Libertarianism, Anarcho Capitalism and Austrian Economics Thread

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  1. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    What Libertarianism Is
    [​IMG]

    Property, Rights, and Liberty
    Libertarians tend to agree on a wide array of policies and principles. Nonetheless, it is not easy to find consensus on what libertarianism's defining characteristic is, or on what distinguishes it from other political theories and systems.

    Various formulations abound. It is said that libertarianism is about individual rights, property rights,1 the free market, capitalism, justice, or the nonaggression principle. Not just any of these will do, however. Capitalism and the free market describe the catallactic conditions that arise or are permitted in a libertarian society, but do not encompass other aspects of libertarianism. And individual rights, justice, and aggression collapse into property rights. As Murray Rothbard explained, individual rights are property rights.2 And justice is just giving someone his due, which depends on what his rights are.3

    The nonaggression principle is also dependent on property rights, since what aggression is depends on what our (property) rights are. If you hit me, it is aggression because I have a property right in my body. If I take from you the apple you possess, this is trespass — aggression — only because you own the apple. One cannot identify an act of aggression without implicitly assigning a corresponding property right to the victim.

    So capitalism and the free market are too narrow, and justice, individual rights, and aggression all boil down to, or are defined in terms of, property rights. What of property rights, then? Is this what differentiates libertarianism from other political philosophies — that we favor property rights, and all others do not? Surely such a claim is untenable.

    After all, a property right is simply the exclusive right to control a scarce resource.4 Property rights specify which persons own — that is, have the right to control — various scarce resources in a given region or jurisdiction. Yet everyone and every political theory advance some theory of property. None of the various forms of socialism deny property rights; each version will specify an owner for every scarce resource.5 If the state nationalizes an industry, it is asserting ownership of these means of production. If the state taxes you, it is implicitly asserting ownership of the funds taken. If my land is transferred to a private developer by eminent domain statutes, the developer is now the owner. If the law allows a recipient of racial discrimination to sue his employer for a sum of money, he is the owner of the money.6

    Protection of and respect for property rights is thus not unique to libertarianism. What is distinctive about libertarianism is its particular property assignment rules: its view concerning who is the owner of each contestable resource, and how to determine this.

    Property in Bodies
    A system of property rights assigns a particular owner to every scarce resource. These resources obviously include natural resources such as land, fruits of trees, and so on. Objects found in nature are not the only scarce resources, however. Each human actor has, controls, and is identified and associated with a unique human body, which is also a scarce resource.7 Both human bodies and nonhuman, scarce resources are desired for use as means by actors in the pursuit of various goals.

    Accordingly, any political theory or system must assign ownership rights in human bodies as well as in external things. Let us consider first the libertarian property assignment rules with respect to human bodies, and the corresponding notion of aggression as it pertains to bodies. Libertarians often vigorously assert the "nonaggression principle." As Ayn Rand said, "So long as men desire to live together, no man may initiate — do you hear me? No man may start — the use of physical force against others."8 Or, as Rothbard put it:

    The libertarian creed rests upon one central axiom: that no man or group of men may aggress against the person or property of anyone else. This may be called the "nonaggression axiom." "Aggression" is defined as the initiation of the use or threat of physical violence against the person or property of anyone else. Aggression is therefore synonymous with invasion.9

    In other words, libertarians maintain that the only way to violate rights is by initiating force — that is, by committing aggression. (Libertarianism also holds that, while the initiation of force against another person's body is impermissible, force used in response to aggression — such as defensive, restitutive, or retaliatory/punitive force — is justified.)10

    Now in the case of the body, it is clear what aggression is: invading the borders of someone's body, commonly called battery, or, more generally, using the body of another without his or her consent.11 The very notion of interpersonal aggression presupposes property rights in bodies — more particularly, that each person is, at least prima facie, the owner of his own body.12

    Nonlibertarian political philosophies have a different view. Each person has some limited rights in his own body, but not complete or exclusive rights. Society — or the state, purporting to be society's agent — has certain rights in each citizen's body, too. This partial slavery is implicit in state actions and laws such as taxation, conscription, and drug prohibitions.

    The libertarian says that each person is the full owner of his body: he has the right to control his body, to decide whether or not he ingests narcotics, joins an army, and so on. Those various nonlibertarians who endorse any such state prohibitions, however, necessarily maintain that the state, or society, is at least a partial owner of the body of those subject to such laws — or even a complete owner in the case of conscriptees or nonaggressor "criminals" incarcerated for life. Libertarians believe in self-ownership. Nonlibertarians — statists — of all stripes advocate some form of slavery.

    Self-ownership and Conflict-avoidance
    Without property rights, there is always the possibility of conflict over contestable (scarce) resources. By assigning an owner to each resource, legal systems make possible conflict-free use of resources, by establishing visible boundaries that nonowners can avoid. Libertarianism does not endorse just any property assignment rule, however.13 It favors self-ownership over other-ownership (slavery).

    The libertarian seeks property assignment rules because he values or accepts various grundnorms such as justice, peace, prosperity, cooperation, conflict-avoidance, and civilization.14 The libertarian view is that self-ownership is the only property assignment rule compatible with these grundorms; it is implied by them.

    As Professor Hoppe has shown, the assignment of ownership to a given resource must not be random, arbitrary, particularistic, or biased, if it is actually to be a property norm that can serve the function of conflict-avoidance.15 Property title has to be assigned to one of competing claimants based on "the existence of an objective, intersubjectively ascertainable link between owner and the" resource claimed.16 In the case of one's own body, it is the unique relationship between a person and his body — his direct and immediate control over his body, and the fact that, at least in some sense, a body is a given person and vice versa — that constitutes the objective link sufficient to give that person a claim to his body superior to typical third party claimants.

    Moreover, any outsider who claims another's body cannot deny this objective link and its special status, since the outsider also necessarily presupposes this in his own case. This is so because, in seeking dominion over the other and in asserting ownership over the other's body, he has to presuppose his own ownership of his body. In so doing, the outsider demonstrates that he does place a certain significance on this link, even as (at the same time) he disregards the significance of the other's link to his own body.17

    Libertarianism recognizes that only the self-ownership rule is universalizable and compatible with the goals of peace, cooperation, and conflict-avoidance. We recognize that each person is prima facie the owner of his own body because, by virtue of his unique link to and connection with his own body — his direct and immediate control over it — he has a better claim to it than anyone else.

    Property in External Things
    Libertarians apply similar reasoning in the case of other scarce resources — namely, external objects in the world that, unlike bodies, were at one point unowned. In the case of bodies, the idea of aggression being impermissible immediately implies self-ownership. In the case of external objects, however, we must identify who the owner is before we can determine what constitutes aggression.

    As in the case with bodies, humans need to be able to use external objects as means to achieve various ends. Because these things are scarce, there is also the potential for conflict. And, as in the case with bodies, libertarians favor assigning property rights so as to permit the peaceful, conflict-free, productive use of such resources. Thus, as in the case with bodies, property is assigned to the person with the best claim or link to a given scarce resource — with the "best claim" standard based on the goals of permitting peaceful, conflict-free human interaction and use of resources.

    Unlike human bodies, however, external objects are not parts of one's identity, are not directly controlled by one's will, and — significantly — they are initially unowned.18 Here, the libertarian realizes that the relevant objective link is appropriation — the transformation or embordering of a previously unowned resource, Lockean homesteading, the first use or possession of the thing.19 Under this approach, the first (prior) user of a previously unowned thing has a prima facie better claim than a second (later) claimant, solely by virtue of his being earlier.

    Why is appropriation the relevant link for determination of ownership? First, keep in mind that the question with respect to such scarce resources is: who is the resource's owner? Recall that ownership is the right to control, use, or possess,20 while possession is actual control — "the factual authority that a person exercises over a corporeal thing."21 The question is not who has physical possession; it is who has ownership.

    Thus, asking who is the owner of a resource presupposes a distinction between ownership and possession — between the right to control, and actual control. And the answer has to take into account the nature of previously unowned things — namely, that they must at some point become owned by a first owner.

    The answer must also take into account the presupposed goals of those seeking this answer: rules that permit conflict-free use of resources. For this reason, the answer cannot be whoever has the resource or whoever is able to take it is its owner. To hold such a view is to adopt a might-makes-right system, where ownership collapses into possession for want of a distinction.22 Such a system, far from avoiding conflict, makes conflict inevitable.23

    Instead of a might-makes-right approach, from the insights noted above it is obvious that ownership presupposes the prior-later distinction: whoever any given system specifies as the owner of a resource, he has a better claim than latecomers.24 If he does not, then he is not an owner, but merely the current user or possessor. If he is supposed an owner on the might-makes-right principle, in which there is no such thing as ownership, it contradicts the presuppositions of the inquiry itself. If the first owner does not have a better claim than latecomers, then he is not an owner, but merely a possessor, and there is no such thing as ownership.

    More generally, latecomers' claims are inferior to those of prior possessors or claimants, who either homesteaded the resource or who can trace their title back to the homesteader or earlier owner.25 The crucial importance of the prior-later distinction to libertarian theory is why Professor Hoppe repeatedly emphasizes it in his writing.26

    Thus, the libertarian position on property rights is that, in order to permit conflict-free, productive use of scarce resources, property titles to particular resources are assigned to particular owners. As noted above, however, the title assignment must not be random, arbitrary, or particularistic; instead, it has to be assigned based on "the existence of an objective, intersubjectively ascertainable link between owner" and the resource claimed.27As can be seen from the considerations presented above, the link is the physical transformation or embordering of the original homesteader, or a chain of title traceable by contract back to him.28

    Consistency and Principle
    Not only libertarians are civilized. Most people give some weight to some of the above considerations. In their eyes, a person is the owner of his own body — usually. A homesteader owns the resource he appropriates — unless the state takes it from him "by operation of law."29 This is the principal distinction between libertarians and nonlibertarians: Libertarians are consistently opposed to aggression, defined in terms of invasion of property borders, where property rights are understood to be assigned on the basis of self-ownership in the case of bodies. And in the case of other things, rights are understood on the basis of prior possession or homesteading and contractual transfer of title.

    This framework for rights is motivated by the libertarian's consistent and principled valuing of peaceful interaction and cooperation — in short, of civilized behavior. A parallel to the Misesian view of human action may be illuminating here. According to Mises, human action is aimed at alleviating some felt uneasiness.30 Thus, means are employed, according to the actor's understanding of causal laws, to achieve various ends — ultimately, the removal of uneasiness.

    Civilized man feels uneasy at the prospect of violent struggles with others. On the one hand, he wants, for some practical reason, to control a given scarce resource and to use violence against another person, if necessary, to achieve this control. On the other hand, he also wants to avoid a wrongful use of force. Civilized man, for some reason, feels reluctance, uneasiness, at the prospect of violent interaction with his fellow man. Perhaps he has reluctance to violently clash with others over certain objects because he has empathy with them.31 Perhaps the instinct to cooperate is a result of social evolution. As Mises noted,

    There are people whose only aim is to improve the condition of their own ego. There are other people with whom awareness of the troubles of their fellow men causes as much uneasiness as or even more uneasiness than their own wants.32

    Whatever the reason, because of this uneasiness, when there is the potential for violent conflict, the civilized man seeks justification for the forceful control of a scarce resource that he desires but which some other person opposes. Empathy — or whatever spurs man to adopt the libertarian grundnorms — gives rise to a certain form of uneasiness, which gives rise to ethical action.

    Civilized man may be defined as he who seeks justification for the use of interpersonal violence. When the inevitable need to engage in violence arises — for defense of life or property — civilized man seeks justification. Naturally, since this justification-seeking is done by people who are inclined to reason and peace (justification is after all a peaceful activity that necessarily takes place during discourse),33 what they seek are rules that are fair, potentially acceptable to all, grounded in the nature of things, and universalizable, and which permit conflict-free use of resources.

    Libertarian property rights principles emerge as the only candidate that satisfies these criteria. Thus, if civilized man is he who seeks justification for the use of violence, the libertarian is he who is serious about this endeavor. He has a deep, principled, innate opposition to violence, and an equally deep commitment to peace and cooperation.

    For the foregoing reasons, libertarianism may be said to be the political philosophy that consistently favors social rules aimed at promoting peace, prosperity, and cooperation.34 It recognizes that the only rules that satisfy the civilized grundnorms are the self-ownership principle and the Lockean homesteading principle, applied as consistently as possible.

    And as I have argued elsewhere, because the state necessarily commits aggression, the consistent libertarian, in opposing aggression, is also an anarchist.35

    This article is adapted from a "What Libertarianism Is,"[​IMG] in Jörg Guido Hülsmann & Stephan Kinsella, eds.,Property, Freedom, and Society: Essays in Honor of Hans-Hermann Hoppe (Mises Institute, 2009). An abbreviated version of this article was incorporated into the author's speech "Intellectual Property and Libertarianism," presented at Mises University 2009 (July 30, 2009; audio).
     
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  3. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    OrangeFlorian This Machine Kills Hippies Senior Member

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  5. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  6. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  7. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    Broken Politics, Broken Economics
    • [​IMG]
    9 COMMENTS
    TAGS EducationStrategyPolitical Theory

    16 HOURS AGOJeff Deist
    [Jeff Deist's comments at the 2016 Mises Supporters Summit in Asheville, North Carolina, September 16.]

    Before we hear from Judge Napolitano, I’d like to speak briefly tonight about where we are as a society, and what role the Mises Institute plays, or ought to play, in that society.

    Most of the country is caught up in the presidential election, following the latest news about Hillary’s health or Trump’s pronouncements.

    But there’s an opportunity here.

    Because no matter who wins, millions of people — maybe 40 percent of the country — are going to view the winner as illegitimate and irredeemable.

    Millions of Americans think Hillary should be in jail rather than the White House. And millions more view Trump as nothing more than a reactionary leader of the deplorables.

    In fact a recent Gallup poll cites that fully one-third of Americans won’t trust the election results anyway — which is to say they don’t trust government to hold an honest election.

    So forget any nonsense about “the most important election of our lifetime” in the conventional sense.

    Trump vs. Hillary represents something much bigger: what we might call the end of politics, or at least the limits of politics. Americans, and Europeans too, are witnessing the end of the myth of democratic consensus. Democratic voting, so called, doesn’t yield some noble compromise between Left and Right, but only an entrenched political class and its system of patronage.

    We know this already — but now millions of ordinary people are waking up to see that our problems — with government debt, with wars, with currencies, with entitlements, with taxes and regulations, with intractable social issues — cannot be solved politically. It’s not necessarily an ideological awakening, but simply a recognition of reality.

    There’s simply no political will or political consensus to address these big picture problems. Politics is broken.

    There’s something profoundly healthy about witnessing this. The understanding that political solutions don’t exist, that our grade-school view of government is a sham — is a profound opportunity. Angry voters, populism, nationalism, anti-globalism, anti-elitism — these are all symptoms of healthy hostility toward politics. We can turn up our noses at these movements, and dismiss them as anti-intellectual or illiberal. Or we can embrace the opportunity they present.

    That opportunity — to make the case for a fully free society, one not organized around politics and the state, is at the heart of the Mises Institute’s mission.

    We have never been afraid to make it. Call it Mises’s view of self-determination taken to its ultimate conclusion, call it Rothbardian anarcho-capitalism, call it a private law society, call it whatever you like — the Mises Institute does not, and has never, shied away from advocating pure stateless libertarianism.

    And I don’t think that can be said of any other organization in the world, inside or outside the Beltway.

    But make no mistake — we are fellow travelers with anyone who wants to reduce or eliminate the role of government on any issue, for any reason.

    That means conservatives abandoning the GOP, progressives tired of the cronyist Wall Street machine, anti-Fed populists, homeschoolers, truck drivers, soldiers, stay at home moms, fed-up nonvoters: anyone interested in liberty, even on a single issue.

    Not everyone in the world sees the world the way we do — and that’s OK. We’re here to provide a gateway, to spark an interest, to make free resources available and feed that interest.

    So as politics collapses, we want the Institute to serve as an intellectual home for anyone interested in a society organized around markets and civil society rather than force: not a utopia, but a society where the great economic, social, and cultural questions of the day are increasingly not determined by politics. We want the Mises Institute to stand as a counterbalance to the dominant political narrative.

    Broken Economics
    But we have another critical mission: saving economics from economists. Because it’s not just politics that is broken. Mainstream economics is equally broken, both as a profession and a field of study.

    Its credibility — hopelessly bound up in forecasting and mathematical modeling — is shot. Its reputation is in tatters. It fails to inspire young scholars, while the PhD factories produce data historians who don’t really understand economics at all.

    Consider that mainstream economists:

    • failed utterly to predict — or understand — the Crash of ’08;
    • failed utterly to predict — or understand — the housing crisis;
    • don’t understand money as a market commodity, rather than central bank scrip produced at will;
    • don’t understand inflation as a monetary phenomenon;
    • don’t understand interest rates, but instead view them as a policy tool;
    • don’t understand malinvestment, and can’t explain booms and busts;
    • don’t understand praxeology — don’t even know the concept — but are absolutely wedded to “proving” their hypotheses using empirical models;
    • don’t understand the role of capital markets as a method of allocating resources to their best and highest uses — along with bankruptcy and its role as the liquidating cure;
    • don’t understand or know much about the history of economic thought; (In fact, I recently spoke with Professor Ben Powell during our Mises U conference and he confirmed my worst suspicions: it is entirely possible to obtain a PhD in economics today without learning or knowing a single thing about economic history. It’s as though universities kidnap young economists and drop them on an island, with no context and no idea of how they got there.)
    • And finally, consider that 300 Ivy League PhD economists in the Eccles Building, employed by the Fed, can’t figure out whether to raise the Fed Funds rate a scant quarter point — as though the fate of the world hangs in the balance.
    This is the state of orthodox economics today. This is where the Mises Institute comes in.

    The correction is obvious: economics needs a wholesale Austrian counter-revolution, away from neo-liberalism or neo-Keynesism or whatever you want to term a jumbled set of beliefs that always come down to governments or central banks stimulating demand at any cost.

    The path forward, as always is education: but it is not limited to academia by any means. On the contrary, none of us can afford to sit on the sidelines.

    You’re probably familiar with Mises’s argument, from his chapter in Human Action on the place of economics in learning, against relegating it to academia and esoteric circles. Mises believed everyone had a duty to learn economics. In fact, he thought that the market economy vs. socialism was the overarching issue of our day — just as religious and monarchical absolutism had been in earlier centuries.

    Note his populist tone here:

    There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon “experts” and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people's domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake.

    The call to duty, as Mises saw it, sounded for every intelligent layman. And that’s at the heart of what we do at the Mises Institute: teaching sound economics to people from all walks of life.

    Because what exactly is a school, in the 21st century? Well, it’s a place where one learns. But beyond that, “school” is being radically redefined:

    • it increasingly takes place in the digital world rather than a brick and mortar building;
    • it’s not for young people only;
    • there are no administrators or forced curricula;
    • there are no irrelevant classes;
    • learning takes place at the student’s pace, any time of day, anywhere in the world, and
    • students consume as much or as little as suits their needs — for the first time in history, teaching becomes market focused.
    By these measures, the Mises Institute is the definition of a modern school. We have students from all walks of life, learning in their own way, on their own time. For some, learning economics might mean obtaining a PhD and devoting their lives to academic work. For others, simply following the Institute’s twitter feed might be all the education they wish to consume. Learning is no longer a one-size-fits-all proposition.

    And I’m pleased to say mises.org — the largest and best website in the world for Austrian and libertarian content — is on track to host 5.5 million individuals this year, a big increase even in the face of a political year. And the husband-wife duo of Professors Peter and Sandy Klein have created a new online group of core classes on a new online platform that will make key parts of the Mises U experience available to students around the world.

    So from my perspective, we are the economics of the future and the school of the future. Thank you for making it possible.
     
  8. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  9. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  10. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  11. busesaway

    busesaway Regular Member

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    I wish the BJP would follow more 'Hindu' policies. On the European political axis, a more 'traditional' BJP would mean that it would move to the left, and it would be politically closest to a center party such as "The Liberal Party of Canada".

    We might see a 'humanitarian' liberal-economic party emerge if the BJP went to the left too.
     
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  12. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    Yes the BJP must become the party of the free market. The thing about modi is that because he was poor his whole life he's probably never even touched on Milton Friedman or Friedrich August von Hayek's works.
     
  13. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  14. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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  15. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    The Mechanics Of The Black Market

    A black market is a forum whereby goods or services are exchanged illegally. What makes the market "black" can either be the illegal nature of the goods and services themselves, the illegal nature of the transaction or both. For example, while the buying and selling of food is not illegal, the transaction enters the black market when the good sold is illegal, such as foie gras in California. And while it's perfectly legal to sell hamburgers, when an all-cash restaurant does not remit to the state government the mandatory sales taxes on its transactions, it too has entered the black market.

    Why Black Markets ExistBlack markets, also called shadow markets, come about when people want to exchange goods or services that are prohibited by governments. Black markets skew economic data, as transactions are unrecorded. Black markets also arise when people don't want to pay taxes on the transaction for legal or illegal goods or services. Some black markets exist simply because people don't realize there are laws they aren't following, such as bartering and not reporting the taxable value of the transaction, or hiring a regular housekeeper or babysitter, but failing to pay employment taxes.

    The licensing restrictions that governments impose on numerous occupations cause some workers to enter the black market because they don't want or can't afford to invest the time and money to obtain required licenses. For example, in New York City, one must purchase a license called a medallion in order to legally operate a taxi business. These medallions cost more than $600,000, making them prohibitively expensive for most entrepreneurs. As a result, some people may choose to operate black-market taxis without a license - at least, until they are caught.

    Sometimes participants in black markets don't want to act illegally, but because they lack the ability to work legally and need to make money, they don't report their jobs or income to the government. Such situations arise when illegal immigrants obtain jobs, when students traveling abroad obtain employment without acquiring a work visa or when children work in violation of minimum age requirements.

    Black markets can also appear when government-imposed price ceilings create shortages. For example, if the government caps the price at which a grocery store may sell bottled water after a natural disaster, the store will quickly run out of water. Vendors will then appear selling that water at the higher prices people are actually willing to pay. This secondary market is a black market.

    Governments can also cause black markets through overregulation. An extreme example can be found in Cuba, where the rationing and ineffective central planning of communism make it difficult to purchase desired quantities of even basic products such as cooking oil. Black markets are rampant because citizens want to buy things that are difficult to come by through legal channels. They're also common because it's so hard to find a job.

    High unemployment can give rise to black markets. When workers can't find jobs in the above-ground economy, they may turn to jobs in the underground economy. These jobs could be as innocuous as fixing a neighbor's toilet (but being paid in cash and not reporting the income to the tax authorities) or as serious as selling cocaine (where not only the sale of the product itself, but also the non-reporting of taxable income, is illegal).

    What Can You Buy in the Black Market? Consumers can buy and sell numerous types of goods and services in the black market. Anything that is subject to the conditions described in the previous section can show up in the underground economy. In the United States, we tend to think of illegal drugs, prostitution, designer knockoffs and ticket scalping when we think of black markets.

    More serious and lesser-known black markets operating worldwide include those in human organs, endangered species, babies, weapons and slave labor (human trafficking).

    Black markets also exist where people might never expect to find them. Online, it's possible to buy an eBay account (to falsely obtain a favorable seller rating) and to buy Twitter followers (to inflate one's perceived popularity).

    The Case for Black MarketsSome people are in favor of black markets. These markets can supply goods that, while illegal (such as marijuana), arguably improve quality of life (for example, when used to alleviate pain for patients who haven't found relief from legal pharmaceuticals). Black markets can provide legal necessities that are in short supply, as in the case of everyday Cuba or a city hit by a hurricane. Also, the shadow economy makes it possible for people to earn a living who would otherwise be destitute or seek welfare - people who would be perfectly employable under less government regulation or in an economy with a higher employment rate.

    Overall, the case for black markets is highly subjective and depends on one's moral beliefs. If you think that drug use is a victimless crime, you might not have a problem with the black market for illegal drugs. If you think tax rates are too high, you might be happy to hire workers under the table.

    The Case Against Black MarketsBlack markets have a number of downsides, some of which are subjective, but many of which almost everyone would agree are serious problems.

    Some black market goods are stolen from legitimate markets, taking business away from law-abiding entrepreneurs. While some consumers might not mind buying a stolen designer handbag at a discount because they think the retailer's price is too high, others would be appalled if they knew that while they thought they were simply getting a bargain, they were really supporting an organized crime ring. There is often a dark side to organized crime that goes beyond theft and the resale of stolen goods. This and other black market activities are sometimes used to fund terrorism since the profits can't easily be traced.

    Violence is another problem inherent in black markets. Because these markets are unregulated, participants can't rely on legitimate police protection in the event of theft or other crimes. If a drug dealer's stash of methamphetamines is stolen by a rival dealer, he can't ask the police to help him get his merchandise back. The dealer might send one of his employees to shoot the thief and reclaim the stolen goods, compounding the effects of the original crime.

    Another argument against black markets is that because their participants don't pay taxes, a heavier tax burden falls on law-abiding citizens.

    The Bottom LineBlack markets will continue to exist as long as we have regulations and taxes. Laws that prevent people from buying and selling the goods and services they desire and taxes that prevent people from keeping what they feel is their fair share of earned income will always cause people to hide their activities from law enforcement agencies, tax authorities and other regulators.



    Read more: The Mechanics Of The Black Market | Investopedia http://www.investopedia.com/articles/economics/12/mechanics-black-market.asp#ixzz4Lr5IiUrF
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  16. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    Does anyone here read Ayn Rand?
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    OrangeFlorian This Machine Kills Hippies Senior Member

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    hoppe is fam hoppe is bro ^w^

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    OrangeFlorian This Machine Kills Hippies Senior Member

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  19. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    How to Fight the Modern State
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    TAGS Free MarketsLegal SystemPolitical Theory

    08/16/2013Hans-Hermann Hoppe
    In this 1997 speech by Hans-Hermann Hoppe, now available as an ebook from the Mises Institute under the title What Must Be Done, Hoppe presents a plan of action for anarcho-capitalists against the modern state.

    Hoppe begins by examining the nature of the state as “a monopolist of defense and the provision and enforcement of law and order.” Like all state-mandated monopolies, the monopoly of law enforcement also leads to higher prices and lower quality of services. Why is this state of affairs tolerated? The modern democratic states, much more than the monarchies and princely estates of old, are seen as moral and necessary despiteample evidence to the contrary.

    In this initial analysis, we find much of what Hoppe eventually expanded into his 2001 book Democracy: The God that Failed, which systematically dismantled modern arguments in favor of the democratic state.

    In the final portion of his speech, Hoppe turns to discussing how a modern partisan of liberty might act to counter the march of centralization and the destruction of property, culture, learning, and natural social hierarchies.

    A Bottom-Up Revolution
    At last to the detailed explanation of the meaning of this bottom-up revolutionary strategy. For this, let me turn to my earlier remarks about the defensive use of democracy, that is, the use of democratic means for nondemocratic, libertarian pro-private property ends. Two preliminary insights I have already reached here.

    First, from the impossibility of a top-down strategy, it follows that one should expend little or no energy, time, and money on nationwide political contests, such as presidential elections. And also not on contests for central government, in particular, less effort on senatorial races than on house races, for instance.

    Second, from the insight into the role of intellectuals, in the preservation of the current system, the current protection racket, it follows that one should likewise expend little or no energy, time, or money trying to reform education and academia from the inside. By endowing free enterprise or private property chairs within the established university system, for instance, one only helps to lend legitimacy to the very idea that one wishes to oppose. The official education and research institutions must be systematically defunded and dried up. And to do so all support of intellectual work, as an essential task of this overall task in front of us, should of course be given to institutions and centers determined to do precisely this.

    The reasons for both of these pieces of advice are straightforward: Neither the population as a whole nor all educators and intellectuals in particular are ideologically completely homogeneous. And even if it is impossible to win a majority for a decidedly antidemocratic platform on a nationwide scale, there appears to be no insurmountable difficulty in winning such a majority in sufficiently small districts, and for local or regional functions within the overall democratic government structure. In fact, there seems to be nothing unrealistic in assuming that such majorities exist at thousands of locations. That is, locations dispersed all over the country but not evenly dispersed …

    But what then? Everything else falls almost automatically from the ultimate goal, which must be kept permanently in mind, in all of one’s activities: the restoration from the bottom-up of private property and the right to property protection; the right to self-defense, to exclude or include, and to freedom of contract. And the answer can be broken down into two parts.

    First, what to do within these very small districts, where a pro-private property candidate and anti-majoritarian personality can win. And second, how to deal with the higher levels of government, and especially with the central federal government. First, as an initial step, and I’m referring now to what should be done on the local level, the first central plank of one’s platform should be: one must attempt to restrict the right to vote on local taxes, in particular on property taxes and regulations, to property and real estate owners. Only property owners must be permitted to vote, and their vote is not equal, but in accordance with the value of the equity owned, and the amount of taxes paid.

    Further, all public employees — teachers, judges, policemen — and all welfare recipients, must be excluded from voting on local taxes and local regulation matters. These people are being paid out of taxes and should have no say whatsoever how high these taxes are. With this platform one cannot of course win everywhere; you cannot win in Washington, D.C. with a platform like this. But I dare say that in many locations this can be easily done. The locations have to be small enough and have to have a good number of decent people.

    Consequently, local taxes and rates as well as local tax revenue will inevitably decrease. Property values and most local incomes would increase whereas the number and payment of public employees would fall. Now, and this is the most decisive step, the following thing must be done, and always keep in mind that I am talking about very small territorial districts, villages.

    In this government funding crisis which breaks out once the right to vote has been taken away from the mob, as a way out of this crisis, all local government assets must be privatized. An inventory of all public buildings, and on the local level that is not that much — schools, fire, police station, courthouses, roads, and so forth — and then property shares or stock should be distributed to the local private property owners in accordance with the total lifetime amount of taxes — property taxes —that these people have paid. After all, it is theirs, they paid for these things …

    Without local enforcement, by compliant local authorities, the will of the central government is not much more than hot air. Yet this local support and cooperation is precisely what needs to be missing. To be sure, so long as the number of liberated communities is still small, matters seem to be somewhat dangerous. However, even during this initial phase in the liberation struggle, one can be quite confident.

    It would appear to be prudent during this phase to avoid a direct confrontation with the central government and not openly denounce its authority or even abjure the realm. Rather, it seems advisable to engage in a policy of passive resistance and noncooperation. One simply stops to help in the enforcement in each and every federal law. One assumes the following attitude: "Such are your rules, and you enforce them. I cannot hinder you, but I will not help you either, as my only obligation is to my local constituents …”
     
  20. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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    What A Divided Berlin Still Teaches Us Today
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    TAGS World HistoryPolitical Theory

    11/13/2014Hans-Hermann Hoppe
    [From A Theory of Socialism and Capitalism, first published in 1989, shortly before the fall of the Berlin Wall.]

    The case of West and East Germany is particularly instructive. Here, history provides us with an example that comes as close to that of a controlled social experiment as one could probably hope to get. A quite homogeneous population, with very much the same history, culture, character structure, work ethics, divided after Hitler-Germany’s defeat in World War II.

    In West Germany, more because of lucky circumstances than the pressure of public opinion, a remarkably free market economy was adopted, the previous system of all-around price controls abolished in one stroke, and almost complete freedom of movement, trade, and occupation introduced. In East Germany, on the other hand, under Soviet Russian dominance, socialization of the means of production, i.e., an expropriation of the previous private owners, was implemented. Two different institutional frameworks, two different incentive structures have thus been applied to the same population. The difference in the results is impressive. While both countries do well in their respective blocs, West Germany has the highest standard of living among the major West-European nations and East Germany prides itself in being the most well-off country in the East bloc.

    The standard of living in the West is so much higher and has become relatively more so over time, that despite the transfer of considerable amounts of money from West to East by government as well as private citizens and increasingly socialist policies in the West, the visitor going from West to East is simply stunned as he enters an almost completely different, impoverished world. As a matter of fact, while all of the East-European countries are plagued by the emigration problem of people wanting to leave for the more prosperous capitalist West with its increased opportunities, and while they all have gradually established tighter border controls, thus turning these countries into sort of gigantic prisoner camps in order to prevent this outflow, the case of Germany is a most striking one. With language differences, traditionally the most severe natural barrier for emigrants, nonexistent, the difference in living standards between the two Germanys proved to be so great and emigration from East to West took on such proportions, that in 1961 the socialist regime in East Germany, in a last desperate step, finally had to close its borders to the West completely. To keep the population in, it had to build a system the likes of which the world had never seen of walls, barbed wire, electrified fences, mine fields, automatic shooting devices, watchtowers, etc., almost 900 miles long, for the sole purpose of preventing its people from running away from the consequences of Russian-type socialism.

    Besides exemplifying the main point, the case of the two Germanys, because of its experimental-like character, proves particularly helpful in illustrating the truth of the rest of the theoretically derived conclusions. Looking at comparable social positions, almost nowhere in West Germany will one find people working as little, as slowly, or as negligently (while the working hours, higher in the East, are of course regulated!) as their East German counterparts. Not, to be sure, because of any alleged differences in mentality or work ethics, as those are very much the same historically, but because the incentive to work is considerably reduced by a policy scheme that effectively closes all or most outlets for private investment. Effective work in East Germany is most likely to be found in the underground economy. And in response to the various disincentives to work, and in particular to work in the “officially” controlled economy, there is also a tendency among East Germans to withdraw from public life and to stress the importance of privacy, the family, relatives, and personal friends and connections, significantly exceeding what is seen in the West.

    There is also ample evidence of misallocation, just as the theory would lead one to expect. While the phenomenon of productive factors that are not used (at least not continuously) but are simply inactive because complementary factors are lacking can of course be observed in the West, in the East (and again, in the German case certainly not because of differences in organizational talents) it is observed everywhere as a permanent feature of life. And while it is normally quite difficult in the West, and requires special entrepreneurial talent to point out changes in the use of certain means of production that would result in an overall improvement in the output of consumer goods, this is relatively easy in the East-bloc countries. Almost everyone working in East Germany knows many ways to put the means of production to more urgent uses than ones that are currently being used, where they are evidently wasted and cause shortages of other, more heavily demanded goods. But since they are not able to bid them away and must instead go through tedious political procedures to initiate any changes, nothing much can be or indeed is done.

    Experience also corroborates what has been said about the other side of the coin: the overutilization of publicly owned means of production. In West Germany such public goods also exist, and as would be expected, they are in relatively bad shape. But in East Germany, and no differently or in fact even worse in the other Soviet-dominated countries, where all factors of production are socially owned, insufficiently maintained, deteriorating, unrepaired, rusting, even simply vandalized production factors, machinery, and buildings are truly rampant. Further, the ecology crisis is much more dramatic in the East, in spite of the relatively underdeveloped state of the general economy, than in the West — and all this is not, as the case of Germany proves clearly enough, because there are differences in people’s “natural” inclination to care and to be careful.

    Finally, as regards the theoretically predicted changes in the social and personality structure, complaints about superiors are, of course, quite a common phenomenon everywhere. But in the countries of Russian-type socialism, where the assignment of positions in the hierarchy of caretakers is and must be entirely a politicalaffair, such complaints about downright incompetent, unqualified, and ridiculous superiors are, even if not more loudly voiced, most frequent, most severe, and best-founded, and decent people are most often driven to despair or cynicism as a consequence. And since a few people from East Germany still go to West Germany at an age where they are still members of the labor force, some as escapees but more frequently because a sort of ransom has been paid for them, sufficient material also exists to illustrate the conclusion that in the long run a socialized economy will reduce people’s productive capacities. Among those going to the West there is a significant number who led quite normal productive lives in the East but who, despite the absence of any linguistic and cultural barriers, prove to be incapable of, or have the greatest difficulties, adapting to Western society with its increased demand for productive and competitive skills and spirits.

    Image source: Wikipedia: Statues_of_Karl_Marx_and_Friedrich_Engels.
     
  21. OrangeFlorian

    OrangeFlorian This Machine Kills Hippies Senior Member

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