I began reading George Stigler’s book The Economist as Preacher, and Other Essays. The first essay is titled “The Economist as Preacher” and touches upon these same themes, and I heartily recommend it. Here is the best version I could find online.
I have previously read the Mises’s defense of advertising, and I agreed with it then and now. It seems that Student does, as well. However, Mises argues that “political propaganda and business propaganda are essentially different things, although they often resort to the same technical methods,” but I fail to see how they are “essentially different things.”
The problem is that it is hard to claim that advertising does not produce artificial wants, while government is capable of doing so. If anything, the “threat of force” should, if the libertarians are right, make the population even more keenly aware of the undesirability of the State.
That is, if you wish to counter Galbraith (and the Frankfurt School, etc.) and insist that humans have sovereign preferences, then it becomes logically difficult (impossible?) to claim that their preference for government is the result of indoctrination. Additionally, if as Mises argues, both political and business propaganda use “the same technical methods,” then why do those methods only sometimes qualify as brainwashing?
Once again, Student and I are maintaining consistency: we defend individuals as behaving with sovereign preferences and for their best interests in all social institutions. (I do not mean to speak on behalf of Student, but I suspect he would confirm that statement.)
Strange Loop,
I would indeed confirm that statement. 
I would only elaborate on why Mises’ attempt to distinguish political and business propoganda doesn’t convince me.
Specifically, he says “The housewife who has tried a particular brand of soap or canned food learns from experience whether it is good for her to buy and consume that product in the future too…In political matters, experience is always the experience of complex phenomena which is open to different interpretations” In other words, it is difficult to use your experience to evaluate political doctrines because that experience is always "the experience of complex phenomena which is open to different interpretations.
Yet, I don’t see why this same argument couldn’t applied to many (most?) of the products/services we buy. Take pharmaceuticals for example. It is notoriously difficult to evaluate the performance of a particular pharmaceutical because our bodies are complex systems with a multitude of factors determining whether we are healthy or sick. In fact, it is so difficult to evaluate the performance of a drug that it almost impossible for an individual to learn from experience whether a particular pharmaceutical is good for her to buy and consume in the future (google “placebo effect” for an example of one difficulty in making this determination).
Maybe Mises was arguing for the FDA without realizing it.
PS* I would also add, now that I am thinking about it again, Mises is implicitly assuming consumer soverignty in his argument. He is essentially saying that people have well defined preferences for soup or soap and that they can evaluate the quality of that soup or soap (independent of the advertising campaign) to determine whether the product satisfies those preferences. In other words, he seems to be only considering the “informative role” of advertising. Yet, in the discussion up until this point, I thought we had been talking about the government’s ability to partially determine an individual’s preferences.
So now I am not so sure if the Mises argument even directly speaks to the conversation as i understood it. But I could have been misunderstanding the conversation.
Maybe everyone should just qualify what their arguments are. Do governments brainwash people into wanting a state (no consumer soverignty?) or do governments misinform a public that would otherwise prefer a “freer” society, but individuals cannot evaluate the government’s claims through experience because they are dealing with complex phenomena (consumers are soverign, but misinformed)?
But keep in mind. I don’t think holding either one of those opinions consistently will lead to conclusions that austrian anarchists will like.
The rest of you point are pretty petty, so I’m going to focus on the substance of your post.
Can you name these specific “public goods problems” which the market cannot resolve? This is going to be a fundamental issue on a community primarily about Austrian Economics.
This is something of an unfair challenge, especially giving the argument I’m putting forward here. The argument we’re advancing is pretty simple, the public goods problems that cannot be solved by the market are currently being solved by the state when it’s efficient that it happens. If it weren’t efficient for the state to be supplying these goods then they wouldn’t be, some sort of bargaining would have occurred which would transfer state provision of public goods to private provision (as has happened). So, the easiest way to find where markets fail is simply to look at where governments are already intervening; law, the environment, defence, national monuments and so on and so forth.
Violence?
This missed the point entirely, if it were inefficient for states to persist they wouldn’t do so. I believe there is some optimum level of violence, and that is the level of violence we have. You just have to ask the question, if state violence is so unbearable why is it that people haven’t risen up and abolished the state once and for all? Simply because the cost of doing so don’t justify the benefits.
By the way, for the record, my point about the places was a response to a pretty specific point by somebody who claimed that a man getting mugged on his way back from the cinema is acting inefficiently, I paraphrased George Stigler’s quip about missing planes at airports because the point isn’t that getting mugged isn’t efficient, the point is to balance costs and benefits of walking to the cinema.
This is an Austrian insight. And still not relevant.
Would you mind elaborating on this? I’m not how the fact that we’re not in a far more scientific society is an Austrian insights.
I feel systematically ignored in this thread.
When I answer a post, I try to leave out bits of the post that seem to agree with what I’m saying, lack substance or aren’t relevant. If you’d like me to pick up on something you feel I’ve missed, go ahead and point it out.
PS: props to Student and StrangeLoop for some great posts.
I really don’t understand how this is not an easily-understood point in a community of economically-literate individuals.
There are many costs out there: mosquito bites, smelly garbage, home intrustion, etc., and we minimize those costs as much as is efficient for us. There is no reason, despite stubborn ideology, to claim that the aggression (or “crime” or “coercion”) of the State is radically different from the rest.
Not preaching, informing. People make mistakes, people have false information. One task of the economist is to inform of what means can best accomplish people’s desired ends. And you arguments bring nothing but conformism to the status quo.
Your argument doesn’t prove an institution’s desirability. It proves it’s ability to witstand abolition, that is it, nothing more.
If everyone gets to know the option of anarcho-capitalism and all its connotations, then I concede that your argument may have some weight. But in a world where people are born in the state, are taught all kinds of BS, and never even heard of alternatives, then of course most are gonna stick with it. It’s praxeologically valid. What is invalid however, is this idea that thugs with guns are efficient at anything past pointing guns at people and maintaining their political power. They’re not, and to prove that they are, you got to put the guns down first.
Even if it’s not cost-beneficial for me to get rid of a certain level of x, doesn’t mean x is at all desirable, nor does it mean x is being efficient at anything other than existing and perturbing me.
There are many costs out there: mosquito bites, smelly garbage, home intrustion, etc., and we minimize those costs as much as is efficient for us. There is no reason, despite stubborn ideology, to claim that the aggression (or “crime” or “coercion”) of the State is radically different from the rest.
Right on, thing is that even in hypothetical anarchtopia there’s no reason to believe that PDAs or whatever would go about stamping out all crime, presumably they’d let some pretty thieves or guys starting drunken fights go free, even though they’ve committed aggression. Once you admit this, you’re conceding there’s some optimal level of violence. After that it’s all a matter of degree…
I also want to state that, personally, the State is not without benefits. I believe Robert Nozick has done an excellent job articulating them in “The Zigzag of Politics” (found in The Examined Life). In fact, I wouldn’t mind calling myself a “zigzag libertarian.”
P.S. I started this as an anarcho-capitalist and ended as an exceedingly pragmatic libertarian!
. It doesn’t follow that the institution itself is ‘efficient’; it’s just efficient at preserving itself. This theory has been elaborated extensively before.
You’re missing the point, is there a coordination problems in “eliminating the state” all that means is that including transactions costs, the benefits of moving towards anarchy are less than the costs. In other words, it’s not efficient.
Also: the fact that the neoclassicals here just do away with ideology - ‘it’s all just interests’ - makes it really hard to see for them to see this (part of the) argument.
Caplan, who is pretty Austrian, states that ideology does matter. Under certain circumstances that is, namely, when the stakes are low.
I don’t get it. After all the methodology discussions - which you basically just left - how come you still have a ‘low opinion’ of Austrian Economics? (Maybe you can answer that in another thread.)
I’ll get back to that topic soon! Sorry, I’ve been pretty busy. Why do I have a low opinion of Austrian economics? It’s basically neoclassical economics with a load of philosophical baggage, libertarian politics and without the insight.
I also want to add that Stigler’s line of reasoning means that investing one’s time in arguing pragmatically, rather than ideologically, is more likely to generate positive returns. That is, if the transition to an anarcho-utopia involves large costs (e.g., collective action, uncertainty, etc.), then making a less-costly tansition (e.g., school vouchers) is much more likely.
Thus, arguing as Friedman rather than Block is economically more advisable.
Of course, Stigler’s pessimism (or perhaps optimism at the world developing efficiently) means that if even these relatively small adjustments have not happened, then the costs are still too high (i.e., and comparative benefits might still be too high–e.g., the satisfaction of symbolically being committed to the poor through minimum-wage legislation might outweigh the material gains of abolishing it.)
“You’re missing the point, is there a coordination problems in “eliminating the state” all that means is that including transactions costs, the benefits of moving towards anarchy are less than the costs. In other words, it’s not efficient.”
<= Oh, but that’s just basically the question: ‘efficient for whom’? The point is that given a strictly utilitarian analysis, you are correct. That’s my major problem with people like David Friedman and all. Morality does matter. It is true that ‘going’ to anarchy has a lot of costs for a lot of people; because they can’t claim their coercion any more and/or people voluntary abstain from benefits to have this coercion. That’s why a strictly utilitarian argument for anarchy fails and why you need the moral argument too.
So I’m in complete agreement there; the costs are ‘too’ high, but they are high for the people who should bear those costs. So yeah; I agree.
You possess the One True Morality?
oh cmon!
“look, you may be worse off moving to a stateless society because the costs of transition may exceed the benefits, but its really the only moral thing to do. trust me.”
with these types of arguments for anarchy on our side, how can we lose!
But let me ask you something. Now that you have proven that things that exist, exist for a reason, is your idea to advocate any kind of change?
No, but I do think there is something morally wrong with the institution the state.