Economics, ethics, and Krugman

Business Cycles, The Left
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Reading Paul Krugman is like picking at a scab: You know you should probably just let it alone, but there’s pleasure in picking the Krugman rough redness. So you read. So you bleed. So you flick away the droplets and the clots.

I could hardly avoid his recent post, “Economics and Morality,” in part because the title mirrors an abiding interest of mine, and of many libertarians. There is a deep connection between economics and ethics. After all, one is the science of human action and transactions, the other is the art of prescribing for same. Frank Knight observed that the subject of economics was the same as that of Herbert Spencer’s Principles of Ethics: “acts adjusted to ends,” or, to put simply, Human Conduct.

Krugman offers no insights about the deep connections. Instead, he regurgitates old pabulum about the welfare state, and misunderstands the case for free markets. Again.

He begins with a concern: “[T]he right is winning economic debates because people believe, wrongly, that there’s something inherently moral about free-market outcomes.”

I don’t know if this is the case, in the real world. Perhaps I don’t follow enough “debates.” But, as I see it, market outcomes are not moral as such. It’s market processes that are. That is, non-fraudulent, non-coerced exchanges (trade) — no matter how much error there may be in them — are more moral processes than fraudulent and coerced processes. It’s the means that are important, here. Fixating on the ends leads you into traps like Krugman seems to rest his whole ideology upon.

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The Illusion That Makes the Math Look Nice

Business Cycles, Podcast Picks, Statism, The Basics
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Perhaps the greatest contribution of socialism to economics was to cajole Austrian economists into understanding just how different their theoretical approach was from the main stream of economics. At first, Ludwig von Mises and F.A. Hayek thought they were on the leading edge of that main stream. But the two major debates that they engaged in in the first half of the 20th century — over business cycle theory and regarding calculation in the socialist society — both proved vexing. They should have won both debates. They had the better arguments. But in both cases the majority of economists sided against Mises and Hayek.

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Don’t Bet on China: Redux

Business Cycles, Democracy, IP Law, Mercantilism, Protectionism
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A Chinese libertarian, Nicolas Dong, who recently did a Mandarin translation of one of my IP articles, recently told me this in an email regarding my earlier post, Don’t Bet on China:

I agree most part of your point of view about China. I believe that after the bust of the current housing bubble and high inflation, there will be much more unrest. The costs to maintain a “stable” social order have exceeded the cost of maintaining the army. Great changes may occur after the Xi Jinpin administration. But democratization will probably make China more socialist, for reasons explained in Hoppe’s Democracy: The God that Failed. There are just too many mobs here. And many social democrats are controlling the media, preaching democracy and equality instead of liberty. Fortunately, some influential media have libertarian-leaning editors or columnists. We also have libertarian and classical liberal university professors. We are trying our best to have a greater influence.

Also, regarding the libertarian perspective on intellectual property and my anti-IP article that he translated, he said:

They [the Chinese libertarians] debated for a while, and now, most libertarians in China are anti-IP.

However its influence is limited since we are just circulating it in our circle, and posting it on websites. Most people in China don’t know what libertarianism is, and they may not capable of catching the idea in the article.

… You know, something nice is that those who control the internet here don’t know what libertarianism and the Austrian School are; thus, most of those sites are not prohibited. The Austrian School does have some influence in academia here, albeit mainly Hayekian.

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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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