How State Lotteries Make Markets Less Efficient

Anti-Statism, Business, Finance, Statism
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Someone sent me a link to this paper yesterday.

Prof. Harris argues that skilled traders, who consistently profit, do so by taking money from people who trade for extrinsic reasons, to hedge risks, increase their savings, or simply to gamble for entertainment.  He then points out an interesting implication:

If gamblers do indeed contribute to market quality in the long run by subsidizing information acquisition, an intriguing argument can be made about public lotteries.  Lotteries would appear to compete with financial markets for gamblers willing to lose money. Lottery gamblers subsidize the state through their voluntary participation in a negative-sum game. Financial market gamblers subsidize productive information acquisition.  Perhaps prices, and ultimately economic production, would be more efficient if gamblers gambled exclusively in the financial markets.

So there you have it — state lotteries make us worse off by wasting gambling money that would otherwise be productively spent.

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(Statist) Politics as Household Management

Anti-Statism, Democracy, Libertarian Theory, Vulgar Politics
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In a previous post, Voting, Moral Hazard, and Like Buttons, I discussed the moral hazards of voting and why democracy does not legitimize the state or protect our liberty. I also discussed how statist democracy, particularly representative democracy, is manipulative and conducive to top-down central planning of society. (Statist) politics tends to reduce all basic social issues to problems requiring administrative manipulation. In this post, I’m going to delve into this issue further and draw upon insights by Hannah Arendt in The Human Condition1 to illustrate how (statist) politics is inherently an attempt to run society as one massive organization, organism, or machine.

Hannah Arendt’s analysis of the differences between action (praxis)2 and work – and between politics, which involves action, and fabrication or making (poi?sis), which involves work – has negative implications for the central planning of society that is characteristic of modern representative-democratic states. In particular, I have in mind her criticism of Plato, and to a lesser extent Aristotle, regarding their tendency to view society as a sort of organization and politics as the running of society as such an organization – or, in their words, politics as akin to household management. This fits with the tendency in many cultures to refer to one’s country as “the Fatherland” or “the Motherland” and with socialists and communitarians (on the left and the right) essentially modeling their ideal society after the family.

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  1. All page numbers, provided for your convenience, refer to the 1998 2nd Edition. ↩

  2. Arendt uses the term ‘action’ more narrowly than do the praxeologists of the Austrian School. ↩

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UK Proposal for Banking Reform: Fractional-Reserve Banking versus Deposits and Loans

Anti-Statism, Business Cycles, Finance, Legal System
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Douglas Carswell, M.P.
Douglas Carswell, M.P.

Austrians and others interested in fractional-reserve banking (FRB) will find of interest a banking reform about to be proposed in the UK. Douglas Carswell, an Austrian economsics-informed member of the UK parliament for Clacton, is planning to introduce a so-called “Ten Minute Rule Bill” after Prime Minister’s Questions tomorrow (Wednesday, Sept. 15) that could have significant implications for current centralized FRB practices. The Bill will be supported by Steve Baker, the Member of Parliament for Wycombe, who also serves on the Advisory Board of the Austrian/classical liberal Cobden Centre.

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All You Ever Need to Refute a Paul Krugman Column

(Austrian) Economics, Anti-Statism
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Courtesy of Tim Cavanaugh at Reason, we now have a basic template to refute just about anything Nobel Laureate, neo-Keynesian, and regime apologist Paul Krugman ever publishes:

[destroy whatever economic fallacy Krugman promotes this week]

The rest of his column is political speech and unworthy of note. The above is all the intellectual content, and it is very shabby.

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Against Political Panglossianism

Anti-Statism, Vulgar Politics
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I offer to readers a term of my coinage: polidicy.

I construct it as “theodicy” was constructed, and I do so in the spirit of the copycat. A theodicy is a vindication of divine goodness in the context of the existence of evil. It is an important theological concept, and you will find theodicies embedded in most understandings of Providence, and nearly everyone who believes in a deity has some sort of theodicy in tow.

Polidicy, then, is a vindication of a state or government body in the context of its own obvious crimes. Most people who are loyal to some state and pretend to possess a moral sense, or conscience, have some polidicy in their head, some set of excuses for why the state’s many crimes do not amount to a moral case against the state as such, and how, even, the state can be said to be “basically good.”

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