Read this before having an opinion on economics

[billyjoeallen]

Remember, folks...

Mises.org's books are free(well, the digital edition at least) thanks to the hardworking anti-intellectual property movement.

P.S. We need a bitcoin address for mises.org.

Do you have something against IP?

IP is artificial scarcity, enforced ultimately by threat of violence.

[1713483273]

1713483273

[1713483273]

1713483273

[1713483273]

1713483273

[niemivh]

Economics in One Lesson: http://www.hacer.org/pdf/Hazlitt00.pdf

It's a great read. It's brief. It doesn't go into a lot of technical detail but it does illustrate a central fallacy that many people, even some economists, make when thinking about economics. If you haven't read this book, I'm going to assume you're ignorant about economics until proven otherwise.

That is like saying that if you haven't read the Koran you're ignorant about god and spirituality.  This is a political document first and a treatise on economics second.  Let's not forget that.  There are other schools of economics.  Everything beyond the basics in economics is a fundamentally political statement.

Well, really, this book IS just the basics, but even so I disagree with your statement. I'm reading Mises' Human Action right now, and he delineates between political ideas and economics. True economics, after all, are amoral and apolitical.

"True economics, after all, are amoral and apolitical."

Could you please define what you consider to be "True Economics"?  I would interpret that to mean just basic supply and demand curve stuff but since you also say that "This book IS just the basics" leads me to believe that you consider the below quotes from the book to be completely non-political statements: 

"We have already seen some of the harmful results of arbitrary governmental efforts to raise the price of favored commodities. The same sort of harmful results follows efforts to raise wages through minimum wage laws."

Chapters titled: "WHO'S "PROTECTED" BY TARIFFS?" & "TAXES DISCOURAGE PRODUCTION" and others.

These are blatantly political topics.  I'm amazed that anyone can claim that there is some sort of disinterested 'correct' answer regarding this positions that wouldn't seek to favor one segment of the population over the other.  This is the nature of political economy.

There are 2 fundamental dynamics you should keep in mind when it comes to schools of thought on economics: does this person's position represent the monied intrests or those without?  Or where between these two do they strike a balance?  If you can't accept that, then how do you rationalize that the person writing the book and presenting their arguments are completely removed from the system that they intend to influence with their arguments and positions?  Is it your position (and I honestly do not intend to misrepresent it) that they all are completely 100% objective, somehow above the political and social landscape yet are involved enough with it's working to comment on all facets of it to which they intend to see a desired effect?  Not to say that they don't have a point and that their interests need a degree of representation but there exists extremes on both sides of this argument and those very extremes seem to offer the least in terms of practical worth in our modern era.

[The Script]

Economics in One Lesson: http://www.hacer.org/pdf/Hazlitt00.pdf

It's a great read. It's brief. It doesn't go into a lot of technical detail but it does illustrate a central fallacy that many people, even some economists, make when thinking about economics. If you haven't read this book, I'm going to assume you're ignorant about economics until proven otherwise.

That is like saying that if you haven't read the Koran you're ignorant about god and spirituality.  This is a political document first and a treatise on economics second.  Let's not forget that.  There are other schools of economics.  Everything beyond the basics in economics is a fundamentally political statement.

Well, really, this book IS just the basics, but even so I disagree with your statement. I'm reading Mises' Human Action right now, and he delineates between political ideas and economics. True economics, after all, are amoral and apolitical.

"True economics, after all, are amoral and apolitical."

Could you please define what you consider to be "True Economics"?  I would interpret that to mean just basic supply and demand curve stuff but since you also say that "This book IS just the basics" leads me to believe that you consider the below quotes from the book to be completely non-political statements: 

"We have already seen some of the harmful results of arbitrary governmental efforts to raise the price of favored commodities. The same sort of harmful results follows efforts to raise wages through minimum wage laws."

Chapters titled: "WHO'S "PROTECTED" BY TARIFFS?" & "TAXES DISCOURAGE PRODUCTION" and others.

These are blatantly political topics.  I'm amazed that anyone can claim that there is some sort of disinterested 'correct' answer regarding this positions that wouldn't seek to favor one segment of the population over the other.  This is the nature of political economy.

"It is true that economics is a theoretical science and as such abstains from any judgement of value.  It is not its task to tell people what ends they should aim at.  It is a science of the means to be applied for the attainment of ends chosen, not, to be sure, a science of the choosing of ends.  Ultimate decisions, the valuations and the choosing of ends are beyond the scope of any science.  Science never tells a man how he should act; it merely shows how a man must act if he wants to attain definite ends."  --Ludwig Von Mises, Human Action, pg 10

In the tradition of the Austrian school I consider economics to be a sub-category of the more general theory of praxeology, the general science of human action.  As such, it is intrinsically a valueless science.  To be sure, the different men who study it have their own biases and judgements of values, which cannot entirely be discarded.  Both Mises and Hazlitt held classical liberal (what now would probably be called "libertarian") views and did not seek to hide it.   However, their study of economics was an attempt to reveal the truths behind economic law and how one must act in order to achieve specific goals. 

I'm amazed that anyone can claim that there is some sort of disinterested 'correct' answer regarding this positions that wouldn't seek to favor one segment of the population over the other.  This is the nature of political economy.

The lesson that Hazlitt tries to teach in this book is:

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups." (pg 5)

You are right that there isn't a "correct" answer regarding positions of value judgements.  However, often, policy makers enact policies that contradict their stated aims.  The goal of that book is to show how certain seemingly innocuous policies and acts are actually harmful to large portions of the population or, at least, contradict the goals they were supposed to achieve.  I feel that Hazlitt dealt with it in a very thorough, logical and even-handed manner.  You should consider reading the work in its entirety.  It is short and a fairly easy read.

There are 2 fundamental dynamics you should keep in mind when it comes to schools of thought on economics: does this person's position represent the monied intrests or those without?  Or where between these two do they strike a balance?  If you can't accept that, then how do you rationalize that the person writing the book and presenting their arguments are completely removed from the system that they intend to influence with their arguments and positions?  Is it your position (and I honestly do not intend to misrepresent it) that they all are completely 100% objective, somehow above the political and social landscape yet are involved enough with it's working to comment on all facets of it to which they intend to see a desired effect?  Not to say that they don't have a point and that their interests need a degree of representation but there exists extremes on both sides of this argument and those very extremes seem to offer the least in terms of practical worth in our modern era.

Man is a product of his social and political environment--I will not deny it.  I would like to point out however, that Mises, for example, was writing at a time when socialism was the most popular socio-political movement of the age and when his free-market laissez faire views were in the extreme minority.  Mises had first-hand experience with the authoritarian statist policies of the day, fleeing his homeland of Austria because of the Nazis.  He wasn't writing for the money-interests of crony capitalism, the rampant corporatism we see today.  Also, I will not deny that no man is 100% objective and that no science is perfect, but as Mises says

"[it] is customary for people to blame economics for being backward.  Now it is quite obvious that our economic theory is not perfect.  There is no such thing as perfection in human knowledge, nor for that matter in any other human achievement.  Omniscience is denied to man.  The most elaborate theory that seems to satisfy completely our thirst for knowledge may one day be amended or supplanted by a new theory.  Science does not give us absolute and final certainty.  It only gives us assurance within the limits  of our mental abilities and the prevailing state of scientific thought.  A scientific system is but one station in an endlessly progressing search for knowledge.  It is necessarily affected by the insufficiency inherent in every human effort.  But to acknowledge these facts does not mean that present-day economics is backward.  It merely means that economics is a living thing--and to live implies both imperfection and change."

And that is what Mises and the other Austrians attempt to do.  That is, within the limits of their own imperfection as humans, to discover the immutable laws of economics as derived logically through a priori reasoning.  You can know things apodictically: if two parties engage in uncoerced exchange, then they do so because they are both expecting to receive something of greater value than what they are giving up.  Axiomatic propositions such as these do not need to be verified through empirical studies, but can be known logically to be true.  This is the Austrian science of economics.

[Fjordbit]

IP can more easily be debunked from this prospective:

An non-violent act (copying information), needs a violent act (the enforcement of IP rights) to be stopped.

This isn't true at all. I'm not sure what kind of libertarian/voluntaryist you are, but there are many voluntary ways to have IP. First of all, IP can simply be enforced through a DRO mechanism if the society recognizes it as protected property (which is just as arbitrary as real property if you think about it). Even if the society doesn't accept it, I could have it so that before I give my book to you, I have you agree to a contract that you will not copy it and sell it or give it away or distribute in any fashion, and again I can use the DRO if you violate this.

Your statement makes about as much sense as "An non-violent act (squatting on someone's homestead), needs a violent act (the enforcement of property rights) to be stopped." This is a pretty solved problem in the voluntaryist community.

[bustaballs]

I usually recommend Lessons for the Young Economist & perhaps The Law. Hazlitt is great too but might be a bit complex for people with zero understanding of economics.

[The Script]

I usually recommend Lessons for the Young Economist & perhaps The Law. Hazlitt is great too but might be a bit complex for people with zero understanding of economics.

I love The Law, that is to say, the Bastiat essay.  . I have not read Lessons for the Young Economist but have heard high praises of it. Perhaps I'll read it to take a break from Mises' brilliant, but daunting, Human Action.

[jtimon]

I've just started "Economics in one lesson".
Have any of you read Gesell's "Natural economic order" or at least a critique of it?
I don't like the first two parts (on land) much, but the part on money certainly changed my view of economics.
Please, give it a try before having an opinion on him. Gesell != Keynes.

[praxeologist]

IP can more easily be debunked from this prospective:

An non-violent act (copying information), needs a violent act (the enforcement of IP rights) to be stopped.

This isn't true at all. I'm not sure what kind of libertarian/voluntaryist you are, but there are many voluntary ways to have IP. First of all, IP can simply be enforced through a DRO mechanism if the society recognizes it as protected property (which is just as arbitrary as real property if you think about it). Even if the society doesn't accept it, I could have it so that before I give my book to you, I have you agree to a contract that you will not copy it and sell it or give it away or distribute in any fashion, and again I can use the DRO if you violate this.

There is an ontological difference between genuine property (people, land, things like hard drives containing bitcoin blockchain patterns) and those things referred to as "intellectual property" (ideas, patterns and concepts). Even physical things which we refer to as "superabundant" like water, air and sunbeams are actually "scarce goods". There is some limit to their quantity even if it isn't practical to treat them as such a lot of the time. There is no conceivable limit to things like ideas and patterns though, besides those we would derive from limits in the actual world of scarcity. I could write "I love you." an infinite amount of times up until I die of old age or run out of paper or pixels.

This is the way the world is, so no it is not just some arbitrary distinction between IP and real property rights. When property rights are assigned to ideas and patterns, this aspect of the legal order creates a conflict within society. If you look at the history of IP, you will see that things like patents have been, from day one, state grants of monopoly. Even though a person copying the pattern of words in a book doesn't deprive an author of any of his own scarce things, a state gives an author license to go take from "infringers".

I don't think that much of the gamut of IP law will survive the transition to a free society besides law related to fraud. In some really high value situations like an employee charged with keeping a copy of a movie secret before release to theaters, it might be expected for this employee to actually agree to the type of contract you propose. If a movie company depends in large part upon being able to release the movie to theaters first and get revenue before the high quality, easily copied DVD version is released, they might be able to get employees to agree to a situation where the consequences of letting a DVD lay around and end up getting copied are severe.

There's nothing wrong with people agreeing to this type of arrangement, but when A and B make a contract, there is no obligation on C to not copy a book. Your hypothetical free market IP has no teeth beyond A and B, the only people who actually voluntarily agreed to the terms. Therefore it would be necessary for A to force B to agree to some sort of harsh punishment for not sufficiently protecting A's secret word patterns. It just seems unlikely to me that people would agree to this type of contract on a $20 book, when the market will provide an equally good book for $25, or else the law will be just so hard to enforce profitably like things are today and some unique work will just end up pirated.

Your statement makes about as much sense as "An non-violent act (squatting on someone's homestead), needs a violent act (the enforcement of property rights) to be stopped." This is a pretty solved problem in the voluntaryist community.

If I got drunk, wandered in to your house and took a nap on your sofa, would that be a property rights violation IYO? I really don't think I should have to explain why this type of thing is "a violent act", or that if you argue this point anyone should take anything you say seriously.

[Fjordbit]

If I got drunk, wandered in to your house and took a nap on your sofa, would that be a property rights violation IYO? I really don't think I should have to explain why this type of thing is "a violent act", or that if you argue this point anyone should take anything you say seriously.

You are begging the question that people have rights to property. So let's rephrase: If you got drunk, wandered into my house, took a nap on my sofa, woke up, and left, and I never knew, would that be a violent act? IMO no it would not be as no one was harmed and no one was fouled. You got a good night sleep and I didn't care.

The problem with anarcho-capitalism is that it expects people to accept a mythical contract of ownership, but I never ratified that contract of ownership. If you are mining gold from a mine what is it, morally, that gives you exclusive right to that land. Anarcho-capitalism handwaves when it says property rights, but it never answers how people got those rights in the first place. All property that is owned has some aspect of violence attached to it, and in fact the defense of property requires at it's base violence.

Personally, I take another approach to ownership, and actually bitcoins themselves fit in with this philosophy. However, this topic has strayed too much, I think.

[flaxindo]

Economics in One Lesson: http://www.hacer.org/pdf/Hazlitt00.pdf

It's a great read. It's brief. It doesn't go into a lot of technical detail but it does illustrate a central fallacy that many people, even some economists, make when thinking about economics. If you haven't read this book, I'm going to assume you're ignorant about economics until proven otherwise.

I usually recommend Economics for Real People ( http://mises.org/books/econforrealpeople.pdf )

I think it comes off as less paranoid, even though I agree that One Lesson is sound.

Wow... thanks for the tips! I'm on page 54 of Economics for Real People. It makes so much sense! I'm even more impressed with Ron Paul, who's stated he reads from mises.org and lewrockwell.org every day.

I also recommend Ron Paul's books, as well as Griffin's "The Creature from Jekyll Island".

[billyjoeallen]

Yes. Why not? If you steal my bicycle, I can't use it anymore. If I steal your idea, you can still use the idea. Only one of us can use the same oven to bake a cake but an infinite number of people can use the same cake recipe.

If i write a book, I spend time, effort and resources on this process. I need to recoup those expenses + profit. If you copy the book, I get no return on investment. If you copy the book and sell it for profit, I can't compete against your price, because you didn't participate in the original expenses so you can reduce your margins. Think about it with a movie. Lots of money spent on it, jobs to pay, places to book, stories to write, film to edit and god knows what else. If you take it for free, I am losing money in the process, and I certainly didn't make that movie to lose money. If you steal my movie, I can't pay for food or rent anymore, how's that?

But let's discuss the fundamentals: do you think intellect can consist in property?

People write for free all the time. You and I are doing it on this forum. Wagner and Beethoven composed before copyrights. Did it impair their creativity? There is no such thing as intellectual property. It's an artificial commodity no more legitimate than carbon credits or Catholic indulgences. Comodities have to be scarce (not in infinite supply). IP requires FORCE, aggressive, initiatory to remain scarce. That's immoral. 

[malditonuke]

Economics in One Lesson: http://www.hacer.org/pdf/Hazlitt00.pdf

It's a great read. It's brief. It doesn't go into a lot of technical detail but it does illustrate a central fallacy that many people, even some economists, make when thinking about economics. If you haven't read this book, I'm going to assume you're ignorant about economics until proven otherwise.

I usually recommend Economics for Real People ( http://mises.org/books/econforrealpeople.pdf )

I think it comes off as less paranoid, even though I agree that One Lesson is sound.

Wow... thanks for the tips! I'm on page 54 of Economics for Real People. It makes so much sense! I'm even more impressed with Ron Paul, who's stated he reads from mises.org and lewrockwell.org every day.

I also recommend Ron Paul's books, as well as Griffin's "The Creature from Jekyll Island".

[frutza]

I apologize for bringing this up on an obviously Austrian school forum  but what about Keynes and Friedman? Not bad reads either...

[JA37]

I wonder why most economists don't subscribe to the Austrian school. Must be some global conspiracy. Contrary to what one might expect from reading these forums, it's quite a fringe theory.

[Fjordbit]

I wonder why most economists don't subscribe to the Austrian school. Must be some global conspiracy. Contrary to what one might expect from reading these forums, it's quite a fringe theory.

You don't have to believe in a global conspiracy to understand how Keynesian economists are incentivized by state governments, nor why state governments would want to incentivize Keynesians.

[JA37]

You don't have to believe in a global conspiracy to understand how Keynesian economists are incentivized by state governments, nor why state governments would want to incentivize Keynesians.

Please spell it out for me. I'm curious why you think so few economists have found the one true way.
Has perhaps "the market" chosen the best economic model there is, the Keynesian, and discarded the others? The market is always right, isn't it?

[BitterTea]

You don't have to believe in a global conspiracy to understand how Keynesian economists are incentivized by state governments, nor why state governments would want to incentivize Keynesians.

Please spell it out for me. I'm curious why you think so few economists have found the one true way.
Has perhaps "the market" chosen the best economic model there is, the Keynesian, and discarded the others? The market is always right, isn't it?

Because Keynes supports state intervention in matters of money, and states like to intervene in matters of money?

[The Script]

If I got drunk, wandered in to your house and took a nap on your sofa, would that be a property rights violation IYO? I really don't think I should have to explain why this type of thing is "a violent act", or that if you argue this point anyone should take anything you say seriously.

You are begging the question that people have rights to property. So let's rephrase: If you got drunk, wandered into my house, took a nap on my sofa, woke up, and left, and I never knew, would that be a violent act? IMO no it would not be as no one was harmed and no one was fouled. You got a good night sleep and I didn't care.

If people don't have rights to property they cannot survive. All organisms are subject to the 2nd Law of Thermodynamics, that is that the entropy of an open system is always increasing. In order to counteract this, organisms must decrease entropy locally by controlling and consuming resourcs around them. Ownership of property is simply the economic controll of resources, and fundamentally, energy, and the ability to utilize said resources in order to sustain oneself.  This is the basis of property rights.

For an insightful look at property without resort to the arbitrary constructs of "God-given" or "Natural" rights, read Butler Schafer's excellent book entitled "Boundaries of Order". Free online in PDF form.

[JA37]

Because Keynes supports state intervention in matters of money, and states like to intervene in matters of money?

That could be one of the explanations why states like Keynesian theory, but it doesn't explain why most economists do.
 

[malditonuke]

Because Keynes supports state intervention in matters of money, and states like to intervene in matters of money?

That could be one of the explanations why states like Keynesian theory, but it doesn't explain why most economists do.
 

Because it turns the dismal science into alchemy.