of ideals and they might feel free in a system that we feel entrapped in.
This is why I don’t support violent revolution. This is why I don’t support Coup d’états. This is why I’m not a fan of “killing for freedom” or “bombing for peace”. If the idea of liberty and freedom is so good, the people will embrace it without force. If it’s not what they want, then we failed either as a philosophy or in our ability to teach it. We need an intellectual revolution, as Ron Paul says. We need an awakening of the minds and a warming of the hearts.
I guess at this point we can infer that if we aren’t able to teach or convey the message of liberty and voluntary interaction, free markets and statelessness that our only choice would be to pull a John Galt leave the system that isn’t for us and find a new territory, with like minded people and a system that we can believe in and live by.
I’m hoping for the prior.
This message brought to you by alcohol.
