Is the state a market outcome?

[StrangeLoop]

@Ludwig von Mises

The ultimate end of action is always the satisfaction of some desires of the acting man. Since nobody is in a position to substitute his own value judgments for those of the acting individual, it is vain to pass judgment on other people’s aims and volitions. No man is qualified to declare what would make another man happier or less discontented.

If human action is purposeful, then all choices are made to satisfy preferences. That does not exclude behavior that is ideologically contextualized as statist. This, following George Stigler, is why we cannot so brashly dismiss public policy: if we assume actors behave according to their most-valued preferences, then the State is the outcome of that behavior.

Even if we color this analysis with a libertarian brush, the argument does not disappear. I would argue that the optimal rate of crime is not zero (the resources needed to stop every murder, for instance, is probably not being applied to the most-valued use of those resources); likewise; even if we cast the government as a “gang of thieves writ large,” then the presence of it seems to indicate that actors have not found it economically attractive to abolish it. Such economic analysis is entirely positive, without the normative stink that accompanies “pass[ing] judgment on other people’s aims and volitions.”

[nirgrahamUK]

if we assume actors behave according to their most-valued preferences, then the State is the outcome of that behavior.

yes, but are they doing so under a regime in which their interests are harmonized or under which what would have been mutually beneficial consenting capitalist acts between have been thwarted?

even if we cast the government as a “gang of thieves writ large,” then the presence of it seems to indicate that actors have not found it economically attractive to abolish it.

yes, hence the libertarian project continues, if what you state was not the case, what do you think libertarians would all be about?

[StrangeLoop]

@nirgrahamUK

yes, but are they doing so under a regime in which their interests are harmonized or under which what would have been mutually beneficial consenting capitalist acts between have been thwarted? . . . what do you think libertarians would all be about?

I assert that individuals know their interests and optimize in searching for information (including political philosophy). I think that libertarians, for the most part, are shouting in the wind: given the opportunity set present, humans are choosing their most highly-valued preferences.

I do believe that speculative models of anarcho-capitalism are better (more welfare-enhancing) than what we have; however, I do also suspect that our present institutions embody a logic that evades our best analyses.

Where is the demand curve for statelessness?

[MJGreen]

I for one agree with the gist of that, StrangeLoop; as I said, I think there is an important issue here. But distorting the definition of “market” or “anarchy” to make the argument seems like a cheap attempt to trap free market anarchists (referring to z1235, not you). I also want to stress, once again, that rational is not wise. You’re kinda slipping into a neoclassical caricature when you say, “the presence of [the state] seems to indicate that actors have not found it economically attractive to abolish it.” This assumes perfect information: that actors know, or even consider, the benefits to be had from dismantling the state. I don’t recall ever getting a satisfactory response from you on this, in that Government is Efficient thread.

The state is a product of individuals acting rationally, and even oppressed citizens act rationally when they continue to obey or legitimize the state. The rain dancer acts rationally, even though all he does is uselessly expend energy. The question is whether individuals are adopting the proper means to satisfy their given ends. (in addition to the separate ethical question, which does get tied up with the proper economic question)

@liberty student

Yes. This bit is squishy. What % between 0 and 100% is the line where markets aren’t working?

Markets exist when private property is being exchanged voluntarily using a common media of exchange. If some goods are banned, prices above or below a certain level are prohibited, practices are regulated, etc., the market still exists. It still “works,” it is simply working around these interventionist barriers. It works with the knowledge that, should these rules be violated, there is the risk that the state will punish violators. Life would be better if there were no interventionist barriers, and the market would be better coordinated, but it still “works.”

[nirgrahamUK]

I think that Stiglerians, for the most part, are shouting in the wind: given the opportunity set present, Misesians are choosing their most highly-valued preferences.

I do also suspect that the present opinions and pronouncements of Misesian’s and their institutions embody a logic that evades the best analyses of Stiglerians.

[EconomistInTraining]

99% of the time, libertarianism is cheap talk.

[MJGreen]

You know that a priori, or do you have the empirical data to back it up?

I want to see graphs and equations, people!

[ClaytonB]

Where is the demand curve for statelessness?

I think it would be nonsense to speak of such a thing. However, I think you have touched on a long-standing deficiency in our tools for analyzing social interactions, especially interactions that involve manipulation and the use of force. Economics ignores the problem by building a very high wall around its domain called “voluntary” so that it exclusively concerns itself with interactions to which both parties clearly wanted to be party and ignores all the hobgoblins involved in interacting with government (or being a government), criminals, and so on, as lying somewhere out there in the dark forests of “Coercionland”.

The reality is that even in a Utopian, stateless society composed of normal human beings, high-status individuals would possess privileges and advantages that low-status individuals would not. The good-looking jock will get his way more of the time in interactions with the goofy-looking nerd. If we were to look at a society composed of such individuals but without being able to see the human attributes that make them into “winners” and “losers” (their looks, mannerisms, family background and social networks, and so on) it would be very tempting to say that the winners must be using force or the threat of force against the losers. This has nothing to do with coercion and it’s not something that is fixed by prices, markets, rationality. It has everything to do with human nature - our tendency to assume that good-looking people are more trustworthy and ugly people are less trustworthy, and so on.

Nevertheless, nobody accepts such primitive attributes that signal social status as a rational justification or inculpation. In other words, if a good-looking man murders someone, he cannot say in a court of law, “But I have great genes!” and, vice-versa, if an ugly man is sued at court for something he didn’t do, it is irrelevant to say, “But he’s ugly, he must be guilty!” So, there’s a limit to how far these in-built primitive social inequalities distort the social fabric and law itself acts as a negative feedback on the whole problem.

However, the statist order systematizes winners and losers by designating special individuals as exempt from legal liability for their actions, right from the outset. The Prince cannot be sued by one of his subjects even if he bulldozes their home to expand his palace (think of the story of Naboth’s vineyard). So, these primitive attributes of human nature - the signals by which our ancestors recognized high-status and low-status individuals - have been systematized. And yet there is no reason to believe that these systematized privileges actually reflect any underlying reality about the status of the Prince or the nobility in general beyond the mere fact that the privileges continue to exist.

Part of the problem is the extremely thin market in law and also the absence of analytical tools by which to study law itself, and I mean law as a service, meta-law, not specifical legal cases. I believe what is needed is a theory of arbitrated exchange.

If Peter exchanges three apples for Paul’s orange and no guns, knives, blackmail or other extortion was a factor, then we can assume that Peter values an orange more than three apples and Paul values three apples more than an orange. But what if Peter accidentally dents Paul’s car? Who benefits from any particular outcome of this situation? Paul could get mad and murder Peter, for example, but that’s clearly a bad outcome because Paul’s car is still dented and Peter is now dead. Paul might have the satisfaction of having gotten revenge but unless he’d rather have the satisfaction of revenge than an undented car (not likely, otherwise, why had he not earlier made this exchange?) he’s worse off than if Peter were still alive and the car had somehow been restored to its undented state. Less extreme, Paul could demand that Peter pay him money. Peter remains alive in this scenario and, if the sum is large enough, Paul can get his dent fixed. The best situation from Peter’s point of view is for Paul to drop it and just live with the dented car. In this scenario, Paul is worse off by a dent and Peter is no better or worse off than he was before he dented Paul’s car.

Peter and Paul could hire an arbitrator to help them sort through the possibilities but an arbitrator who does not have guns, knives, blackmail or extortion of his own cannot impose his decisions on Peter and Paul. He is merely a facilitator of discussion and agreement. My theory of arbitrated exchange is this: if the arbitrator can succeed in producing an agreement which both Peter and Paul find satisfactory, then we can say that Peter and Paul are better off than they would have been without the arbitrated agreement. This is different from a regular economic exchange because it requires two parties rather than just one party. However, if both parties can agree, then they can together make a mutually beneficial exchange, that is, exchanging one conflict between themselves (“you dented my car, now I’m going to kill you!”) for another conflict that both parties prefer (“You dented my car, pay to have it fixed plus the cost of my alternate transportation!”)

Clayton -

[liberty_student]

@z1235

@liberty student

@z1235

When has reality ever not reflected the aggregate outcome of human action (humans using means toward their subjectively valued ends)?

What is an “aggregate outcome”?

The outcome of humans acting (pursuing their self-interests).

Why aggregate? How do you aggregate?

@z1235

I value reality because that’s where I live and act. But values are subjective, so to each their own. I also think that actual outcomes of human action provide information about actual subjective valuations which drive the actions of humans.

I wrote a long response, and lost it. So that pisses me off, but I was already annoyed at this line of discussion, so now hopefully I will be a bit cooler.

We all value reality. We all live in the “real world”. Why I don’t like these appeals to reality, are that they are a shortcut, and contribute nothing to the discussion. Just saying, “Get real!” is not an argument. What you probably mean, is that you don’t like theory when your observations contradict it. But the conclusions you draw from your observations are also theories. Also, your observation is subject to bias. Your ability to perceive and analyze data is also questionable. Deduction is handy because you start with a premise and test it logically. It is either true or false, regardless of whether it has every happened in the “real world”. I have never tried to breathe in outer space, so that has never happened in the “real world” and yet from the permise that space is a vacuum, I know I could not. That’s a theory. Just as gravity is a theory. You have never jumped off a cliff onto sharp rocks, but you can theorize based on what you know about gravity, the distance and the fragility of your meatsuit, that you probably wouldn’t survive. That’without having to rely strictly on scenarios we have personally experienced and observed.

So please don’t appeal to the real world. Refute my theory. Show me my logical error. Show me where I have a false premise. But don’t go the lazy route and just dismiss me as fantasizing, because that is totally unproductive, as I take these discussions AND your opinions seriously, when you’re interested in making a good argument.

@z1235

Your idea is real, alright. So is the idea of (non-market) parasites to act in their own self-interest and profit from hampering your idea. So is my idea that all girls can be horny. All ideas are real. They exist – in someone’s head.

This ^^ is a non-argument. It’s a waste of both of our time. It’s a non sequitur based on your previous fallacy.

@z1235

Of course, voluntary exchange is possible. No one needs to be coerced. But why would a parasite care about your needs if he calculates that coercing you would be in his best interest?

Thank you for accepting that my theory is true. As to why parasites should care, I never asserted that. You’re mixing arguments.

@z1235

I understand them perfectly. You advocate that all exchanges be voluntary. I advocate that all girls are horny. We both wake up in the morning and observe that not all exchanges are voluntary and not all girls are horny. Tough titties for both of us.

I don’t think you do understand them, because you use non-standard definitions that seem to fit your conclusions. This goes back to your first debates here, I assumed (wrongly) that you had understood the Ancap or Austro-libertarian position, and understood the Austrian method as it pertains to human action.

I am not advocating anything here. I am simply indicating to you that the state as market outcome is a logical error, because the state and market are not compatible. You’re the one trying to advocate that we should care about something.

I suppose if I advocate anything, it is logical precision.

[I_Ryan]

@StrangeLoop

If human action is purposeful, then all choices are made to satisfy preferences. That does not exclude behavior that is ideologically contextualized as statist. This, following George Stigler, is why we cannot so brashly dismiss public policy: if we assume actors behave according to their most-valued preferences, then the State is the outcome of that behavior.

Can’t people have stupid preferences?

[ClaytonB]

Even if we color this analysis with a libertarian brush, the argument does not disappear. I would argue that the optimal rate of crime is not zero (the resources needed to stop every murder, for instance, is probably not being applied to the most-valued use of those resources); likewise; even if we cast the government as a “gang of thieves writ large,” then the presence of it seems to indicate that actors have not found it economically attractive to abolish it. Such economic analysis is entirely positive, without the normative stink that accompanies “pass[ing] judgment on other people’s aims and volitions.”

But that positivity is precisely the problem. Your argument certainly applies to slavery, as well, yet I doubt you would refrain from saying that the end of slavery was an improvement of society… hardly a positive statement. If you hold the positive position that slavery was efficient until its end (as evidenced by its existence) then that surely illustrates that efficiency and improvements to society are unrelated so it’s a mistake to say that anti-statism ignores the efficiency of the status quo in recommending social improvements. Anti-state recommendations can improve society irrespective of the efficiency of the status quo and, once these improvements have been made, a new status quo efficiency will quickly emerge.

For example, consider police brutality. It’s fairly easy to explain how it is that the incentives created by socialized courts, socialized prosecutors and socialized police inevitably result in police brutality. We don’t have to go to extremes and say “the optimal level of assaults is zero” in order to say that an end to police brutality would be an improvement. And if changes were made to the system (for example, closing down all public prosecutor’s offices would be a great start) that resulted in a reduction in police brutality, the new equilibrium level of police brutality would be as efficient as the prior level had been under the old system.

Clayton -

[liberty_student]

@StrangeLoop

Where is the demand curve for statelessness?

That’s a logical fallacy. It should feel wrong for you to even type it.

[StrangeLoop]

@Clayton

But that positivity is precisely the problem. Your argument certainly applies to slavery, as well, yet I doubt you would refrain from saying that the end of slavery was an improvement of society… hardly a positive statement. If you hold the positive position that slavery was efficient until its end (as evidenced by its existence) then that surely illustrates that efficiency and improvements to society are unrelated so it’s a mistake to say that anti-statism ignores the efficiency of the status quo in recommending social improvements.

Actually, when libertarians (many at LvMI) argue against Lincoln’s interventionism, they claim that slavery more often than not ends peacefully: as societies become wealther and or as slavery becomes more economically inefficient.

But don’t get me wrong: I think as government increases its costs, as information cheapens (e.g., LvMI’s free digital books), and as alternative political systems become less costly (e.g., Patri Friedman’s seasteading), we’ll have a shot at approaching libertarianism.

[liberty_student]

@Michael J Green

Markets exist when private property is being exchanged voluntarily using a common media of exchange. If some goods are banned, prices above or below a certain level are prohibited, practices are regulated, etc., the market still exists. It still “works,” it is simply working around these interventionist barriers. It works with the knowledge that, should these rules be violated, there is the risk that the state will punish violators. Life would be better if there were no interventionist barriers, and the market would be better coordinated, but it still “works.”

So 1% is enough?

[StrangeLoop]

@liberty student

@StrangeLoop

Where is the demand curve for statelessness?

That’s a logical fallacy. It should feel wrong for you to even type it.

People demand government; people aren’t demanding anarchy.

[liberty_student]

@StrangeLoop

Actually, when libertarians (many at LvMI) argue against Lincoln’s interventionism, they claim that slavery more often than not ends peacefully: as societies become wealther and or as slavery becomes more economically inefficient.

I have never seen this. Source?

@StrangeLoop

But don’t get me wrong: I think as government increases its costs, as information cheapens (e.g., LvMI’s free digital books), and as alternative political systems become less costly (e.g., Patri Friedman’s seasteading), we’ll have a shot at approaching libertarianism.

We won’t have a shot at libertarianism if people make excuses for the state, or treat the state as a bad design, instead of something which is distinctly anti-social and serves no purpose but to undermine freedom.

[liberty_student]

@StrangeLoop

People demand government; people aren’t demanding anarchy.

Yet another logical fallacy. Argumentum ad populum. Your inability to articulate a good argument always make me laugh. If you’re the best of our critics, then this is a cakewalk.

[StrangeLoop]

@liberty student

I have never seen this. Source?

http://www.lewrockwell.com/dilorenzo/dilorenzo146.html

@liberty student

We won’t have a shot at libertarianism if people make excuses for the state, or treat the state as a bad design, instead of something which is distinctly anti-social and serves no purpose but to undermine freedom.

I tend to have a “comparative institutional analysis” approach to the world: all our institutions suck, but which suck the least? For instance, in The Machinery of Freedom, Friedman openly admits his uncertainty about whether statelessness could provide adequate national defense against foreign aggressors; that’s the style of my thinking–the State isn’t great, but there are certainly worse possibilities.

[StrangeLoop]

@liberty student

Yet another logical fallacy. Argumentum ad populum. Your inability to articulate a good argument always make me laugh. If you’re the best of our critics, then this is a cakewalk.

Actually, like usual, you’ve just rejected other ideas because of your cultist perspective. And, like usual, you’ve once again misapplied a logical fallacy. An argumentum ad populum is when a speaker contends a proposition to be true or false because many people share that belief. What proposition did I assert was true simply because most others share it?

I have not stated “government is good” or that “government is needed”; I asserted that government exists because people demand it, much like McDonald’s still exists because people demand it.

The existence of McDonald’s is not an argumentum ad populum, either.

[Lilburne]

@liberty student

@Michael J Green

Markets exist when private property is being exchanged voluntarily using a common media of exchange. If some goods are banned, prices above or below a certain level are prohibited, practices are regulated, etc., the market still exists. It still “works,” it is simply working around these interventionist barriers. It works with the knowledge that, should these rules be violated, there is the risk that the state will punish violators. Life would be better if there were no interventionist barriers, and the market would be better coordinated, but it still “works.”

So 1% is enough?

The extensiveness of property rights required for there to be any market at all depends on the data of the situation and anyway is not subject to quantitative measurement, aside from 0% (which simply means there are no property rights) and 100% (which simply means that there are property rights, and nobody is abrogating those rights).