The Trucker wrote:
> On Sat, 14 Jun 2008 04:42:46 -0400, Les Cargill wrote:
>> The Trucker wrote:
>>> On Fri, 13 Jun 2008 22:50:53 +0000, anonymous wrote:
>>>> On Thu, 12 Jun 2008 14:15:16 -0700, The Trucker wrote:
>>>>> There is a crying need for honest economic study in this and other
>>>>> nations. The Hayekians have been shown to be wrong. The Marshallians
>>>>> have also taken the gas with the Cambridge Capital deal yet the
>>>>> universities are still selling snake oil. It has been a total corruption
>>>>> of economics that has misled the American people. They have not been
>>>>> given information necessary to properly vote their own best interest.
>>>> Was Hayek wrong? On what issues?
>>>> I ask because I tend to agree with you on many things, Trucker, and yet
>>>> I think The Austrian School has merit (which you dont?).
>>> All schools of economics have some merit in that they challenge and
>>> criticize other schools and they reexamine some "accepted" theories that
>>> might be in error. The problem for Hayek and Austrians in general is the
>>> failure to recognize the fact that the pursuit of power is not actually
>>> the pursuit of wealth
>> No, I'm pretty sure that Hayek understood that. The pursuit of power
>> generally drives out wealth. That's kind of the spine of his works...
>> Might just be me, but I think that almost all political evils are
>> based in people trying to make some sort an activity "more important
>> than" just plain old economic activity. It's an old habit, borne of
>> the old proscriptions against usury*. Bluntly, if somebody
>> can not negotiate a price for something, they've stopped being
>> reason-able. All political statements of the form "but is so
>> evil it cannot be tolerated" are where *real* evil comes from.
>> Evil is bootstrapped.
>> Clearly, some things are beyond price. But those are personal
>> things, not universal.
> Clean water and air are not "personal". But the Hayek worshipers are
There's absolutely nothing in Hayek *against* clean air and water.
Indeed, it's simply not covered by that. It simply wasn't at issue
at the time.
Depending on whose interpretation of "clean air and water" you choose
to use, that could mean anything from a river catching fire
to forcibly controlling human population.
And for what it is worth, David Friedman has tried, or is trying to
extend an ostensibly Hayek position to cover that, using
>> *which is fascinating, when you think about it in light of "render
>> unto Ceaser..." It's Aristotle, who though interest "sinful" because
>> it reified the symbol of money as a good itself.
>>> and that even the pursuit of wealth does not
>>> necessarily produce wealth for the society.
>> That's pretty much incredibly empirically indefensible, Truck.
> No. It is not. see later...
Sorry, you're simply wrong.
>> A rich person who hasn't just played the system for the wealth,
>> who has actually managed to produce something enriches everybody
>> in two ways - one, as seller of goods, and two, as buyer of goods.
>> Money velocity is (understandably) much greater when there's
>> more wealth. *Some* people :) just don't like the way in which it
>> is distributed.
>> As to "people playing the system", well... rent-seeking is an artifact
>> of the sorts of things that Hayekians foam at the mouth about. Again,
>> a Rockefeller made do without lobbyists. It is the reaction *to*
>> a Rockefeller that creates a target-rich environment for lobbyists.
>> Don't get me wrong - I do not think Hayek's is a complete economic
>> theory. It assumes a tendency towards social-democracy style Euro
>> Socialism (or more ominous replacements) as a thing to push against.
>> And incredibly, as Fundamentalist religionism has replaced
>> Libertarianism as the touchstone of Conservatism, not even
>> the supply-siders really believe much in Hayek anymore. After
>> all, his was a secondary theory to support the overthrow
>> of the Evil (as in godless) Empire. So expect the Liberals to
>> embrace him...
> I am as Liberal as it gets. But we just have a misunderstanding around
> the word "wealth". The economics "profession" is two faced about it. The
> term "wealthy" is normally measured in ones capacity to forgo labor
I simply don't agree with that definition. Wealth is nothing more
than the potential to achieve one's will through material ( as
opposed to political ) means.
> or to
> command the labor of others. Yet the economists also refer to commodities
> as wealth; never letting it be understood that labor (hence
> commodities) can be commanded at the point of a gun or coerced by the
> withholding of natural resource.
My point, assuming I have one, is that what flows from the barrel of
a gun is *power*, not wealth. Power is coercive; wealth is
cooperative. that's definitional.
> Hayek's insinuation that accumulation of
> wealth only occurs when the accumulating entity is _producing_ something
> of value is incorrect.
No, I think it's *correct*. It solves the problem definitionally, by
declaring rent-seeking as not-wealth. Now.... that's slightly
cheezy - it handwaves it away - but that's how it remains consistent.
Again, it cannot be considered to be complete.
> And the notion that the environment is protected
> from those who seek to accumulate wealth is also not properly appreciated.
That's a narrow path to walk. There are neo-Luddites, outright
Druids and Oedipal cases in there with you. Prior to the establishemnt
of public choice theory ( which came after Hayek ), there wasn't
much of a framework.
>>> That erroneous proposition
>>> was and still is the cornerstone of Hayek and the Austrians. This belief
>>> that the pursuit of wealth always produces great wealth for all. It is
>>> primarily a refusal to recognize the coercive and corrosive effects of
>>> economic rent.
>> Fair enough - although it really speaks to the sorts of rents
>> we might find in a Five-Year Plan sort of economy - where power
>> is based solely on personal relationships with The Great Center.
>> That *is* rent-seeking, and the sort Hayek was rather explicit
>> about, if not rather oblique about. That's the Big Thing behind all
>> of Hayek - that explicit human control cannot replace market
>> I intend to find this book, but the synopsis is pretty good
>> Search within the text for "Boettke's
>> controversial interpretation is of a Soviet dictator"
>> Indeed, when I first read George, this is what I noticed
>> about George - that he was 100%% congruent with Hayek.
>> I'd read "Machineries of Freedom", and didn't understand
>> land rents at the time. If David Friedman can notice that....
>>> The greatest wealth imaginable is the control of natural
>> Nah. The productive value of land goes up because production
>> increases dramatically, not because of the land itself.
> Land values and land trade prices are influenced by factors other than
> aggregate production. But you are correct in saying that the land itself
> did not jump up and make itself more useful. I can't imagine that anyone
> would ever claim such a thing. However, the proximate population
> necessary to the division and specialization of labor and the value
> created by that organization has an actual price. And that price is the
> land rents. In order to participate in this bountiful harvest arising
> from the division and specialization of labor it is necessary that people
> get _CLOSE_ to one another. And this proximate population increases the
> cost/value of land in the proximity.
>> this is only "unfair" if you do considerable wrestling with
>> assumptions. It does not matter what you do, there will
>> be contradictions in any system, so a few more to preserve
>> absolute right to property are masked.
> Blah, blah, blah....
Well, if you don't wish to discuss it, don't post. It's as simple as
that. I consider you a very reasonable person; we don't agree
I think this thread shows very well why, now, and I find that
interesting, after all these years.
> There aren't a lot of assumptions being made here. If I control
> (power) access to the land then I can derive personal wealth by charging
> others for access to that which, without my control, they have would have
> had free access. That seems rather a straight forward proposition. I can
> become very wealthy indeed from this use of this power, and I will not
> have increased the amount of good/goods in the least.
But you are mixing power and wealth. That's not a valid reading of
Hayek, so you disqualify your criticism.
>> In a way, control of natural resources is about *power*, not
> Yet private wealth is easily attained by this exercise of power/control.
You're missing the essential relationship - power comes at an
economic *cost*. Trade is reason-able; force is not. You
*literally* cannot have both. It is guns or butter, as
Bismarck clearly showed.
>> Real wealth is transactional in nature - it is
>> inherently social.
> You are doing the economic two step using two different definitions of
> wealth. One is goods and the other is the command/control/power.
I am saying that these are separate things, and that this is Hayek's
most vital point. Indeed, it's also the Founder's most implied
point, the foundation of Smith... it's Liberalism in one stroke.
Trying to mix them leads to hubris. That's Renaissance history in a
nutshell. That's why empires fail, nations fall and people lose
>> Drawing from science fiction :),
>> Paul Atreides says "if you can destroy a thing, you
>> can control a thing." That's power, not wealth. When
>> OPEC expressed political rage by chinking the
>> supply of oil, they paid for it in the long run.
> They did???
>> This is literally hubris. LBJ tried to eradicate poverty,
>> "paid for it" by escalating in 'Nam, and lost on both fronts
>> (by his lights, anyway).
> Your treatment of the actions of LBJ are very confused. A "war on
> poverty" and a "war on terror" are equally hubris. Wars are things
> where you have a known enemy that can be defeated through military action.
>> Section 8 housing does bear the mark
>> of LBJ, and it's a more-Hayekian thing, and ... it works
>> better. LBJ thought poverty a greater evil than its economic
>> effect, and by an adjustment, a Great Society program became much
>> more effective.
> Yada yada yada....
>> That's the *profound* thing at the core of Hayek - it is a
>> plea for humility.
> I do not get that impression. Totally free markets produce
> private ownership of natural resources and the ability to coerce all of
No, because goods substitution and ostensibly free markets
almost guarantee that nobody gets to do that. Again, I am being
somewhat abstract - but then again, I don't consider most
monopoly theory valid - monopolies are purely artificial.
Monop*somies* happen for sure, but they serve us, ultimately,
assuming market "potato famines" don't occur.
And of course, exceptions arise. But exmaples of market-shunning
abound. People being real bad-faith players won't last long.
> As I have said we have a problem with wealth/power. Wealth is
> fine so long as it does not prevent others from the accumulation of
> wealth. Power produces all the private wealth that is needed by any
> individual and it impoverishes the rest. The concept of wealth through
> power is really what the words "trickle down" are all about.
Well, that's Reagan being a politician. It's bovine excrement. He
then proceeded to behave exactly the opposite of how he spoke. It's
the sort of thing people do to get elected, Truck.
People, for reasons I do not fully comprehend, operate on a sense
of status. Politicians appeal to that. Smart people know better, but
may hold their nose and go that way anyway.
Laffer stuff simply said that reducing tax rates will move
transfer of funds to government back towards optimal if the
rates are too high. That's inarguable in general. It may or may
not have applied to the 1980s.
>>> Yet such control does not create wealth for anyone other than
>>> the rentier. In the lust for more private wealth and power the rentier
>>> will destroy that which he cannot own or create scarcity where none exists.
>> It is nothing more than an artifact of the legal system we presently
>> have. But any person who does not participate in the eradication of
>> scarcity is a big ole boogerhead. If there is a Utopia, it
>> should be based on the idea of the eradication of scarcity, or
>> at least moving scarcities up the Maslow hierarchy.
> Scarcity cannot be eradicated unless you eradicate the population.
Wow. I think we can do much, much better than that.
> scarcity is the result of competition for limited resources.
The known universe is, for all intents and purposes, unlimited.
> resources are fixed and will not expand. The cost (seen as rent or a
> consumption fee) of a natural resource use is contingent upon the
> existence of a market (population) and the ability to contribute (pay).
That's just how we keep score. It is not the game.
> Whosoever will offer the most contribution for the use of the resource
> will be awarded the use of the resource in a reasonably free market. I
> think you refer to the eradication of the adverse effects of scarcity as
> opposed to scarcity itself.
Good point; but if you can't tell, it doesn't matter.
>> We have a beginning of that, and even *that* has psychological
>> side effects which are unsettling...
> This controlled scarcity is being practiced in the oil patch and in the
> political arena as we speak.
> The people behind this rip off were the cheer
> leaders for gas guzzling cars and the cheerleaders for a fake war and for
> "borrowing". And now they all want the US government to _GIVE_ 1.4
> trillion dollars worth of __**OUR**__ oil to the oil companies for a
> pittance of $138B. And this continued controlled scarcity will be the
> gift that keeps on giving for the fascists.
Dr. Ron Paul has proposed eliminating the Fed. That's the only thing
that will "fix" this, but... it'll probably kill us off. More
unintended consequences, I fear.... I think this is an *inherently*
difficult thing, and we have manevuered ourselves into yet
another corner. It'll take real brilliance to get us going out of it.