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Philip Pilkington: The Origins of Neoliberalism, Part III – Europe and the Centre-Left Fall under Hayek’s Spell

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By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil


In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good.

– Sun Tzu

In part one and two of this series we explored how Hayek waged war on what he thought was the cause of all the political ills of the 20th century: namely, economic planning in all its forms. We also saw that Hayek’s doctrine of classical liberalism and anti-statism proved too radical for American political and business establishment and that it required diluting by Milton Friedman.

We turn now to Europe, which would come to adopt its own form of neoliberalism. Once again, while the end result was a somewhat different creature from that conceived of by Hayek, it was nevertheless his strained, absolutist thinking that lies at the heart of the system that developed.

Motivations for a European Repression of History

As we have already seen some in the American right-wing loathed the economic planning that had grown up in the US in World War II and which, due to producing good outcomes for the overwhelming majority of citizens, gained consensus in the post-war years. This gave rise to a new propagandistic discourse aimed at what Hayek and others called “socialism” but which had little to do with the collective ownership of the means of production and was in reality a mixture of pragmatism and centre-left sentiment. The reason that Hayek’s extremism found fertile soil in Europe was that the underlying conditions were altogether different from those in America but ironically, that meant the model was bent into an even more palatable-looking form.

Europeans were, quite frankly, not as gullible as their American neighbours. They were less inclined to have the words that make up their language twisted and distorted in order to become meaningless propaganda of the sort that Orwell imagined. Unlike in America there was a strong socialist tradition in Europe and people knew what socialism was – and what it was not. The reason neoliberalism ultimately developed in Europe was altogether different.

In the post-war years many right-wing liberal politicians and intellectuals were tarrying with the same problem that Hayek faced in the 1930s. Any honest look at history – and indeed for many of these people this history was lived – would lead one to conclude that totalitarianism and war had developed in Europe, as Keynes hinted that it might in his 1919 book The Economic Consequences of the Peace, due to punitive reparation policies that were deflationary in nature. The neutral observer would also conclude that these circumstances had been exacerbated in Germany by a government which dogmatically pursued austerity policies and that this ultimately led to Hitler’s election. This presented right-wing liberals with a conundrum: how could they continue to support so-called laissez faire, small government policies if these policies resulted in forces that were so destabilising that they had led in the past to the most monstrous of tyrannies?

The answer for some was to convert to Keynesianism and to acknowledge that some degree of economic planning was not inconsistent with the principles of conservatism. The answer for others was to embrace Hayek’s delusion wholeheartedly and pretend as if it were economic planning and not laissez faire policies that had led to Hitler. So, they picked up a copy of The Road to Serfdom, joined Hayek’s network which was centred on the Mont Pelerin Society and threw history down the memory-hole.

Their problems were, however, much greater than their American compatriots. While the labour unions were indeed extremely important in the American political structure, they were never integrated in the same way that they were in many European countries. Europe, after all, had a strong tradition of social democratic parties that literally grew out of the labour movement. For this reason the unions had become more institutionalised in Europe than they had in the US, which lacked a labour party proper.

While in private many of the Mont Pelerin ideologues might have called these unions “socialist” – and indeed Hayek had some very unpleasant things to say about them as we shall see – this was not a tactic that would readily win political and institutional power. A public face was needed that would accommodate the unions in a way that they would not become vehicles for the economic planning that these “thinkers” had convinced themselves would result in totalitarianism.

Folie à syndicat

Throughout his life Hayek was extremely hostile to unions – a hostility that would later be taken up directly by the Thatcher government in Britain – but many of the Europeans around him thought this ideology counterproductive to the spread of neoliberal ideas. Some of these politicians and intellectuals genuinely did seem to believe that unions had a place in a neoliberal society, while others were likely being pragmatic.

Hayek and his Austrian compatriots saw the unions as a dangerous force – a potential harbinger of their fantasy totalitarianism – and sought to have governments squash them using the legal apparatus. Somewhat ironically Hayek’s stance on unions can only really be properly compared in Europe to the positions taken by the fascist and Nazi movements in the early 20th century insofar as brute legal force was sought to crush organised labour in the most authoritarian manner imaginable. Perhaps then, it should not surprise us that many members of Hayek’s inner circle would later rally to the support of savage dictatorships in Latin America.

However, other emergent European neoliberals took a completely different view and one would probably not be far wrong in saying that this was because the Hayek position brought up some rather unsavoury memories of the fascist era and the abuse of the legal apparatus that took place in those times. The main faction who supported the thesis that unions should be integrated – unsurprisingly, mostly Germans – were the ordoliberals. They, like the neo-Austrians, had formed largely as a collective of intellectuals opposed to the emergence of totalitarianism in Europe, but they had a slightly different view of what sort of society they thought would defend against it.

The ordoliberals and their allies – who dominated the discussion in the Mont Pelerin Society on this issue – believed that unions had already been integrated into the structures of power sufficiently that their more radical elements had been neutralised. They believed, rightly it turned out, that the union leaders could be “educated” in the ways of neoliberalism and help to keep their own workers in check. Thus the unions were seen by the ordoliberals and their allies as an integral part of their ideal of a neoliberal system of governance.

This ideology would later become known in Europe as “social partnership” and would prove, in Germany especially, as a remarkably effective way to keep wages low by indoctrinating union leaders into believing that doing otherwise would necessarily result in their workers being laid off. (The perceptive reader who is aware that many of Europe’s current problems actually stem from this will see yet another important link between today’s events and our little history). Within the left and the union movement those opposed to social partnership in its neoliberal form would also be painted as “Reds” and “communists” and be criticised in line with Hayek’s totalitarian delusion in much the same perverse way as the charge of “socialism” is used in the US. Those who go against the neoliberal orthodoxy in the European labour movement, while tolerated, are generally seen as socialists of a rather old fashioned sort whose silliness stems from the fact that they failed to learn the lessons of Europe’s totalitarian past. Need we amend this to correctly read: “Hayek’s construction of Europe’s totalitarian past”?

Not only were the ordoliberals concerned with keeping unions in check in terms of their bargaining powers, but they also saw in Europe a very real threat that workers were gaining political ground within the workplace. While they did not generally agree with Hayek’s stance on unions, they certainly did see this as an obstruction of “the market” and thus, in the language of Hayek’s delusion, a possible source of totalitarianism. Once again, however, the ordoliberals saw social partnership as a means by which they could back labour leaders who were not antagonistic to managers at the expense of their more radical colleagues. As in the case of wage bargaining, the ordoliberal project was to essentially gain control over the union movement and turn it into a means by which to further the neoliberal agenda.

Hayek and the Austrians reacted to all this in a rather extreme manner, even, rather surprisingly, invoking the spectre of class war. Indeed, one might easily mistake their stance for a sort of right-wing Leninism. Fritz Machlup, for example, at a meeting of the Mont Pelerin Society in 1947 said that:

Industrial peace is something that we should be afraid of, as it can only be brought at the cost of further distortion of the wage structure. I am most afraid of Professor Iversen’s proposal for wage determination by State, and consider it the end of democratic government.

According to such a view, of course, any countries with minimum wage laws do not, by Machlup’s idiosyncratic standards, have democratic government; and labour markets should, in a functioning Machlupian society, be in a state of constant war.

But rhetoric aside the Austrians largely lost the debate on the unions in Europe, while the ordoliberals won the day. Unlike in the case of monopolies, however, there was substantial opposition from Hayek and his allies. Whereas large corporations were to be accepted as normal by all those of neoliberal persuasion in both America and Europe, the tension over unions within the movement would continue; reaching fever pitch in the administrations of Reagan and Thatcher. These politicians and their allies, in a very real and direct sense, can be seen as purist Hayekians in the context of labour policy where they were not in terms of macroeconomic policy for which they favoured the doctrines of Friedman and the monetarists.

Conclusion: Neoliberalism Today

Many of us today live under neoliberal structures of governance. Each country may have its own peculiarities, but on broad principles they follow a pattern that invokes laissez faire, balanced government budgets, control over wages, privatisation, an abstention from economic planning beyond that strictly required and deregulation. What is more, Hayek’s delusion has become widespread to the point of all discourse being completely saturated. In polite company and in public you can certainly be left-wing or right-wing, but you will always be, in some shape or form, neoliberal; otherwise you will simply not be allowed entry.

Any policy or notion that offends the neoliberal mind-set and threatens to shatter Hayek’s delusion is said to only put us on the road to serfdom. It is not difficult to win a rational argument by pushing the point home that this is utter fantasy and nonsense, is completely ignorant of history and is founded on pre-school notions of economics; but that matters little. When you leave the room people will whisper to one another that you are an odd sort with silly ideas and probably should not be trusted.

Such is characteristic of all systems of crude propaganda. Propaganda, by construction, appeals to a series of images inside peoples’ heads – snapshots of a history either half-forgotten or fabricated entirely. These images, in turn, are design to affect peoples’ emotional centres and control them through manipulating that which causes their anxieties and their fears. That the founder of this propaganda himself believed in it entirely makes no difference, for it is the foolish man who thinks that effective propaganda is based on pure and cynical lies.

The oddness of the world in which we live today is that neoliberalism as a system of governance has become entirely dysfunctional. Those ambitious souls in the present ruling generation that received the torch from the inventors of the discourse believed it to be a pragmatic doctrine. This is not surprising given that we have seen that this is precisely how it was constructed. But as we have also seen neoliberalism was built on a fundamental fantasy – a sort of primal repression. Any serious student of history in general and economic history in particular knows that such policies are bound to be deflationary in the medium to long-run and that they will likely generate economic meltdowns and result in social and political turmoil.

And so our leaders, both intellectual and political, try to get a grasp of the situation we face today. But they consistently fumble and fall over; tripped up by their own ideologies. Hayek’s delusion is potent – very potent – and just as he all those years ago preferred to retreat into a fantasy world rather than face what was going on all around him, so too today our leaders do the same. Against all odds and in an act of what can only be considered heroic ignorance Hayek went to the grave with his delusion intact, we can only wonder how long others will uphold it before they buckle under its weight.

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146 comments

  1. William

    Great post. Reminiscent for me of what Michael Hudson talks about, effectively that the Free Traders in Great Britain at one time drank their own kool-aid, believing their own propaganda or PR, when different policy solutions were called for and would have been beneficial, a policy architecture that at one time in G.B.’s economic history had been to Great Britain’s advantage caused it to cede it’s superpower status more rapidly than had they changed course.

      1. William

        Hudson’s book Trade, Development, and Foreign Debt: How Trade and development concentrate economic power in the hands of the dominant nations.

      2. William

        I would look to Chapter 4 “How Mercantilism Evolved into Laissez Faire” and I would also look at Chapter 11 of the same book “The Narrowing Scope of Trade Theory”.

  2. The Dork of Cork.

    I remember being in a trade union officials office back in those cat days……..
    He had old black and white pictures of labour minister Bertie on his walls in almost JFK (not quite) like poses……

    I was really stuck for words.
    I could not get up to courage to ask him why ?

    Whats really not talked about in Ireland is how absurd and strange the place is.
    Its almost as if this euro jurisdiction does not exist in reality – everything I see is made of cardboard.

    Its like a bad , malfunctional Holodeck programme

  3. RanchJames, Longdrycreek

    Back to the books for you, Sir. Since you claim to know much about the U.S., I suggest you consult Wolfgang Schivebursch’s “Three New Deals.” FRD, Mussolini, and Hitler. Peas in a pod until 1939.
    If you have interst, I urge you to read Hernando de Soto’s “The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else.”
    Of course, central planning is useful if one wants to exterrminate a population or thin it.
    But as we learned in FDR’s 1930′s in the U.S., The Brain Trust was terrible at running farms.
    These books, among other I have in my library, are sufficient to give you a start on understanding the flaws the Hayek and other saw in the offing.
    Best wishes to you. JAG

    1. Philip Pilkington

      Well, it must be said: articles on Hayek, they really do bring the geniuses out of the woodwork, don’t they? Equating FDR with Hitler — a man who tried to wipe out the Jewish population using death camps and gas chambers? Yes, the level of obfuscation, paranoia and fear-mongering is on par with something from a hardcore conspiracy theory website. At least these people do us the good service of commenting here. Like Alex Jones on Piers Morgan’s show the other day, they show just what sort of people adhere to these fringe ideas.

      1. Sufferin' Succotash

        Well, it never occurred to me to equate farm price supports with Auschwitz. Maybe there’s something in it after all!
        :)

      2. ScreenName48

        Wow, what an incredibly condescending, sophomoric, and rude response from the post’s author to a comment made in good faith. Why does anybody bother with this Phil guy? Pure sophistry.

        I’ll just keep saying it since it easily invalidates everything Phil “argues”:

        Taxation is theft. Theft is immoral. People pay their taxes because they don’t want to get kidnapped/shot/raped in a cage. People use “dollars” for the same reason. People observe ridiculous economic central planning laws for the same reason. Everything Phil talks about, his life’s work, thousands and thousands and thousands of useless words spewed into the ether, all of it requires the use or threat of violence as a necessary prerequisite for its existence.

        Phil supports violence against me. Yves supports violence against me. This, ladies in gentlemen, is where peaceful debate and argumentation ends. No further discussion is necessary. You are either a violent thug like Yves and Phil, advocating that the guns of the state be pointed at me and that I must be forced to obey and submit, to work half my life as a slave to pay my “taxes” so they can wage war, to be forced to use their garbage paper money that constantly loses value, to control every aspect of my economic life.

        This is the reality. What Phil (and mostly Yves) talk about? Pure sophistry. They are relics of an age of violence whose age is hopefully soon past, and their inability to see the violence that surrounds them, and that indeed they advocate on a daily basis, only serves to cement their uselessness.

          1. rkka

            Taxes are part of the price of a civilized society. Clearly, RanchJames and Screen do not wish to be part of a civilized society.

          2. ScreenName48

            Additionally, perhaps you could clarify for me what is “civilized” about pointing guns at people and depriving them of the fruits of their labor? What is “civilized” about the fact that the tax farm called the United States has more humans locked up – both in absolutely numbers as well as per capita – than any other nation on earth? What is “civilized” about this?

          3. rkka

            Please supply an example of civilized society, beyond the hunter-gatherer extended-family clan, that has not taxed.

          4. ScreenName48

            Easy! America after winning independence from Britain! The income tax was not wrought upon us until the early 20th century, with the creation of the Federal Reserve – of course, it was marketed at targeting only the richest 1%, but we all know how that goes. But your argument is invalid anyway (I noticed you changed it once I refuted your original argument – bad form!), because even if you couldn’t find ANY example of a free society in the past, that is not an argument as to why one shouldn’t or couldn’t exist, just as it was not a good argument that we could not end slavery because there had always been slavery, or we could not give women equality because they had always been unequal, etc. (and people definitely made those arguments at the time!)

            Notice the pattern? Notice the list of things we thought could never change, but did? Which side of that argument do you really want to be on?

          5. rkka

            Screenie, the Constitution gives the government the power to levy taxes.

            Obviously, our Founding Fathers did not believe that “taxes are theft”

        1. Philip Pilkington

          “Phil supports violence against me. Yves supports violence against me.”

          More victim-complex paranoia. Thank your for your comments. Please keep them coming. The more we get the larger the sample size. Eventually we can run some regressions on the link between Austrianism and the use of paranoid and anxiety-ridden language.

          As Dershowitz said of Jones on the above mentioned television program: “He wasn’t a witness, he was what we’d call an ‘exhibit’”.

          1. ScreenName48

            This is not an argument; this is an Ad-Hominem Attack. See what I wrote above for what an actual argument looks like.

            I’d love to see your attempt at an actual argument at some point Phil, but I really haven’t seen any evidence, despite your loquaciousness, that you are capable of making one.

          2. ScreenName48

            Also I’d point out that you are clearly confirming my final argument, I’ll repeat it here for you:

            “their inability to see the violence that surrounds them, and that indeed they advocate on a daily basis, only serves to cement their uselessness.”

            I’d be happy to elaborate on this violence that you are so blind to if you’re at all interested in furthering your understanding. You seem to be more interested in tearing people down who make arguments that you dislike, unfortunately, so I doubt any real curiosity on your part exists.

          3. ScreenName48

            Ok Phil, I’m not surprised you can’t go there.

            For anyone else who may be reading this, I’d really like to point out that Phil does not have a counter-argument to what I wrote, other than personal attacks. This does not surprise me.

            You see, Phil really is scared; he’s scared that I’m right. If I’m right about the violence, then I’m right about everything else, including what I said about Phil’s life’s work. He cannot deal with the possibility that he is wasting his life on sophistry – understandably – and so psychologically, he must come up with some other justification for why he will not address my arguments – this is known as the Confirmation Bias:

            https://en.wikipedia.org/wiki/Confirmation_bias

            (See, I can link to Wikipedia too!)

            What I said is true, and everyone knows it (though they are reluctant to scrutinize it); the system RUNS on violence. “Governments” exist ONLY through the use or threat of force. Phil does not want to talk about, or even acknowledge, the violence that underpins the system that he advocates. To do so would be to call into question the perceived morality of the actors whom he (inexplicably) assigns such virtue.

            I could go on, and speak about how all of this likely stems from childhood abuse and the enforcement of arbitrary rules with the threat of violence from parental authority figures (an experience that was surely not unique to Phil) – but to do so would, I feel, be to kick a guy when he’s down. Suffice it to say that the answers that Phil is seeking do not exist in the sophistry of MMT, but rather in exploring the painful experiences of his own childhood.

            Same as it ever was…

          4. Philip Pilkington

            Gosh, maybe you’re right. Maybe I should engage with you over whether its “right” (subjective argument) that the government “point guns at us” (never had the government point guns at me) to “steal our money” (no courtroom in the country would uphold a ruling that taxation is theft). Of course, this is an incredulous and emotionally charged argument that would be laughed out of any courtroom or academic journal worth its salt (oh, but then they’re part of the conspiracy too, right?).

            Okay, we’re done. People can make up their own minds whether you and the other vulgar Austrians are fear-mongers or not. And by the way, you ask why anyone “bothers with me”. Well, here’s a reality check, buddy: you just left more comments than any other reader on this blog. Next Christmas, ask for a mirror.

          5. ScreenName48

            Oh what the heck, this is fun! Maybe we’ll all learn something. I can keep going.

            Lets pretend that Phil made an actual argument before. Here, I’ll rephrase it for him to put it in the proper form:

            1. Phil doesn’t argue with irrational fear-mongers.
            2. All persons with Martyr Complexes are irrational fear-mongers.
            3. ScreenName48 demonstrates clear signs of having a Martyr Complex
            4. Therefore, Phil will not argue with ScreenName48.

            Ok, I am only going to concentrate on #3 here, though I think that there are good arguments against most of these. So, per the helpful link that Phil provided:

            In psychology, a person who has a martyr complex, sometimes associated with the term victim complex, desires the feeling of being a martyr for his/her own sake, seeking out suffering or persecution because it feeds a psychological need.
            In some cases, this results from the belief that the martyr has been singled out for persecution because of exceptional ability or integrity.[1] Theologian Paul Johnson considers such beliefs a topic of concern for the mental health of clergy.[2] Other martyr complexes involve willful suffering in the name of love or duty. This has been observed in women, especially in poor families, as well as in codependent or abusive relationships.[3][4] It has also been described as a facet of Jewish-American folklore.

            So to take Phil’s argument further, he went out of his way to point out this part of what I said:

            “Phil supports violence against me. Yves supports violence against me.”

            Lets assume, since he didn’t bother to articulate, and ignoring for the moment that he ignores all of the other arguments that I made, that this is the part that Phil believes demonstrates incontrovertibly that I suffer from a Martyr Complex. I’d like to provide some argumentation and evidence to back up my claim (that Phil quoted).

            First, the argument is not merely that Phil and Yves advocate violence against ME, but also against anyone subject to the violent coercion of government (which includes, presumably, all the other readers of this blog). I referred specifically to myself because Phil and I are the ones participating in the conversation. It was meant to contrast the fact that, unlike Phil, I would argue that Phil ought to be free to spout his nonsensical MMT claptrap to his hearts content, and that NOBODY should have the right to point guns at him (or anybody else) and deprive him of the fruit of his labor, or tell him what to use for money, or where he may work, etc. I would NOT advocate violence against him in any form whatsoever.

            Phil and Yves cannot make the same claim. They believe it is right and good and just that blue-costumed thugs should point guns at me (and you) and force all the nonsensical opinions of people much like themselves on every aspect of my (and your) life, the most important of which is the money we are allowed to use, the lifeblood of any economic system. “Give ME the gun, and I will make the system work!” they cry, to which I say “Lets all put DOWN the guns, and maybe then we can have a rational conversation and actually begin the process of solving these problems.”

            Thus, at the end of the day, it is all about violence vs. nonviolence, and those who advocate for the virtue of the State syllogistically are advocating violence against me and you and everyone else. This is obvious on its face for anyone brave enough to examine the issue, which is why sophists go to such lengths to dispel their own cognitive dissonances. Because what I said was the plain truth, how could it then be used to demonstrate that I suffer from some sort of “Martyr Complex”? It cannot, and therefore, Phil’s argument is invalid. See, wasn’t that fun?

            The piece of the puzzle that Phil is missing is not about “Neoliberalism” or “Libertarianism” or “Austrianism” or “Kensianism” or “Modern Monetary Theories” or “Exogenic Anamorphic Fiscal De-UnStabalizers”…

            It Is The Violence.

          6. ScreenName48

            “Okay, we’re done. People can make up their own minds whether you and the other vulgar Austrians are fear-mongers or not.”

            I will take that as a concession, for is any argument ever truly done? I am certainly open to the idea that I am wrong about everything, always… can you make the same claim?

            “And by the way, you ask why anyone “bothers with me”. Well, here’s a reality check, buddy: you just left more comments than any other reader on this blog. Next Christmas, ask for a mirror.”

            Hey bud, I work in IT (today is a slow day) – I just do this for fun! And as I mentioned before, I really am having fun, philosophy really gets the blood pumping, don’t you agree? The quest for the truth invigorates the soul! And I’m not the one hurling around personal insults and attacks to cover up for my own bad ideas – that is why I questioned why people would bother with you. If I were as mean-spirited as you are, I would question why people would bother with me as well!

            Finally, I’d like to give a shout out to that Digital Gutenberg of our times, the Internet. Where else could this lowly IT grunt philosophically trounce this “writer and research assistant at Kingston University in London”?

            The future is bright, brothers and sisters!

          7. ScreenName48

            Hey, now we’re talking! Lets knock these down one at a time, shall we?

            “Gosh, maybe you’re right.”
            I’d like to believe that Phil is actually capable of truly considering the merits of my arguments, but I sense some irony in this sentence?

            “Maybe I should engage with you over whether its “right” (subjective argument)”

            Ah so your argument, Phil, is that morality is subjective? Rape is not objectively immoral? Theft is not objectively immoral? I think this has all been pretty well refuted in Molyneux’s Universally Preferable Behavior (give it a read!)

            “that the government “point guns at us” (never had the government point guns at me)”

            Try not paying your taxes, Phil! Try ignoring the letters, and then try resisting when the man in the blue costume comes to take you away. Do you think Wesley Snipes is sitting in a 6×8 because he likes the food? How do you think “Laws” work, Phil? They just ask real nice? Here’s another analogy: once a herd of cattle get shocked a few times by the electric fence, the farmer can turn it off.

            “to “steal our money” (no courtroom in the country would uphold a ruling that taxation is theft).”

            Invalid argument! Courtrooms are not the final arbiters of the TRUTH!

            https://en.wikipedia.org/wiki/Appeal_to_authority

            Theft is taking something from someone without their permission. We learned this when we were five, Phil. Nobody has my permission to take my money, but they sure seem to take it anyway. That’s why the lie that this is all voluntary is necessary – people don’t want to admit that they’re being stolen from, and if they convince themselves that it’s necessary for a “civilized society” (see above), they don’t have to acknowledge the violation. Unfortunately, the half a billion dead in the last century sort of put the lie to the whole “civilized society” thing, so people don’t want to talk about that, either.

            “Of course, this is an incredulous and emotionally charged argument that would be laughed out of any courtroom or academic journal worth its salt”

            I get that you are incredulous, Phil, but this is not an argument.

            https://en.wikipedia.org/wiki/Appeal_to_authority

            “(oh, but then they’re part of the conspiracy too, right?).”

            Who said anything about a conspiracy?

            Alright! Got any more for me? Or are you ready to concede yet?

          8. Philip Pilkington

            I’ll tell you what. You seem to be putting a lot of effort into this, so I’ll just throw something out there that others might find interesting — and which is typical of Austrian/libertarian “thinking”.

            Note how you keep claiming to have won the argument. This is interesting because most people understand that the person making the argument doesn’t get to decide whether they won or not. The reason for this is obvious: they will always WANT TO believe that they won the argument. So, most people would realise that in order to win the argument neutral third parties must decide that you have won the argument. But you clearly don’t think this.

            Now, I put to the reader — the neutral third party, because that’s who I aim my arguments at, not at myself — that this is fundamental to understanding these people that say things like “taxation is theft”. If we analyse that statement we’ll realise that it’s either (a) untrue or (b) conforms to a very strange idea of what truth is.

            In order for something to be “theft” — i.e. a criminal action — a court must uphold such a decision. The court here is our neutral third party from before. But you ignore the court and the law. Because obviously the court/law does not uphold the view that taxation is theft, otherwise no one would pay taxes. So, what you’re doing is the same thing as before. Your narcissism means that you ignore the existence of neutral third parties and simply shout out what you believe to be the truth.

            When you claim to have won the argument and when you claim that “taxation is theft” you’re manifesting the same irrational and weird argument style. One that begins and ends with you. You, and all the other vulgar Austrians, live in an echo chamber.

            Okay, enough of this. I’m actually done this time. I just hope that shows others something about the mindset we’re dealing with here.

          9. ScreenName48

            “I’ll tell you what. You seem to be putting a lot of effort into this, so I’ll just throw something out there that others might find interesting — and which is typical of Austrian/libertarian “thinking”.”

            It’s not much effort at all Phil – I love this stuff! Sure is more interesting than migrating Oracle databases :P But I’m a bit worried – you seem to once again be working up to not addressing any of my arguments. Lets find out…

            “Note how you keep claiming to have won the argument. This is interesting because most people understand that the person making the argument doesn’t get to decide whether they won or not.”

            Well you don’t refute any of my points, Phil, so what other conclusion am I to come to?

            “The reason for this is obvious: they will always WANT TO believe that they won the argument. So, most people would realise that in order to win the argument neutral third parties must decide that you have won the argument. But you clearly don’t think this.”

            Ah, interesting! You’re saying that you believe that one cannot successfully evaluate an argument save for the arbitration and confirmation by a “neutral third part[y]“? What an absurd idea! Have you no familiarity with Syllogistic Logic? Logical Fallacies? Recognition of biases? Epistemology? Man, that explains a lot! No wonder you are constantly falling victim to these logical traps! Seriously man, and I say this with all the warmth I can muster, put down then MMT and pick up some Socrates, some Plato, some Aristotle! Learn to spot bad arguments, and maybe you will cease to constantly spew them forth!

            “Now, I put to the reader — the neutral third party, because that’s who I aim my arguments at, not at myself — that this is fundamental to understanding these people that say things like “taxation is theft”. If we analyse that statement we’ll realise that it’s either (a) untrue or (b) conforms to a very strange idea of what truth is.”

            I sense an argument coming on… could it be possible?

            “In order for something to be “theft” — i.e. a criminal action — a court must uphold such a decision.”

            How absurd! Theft is the involuntary taking of property, it’s easy peasy and we teach it to children in Kindergarten. Let me ask you this, Phil – does Rape require illegality to be immoral?

            “The court here is our neutral third party from before. But you ignore the court and the law. Because obviously the court/law does not uphold the view that taxation is theft, otherwise no one would pay taxes.”

            What does a “court”, which is a bunch of chuckleheads in robes, have to do with any of this? What does the “law”, which is a bunch of arbitrary rules written down by a bunch of chuckleheads in suits, have to do with any of this?

            “So, what you’re doing is the same thing as before. Your narcissism means that you ignore the existence of neutral third parties and simply shout out what you believe to be the truth.”

            Not what I believe to be the truth – what logic, reason and evidence have shown me to be the most likely explanation, and which I (for the time being – until or unless a better argument or new evidence comes along) accept as the truth.

            I point this out to contrast the difference between what someone “accepts” – which has no preference value – and what one “believes”. You “believe” in MMT because you want to; I “accept” the reality of the violence of the system, despite the fact that I would LOVE for it to not be true, Phil. Personally, I wish it was all kittens and rainbows and that candy-coated perfection shot out of Ben Bernanke’s ass to solve all the world’s problems, but unfortunately the evidence does not seem to support any of that. A shame…

            “When you claim to have won the argument and when you claim that “taxation is theft” you’re manifesting the same irrational and weird argument style. One that begins and ends with you. You, and all the other vulgar Austrians, live in an echo chamber.”

            Us vulgur, vile Austrians, how evil we are for not having any sacred cows, for putting it all up on the table, taking the bat of logic and evidence to the whole pinata, and see what’s standing at the end of the day.

            I’m not sure what you’re arguing here, Phil, other than that you have a strong negative emotional reaction to my arguments, which I really do understand and empathize with, as I mentioned before. Also as I mentioned before, I suspect this has to do with your relationship to violence and authority as a child – care to prove me wrong on that one, or is that somewhere you’d rather not go?

            “Okay, enough of this. I’m actually done this time. I just hope that shows others something about the mindset we’re dealing with here.”

            What is it exactly that you are hoping to show, other than that you yourself are hopelessly dependent on the validation of third party “authorities” to evaluate an argument?

          10. ScreenName48

            I’d like to make one additional point, and then I, too, must be off (those databases aren’t going to migrate themselves, you know…)

            I made a lot of arguments about the violence that underpins the system, the euphemisms we use to cover it up, and even tried to use syllogistic logic and point out logical fallicies whenever possible. I may not be right, but I feel I did an admirable job of defending the points I was trying to make.

            Phil, on the other hand, has spent this ENTIRE thread attempting to attack me as a person, and as a result to use that to invalidate my arguments. His responses, even when seeming to touch on the points I made, have entirely been about discrediting me as an entity. Here are some examples in the few short things he wrote, starting with the comment I replied to:

            “really do bring the geniuses out of the woodwork, don’t they?”
            “the level of obfuscation, paranoia and fear-mongering is on par with something from a hardcore conspiracy theory website”
            “they show just what sort of people adhere to these fringe ideas.”
            “More victim-complex paranoia.”
            “he was what we’d call an ‘exhibit’”
            “I don’t argue with irrational fear-mongers.”
            http://en.wikipedia.org/wiki/Martyr_complex
            “laughed out of any courtroom or academic journal worth its salt”
            “you and the other vulgar Austrians”
            “you’re manifesting the same irrational and weird argument style.”
            “You, and all the other vulgar Austrians, live in an echo chamber.”
            “I just hope that shows others something about the mindset we’re dealing with here.”

            So I ask you, who is making a better argument, Phil or myself? Who is relying on personal attacks instead of arguments, Phil or myself? You may disagree with what I am saying (obviously Phil does), but doesn’t what I wrote make more sense, and feel less insulting, than everything Phil has written? I get that it is frightening to see the leviathan for what it truly is, and if you choose to shy away to protect yourself, I will understand. But do not let yourself be tricked by the pied pipers like Phil, who would have you locked in a cage if you should dare to disagree with him.

          11. Philip Pilkington

            Well, I didn’t read the last to disquisitions. Too much wisdom for my tiny mind, I suppose.

            Let’s just say you kicked my ass, you big ‘ol keyboard warrior you. So, hold that head up high for the rest of the day. With pride. And when you’re on the way home, yeah, the secretary was looking. Give her a wink. Because you kicked ass today, brother. And ain’t no-one going to take that away from you.

          12. ScreenName48

            “Well, I didn’t read the last to disquisitions. Too much wisdom for my tiny mind, I suppose.”

            Your poor grammar is a bit hard to follow, Phil, but I take it you meant “two” instead of “to”, implying you’re now simply not reading my arguments at all? Hardly good form for “a writer and research assistant at Kingston University in London”! I’m genuinely disappointed; perhaps someone else will find some value in what I wrote.

            “Let’s just say you kicked my ass, you big ‘ol keyboard warrior you. So, hold that head up high for the rest of the day. With pride. And when you’re on the way home, yeah, the secretary was looking. Give her a wink. Because you kicked ass today, brother. And ain’t no-one going to take that away from you.”

            Excellent, the concession I was looking for! I’d print this out for posterity, but once again I fear that you may be engaging in condescending sarcasm rather than an actual discussion, for I would think that someone who truly understood and accepted the arguments that I am making would stop dedicating such time and energy in the pseudo-intellectual support of violent, evil men.

        2. Septeus7

          Quote: “Taxation is theft. Theft is immoral. People pay their taxes because they don’t want to get kidnapped/shot/raped in a cage.”

          So the religious manta begins as a declaration of faith. No argument is made as to why taxation must be understood as theft. It assumed apriori without reasoning as dogma.

          Taxes is imposition public debt for the consumption of public goods and as no difference than the imposition of debt for the consumption of so-called private goods.

          Stating with “taxes are theft” because it implies that failure to make a payment carries the threat of imprisonment or deprivation of “freedom” is like saying that “forcing” a bandit to return his loot is violence because it carries the threat of imprisonment is wrong because it it represents “initiation of violence” against the bandit.

          Quote: “Phil supports violence against me. Yves supports violence against me. This, ladies in gentlemen, is where peaceful debate and argumentation ends.”

          Ahh, the entitled cries of the kleptocrats throughout all time that ” any effort” to stop their looting of society is “violence against my property” and therefore the only evil that can exist.

          He, the almighty kleptocrat ScreenName48, is beyond taxation and entitled to everything he possesses and as a Randian Superman he owes nothing to the commonweal standing above the conventions and morals of mere humans.

          As a superman, he has the right to ends peaceful debate which implies the use of “non peaceful” means i.e. violence.

          So violence of an organization of men to to lay claim to that they claim is rightfully theirs (i.e.) for the cause of justice is wrong unless it an organization we kleptocrats agree is valid in which case violence is acceptable as it is defense of their property whereas any other form of violence is wrong because it an attack on the property of the kleptocrat.

          Circular Reasoning and Double Think! I am impressed.

          1. ScreenName48

            Wow, I have no idea what most of that meant, and I had trouble finding an actual argument in there, but I think you have a problem with my statement that taxation is theft? I’d be happy to elaborate.

            Theft is the act of taking the property of another without their permission. Children recognize this very, very early (the science is very interesting!) Taxation is extracted involuntarily, with the threat of punishment (kidnapping, imprisonment, additional theft, etc.) as the enforcement mechanism. Because it is a universal principle that threatening a person in order to deprive them of their wealth (or for any other reason) is immoral, an organization does not get a magical moral exception because they wear a blue costume, or claim to “represent” someone.

            We recognize that violent coercion is immoral in every other instance (it’s the difference between rape and lovemaking, the difference between assault and surgery, the difference between murder and euthanasia), it is a simple matter of pointing out that moral rules are UNIVERSAL, and that there is no magical exception, no mythical “social contract”, really nothing that COULD exist – short of voluntarism – that could reverse the moral rules of involuntary, coercive purloining of wealth or enforcing of arbitrary rules, just as there is no situation where involuntary sex is anything other than rape, or anything other than reprehensible.

            Taxation is theft because it is involuntary. If it were voluntary, it would be called charity. Taxation is a euphemism that we use to convince ourselves of the lie that we do it because we want to, rather than the truth, which is that we do it because we are afraid.

          2. rkka

            “Theft is the act of taking the property of another without their permission.”

            That is a lie.

            Theft is the act of illegally taking the property of another without their permission.

            To say taxation is theft is a lie.

          3. ScreenName48

            Law ain’t got nothing to do with it, brother – writing something down on a piece of paper doesn’t change reality. If someone passed a law saying that rape was peachy-keen, that wouldn’t make it so. Violent coercion is universally recognized as immoral outside of the bizarro-world of government, so why the reversal in this one area?

            Question for you friend – how many years did you spend in government “schools”? They had me for sixteen years – the most formative of my life – and this really set me back.

            Might be a factor in why you believe what you believe, is all I’m getting at.

          4. Septeus7

            Quote: “Theft is the act of taking the property of another without their permission. Children recognize this very, very early (the science is very interesting!) Taxation is extracted involuntarily, with the threat of punishment (kidnapping, imprisonment, additional theft, etc.) as the enforcement mechanism.”

            Repo is extracted involuntarily by private firms but you don’t seem to have a problem with folks using violence in that case.

            The fact something is “extracted involuntarily” by threaten has nothing to with how objective valid or invalid said extracting is i.e. by your reasoning using violence against copyright violators who use “property” without permission is valid?

            Quote: “We recognize that violent coercion is immoral in every other instance (it’s the difference between rape and lovemaking, the difference between assault and surgery, the difference between murder and euthanasia), it is a simple matter of pointing out that moral rules are UNIVERSAL.”

            Ah…yes traditional argument for slavery.

            Let’s apply slavertarian ScreenName48′s logic. According him it is the “coercion” that is always wrong not the rape.

            But let’s take the case of coverture marriage wherein a women sell herself voluntarily as property of their husbands who proceeds to rape every her night that’s fin since ScreenName48′s believes that “taking away property” i.e. the “State stopping rape” is theft and therefore always wrong we must conclude that ScreenName48 isn’t really against rape but “illegitimate rape.”

            According to the Slavertarian ScreenName48 rape is legitimate if the woman has agree to alienate her property claim to her body.

            ScreenName48′s is saying the saying determination of “violent coercion” in society with regard to property and value of such comparative property claims are “objective” “moral rules” and but according to the Austrian school claim’s all the value including such moral “values” is subjective.

            The self contradiction is evident and reason is simply to claim political power over others by pretending that his morals are objective and then to turn around everyone else’s are “based on force.”

            How can you claim to know that value and hence the validity of all property claims such as Coverture marriage contact versus copyright is subjectively determined by the individual but society know that objectively knows to what extent of “involuntariness” arises by the removing said property from that individual in each and every claim against that individual’s claim?

            Are you claiming that everyone is able to read minds or has access to a central planner of comparative value of property?

            You would seem to believe that their is in fact a absolute world government standing over all nations of men passing judgments against violators of this “Universal” Imperial law.

            I would claims that all such Universalism defines attitude the of tyrant not a liberator.

          5. rkka

            Screenie, our Founding Fathers said “Taxation without representation is tyranny.”

            They did not say “Taxation is theft.”

            They, being civilized men, accepted the validity of taxes.

        3. unsympathetic

          If you’ve got an alternative idea, “48,” by all means post it. But these numerous threadjacks are nonsensical, inaccurate, and tedious.
          violence projection is annoying.
          government tax is not the issue at all, you are clearly smart enough to comprehend that all systems tax citizens.

          I don’t know if you’re being paid to troll and I don’t care. But quite frankly: Everything you have posted on this thread is barely tangentially relevant to neoliberalism and you know it.

          Make an argument and quit the personal attacks – if you have something substantial to say. If not, please go post on Yahoo Finance boards and i’ll reply there on the 22nd of never.

        4. skippy

          @ScreenName48

          Victim playing (also known as playing the victim or self-victimization) is the fabrication of victimhood for a variety of reasons such as to justify abuse of others, to manipulate others, a coping strategy or attention seeking.

          By abusers

          Victim playing by abusers is either:
          diverting attention away from acts of abuse by claiming that the abuse was justified based on another person’s bad behavior (typically the victim) soliciting sympathy from others in order to gain their assistance in supporting or enabling the abuse of a victim (known as proxy abuse).

          It is common for abusers to engage in victim playing. This serves two purposes: justification to themselves – as a way of dealing with the cognitive dissonance that results from inconsistencies between the way they treat others and what they believe about themselves. justification to others – as a way of escaping harsh judgment or condemnation they may fear from others.[edit]

          By manipulators

          Manipulators often play the victim role (“poor me”) by portraying themselves as victims of circumstances or someone else’s behavior in order to gain pity or sympathy or to evoke compassion and thereby get something from another. Caring and conscientious people cannot stand to see anyone suffering, and the manipulator often finds it easy and rewarding to play on sympathy to get cooperation.[1]
          [edit]Other types

          Victim playing is also: an attention seeking technique (see for example Münchausen syndrome, Münchausen syndrome by proxy and Münchausen by Internet). a strategy used by alcoholics to elicit constructive criticism, rescue, or enabling behavior from others[2]
          [edit]In corporate life

          The language of “victim playing” has entered modern corporate life, with pundits expressing ‘frustration around highly competent professionals who constantly played the victim in virtually every aspect of their careers…always someone else’s fault’.[3] Taking the position that ‘when someone plays the victim, they act as if they are powerless and not responsible for their actions…irresponsible and dishonest’,[4] may be empowering; as may be the knowledge that ‘individuals with boundary issues will play the victim, expect you to act in certain unstated ways based on how a parent or sibling treated them’.[5]

          The danger is perhaps that, in the hustle of office politics, the term may be abused to penalize or victimize those to whom it is applied, on the principle of ‘Dostoyevsky’s famous “knife that cuts both ways”‘: as Freud long since warned regarding the politicization of therapeutic language, ‘the use of analysis as a weapon of controversy can clearly lead to no decision’.[6]
          [edit]Transactional analysis

          Main article: Transactional analysis

          Transactional analysis has devoted much attention to the idea of adopting the role of “Victim”, as ‘distinguished from the real victim. The Victim is someone who nauthentically behaves as if they are being victimised in situations where they actually have reasonable opportunities to alter the situation’.[7]

          Eric Berne had early explored the game of “Look How Hard I’ve Tried” – ‘played from either of two positions: “I am helpless” or “I am blameless”‘ – as well as that of “Wooden Leg”, characterised by ‘such pleas as: what do you expect of a man who (a) comes from a broken home; (b) is neurotic; (c) is in analysis or (d) is suffering from a disease called alcoholism?’[8]

          Subsequently TA developed the idea of the Karpman drama triangle, with role switches between Victim, Persecutor, and Rescuer. ‘Judith (speaking as the victim of emotional troubles): Rescue me. Dr Q (speaking as a rescuer): I’ll rescue you. Judith (switching into the role of a persecutor): Wise guy!’[9]

          R. D. Laing considered that ‘it will be difficult in practice to determine whether or to what extent a relationship is collusive’ – when ‘the one person is predominantly the passive “victim”‘,[10] and when they are merely playing the victim. The problem is intensified once a pattern of victimization has been internalised – for example, ‘when the victim has learnt to perceive his universe in double bind terms’.[11]
          [edit]Object relations

          Main article: Object relations theory

          Object relations theory has explored the impact of the false self on neurotic personalities, in terms of ‘the effects of the discordant source. The processes of their mind are always being interfered with and being cut off from the source of action, and so they are always victim’.[12] Such theorists emphasise that ‘if one is preoocupied…[with] the false self, the sense is less of living one’s life than of being at the mercy of fate’.[13] In addition, ‘when the personality is victim to the discordant source, the subject feels victim to outside pressures…It is a false perception of my inner relation to the other object. I have no responder within’.[14]

          To break out of ‘the spell cast by the negative complex’, and to escape the passivity of victimhood, requires you to ‘develop a great deal of patience and tolerance in order to take responsibility for your desire and not blame another for failing you before you have fully tried’.

          http://en.wikipedia.org/wiki/Victim_playing

          Reiterating from my response to pastor Jim (btw never got a response from him, I must be a victim now!?) see:

          “Back to school for you!

          “Menger, in contrast, falls squarely in the latter camp, and is presented as having shown the way towards a genuinely scientific theory of the “principlesn of economics, a theory capable of being applied at all times and to all cultures” – on the PHILOSOPHICAL ORIGINS OF AUSTRIAN ECONOMICS – Gordon David

          Skippy… economics is not a scientific endeavor by any means of the process, Pastor James. Just because you folks say it is, does not qualify it as so. Religion kinda has a habit of it… eh.”

          Skip here… Von Misses theologians are still having the Babylonian – Greek debates and if that was not bad enough in this day and age (manifold increase in factual knowledge – yet still digging up forensic anthropological history, not looking good for the armchair thunk-it gang) as I have pointed out in above comment to Jim, the very foundations of your sects philosophical origins assertions are empirically wrong ie “a genuinely scientific theory of the “principlesn of economics, a theory capable of being applied at all times and to all cultures”.

          Repeat after me… economics is NOT a science… it is a social template usually based on some foundation myth. Now if your mob can’t get even this simple observation correct how bad is all the rest of it …eh.

          Skippy… Faith Breathing… its like watching all the parishioners run into the church… whence the storm comes… asking for the creators protection through their manic devotion… sadly unlike the CB DeVille movies… the place gets flattened. The sad part is… you want to take everyone and other living thing with youse.

          PS. Abrahamism is a victims cult IMO, kicked out of Eden, kicked out of its Empire, Israel, now languishing in America (getting dumber by the moment) and soon the planet. Talk about maladaptive… shezzz

        5. JTFaraday

          “You are either a violent thug like Yves and Phil”

          Yves is not a thug. Also, stop besmirching the sophists.

        6. Phil

          ScreenName48,

          Taxation is not theft. You choose to live in the US(or UK?). You are perfectly able to renounce your citizenship and take your assets and person elsewhere. If decide not to take that initiative then you are consenting to the obligation of paying taxes. Take Care.

        7. Zapster

          One kind of has to wonder what you think is being taken from you, that you didn’t get from the government in the first place? Government printed that stuff for you to use, y’know..

        8. Robert Dudek

          Here is an argument…

          In order to conclude that taxation is theft, you have to first assume that you are the owner of that which is stolen.

          But you are not the owner, as every material gain you have made in your life is a function of your interaction with a wider group of people called “society”.

          Taxation is merely reflective of the fact that the wealth you THINK you created for yourself, was in fact created as part of a cooperative enterprise called “society”.

      3. BC

        The only point the guy is trying to make is that FDR had similar economic policies to Hitler–no more, no less. Keep the straw man arguments to a minimum, please.

        1. rkka

          That is a lie.

          Upon takiing power, Hitler began organizing the German economy for war, neglecting investment for fast rearmament, with a view towards waging a war of racial extermination against Slavic “subhumans”.

          FDR did nothing of the sort.

          1. Roland

            Well, actually, everyone was arming-up by the mid 1930′s. The biggest programmes were in Germany and the USSR, followed by France and Britain.

            It’s not surprising that the continental European powers would be devoting the most to rearmament. That’s geography.

            In the USA, rearmament was less hectic, as befitted its location, but still significant. Logically enough, the USA was starting on the stuff which demanded the longest lead times for development: new battleship classes and new heavy bombers all as part of more forward doctrine of “hemisphere defense.” The general staff was busy drafting the strategic plans for worldwide deployment that would eventually be implemented in the ’40′s.

            n.b. FDR was a pronounced navalist who had been Undersec of Navy during WWI.

          2. MRW

            Upon takiing power, Hitler began organizing the German economy for war, neglecting investment for fast rearmament

            I thought he refused to pay WWI war reparations.

          3. Yves Smith Post author

            Churchill, who was a mere backbencher in the early 1930s, but had been Admiral of the Navy in WWI, was very concerned about German rearmament, particularly warships. IIRC they had built up to rough parity or were even ahead by then, and England wasn’t going to spend much more on its navy and Germany was clearly beefing up further.

      4. badweather crow

        Rexford Guy Tugwell (July 10, 1891 – July 21, 1979) was an agricultural economist who became part of Franklin D. Roosevelt’s first “Brain Trust,” a group of Columbia academics who helped develop policy recommendations leading up to Roosevelt’s 1932 election as President. Tugwell subsequently served in FDR’s administration for four years and was one of the chief intellectual contributors to his New Deal.

        Tugwell also said of Mussolini’s fascism: “The cleanest, neatest, most efficiently operating piece of social machinery I’ve ever seen. It makes me envious.”

        Tugwell saw the conflict of WWII nad the depression as opportunities to “make society into a great factory” and calling for the end of the “dead hand of competitive enterprise” and replacing it with central planning.

        And it wasn’t just him, Gerard Swope, chairman of GE who also wrote the first draft of the NIRA called for suspension of anti-trust laws, “The Swope Plan” saying: “Shall we wait for society to act through its legislatures or shall industry recognize its obligation ti its employees and to the public and undertake the task?”

        taken from: Thaddeus Russell – The Renegade History Of The United States (pg. 247, 248)

        Eugenics the sterilization of the “unfit”

        American eugenics and the new deal were both progeny of the progressives. A large number of progressives who established many of the principles and policies that were later developed by the Roosevelt administration – including Margaret Sanger, David Starr Jordan, Robert Latham Owen, William Allen Wilson, Harry Emerson Fosdick, Robert Layout Dickinson, Katherine Bement Davis, Virginia Gildersleeve, and Rexford Tugwell’s mentors, Simon Patten, and Scott Nearing – were deeply involved with the eugenics movement.

        Taken from: Thaddeus Russell – The Renegade History Of The United States (pg. 267)

        I don’t know what page it’s on, somewhere between these references, Prof. Russell points out the forcing of homosexuals to work for the military or be imprisoned for being gay which was pushed by Tugwell also.

        Clearly these guys were fascism lite and for that reason ultimately more successful than Nazi Germany and Mussolini’s Italy but the theme was the same and more or less invented in America by people very close to FDR.

        The new deal was neo-liberalism and was the founding of the military industrial complex.

    2. skippy

      Back to school for you!

      “Menger, in contrast, falls squarely in the latter camp, and is presented as having shown the way towards a genuinely scientific theory of the “principlesn of economics, a theory
      capable of being applied at all times and to all cultures” – on the PHILOSOPHICAL ORIGINS OF AUSTRIAN ECONOMICS – Gordon David

      Skippy… economics is not a scientific endeavor by any means of the process, Pastor James. Just because you folks say it is, does not qualify it as so. Religion kinda has a habit of it… eh.

    3. JP Hochbaum

      “Of course, central planning is useful if one wants to exterrminate a population or thin it.”

      What complete nonsense. Every country on this planet has some form of central planning, and every single country besides those in the eastern European bloc (because of austerity!)have seen tremendous population growth. Put down the conspiracy theory juice.

      1. Stephen Zielinski

        Industrial policy and central planning exists — and has existed for many decades — in the United States: It’s called the Pentagon budget, although today we would need to include the budgets for each component of the security-surveillance appartus.

        In practice, every neoliberal but the most doctrinaire support ‘big government.’ It’s nature or identity or functioning of the big government that distinguishes the American neoliberal from those opposed to him or her.

        1. bobw

          True true. Look at the levels of military-related government spending and compare to the levels for “entitlement” programs. No contest.

      2. Paul P

        US/Canada FTA
        NAFTA
        MAI
        AGOA
        A GODZILLIAN OTHER FTAs passed and proposed
        and now MAI is coming back as the TPP.
        Someone’s planning.

        1. JTFaraday

          The idea that “neoliberalism” and “central planning” are somehow antithetical doesn’t work for me.

        2. nonclassical

          …ummmnnn…we KNOW who’s planning Trans Pacific Partnership…the corporations who intend to override U.S. law…

          …law being the basis of U.S. society, and “private property” being the basis of
          law…

          libertarians conflate “private property” and taxes…ignoring “the commons”, without which there would be no society or “business”…

  4. Watt4Bob

    My latest rant is that everywhere I look, everyone is attempting to do the same thing, especially businesses;

    They’re trying to do the work of ten people with five or six people, and those people are under-paid.

    Competent people move away from these conditions if they can, so businesses are left to run under-staffed with low-skil, or incompetent employees, which results in low productivity and dis-satisfied customers.

    Because those people are under-paid and trying to do the work of two, they are depressed, and dispirited, they reflect that reality into the market.

    Recently I find that in managing IT/telcom projects involving multiple vendors, I have to enlist the help of independent engineers to do tasks that the vendors in-house people would have done in years past because vendors are trying to deliver services without the cost of deep engineering resources.

    Last month, I had a pre-sales engineer ask me “Who’s going to do the heavy-lifting on this?” referring to the programming necessary to integrate some legacy Cisco equipment with the hardware/services he was getting ready to deliver. Throughout the sales process, this vendor had touted their Cisco expertise. In the past it had been my experience that vendors would be embarrassed to admit they couldn’t handle every aspect of the job.

    In the retail business it’s an almost universal complaint that you have to search for salespeople when you need assistance, and when you find them they have bad attitudes.

    How long until nothing works because no one wants to pay the cost of doing business?

    Not to mention the fact that people making $6/hr can’t afford to buy your products.

    It’s an obvious race to the bottom, and we’re making remarkable progress on that front.

    1. Philip Pilkington

      Yes, also in times of high unemployment, and in keeping with the Kaldor-Verdoorn law, investment in new equipment also declines. This is happening today too:

      http://research.stlouisfed.org/fred2/data/USAGFCFADSMEI_Max_630_378.png

      Low capacity utilisation literally causes capitalist economies to rot from the inside out. The neoliberal doctrine literally, like the French revolution, tends to eat its own children. Businessmen think its in their own interests to pursue it, but its so obvious that this is not the case.

      1. The Dork of Cork.

        @Philip
        The function of fixed capital formation in a neo liberal economy is merely to farm the fiat / fossil fuel flow using the asset as a conduit for your banking operations.

        The real utility of the asset is of no consequence until you get a larger physical world breakdown which prevents you spending these extractive tokens.

        Most of the “assets” created post 1980 at least have been junk

        1. The Dork of Cork.

          Indeed the banks have always did this.

          The function of nation state national spending on “productive assets” was to make this extraction operation sustainable.

          But the goal remains the same.
          The bankers perhaps got too ambitious.

          You can always create state money / altrustic ideas so as to fling some Baldric at a Machine gun nest.

          I can understand why Hayeck was so sceptical (and fucked up) of state money systems given what happened to people of his generation.

          The banks merely use state money systems to get them out of a hole.
          Once a hole is filled they go back to normal extractive operations.

    2. ambrit

      Dear Watt4Bob;
      You have hit the nail squarely on the head! All of your observations apply to the Boxxstore economy. Expect to see an acceleration of the declines soon, as the cadres of experienced workers are rapidly being exhausted, figuratively and literally. Some sort of inverse square law looks to be applicable. One axis can be the level of experience of the workforce. The other can be quite a lot of things. I suspect the curve would be roughly the same across the series.

    3. diptherio

      All true.

      I’ve been looking for a little employment to get me through until spring, when the painting picks up again, and yikes! It is truly ugly out there, folks.

      Most of the low-skill entry level jobs start at <$9/hr and are not full time. Expected pre-tax earnings come to less than $1000/mo for many of them. If you have a degree in Social Work and two years experience, you can make as much as $11.25/hr! Whoopee!

      I made more money than that doing cookie-cutter family photography in 1998! WTF?

      1. newView

        I got a job in 1986 as a skilled carpenter with a big retail company with full benefits at $12/hr.

        Guess what a carpenter makes now? Guess what benefits?

        There was a time, not so long ago, when a tradesman could make a good fair living in this country, if he was fast and lucky. Those days are nearly gone.

    4. pws

      Yes, the main truth of our age is, “Nobody, no matter how rich they are, wants to pay anyone for doing actual work, ever.”

  5. Schofield

    The failure of Hayek’s Neo-Liberalism can be seen in the economic planning that took place in the bail-out of financial sectors of countries operating under Neo-Liberal ideology. If you recall in the United States Republican members of Congress were initially hostile to the bail-out but as the severity of the domino effect on credit provision sunk in they reluctantly supported the bail-out measures. Such reluctance reflects the Neo-Liberal inability to understand the sovereign bank role played by government in supplying and regulating credit to allow the private banks to do so and indeed for the sovereign government bank to supply credit to the economy when the private banks are reluctant to do so. Reluctance stemming from the private banks themselves crashing the economy by hyper-inflating house prices.

    The failure of Neo-Liberals to recognise that government operates as a sovereign bank in the manner I’ve outlined lies at the heart of the so called “Fiscal Cliff Crisis” and also is reflected in their failure to understand the Platinum Coin Seignorage solution and their opposition to it. Indeed their opposition to the notion of government as sovereign bank is rational in the sense that acknowledging the role of a sovereign government bank means the possibility of democratic economic planning which will better regulate the activities of the private banks to prevent them under-mining the real economy and also engage in redistribution of wealth. Such “rationality” stems from the ambivalency of human nature and a propensity to “thieve” from others. A sovereign government bank clearly interferes in the ability to thieve:-

    http://cliodynamics.info/PDF/Spinney_NewScientist2011.pdf

  6. David Lentini

    Philip,

    Thanks again for another series of great posts. I think our failure to grasp the intellectual history of our time has seriously crippled our ability to come to grips with the crises we face. Instead of starting from a position of having some knowledge of how we got into the messes we face, we have noting by legend, myth, and superstition. Indeed, as you conclude, the failure of our so-called elites to understand the most basic aspects of the philosophical and intellectual foundations on which their policies and values are based has left us rudderless in the midst of a typhoon.

    I hope you’ll consider writing more about the cultural history that brought us here. While Hayek and Friedman (and others) did the intellectual groundwork for the economic and social phantasms of neoliberalism and libertarnianism, the public in general had no such conditioning. Indeed, the whole neoliberal-libertarian movement was just a backwater of cranks for decades. What happened to make it so popular.

    In your American history, you point to Ronald Reagan as a sort of Pied Piper of neoliberalism. I agree that Reagan was a popular spokesman and had an effect on public opinion, but I don’t think that he alone somehow Mesmerized America into buying what Friedman was selling. I think the public attitude shifted towards his positions for a variety of unrelated reasons. First, America’s cultural mythology has always been heavily influenced by a strain of Calvinism that comprised a strange amalgam of Christian eschatology and greed, leading during the Enlightenment to a belief that wealth was God’s blessing on the chosen and man was infinitely perfectible; the latter deriving from the former’s view of America as the true Eden and the colonization of the continent the culmination of the Biblical End Time. Second, the death of Enlightenment’s attempt to distill out a basic universal moral framework from Christianity and its replacement by Modernism’s cult of the self during the 19th Century. Third, the rise of industrial production, especially Fordism, that for a time gave the public at large a level of material wealth previously available to only the very rich. The rise of industry was predicated by the apparent triumph of science and technology, the former the keystone of the Enlightenment’s attempt to surpass religion with rationality, also created a sense of ever-increasing good–the new was inherently better than the old.

    Is it really a wonder then, how, after the Second World War ended the Great Depression, that the American public grew increasingly self-centered and anti-social? Following such social critics as Christopher Lasch, Richard Sennett, and Erich Fromm, one sees a progression from the “public man” to homo economicus as the public is more enthralled by the apparent power of owning more and doing more, justified by the triumph of science over religion and its moral edicts. By the late ’60s, much of the American public that trusted the New Deal had grown impatient with the government’s failure in Viet Nam and the limits it was reaching on domestic welfare. The ground was then very fertile for Friedman’s and Hayek’s ideas of government-as-evil (or at least incompetent) and they could do much better if only unfettered by taxes, regulations, and civil rights laws? Give the frustrations of the public by the late ’70s–the disappointment in the rate of increase in material gain and the apparent failure of the government to “fix” that problem–Reagan started sounding pretty good.

    Of course, no one would speak or think about the real implication of neoliberal and libertarian society–the tendency of some human beings to seek power and collude in that search. In other words, the inherent path of neoliberalism and libertarnianism toward corporatism; the fact that tyranny can come from individuals as easily as from governments; the fact that the question of whether the society that allows slavery is more free than the society that forbids slavery is not so easy to answer.

    1. Philip Pilkington

      Thanks David. Your comments here have been a fantastic contribution to the discussion.

      I did actually do a piece before referencing Lasch and alluding to some of the issues you raise:

      http://www.nakedcapitalism.com/2012/01/philip-pilkington-of-idiocy-and-anomie-%E2%80%93-ron-paul-vs-the-nanny-state-liberals.html

      I agree though, this is an extremely important issue. In my personal opinion, the left have become too concerned with social liberalism and welfarism — the politics of anomie, one might say — and this has alienated them from the populace at large. The libertarians want the social liberalism, while they ditch the welfarism. The conservatives try to mix social conservatism and free markets — two things in complete contradiction with one another.

      It’s a total mess. But its very hard to pierce the bubble. When you try to say anything about this state of affairs people don’t want to listen most of the time. It’s an awful pity.

        1. Old Hickory

          This has been a fantastic discussion, one of the best I’ve ever followed on Yves’ blog. I’m too wowed to make any intelligent comments right now, other than to say that I admire Phil for responding to most of his attackers. Will have to read this again tomorrow.

          1. JTFaraday

            Phil did what he usually did–pissed on everyone who didn’t agree with him 100%, regardless of the tone of the comment.

            His classmates, unless they are just like him which is entirely possible, have my sympathies.

  7. jsmith

    “The oddness of the world in which we live today is that neoliberalism as a system of governance has become entirely dysfunctional. Those ambitious souls in the present ruling generation that received the torch from the inventors of the discourse believed it to be a pragmatic doctrine.”

    Good series especially this last installment on the exposition of the mutability of neoliberalism in the hands of clever of fascists – a doctrine to fit any political system or religion it encounters.

    Can modern society rise above the incessant sea of courtier propaganda to see that we are living under a modern version of the “divine right of kings” dressed up as pragmatic doctrine?

    Another thing, while PP gets a slight dig in on Leninists one of the more interesting comparisons in light of his analysis is that now we can see why Marxism and socialism were such an anathema to Hayek and his minions – basically, Marx’s vision of economics was largely correct while the neoliberals’ system was ungrounded horsesh!t based upon nothing more than the delusions of sick minds.

    From its inception, neoliberal thought in any form has failed to honestly address that little thing called “reality”.

    Thus, the rise of the even more insidious side of neoliberal thought where the rulers – as a Bush aide reportedly stated – create their own “reality” utilizing the techniques of Strauss and others – the Big Lie, etc.

    Whether they will ultimately be proven correct or not, Marxists thought socialism a progressive step based upon an accurately depiction of economic systems of the past and present.

    A neoliberal society?

    A whole-cloth manufactured chimera based on delusion and ignorance.

    Not only was Marxism/socialism a threat to the wealth of the courtiers but it was an intellectual threat because as a system of thought it was actually born of an accurate depiction of reality.

    As annoying as some doctrinaire Marxists can be, at the very least the take as their base a system that most non-Marxists can agree has much value as a tool in describing the social world in which we live.

    Give me a leftist diatribe over a neoliberal fairy-tale any day.

  8. Hugh

    Hayek was just a convenient dupe whose goofy libertarian ideas, mixed with a little neoclassical economic theory, were taken up by kleptocrats as a perfect philosophical cover for their looting: neoliberalism. In neoliberalism, it is important to distinguish between the form and the function. Neoliberals, for example, seldom balance budgets despite their clamoring for them. The push for balanced budgets is just a way to eliminate spending and increase taxes on the 99% as well as privatize more of government and the commons. At the same time, there is the countervailing and contradictory tendency of demanding tax cuts which primarily benefit the rich.

    Corporate welfare schemes are seldom touched by balance budget crusades. Again this illustrates the difference between the rhetoric and the action of neoliberalism (and one of its intellectual antecedents, libertarianism). They can talk about “free markets”, “self-correcting markets”, and “creative destruction” all they want, but at the end of the day and despite the protestations of reluctance and distaste, the rich and the corps take the government welfare and the bailouts, and stick it to everyone else. They do this, not because they have been forced to against their beliefs, but because they always meant to (because it is always about the looting, not the words). You can look on it as Brer Rabbit and the briar patch as applied to politics and economics.

    1. Stephen Zielinski

      Capitalists and large corporations are profit-takers. They do not need an elaborate ideology to justify their profit-taking. Both inclination and institutional pressure compel them to take whatever profits they can.

      One could have expected the Great Recession to have caused the neoliberals and the practical counterparts to reevaluate their beliefs and practices. Leftwingers did so after the collapse of the Soviet Union. This even includes those leftwingers who were dedicated critics of State Socialism. I have yet to detect a comparable commitment to self-reflection or self-enlightenment by the neoliberals and the practical counterparts. They have continued on as they have before even though the world reveals their ideology and practices to be and to have always been foolish.

      1. Hugh

        “Capitalists and large corporations are profit-takers”

        And their profits should be going to workers. Profit taking which does not fulfill a social good but just makes owners of companies and owners of wealth richer is looting.

        The social good, how we achieve the society we want to have, should be central to all these discussions, and it is for precisely this reason that all mention of it is excised. Corporations and the rich are not forced to loot. They choose to loot. Through their propaganda, they have created this myth that they must behave in as predatory way possible in order not to maximize or even address any social good but to maximize their profits for their own benefit.

  9. The Dork of Cork.

    @Stephan
    As long as you can safely spend your winning their actions are not foolish – they are very rational.

    The trick is to keep the patient alive but not too sentient.

    That recent BIS paper / proposal that governments role is only to preserve money contracts even if the physical world enters a singularity is very very instructive.

    Governments role is now to manage entropy in the interests of the managers.

    1. Stephen Zielinski

      Governments role is now to manage entropy in the interests of the managers.

      Thus the dedication which the American government devotes to property and wealth defense, war-making, jailing the unemployed-unemployable, etc.

      1. Wat Tyler

        + 1

        BTW: It must be lonely over at Mike Shedlock’s blog. The hate government crowd seems to be over here today.

        Jim

  10. Massinissa

    Its always sad when the Inner Party starts drinking its own Prolefeeds… *cough Romney and 47% cough*… The delusions of a few have been popularized and become commonplace among our elite. What should have been, for them, a convenient ideology to pursue their goals, has led to being that, PLUS making them completely irrational. So now instead of the greedy bastards of the past…

    We have thoroughly irrational greedy bastards. What an improvement! >.> At least fascist sympathizers like Henry Ford understood basic economics.

  11. cripes

    Yes. History shows us again and again that ideology is construed to justify class interests, and courtiers to paint their philosophical ceilings are a dime a dozen. The Kochs and Scaifes are latter day Medici seeding a hothouse industry of pissant intellectuals to tart up their playing. At least leave us a sitting chapel. But no, we get Friedman and Greenspan.

  12. Susan the other

    Yuk. It’s been terrible watching politics this last century. Like watching Grendel grow up. Time to accept our limits, whatever they are. Slavery was the quickest way to profit; feudalism was slavery with a veneer of patriarchy; mercantilism was feudalism with a keel and a sail; and capitalism is mercantilism with a corporate charter. So what’s post-capitalism gonna be? In a world with nothing left to exploit.

  13. diptherio

    Philip Pilkington:

    Any serious student of history in general and economic history in particular knows that such policies are bound to be deflationary in the medium to long-run and that they will likely generate economic meltdowns and result in social and political turmoil.

    This is a feature of neo-classical economics, not a bug. It’s main purpose is to serve as ethical cover for the status quo, which is anything but ethical in reality.

    Consider, Thorstein Veblen from Theory of Business Enterprise

    …the modern industrial system is a concatenation of processes which has much of the character of a single, comprehensive, balanced mechanical process. A disturbance of the balance at any point means a differential advantage (or disadvantage) to one or more of the owners of the sub-processes between which the disturbance falls; and it may also frequently mean gain or loss to many remoter members in the concatenation of processes, for the balance throughout the sequence is a delicate one, and the transmission of a disturbance often goes far. It may even take on a cumulative character, and , may thereby seriously cripple or accelerate branches of industry that are out of direct touch with those members of the concatenation, upon which the initial disturbance falls. Such is the case, for instance, in an industrial crisis, when an apparently slight initial disturbance may become the occasion of a widespread derangement. And such, on the other hand, is also the case when some favorable condition abruptly supervenes in a given industry…

    The keeping of the industrial balance, therefore, and adjusting the several industrial processes to one another’s work and needs, is a matter of grave and far-reaching consequence in any modern community, as has already been shown. Now, the means by which this balance is kept is business transactions, and the men in whose keeping it lies are the business men…Hard times or prosperity spread through the system by means of business relations, and are in their primary expression phenomena of the business situation simply. It is only secondarily that the disturbances in question show themselves as alterations in the character or magnitude of the mechanical processes involved. Industry is carried on for the sake of business, and not conversely; and the progress and activity of industry are conditioned by the outlook of the market, which means the presumptive chance of business profits.

    All this is a matter of course which it may seem simply tedious to recite. But its consequences for the theory of business make it necessary to keep the nature of this connection between business and industry in mind. The adjustments of industry take place through the mediation of pecuniary transactions, and these transactions take place at the hands of the business men and are carried on by them for business ends, not for industrial ends in the narrower meaning of the phrase.[emphasis added]

    Just as bankers, operating on a bankruptcy-for-profit model, a la Romer and Akerlof, engage in behaviors that they know will bring their firms crashing down eventually, so too do those operating our country on a bankruptcy-for-profit model know exactly what they are doing. Their goal is the creation of profits, of gain, not the stability of the economic system, and gain can be had just as much from collapse as from unfettered operation. In fact, gain, especially ill-gotten gain, is actually easier to acquire during times of general crisis, at least if one happens to be in an advantageous position.

    Hayek may have been deluded, but the people who have instituted and continue to institute these policies know exactly what they’re doing.

  14. Democraatus

    Am I the only one who cannot find logical arguments in this piece? The continuous flow of ad hominems and general name calling (those filthy Austrians again) don’t help the cause.

    If you want support for your cause, stop writing jargon like a Phd/doctor and present clear logic. Secondly, please behave when commenting as author. Your behaviour is below acceptable level.

    Whether you agree or disagree whether tax is theft: if you cannot understand this premises, it is worse with the real understanding of the world than I thought.

    1. skippy

      Go into a vacuum devoid of anything and create something, now if some one inters your godly domain and steals a portion of your creation… then you might have an argument.

      Skippy… society is a groupe effort, the only time it seems to go boom, is when there is TO MUCH disparity.

  15. JEHR

    We are usually about 10 years behind the US in adopting certain ideas. We have an economist as our Prime Minister. Think about that!

    Here’s a letter I wrote to some of the MPs:

    This morning I heard the Minister of Fisheries, Keith Ashfield, being interviewed on our local CBC program. He ended with the comment that the Federal Government’s main focus now was on balancing the budget just as it was the main focus of the New Brunswick government to balance its budget.

    Well, as you probably know, these two things are not the same: The New Brunswick government is dependent upon its own taxes and a grant from the Federal government for its revenues. What Mr. Ashfield failed to mention was that the Federal Government has no tax revenue constraints on its spending. As a country with its own sovereign currency, Canada can afford to spend money on anything it chooses to spend it on as long as it is in its own currency.

    That spending, by the way, included bailouts for banks which occurred in 2008 to the tune of $114 Billion and includes payouts under employment insurance for fisheries workers who work on a seasonal basis in the province of New Brunswick. The Federal Government has chosen to take Canada into austerity by reducing public service employment (adding to unemployment in a time of recession!) and by reducing public spending in all departments by 10% (in a time of recession adding to the misery of people by decreasing services) and by reducing accessibility to programs like employment insurance for seasonal workers.

    The austerity that Prime Minister Harper seems to think is so necessary is just his ideology working its way through our economy. There is no need for austerity; what we really need is more jobs (not fewer) and increases in wages which have been stagnant for years (except for the CEOs of corporations and banks who have obtained most of the wealth gains since the financial crisis).

    I think the Federal Government has chosen austerity in order to balance the books so that when election time comes round the Conservatives will be re-elected for their good housekeeping practices.
    Actually, in real life money works in a different way than most of us suppose it does. Deficits at the Federal level actually are necessary so that the other sectors of society (the private individuals and private companies) can have “savings” (or “deleverage”). All sectors of society cannot save at the same time so that government deficits serve a useful purpose especially during a time or recession.

    Below is a video by S. Kelton explaining how money really works in the economy. It focuses on the United States but applies to Canada as well. Once people realize that the constraints on Federal spending are placed there artificially to suit the government in power (and the “need to balance the books” is an artificial constraint in a time of recession), then others can confront the government’s choices for spending. Why can it bail out the banks (spend) and not provide decent unemployment payments (spending) for fisheries workers? Why are the banks special but not individual workers?

    The government is elected to provide the public with services and goods that the public needs. Harper seems to think that privatization is the answer for fulfilling goods and services rather than the public sector. Both are important but we need more focus on helping the public obtain employment so that wages can increase and people can buy the things they need and thus help the economy.

    See video: http://www.nakedcapitalism.com/2012/12/stephanie-kelton-explains-modern-monetary-theory-to-you.html

    There are a number of places on the Internet where you can obtain information on Modern Monetary Theory which is an important analysis of how money works. Not knowing how money works, gives “budget balancing” much more importance than it deserves. The links between austerity and deficits is also important. In a recession, deficits are necessary for providing jobs; whereas, austerity during a recession just brings more pain and unemployment.

    Things can be different. There are alternatives.

    I hope you will give these ideas some consideration.

    1. Wat Tyler

      Unfortunately Lauren Lyster’s show (“Current Account” I recall) on RT has ended as of last week. Ms Lyster is better informed than most and the show’s format allowed extended discussions with guests like Ms Kelton who do not appear on mainstream media. I ,for one, will miss her show and hope she lands on her feet somewhere.

      Jim

    1. ScreenName48

      To whom are you referring? The only one getting angry that I can see is the author of this blog post…

      Don’t make the mistake of confusing boisterous debate with anger! Look for the ad-hominems to see where the anger truly lies…

    2. chris m

      this is the nature of delusion. when faced with logic and facts the deluded simply stamp their feet harder.

  16. Jim

    Philip:

    As you continue on your quest for certainty in political and economic matters try to keep in mind the following:

    Hayek chose the Market (what he calls a spontaneous order)
    You chose the State (in your identification with MMT)

    Hayek concealed his normative choice for a liberal order behind evolutionary considerations which conferred upon his reasoning an air of objectivity.

    You concealed your normative choice for a state-centered monetary-economic order behind historical considerations (i.e. choosing to begin your description of monetary history with money origination in the state) which also conferred upon your reasoning an air of objectivity.

    The logic of both choices is the same. Both you and Hayek can only proceed in your respective analysis by artificially privileging a certain premise (in this case either the Market or the State) and then moving ahead with evolutionary or historical considerations.

    At some point you may come to realize that any phenomena (Nazism, the nature of monetary-economic systems, etc.) are susceptible to multiple (see, for example, MMT, MMR, and Neoliberal thoughts on our monetary system) or even contradictory conceptual encasements.

    In my opinion the beauty of democratic theorizing is the realization that we are all grounded in an equality of ignorance and that we only have each other to rely on in sustaining a fabric of collective living.

    1. diptherio

      Agreed. Every time the conversation turns to some touchy subject, like the dreaded libertarians or Austrian (Austerian?) Economics, arguments move to the black-and-white, either-or perspective rather drastically.

      While I largely agree with PP’s analysis, the fact that much of Hayek’s theorizing was bunk does not mean that he never had any valid insights. PP’s treatment of dissenting voices in this thread is disappointing, to say the least. Is it any wonder that our political discourse is so mean-spirited and compartmentalized, when regardless of the many things people may disagree on, everyone seems to agree that if you don’t agree with me, immediately, you must be crazy or stupid or paid-off. It’s a recipe for competing echo-chambers, but not for useful political dialogue.

      Let’s delve into the tax issue, shall we? MMT states, and I believe, that the value of a sovereign currency ultimately lies in the sovereign’s ability to tax the populace. There is empirical, historical support for this view.

      So wherein lies the sovereign’s ability to levy taxes and to ensure payment? From whence does this capacity arise? Other commenters have said, and I am inclined to agree, that this ability itself ultimately stems from the states ability to use force and coercion to impose it’s will.

      There are many on the left, for instance (and I count myself among them) who hold that wholesale slaughter, pre-emptive strikes, war and bloodshed in general, are abominable activities. Our government was founded on expropriation and genocide and it continues to fuel itself on such, though the scenes of the crime have been outsourced far from American eyes so as to help us forget what immense human suffering makes our consumer lifestyle possible.

      Considering thusly, some of us come to the conclusion that the horrors caused by our government’s nefarious activities far out weigh whatever benefits we might receive from the same. We decide we want out, want to exit this whole corrupt system and try to make something more humane…But wait! It’s not that easy: if you get caught “avoiding taxes” (i.e. trying to keep the Feds from taking their cut out of every transaction that takes place in our economy in order to fund (mainly) their international war machine), well then you just might end up in jail. At the very least, will make life a real bummer for you until you fall in line.

      And that, whether any gun is every pointed at any American taxpayer’s head, is coercion, pure and simple. A tax-protest would probably be the easiest way to really get TPTB’s attention, but who’s gonna do that when you could get sent to jail and/or financially ruined for doing it? I find it ironic that while we live in a “free” country, the one thing you are not free to do is opt-out. I don’t see why some slave-owners’ signatures on a piece of paper should be binding on me, but then again, I’ve been accused of libertarian sympathies (horrors).

      I’ve never had a US government thug point a gun at my head, but I’m pretty sure my taxes have helped purchase guns that have been pointed at plenty of heads in Afghanistan, Iraq, Syria, Libya, etc. Food for thought, no? Not fun to think about, surely, but maybe important.

      And finally, practically speaking, some of the most active and most effective people at my local Occupy were…wait for it…Ron Paul Libertarians! But guess what, we have a lot in common, especially when it comes to bank bail-outs. We didn’t agree on monetary issues, but unlike a lot of liberals I know, they were at least willing to talk about it.

      I understand, people have some bad experiences with the true-believers and assume that they’re all like that. Better, I think though, to try to understand where they’re coming from and engage in dialogue, rather than facile debate.

      1. ScreenName48

        Thank you SO much for saying this. At the end of the day, people like me (and there is a growing number of us) just want to talk about the gun in the room. And you know what’s funny? NOBODY wants to talk about the gun in the room, and instead of rational debate we get all of the worst kinds of emotional attacks, as evidenced by all of the completely needlessly slanderous things that Phil hurled at me above. It is easier for them to attack us than to acknowledge the gun in the room, or even to debate its existence or necessity.

        I implore you to continue to examine the role that violent coercion (threatening, explicitly or implicitly, people with the use of force in order to achieve compliance) plays in our society. As you said, it is not an easy thing to examine, but people should at least have the courage to acknowledge that violence is a fundamental component of the system that they are advocating for.

        1. Scott

          I always find it interesting when it is asserted that violence is the source of governmental power. Schumpeter in “Capitalism, Socialism and Democracy” on page 17 has an interesting footnote: “Many socialist writers besides Marx have displayed that uncritical confidence in the explanatory value of the element of force and of the control over the physical means with which to exert force. Ferdinand Lassalle, for instance, has little beyond cannons and bayonets to offer by way of explanation of governmental authority. It is a source of wonder to me that so many people should be blind to the weakness of such a sociology and to the fact that it would obviously be much truer to say that power leads to control over cannons (and men willing to use them) than that control over cannons generates power.” It’s a case of getting the cart before the horse.

          1. Nathanael

            Exactly. The state actually exists due to common consent.

            When we *elect* the government, this is particularly true. But it was true even of kings, when people generally considered the king to be doing a good job.

            I happily vote for my local town board to raise my taxes, because they are competent and are providing useful public services (like the water supply).

            I’m a lot less happy about the federal government conducting giant useless foreign wars and torturing and murdering innocent people. Thanks to gerrymandering, I feel that I am not really represented in the federal government.

            The source of governmental power is the consent of the (majority of the) governed — not “force”

  17. chris m

    most basic pol sci/american government courses define government at the outset as the legit use of force. the notion that taxes are theft denies this reality. government’s derive their legitimacy through the consent of the governed. in a democracy this is typically a simple majority of the governed.

    so taxes are not theft. more proaganda of this nature does not suffice to rebut an otherwise effective take down of this shared delusion.

    1. ScreenName48

      Weird, classes in government schools about the government say that the government’s use of force is legitimate?

      What was that you were saying was propaganda?

      This is what people believe, folks. This is the extent of their thinking on this subject. Take note.

    2. diptherio

      And if the governed decide they don’t want to be governed any longer by a bunch of corrupt kleptocrats? Oh right, that’s not an option.

      Taxes are a requirement to invest in a government’s activities regardless of what those may be, regardless of whether you approve of said activities, and regardless of whether or not you actually get much of anything back. We get some things, sure, but what’s the trade off?

      If taxes were optional, if they had to be earned by the government, rather than demanded, I wouldn’t have an issue. As it is, your argument is unconvincing to me. If the actions of an institution of unjust then supporting that organization is also unjust.

      Know what other organization also regularly levies taxes on business owners/citizens? The Mafia. Taxes=protection money, and they always have.

      1. Aquifer

        dip – gotta disagree with you here …

        “And if the governed decide they don’t want to be governed any longer by a bunch of corrupt kleptocrats?’”

        ” … it is the right of the people to alter or abolish it (the gov’t)” And if the people do not choose to alter or abolish it then they must needs be put up with it or leave ….

        “We get some things, sure, but what’s the trade off?”

        See above …

        “If taxes were optional, …..”

        So few would pay that they would not suffice …

        Taxes are the price paid for living in a society that provides the services one needs to navigate in that society – if you want to use the services, you pay the price – if you don’t want to pay the price, then don’t use the services – and if you do use them without paying, how is that not “theft”?

      2. Nathanael

        “And if the governed decide they don’t want to be governed any longer by a bunch of corrupt kleptocrats?”

        Then the government will be overthrown. We’ve seen it happen recently in Tunisia and Egypt and it’s happening in Syria.

        Yes, this hasn’t happened yet in the US. There are far too many people in the US who are still OK with their current rulers. Often this is because they (inaccurately) perceive them as doing good things. Hence, the need for education and dissemination of information.

  18. Brian B

    I’ll give this writer some credit. He knows how to write a conclusory hit piece with little basis in fact. Undoubtedly because he resides in the economic fantasyland of academia.

    The funny thing is he can’t claim half the things he is claiming because no country has ever tried Hayek’s ideas.

    The Republicons and Democriminals in the US pay lip service to them but in reality the only capitalism they support is crony capitalism and its resulting preservation of the current elite.

    1. chris m

      hayek’s idea’s never been tried for a reason. why should anyone weigh favorably a fantasy theory that has never been employed in any actual society.

      i might just as easily justify green T-shirts as a panacea for society’s ills. they haven’t been tested either.

      1. chris m

        the crony part of capitalism isn’t a bug. it’s a feature. every system becomes a tool of the current elite. laissez faire capitalism fetishizes elitism. how is this preferable?

  19. Brian B

    “hayek’s idea’s never been tried for a reason. why should anyone weigh favorably a fantasy theory that has never been employed in any actual society.”

    There’s the rub. The presumption that something is correct simply because it is widespread and something that has not been tried is incorrect for the simple reason it has not been tried. I am presuming a few centuries ago you would be here railing the world is flat.

    Crony capitalism is a feature of entrenched interests; not a feature of capitalism. Ask any small business owner.

  20. skeptonomist

    Pilkington seems to think that current policies in advanced countries have evolved through a process of competition between intellectuals, and that politicians are driven by ideology. It would be more realistic to think of it in terms of warring interests, not only “class” interests such as capitalists versus workers, but special economic interests such as monopolistic corporations and big banks and unions, which may be for their own worker’s interest and against the interests of other workers. Then there are rawer motivations such as racism (always important in American politics) and nationalism. Economic ideology is probably more often a cover in this real world than a primary motivation.

  21. Brian

    This has been an excellent series of articles. The clear, linear explication is a model of simplicity. The citations were well chosen.

    Delusion is a basic tenet of human society; all the great philosophers, from Epicurus on, have focused on recognizing and removing delusion. Unfortunately, while individuals can achieve that, with much work, human society seems incapable of it; instead we stumble on until everything fails, chaos intervenes, and some new or reworked delusion is installed. I don’t suppose our situation will prove any different.

  22. jsmith

    Funny, give a person a copy of “Endgame” by Derrick Jensen and they turn into it’s VIOLENCE MAN, VIOLENCE!!! screaming tartars.

    Yes, we readers did notice your repeated “allusions” of which is a sample:

    “Because civilization depends on widespread violence (premise three), all civilized people (even dogmatic pacifists) are complicit in violence simply by their own participation in the industrial economy.”

    Wow, man, you’re blowing our minds!

    You mean, v-i-o-l-e-n-c-e – is that right? – is something to consider when taking about society and civilization?

    Trippy, man!

    Why, I’m sure no other philosophers/sociologists – Hobbes, Rousseau, Marx, Foucault, Sartre etc – throughout history ever thought to comment on said topic, huh?

    I’m sure no readers of NC have ever read such philosophers, right, so that we all need to consistently have our poor minds blown when in your thread-hijacking (because that’s what it is) you repeatedly claim – hold on again here it comes again, kiddies – it’s all VIOLENCE, MAN, VIOLENCE!!

    Wait a second, Screename, are you telling us that you’re NOT a philosopher?! Or a sociologist?!! Or an economist?!!

    Just an IT guy?!!

    Holy F@ck!!!

    And you figured this violence thing out all by yourself (with the help of Mr. Jensen, I’m sure)?!!!

    Even crazier, man!

    Quit your IT job, STAT!!! and get thee to a think tank, bro!

    Violence….holy fuck, it’s been staring us all in the face for so long.

    But wait, I think it’s all f*cked because we’re HUMANS, man!!

    No, wait, hear me out.

    Since humans are violent then it’s really not the violence it’s the fact that we’re HUMANS, MAN!!!

    It’s because we’re humans that we’re violent and thereby have to pay taxes, man!!

    Holy Fuck, now I’m blowing my own mind….

  23. Ben

    Wow this message board got contentious!.
    My main quarrel would be that Phil wanted Hayek to be the cause of all our present problems. He certainly is behind austerity, but Friedman was more the auteur of the crony capitalism that allowed corporations to become the tail wagging the dog of society. Too big to fail was the main proximate recent problem, and that belongs to Freidman’s effects on the American political system and Wall Street’s surreptitious coup.

  24. Keynesian

    Great treasure of historical material Philip Pilkington! Here is a little more history about that little man called Von Hayek.

    After the publication of “The General Theory of Employment, Interest and Money” by John Maynard Keynes, economists all over the world expected an outraged response from Keynes’ loud and indignant nemesis, von Hayek. But for some reason Hayek was unable, or unwilling to respond with any counter arguments whatsoever. There was simply no response, only a deafening silence.

    [quote]If The General Theory was riven from top to bottom with misapprehensions, misleading assumptions, false logic, and inappropriate and deluded leaps of imagination, this was surely the time for Hayek to dismantle Keynes’s arguments before they took hold. But answer came there none. Hayek remained hushed. Faced with confronting Keynes at full flow, Hayek blinked. Weeks passed, but his expected counter-blast was not forthcoming….Keynes’s great work was met with neither a bang nor a whimper. Hayek’s response, so keenly awaited by classical economists throughout Britain and the continent, was a yawning silence.(Polanyi, Karl, The Great Transformation: The Political and Economic Origins of Our Time, Beacon Press. Kindle Edition. pp.152-153).[/quote]

    Hayek was a student of Ludwig von Mises and held the position of director to the Austrian Institute for Business Cycle Research. Hayek had the entire Austrian School of Economics to help with a counter response. Hayek wrote over forty years later,

    [quote]“I ought to explain why I failed to return to the charge after I had devoted much time to a careful analysis of his writings—a failure for which I have reproached myself ever since,”9 he wrote in a 1983 piece to mark the centenary of Keynes’s birth. “It was not merely . . . the inevitable disappointment of a young man when told by the famous author that his objections did not matter since Keynes no longer believed in his own arguments. Nor was it really that I became aware that an effective refutation of Keynes’s conclusions would have to deal with the whole macroeconomic approach. It was rather that his disregard of what seemed to me the crucial problems made me recognize that a proper critique would have to deal more with what Keynes had not gone into than with what he had discussed, and that in consequence an elaboration of the still inadequately developed theory of capital was a prerequisite for a thorough disposal of Keynes’s argument.”10 (Ibid., p. 175).[/quote]

    Later, Hayek attempted to write his own book in response to Keynes’ “The General Theory” entitled “The Theory of Capital” published in 1941. However, Hayek wrote about his own book, “it very gradually dawned on me”32 that “the thing’s become so damned complicated it’s almost impossible to follow it.”33 (Ibid., p. 183). Milton Friedman agreed and wrote, “I think his capital theory book is unreadable.” (Ibid., p. 29.)

    1. Unsympathetic

      Of course Hayek didn’t reply – because Hayek [as with all Austrian economists] had nothing to contribute. But, as we see even today with the Republican party in the US, Hayek told himself what he wanted to hear, and became more skilled at actualizing the way he wished the world worked.

  25. digi_owl

    Thanks, confirms my thinking that the Labor Party in Norway is more light blue than red (blue in Europe being capital friendly while red being labor friendly). This because they seem to operate under the idea in recent decades, that to help labor they have to help capital first. A kind of trickle down way of looking at things.

  26. different clue

    Reading briefestly on a small break from work. Who was it who said “property is theft”? Some French socialist whose name I forget. A lot of what is so-called “private” property today was thefted from the common ownership of traditional peoples at gunpoint or spearpoint or bow-and-arrow point or swordpoint. Viz the Enclosure Acts all over England and Scotland. Also, the violent conquest of North and South America, New Zealand, Australia, etc. and the “privatisation” and “propertyfication” of all that tribal commons land. Soooo . . . . taxation is not the only theft.

    Separately, a picky-poo point: Hitler was never elected. He was install-appointed as Chancellor AFter his Nazi Party got less votes than the election before, and it appeared clear to the German OverClass that his Nazi Party would keep getting fewer votes each cycle. The German OverClass inSTALLED Hitler into the Chancellorship to make sure he would provide the governance THEY wanted. Or am I wrong about that?

    1. Beppo

      Anyone who would like to know about creation of capitalism should read this book. “The Invention of Capitalism” http://www.amazon.com/Invention-Capitalism-Classical-Political-Accumulation/dp/0822324911 It can be found online for free as well.

      Capitalism is not some natural most efficient system, it’s the result of some aristocrats realizing that the feudal system didn’t leave enough room for profit and exploitation. They had to create capitalism and create the idea that working all the time just to survive is somehow a good thing.

      Here’s an exiledonline article by Yasha Levine that discusses some of it http://exiledonline.com/recovered-economic-history-everyone-but-an-idiot-knows-that-the-lower-classes-must-be-kept-poor-or-they-will-never-be-industrious/

  27. skippy

    Funny stuff….

    Criticisms

    Milton Friedman considered Mises inflexible in his thinking:

    The story I remember best happened at the initial Mont Pelerin meeting when he got up and said, “You’re all a bunch of socialists.” We were discussing the distribution of income, and whether you should have progressive income taxes. Some of the people there were expressing the view that there could be a justification for it.
    Another occasion which is equally telling: Fritz Machlup was a student of Mises’, one of his most faithful disciples. At one of the Mont Pelerin meetings, Machlup gave a talk in which I think he questioned the idea of a gold standard; he came out in favor of floating exchange rates. Mises was so mad he wouldn’t speak to Machlup for three years. Some people had to come around and bring them together again. It’s hard to understand; you can get some understanding of it by taking into account how people like Mises were persecuted in their lives.[25]

    Within the post-WWII mainstream economics establishment, Mises suffered severe personal rejection: for example, in a 1957 review of his book The Anti-Capitalistic Mentality, The Economist said of von Mises: “Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard.”[26]

    Conservative commentator Whittaker Chambers published a similarly negative review of that book in the National Review, stating that Mises’ thesis that anti-capitalist sentiment was rooted in “envy” epitomized “know-nothing conservatism” at its “know-nothingest.”[27]

    Economic historian Bruce Caldwell writes that in the mid-20th century, with the ascendance of positivism and Keynesianism, Mises came to be perceived by many as the “archetypal ‘unscientific’ economist.”[28]
    In a 1978 interview, Friedrich Hayek said about his book Socialism: “At first we all felt he was frightfully exaggerating and even offensive in tone. You see, he hurt all our deepest feelings, but gradually he won us around, although for a long time I had to – I just learned he was usually right in his conclusions, but I was not completely satisfied with his argument.” (Hayek’s critique of central planning never incorporated Mises’ contention that prices as an indicator of scarcity can only arise in monetary exchanges among responsible owners, a particular case of the universal economic law that value judgements are utterly dependent on property rights constraints.)[29]

    Murray Rothbard, who studied under Mises, agrees he was uncompromising, but disputes reports of his abrasiveness. In his words, Mises was “unbelievably sweet, constantly finding research projects for students to do, unfailingly courteous, and never bitter” about the discrimination he received at the hands of the economic establishment of his time.[30]

    After his death, his wife quoted a passage that Mises had written about Benjamin Anderson, and said that it best described Mises’ own personality: “His most eminent qualities were his inflexible honesty, his unhesitating sincerity. He never yielded. He always freely enunciated what he considered to be true. If he had been prepared to suppress or only to soften his criticisms of popular, but irresponsible, policies, the most influential positions and offices would have been offered him. But he never compromised.”[31]

    A number of critics of Mises, including philosopher Herbert Marcuse, economist J. Bradford DeLong[32] and sociologist Richard Seymour,[33] have criticized Mises for writing approvingly of Italian fascism, especially for its suppression of leftist elements.[34]

    Von Mises wrote in Liberalism, a book published in 1927:
    It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.[35]

    Mises biographer and supporter Jörg Guido Hülsmann calls the criticism that Mises supported fascism “absurd”, pointing to the rest of the quote that called fascism dangerous and described as a “fatal error” the view that it was more than an “emergency makeshift” against the threat of communism.[36]

    http://en.wikipedia.org/wiki/Ludwig_von_Mises

    Skippy… when are some people going to understand that the Austrians are just the ” church of property is sacrosanct” over – all other – considerations and that individualistic freedom trump’s – social cohesion – when all the evidence is to the contrary (Lord of the Fly’s anyone – CIA kiddy testing in Northern Europe – corporations destroying a world ?). That their entire sense of self is attached to a piece of material stuff and not the human standing right next to them?! FFS its such a childish position I – I – I – narcissistic wounding stuff.

    1. Finnucane

      I reckon many Libertarian types have some sort of enduring fascination with commodity money. There’s some sort of enduring inherent value-quality to that denarius. What mystical quality makes gives this thing the power to demand other things in exchange? What makes us desire this thing, which makes no sound, produces no light, and performs no act on its own, yet makes the world go ’round? Wherein lies the value, so out of proportion to the utility of the base metal of the thing itself?

      I don’t get it myself. But I was never really so fascinated by the body/soul dichotomy either, so what do I know?

      1. digi_owl

        Just speculating here, but it could be that commodity money allows for the potential to corner the market. Observe a certain family that held the world economy by the balls because they controlled the gold supply.

        1. Nathanael

          Or the Hunt brothers cornering the silver market.

          Although, in fact, it’s a curse to corner the market in currency metal, as Spain discovered when it found the gold mines of South America and promptly destroyed its agricultural and manufacturing export industries.

    2. Somebody

      Well, that’s what you can expect to happen in a society that values ‘Stuff’ so highly.

      [Insert Obligatory Fight Club Quote Here]

  28. David Gorodess

    “A particularly telling example(of Market Fundamentalism) is Margaret Thatcher’s Companion of Honour, Friedrich von Hayek. His mode of arguing is characterized by arbitrary declarations and assumptions – for instance, concerning the ‘impartiality of the state’ – coupled with Nobel Prize-winning tautolgies. Thus we are told in his bestselling ‘Road to Serfdom’ that “It was men’s submission to the impersonal forces of the market that in the past has made possible the growth of a civilization which without this could not have developed. Likewise, Hayek declares that ‘the Rule of Law, in the sense of the rule of formal law’ is the only safeguard against ‘arbitrary government’. Having thus assumed with class-apologetic arbitrariness the necessary relationship between ‘the rule of formal law’ and ‘non-arbitrary government’, thereby aprioristically excluding substantive justice from the domain of legislative reason, Hayek concludes a few lines further on with an equally arbitrary – and utterly tautological – declaration according to which a ‘substantive ideal of distributive justice must lead to the the destruction of the Rule of Law’. In the same way, Hayek’s apriori ideological preconception produces the unsustained axioms that ‘planning leads to dictatorship” and that ‘the more the state “plans” the more difficult planning becomes for the individual’. However, later in the book he contradicts his own lament about the difficulties of individual planning by happily embracing the idea that ‘A complex civilization like ours is necessarily based on the individual adjusting himself to changes whose cause and nature he cannot understand’. In this way we are left not only with a blatant contradiction between the idealization of ‘individual planning’ under capitalism and its effective denial by the market, but also with a grotesque notion of what the submissive individual is supposed to accept as the ultimate conquest of our ‘complex civilization’. Indeed, we are told – curiously in the name of freedom – that unquestioning submission by all individuals to the tyranny of the market is the ultimate virtue.
    Evidently, Hayek cannot admit the possibility and legitimacy of envisaging an alternative to the rule of capital, to which in his view everybody must submit; least of all if it means taking control by the individuals over their own life-activity through consciously organized -i.e. genuinely planned – forms of productive social interchange, managed on the basis of their own decisions as opposed to preexisting ( and in Hayek’s view even in principle incomprehensible) material dictates. What remains a complete mystery in Hayek’s approach is: why should one prefer his kind of uncontrollability and submission to what he quite demagogically projects as the ONLY alternative?
    ~Meszaros, Beyond Capital p.198

  29. skippy

    From the NC dream-time…

    Skippy says:
    December 12, 2011 at 5:27 am

    “Man is born an asocial and antisocial being. The newborn child is a savage. Egoism is his nature. Only the experience of life and the teachings of his parents, his brothers, sisters, playmates, and later of other people FORCE HIM to acknowledge the advantages of social cooperation and accordingly to change his behavior.” ~Ludwig Von Mises, Omnipotent Government, p. 241

    Skippy…hate clubs have a hard time without archenemy’s (commies). One left to go… working classes.

    Lidia says:
    December 12, 2011 at 10:43 am
    Skippy, thanks for that quote. When I talk to libertarians or read their writings, what comes across to me is a very bad sort of autism (and I say this as someone who has a family member with autism).

    I think they really don’t know how other people feel, they don’t know how to be tolerant or to share, and they can’t imagine living any other way.

    They project their own ABNORMAL asocial and antisocial tendencies onto everyone else. This Mises quote reminds me so very much of Calvin’s regarding a newborn baby as a “seething sack of sin”. When you base a worldview on that, it’s bound to deliver precisely the distortions you’ve programmed into it.

    RanDomino says:
    December 12, 2011 at 10:56 am
    I strongly suspect many of them are sociopaths, as in the mental condition that prevents them from having empathy.

    F. Beard says:
    December 13, 2011 at 8:40 am
    This Mises quote reminds me so very much of Calvin’s regarding a newborn baby as a “seething sack of sin”. Lidia

    The same Calvin who justified usury?

    Speak for yourself, Calvin!

    psychohistorian says:
    December 12, 2011 at 3:03 pm

    Thanks skippy.

    The quote reminds me of my position, stated here multiple times, that folks should not be allowed to get beyond grade school without becoming one with the concept of societal sharing.

    Skippy says:
    December 12, 2011 at 5:35 am
    Austrian theory includes the concept of time preference, or the degree to which a person prefers current consumption over future consumption. During a lecture in his Money & Banking course, Hoppe hypothesized that, because they tend not to have offspring, thus heirs, children, old people and homosexuals tend to focus less on saving for the future. One of Hoppe’s students characterized this statement as derogatory and a matter of opinion rather than fact. According to the Chronicle of Higher Education:

    In his lectures, Mr. Hoppe said that certain groups of people — including small children, very old people, and homosexuals — tend to prefer present-day consumption to long-term investment. Because homosexuals generally do not have children, Mr. Hoppe said, they feel less need to look toward the future. (In a recent talk at the Ludwig von Mises Institute, which Mr. Hoppe says was similar to his classroom lecture, he declared, “Homosexuals have higher time preferences, because life ends with them.”) [The student], Mr. Knight found that argument unwarranted and obnoxious, and he promptly filed a complaint with the university. In a telephone interview on Saturday, Mr. Knight said: “I was just shocked and appalled. I said to myself, Where the hell is he getting this information from? I was completely surprised, and that’s why I went to the university about this.”[3]

    http://en.wikipedia.org/wiki/Hans-Hermann_Hoppe

    Skippy…Just the Wiki page gives me the creeps.

    Philip Pilkington says:
    December 12, 2011 at 6:04 am
    And once again I say: a lot of this Austrian stuff is about good old fashioned psychological intellectualisation.

    http://en.wikipedia.org/wiki/Intellectualization

    “Oh no, I’m don’t have a fundamental, burning, irrational, emotionally driven hatred toward blacks/gay/the poor/women — I’m just saying that they are generally less productive/less conducive to saving/more inclined to take on debt than white mal… I mean… everyone else.”

    Most of this libertarian stuff is so transparent its not even funny. Hoppe is just an extreme manifestation because he’s probably completely around the bend. But you can see it shine through in most libertarian discourse.

    Read more at http://www.nakedcapitalism.com/2011/12/journey-into-a-libertarian-future-response-to-reader-comments.html#UzdgZx19FH4cIBlW.99

    Skippy… ask an Austrian if gawd exists… why YES!… may I see your evidence please… sure… we are here… it was written!.. we were born into SIN… see above Quote at top of comment.

    How in the fuck does Moses.. I mean Mises arrive at his conclusion ie:

    “Man is born an asocial and antisocial being. The newborn child is a savage” – crackerjack trope

    Man… know wonder sociopaths rise to the top so often, no emotional impediment in a competitive environment, know wonder they love corporations so much, align themselves with these engines of malice… stripping away the last vestiges of goodwill between humans, wrap themselves up with the Coat of arms of ennoblement and Gwad given heredity, promote freewill when its a price the market determines… BARF~~~

    Seriously… if myself had a choice between the Austrian sociopaths and a benevolent dictator looking out for social well being, not killing the planet, advancing the understanding of our universe, do no harm as the first rule of act… well… All Hail the Dictator!

    Got that Mises.org – zeroheadge… I rate you lower than a dictator… even the vicious ones… at least their honest about their cruelty. How you numb nuts try and pass off yourselves as enlightened humans and yet say stuff like “Man is born an asocial and antisocial being. The newborn child is a savage” is truly insidious. I am your mortal enemy… and embrace my hatred of you…

    1. Finnucane

      ‘Zooks, Mr. Skippy, your mind is like a steel trap, yet your pronouncements remain pythonic.

      In any case, I wonder about the psychopathic individualism of our von Mise-esques. Not the psychopathic part, but the individual part. I mean, look at the “Yves is a violent thug” response of Mr. ’48 above – or, more generally, the easy and quick equation of Absolute Evil with any form of dissent from the Book of (von) Hayek. That behavior (and yes, it is behavior) is not merely knee-jerk, hypersensitive, ad hominem, etc. – it is bullying. Like “the athlete laughs at the broken crutch” type bullying. And bullies always rely upon or expect peers. Bullies point out the broken crutch, pointing and laughing, with the expectation that others will laugh along. That is, bullies are conformists.

      Likewise, think of the “W is my president type” around the time of Gulf War II (or whatever they call it.) A fantastically and demonstrably idiotic event, yet a peep of dissent brings down a torrent of abuse. Now, the Lib purist and the W neo-con are supposedly antithetical, but the emotive response is similar. Or the same? And both derive from the same sense, the warm togetherness sense of being in the right camp, having the right feeling, sensing the — herd warmth. It’s a, well ya know, COLLECTIVIST sense.

      And who would say that Yves Smith is a violent thug?

      1. skippy

        “Zooks, Mr. Skippy, your mind is like a steel trap, yet your pronouncements remain pythonic.” – Finnucane

        I blame early evening TV programming and myself (um age 14) sitting alone in the kitchen watching Python on the small tube, whilst the rest of the family was in the shag carpeted sunken lounge room watching Don Rickles in on the big set. I was besides myself with merciless absurd laughter and was juxtaposed by guffaws from non whites getting slapped or reduced by a short bald white midget making a buck… by the rest of my infected mob.

        Skippy… “And who would say that Yves Smith is a violent thug?” Finnucane Skip here… Those that fear her.. for her… intellectual honesty… for her ability to be a cold calculating bitch when it comes to data… yet leave the safety of her abode… with a shooting stick… to render aid intelligently… to someone… that is obviously being attacked.

        PS. Yours in Pythondom, http://www.youtube.com/watch?v=WmudPExkKJ4

        1. Nathanael

          Skippy… you remain brilliant. If you’re ever in my neck of the woods (Ithaca), I want to meet you.

  30. Keynesian

    [quote]“Professor Hayek . . . does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.” (George Orwell, “Grounds for Dismay,” Observer, London, April 9, 1944.).[/quote]

  31. Late to the Party

    Hello, just curious for my own sake after reading the polemics here what the same speakers (you) would like to do (passively: what you like to see put into place), you know, economically and politically? I want to put an opinion with an actor (agent, citizen or whatever you want to say), since I can’t put a name to a face!

  32. Keynesian

    Fake Prize, Fake Economist

    [quote]Hayek’s venture into doomsday prognostication in The Road to Serfdom was also cited as evidence that he lacked the intellectual rigor expected at the Chicago School. According to John Nef, chairman of Chicago’s Committee on Social Thought, some Chicago economists believed The Road to Serfdom “too popular a work for a respectable scholar to perpetrate. It was all right to have him at Chicago so long as he was not associated with the economists.”42 In the fall of 1950, at the suggestion of Nef, Hayek became professor of social and moral science in the Committee on Social Thought, a chair funded in part by the Volcker fund. Despite the rebuff, Hayek accepted the post. (Wapshott, Nicholas, Keynes Hayek: The Clash that Defined Modern Economics (pp. 217-218). Norton. Kindle Edition.)[/quote]

    Hayek won the Nobel Prize in Economics 1974…. sort of. It is the Nobel Prize that a bank created. It is the same prize that was awarded to Milton Friedman.

    [quote]The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics,[1] [2] but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (Swedish: Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an award for outstanding contributions to the field of economics, generally regarded as one of the most prestigious awards for that field.[3] While not one of the Prizes established by the will of Alfred Nobel in 1895, it is consistently identified with them.
    Some critics argue that the prestige of the Prize in Economics derives in part from its association with the Nobel Prizes, an association that has often been a source of controversy. Among them is the Swedish human rights lawyer Peter Nobel, a great-grandson of Ludvig Nobel.[26] Nobel criticizes the awarding institution of misusing his family’s name, and states that no member of the Nobel family has ever had the intention of establishing a prize in economics.
    http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences/quote

    So why did Hayek get the Sveriges Riksbank counterfeit Nobel Prize in Economics even though the University of Chicago would not hire Hayek as a professor of Economics.

    [quote]The reasoning behind the Nobel committee’s decision to recognize Hayek’s contribution to “pioneering work in the theory of money and economic fluctuations” was not quite the endorsement it seemed. Hayek had to share the honor with Gunnar Myrdal,30 a Swedish Keynesian economist and social democratic politician. According to Friedman,31 by yoking Myrdal to Hayek the Nobel committee hoped to avoid the charge of sympathizing with the Left. In the event, the double bill provoked substantial controversy, with Hayek declaring that Nobel Prizes for economics were absurd and worth neither giving nor receiving, and Myrdal condemning the Nobel committee for honoring Hayek. (Ibid., p. 256)[/quote]

  33. David Graeber

    This is great stuff – you should really write a book about all this (or are you already?) I suppose I like it partly because it also confirms my own sense that neoliberalism is basically about prioritizing the ideological victory of capitalism over effective economic policies, even at the cost of undermining the very long-term viability of capitalism itself. “Kamikaze capitalism” I’ve sometimes called it. But this history is a beautiful illustration of how that obsession with ideology first came to be.

    1. Keynesian

      David Graeber! NO WAY. But then David Graeber would be up late reading about economics. I read the The History of Debt. I thought it was a perfect example of Adorno’s immanent critique…revealing contradictions of conventional reified concepts by exposing their historical origins.

        1. Keynesian

          [quote]“An immanent critique of society is a critique of those beliefs which hold society together. These are beliefs which hold society together. These are beliefs given by society to the individual who, Adorno claims, conforms to those beliefs It is in this way that soicety sustains and reproduces itself… Conformity, however, is irrational in that it can succeed only, in Adorno’s account, when the individual holds contradictory beliefs which constrains that individual’s self-realization.” (Adorno, by Brian O’ Connor, Kindle Loc: p. 47.)[/quote]

          Specifically, in “Debt: The First 5,000 years” you trace the concepts of private property (Ancient Roman law), freedom (“free” from German root “friend”), and individual rights back to the history of slave ownership–slaves don’t have friends and we “own” ourselves.

          [quote]“According to Adorno, immanent critique involves an examination of the coherence of a position by assessing it through its own values….it is possible to make an assessment of a society using as criteria values it would recognize as its own.” (Ibid., p. 46.)[/quote]

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