The term capital is used in different ways in different contexts. In investment, it is how much wealth a person has. In business, it is the sum of your assets, or assets minus liabilities. In some economic contexts, it is any durable good that is used to produce other goods. In certain economic contexts, capital consists of anything that enhances your ability to perform economically useful work. So, anything that makes you productive would be considered capital. Some people prefer other definitions that exclude things like land and labor.
The common theme is that capital is something that people can use to do what they want to do. Continue reading →
In his book, A Spontaneous Order: The Capitalist Case for a Stateless Society, Chase Rachels does an excellent job conveying insights from both libertarianism and economics. He uses clear explanations of basic concepts and persuasive examples for applications. He relentlessly identifies aggression as the root cause of society’s problems, and the state as the primary source of aggression. Most importantly, the book is permeated by a Rothbardian hatred of the state, which will make it an enjoyable read for any ancap.
Rachels makes frequent use of long passages quoted from other works. Thankfully these are drawn from some of the best sources on libertarianism and economics: Continue reading →
When I explain anarcho-capitalism to the average person, I usually say that it is a philosophy that combines the peaceful society advocated by libertarianism with the rapid technological progress and high standard of living produced by capitalism.
Saying that anarcho -capitalism produces the most peaceful world, the best technology, and the most wealth is true. However, those are really just the effects of anarcho-capitalism. They are a kind of a hook to show how appealing ancapistan would be, but they do not really explain what it is.
Anarcho-capitalism is a social system that aims to maximize freedom. It does this by combining the peaceful coexistence of libertarianism with the optimal productivity of laissez-faire capitalism. Peace is important because any conflict between people reduces at least one person’s freedom. Productivity is important because every bit of capital that people produce increases someone’s freedom. So to have the best life possible, we want to minimize conflict and maximize capital.
Libertarianism minimizes conflict with one simple rule: do not cause conflict. All other libertarian ideas like “stealing is bad” are derived from this non-aggression principle. The non-aggression principle limits the freedom of individuals by forbidding certain behaviors like theft, murder, etc. Though this rule directly reduces everyone’s freedom, it tends to produce a society with more freedom than a society with no rules at all. You don’t get to kidnap other people but, Continue reading →
Freedom is the ability to do whatever want. Unfortunately, there are many things that might get in the way. Gravity prevents you from jumping over buildings like an old-school superman. Poverty could prevent you from travelling to southern Australia to see the little penguins that live there. Your love interest might prevent you from sleeping over even though you sent all of those romantic selfies.
With so many constraints on how you can live, it is hard to imagine what it would be like if one were truly free. You could go anywhere and do anything. You would know everything, if you wanted to. These god-like powers would let you live your life exactly how you want. That is the ideal, so what is the reality?
Humans are nowhere near total freedom, but we have made great progress in improving freedom in some respects. Most prominently, new technology has continually pushed back the limits of nature. Access has improved to food, water, travel, information, and many other things that enable us to live more how we want. Science and technology free us in a very real sense, but they are not the only engines of progress. They are just part of a more general term for this type of freedom called capital. When most people talk about capital, they mean physical goods that allow people to do things: hammers, horses, and houses. Yet, capital can be other things too, like the knowledge of how to build a car, or the organizational structure that allows everyone in town to play soccer together, or the supply chains that keep cities fed every day without a farm in sight.
The relatively pleasant lives that people enjoy today, compared to five hundred years ago, is due primarily to the huge amounts of capital accumulated since then. Continue reading →
Pompeii was a wealthy city in Southern Italy until its population was destroyed by the eruption of a neighboring volcano in the year 79 CE. However, the eruption left much of the city intact, and preserved it under several meters of ash. It is slowly being dug out and has become a tourist attraction where people go to see what life was like at the beginning of the common era.
Pompeii was impressive for its orderly neighborhoods, metal water pipes, and some clever civil engineering. It was much smaller, and much less grand, than the city of Rome located a short distance to the north. Yet, in comparison, Pompeii seems to shine as a city that never lived past its prime. Rome, on the other hand, is a shadow of its former glory.
The interesting question, however, is not whether Pompeii would have suffered the same decline as Rome, but why so many civilizations seem to rise and fall with the historical tide. Is it part of human nature that societies must decay? Continue reading →
Ludwig von Mises’ last book is an examination of social sciences as they are and as they should be. Mises characteristically spends time excoriating historians who pretend to be economists. His main effort, however, is on the proper delineation between psychology, economics, thymology, and, of course, history.
For those who have read Human Action, the distinction between historical science and economic science is well known. When a so-called economist models the price of onions in Venice in the 1850s, he is not furthering economic knowledge, but simply using mathematics to relate what happened in the past. That this work provides no economic insight and has no predictive power is a central theme of Theory and History.
Furthermore, Mises attacks supposed economic theories that are actually theories of history, and bad ones at that. He embarrasses Marxism for its foundational beliefs that technology determines the social state of affairs and that history is on an inevitable trend towards a final state of socialism. With his typical dry humor, Mises tears apart collectivist ideologies, though some may seem obscure to a modern reader.