Sunday, April 11, 2010

Capitalism is the Greatest Achievement of Human History — Praise It

by on April 11, 2010 @ 11:59 pm · 2 comments

in (Austrian) Economics

I am grateful that we have capitalism to the extent that we in fact do have it — and although we certainly don’t have enough capitalism, I am grateful for how much we actually do have. Everything we have in the modern civilized world is only possible due to capitalism and the accumulation of capital. It is the natural expression of free markets whenever there is a sufficient level of civilization. The accumulation of capital is essential for the progress of civilization in all aspects. Technological progress alone is insufficient. While capital accumulation has occurred to various extents throughout history, the system of capitalism is a more recent development allowing for much more efficient capital accumulation and development.

It is actually quite incredible to think of how much prior civilization, technological progress, and accumulated capital are necessary to make something as simple as a screw. Even with the instructions and all relevant knowledge, primitive people wouldn’t be able to make them for at least decades, possibly centuries. When you think about the precise dimensions of something as simple as a screw, you realize it obviously required something very precise to make it (e.g., precise casting). And that thing required something precise to make it, and so-on and so-forth. It is a process of building up more and more sophisticated tools from simpler ones, which requires significant capital accumulation.

It is also doubtful that many people, if any, know the entire production process — from raw earth materials to finished product — for even something as simple as a screw. Its production requires the voluntarily cooperative interactions of numerous people. Furthermore, as my friend Juan Fernando Carpio has argued in a forthcoming paper, the human mind and body are both capital goods, which require development. The entirety of human knowledge, considered in the abstract, is akin to the accumulation of capital goods. To the extent that we have civilization, such is only possible because of the accumulation of different kinds of capital.

This is something ignored by socialists of every variety, be they anarchist or Statist socialists. (I would argue that an anarchist socialist will, when faced with the reality of how free people actually act, either have to at least tacitly endorse private property and capitalism, or will become a Statist). The various systems advocated by socialist anarchists all hinder or make impossible capital accumulation. For example, various flavors of anarchist socialism might attempt to ban — how can they do this while remaining anarchist? — absentee ownership or the separation of ownership and control (i.e., corporations). The banning of either would result in rising time-preferences and thus greatly decrease incentives for saving and capital accumulation.

Some Suggested Readings

Ludwig von Mises, 2008 [1956]. The Anti-Capitalistic Mentality. Ludwig von Mises Institute, Auburn, AL.
Reisman, George. 2002. “Some Fundamental Insights Into the Benevolent Nature of Capitalism“. Mises Daily. October 24.
Rothbard, Murray N. 2009. “Capitalism versus Statism“. Mises Daily. September 29.
Leonard E. Read, “I, Pencil,” The Freeman, December 1958.

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The Hartford Capitol Flag Brouhaha

by on April 11, 2010 @ 4:26 pm · 0 comments

in Anti-Statism, Vulgar Politics

Tea Party protestors in Hartford, Connecticut, wanted to fly the Gadsden Flag over the capitol, as part of a protest. From the ensuing coverage, it seems that Connecticut’s capitol building flies a number of flags, upon request. Odd things, that.

The police who draw flag duty at the state’s capitol initially assented to the request. But a politician protested and the police withdrew permission.

At first blush, the idea that a state capitol would co-operate with protestors to hoist a specialty flag up the state’s sacred pole seems nuts.

Gadsden Flag

Gadsden Flag

But the Gadsden Flag — a golden field featuring the figure of a coiled snake captioned with the simple command “Don’t Tread On Me” — has a respectable history . . . at least it does if you consider the founding of the United States of America respectable. Droll to think of one of the original 13 states as repudiating one of the union’s first real flags.

It was a Democratic pol who objected. He said it was a “partisan” flag. Tea-Partyers are partisan? This is not completely obvious to me, considering that I know registered Libertarians, Republicans, and Democrats in the movement. But, hey: The Democrat almost certainly knows what he’s talking about. If he feels threatened by the sentiment, I think we should take him at his word.

[Keep reading…]

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Stop the ACTA (Anti-Counterfeiting Trade Agreement)

by on April 11, 2010 @ 2:41 pm · 10 comments

in IP Law, Mercantilism, Protectionism

I blogged a year ago about the “Secret intellectual property treaty [that] could profoundly change life on the Internet.” At the time, the text was still secret but it was believed that the treaty: “seeks to set forth standards for enforcing cases of alleged copyright and patent infringement.” Now, as Cory Doctorow notes in How ACTA will change the world’s internet laws, the text has been leaked. This thing is bad. America and the west have long tried to extend the reach of their mercantalist IP laws — they use the WTO to twist the arms of other countries, etc. (see, e.g., my previous posts Hatch’s “International IP Piracy Priority Watch List”; IP Imperialism (Russia, Intellectual Property , and the WTO); Russian Free Trade and Patents; Bush Wants More Jailed Citizens in Russia and China; China, India like US Patent Reform).

The ACTA is also similar to another arcane law, the Digital Millennium Copyright Act (DMCA), which, under the guise of protecting “property rights,” snuck in provisions that criminalize even the mere possession of technology that can be used to circumvent digital protection systems (see, e.g., my post TI Uses Copyright Law to Attack TI Calculator Enthusiasts). Likewise, under the guise or protecting property rights in inventions and artistic works (patent and copyright), it “seeks to provide legal authority for the surveillance of Internet file transfers and searches of personal property”. As one group notes, “ACTA goes way, way beyond the TRIPS (the copyright/patent/trademark stuff in the World Trade Organization agreement), creating an entirely new realm of liability for people who provide services on the net”. More invasion of personal liberty and property rights in the name of false, artificial property rights.

So the ACTA is like a hybrid of previous efforts: it is as abusive and insidious as the DMCA, and covers patents as well as copyrights. And it will apply worldwide. This is culmination of America’s efforts use of the WTO to extend western style IP rights worldwide. As Doctorow notes, this is “a radical rewriting of the world’s Internet laws, taking place in secret, without public input. Public input? Hell, even Members of Parliament and Congressmembers don’t get a say in this. The Obama administration’s trade rep says that the US will sign onto ACTA without Congressional debate, under an administrative decree.”

For detailed comments on the ACTA, please see the following report:

James Love, Comments on ACTA Provisions on Injunctions and Damages (pdf), KEI Research Note (Knowledge Ecology International, April 6, 2010).

[cross-posted at Mises blog]

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