Why I’m Bullish on the Future of Capitalism

Why am I not worried that some group of people or the entire world are ‘moving towards socialism’?

Because I have eyes.

Everywhere I look – every state, country, city, or region in every culture and tongue – everywhere I have ever been or heard about consists of people who daily reveal their love for markets. People the world over love free trade and the fruits thereof. They seek it. They find it even when governments try to stamp it out. It cannot die.

People love to create, exchange, produce, consume, innovate, improve, and seek material and spiritual progress, happiness, and comfort. The remotest place on earth, if humans live there, will have shops and markets and trading of some kind.

Everywhere capitalism has an ounce of oxygen or an inch of space it explodes with a force untouchable by any do-gooder scheme of violence and control.

Show me a protester and I will show you his closet full of the fruits of capitalism. Show me an advocate of redistributionism and I’ll show you her interest-yielding accounts. Show me an unruly mob and I’ll show you a group of consumers and producers who jump at every chance to engage in peaceful, self-interested trade.

I don’t listen much to what people say. People say they love many things that, when the lights go out, they completely ignore. They say they hate many things that, when behind closed doors they delight in. One of the great lessons of social sciences is that people’s labels and protests and pet causes and speeches and tracts do a piss-poor job of revealing their preferences compared to their actions.

People say a great many things about markets with words. Yet they speak with remarkable simplicity and uniformity with deeds. That voice cries out, the world over, that humans love nothing more than the freedom to peacefully pursue their own self-interest and enjoy the results of that pursuit.

Listen to their actions. Give them more of what they want. The greater the extent of freedom experienced the harder it is to lose that ground later.

Don’t just tell people what markets can do. Show them.

Imagine. Create. Build. And see that you are not alone. All of humanity supports you, though many lack the clarity or sense or humility to admit it in words.

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Danilo Interviews Antony Sameroff of the Scottish Liberty Podcast (1h4m) – Peaceful Anarchism 031

Peaceful Anarchism 031 features an interview of Antony Sameroff, host and founder of the Scottish Liberty Podcast, by Danilo Cuellar. Topics include: his journey to libertarianism, the humility of voluntaryists, minimum wage, his podcast, capitalism, the state, profit and loss, poverty, selfishness, thinking like an economist, and more.

Listen to Peaceful Anarchism 031 (1h4m, mp3, 64kbps)

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Mystery All The Way Down

We are constantly told that we are only a click away from a nearly infinite amount of information and that scientific inquiry is pushing out the frontier of knowledge at a breakneck pace. Never mind that information is distinct from wisdom and that a great deal of the information in which we are now immersed consists of trivia, vulgarity, pointless “news,” and transmissions aimed at nothing more than a moment of amusement. In any event, even the real, important information to which we now have access via the Web remains only a drop in the oceanic sea of potential information that people might someday possess. Moreover, much genuine information — the Hayekian knowledge of transient time and place — remains personal, tacit, and resistant to measurement, capture, and storage by technological means.

So, the overwhelming quality of the universe we inhabit and of our place and destiny in it remains a mystery — not only a mystery in regard to questions we might raise about these matters but, perhaps more important, a mystery in regard to questions that in our ignorance we have not yet even thought to pose. We are not the masters that we sometimes fancy ourselves, but tiny, fragile, ignorant beings lodged in an unimaginably large and mysterious frame of being and becoming. Humility about our knowledge would seem to be in order. Science is a wonderful means of discovery about the material world, but even in its proper realm — itself limited and unable to deal with questions of human meaning and value — it cannot answer many of the questions we are posing or might pose in the future. For as long as we can imagine, mystery must remain the overwhelming nature of the world we inhabit.

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True Humility is Leaving Others to Live in Freedom (7m) – Peaceful Anarchism 026

Peaceful Anarchism 026, “Humans are not mathematical equations. They are sentient beings with free will. They must be respected as such. One cannot assume to know what another sentient human being considers valuable or prioritizes. That is committing the fundamental folly of the violent ruler who rules by force and coercion.”

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Almost Everyone Misunderstands Rational Choice Theory

Pete Leeson’s wonderful new book, WTF?! (review coming soon) is cathartic reading.  Especially after reading some papers and comments by behavioral economists and their ilk recently.  Everyone loves to throw around examples of humans being “irrational” to prove that the economic method, or rational choice theory, is of limited application and doesn’t apply to real humans who aren’t calculating machines.

This is an elementary error in understanding what “rational” means to a (good) economist.  In common parlance, the word has a lot of meanings.  It’s loosely used to refer to reasonable, sound, understandable, or coldly scientific behavior.  In the context of rational choice theory, however, it has a much simpler meaning.  Rational action is any purposeful action taken to achieve an end desired by the actor.  Here, every deliberate action is rational.  Based on the preferences, information, incentives, and constraints an individual actor faces, they will act in a way preferable to perceived alternatives at the time of acting.

This understanding of rational choice is the foundation upon which Mises built his entire magnum opus, Human Action, and from it spring everything from demand curves to the structure of production.

When defined in this way, most people will dismiss the idea of rational action as useless.  It’s just a tautology.  Sure, whatever a person chooses must, by definition, be the thing they preferred to other perceived alternatives at the time of choosing, otherwise they wouldn’t have chosen it.  So what?  Isn’t that like saying ‘A is A’?

Yes, kind of.  And the law of identity is one of the most important tautologies in the world.  You can call it simple or obvious, but you’d better not ignore it or forget it is always and everywhere true.  It’s the same with rational choice theory.

Many of the same people who call it a useless tautology go on to make claims that contradict this ‘obvious’ truth.  Things like, “People are just crazy/irrational/greedy” and therefore outside the reach of economic analysis.  Or, “Humans have biases, therefore ‘homo economicus’ is unrealistic, therefore economics can’t explain human behavior.”  Of course economics never seeks or claims to explain motives, or why people have the preferences, information, incentives, or constraints they do.  It only seeks to demonstrate that, given these, their behavior is rational.

The power of this approach is staggering.  When “That’s just crazy” isn’t an option, humility and curiosity replace fear and ignorance.  If, given the preferences, information, incentives, and constraints, all purposeful human action is rational, we can’t get off the hook with hand-waving or invective adjectives.  We are forced to ask, “What are the preferences, information, incentives, and constraints facing this actor?”  That is where the real understanding comes!

If you want to see different actions, by yourself or others, you needn’t hopelessly appeal to “just because it’s the right/better thing to do”.  Instead, if you understand information, incentives, and constraints, you can try to alter them so that the rational choice for a given person’s preferences is closer to the choice you’d prefer.  It’s easy to see this in government policy, but it also applies to daily individual life.

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Words Poorly Used #107 — Humility

We often use humility to mean un-self-centered and objective, not acting on an assumption of superiority.  Most dictionaries, however, say that the word comes from the Latin word for low.  I cannot accept the gradation of humans that presents them as prisoners of a caste system.  I think what we are looking for is a different, better word that says “down to earth,” “level-headed,” “even handed,” “unassuming,” “objective,” “worthwhile,” and so forth.  Maybe “genuine?”

— Kilgore Forelle

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