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Peter,

"pacifism" and "anti-militarism" are nice ideals and I definitely subscribe to that. But, I also don't like disease, I'm against viruses and cancer. Proclaiming my stance on illness does not help me understand why it occurs or how to cure it (I agree it's a first step). To come back to a previous post, shouldn't we use Bryan Caplan's model and conclude that GWB went to war in Iraq to satisfy the American electorate strong desire for such a war? By saying that Bush was the worst president in history (aside from signaling your ideals) aren't you giving too much credit to one single man? (Again, I have no sympathies for GWB). To take Caplan's approach again, we should maybe focus on Bush's role as a moderator of the worst impulses of his electoral base, and in this regard, his stance on immigration wasn't as bad as, say, the "wetbacks operation" of president Eisenhower.

I never said worse President in history, I said worst President in my lifetime.

Also, I agree with your point about Caplan's position. There is a public opinion component to all of this that is vital for us to understand. Bush's policies might now be deemed as unpopular, but at the time we started down this path his policies had strong public support. We may now want to say that Bush lied and misled us into an unpopular war.

And the same can be said for the popular opinion of the rate freeze, the steel protections, and the spendning programs.

The job of economics is to overturn public fallacies. We economists are obviously not doing the job we thought we were doing.

Pete

Pete,

I agree whole-heartedly that liberalism "in the hands of Mises," and properly understood is cosmopolitan, tolerant, accommodating, pacifist, and anti-militarist.

My question is what is the alternative? Bush (to my knowledge) does not claim to be a liberal (though he does toss the phrase liberty around quite a bit). What allegedly liberal messages are out there that are anti-cosmopolitan? Is there a degree or spectrum of cosmopolitan-ness where some opinions out pace others?

I had never heard of Nation, State, and Economy.

Was that simply a different title, and was Liberalism simply a different title, for Omnipotent Government?

No Mr. Lesvic, NS&E was a book Mises wrote right after World War I (1919), before Socialism and Liberalism. And Liberalism was NOT the same thing as Omnipotent Government. Totally different book.

For someone who claims that he has the key to Mises and we do not, you seem to have missed a few locked doors along the way.

More than a few.

Thank you for the input.

The terms left and right are profoundly unhelpful for our purposes. There is a (statist and collectivist) central tendency among the groups of the left but there is no common factor among the groups of the "non-left" which includes anarchists, classical liberals, Religious Right and authoritarian/collectivist conservatives. To make ground the economists need to get more attuned to the cultural agenda which is dominated by the left, apart from places like The New Criterion and Salisbury Review. And the cultural conservatives need to lift their game in economics. http://www.the-rathouse.com/hayuniting.html

As to getting on the winning track, it is tempting to lift a line from one of your national heroes whose ship was sinking under British fire. Asked if he was ready to surrender he replied that he had not really started to fight (or words to that effect). We have not really started to fight until we fully mobilize the combined resources of the Mises and Popper strands of thought which appear to have run in parallel without really generating any synergy. People from the Popper camp like Larry Boland, Jack Birner and Gerard Radnitzky hardly appear in the Austrian literature. And William W Bartley! http://www.the-rathouse.com/bartphiloflib.html

Since the left depends entirely on the assumption that taking from the rich to give to the poor reduces inequality, all you have to do is point out that it doesn't reduce but increases it.

Mr. Lesvic,

The point you raise is valid, but also one that has been stressed by a variety of economists for one 200+ years. First, just think of some basic economic arguments one can find in books like Charles Murray's LOSING GROUND, where the unintended and undesirable consequences of a host of welfare state policies actually make the situation worse for the very people the policies were supposed to help. Second, look at some basic public choice arguments related to this issue found in the work of Gordon Tullock, e.g., THE ECONOMICS OF WEALTH AND POVERTY.

So the question isn't that we do not know the point you are raising --- anyone familiar with economic argument know this point about the unintended and undesirable consequences of policies of redistribution. The question must be instead, why in the wake of overwhelming evidence on the counterproductive consequences of wealth redistribution policies does the demand for those policies among the electorate persist? Why cannot economists communicate their message clearly enough to persuade the public to cease unleashing the redistributive state?

Here Hayek suggested we have a "tribal" code from our past written on us which means that our moral intuitions (atavistic) cut against the moral demands of the 'great society' (the liberal order). How persuasive do you find this argument? Mises's argument is more focused on fallacious public opinion in concert with interest group politics and how economists must speak clearly and defeat this coalition --- otherwise Ricardo's law of association will be defeated by 'clash of group interests'.

Defeating the 'left' --- whatever that term may mean --- require a lot more than just pointing out that the policies advocated are ineffective with respect to the goals sought. This is, of course, the necessary first step. But there are deeper issues involved that must be addressed. And we economists have not done as effective of a job in these other areas. But for the first point which you always bring up, there are tons and tons of studies by economists that have shown this argument to be true. You are on the side of truth, but it is a well-known truth that we need to learn how to communicate more effectively.

Pete

Is it true that redistribution makes the poor worse off? All the poor? Some section of it? How about tenured profs at state universities? Are they worse off because of the welfare state?

Prof. Boettke,

I am glad to learn, at long last, that you agree with my theory, and perhaps that of others' as well, that taking from the rich to give to the poor does not reduce but increases income inequality, but sorry to learn that you do not intend to use it.

Prof. Boettke,

Here was my Letter to the Editor of the Wall Street Journal, dated Aug 8, 2007.

"The Nobel laureate, Edmund Phelps, in his letter yesterday, missed the main point about inequality, that redistibutive intervention cannot reduce but only increase it."

The Journal did not publish that letter, and its readers still don't know what you and I do about redistribution.

As you can see, I tried but couldn't do anything about it. You are another matter. They have published feature articles by yourself. They will jump at anything you say.

So, will you step into the breach?

As Tullock points out, it is welfare for the well-to-do. Look at his studies on the economics of income redistribution.

So we are engaged in a counter-factual argument -- would the poor be better off were it not for the policies of income redistribution in the long run?

I think there is strong evidence to answer that question with a YES. Does that mean that ALL poor people would be better off? NO, obviously some individuals will be sad cases and will fall through the cracks of either economic opportunity on the one hand, or civil society help on the other. But if economic freedom is allowed to run its course, the poor will be made better off as a class and this will be seen both in mobility between income groups, and in a rising of the material well-being of the lowest income group.

The problem with income distribution policies is not that they violate the rights of the rich (which they do), but that the policies undermine the incentives for exchange and production which generates economic progress. In other words, what I am putting forth is an empirical proposition that can be debated. How do the least advantaged in society fare under capitalism versus statism?

Deirdre McCloskey's The Bourgeois Virtues is an excellent economic history of the big picture story on this. And the economic freedom index work also captures a large part of the story. But the story on the "margins" --- how much aggregate income does a country have to give up in order to have a more egalitarian distribution of income? --- is a different story. I have been talking in terms of the bigger picture, and I believe that bigger picture tells the real long run story and also captures issues such as mobility and raising of the minimum. But if we take a snapshot at any one point in time there are discrepancies in income that are large, and a redistribution would APPEAR to level out the income gap. But note that is because of the SNAPSHOT nature of the picture, rather than a movie through time. It is the dynamic through time that matters to me.

Pete

As Tullock points out, it is welfare for the well-to-do. Look at his studies on the economics of income redistribution.

So we are engaged in a counter-factual argument -- would the poor be better off were it not for the policies of income redistribution in the long run?

I think there is strong evidence to answer that question with a YES. Does that mean that ALL poor people would be better off? NO, obviously some individuals will be sad cases and will fall through the cracks of either economic opportunity on the one hand, or civil society help on the other. But if economic freedom is allowed to run its course, the poor will be made better off as a class and this will be seen both in mobility between income groups, and in a rising of the material well-being of the lowest income group.

The problem with income distribution policies is not that they violate the rights of the rich (which they do), but that the policies undermine the incentives for exchange and production which generates economic progress. In other words, what I am putting forth is an empirical proposition that can be debated. How do the least advantaged in society fare under capitalism versus statism?

Deirdre McCloskey's The Bourgeois Virtues is an excellent economic history of the big picture story on this. And the economic freedom index work also captures a large part of the story. But the story on the "margins" --- how much aggregate income does a country have to give up in order to have a more egalitarian distribution of income? --- is a different story. I have been talking in terms of the bigger picture, and I believe that bigger picture tells the real long run story and also captures issues such as mobility and raising of the minimum. But if we take a snapshot at any one point in time there are discrepancies in income that are large, and a redistribution would APPEAR to level out the income gap. But note that is because of the SNAPSHOT nature of the picture, rather than a movie through time. It is the dynamic through time that matters to me.

Pete

In other words, you will not step into the breach. I am posting this for DG Lesvic who is temporarily not able to post.

In other words, you will not step into the breach.

"If old truths are to retain their hold on men's minds, they must be restated in the language and concepts of successive generations." Hayek

So let us restate the old truth of Charles Murray, Gordon Tullock, and Deirdre McCloskey, that taking from the rich to give to the poor does not reduce but increases inequality, for the current generation.

And where better to start than with your benighted friends at the Wall Street Journal?

Can you not ban this Lesvic fellow? He is getting rather tiresome with his holier than thou 'know more economics than Dr Boettke' antics.

Please ban him. Or at minimum stop encouraging his nonsense. Lesvic has no theory, as such, lacks any understanding of very basic price theory (see the tiresome Qd, D, controversy in other comments sections), and as Dr Boettke cedes, you cannot prove that redistribution does not make some people better off. Slows down growth, etc, etc, but still certainly benefits some folk while making others worse off relative to the position an anarcho-capitalist society would deliver them.

Rick,

Dr. boettke has already stated that he agrees with my (non) theory, that taking from the rich to give to the poor does not reduce but increases inequality. He had simply pointed out that it was not as new as I had thought, that it had already been stated by Charles Murray, Gordon Tullock, and Deirdre McCloskey.

That isn't to deny that redistribution makes some folks better off. So does bank robbery. The point is that makes the poor as a whole worse off, in proportional as well as absolute terms.

Why would you want to keep that a secret?

Whose side are you on?

By the way Rick, the pure capitalist economy is not anarchic. The market is a self-governing process, and, interference with it, interference with government, not itself government but anti-government.

Was there government or utter anarcy in New Orleans? Could a free market have been worse, or even as bad? Would the private owners of a city have allowed it to be swept away? It happened because, as usual, the business of the public was the business of no one.

It is precisely because we cannot afford anarchy that we cannot afford the state.

First of all, it's already no secret that redistribution doesn't work, as evidenced by the fact that many social scientists have made the point many times. So not only is your "theory" not new Mr. Lesvic, it's no secret either. Consider whether that might be one reason why people here aren't interested in discussing it any depth, aside from the fact that your particular version of it suffers from numerous errors.

Second, the word anarchy does have an accepted definition as "absence of ruler" and not just "absence of order." Calling the market "anarchic" is perfectly fine as a descriptive term for it - it has no "ruler". Compare "anarchy" to "monarchy" or "demarchy" or "oligarchy." Marx was quite correct in referring to the "anarchy of production" under capitalism.

Our job as economists is to show how order emerges in the absence of "rulers."

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - F. A. Hayek, The Fatal Conceit, p. 76

Prof. Horwitz:

Mises: "The idea underlying all inerventionist policies is that the higher income and wealth of the more affluent part of the population is a fund which can be freely used for the improvement of the conditions of the less prosperous. The essence of the interventionist policy is to take from one group to give to another. It is confiscation and distribution. Every measure is ultimately justified by declaring that it is fair to curb the rich for the benefit of the poor.

In the field of public finance progressive taxation of incomes and estates is the most characteristic manifestion of this doctrine. Tax the rich and spend the revenue for the improvement of the condition of the poor, is the principle of contemporary budgets. In the field of industrial relations shortening the hours of work, raising wages, and a thousand other measures are recommended under the assumption that they favor the employee and burden the employer. Every issue of government and community affairs is dealt with exclusively from the point of view of this principle."

Hayek: "Redistribution" was "the crucial issue on which the whole character of future society will depend" and "it would be disingenuous to avoid discussing" it.

So, professor, tell it to Hayek and Mises, and Hillary, while you're at it.

Prof. Horwitz,

Since defining the market as anarchy practically condemns it right from the start, why call it anarchic rather than free?

There is a world of difference between the vague point that redistribution doesn't work and the specific point that taking from the rich to give to the poor doesn't reduce but increases inequality.

You referred to my "numerous errors."

I defy you to cite just one.

Prof. Horwitz,

If the ultimate problem of economics has already been solved, and everybody already knows the solution, what are we still paying you for?

To save prof Horwitz the time, I point out Lesvic;s total inability to understand basic u-grad price theory (see his repeated confusion between supply and quantity supplied; also he has no idea what lump-sum taxation and deadweight losses are). I am truly surprised that serious scholars like the Austrian economists would waste their time on this worthless Lesvic hack.

In a just world Lesvic would be locked in a room to discuss political economy with his left-wing counterpart:

http://robertdfeinman.com/society

At the risk of being called elitist, let me suggest there's probably a reason why these guys have to spam comments sections of blogs to find an audience.

Thanks for the plug, Steve.

Just for the record, I'm not "left-wing" although I do share many goals with the left. I consider all "wings" as being quasi-utopian, at least in inspiration.

Wishing won't make it so, no matter how fervently people believe. If I had to put my views on a bumper sticker I'd say that I believe that the best way to solve the problems of society is through democratic structures. This includes the right of the majority to set up limits on people and institutions and to create governments to carry out these directives.

Even though I think democracy is the best mechanism yet devised, I'm aware of its defects. The two most important are the "tyranny of the majority" which can lead to abuse of minorities. The US has tried to make this harder, but we know of many examples where this has not worked even so. The two I like to cite are the adoption of slavery by the new republic and the internment of Japanese-Americans during WWII.

The second is the possibility of an imperfect democracy, where some of the trappings exist but a minority actually controls things. There are many examples these days, from Russia to Pakistan and much of Africa. Elections do not prove that there is a democracy in place. One needs the "checks and balances" as well.

Most of my ideas are misunderstood as people try to fit them into the existing left-right framework, but I see more people understanding, the longer I'm at it.

The area where I'm currently being most misunderstood is in my efforts to open a discussion on what comes after capitalism. None of the schools of economics are prepared to think about that. I maintain that as resources become scarce current economic systems will no longer be appropriate. I don't know what should replace them, so I invite others to think about it.

I'm having little success. Climbing out of one's rut is hard to do.

Mr Lesvic is not so bad. We should vote on whether Dr Boettke invites Lesvic to guest blog. I vote yes. What say the demos?

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