"According to Scott, Mafia-style protection rackets compelled people to produce grain."
James Scott—an anarchist—lays the point bare: the state functions much like an aged, institutionalized mafia. A stationary bandit, not fundamentally different from the predatory groups it claims to suppress.
> the state functions much like an aged, institutionalized mafia
Which happens to prevent immature, dumb and cruel mafias from taking over, the latter are the wet dream of Anarchists, that's why they hate governments.
> not fundamentally different from the predatory groups it claims to suppress
"Fundamentality" is in the eye of the beholder. The objective qualitative and quantitative differences are enormous however, the rest is mud in the eyes.
>Which happens to prevent immature, dumb and cruel mafias from taking over, the latter are the wet dream of Anarchists, that's why they hate governments.
No, they hate governments because they think they’re a kind of mafia. Which anarchist likes cruel mafias?
Those anarchists who aren't dumb must like cruel mafias, this is a conclusion I reach by implication, not by their admission.
Anarchist's believes exclude or at least severely limit the state as a force that can prevent warlords, gangs and mob rule which inevitably arise in any power vacuum.
Ergo, those anarchists who aren't dumb, understand the above and by virtue of continuing to promote anarchy they prove that they like the inevitable result of their political program.
I get the sense smart anarchists don’t want no organization, but organization with borderline zero coercion, and they’ve got complicated ways they imagine that might be possible. I also think many consider an absence of coercion the aim, but don’t feel it can be reached; rather, we should approach it asymptotically. I’ve heard some say in response to the warlord point that an “anarchist society” (if such a thing could exist) would police the warlord, but through the spontaneous action of its participants, not with a centralized hierarchy+bureaucracy. Can you point to any specific anarchists as counterexamples?
That’s just a restatement of the original argument
>Anarchist's believes exclude or at least severely limit the state as a force that can prevent warlords, gangs and mob rule which inevitably arise in any power vacuum.
Capitalism will sell you guns and crosses, it depends on what people demand. If you go to Italy there are no mc donald's. It's a cultural issue, not a problem of the the economic system.
But there was. Just didn't get enough customers. So they bailed out :-)
That aside, in the context of healthyness, one has to wonder if Pizza as such is good for you, no matter how and with which ingredients it is prepared, if eaten too often?
Thing is, the part about using math for economics is highly debatable and that's why Austrian School of economics doesn't use it. From that perspective, we use ranking systems for our preferences, at the individual level, so using math for aggregate behaviour is just not well substantiated. This point of view comes from Carl Menger, which started the whole marginalist revolution.
As far as I can tell, Austrians believe that analyzing based on individual preferences and actions is the key. I haven't made it very far into Mises Human Action, but I gather that was the starting point and Mises developed many theorems based on that. So if you say that allowing individuals to maximize their preferred choices given the constraints around them is "the market" and artificially restricting those choices, using acts or threats of violence, is "the government", then yes, I suppose that is their framework. One of the main things they would probably push back against is the notion to think of the market or government as independently existing entities. The government is just a collection of individuals who use violence to impose their will on others in a way that most of the society is agreeable to, at least to some extent, and, because they are individuals, they have their own preferences and actions which can also be analyzed in this framework. If you think people in the market do things that are nasty when all the actions are voluntary (and that certainly can happen), shouldn't you be even more skeptical of those who are willing to engage in violence to force the things they want to come to be to happen?
Austrians would also object to the notion of something being perfect. But they do analyze situations in which an external force interferes with the normal voluntary flow of actions and generally find that the stated outcomes (probably not the actual desired outcomes) of those external forces is generally not met. For example, rent control is often argued for as about helping more people to be housed and, empirically, that usually is not what happens when rent control is enforced. One could argue that the real intent of rent control is about making life better for the well-connected at the expense of the less well-connected and that probably does happen regularly.
If I were to summarize the insights of economic schools of thought, then we get:
1. Keynesianism: "Your spending is my income, so when there's not enough spending, the government needs to step in".
2. Monetarism: "The monetary supply directly controls the economy and is the primary reason for economic phenomena".
3. Austrian economy: the market god, the market is king, all hail the market.
The first two approaches provide actionable models and make predictions. As with all models, they have limits of applicability, and they are often wrong to some degree.
Meanwhile, Austrian economics is always right. And when it's wrong, it's because you haven't done it hard enough.
> If you think people in the market do things that are nasty when all the actions are voluntary (and that certainly can happen), shouldn't you be even more skeptical of those who are willing to engage in violence to force the things they want to come to be to happen?
Well, let's look at a particular example: pollution regulation. Laws limit the almighty Market by forcing compaines to clean up their waste.
Another example is monopolism. In the view of the Austrian economy "school" it is _always_ the result of government actions. And monopolies wouldn't exist otherwise, even for things like water supply and sewer.
As an American, all economic discussion I've ever seen has been posturing as #1 or #2 while desperately pretending you aren't just trying to justify #3.
The Capitalist Market is the One True God of America. All the math and waxing philosophic are just set dressing to make that idea less obviously absurd.
Abusive monopolies without the imposition of violence (either by the government or the company) lasting for a long time horizon? Yes, that would seem implausible in a free market. For example, if someone controlled the water pipes and charged a $1000 for a cup of water, then someone would find a way to bring in water for less and would start contracting to build their own pipes, maybe locking in long term contracts with people given the time horizon of construction. That threat alone keeps the prices low. But I also live in a city with city run water and sewage where the infrastructure is falling apart and the cost is on the order of 2k a year for normal water usage and actually would be about 1500 if no water was used. Sewage overflows, water goes brown and federal intervention is required. So a little competition might actually be useful.
As for pollution, have you looked at the history of state run industries and their pollution record? How well does the US military manage its pollution, particularly prior to the EPA when the public consciousness shifted? How many of the worst private polluters were in the service of the government (such as for the military)? There are also tales of the communist countries and their abuse of the environment. And in the context of a democracy, one would assume that if it is faithful to what people want, then to have pollution controls requires at least 50%+ of the population to want them. That sounds like a strong market incentive to provide that not to mention actual destructive pollution can be subject to claims by those injured by the polluters. While it was before the largest amount of industrial pollution, there was a time in the US before the government got involved where pollution was restricted by such considerations. Companies did not like that so the government started to regulate in order to protect the polluters. Time and time again, actual government legislation is used to either protect the guilty or it comes in when 90% of a problem has already been resolved.
Also, the first two economic schools of thought you list do not make any basic sense. If it is just spending, then why would there be boom bust signals? Why doesn't everyone just keep spending? Something else must cause a reduction in spending which ought to be pretty important. If monetary supply is the only control for the economy, then set it and forget it on the trajectory you want. Since there doesn't seem to be a stable path, then some other factor is important to consider.
For either of them, why not just print up a million dollars for every person? Do you suddenly have a supply of million dollars worth of goods for everyone? No. There is real wealth that has to be produced and that is why futzing around with money is not good enough.
The information coordinating function is that of prices which requires a relatively stable money supply for accurate signals. If the money supply is artificially tampered with, then the entrepreneurs make bad bets, thinking that either there are more resources then there are (inflationary monetary supply, boom period) or there are less (deflationary monetary supply, spending contraction). The first case leads to half-completed projects when actual resources run out across the economy (bust). This leads to recession/depression which is a time to realign the resource allocation to what is actually desired if government stays out of the way. Compare the 1920 economic downturn (hands-off government, rebounds quickly) to the 1929-1940s economic depression (heavy government intervention under both Hoover and even more Roosevelt). In the second with deflationary, it is idle resources that are the result, they get cheaper, and eventually leading to a boom. There aren't too many examples I am aware of of this though there is a train of thought that the late 1920s had inflation (to help the British with their war debt?) and then the Fed reversed course and starting deflating the money supply cause quite the shock. In any event, both are examples of problematic time periods during the price readjustment to the new value of money.
The main reason the government inflates money is so that they can spend without explicit taxing (inflation is an implicit tax for those that do not get the first rounds of the money printed) and allows for the wealth to borrow to acquire assets, where asset prices inflate with the money supply while the debt burden deflates with inflation. This is specifically to help rich people get much, much richer.
> Abusive monopolies without the imposition of violence (either by the government or the company) lasting for a long time horizon?
Example: Google. It happened all by itself in an essentially unregulated area, without any real government action.
> Compare the 1920 economic downturn (hands-off government, rebounds quickly) to the 1929-1940s economic depression
The 1920 downturn was _stopped_ by the government intervention. You're confusing the cause and the effect.
Want another example? Look at 2008. The US went with a tepid Keynesian approach of fiscal stimulus and quantitative easing. So the economy recovered to pre-recession levels in 2 years. Europe went with the Austrian approach of austerity and tight monetary supply (they RAISED the interest rates!), and it took 11 years for them to claw back to the pre-recession levels.
And what is the conclusion of Austrians? That there was not enough austerity!
It was about abusive monopolies where consumers want something different. This is easily fixable by competition. Google is a perfect example of how incredibly easy it is to escape that monopoly. I do it all the time. Imagine what would happen if google started charging a $100 a month for its services. The issue is that the current situation does not conform to what "superior intellectuals" think people ought to do so they want to use violence (government) to force people to live the way they see fit. Yay! All it takes is changing the default. And the anti-monopolists did not even try to do a public awareness campaign of this evil; they went to court (violence) instead of persuasion.
I am unaware of what government intervention you are talking about in 1920. I have heard explicitly that the government did nothing by historians and I asked ChatGPT and it had nothing [1]. In that same conversation I also asked it compare Europe versus US in 2008 from an Austrian perspective. The main thesis Austrians have for busts is that of misallocated resources based on false price information whose remedy is reallocation, often through bankruptcy and repurposing of capital goods. It seems that the US was able to have a better reallocation of resources. I am not sure entirely of the mechanism, but at least some of it was allowing some things to fail and some of it might have been the government going in and manually realigning these things (taking over in the short term). It sounded like Europe did not allow for that, either direct intervention or simply allowing things to fail -- the bad businesses limped along as zombies. Europe kind of did the worst of both worlds.
As for the US, it also suggests that the Austrians, and I have heard this, cite our extreme debt, and it keeps growing, as a sign of a reckoning to come. Kind of like one can keep pumping sugar in to deal with sugar lows after a high, but eventually the bill comes due. Keynesians and others seem to view the economy as a short-term adjustable kind of thing, a chemical reaction with just the right reagents producing something wonderful. Austrians view it as a lumbering ecology, with things adapting and to the extent adaptation based on truth is present, it gets better. To the extent that distortions and violence happen, not so good. We shall, unfortunately, probably see soon enough unless AI can make a productivity miracle happen.
No, they don't say that the market is perfect. And if you want a cult, that's the current keynesian economics.
Anyway, I don't see any way around not using math. Because value is subjective and that means it's a ranking system of preferences, not based in nominal values.
You can mathematically analyze subjective rankings. That's not at all a problem for model building.
What makes the Austrian economics "school" a cult is not the complexity of models. It's their rejection of models altogether and a refusal to make testable predictions.
Krugman is a statist. The truth is that GDP per capita growth has been much slower in Europe than in the US since 2008 — except in a few countries that adopted a more free-market approach, such as Poland, Switzerland, or Ireland.
Whenever there's a transaction, that means that both parties give a different value to whatever is exchanged. For example, when you buy a home, the buyer prefers the house to the money and the seller prefers the money to the house. If this wasn't the case, the transaction just wouldn't take place.
So transactions are the opposite of a zero-sum game, they are a win-win game, where both parties end up winning. Because value is subjective.
I was thinking "I pity the guy that has to read/review his code." but he mentions his code changes aren't complex so perhaps he's right on his approach.
Most local tax, certainly the lion's share of property taxes go to public schooling and services like fire fighters, sanitation, police, public works, and park and rec.
Could we privatize all those things or set usage fees? Probably. Where I live many things like your well, sceptic system, garbage collection are privatized but that only works when one lives in the country. It would be impossible to privately implement most public services in urban settings. I don't think I would want to live in a city where trash collection was left up to the individual to work out how to address. Even then, you are going to end up paying for these services somehow right? In fact, I would rather my county work out a bulk trash collection contract likely at a discount and tax me for it based on the number of bedrooms I have than leave that to me to figure out with a bill I have to manage every month.
Your mileage may vary as they say but while I hate paying tax, I do enjoy the services they support and I don't see them as any kind of theft.
You do have a point, but in this case the original purpose of property tax is so that there is a provision for taxing authorities to confiscate the property itself, in case you or your heirs do not remain well-heeled enough to be fully welcome any more after the property is otherwise completely paid for.
The money collected by the levies has always been just collateral damage.
