9 posts from February 2008

Listen to this [MP3] lecture on "Roads, Education, and Waterways: The Case Against Public Services."

Walter Block Links:
---Official Website
---LRC Archives

Chapter six of ATSC is on "The Socialism of Social Engineering and The Foundations of Economic Analysis."

Empiricism-Positivism, its Two Tents, and Socialism Immunity from Criticism

Marxism originally was, due to David Ricardo's heavy influence on Karl Marx, more "rationalistic and deductive." Later, however, economics was being viewed as increasingly an empirical science, parallel or akin to the natural sciences. This in itself is a mistake, and is the first tent of what Hoppe calls the "socialism of social engineering." But this is not all, and this leads us to the second tent.

Observable results (viz. the empirical evidence) from the former Soviet Union and Eastern Europe, when it was under a heavy degree of socialism, should alone have led one to question the pronouncements that socialism is a superior economic system to capitalism. This is where Karl Popper, an advocate of "critical rationalism," and his "piecemeal social engineering" came in. Empirical results of socialism could then be escaped. Under this methodology everything remains hypothetical, even in principle after infinite testing. Nothing can ever really be proven correct or incorrect. Nothing can ever be known before testing. Extra uncounted or uncontrolled variables can always be thrown in to deflect the empirical results. Moreover, any extra variables that could be claimed to upset the experiment can, in principle, range to the point of absurdity. It then becomes an easy task to see that socialism, for someone who holds on to it, becomes immune to any criticisms.

"There simply could not," writes Hoppe, "anything categorical about reality" with this methodology. The economic analysis in the previous chapters become just "verbal quibbling." Any analytical knowledge is knowledge about abstract words, terms, symbols. Analytical knowledge becomes non-existent. They are just tautologies.

Intuitive Argument Against

Knowledge about, for example, mathematics seems to fly in the face of this methodology. They exist without being able to be contradicted through experience "because their validity is independent of experience." Certain statements, likewise, in economics on the face of it also seem to be valid independent of experience. They are true a priori.

How can we test the subjective theory of value (dealt with below), for example?

Empiricism-Positivism is Self-Defeating

Since under this methodology empirical knowledge, unlike the supposedly non-existing analytical knowledge which is true a priori, is able to be discerned somehow, the discernment itself, as "a practical affair," must be a given to avoid arbitrary interpretations of validity which are "thus tied to reality."

The very statement that something cannot be known in advance of testing must be a statement of either analytical knowledge or empirical knowledge.

If it is analytical, then by its own standards the foundation of this methodology is nothing but word play. It has no meaning to apply to reality. The methodology is empty. Instead if one is to give it reality-based meaning so as to engage in testing, this meaning, as said above, is "thus tied to reality." The statement becomes a priori as an analytical statement. This is nothing but a contradiction.

If it is empirical, then this leads to the destruction of the whole methodology. The basis to discovery can then be said not only to be true, as it does, but also false. An infinite number of other statements could be taken, because they never could be proved or disproved. The journey to discovery will be arbitrary just as what is discovered.

Even if we just accept that it is an empirical statement, and ignore the consequences of that, it still cannot pass as a correct methodology. This is because it presumes certain nonempirical knowledge about reality as true.

Observing a link between two or more events with the same outcome can only become a "neutral repetition" if and only if the causes operate in time-invariant ways. Nothing could ever be said to be proved or disproved with the repetition or nonrepetition of events if this were not presumed. It must exist independent from experience.

Being that this----the "constancy principle"----is a prerequisite to empiricism and its investigations the methodology is inconsistent and contradictory.

General Comments on Aprioristic Knowledge

• Aprioristic knowledge has nothing to do with '"innate ideas' or with 'intuitive' knowledge."
• Epistemology deals with how one can tell the validity of knowledge.
• Only psychologically is aprioristic knowledge analogous to empirical knowledge in man's search to understand them. Other than that they differ categorically.
• Aprioristic knowledge can be more difficult to understand and, so to speak, discover, since it is implied.
• They are not just apart of nature-given things, but also man-made things. These man-made things, if they are constructs, are capable of being studied in "their structure and implications" and if they can be alternated in construction----i.e., their construction has a priori knowledge.
  

Man-Made Constructs: Language and Thought

There Major Fields: language and thought, actions, and fabricated objects.

The first two will be looked at. But, Hoppe notes, that Euclidean geometry, as an "ideal norm," was not refuted by the theory of relativity because its measurements and constructs were implicit in the discovery.

Language and thought are given constructions and have rules, i.e., requisites, in regards to its usage. As empiricism claims, it is a conventional system. A system used around the world with different and unique languages. But, according to this methodology, "nothing can be known about it a priori." This is not true.

Connecting words to objects works in a conventional system that is implicitly established a priori. Using this convention presupposes man knows what it is. One can only define something with language when the convention system to do such is known beforehand. Man cannot just define "define" without this a priori foundation. Defining any word requires this.

In the same manner a proposition cannot be made to another without the ability to interpret that proposition. To speak and communicate with another presumes this foundation.

Refuting this would be self-contradictory. Any attempt to do this would be engaging in a language, by "making propositions and using definitions."

This also tells us a fact about reality. That one can use language to discern reality.

Man-Made Constructs: Action

Man's actions, according to empiricism, can be tested against various hypotheses and must be tested to state anything about man's actions. This runs into problems because the actions of a man cannot be known like that of an equation, but this is what this methodology attempts to do.

The observer----who formulates hypotheses, observes, and interprets----himself is an actor. Implied in his observing role is that he has the ability to learn. But if he can learn, then he cannot know what he will know in the future and how his actions will reflect this, which is equally applied to all men. Man cannot explain his new knowledge before he has it. The field of knowledge and action just cannot work within such a methodology.

(See chapter ten & fourteen of The Economics and Ethics of Private Property.)

Hence: "Nothing can be known a priori about any particular action; but a priori knowledge exists regarding actions insofar as they are actions at all. It can be known a priori that no action can be conceived of as predictable on the basis of constantly operating causes."

Action implies: causality, time, value, goals, means, choice, preference, cost, profit and loss.

Causality is a requisite of action. It is a necessary construction of action. It is thus "produced rather than a given feature about reality." It is not observed, but implied in the way one observes (anything) and hence cannot be refuted. All intentional action is based on this. Man could not act without these facts being a given.

An action is aimed at changing circumstances or preventing an expected upcoming event if he were to do nothing. Action occurs because the given man believes the goal he is aiming at is accomplishable. He might go wrong in his assumptions of cause-and-effect or whatnot, but nonetheless the underlying reasons and logic of action is and has to be present.

Causality implies time. For anyone to prepare to produce this or that result one must be able to see cause-and-effect, and thus must be able to differentiate between before and later. Never could someone that is not able to act or does not understand what it means to act place events in a temporal order. Delineating time is a prior knowledge in action.

[Time is an aspect of relation that holds between things changing relative to each other. It has no meaning if it is independent of its relationships between objects changing. As time, so to speak, is 'nothing but' change; action is man's manifestation of change and his being a part of an objective, be it relativistic, temporal order. This, of course, is also true of spatial relationships.]

Value is also presupposed in acting man. Man acts because he places values on things. Higher and lower values are expressed for different things and man acts expressing his value preferences.

[As Ron Paul wrote in his essay Mises and Austrian Economics, attacks against the subjective theory of value, i.e., that prices are subjectively determined in the minds of individual actors rather than objectively through some formula by a scientist, because they are not and cannot be determined objectively also often enough ironically think that no other objective laws exist. They reject the subjectivism here, but miss that this in itself states something objective about reality. Then again, it is not difficult to see why they reject the Austrian view. As Paul says, a belief in some kind of objective value theory creates the illusion that the State has it within its means to control prices without chaotic effects. (Acting man cannot be cut off from the nature of values and what happens when the State adds or decreases costs to actions.)]

For man to act he must have a goal and this goal shows that he places a value on it. A value higher than other alternative goals he can at the moment pursue or think of. Now if this were not the case, then he would not act in the direction he is acting (i.e., acting towards the given goal).

To get to a goal man must act and pursue it in time. This requires the use of means, which include at the very least man's physical body and time (which will be used up for this goal and which could have been used for other possible goals). These means have a value since they are used to obtain some goal.

All of this requires making choices since "actions can only be preformed sequentially." It requires giving up alternatives----i.e., giving up less valued goals for what is valued more. These are the costs of action.

In pursuing one goal versus another via some means, this implies that the costs are less than the expected outcome. He expects to profit in some way [which is not necessarily in terms of money]. But man can have a loss too. This occurs when in retrospect one sees that his action produced something less valuable than what the costs were. In action, then, man can not only increase his state but lessen it. He must think and act accordingly.

Again: This is not "derived from experience. Rather, that one is able to interpret experiences in the above categories requires that one already know what it means to act. No one who is not an actor could understand them as they are not a 'given,' ready to be experienced, but experience is cast in these terms as it is constructed by an accord according to the rules necessary for acting."

Economics

Economic analysis requires {1} the above understanding of the meaning and categories of action (praxeology), {2} knowing how to apply them to definite people, and {3} the ability to deduce the consequences of the actions of man and how any changes to the environment or circumstances of an actor will effect his actions.

This allows one to derive the things that have been derived in the previous chapters.

The Socialism of Social Engineering

As seen above, the epistemological analysis of economics has shown that the methodology of empiricism-positivism is erroneous. There are things that are known before and ahead of experimentation. A priori knowledge exists and it cannot be refuted by some kind of statistical manipulation. In the attempt to refute the above Austrian method, one would only be engaging in a performative contradiction because his actions presuppose axiomatically deduced knowledge. Furthermore, the empiricist-positivist methodology is very much muddled because it presupposes a priori knowledge! Logic refines our understanding of the world; not the other way.

What can then be said about the socialism of social engineering and its economic effects?

It is not dissimilar to the other socialisms examined. But unlike the other versions this does not have a grand overall plan or objective. It changes according to the wants of the social engineering elites.

Remember private property owners, under the natural theory, can do whatever they want to do with their respected property as long as it does not uninvitingly invade the physical integrity of anyone else's private property. Social engineers, who are not connected with such property and have no contractual relationship to it, have the ability to decide unilaterally on how, when, and what degree to interfere with property owners and/or restrict their actions.

Property titles will be redistributed from users and contractors to nonusers and noncontractors. The cost of production will go up and the output of wealth will go down. This general result is true for all policies of the social engineers.

Hoppe gives a couple of examples.

Minimum Wage Laws...

Say the elites of social engineers do not like that some people are earning a low income. What will be the results if they then put into existence a minimum wage law above the market price?

Private property rights will be assaulted for both employers and employees. They can no longer engage in certain mutually beneficial relationships contractually. It outlaws them---i.e., destroys some---causing unemployment. Hiring costs increases lowering the amount of employees employers will be able to hire. Given this, there will be less production for the employers and hence wealth, and some will now have no income versus low income. The general results can be said a priori, but not what specific groups of employers and employees will be hurt only insofar as to say that the employees with relatively low market value and the employers who hire such will suffer the most. Empirically this on average, who compose low-skilled labor, means those "among the young, among blacks, among women, and among older people who want to reenter the labor force." The group that it was supposed to help, actually will be hurt the most.

Rent-Control Laws...

Say the elites of social engineers do not like that many rents for apartments are high. What will be the result of rent-control laws?

There is no need to 'wait and see.' Since the profits to be made out of apartments will be less, there will be less construction. Old apartments will exist in shortages because the prices will be artificially low and demand will rise. Another factor that will add to the shortage problem is that, if the prices have been pushed down low enough so as the expenses of risk and repairs are higher, some apartments will not just be rented out despite the demand. The shortages will also produce the result of "very costly inflexibilities" as it relates to people moving out of such apartments. Less will do so. Given that the family size in a household changes, those who would otherwise move into a smaller place will be less likely not to do so. There will therefore be "huge waste of rental space."

For the social engineers this might have just resulted because they forgot X, Y, or Z variables. They believe if they could just isolate them and control them this result will not happen. But, as we can see, this is all untrue. All of their interventions are, by definition, directed somehow at the users and contractors of private property and into their control as nonusers and noncontractors. The possibility of increasing wealth by doing this can be known a priori. Interventions to produce "low housing prices" or "free" this or that will result in shortages and lower quality etc., ultimately lowering living standards.

The Broken Window Fallacy (alive and well):

“This little act of vandalism will in the first instance mean more business for a glazier. The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the shopkeeper will be out $250 that he was planning to spend on a new suit. Because he has had to replace a window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as part of the community, the community has lost a new suit that might otherwise have come into being, and it just that much poorer. The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new ‘employment’ has been added.”

--- Henry Hazlitt, Economics in One Lesson.

Here we go again! At least we can expect consistency from "our" elected officials. Consistency in economic nonsense and ignorance, that is.

President Bush in an interview said that "I think actually the spending in the war might help with jobs…because we’re buying equipment, and people are working." Next he will say that Katrina "helped" the economy, too. Or it might dawn on him with his economic insights to enslave draft all men, women, and children to produce equipment for the war. Then he can say that he has created "zero unemployment." That will really boost the economy.

As Dr. Robert Higgs says in this [mp3] speech, the idea that war brings economic prosperity----the idea of which primarily, he says, comes from a misinterpretation of history----leads one to believe that Bush's "stimulus" program is one. But it is a program that is like dishing "water out of the deep end of the swimming pool" and then dumping "it into the shallow end" in the "expectation that the water level is going to rise."

If someone were to declare that economics is a "dismal science," advising them to study chapter five of Dr. Hans-Hermann Hoppe's A Theory of Socialism and Capitalism (ATSC) would be an almost certain way to prove them incorrect. This chapter, for me, was particularly good. It is my hope that this will be, to some extent, shown here.

As you know, this is part of an on-going series of informal studyblogs. My time has been more limited than I originally suspected, but I will try to continue at the present pace. You can see my previous studyblogs: Chapters 1 & 2, Chapter 3, and Chapter 4.

***

The cul-de-sac of social-democratic and Russian-style socialism, as Hoppe showed, is a road to increased poverty and lessened overall living standards. Alongside these two forms of socialism is conservatism. It is the ideological heir of feudalism and as such wishes to preserve a certain given status quo of the distribution of wealth and income. That is to say, it wishes to freeze individuals to a given position by lessening or destroying social mobility. But, as a type of socialism, it too will lead to relative impoverishment. The more stringently it is applied, the more impoverishment will result.

It appeals to man's desire for security and stability. For this reason it has had a great impact, and more so than most people think, on the increase of State power in society.

Feudalism

• Prior to 18th Century Europe there existed a system of feudalism.
• Natural owners of private property, i.e., those men who have attained their property through the natural theory of property (via homesteading or contractualism), were forced to live under feudal overlords.
• These overlords claimed ownership of large chunks of land property inhabited by multiple natural owners by force. They had no relationship to the natural (real) owners contractually.
• In effect, these overlords had full control over the resources in these territories and over the men that lived there.
• The occupation and expansion of an overlord's reach was often with the help of "a noble caste of military men."
  

The Rise of Capitalism

• The development of merchants and traders were the precursors to the ultimate fall of feudalism. They stood in direct contradiction to the system, living and traveling "internationally." Meaning----they were not solely enslaved to a single overlord.
• As such, they could travel buying low at one place and at another place sell high. Working outside of the system weakened the power of overlords and formed the lion's share of opposition to the feudal system.
• The international commerce developed an international law to secure property rights in trade. This international arena was de facto in political anarchy. This created the grounds for the development of banking and insurance.
  
• Hostility between the overlords and merchants/trades increased and the latter became outcasts.
• The merchants/traders were forced into the position to organize themselves away from strong feudal powers, and for this reason away from the centers of society.
• Tremendous growth and wealth increased immigration to these commercial areas. They formed into towns. Many private enterprises and crafts formed, which could not be formed in feudal areas.
• These cities were located in "northern Italy, the cities of the Hanseatic league, and those of Flanders."

Monarchism

• With the above said, the merchant/traders were still internally weak.
• Commercial centers/towns were filled with feudal- or statist- ideas. These ideas resulted into many "noncontractual regulations and restrictions." Guilds, in particular.
• These areas, still in development, were weak and vulnerable to outside attacks from nearby overlords.
• They therefore formed alliances with other competing overlords, in particular the more powerful ones. Since (see above) these overloads were more powerful they were distant from the new commercial centers. The weaker overlords were the ones closer to these centers.
• The allied overlords were then able to increase the range of their power to these distant centers. While they protected the centers from other overlords they were then able to crush the smaller overlords.
• It was this that led to "feudal super powers" or absolute monarchies.
• Soon, after this transition was complete, the commercial centers started to decay and economic decline set in.
  

[It is interesting to note here that the one fault that capitalism can be claimed to have is seen in Hoppe's book. Capitalism's great productive energies are something that the State can benefit from parasitically. Hoppe's brief overview of feudalism, the rise of monarchism, and their relationship to the capitalism or semi-capitalism that existed illustrates this point. It is this that is further seen in what types of States become imperial powers. Nation-States that tend to be internally liberal, in the classical sense, have a far more productive economy to be parasitic on. This increases the chances that these States will be externally aggressive. Economically it explains why and (more accurately) how the United States government is the world's imperialist empire, and helps explain the ones before it.]

Liberalism and the Industrial Revolution

• With the increased statism came the decay of the commercial centers and overall, general economic decline.
• Noticing this was not lost on everyone. This resulted in the rise of a liberal (anti-statist) ideology in the late 17th and early 18th centuries. Feudalism and monarchy were under ideological and intellectual attack.
• Consequently, study on Roman and natural law increased. The merchant class looked to natural law to justify its existence.
• Major works came out: John Locke's 1688 Two Treatises on Government and Adam Smith's 1776 Wealth of Nations.
• The idea and support of a contractual society increased in the minds of the public. They saw the government only as an enforcer of natural (property) rights.
• Major revolutions happened: Glorious Revolution in England (1688), American Revolution (1776), and French Revolution (1789).
• These revolutions proved, writes Hoppe, "that the old order was not invincible" to the public.
• Half a century of support for liberalism resulted in deregulation. Liberalism championed governments to be internally (i.e., domestically) and externally (i.e., internationally in foreign policy) hands-offish.
• The Industrial Revolution was taking place: the greatest economic advancement in human history.
• The increased economic advancement allowed a growing population and led to a general rise in the standards of living. (The growth of the population was lower than the rate of capital growth.) Whereas before, with greater statism, the economic system could barely support the current population, and many of men died of starvation.
  

Consequences of Increased Liberalization: Man's position and status in terms of income and wealth are not secure. That is to say, someone's relative position in the hierarchy of wealth and/or class is not a fixed constant.

Remaining wealthy is, unlike a frozen and conservative society, not guaranteed.

Customers and workers only have voluntary relationships to businessmen. Hence, there is nothing constant or fixed about them in relationship to a businessman or anyone else.

Consumer demands change. Customers can go to one businessman to buy something versus another. Workers too can go find work with different businessmen (or go into business themselves).

Businessmen are in competition with each other, in respect to customers and labor.

So for a businessman to remain wealthy he must produce a product at low costs, meet the changing demands of consumers, stay ahead of his competition, and remain competitive in the hiring of labor.

The consequences, then, in capitalism is increased social mobility.

Marxism vs. Conservatism, Part I

Russian-style and social-democratic socialists see the move away from feudalism as civilizational progress. It was a step, they believe, towards an increased egalitarian society. Classical liberal ideals or outcomes, in principle, they embrace and support, but see the goals accomplished through statism (which, as the last chapters have shown, does not lead to increased wealth but poverty).

Conservatives, on the other hand, reject egalitarianism as a principle and sees feudalism as ideal. As conservatives they want to preserve the status quo of wealth distribution. This requires the demolition of social mobility and the placing of everyone into a freeze-ed position in the hierarchy of wealth.

Aristocratic Socialism

Endeavoring to preserve the current wealth distribution can only done (or, better put, attempted to be done) through socialist or noncontractual methods. After all, capitalism is the very reason for increased social mobility.

Conservatism, thus, finds it acceptable for some chosen class of owners to use socialist methods to hold down any and all social change. And they do not care how this chosen class came into its position, i.e., if it got where it got legitimately or not in accordance with the natural theory of property.

The type of socialism they support could be called "aristocratic socialism." It is the "ideological heir of feudalism."

The Fall of Liberalism

Around mid-19th century classical liberalism reached its height. It fell flat because (1) its "internal weaknesses and inconsistencies" [to be addressed in the future], (2) State imperialism around the world, and (3) socialist ideology of safety and security lulled the public.

Reason three expresses the actuality that conservatism, as a form of socialism, has had a greater impact in the development and increase of statism than most people think. Wanting security in one's position has been more forceful than abstract egalitarianism.

Changes of social mobility are not always welcomed: Consumers generally find it acceptable and a good thing because it increases their choices. Producers are more inclined towards stability.

Private Property and Value under Conservative Socialism

• The ownership of private property is allowed, like in social-democratic socialism. Meaning that things can be owned, sold, bought, and rented.
• No one owns all of his property, though. The income taking away from a property owner is used in redistribution to preserve society's wealth distribution.
• The degree of redistribution can change and the perceived thing needed to be preserved via redistribution can also change.
  

Natural Theory of Property: Private property owners can use their property in any way they see fit, as long as it does not damage the physical integrity of another's property uninvitingly.

Private Property vs. Conservatism...

Property owners can change their property and put it into different uses. This allows them to change their property to adjust to the changing future and consequently to "preserve or possibly enhance its value." Their adjustment to the changing conditions allows them to profit and keep that profit.

Furthermore, values do not just depend on the given property owner but the actions of others with their property and their exchanges.

The natural theory of property only protects property owners from physical aggression. It does not allow the acquisition of property through noncontractual means.

This implies that the value attached to man's property is not protected with the natural theory. No one owns the value of property, and consequently no one has any right to preserve this value through noncontractual means.

The goal of conservatism is in direct contradiction to this. It wants to protect the various values of property to maintain the status quo of relative distribution.

Conservatism in Action

To preserve all property values would require one person or group of people to literally own everything, including all physical bodies. All property values are dependent on the actions of others. Accordingly, in the attempt to achieve conservatism, the titles of property would have to be redistributed away to those who have no natural relationship to such property titles.

General Economic Consequences...

Full or partial expropriation would redistribute in favor to nonusers, nonproducers, and noncontractors. The incentive for users, producers, and contractors to attempt to preserve or increase value decreases, hence their efforts to acclimatize decreases.

As for the latter, the effort to change and be aware of possible changes in demand drops. This will lessen savings and investments. The profits made out of such actions have dropped because of the socialization thereof.

Incentive to do nothing increases because any drop of value will become socialized and will not be felt privately.

Since these activities will decrease, and because they require the use of time, the time spent on leisure and consumption will increase.

Thus, a conservative form of socialism will lead to a relative drop in the standards of living. In the effort to preserve some given wealth and income distribution, the general living standards and amount of general wealth will continually lower. Moreover, like that of any other form of socialism, earning wealth also becomes an increasingly political matter.

Marxism vs. Conservatism, Part II

As seen above, there is much overlap. There is a redistribution of property titles. The general economic results will be the same: relative impoverishment.

The privileged nonproducers who gain, however, in the redistribution are different...

• Social-democratic socialism prefers the have-nots of nonproducers, and this is where its primary support will come from. It especially hurts the haves of producers.
• Conservative socialism prefers the haves of nonproducers. It especially hurts the have-nots of producers.
  

The methods or techniques to reach their respected goals are generally different as well...

• Social-democratic socialism prefers taxation (examined in the previous chapters).
• Conservative socialism must use some taxation, but [1] price-controls, [2] regulations, and [3] behavior controls are its preference.
  

Why is Taxation Deemphasized and Replaced with the Above for Conservatism?

It will legitimatize change. Taxation is applied "progressively." Exclusively implementing taxes will allow for change to occur first. Social mobility will to some extent occur for those lower in wealth and income to rise to higher relative positions and vice versa. After taxation is implemented, the calls to push back any of the changes that occurred will become more difficult and less socially acceptable. Allowing this will weaken its case.

(In Murray Rothbard's Power and Market, Hoppe explains, three market interventions exist... {A} Autistic intervention: is an intervention that dictates to a single individual and his property what he can and cannot do with his person and property acting by himself with no other person or persons. {B} Binary intervention: an exchange forced on a person and his property. {C} Triangular intervention: an intervention that forces or stops an exchange between two parties. The type of interventions that conservatism focuses on can then be described as triangular. Its second focus would be autistic, "insofar as," writes Hoppe, "autistic actions also have natural repercussions on the pattern of inter-individual exchanges." Social-democratic socialism has its focus on binary interventions. "Note, however, that the actual policies ... do not always coincide precisely." E.g., labor unions are a supportive example of triangular interventionism for social democrats.)

[1] Price Controls

Changes in prices, i.e., the prices of various products and services sold to consumers, will naturally effect the relative position of men who are associated with such production. Conservatives, in their zeal to maintain the status quo, can implement price controls in an attempt to freeze prices and thus wealth distribution.

But the causes that change prices are not eliminated with a price control.

Assuming that "the current market price has been decreed as the price above or below which the product may not be sold," the following can be axiomatically deduced.

A price control that is identical to the current market price will have no effect; making it irrelevant to the discussion.

Increased demand for a given product would increase prices, ceteris paribus, without any price control. Here the conservative price control becomes a maximum price control. Selling the given product at a higher price becomes illegal.

The artificially cheap product will result in a surplus of demand. The number of willing buyers will be artificially higher. Producers of the given product can only continue to produce to the point when the marginal cost is equal to the marginal revenue. The output will not be able to increase without losses, until the price is allowed to increase to the market demand. A shortage will be produced. And those "willing to buy at the fixed price can" no longer do so.

Side Effects: "Queues, rationing, favoritism, under-the-table payments, and black markets will become features of life."

Ripples in a Pond: The shortages and increased demand for the given product will have a rippling effect on other products. Substitutes will get an increased demand----demand it would otherwise not have gotten, and thus the prices towards those substitutes will increase. There will be a general shift from controlled production to uncontrolled production.

[One can see the general trends of interventionism in the market. The first intervention caused several side effects and drifted production into other areas. Predictably, if the lesson of the first intervention is not seen for what it is and what it causes, there will be a second intervention to try to "fix" the first and then a third to "fix" the second and so on. The public has an interest in learning this, but States have little because this process will further its control on society.]*

Decreased demand for a given product would decrease prices, ceteris paribus, without any price control. Implementing a conservative price control becomes a minimum price control. Selling the given product a lower price becomes illegal.

The artificially expensive product will result in a surplus of supply. The number of willing buyers will be artificially lower. This will not change until the market price is allowed to function, which would allow the price to drop.

The surplus of supply will simply have to be gotten rid of without buyers. Interventionism often increases at this point. The producer is paid not to produce. Etc.

Ripples in a Pond: Artificially high prices will increase investment to the given area. With no price control they would have gone to other places. Thus, those other places will have fewer investments than they otherwise would have had. Consumer demand being higher in those areas relative to the price controlled area will further strain these areas. Prices will subsequently increase.

Generalized Results of Price Controls

• There will either be, according to consumer demand, too many of X goods (via price floor) in production lines causing relative impoverishment with too little of Y, Z, etc. goods, or too few of X goods (via price ceiling) in production lines and too many Y, Z, etc. goods, also causing by necessity relative impoverishment.
• This means that the most urgently wanted goods (X, Y, or Z etc.) cannot be satisfied. The first cannot be satisfied first, the second cannot be satisfied second, and so on. So the ones (relatively) less wanted are satisfied at the expense of those wanted more.
• On top of this, time will be wasted for man in the extra efforts he will have to make to get goods in artificially short supply and the effort to get rid of that which is in artificially high supply (with its artificially low price).
  

Conservative Goal Fails: Partially controlled prices will create a tendency, as said above, for man to move from controlled areas of the economy to those that are not. Hence, the distribution of wealth and income will not remain static. The only way to attempt to stop this process is to widen the State's control over the economy, with the ultimate conclusion of conservatism de facto abolishing private property. People, as Hoppe says, will "own" their property but only in name.

Universal Price Controls*

This takes us into universal price controls. Everything, including the cost factors of production and of labor, is frozen. But, still, there will be an environment where demand changes. The goal will fail here as well.

A society with zero price controls would allow for the coordination of resources to move from less demanded lines of production to those that are more valued.

This would be gone with universal price controls.

Increased demand for X product would create a shortage. Profit cannot be made by putting in additional production. This will ripple across the market creating an increased demand for other items, which will be higher that it otherwise would be. But here too prices cannot be allowed to rise and thus a shortage will be created. Therefore there will be a constant shift of demand from most highly valued products to less and less. As this process continues, alternatives will disappear and a demand created for products that were originally falling in demand.

Those products, because they have been under conservative price controls like everything else, had an excess of supply. Men will move to its direction, as said above, and sales will increase "in spite of the artificially high fixed price surplus."

The connection between the "production structure" and "structure of demand" will be disconnected. The former will be arbitrary and not need to conform to the latter. Any changes that happen with the production structure will not have to be inline with the structure of demand.

Standard of living must go down. Output of production is not paramount to the living standards, but the balance of that output to consumer demands.

Hoppe quotes George Reisman on the coordination disaster that would be created: "...flooding people with shirts, while making them go barefoot, or inundating them with shoes while making them go shirtless; or giving them enormous quantities of writing paper, but no pens or ink..."

[2] Regulations

Products and the producers that produce them are not a fixed constant, and another reason why the distribution of wealth is subject to change.

The creation or invention of "new and different products" or "new technologies for producing products" all bring about change. In addition, new producers can enter the producer line. All of which would compete with the old and, because they are new, would not be price controlled.

Conservative regulations can then be implemented to try to stop this. This could be done by outlawing all innovation and invention, but this would not be very popular with the public. Instead a more moderate method is taken: everything first must get official approval before implementation.

It is argued, often by those conservatives who wish to fight off "consumerism" or hinder the development of technology to "save" (old) jobs, that regulations will make new innovations or inventions "socially acceptable" and make progress gradual allowing everyone to "share in its advantages."

To this end cartels are formed by the government: Excess supply, caused by price controls, are attempted to be lessened by quotas. Innovations and general production are controlled and force producers and/or their products to pass certain tests to be officially approved to exist on the market.

The Economic Effects: Regulations (à la cartels) reduce property titles of innovators in favor to those that are noninnovators (i.e., "established producers, products, and technologies").

Therefore there will be a smaller amount of innovators and innovations and a greater amount of those that fall back to the established way. Consumers will suffer because there will be less innovation to provide the supply of products that they desire. There will be less advancement cutting costs of producing. The producing structure, akin to price controls, will become detached from the structure of demand. The overall living standards will decline.

[3] Behavioral Controls

Price controls and regulations deal with freezing the supply side.

Behavioral controls are directed at the demand side. And it is this that makes conservatism most unique because behavioral controls specifically attack consumption and noncommercial exchanges.

Conservatism to its maximum would freeze all behaviors to previously defined, "traditional" roles. The more moderate, and politically acceptable, would be prohibition laws on certain consumption and noncommercial exchanges.

Individual consumers could not develop themselves fully. But by relieving or lessening man's ability to develop his production abilities or talents, they will become less important in society and man will consequently become less personally developed in these respected (outlawed) areas. The development of one's "consumer lifestyle" will be less.

While such laws would hurt certain groups of people, they would also benefit those that wish to enrich themselves by getting rid of annoyances they do not personally like via political means of controlling certain groups.

The general result will be less investment and attachment to human capital. There will be less savings and investment. Production will be more costly, whereas consumption, leisure and the obtainment of wealth through politics will be less.

Validity of Economic Analysis and (Briefly) Empirical/Historical Perspective

• Conclusions reached in this chapter and the others have been through deduction and independent from empirical observation.
• [Empirical results will never contradict deductions, if the deductions were axiomatically deduced accurately with no mistakes.]
• No nation or place exists where a pure form of conservatism, social democracy, or Russian-style socialism exist.
• Instead there is a mixture of the three.
• Therefore the respected results of the three forms of socialism will not come out exactly like that described.
  

Europe...

• There is a greater degree of redistributive socialism in comparison to the U.S.
• Feudalism was its past. And there is still an attachment to it: there exists a number of regulations, price controls, etc.
  
• Socialism has been more fueled by feudalism/conservatism than by social democracy.
  
• Italy and France have been most conservative: taxation is not higher than average, but regulations, price controls, etc. Consequently they have some of the lowest living standards.
  
• The Nazism of Germany (national-socialism) and fascism of Italy were conservative in nature. Beyond their regulatory emphasis, they were also dedicated to aggressive expansion unlike the two other forms of socialism which looked at transforming a place "from within." The largest enemy to national-socialism was (classical) liberalism and not social democracy.
  

United States...

• The government is more internally liberal. This explains the greater wealth in the U.S. vs. Europe.
  
• There is no history of feudalism.
• However, even without the direct history, the increasing degree of socialism in the U.S. has been more the consequence of conservatism, as Hoppe defines it, than social democracy.

Here is a message from Ron Paul:

Whoa! What a year this has been. And what achievements we have had. If I may quote Trotsky of all people, this Revolution is permanent. It will not end at the Republican convention. It will not end in November. It will not end until we have won the great battle on which we have embarked. Not because of me, but because of you. Millions of Americans -- and friends in many other countries -- have dedicated themselves to the principles of liberty: to free enterprise, limited government, sound money, no income tax, and peace. We will not falter so long as there is one restriction on our persons, our property, our civil liberties. How much I owe you. I can never possibly repay your generous donations, hard work, whole-hearted dedication and love of freedom. How blessed I am to be associated with you. Carol, of course, sends her love as well.

Let me tell you my thoughts. With Romney gone, the chances of a brokered convention are nearly zero. But that does not affect my determination to fight on, in every caucus and primary remaining, and at the convention for our ideas, with just as many delegates as I can get. But with so many primaries and caucuses now over, we do not now need so big a national campaign staff, and so I am making it leaner and tighter. Of course, I am committed to fighting for our ideas within the Republican party, so there will be no third party run. I do not denigrate third parties -- just the opposite, and I have long worked to remove the ballot-access restrictions on them. But I am a Republican, and I will remain a Republican.

Government Hates Competition

I also have another priority. I have constituents in my home district that I must serve. I cannot and will not let them down. And I have another battle I must face here as well. If I were to lose the primary for my congressional seat, all our opponents would react with glee, and pretend it was a rejection of our ideas. I cannot and will not let that happen.

In the presidential race and the congressional race, I need your support, as always. And I have plans to continue fighting for our ideas in politics and education that I will share with you when I can, for I will need you at my side. In the meantime, onward and upward! The neocons, the warmongers, the socialists, the advocates of inflation will be hearing much from you and me.

Sincerely,

Ron

This is another studyblog installment of Dr. Hoppe's A Theory of Socialsm and Capitalism (ATSC). See previous studyblogs: Chapters 1 & 2 and Chapter 3.

***

Socialism, as examined in chapter three of ATSC, could never be implemented in any society where all the factors of production were socialized. It would just lead to collapse.

Consequences that came out of the former Soviet Union and Eastern Europe lessened the popularity and appeal to the more radical form of socialism with the majority of the public. It has been these (horrific) consequences, says Hoppe, more than any deductive economic analysis. The greatest negative effect on public opinion, as to be expected, have been in places where people have experienced the highest degree of socialism, or to those who have at least been close to seeing the consequences that their neighbors, in nearby nations, experienced.

The consequences of socialism and the subsequent diminished popularity have shifted socialism away from "Russian style" to "social-democratic style." Both are forms of socialism. Differences between these two types of socialism are not categorical but of degree.

The Marxist Movement: Two Branches and the Moderation

• Mid-19th century socialism had two general movements...
• The first movement was the revolutionary and radical one. As such they wanted a violent overthrow of the government and of all the capitalists. (Supposedly) Temporarily they saw the need to have complete dictatorship control over the workers until order was restored and transferred to their economic control. Marxists that dominated the theoretical aspect of socialism typically resided in this branch.
• The second promoted gradualism and democracy. They believed that universal suffrage combined with capitalism would promote a class consciousness to develop for proletarians. This class consciousness would, they believed, come from more and more individuals becoming employees instead of becoming self-employed. This would develop support of socialism. And it would develop more public support than a radical revolution, would be peaceful, and appear less threatening to capitalists. Marxists that dominated movement activists typically resided in this branch.
• The Bolshevik Revolution (October, 1917 Russia) took the path of the first branch. Before this event both branches more-or-less coexisted. This event, due to its ugly violence and destruction, helped change the path of Marxism outside of Russia to the second branch.
• Two things contributed to the Marxist shift to the second branch and towards moderation...
• The first is from the bullet point above: the seen violence of the Bolshevik Revolution.
• The second was from the undeniable results of the living standard under a socialist economy in Russia. Those standards, contra the Marxist claims, did not raise the standards but declined them.
• The second was further promoted after World War II with East European nations adopting socialism. It took away scapegoating----e.g., saying that socialism only failed because it was implemented in Asia.
• An illustration of the bankruptcy of socialism was also seen with the freeing-up of some sectors of the economy for privatization by the Soviet Union government. It essentially, as Hoppe notes, admitted its inferiority.
• This had the impact of shifting the idea of the Marxist to decentralization of socialist management, allowing some private activity, and socializing only major industries. It also shifted to increase emphasis on progressive taxation, and using it to promote egalitarian redistributionism, and also an emphasis "on equalization of opportunity." With this the transition of Marxism from Russian-style to social-democratic style was complete.
  

Social-Democratic Style Socialism: Its Relation to Private Property

• Theoreticians of this type of socialism, unlike original Marxist doctrines, do allow private ownership and private production to some degree.
• Since the rights to the partial ownership and control of private property exist, this implies that man can (hampered though it is) use, own, and obtain property according to the natural theory of property rights: I.e., he can own, acquire property via homesteading, buy, sell, give away as gift, or contractually rent out his property. This also applies to him owning means of production.
• But man cannot own all of his property: Any income derived from his property or his contractual labor relationships with others cannot be fully used by him. Such taken property therefore cannot be put into use for investment or used for consumption.
  
• The income that is taken away from him (expropriation), without voluntary choice, is used for redistribution purposes inline with socialist ideology.
• The income taken away is not a fixed or static thing. It can change (and does change, if we look at all statist systems). This change is also not something that a private property owner (a producer) can agree-to or disagree-to.
  

Economics of Private Property and Partial Socialization

Natural Theory of Property Review: To quote Hoppe, under the natural theory of property, "the user-owner of the means of production can do whatever he wants to [his property]; and whatever the outcome of his usage, it is his own private income, which he can use again as he pleases as long as he does not change the physical integrity of someone else’s property and exclusively relies on contractual exchanges."

Income Distribution: Comparing and Contrasting ---- (A) Property Respected vs. (B) Social-Democratic Socialism

(A) Private Property Respected...
There is obviously only one step to this process under private property. Income derived goes straight to the owner, plain and simple.

(B) Social-Democratic Socialism...
There are two steps. The producer produces income with his property. Then part of that income produced is taken away and redistributed to those who have, by definition, not produced from such property.

Again, the amount of expropriation is not a fixed constant. In principle it can be raised to 100%, thereabout, or somewhere in-between. [After all, the government has final say to the property owner; implying that the government seemingly is in the position of the "real" owner and is just renting out property to private individuals!] The difference thus between full socialism ("Russian-style") and partial socialism or social-democratic socialism is just one of degree.

Given the above, the producer is under the fear and constant threat that the degree of socialism will be raised. This increases the risk of production, and hence the cost thereof and lowers overall investment. Short-term thinking replaces long-term.

Social-Democratic vs. Russian-Style Socialism: The general consequences (e.g., relative impoverishment) will be felt under whatever type of socialism. It will only be of degree. But there are substantial differences in that social-democratic socialism allows private property, which permits coordination of scarce resources economically under the price system. Therefore the problems of gross misallocation will be avoided. Overutilization will be more limited. And investments, although relatively lowered versus pure capitalism, will become possible because property is allowed to be owned privately.

But, to quote Hoppe once again, "By taking part of the income from production away from owner-producer, however small that part may be, and giving it to people who did not produce the income in question, the costs of production (which are never zero, as producing, appropriating, contracting always imply at least the use of time, which could be used otherwise, for leisure, consumption, or underground work, for instance) rise, and mutatis mutandis, the costs of nonproducing and/or underground production fall, however slightly."

Countering (Statist) Economic Fallacies and Misconceptions

Gross National Product (GNP) Proves Living Standards Have Gone Up with Increased Taxes.

The economic analysis only shows that a relative decline will take place. It says nothing about an absolute decline. Thus, one can deduce that if taxation was lower (or zero), then the living standards would be relatively higher a priori.

Standards of Living Declines: Would Increased Work Make Up For It?

If the amount of work increased to make up for the loss of such taxation, then a relative decline in the standards of living has still taken place because the amount of time for leisure has decreased. (Remember: Everything costs something. Time spent on production could have been spent on leisure or consumption.)

[And, besides and very obviously, an increase in work, mutatis mutandis, would produce an even greater output (income) without any relative increase in taxation in comparison to the above situation with a relative increase in taxation. Meaning, throwing in these extra variables or factors to make up for decreased income if equally applied to a situation without the relative increase in taxation shows that such statist reasoning is grasping for straws and should be rejected as such.]

Taxation Increases "Workaholics" and Neutralizes the Effects of Taxations.

Looking to the above second objection/confusion concerning the fact that an increase in work comes at the expense of giving up leisure and consumption time already puts this idea into the classification of fallacy. The general idea that increasing taxation leads to increased work would be in the vein of saying that increasing the transfer from producers and users to nonproducers and nonusers 100% would have (which is wrong) no net effect on production output by the subsequent rise of work by producers.

The implementation of taxation not only favors nonproducers over producers, however, but in addition changes the costs involved in the way one can obtain wealth. There are two sides of the coin. Costs involved in production will have risen with this implementation or increase of taxation and the costs involved in nonproduction will have fallen. Producers will then increasingly obtain wealth using the latter method. Taxation, then, can never be "neutral." It will always change the costs involved in producing and accordingly the number of workaholics. And it also changes the opportunity costs of production in terms of leisure and consumption.

But more specifically in Hoppe's The Economics and Ethics of Private Property pp. 38-42, it is sometimes argued that taxation increases work by increasing the marginal utility of the assets taxed. Therefore instead of diminished wealth, it is said, work will increase to compensate, even though the marginal utility for leisure has gone up. Because of the latter, it is claimed that taxation then really has a "neutral" effect. But this is not a set of contradictions. Both of them work together, so to speak. The question is not just of production versus not. It is also one of time preference and the method chosen for the roundabout production of future goods.

Man acts in time and is motivated by time preference. Man cannot produce future goods without consumption. And, ceteris paribus, man prefers present goods opposed to future ones. Since the marginal utility of the taxed assets is higher than it otherwise would be, inline with this man will choose methods to produce such goods by cutting production time and shorting roundabout methods of production. Thus, the increased marginal utility for such goods and the increased marginal utility of leisure are perfectly explainable and consistent. The consequences, then, are lower output by lowering production. The claim that taxes produce a "neutral" effect is here shown to be mistaken. The real results will be less production, more consumption and leisure, and the increased acquisition of wealth via politics and theft. Additionally, since money assets are being taxed, the result will be to shift man to increasingly engage in barter. That is to say, it will devolve a civilized economy based on money, which avoids double coincidences of wants, to a more primitive one.

The Socialization of "Natural Assets"

Social-democratic socialism has led to the rise of the egalitarian concept to "equalize" all men by creating some kind of "equal playing field." Egalitarian wealth redistribution of the above analysis is concerned with exchangeable goods. But to create an "equal playing field" also requires that nonexchangeable goods be dealt with.

These nonexchangeable goods are called, by Hoppe, natural assets. They include things like physical appearance, intelligence, family environment, health, etc. Man can earn "psychic income" from them.

Redistribution of Natural Assets: Redistribution obviously cannot be done directly nor can equalization. The goal, taken at face value, of an equal playing field is impossible. Man A grows up at such-in-such location and man B grows at another location at such-in-such place. This cannot be changed. Nor is it practical to try to "equalize" those that have good-looks and those who do not (and who is to determine such a subjective thing?) by, to quote Hoppe, "smashing the good-looking people's faces to make them look like their less fortunate bad-looking fellows." Or by damaging the health of those healthy to make them "equal" to those less-healthy.

Instead, then, natural assets are taxed (on exchange goods) and redistributed to those who do not have a certain advantage.

Example: Health. It requires some production and effort on the part of the healthy individual. He can also lessen such efforts which will consequently make him less healthy. Taxing healthy people and redistributing that wealth to un-healthy people will make the effort of being healthy more expensive and make the costs of being less healthy less costly. It goes without saying that such a policy will produce a more un-healthy society.

Example: Intelligence. This cannot be directly affected on the intelligence levels of a given population, but it can and will have some relative effect on the impact on the offspring of such a population, since intelligence is passed down in inheritance according to genetics. (This can be affected by, for example, subsidizing births of the lower end of intelligence at the expense of the higher through the welfare state. Hoppe believes that intelligent levels and moral values have declined from the welfare state----see ch 9 of Democracy-The God That Failed, especially pp184-5.)

"The Social-Moral Structure of Society"

Russian-Style Socialism

• Everything, in essence, has been settled in favor of socialization.
• As a result debate will be more-or-less settled. Men will be less in public-political life and more in their personal private lives. There will be increased distrust and cynicism concerning politics.
  

Anarcho-Capitalism

• At the other "extreme" end, debate would also be settled.
• There would be no "public" in terms of politics. All agreements and arrangements would be contractual under a purely capitalist society.
  

Social-Democratic Socialism

• Categorically socialism has not disappeared; it is now only of degree.
• Hence, political debate and political activism will exist to what that degree should be.
  

Three general approaches to this type of socialism: (A) Income Egalitarianism, (B) Minimum Income Guarantee, and (C) Equality of Opportunity

(A) Income Egalitarianism

• This social-democratic socialism will, to some extent, equalize income of all professions in society.
• With this there will be a general lowering of the incentive to work because it no longer matters what the market value of various jobs is.
• Given that there is a disutility of labor man will increasingly fall into lifestyles with increased lazing around.
• Average income will continually fall relatively.
• It will also produce more withdraw from public life, including that of politics.
  

(B) Minimum Income Guarantee

• Being a more moderate approach compared to A, the results will be much less severe. At the same time, in spite of this, this approach will increase the degree of politics in society and therefore increase man's need to develop his political character.
• A minimal wage, by State fiat, will decrease the incentive to work for marginal producers than without. There will be a tendency to fall back to the minimal wage line.
  
• With this in mind, there will be relatively less production and personal advancement. Consequently, more people will be place below the line and average income will fall.
• There will be a greater shift to politics because the minimum income wage is a subjective line and can be easily changed.
  

(C) Equality of Opportunity

• The politicization of society is highest here. It opens all areas of life to be examined in the context of politics.
• There is no actual way to produce such an equal result and adds to the vagueness and confusion of this kind of social-democratic socialism. This feature adds to the popular support.
• The areas of life, infinite in number, to "equalize" is subjective and changing in the minds of men. These areas will be under constant debate.
• Given this, the amount of time spent on the development of one's political attributes will dramatically rise. (This will decrease time spent on work, for example, and result in lower standards of living.)

Dummying Down Politics: All of these programs require support on the public. Wealth equalization and a minimum wage will require support of the poor---a.k.a. the "have-nots." Since, on average, the "have-nots" are less intelligent, this will decline the intellectual political debate.

Intellectuals in Politics: Equalizing opportunity will allow for the "haves" to enter into politics. Since, on average, they have higher intelligence, they will rise in power. The language of politics will then become increasingly intellectual and scientific.

Looking into empirical examples, Hoppe writes that in East Germany this is what happened. Equalizing opportunity produced a class of intellectuals to dominate politics. Redistribution of wealth then becomes increasingly from "have-nots" to "haves." The amount of intellectuals increases (i.e., demand goes up) and they get a safe spot in the State.

The shift to politics will increase the thinking of people to always seek political solutions to problems. A crisis in the economy will become worse because those who are most apt to deal with them are the ones who are punished in a socialist economy.

“In every age the advocates of the dominant political theory seek to give it dignity by identifying it with whatever contemporaneous desire of man happens to be most powerful. In the days of monarchy, monarchy was depicted as the defender of the faith. In our present era of democracy, democracy is depicted as the only safe guardian of liberty. And the communism or super-communism of tomorrow, I suppose, will be sold to the booboisie as the only true palladium of peace, justice and plenty. All of these attempts to hook up cause and effect are nonsensical. Monarchy was fundamentally not a defender of the faith at all, but a rival and enemy to the faith. Democracy does not promote liberty; it diminishes and destroys liberty. And communism, as the example of Russia already shows, is not a fountain that gushes peace, justice and plenty, but a sewer in which they are drowned.”

“Nobody ever went broke underestimating the intelligence of the American public.”

    --- H.L. Mencken

At Chronicles, Thomas Fleming writes that he feels like a stranger in a foreign land. I many times feel likewise. I never heard of Heath Ledger, either.

Dr. Fleming also writes on "Hillary v. McCain": "I am always happy when my political predictions turn out to be wrong. My gravest errors usually result from the failure to heed Mencken’s dictum that nobody every went broke underestimating the American people"

"Only Anarchists Are Really Conservative," says Doug French in his review of Look Homeward, America by Bill Kauffman.

Joseph Sobran writes on "Father Casey and Me." Anyone who reads his columns regularly knows he is in poor health. Please have Mr. Sobran in your prayers.

Robert Spencer writes about "The Galileo Myth" at Taki's Top Drawer.

R.J. Stove, author of the new book A Student's Guide to Music History, writes on "The Death of Music by the Spirit of Government Subsidies." Plus see Paul Gottfried's review of Mr. Stove's book.

Obama's victory was hollow, says Patrick Buchanan.

The American Conservative offers a preview of the February 11 issue. They endorse, who else but?, Ron Paul.

They have an article on "The Madness of John McCain" by Justin Raimondo: "A militarist suffering from acute narcissism and armed with the Bush Doctrine is not fit to be commander in chief."

John Derbyshire writes over at NRO "On To The McCain-Kennedy Ticket."

Ron Paul has a new book coming out: The Revolution: A Manifesto. Floy Lilley writes about it.

Robert P. Murphy tries to correct and explain libertarianism to Michael Kinsley. So does Walter Block.

"Surge to Nowhere" by Andrew J. Bacevich: "Don't buy the hawks' hype. The war may be off the front pages, but Iraq is broken beyond repair, and we still own it."

Methodological Individualism and Intermediate Institutions

Man is obviously not an island all alone to himself. This is a fact that is a given in libertarianism or "paleolibertarianism," properly understood. No man or men could live in that kind of state, unless their wish is starvation, death, and extinction.

For man to fulfill his natural instincts of preservation, contractual and covenant marriage comes about. As the Austrian economist Ludwig von Mises reasoned, the division of labor for sex under capitalism brings about "traditional" marriage and fosters it.

Man wanting to enlarge his family's wealth, for that of his wife and children and their future, and not to live a minimum and brute life cannot happen without voluntary cooperation with other men under an economic division of labor. This cooperation under the division of labor represents the source of civil life. It brings a natural social order of free market activity and capitalism.

Building up material wealth also allows man time to fulfill his religious and spiritual needs. (State fiat requiring man to work from dawn to dust leaves little time for religion, family, or such things! In the same manner, involuntarily forcing both parents into the workforce lessens the family structure.) Man's "quest for community," too, is fulfilled in this cooperative, non-political atmosphere. Intermediate institutions, or social intermediate institutions, absent monopolistic statist power and dictates, fill the necessary need for social, cultural, and economic authority and "regulation." They provide a framework to a world of uncertainty and scarcity.

This brings us to the first article. In the Mises.org Daily Article “What We Mean by Individualism” by Adam Martin, the author explicates why supporting subsidiary institutions requires the understanding that the building blocks to all institutions is that they are always and by necessity composed of individuals. For intermediate institutions to be present, they cannot be divorced from the actions of individuals, nor could they possibly be formed without individuals.

This is why a methodologically individualist stance must be taken, both metaphysically and morally. Once this is grasped, then the idea that there is a battle between intermediate institutions, community and individuals (if the terms are properly defined), as Mr. Martin writes, is theoretical nonsense. To organize and form institutions is only natural to man. They make an atomistic individual with no attachments nonexistent. Because of this, attacks against libertarian individualism, by such gentlemen as Russell Kirk, are falsely premised.

This understanding also amplifies important insights from the great Robert Nisbet. The State is not just at war with the lone individual and his liberty and property. This is to miss the full picture, perhaps most interestingly the most important aspect of the full picture. The State is also at war with all societal institutions and associations that men----individuals----form. One individual is alone and weak. But institutions---be they a business enterprise, a church, or family---are not. This proper frame of reference allows us to understand how to strengthen these institutions and associations (and, at least in purely economic terms as it relates to some of these institutions, why they exist in our scarce world).

A Layered Society: Individual, Nuclear Family, Extended Family, Clan, Nation

Roland Watson's LRC article “State vs. Community” makes a conceptual framework to understand community and its relationship to separate, unique individuals by that of a layered onion.

At the very center of this onion there is the individual. It is what makes you, you and me, me. It expresses our individualism and the "something" that makes us truly human.