Archive for the ‘economics’ Category

It should be recognized that most people are stupid about most things; myself included. However, there is a certain lack of self-critical thinking I want to pick on at this moment, and I am going to call this mode of thought the “Preference Fallacy.” I will define it as this: the dissonance that inheres in what people say they prefer to be the case, and what they signal and/or choose to be the case by their actions. I’m noting that this is not some broad form of hypocrisy, since it is not so much someone saying “People shouldn’t do this” and then they go do it, but rather they say something like “This should be the case,” yet they do nothing of themselves to achieve that. Note how I say that it is of themselves, a very specific distinction I make for political cases, where the Preference Fallacy crops up very often.

Consider this image, which I have seen several times and which certainly has been seen by others:

What is meant to be illustrated? First, there is the bare fact that wealth distribution is unequal. That’s a given, and anybody with a brain recognizes that attempts to “reduce inequality” will inevitably lead to wealth destruction. I’m not going to hammer on that point. The other thing meant to be illustrated is this quaint notion many individuals seem to hold that “distribution should be equaler.” Why? Well, just because, but I’m going to challenge exactly this stated preference, since it not only fails to reflect reality (not a shortcoming of any preference in itself) and is beside the point, but because people don’t actually behave like this is the ideal. In fact, attempts to behave in order to fulfill this stated preference clearly, by demonstrated preference, would cost people what they prefer more. As such, this “stated preference” essentially doesn’t matter.

Here is a thought experiment. Equalitarian Edward states that he would prefer for society to be more equal. He insists that he behaves in accordance with this preference whenever he can. However, as we observe his behavior in the market, we see that this stated preference informs his decisions not at all. Who does he choose to buy his car from? Subaru, thereby increasing the profit of the company and by extension to a larger degree its owners, as opposed to the employees. Why does he buy a Subaru? Because he prefers its comfort, reliability, and style. He chooses not to buy the beater from Poverty Pam, even though doing so would help decrease wealth inequality, since now his money is going not to those who are already wealthy but to someone who is poor.

Where does Edward buy his groceries? The bulk come from Cub Foods, because it is most convenient, they have a wide selection, and the prices are cheaper. Once again, he passes over Pam. Likewise for where he buys his coffee (Starbucks), his clothes (JCPenney’s and assorted boutiques), his books (Amazon), his internet (Charter), his cell phone (Apple) and service (Verizon), so on and so forth, virtually every purchase of his lines the pockets of the wealthier more than those who are less wealthy. What seems a better explanation of his behavior, that he has a preference for lessening wealth inequality or increasing it? Between only those two options, the latter seems clearly to be the case.

But but but, you will certainly say, there are other explanations! And I say that is certainly the case! I don’t actually think he has a preference for increasing wealth inequality so much as he simply prefers better quality and service in his purchases, and it just so happens that this has a high degree of correlation to increasing the wealth of the wealthier. It is not that he has a preference for increasing wealth inequality, only that he doesn’t really have a preference either way. If it so happens that buying from a person who is poorer gives him a better quality good, he will do so; but that the person was poor won’t affect his decision so much as the product itself. In the market, people choose products, not people.

So what are we to make of the “ideal” distribution of wealth shown in the above graph? Precisely nothing. The demonstrated preferences of people in the market happens to support more wealth inequality rather than less. (Caveat: I say that it supports the present distribution only because the American society happens to have capitalistic elements. More accurately, the USA has a distributed socialist-corporatist economy with capitalistic elements peppered here and there. I’m not pretending a full-fledged capitalism won’t have “huge” wealth inequality, though I do believe the “true measures of wealth” would in fact be more equal. For an elaboration on my views here, read my paper.)

I understand that some who remain sold on the intrinsic good of “equaler wealth distribution” would like to point to other problems, say that while a company like Subaru might choose to disproportionately give its profit to the owners and elite controllers of the company, it shouldn’t. It just so happens that people don’t have a lot of say about how the companies they buy from are structured. To this, I would point out that this just pushes the Preference Fallacy back another step. Sure, one might state they have a preference for “more equally distributed profits” within a company, but once again, the business models that happen to correlate most with the products they prefer for itself are these companies where the CEO’s pay is many hundreds time that of the average worker within that company. I think distributists are especially prone to this way of thinking, and all my ire to them where that is concerned.

So I’ve chosen in particular the issue of economic inequality for my focus of the fallacy, but it certainly occurs throughout just about everything people say they prefer. Women say they prefer Nice Guys, but they run off with Bad Boys. People say they prefer the minimum wage higher, but they still shop around for cheaper prices and don’t tip those people who do work minimum wage (honestly, have you ever seen someone tip the cashier at McDonald’s?). They want men and women to have equal pay, yet (like the issue of business models) they consistently support those models in which women are paid less. (I’m not going to explain this one: here’s a video which deals with it in short order.)

There are so many things people say they prefer to be the case, but they won’t help to establish that for themselves. Sure, they might be a political activist, but note that the introduction of the power of the state to cure problems doesn’t count as exercising one’s own preferences but penalizing and prohibiting the preferences of others.

Don’t look to what people say, look at what they do. There is nearly always some degree of bullshit in what people say they prefer. This bullshit is the Preference Fallacy.

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Part 1 here.
In the latter part I detailed the correlations that hold between savings and interest, and showed how lower interest rates will increase present consumption both by borrowers who find it profitable to do so since they expect it easier to make returns on investment and potential lenders who aren’t persuaded by lower interest rates to save money rather than spend money now on consumption. Low interest rates would then indicate prosperity, since it is generally only societies in which most income is spent on immediate consumption of food and shelter where it is harder to save and thus higher interest rates hold.

I left with these questions. Provided this understanding, how would those desiring to manufacture prosperity think they could manipulate the institutions involved in lending and borrowing (e.g. banks and households) to make their political record look good? What would they achieve throughout the system?

What would a lower interest rate achieve in the short run? That is, if we suppose that the interest were lowered by political policy from 5%, the rate determined by savings, to 2%, a rate made possible due to interventions of various kinds I will discuss later, what would happen?

First, and most obvious, borrowing will increase. Entrepreneurs will find it cheaper to borrow, and as we know, lower prices cause higher quantity demanded. Where before, at the 5% rate, people would borrow only when they thought that the returns in the future would be over 5%. Now, at a 2% rate, they would be willing to undertake investments for goods and services that will have returns which are lower, say at 3%.

At the same time, real savings will decrease. Lower prices cause lower quantity supplied. When it was relatively more lucrative to lend, people saved more. Now, they will choose to consume since lower present utility seems more likely equal to only negligibly higher future utility. Why try harder to save when the return is lower than my present consumption?

These together mean higher spending. Investors are putting more money into capital, in order to produce goods and services in the future, while consumers spend more on goods and services. There is an uptick in GDP and jobs are easier to come by. The economy booms. The credit is given to the politicians and their policies to lower interest rates.

Can it last? It does not seem likely. Let us make some suppositions so that it is easier to see cause and effect.

I will propose a value I am calling the “value of sustainable production” (VSP). What this value represents is the total price value of goods available for all consumers that would sustainable, where producers are making a sufficient profit that they can continue their operations.

In the economy before the manipulation of interest rates occurred, VSP was $10m. Savings equaled $1m. Total income is $11m. This is, all together, a sustainable structure, since as much as is produced can be consumed and the producers remain profitable (which is to say that the producers derive an income of their own).

After the manipulation of the interest rates, VSP is $12m. Savings total $500k. Total income has risen, to $12m. Since there is now produced more than can be consumed, at least while the producers would remain profitable, it follows that a correction will follow as only $10.5 of production is consumed, leaving in excess of 500k not profitably consumed.* This will put people out of jobs, since the capital with which they labored must be redeployed to sustainably profitable operations.

*While total income is $12m, and after $500k is saved this leaves a gap of 500k for consumption, it is altogether likely that many products will be lowered in price, not in order to make a profit, but to lessen losses.

We must ask, why didn’t income rise commensurate to VSP? That is because, in order for income to have increased at the same rate, the rate of saving must have increased as well. Higher savings in the present mean greater income in the future, and thus the possibility of higher consumption. However, since the interest rates were purposefully separated from savings, savings actually decreased, meaning that the growth of income due to savings decreased. Why then the increase in income? Nominally, it is because more money is being thrown around, and jobs and raises are easier to come buy; as such, the increase in consumption in the present will be paid for by the correction to the production structure, and the jobs from which people derived their income are found not sustainable.

After the correction, VSP is $11m, total income is $12, and total savings is restored $1m. This increase from before manipulation will be explained.

The gap between VSP and consumption prompts some economists to worry about “underconsumption.” This leads them to advocate policies that will “increase demand.” However, these policies can only work provided they further exacerbate the problem of lending not backed by real savings. For instance, if they were to incentivize spending so that savings are even lower, in fact, perhaps even negative, this will leader to an even greater gap in VSP and actual consumption, which must inevitably lead to a correction when either manipulation will no longer be done or can no longer be done.† As such, the problem is not underconsumption but overproduction, since some production took place that could not be supported by what could be sustainably consumed. After all, doing nothing but increasing one individual’s consumption must be backed by someone else’s savings, i.e. they borrowed in order to consume more.

†The point at which these “stimulus” policies simply can no longer be effected will be discussed in Part 3, when I go over mechanisms for lowering the interest rate apart from savings.

Now someone might point to the fact that VSP does, despite the correction, remain increased from before the manipulation of interest rates. Thus, it seems that this increased prosperity is real, it simply came at the price of a temporary setback. However, this ignores that the recession is a real cost which could’ve been avoided. The recession indicates that time and resources are wasted forever, and these things cannot be regained. The time spent on training and moving labor and committing resources to some particular production structure is wasted. Growth without waste must be able to increase faster than growth with waste.

But, how are we to account for what growth did occur? Some investments did remain profitable even despite the recession, though we must not forget that the recession would serve to kill some investments which would’ve been profitable without the manipulation of interest rates, and some investments wouldn’t have been profitable under either course. Investment would have occurred without the manipulation of interest rates, and if investment never proved profitable, it never would occur in the first place. As such, growth does take place without manipulations, and can occur even despite manipulations!

As our analysis finds, manipulations cannot of themselves produce real growth, and what growth does occur occurs despite the manipulations, rather than because of it. Manipulations impose great costs on society, since time and resources are wasted on the production of goods and services which it is not profitable to sell, and that time can never be regained while the resources at best might be recycled.

How are manipulations effected? I will cover that in Part 3.

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What causes booms and busts? Why is the upward procession of the economy so prone to downward recessions? It is nothing so exciting as things like animal spirits, drops in consumption, or anything like. It is caused by a divergence of the rate of savings and the rate of interest. To put it very simply before I elaborate: the rate of savings determines the natural, or “real,” interest rate; if the interest rate is distorted so that it does not reflect the rate of savings, and thus is no longer a natural rate of interest, then it follows that the building up and consumption of resources in the pursuit of investments to ultimately produce items of consumptions will eventually lead to the market being systematically overfilled with products that consumers do not buy because they did not save so that they could buy such items at a later time. At this point it is discovered that investments are not profitable, so a readjustment of ownership and capital ensues economy-wide, which leads to widespread unemployment to a degree as high as the original distortion. This will be painful, but will quickly lead back to resources being properly utilized, and employment will pick up again. That is, it will pick up again assuming the economy isn’t further distorted.

The moral of the story: Investment not backed by someone’s real savings will lead to recession.

So first, what does savings have to do with the interest rate? The interest rate is essentially the price of borrowing, wherein the price is paid at a later date for present resources. It makes perfect sense to borrow in the expectation of paying it back; if I can borrow $1 today to pay back $1.10 tomorrow, but with that dollar I make $2.10, then I’ve made $1. The person who lent now has an additional $.10, I have an additional $1, and I will (presumably) have provided an economic resource to someone else who is also better off for having it (otherwise why would they use their money to buy that, and not another thing?).

If it is difficult to save, say because one lives in a poor society and a large amount of income is dedicated to immediate consumption, then one must be offered more future money to part with present money. The extent to which present saving, or present withholding of consumption, is found less preferable than simply partaking in present consumption, drives up the price of borrowing, which is to say that it increases the rate of interest.

On the other hand, if one finds it easier to save, either because they do not need to devote such a large portion of their income to present consumption or just because they are able to easier restrain their spending, then they will be more easily persuaded to lend at lower rates of interest.

Of course, supply is only one element of the price of something. The lender, who supplies savings, has only half the say in the rate of interest. Of course, if they had perfect control, then they would raise the rate of interest to infinity, which would lead to extremely high rates of savings.

If interest rates were that high, however, then no one would borrow. Borrowers are those with a demand for present money greater than a demand for future money. That is, they are in a position where they judge it to be likely profitable to spend money in the present on something in order to produce for the future.

If someone is more sure that they will be able to turn present money into future money by investing in some venture, then they will have greater demand. Greater demand means they are more willing to pay a higher price for borrowing, which means that greater demand for present consumption (much like with the lender!) leads to higher rates of interest. Conversely, a lower demand for borrowing would lead to lower rates of interest.

The real rate of interest then reflects that middle between what persuades people to save money and what lets borrowers to spend future money.

We can note that the rate of interest in its own right is a form of information. Low interest rates tell people now is a good time to spend in the present, whether potential lender or actual borrower, while high interest rates tell people now is a good time to save for the future, whether actual lender or potential borrower. Expressed as a simple formula, the (natural) rate of interest correlates inversely to the present rate of consumption. In other words, higher interest rates mean lower present consumption, lower interest rates mean higher present consumption.

Seeing that such a relationship holds, it is obviously tempting to economists and politicians of a certain disreputable bent to have it in their designs to lower the interest rate at whatever means, since such would lead to an increase in spending and thus give the appearance of prosperity as people who would otherwise save are persuaded to spend on items of consumption as well as borrowers to spend on investments, which provides people jobs and uses up resources. The aggregate effect of a lowered interest rate will be a higher GDP, since higher spending = higher GDP. As you surely have heard, high GDP is good. The effects of such a plan, if it could be implemented, will be systematic and economy-wide. It follows then, that if such a design will lead to investments which produce more than people will later consume, there will come a period of time when it is understood that the investments made in the past are not as profitable as they seemed they might be; this would lead to a selling off of accumulated capital and the firing of employees. If such plans are unsound, they will lead to an economy-wide recession as the economy readjusts by redeploying previously committed capital and employees.

How would such a design to lower interest rates through artificial means be achieved? Who advocates such a design? Is it a reflection of present policy? If such a policy is unsound, what makes it unsound? I’ll come back to that in Part 2.

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I wish to propose a principle concerning the epistemology of social and political policies. The principle is this: “Unless one understands the costs associated with the implementation of a policy, they do not understand the policy they advocate.” This principle is obviously very relevant to politicians. How many times have we caught them suggesting that the costs of their favored policy proposal are essentially nil? Of course, that rhetoric is probably because people are just very poor thinkers in the first place; if someone acknowledged the costs, while their opponent didn’t, suddenly it seems that only one plan has costs, no matter that this obviously can’t be the case. I don’t think we can expect politicians to speak intellectually on politics, since politics is, after all, the business of persuasion, rhetoric, and image (the cult of personality is just this to the extreme, and is different from most politicians’ practices by degree, not quality).

For that, we should expect intellectuals to be up front about the costs of their policy proposals, obviously with the assumption that the benefits will outweigh them. Yet how often do Krugman et al. acknowledge the costs of Keynesian spending and inflationary policies? Then again, perhaps they are no longer intellectuals but political lackeys. Such would be an “uncharitable” supposition, but then again academics have pretty much always been in support of the presiding political regime, and if they dissent, they tend to dissent to the extreme representation of that regime. Fine, I suppose we can cut academics-qua-academia out of the group of intellectuals as well. I have no hard feelings on the matter.

But who does this leave that will acknowledge the costs of proposed policies? Most people, in my experience, aren’t even able to comprehend the fact that there is no such thing as costless activity. In fact, when one tries to be up front about cost, others just jump on that as the primary reason to not support what you’re proposing. What, in anarchy it might be harder to separate children from neglectful and abusive parents? Sure. But then again, in statism it’s too easy to separate children from their parents for wanting to homeschool. Which cost do we prefer here? Some children broken at the hands of their parents, or some children broken at the hands of the system? Not an easy decision, but not one we can’t pretend to side with either way.

I’m going to be formulating and attempting to describe the social institution of justice (i.e. laws, police, courts, defense, etc) as it would happen in anarchy in the upcoming months. I bring this up because most objections to an anarchical arrangement of this social institution has to do with costs that are likely to be real, albeit to a degree far lesser than supposed and certainly to a degree lesser than it would likely occur under statism (and this as the comparison of the arrangement in similar cultures, not, say, the tribalistic and warlord favoring culture of Somalia vs. the individualistic and liberty preferencing culture of America). This is just some framework building as I think up my means of presentation.

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Let’s continue our riff on the concept of wage slavery. I was quite surprised to hear an argument supporting the concept which was reasonably sound. Now, I still think the argument is complete bunk, self-defeating even, but I can see why it is at least prima facie alluring. You can say that’s as good as it gets from me.

The argument goes like this. “Wage slavery” is a licit and accurate term because it describes those occasions when the workers are forced to accept their offer from an employer because the employer is exploiting the poor worker’s lack of effective agency. That term, “effective agency,” is important. It means simply that a person has a wider degree of choices available to them which they might affect. Someone who is poor in a poor society has little effective agency since there are few options available to them for how they might get along; after all, they don’t have much access to education or even a means to improve their lot by learning a valuable trade. They have essentially one choice; accept the menial labor in the factory, because while it’s dehumanizing and mindless, it’s still better than any other options. This is “wage slavery.”

Now let’s critique it.

First, right away, I think we can note that the opportunity to accept that sort of job is still something which improves the plight of our poor worker. After all, the factory might not have come to town, and then their options would be even worse (for we can assume that they choose factory work because, amongst their other options, it is still better; hence, lacking this option, their remaining options are worse). Anytime we are going to use the concept of slavery to describe something, it should be understood that this is not also someone’s best option, and whatever results in slavery should be removed from a system. However, if we remove this employment opportunity, we would manage to leave them worse off than as “wage slaves.” Thus, there seems something fishy in the concept of wage slavery when you make the comparison in this way.

Someone might rebut that the wealthy West could certainly afford to provide a better “living wage” (another cringe-inducing term!), and I could concede that that is probably the case. However, I might then point out that one of the greatest influences on keeping the wages of third-world workers lower is the anti-free trade tariffs and quotas enacted in first-world countries, who are the largest consumers of cheap third world labor, ostensibly in order to protect the jobs of our “working poor.” I would call that a dissonance if ever there was one. Solution to increasing the wages of third-world workers? Let them compete more directly with first-world workers who produce less of the same goods but receive higher wages! When more people are buying from you, you get paid more.

Finally, we come around to the way in which this analysis of wage slavery by way of effective agency is self-defeating. It is supposed as a matter of course that exploiting someone’s lack of effective agency is what creates wage slavery. Therefore, we need to impose higher taxes or something like that. However, a socialist, or government, solution hinges on the elimination of effective agency in order that those whose effective agency has been eliminated might be itself exploited by the government! If we mean to increase someone’s effective agency, then the solution cannot be the reduction or elimination of someone’s effective agency. That is like insisting that we need to steal in order to keep people from stealing! (Which is something people implicitly do when they argue that we need taxes in order to have a police force.) If we value the increase of effective agency, then we must disvalue the reduction of effective agency. As we can see, even supposing that there is such a thing as wage slavery, it cannot be solved by substituting another form of slavery, namely tax slavery.

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I started school yesterday. This is now my junior year. Here are some recently inspired thoughts as I wait between classes.

As we know, when you subsidize something, you get more of it. And what is subsidized? College. In fact, it is subsidized quite heavily. Taking this into account, we know that the kinds of resources that get pushed into it (that is, young adults) will diminish in quality. This can be illustrated quite easily. The production-possibility frontier stipulates that, as you increase the production of one thing, you decrease the production of other things; however, returns will inevitably diminish, since some resources are better suited for the production of one thing rather than another thing.

From this I believe we can conclude that certain cultural facets like the pervasiveness of partying, binge drinking, promiscuity, drug abuse, and the like as a part of the “college experience” are the result of the subsidization of higher education.

This might be taken as an example of something I’ve been thinking about in a more general way. What is the relationship between government influence and decency? Hans-Hermann Hoppe proposed that, as government intervenes in the economy to a greater extent, people have higher and higher time preferences, which means that people are less likely to act decent, since decency is much a function of lower time preference.

Also, what of the quality and quantity of education? The production-possibility frontier analysis would also seem to indicate that, as you increase the quantity of education by the use of subsidies, the quality must diminish. You have more people who choose to be professors who would’ve been better suited as, say, business accountants. And these professors are subsequently of a lower quality than those who would’ve otherwise been professors in a university system free of subsidies.

I would propose also that the quality of professorship, that is, the actual teaching of students by the instructors, is at an inverse relationship with the pressure to publish and pad one’s resume. After all, the time spent by a professor producing a paper cannot be spent by that professor in preparing lessons or attending to the needs of students.

Now, is there a relationship we could diagnose between subsidization of higher education and the pressure to publish? I feel like there must be. After all, the pressure to publish appears to be a more recent phenomenon, even growing as subsidization has grown.

Perhaps it is like this. Subsidization is not applied equally throughout the university system, and some universities are more eager and willing to accept state funding for their activities, especially as the intellectual character of their faculty becomes more trenchantly socialist-statist. As such, there are disproportionately higher salaries at these institutions, as well as greater prestige. Why would there be greater prestige? More funds from the state means greater state oversight, which also tends to mean a greater rate of exchange between the institution and the state, such that those who are members of the institution become in increasingly direct and official means state sponsored intellectuals who also have more influence on the policies of the state (something we usually call “power”). Therefore, there is a disproportionate pressure to pad one’s resume by any material means, such as publishing, and each of these things takes away from the instruction of students.

Ironically, the increase of publishing also leads to a diminished quality of publications, for the same reasons as stated above.

In short, the decreasing quality of higher education in each of its individual forms of degeneration is due to the intervention of the state.

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Further on Wage Slavery

My original post on wage slavery here. This will be a response to jleavittpearl’s response to that original post. I’m going to call him J. for short.

I believe that the junction of difference comes down to the question of my critic, as J. puts it.

Why, asks the critic, must work be mediated through an irreal system before it might be of value, not economic value, but real, human, everyday value.

To this I can only respond that it is because this is how the real world works. The “irreal system” is simply the system that comes about when many people come together in order to mediate the allocation of labor and resources to the production and distribution of goods and services. Pretending that this system somehow “isn’t real,” such that it might be called “irreal” or even “alienating” puts a fine spin on the issue, as though somehow people making promises shouldn’t be carried out, that is, when the laborer agrees to be provided with a wage by using the property of their employer at a work that is in place because others have chosen to value the product. This is my particular point at issue, especially if you consider where J. goes on to say “the model of a non-wage based economics is […] the artisan, the craftsman, for whom a ‘wage’ is irrelevant.” But that’s exactly what I find ridiculous: that people shouldn’t act in order to produce something that they, or someone else, values. Unless it were valued, it shouldn’t be produced; and because we’ve found that we can have more of what we value when we engage in this division of labor, we engage in a specialized role in order to get wages in the form of currency that provides a means for indirect trade with others so that we may obtain the things that we directly value. This romanticization of “the artisan, the craftsman,” overlooks the fact that they choose to work because they care about their wage; it just so happens that they also happen to employ their own capital, the only difference in their own model than the capitalist model.

But why employ the capitalist model? That is where the Marxist gets hung up on this issue (I realize there are many more contentions, but we’re dealing with this particular one for now). Rather than admitting that people have figured out a better way of doing things than relying on self-capitalized artisans and craftsmen for a large part of those things we consume, we have instituted factory lines and automation, in order that more of what we value gets produced, and thus we can each have more of what we value. Frankly, if the co-op model made us wealthier, then it would be practiced much more often, since it is finding a way to produce more of what people value with less work and less capital that succeeds in a capitalist economy, and the capitalist economy is the one we choose to employ when we are free of state coercion. If we suppose that I’m wrong about the co-op model, and that it is 1) a model of production that would produce more and 2) a model of production overtly valued by laborers (insofar as we consider their interactions as being free of statist coercion), then I can only suggest to the respective Marxist (and distributist, as this also seems their sort of thing) that they go ahead and enact this sort of model, since there is money to be made!* In fact, quite often there is the possibility of buying stock in one’s own company; but if one doesn’t choose to capitalize in their own line of work, then they shouldn’t complain that they don’t. On the other hand, if the capital provider doesn’t want to provide the option of buying stock in their capital, that is also up to them, since it is, after all, their own property.**

*Obviously, one cannot object that this is a wrong end, since isn’t the point of overturning the “wage-based economic/productive system” also supposed to be that it will make us all wealthier? Then there’s nothing wrong with working to make us all wealthier, if a co-op model of production were to do that.

**Marxists will reply that it is, for dubious reasons, unjust that people might privately employ “the means of production.” As an economic issue, it’s very clear that private ownership of the means of production provides prosperity; and as a moral issue, I can’t begin to comprehend their reasoning.

But, I’m skeptical that a co-op model would make us wealthier. Assuming that what occurs in markets provides some level of useful information, then looking around and seeing that it is the “capitalist model” which is in place (someone works to provide the capital that is utilized in production, and he pays the laborers ahead of time for the value of what they produce according to mutually agreed contracts) wherever statist coercion is not the case, I can only suppose that it is a more effective distribution of labor.

However, I can note that the position provided by J. is remarkably tentative compared to the use of the nigh propagandistic term “wage slave,” since, as I pointed out in the original post, it seems to usher in a moral obligation to free people of the “slavery” of “working in order to get things that we value.” If it is only meant that there is some problem with the model employed that we find to be profitable (which means that it produces the most of what we value, that’s why things become profitable, sans statist coercion!), then perhaps something like “labor romanticism” would be a better description of what one would prefer to be the case. But even that seems to me to be far-fetched.

I can concede that I obviously produced an analysis of the idea of “wage slavery” within the perspective of something that might be broadly described as a conservative anarcho-capitalism (for reference, see the Austrian school of economics), but I believe the reasons for doing this are simple: it is the correct perspective, and the Marxist perspective on, say, value, is wrong. As such, I don’t stand in that alternative perspective, and reject it as forcefully as my reasons in favor of not stealing strike me as integral moral convictions and practice, because, quite simply, any perspective other than anarcho-capitalism involves the implicit condoning of stealing.

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