Tag Archives: economics

What is Capital?

bull_dozerThe 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

Review of A Spontaneous Order: the Capitalist Case for a Stateless Society

spontaneous_order_chase_rachelsIn 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

Science and Technology Are Awesome

jetpack

Technology rocks

I really like technology, and most other people do too. That’s not surprising because technology empowers us to do the things we want to do. Like fly around over the ocean. Or read a blog.

Quite literally, technology gives you freedom. Without technology you have to walk around naked everywhere. With technology, you can wear a jacket when the weather is cold or ride a train to get places.

Science is cool, too. It helps create new and better technology. Plus, it is fun to know how the universe works. Without science, the rate at which technology can improve is greatly diminished. So if you love freedom you should also be a supporter of science and technology. They free us from the constraints of nature and make life better in oh-so-many ways.

However, science and technology don’t solve problems on their own. Continue reading

Theory and History

Theory and History

Theory and History

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.

On the other hand, his work on thymology is immortal. Continue reading

Anarchy in Afghanistan

There's no government, like no government.

There’s no government, like no government.

Dr. Ilia Murtazashvili and Dr. Jennifer Murtazashvili have done research on conflict resolution systems in Afghanistan that many ancaps will find interesting. In their paper, “Anarchy, self-governance, and legal titling“, they describe how most Afghanis choose traditional, decentralized conflict resolution solutions over state provided systems. Specifically, the paper focuses on conflicts over land and how, after doing extensive field research, the authors believe that “…it is time to rethink anarchy as a policy option in Afghanistan and similar fragile states.”

The Murtazashvilis are not suggesting total anarchy, but rather a complete laissez-faire system for resolution of disputes over land. This is not simply a matter of economic efficiency, but also the cultural and social norms of the various groups that live in the country.

From a historical perspective in different areas of the world, they point to other academic research:

“The experience on the American frontier provides ample examples of order in the pale shadow of the state. Anderson and Hill (1990, 2002, 2004) depicted how frontier settlers cooperated without relying on the American government in an ‘‘anarcho-capitalist’’ environment. During the California gold rush that commenced in 1848, individuals established informal systems of property rights to allocate access to gold deposits (Umbeck 1977).3 In fact, individuals in each of the major frontier sectors jumped the gun on land settlement by establishing government-like organizations to specify and enforce property rights during times when they had no formal rights to do so (Murtazashvili 2013).”

Continue reading

Review of David Friedman’s “Machinery of Freedom”

The Machinery of Freedom by David Friedman

The Machinery of Freedom by David Friedman

David Friedman recently published the third edition of Machinery of Freedom, his classic book on anarcho-capitalism. Even after 40 years it is still a great read for both fledgling and seasoned libertarians.

Friedman does his best work using economics to describe how, and why, anarcho-capitalist institutions could, and should, be developed. He gives an excellent historical examination of Iceland, which had a legal system that showed how some libertarian ideas would work in practice. In Chapter 37, he also has some wise words for radicals about civil disruption, discussing how shock tactics and property damage will only instill in people a desire for strong government. He warns that anarchists should avoid traditional revolutionary techniques used by those who want to usurp government power because the same strategy does not work for destroying government power all together. It should be noted that this book is not just an historical tour of libertarianism. Friedman includes many modern topics, including crypto-currencies and anonymous online markets.

Rather than take a broad look at the different areas where Friedman shines on well traveled topics (global warming, private courts, market derived law) and nit-picking other areas (pollution, foreign policy, writing style), this review will focus on the implications Machinery of Freedom has for libertarian ethics. This is because the most important contribution of his book 40 years later is not the libertarian answers he was able to find but rather those questions that he has been unable to identify solutions for after all of these years. In this way, Friedman lays out clear challenges to young libertarian thinkers who are working on the next generation of libertarian insights.

Friedman’s challenge consists of two fundamental problems with principled libertarianism that, even after 40 years, no one has answered to his satisfaction. Continue reading