The Different Types of Libertarian

One response to my post on Neoclassicism and Libertarianism was made by ‘Lord Keynes‘, a prominent critic of Austrian Business Cycle Theory. He provided a list of the different types of libertarians. Though the list is useful, I feel he is simply begging the question: where are these types of libertarianism ultimately derived from? Though the strands they may appear separate at first, it is rarely difficult to link them to neoclassical economics. Here is LK’s list:

I. Randians

Ayn Rand’s primary ‘philosophical’ conclusion is that everybody should pursue their own rational self interest. Do I really have to say it? This is lifted straight out of the textbooks.

II. Austrians
(1) the Anarcho-capitalists, like Rothbard and Hoppe;

(2) The minimal state Austrians like Mises (with his praxeology);

Praxeology strikes me as the ultimate copout to justify neoclassical modelling. Allow me to explain:

Person A: “People are rational and self interested and so are best left to pursue their own goals.”

Person B: “No, they aren’t – look at various experimental evidence showing that they are altruistic and also often make mistakes.”

Person A: “OK well they maximise their own utility, and whatever they do fulfills the objectives that make them happiest.”

Person B: “No, actually people make the same decision differently based on how it is presented to them, and are also unable to evaluate how much utility they got from certain actions.”

Person A: “OK, well all human action is purposeful and all actions are justified as they are the rightful response to stimuli. The end result of the action is not as important as the valid agency created by the actions that achieved it. Thus, people should be left to pursue their own actions. Trying to falsify this will only result in its validity.”

Person B: “Erm, OK.”

Randians and praxeologists have their ideas about human action ultimately derived from a neoclassical framework – in Rand’s case, she is seeking to make people behave like the textbooks; in the case of Mises/Rothbard, they are seeking to justify ‘market’ transactions by whatever means possible, the ‘market’ itself being a creation of neoclassicism.

(3) Austrian supporters of Hayek’s economics, with a minimal state;

LK concludes himself that:

paradoxically, the Hayekian version of the Austrian business cycle theory is heavily influenced by neoclassical equilibrium theory via Hayek’s use of Wicksellian monetary equilibrium analysis.

As you can see, wherever a libertarian analysis exists, neoclassical economics is not far off.

His final groups are areas where his knowledge far outweighs mine:

(4) The “orthodox” Austrians who have a moderate subjectivist position (like Israel Kirzner and Roger Garrison);

This is the area where I am willing to concede the most ground. These are the Austrians who have stayed closest to the birth of their school, which genuinely sought to create a non-equilibrium alternative to neoclassicism. However, the fact is that they seem unable to come to conclusions other than ‘government = bad’, and persistently frame issues as governments versus markets, both of which are things that neoclassical libertarians do. After all, is it no coincidence that many libertarians who followed neoclassicism before the crisis have had no trouble choosing the Austrian school over evil Keynesianism? The two schools are simply too compatible for me to consider them completely separate.

(5) Austrian radical subjectivists like Ludwig Lachmann;

II. Non-Austrian libertarians (but influenced by Austrian economics)
e.g., George Selgin

It strikes me that the positions of these economists are not particularly ‘libertarian’, given the amount of ground they are willing to concede. In fact, George Selgin no longer identifies as an Austrian and is also uncomfortable with the libertarian label, which offers some conformation of my point.

Scratching beneath the surface of the different types of libertarians often reveals foundations that can also be found in neoclassical economics: consumer sovereignty; the economy as separate from the political and social spheres, the assumption of an entity called ‘the market’ that is in or close to ‘equilibrium’ and is ‘distorted’ by the hand of government. Until libertarians can prove to me that there is something fundamentally different about the different strands of their ideology, I stand by my argument that it is closely interlinked with neoclassicism.

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  1. #1 by Brendan Lowe on December 26, 2011 - 8:18 pm

    But you have no evidence. Who could be persuaded by such a weak argument? Especially considering that Austrian economics precedes neoclassical economics. Also, your connection of Rand to neoclassical economics is terrible. Rand thought it is moral to follow your rational self interest, and neoclassical economics says people do follow their rational self interest, therefore Rand follows neoclassical economics? That’s terribly weak. Your point on Hayek is even worse.

    This is why mainstream economists (who would never refer to themselves as neoclassical) always accuse heterodox economists of strawmanning them. You demonstrate no understanding of neoclassical economics, mainstream economics, or libertarianism. This is a very bad argument. You should get some evidence, define “neoclassical” economics (I expect what you call neoclassical economics is really a bad econ 101 strawman of mainstream economics), and then make your argument–if you still can.

    The issue here isn’t even that I disagree with your thesis–although I do, since it is wrong. However, what compels me to comment is how badly made your argument is, especially when contrasted with your apparent confidence in your position.

    • #2 by Unlearningecon on December 26, 2011 - 10:06 pm

      Evidence of what? This is based on argument alone.

      ‘Rand thought it is moral to follow your rational self interest, and neoclassical economics says people do follow their rational self interest, therefore Rand follows neoclassical economics? That’s terribly weak.’

      Apparently you have reading comprehension problems. Rand was a supporter of capitalism and neoclassical economics is the primary model of capitalism, and models people as rational and self interested. In this model, rational self interested individuals produce the most efficient outcomes.

      Are you telling me the idea that people should pursue their rational self-interest was plucked out of nowhere, and not affiliated with the models that claimed it was optimal?

      That was the only argument you make in your post. The rest is stuff I have seen 1000 times – bare assertions that my arguments are poor, coupled with a claim that I am straw manning. At least read my ‘about’ section before you throw poor, generic arguments like yours at me.

      • #3 by Brendan Lowe on December 26, 2011 - 11:13 pm

        Evidence that libertarianism is “closely interlinked with neoclassicism.” You’re a student, right? Weren’t you ever asked to write a paper in a history class? Don’t you know that you need more than superficial similarities to prove that two things are “closely interlinked”? How can you possibly think you have even begun to prove that libertarianism “clearly has neoclassical economics at its heart”?

        Considering your claim about Rand, for example, using the sort of “logic” you employ, I can prove that straws are closely interlinked with America, since my straws have red, white, and blue stripes. My straws and the American flag have the same colors. Are you telling me this idea for red, white, and blue stripes was plucked out of nowhere (or perhaps simple patterns of aesthetics), and not affiliated with the national flag that also features those colors? But of course this proves nothing more than a superficial similarity. Maybe my straws and the American flag are interlinked. But I have not at all established any proof for this claim.

        Now, if you want to define “interlinked” to mean “two things which have superficial similarities,” (which is all you have managed to successfully prove), you could be right, but no one would care.

        So, your arguments are poor. You also display much ignorance–for example, while it is true that primitive mainstream models (econ 101 stuff, obviously) prove that everyone rationally pursuing their self interest is optimal, Adam Smith claimed something similar as well. Or is he a neoclassical economist? Or is it that his claim was much more realistic and nuanced, whereas you have to get to at least econ 102 to find that in mainstream models?

        As for straw mans, the various things you accuse mainstream economists of in “How to Unlearn Economics” may be somewhat accurate in (badly taught) undergraduate courses, but as a graduate student they all seem false, and rather plainly so. It is telling that you cite no actual evidence to support any of your claims in that essay. Mainstream economists do not rely on Homo Economicus, government-vs-market framing, or really anything else that Post Keynesians, Austrians, Marxists, and so on, accuse them of. While this particular post does not really contain a straw man because it does not really contain any evidence and barely even has an argument, several of your other posts are quite plainly straw men–anything that relies on accusing mainstream economists of assuming rational actors, for example, is simply a straw man.

        It doesn’t help that you call mainstream economists “neoclassical,” which is simply false and ridiculous. It also doesn’t help that you’re a fan of Steve Keen, who is laughed at, regarded as ignorant, and easily torn to pieces by mainstream economists, rather like a John Kenneth Galbraith, but worse at math and at writing.

        I’m actually quite sympathetic to heterodox economics–Austrians and Post Keynesians mostly, not Marxists, who are a joke–which is why I even know about your blog. The financial crisis and recession clearly prove that economics still has a way to go. Unfortunately, progress will almost certainly not come from Austrians or Post Keynesians, despite them being based on great economists–Menger, Mises, Hayek, Minsky and Keynes were great economists. Unfortunately, their modern day followers simply are not, and can not be, given their knowledge of mainstream economics and their loose and lazy approach to criticizing it.

        I found Steve Keen some time ago, and although I was skeptical, I thought it would be interesting to get the opinions of some of my professors–mainstream economists–on him and his arguments. I was shocked by how quickly and easily they destroyed him on factual and theoretical grounds, so much so that I quickly had to claim that I was only playing devil’s advocate, less their opinions of me lessen for being taken in by the poor quality of Steve Keen’s arguments, if only for a moment.

        You should really get to know some mainstream economists. Do some work for them–there are a million menial tasks students can do for professors and researchers–and if you’re smart, open-minded, opinionated but without hubris, they’ll talk to you, and teach you a lot. I have been surprised again and again by the knowledge, erudition, wisdom, and sophistication of mainstream economists, and how poorly they are caricatured by journalists and heterodox critics.

      • #4 by Unlearningecon on December 26, 2011 - 11:44 pm

        ‘Evidence that libertarianism is “closely interlinked with neoclassicism.” You’re a student, right? Weren’t you ever asked to write a paper in a history class? Don’t you know that you need more than superficial similarities to prove that two things are “closely interlinked”? How can you possibly think you have even begun to prove that libertarianism “clearly has neoclassical economics at its heart”?’

        They aren’t superficial similarities. Every single strand of libertarianism suffers form the same framing issues I presented in my first post on this, coupled with the ones I have mentioned elsewhere in my blog. Every libertarian who has replied has gotten nice and angry, but few of them have responded properly to the points.

        ‘Free market’ neoclassicism says rational self interest is often optimal for society, from an efficiency perspective. Rand argues the same but from a moral perspective. Both come to similar policy conclusions. Both frame issues as markets versus governments. Both effectively ignore work. Both indulge in Adam’s Fallacy. The latter was quite clearly heavily influenced by ideas that stem from the former.

        ‘So, your arguments are poor. You also display much ignorance–for example, while it is true that primitive mainstream models (econ 101 stuff, obviously) prove that everyone rationally pursuing their self interest is optimal, Adam Smith claimed something similar as well. Or is he a neoclassical economist? Or is it that his claim was much more realistic and nuanced, whereas you have to get to at least econ 102 to find that in mainstream models?’

        Adam Smith didn’t use the term the invisible hand in that context, though this is a red herring.

        And yes, more advanced models do attempt to incorporate ‘frictions’, an approach I saw Noah Smith take issue with here:

        The whole notion of thinking of each interesting feature of the economy as a “friction,” and then of considering only one or two “frictions” at a time, has been very detrimental. For one thing, it makes it hard to develop a useful model of the economy, since the actual economy contains many, many “frictions” (so many that the “frictions” together are usually more important than the “frictionless” dynamics that supposedly “underlie” them). Also, the “one friction at a time” approach makes it very difficult to generate any alternatives to the classical “core theory” of Walrasian general equilibrium.

        More advanced models do not matter if the foundations of your theory are built on sand.

        ‘It doesn’t help that you call mainstream economists “neoclassical,” which is simply false and ridiculous. It also doesn’t help that you’re a fan of Steve Keen, who is laughed at, regarded as ignorant, and easily torn to pieces by mainstream economists, rather like a John Kenneth Galbraith, but worse at math and at writing.’

        I’m not sure what you think neoclassical means, but it is just a term for the methodological approach that mainstream economists have. Our professors use it to describe what we’re taught, and it’s covered in great detail here. The rest: yep, typical mainstream behaviour.

        Nobody has *ever* torn Keen/others to pieces – link me to someone that, for example, refutes the Sraffian idea that partial equilibrium models violate CP when one curve moves; to Keen’s incredibly robust empirical link between private debt and growth; to Adler’s critique of neoclassical labour models; to Graebers ideas on debt.

        Overall, your post should just read ‘straw man, ignorant, joke’ over and over again. I’ve heard it all before and it’s the stock reply of mainstream economists. They are unable to understand the problems with economics, which are actually quite subtle, something I detail in my post on straw manning, which you have clearly not read or engaged in any meaningful manner. In fact, you rarely present an actual argument against what I’ve said, anywhere, and instead rely on calling me ignorant and a straw manner (I don’t believe I’ve even critiqued the rationality assumption, btw, which shows how much attention you’re paying).

        Here’s the problem: after the crisis the emperor is well and truly naked. If anything, the burden of proof lies on mainstream economists to defend their orthodoxy, rather than on others to attack it. Keen, for example, predicted the crisis to a tee by observing the level of private debt, which neoclassical economics ignores. Of course, you can continue to dismiss the people who are able to create more realistic models than you do, and probably will. Just don’t clog up my blog with your non-arguments and arrogance.

  2. #5 by Lord Keynes on December 26, 2011 - 9:01 pm

    This is an interesting post.

    “After all, is it no coincidence that many libertarians who followed neoclassicism before the crisis have had no trouble choosing the Austrian school over evil Keynesianism?”

    There is a related point: if mainstream neoclassical economics came under fire to such an extent that the major players were willing to concede serious problems, they may well retreat to something like Austrian theory, but by taking their mathematical models with them in some way. Steve Keen has made this point in Debunking economics: the naked emperor of the social sciences, pp. 301-305. Overall your view that Austrian economics shares many features with neoclassical theory is confirmed there by Keen.

    Also, it is widely accepted that many Austrians went through a neoclassical phase in the 1930s or were lost to neoclassical theory:

    http://socialdemocracy21stcentury.blogspot.com/2011/06/neoclassical-wing-of-austrian-school.html

    Nevertheless there is a radical subjectivist Austrian wing that rejects neoclassical theory rather strongly:

    Lachmann, L. M. 1976. “From Mises to Shackle: An Essay on Austrian Economics and the Kaleidic Society,” Journal of Economic Literature 14.1: 54-62.

    As for Mises, he regarded equilibrium states as entirely fictitious, but retains the tendency to equilibrium.

    • #6 by Unlearningecon on December 26, 2011 - 10:07 pm

      Thanks for your post, some interesting reading in there.

  3. #7 by Lord Keynes on December 27, 2011 - 3:39 am

    It doesn’t help that you call mainstream economists “neoclassical,” which is simply false and ridiculous.

    No, it isn’t. New Classical macro, monetarism, or simply the New Consensus macro is all neoclassical.

    It also doesn’t help that you’re a fan of Steve Keen, who is laughed at, regarded as ignorant, and easily torn to pieces by mainstream economists, rather like a John Kenneth Galbraith, but worse at math and at writing.

    LOL.. Are these the same mainstream “economists” whose own economic theories turned out to be worthless? Whose policy prescriptions led us to bubble economics and the financial crisis?

    That your neoclassical professors spit bile at Keen isn’t remotely surprising: they’ve been severely discredited by events over the past few years. Your statement is akin to saying :

    “It also doesn’t help that you’re a fan of Copernicus, who is laughed at, regarded as ignorant, and easily torn to pieces by mainstream scientists. His heliocentrism is rejected by mainstream scientists.”

    The opinions of most neoclassical professors aren’t worth jack.

  4. #8 by Blue Aurora on December 27, 2011 - 4:57 am

    I would like to point out that Keen apparently can use differential equations. However, Keen does have a problem that Dr. Brady has recently revealed to me – Paul Davidson’s principle of effective demand is a mathematical error. See the comments section of this Amazon.com review, where I raise the issue to Dr. Brady.

    http://www.amazon.com/review/R28VLQCV129O04

  5. #9 by yorksranter on December 30, 2011 - 7:40 pm

    We need a word for the fallacy that whatever economic behaviour is observed must be utility-maximising. It is entirely circular reasoning – absolutely any behaviour can be explained by declaring that the individuals who exhibit it must do it because their preferences are such. It’s like saying the cause of rain is water falling from the sky or that someone who is convulsing is doing it because they have a revealed preference for convulsions.

    The fact that preferences are defined to be whatever is convenient ought to be damning. It’s also true that the cognitive neuroscientists have identified the over-estimation of agency, the so-called Fundamental Attribution Error, as a basic feature of the human brain. We hugely over-ascribe agency to things and people. This can obviously be adaptive in some circumstances, but in others…DAMN YOU, COMPUTER!

    Dr. Pangloss, of course, thought that everything that happened was for the best in the best of all possible worlds. Revealed preference is rather similar. Perhaps we could baptise it 3P: the Panglossian Preference Principle.

    • #10 by Unlearningecon on December 30, 2011 - 9:14 pm

      Will simply ‘Revealed Preference Fallacy’ suffice?

      • #11 by yorksranter on December 30, 2011 - 10:47 pm

        Nah, I want Pangloss in there. IIRC he may originally have been intended as a satire of early economics.

  6. #12 by Wheylous on January 19, 2012 - 7:26 am

    “the economy as separate from the political and social spheres, the assumption of an entity called ‘the market’ that is in or close to ‘equilibrium’”

    Nah, Austrians make no such claims at all. In fact, they often emphasize that the economy is not a beast acting outside of the social human sphere. They also emphasize that markets are dynamic and almost never in equilibrium.

    • #13 by Unlearningecon on January 19, 2012 - 11:03 am

      Austrians claim to do a lot of things different from the mainstream but still fall into many of the traps neoclassicism does.

      For example, they indulge in what Duncan Foley calls ‘Adam’s Fallacy’ – the separation of the economic sphere from the political and social ones as one where self interest is presumed to be beneficial and we simply follow the actions of actors through to their conclusions without questioning them.

      They also discuss things in terms of governments ‘intervening’ in markets (often painted as negative), which implicitly suggests that the market was in some sort of natural or ‘correct’ state before the intervention.

  7. #14 by Madmiser on January 20, 2012 - 3:32 pm

    The fundamental idea underlying AE is that, in light of the subjectivity of morality and value, nobody is in a better position to know what’s ‘best’ for person X than person X is. Nobody is in a position to say action Y is ‘wrong’ for X to take, as that would involve judging action Y by the standards of their own subjective value schema, which cannot in any way be shown to be objectively better than X’s subjective value scale. Utility in the quantitative sense is just another case of treating one’s own value judgements as somehow superior: generally, the judgement that ‘happiness’ (in the sense of an empirical, measurable thing) is inherently desirable, such that it should be promoted even to the extent of forcibly preventing an individual from taking action Y if said action would bring that individual unhappiness. It ignores that the emotional experience of happiness might well not be the top priority of the individual at that time, and assumes that whatever value schema prompts the individual to take action Y is inferior to the value schema of the person making the judgement.

    • #15 by Unlearningecon on January 20, 2012 - 3:46 pm

      From my PoV, this just strikes me as an almost tautological definition of human action used to justify whatever takes place in an economy with capitalist institutions already in place. Austrians seem to take things like private property, trade and contract for granted as ‘human nature’, when in fact these things have incredibly rich histories and took a long time to implement successfully. So Austrians decry the efficacy of the state in ‘making decisions for people’ but take for granted that the state makes the ‘decision’ to have a capitalist economy in the first place.

      I am no praxeology expert but it seems to me that taken to its logical conclusion you would just have no government and leave people to fend for themselves, as their actions are always purposeful. No?

      • #16 by Madmiser on January 21, 2012 - 6:25 am

        All logical prepositions are tautological, and any non-tautological preposition cannot be entirely logically coherent (as explained in Wittgenstein, Satz 6.1 http://philosurfical.open.ac.uk/tractatus/tabs.html.) 2+2=4 is a tautology, but nonetheless can still be of use in some context, as are statements like e=mc^2, or “cats are mammals”. Praxeology doesn’t ‘justify’ whatever takes place in an economy with ‘capitalist institutions’, it ‘justifies’ what takes place in an economy (world) where people interact freely under the influence of a minimum of violent coercion, as the more violent coercion there is, the more people are forced to act in ways contrary to their highest preferences, and hence utility (in the ordinal sense) is reduced. And by ‘justifies’, I mean it states that such a situation would result in maximum utility, in the sense of each individual being able to act to the greatest degree possible in keeping with their own subjective value scale; each free to do as they wish, as long as it didn’t impinge upon the freedom of others. Private property, trade and contract aren’t ‘taken for granted’, rather it’s stated that these things are necessary to maximise utility (again, in the ordinal not cardinal sense). The point of AE (or at least Mises Human Action) is that if everyone was educated enough about the subjectivity of morality/value, and about how free exchange is the fastest route for maximising overall ordinal utility in the long term, they’d decide to have a ‘capitalist economy’ of their own volition, with no need for a state to make that ‘decision’ for them.

        Praxeology is descriptive, not prescriptive; it can’t say “get rid of government”, as that’s a prescriptive thing. Rather, it can just say that a people with no government and complete respect for property rights would exist in a state approaching maximum utility (in the ordinal sense). Mises used another term for prescriptive statements, for shoulds, and they’re not taken with the same degree of certainty as praxeological statements, which are by definition true (tautologies). He was a minarchist, advocating a small government devoted to protecting property rights and enforcing contract. Later Austrians however, following Rothbard, were anarchists as you describe, taking praxeology to its logical conclusion, but I’m fairly certain that they didn’t just advocate the instant elimination of the state, rather people would have to be taught to understand the value of freedom, property and free exchange first, lest they simply establish another state, or descend into lawlessness.

      • #17 by Unlearningecon on January 21, 2012 - 9:47 am

        ‘Taught’ sounds an awful lot like some sort of Orwellian nightmare to me. What if people simply disagreed that private property and contracts were the right path to prosperity? Seems it was that was in the early industrial revolution, where peasants had to be separated from their means of subsistence and hence forced into factories.

      • #18 by Madmiser on January 21, 2012 - 1:15 pm

        Except that Austrian Economics doesn’t advocate educating people against their will, and is explicitly opposed to the idea of compulsory public education. If a minority of people disagreed that private property and contracts weren’t the right path to prosperity, and acted upon those beliefs, then they’d be acting against the laws of that society, and would suffer whatever consequences accompanied that. Much as how if people in our society do not believe in private property, and act on that by relieving another person of property that is legally considered as belonging to that other person, then they are generally charged with theft/burglary. And if a majority of people in that society disagreed that private property and contracts were the right path to prosperity, then the society would become more statist, with less legal protection for property/contract rights, much as happened to America over the past century, and from a praxeological perspective would exhibit slower growth in prosperity. As to forcibly separating peasants from their land, that’s obviously not something Austrian Economics or most any other form of libertarianism would support; Austrian Economics doesn’t even support eminent domain.

      • #19 by Unlearningecon on January 21, 2012 - 1:45 pm

        OK, well if you’re advocating democratic law making then I probably have little to disagree with you about.

        I’m aware Austrians wouldn’t support that but my point is that history suggests wage labour was not preferred by many peasants, so the capitalist way of production is by no means natural to individuals.

      • #20 by Madmiser on January 21, 2012 - 2:34 pm

        The fact that wage labour wasn’t preferred by many European peasants doesn’t mean the capitalist ‘way of production’ is by no means natural; it just means that they could have a better standard of living as peasants than as factory workers. Subsistence farming is no less a part of the ‘capitalist way of production’ than wage labour; America up to the latter 1800s was still a nation of subsistence farmers, yet equally the most capitalist nation on the planet at the time. The American ‘peasants’, however, gradually urbanised, as the standard of living they could enjoy as wage workers in cities exceeded that offered to them as subsistence farmers. There’s nothing to say that, had the European States not violently intervened to force peasants off their land, they wouldn’t eventually have become factory workers anyway, when the standard of living offered by such labour exceeded that which they could garner as subsistence farmers. Just look at modern China: the richer cities in the east are awash with masses of migrants from the more poor rural regions, who haven’t been forcibly evicted from their lands, rather are pursuing the lifestyle offered by the city which, whilst spartan by our standards, is still far more luxurious and less strenuous than the life they left behind in the west.

      • #21 by Unlearningecon on January 21, 2012 - 3:05 pm

        Actually there is evidence that at least some Chinese peasants *are* being coerced into working in factories:

        http://chinadigitaltimes.net/2004/10/chinese-peasants-forced-to-give-up-land-to-government/

        There is also the history of places like Darjeeling and other colonised areas, where big multinationals either forced or gave peasants no other choice but to work in factories.

        I’m not sure dismissing historical facts on the (unverifiable) counterfactual that peasants would have worked there anyway, eventually, is really an argument. Perhaps they would have. But my overall point is that once you take public choice considerations into private property, you see that the owners of it will use the state to further their own interests, and history offers significant evidence in favour of this. Your ideal of capitalism may well involve some peasants choosing to work on their own land, but evidently this would not sit well with the ruling class. I’m just highlighting a blind spot libertarians have with public choice theory and property.

  8. #22 by Madmiser on January 21, 2012 - 3:30 pm

    Some Chinese peasants may well have been coerced into factory work, but that certainly doesn’t mean all of them are. My counterfactual isn’t unverifiable: I’m using the historical fact that American peasants, free from coercion and from seizure of their land, still chose eventually to migrate into cities and engage in wage labour. Unless there’s some qualitative difference between the nature of American and European peasants, how is it not reasonable to say that the voluntary urbanisation of American peasants suggests that European peasants might eventually have acted similarly?

    Austrian Economics also states that owners of capital will use the State to further their own interests (corporatism), hence why it argues for a minimal or nonexistent state. Such as a constitutional republic whereby the laws prevent any party from using the State to further their own interests at the expense of other parties, generally by minimising the power of the State. Libertarians don’t have a ‘blind spot’ with regards to public choice theory, rather they either A: don’t support the idea of a state at all (such as Rothbard), and hence public choice theory is irrelevant, B: support a state whereby the power of the executive is extremely constitutionally limited, hence regardless of whom the people elect, the executive and legislature (or equivalents) won’t have the power to infringe upon property rights, or C: they believe in bring about a libertarian society by telling everyone about the merits of libertarianism and converting them all to libertarianism, hence in a society where everybody was a libertarian, public choice wouldn’t lead to any un-libertarian outcomes.

    • #23 by Unlearningecon on January 21, 2012 - 3:56 pm

      Were American peasants entirely free from coercion (genuine question)?

      And, assuming they weren’t, I think there is a difference. It depends on the lot of the peasants – it seems your average medieval English peasant was not that unhappy, unhealthy or poorly educated, which explains why they had to be coerced into wage labour. The USA was founded partially on the ideals of private property so people had a different mentality. There was a general conception that the USA was a land of opportunity, and of course it is well known that many immigrants, having arrived, were somewhat dissatisfied.

      As for the stae: but what about the time when the initial legislature is established? How do you prevent the restrictions being eroded over time? In the past 30 years capitalists/rentiers have managed to remove usury laws that are centuries old; politicians have lifted caps on campaign spending and donations. I find it hard to believe that the large fortunes accumulated would not eventually corrupt the state, even if there were initially firewalls.

      • #24 by Madmiser on January 22, 2012 - 8:33 am

        I’ve never read or heard of any particularly coercion against American peasants, definitely not any on a large scale. As I said, however, even if all the peasants had been coerced into factory work and by nature would prefer to be subsistence farmers, this isn’t incompatible with capitalism, at least not in the general libertarian sense of the word. An economy of 99% subsistence farmer would still be considered ‘capitalist’ if these farmers didn’t engage in any institutionalised aggression against other farmers or their property (only used violence and the threat thereof in defence of their own life and property). Capitalism in the technical sense doesn’t require factories or industry: a farmer who stockpiles grain is a capitalist, accumulating capital, and if he lends it out, he is an investor. I’d also add that it wasn’t so much that the Europeans didn’t believe in private property, rather that their land (and possibly in some cases the peasants themselves) was considered private property of the nobles and/or the sovereign, so said peasants were seen as having no rights over the land they toiled.

        Nothing’s eternal: you can’t expect the State to last ‘uncorrupted’ forever. All you can do is be very specific with the initial legal framework. For instance, the American constitution would have been much harder to reinterpret in ways contrary to intentions of the founding fathers if they’d been much more specific and comprehensive in their language. Ultimately, it depends on the people: if at year zero you had a nation of libertarians, then at year one hundred you had a nation of fascists, obviously the nature of the State would change to reflect that, regardless of the initial safeguards. This risk of ‘corruption’ is one of the major reasons anarcho-capitalists oppose minarchism: even if they might have no objections to a small State dedicated solely to the protection life and liberty, they think it inevitable that this State would eventually grow larger and become corrupted, as happened to America. I think they reason that a society of anarchists would be less likely to be corrupted than a society of minarchists, which is technically true in that an extreme position like anarchism is further removed from statism than minarchism is, hence people are less likely to change from anarchists to statists than from minarchists to statists, however it first requires convincing the vast majority of people in the society to be anarcho-capitalists, which would likely be more difficult than convincing them just to be minarchists. Also, many anarcho-capitalists don’t support the idea of limited liability corporations, viewing them as entities that couldn’t exist without the State, and so in an anarcho-capitalist society the absence of such corporations would limit the concentration of power.

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