1.) Governments cannot solve poverty, they can only create more. (In the real sense, of course they can always redefine the ‘poverty level’ to suit their needs.) The government and the banking cartel engage in massive inflation destroying the value of the dollar, which hits hardest on the poorest. Regulations and price controls drastically raise the cost of market entry and operation, thus keeping out new business ventures by financially strapped upstarts and small businesses. In the laissez faire era, many of the self made millionaires started with very little financial assests.
If you can’t convince on logical or philosophical grounds, maybe present the case against governmental intervention in the free market from a historical perspective. The recently posted recordings of Rothbard’s 1986 “American Economy” class provide tons of historical examples that destroy the orthodox view that government regulation is designed to protect the consumer against evil business interests.
They do?? There are people in welfare bureaucracies who are basically un-self-interested more than the population average? If so, then I would like to understand the selection mechanism by which welfare bureaucracies manage to recruit all the selfless people and leave all the selfish people to go work in private corporations. Once we understand how the churches, police departments, welfare bureaucracies and grade schools manage to recruit selfless people, we can take this formula and apply it to the private sector and Voila! problem solved.
This is a mental exercise more than anything. Go back and re-read what Bastiat says about those who are supposedly made from a finer clay than the rest of us. The point is that the socialist is making a remarkable claim regarding the inherent selflessness and heroism of the redistributing-class - like claiming that angels exist and are real - that requires some evidence or reasoned argument to back it up.
Donation, as has been noted, is voluntary and, therefore, can be laudable. As for who is more moral than who else, well, I’ll leave that debate to the theologians and self-flagellation types… it seems to be a pointless and futile endeavor as almost no one believes they are a horrible person and most people believe they are the very best they can be, morally and there seems to be no objective method for determining who is right or wrong.
Huh? No economist, not even a card-carrying Marxist, would agree with that statement.
They have to pay differently. The market sets the price, never the government. One of the primary effects of minimum wage laws and labor regulations is to increase the substitution of capital equipment for labor, meaning, using mechanical devices to do jobs that humans otherwise would have been doing. The more expensive it is to comply with government regulations, the more worthwhile it becomes to use a machine to do the job, instead. Without our heavy regulations on labor and absurd minimum wages, we’d probably have a lot more people doing jobs that are currently being done by machines.
Nobody labors at less than $1 million/hr. voluntarily. We all accept wages lower than $1 million/hr. because we have no other choice. Anyone who could be paid that would certainly accept the opportunity.
Which is a consequence, not of anyone’s greed, but of the marketability of their skills, education and experience. Buggy whip makers had to accept lower wages after the invention of the automobile. This is not a consequence of greed, but a consequence of the fact that those skills are no longer as valuable as they once were. Everything in the free market is constantly in flux.
Nothing can be done about them, whether by the government or the free market, except maybe advances in medicine. No matter how respond to the fact of their reduced productivity, the fact remains that they are less productive than others. Government measures do not change or increase their productivity so the root problem is not addressed by forcible redistribution. Advances in medicine may be able to address the root problem.
As for how they will get fed and clothed, ask yourself how the blind or the crippled or leper colonies got fed and clothed before the rise of the welfare state 200 years ago? Do you think the people living in tent cities in California who were foreclosed on as a result of the economic crisis are benefiting from the supposedly “compassionate” welfare State? The key is to remember that the government is not the people, it is an organization. Like any organization, it is inherently self-interested. The State never acts but in its own interests. To be more precise, the individuals within the government act in their own self-interest to the same degree that individuals within any organization do. They respond to the incentives which are facing them in a rational (self-interested) manner.
There are two responses to this. The first is more of a “pshaw” and the other addresses the root angst underlying this sentiment.
First, we can point out that value is subjective, so there it is not possibly to perform what economists call inter-subjective valuation. This is a big, fancy term for comparing the subjective pleasure you derive from something to the subjective pleasure I derive from that same thing. There’s just no way to compare this. Pshaw.
Second, we can apply the concept of bilateral monopoly to bargaining analysis, as David Friedman does in his textbook Price Theory. He discusses a concept called surplus value which is, permitting some abuse of notation for the sake of brevity, the difference between the highest price the buyer would have paid and the lowest price the seller would have accepted. If the highest price I would have paid is $85 and the lowest price you would have accepted is $65, then there is a $20 surplus value involved in this transaction… the bargaining process consists of each side trying to plumb the other side’s true limit price and then push the bargain to that limit. The seller wants to push the buyer right to the edge of $85 and the buyer wants to push the seller as close to the $65 as possible. You can think of it as, they have agreed to the exchange, but there is $20 sitting on the table and they are arguing over how to divide it. The left-wing mentality makes this mental leap that the more wealth participant to the bargaining will always get the larger piece of the surplus value (or all of it) but there is no causal connection, at least, not if the market is free. Because if the market is free, then the buyer/seller are not locked into a bilateral monopoly bargaining situation and are free to find others who will give them a better price.
Finally, even if the rich guy always slurps up all the surplus value, there is another “pshaw” aspect to this… the poorer party to the transaction still revealed his/her preference for exchanging at the given price without any of the surplus value. In other words, if I’m poor and forced to always buy everything at the highest price at which I’m willing to buy at all and sell everything at the lowest price I’m willing to sell at all, that still doesn’t mean I’m being jilted… it just means I’m really bad at bargaining and navigating the marketplace. But by virtue of freely exchanging, I’m revealing that whatever I exchanged for was still more valuable to me than whatever I exchanged away to get it.
Good point. There is a great deal of “out of sight, out of mind” to the welfare statist mentality. Whatever happens off camera is sanitized and rationalized and we’re all supposed to pretend that things mostly conform to the fantastical, Platonic idealizations in the welfare statist’s head.
“Marxian agitation/propaganda turns people against each other and unleashes mans most evil faculties–jealousy being one of them. Some people are so jealous that they would willingly compromise their own economic welfare in order to destroy the wealth of others. They call this “social justice.”” - Esuric
“If a man says socialism, or planning, he always has in view his own brand of socialism, his own plan. Thus planning does not in fact mean preparedness to cooperate peacefully. It means conflict.” - Ludwig von Mises, Omnipotent Government
I wont try to give you specific advice to answering questions as others have done that quite well. I would just relay my experience with talking with women. It is for many of us natural to answer factually and theoretically to such questions. In my experience this will just mean you will keep getting uncomprehending questions. Because we are not really answering her question. Even if we think we are. Because she does not think in terms of abstract morality. Her questions are based on emotional sympathy with other people. Until you satisfy that feeling and connect with her on an emotional level, then all the rational arguments in the world will be of limited use.
My main success was after talking for hours. The main thrust of the conversation was her going ‘but what about this’ and myself struggling to come up with answers. I had tried everything from practical arguments to pointing out hidden gun. To little success in eroding her scepticism. Until I remembered that she had been to a theme park with only one rule. One rule that she thought was wonderful. That rule was something like 'have fun and don’t harm/hurt anyone. I mentioned it and she made the emotional connection. The connection between the harmony and fun of the theme park & its one elegant rule, and what I had been saying all along.
Of course that does not mean that she will become a libertarian straight away. It just means the defences are down & the blinkers off. It is a foundation that you can gently build upon over time.
Also be aware of any emotional hot button sensitivities she has. Like an emotional prejudice against particular political labels or perhaps an attachment to issues like saving the rainforest rainforest or care for the disabled. Ether avoid these like the plague or be clever in turning them to your advantage.
If you can get her to feel on an emotional level what you believe then you have won.
DISCLAIMER:
I am not claiming all girls and women are like this. Just the ones I have dealt with in person.
Hmmm, this may be the most useful answer I’ve gotten thus far. I wish logic would work… or even facts but sadly they don’t. I’ve pretty much given up trying to convince her, so I guess this whole thread was kind of pointless, but it did reaffirm some loose points I had about the freemarket. Anyway, trying to reach her on an emotional level (while good advice) is practically impossible because she fails to see how you can help someone without literally offering them your hand (perhaps with your wallet resting on your palm).
Okay, after an extensive debate with my girlfriend I came up with more problems I can’t address with any kind of certainty. I know I’ve taxed your pools of knowledge, but if you would oblige me yet again with more answers to what (I assume) are common complaints with free markets I’d be appreciative.
She repeatedly made the claim that most people are born rich so they’re better off from the start than other, poorer, people. She also makes the argument that rich people have more connections giving them better access to opportunities than poor people, so we don’t have equal opportunity in America.
While I asserted that rich people have to contribute to society in most cases to make their money, she said that most rich people made their money through illegal means (???). I don’t know where she got this fact, but I doubt there are any studies that support it. However, when she asked questions like "what does Paris Hilton contribute to society? She was born into privilege so she could do anything with ease as she had the capital to back it up.
She claimed that anyone could run a business and that it was easy. When I asked why everyone didn’t do this, she said that poor people don’t have enough capital, a bad credit score, etc etc. I mean this is flawed in that running a business is not easy, but how do you deal with that poor people cannot get capital even if they want to improve their lot in life.
In cities there is a cycle of poverty as education funding is based on property taxes and property in cities (especially ghettos) are deplorable so schools are poor so they have no opportunity even for a decent education. I don’t know how to counteract this, as it seems to have basis in fact in that inner cities have bad schools etc etc so their opportunities are reduced.
this article. Now it does prove my point that rich people donate more (in terms of money) but less in terms of percentage. I guess a lot of the Austrian argument relies on people being charitable, but this graph seems to show a downward trend in people who gain more money in terms of percentage of money.
Again, she brings up the exploitation of workers. This belief is so widespread is there anyway to counteract it? I can say they take a job because they need to live, which gives corporations a better bargaining hand, but how do you refute this claim? Saying that its what they’re “marginal productivity” is seems heartless, though I know its the answer.
With regards to rich children, I maintained that its a skill to maintain wealth (especially vast sums of it) and that thats why rich people are rich and their children remain rich, and they lack this skill they lose wealth. She said its easy to maintain wealth, but hard to get it (one of the “failings of capitalism”) I don’t know what my question is here, really just more a point of contention.
Capitalism doesn’t provide a safety net that socialism does for workers who are subject to tragedy or who need healthcare. Despite my attempts to say that a system based on a determination of "need’ is arbitrary and varies from person to person, she said most people know what it is “needed” so that no one could ever be given more. I guess my broader question is: is it a fallacy to take an argument to its logical extreme to see if it still holds true, and if it doesn’t than its not a good theory? Like need based welfare could be taken to a point where people are given luxuries and not needs, therefore it is flawed… is this an okay argument?
Any help would be much appreciated, thanks in advance everybody!
Here is an excerpt from a ‘neoclassical’ (non-austrian) study into the intergenerational effects of parents income on childs adult income(i.e. when they grow up) done on Israeli data.
There is one harsh but beautiful (because it is true) lesson that all people have to take to heart and truly feel in their veins: The world is not paradise.
Having said this, ask if socialism will eliminate the caprices of luck, the use of power, the inequality of goods, etc. Obviously you can’t really eliminate these things. Obstacles are the reason why people develop wealth, if there were no obstacles, all of our problems would’ve been solved already.
Wow, that was an intensely interesting post. I don’t know why but thats incredibly interesting to me, I wonder what she’ll think of it. Anyway, thank you for contribution…
I read the rest of the thread since Jan. 23rd. It is now Feb 3rd, and she has eight retorts. Tomorrow, she will have three more, and more after that. The most sound advice at this point (in my humble opinion) is to perhaps enjoy a nice day at the park or go to a movie and forget about discussing socialism.
I thought I gave you my “I was a socialist once” lecture on this thread, but it must have been on a different one. In short, I had to learn on my own why my socialist philosophy was bankrupt. Many people, including an entrepreneur family member, tried to reason with me (it did no good). It took years to unwind my socialist thinking. I had to see for myself that socialism (interventionism, please forget the semantics for now) does not work.
If she is “too busy” to study sound economics on her own, then I don’t see how she will ever remove the concrete that is in her brain on this subject. She has to remove the concrete, no one can do it for her. I didn’t have the benefit of Mises.org, she does. If she doesn’t have 10 minutes each day to read Daily Mises, or LRC then there simply is nothing that can be done.
I guess when the economy really crumbles (social unrest), maybe she and millions of Republicans and Democrats will suspect that intervention does not work since that is what we have been engaged in on an undeniably massive scale.
I don’t mean to sound like a jerk about this, but I do understand the socialist mentality, and I really am trying to be helpful to you both. Good luck. [~]
Behavioral genetics! The most conclusive and scientifically rigorous collection of studies in the field of human nature, which of course, everybody in this statist world chooses to ignore.
They always render the same results and the same conclusions. The shared environment (all that we can deliberately control in order to influence and shape our children) amounts to negligible contribution in how the child turns out when he grows up, i.e., personality, intelligence, etc…
The statist hate this science. Why? Because if parents can’t shape their children, what does this say about the roll of the state and its legitimacy to interfere in how to raise them?
Yes, this is true. Also, the congenitally deaf and blind have reduced opportunities, in a way which your empathetic girlfriend can do nothing about. Here’s an essay you and your girlfriend should read… this is a very dangerous path when followed to its logical extreme.
Well, this one is true and false. Most of the world’s richest people have made their money by benefiting from state legal and regulatory advantages (coercion) but few of the world’s richest people have made their money illegally. And, whatever the percentage is, we will never know because those individuals don’t appear on the Forbes 400, if you get what I mean.
The children of the very rich may live their entire lives in idle luxury if their parents are willing to pay for that. I think it’s less common than we like to believe. As for Ms. Hilton, I think she and her sister actually prove the opposite of your girlfriend’s point - they are visible exactly because they are not just sitting around at home in the lap of luxury while producing nothing. Paris Hilton has produced TV shows, music albums, clothing lines and many other goods and services. I hate to be condescending, but I think Ms. Hilton has contributed a great deal more to society than your girlfriend (or I) ever will.
[:)] This is symptomatic of the socialist mindset. Lenin thought he would convert the entire economy into one, gigantic corporation, with himself as CEO. After starving millions of his fellow Russians to death in pursuit of his follies, even the uniquely ideologically inflexible Lenin was forced to allow a limited return to the free market! (See Wiki for sourcing on this).
I’m not poor and I don’t have the capital or the know-how to run a business. While operating a business in the natural order would be a hell of a lot easier than it is in our statist society, running a profitable business is not easy because there is competition. The more profitable the market, the greater the competition (in the natural order… the State actually reverses this correlation by eradicating competitors from profitable markets on behalf of its private-sector consorts). Finally, even if it were easy to run a business, income is not determined by the amount of sweat you expend. The labor communists have this naive desire to measure the value of labor in terms of the physical exhaustion it induces, so that, the iron fab worker who sweats his ass off lugging around iron ingots should be paid a lot more than the CEO who just sits all day in an air-conditioned office. The problem is that labor is not homogeneous (same everywhere), there are many different kinds of labor and as the division of labor increases, labor becomes more specialized (less homogeneous). Wages (the price of labor) are determined by the supply of and demandfor a certain kind of labor. In the wake of a hurricane, for example, we can expect that carpenters will make more money than new car salesmen, even though car salesmen usually make more than carpenters. (This illustrates the effects of demand on wages). Anyone with two hands and two feet can dig. So, given the large supply, ditch-diggers don’t make a lot of money. Not very many people can learn to be a commercial airline pilot. So, given the small supply, airline pilots make a lot of money. If you idolize physical laborers, that’s fine, that’s your taste… feel free to poster the inside of your apartment with “Power to the Workers” posters to your heart’s content. But don’t try to overthrow the law of supply and demand with a gun. All that comes of it is mass murder, as the history of the 20th century amply illustrates.
Most poor people could do more to build capital if they chose, especially in a free market. People have a hard time accepting this fact, psychologically, because it immediately leads to the conclusion that the primary reason I do not have more money is because I’m not doing more to get it. People don’t like facts that fault them for the consequences of their own decisions. Also, very smart people have a tendency to feel that their superior intelligence entitles them to greater than average wealth (or at least, greater than average privilege) - but many very smart people don’t earn a lot of money and these people (ahem academics ahem) prefer to weave conspiracy theories of secret capitalist cabals kicking the average person down so that he can’t make it in life… the lower-middle class academic would be much, much poorer but for his or her superior intellect which enables him or her to evade, to some degree, the trampling of the lower class by the capitalists.
The government educates our children. Our children are not well educated. Therefore, it’s the government’s fault. I find it amusing when people try to argue that the government must operate an educational monopoly and that the government’s failure to educate our children proves this! LOL
As for the issue of opportunities, see above. Many people face reduced opportunities in ways that cannot be righted by application of the threat of force. To even attempt it would be a naked crime against humanity (see the essay I linked). This should illustrate why it is wrong to apply the threat of State force to “create opportunities” for the “underprivileged”. Inevitably, you will descend into red-tape-thuggery.
If 50+% of your income was taken by the government to “help the poor”, just how charitable would you feel?
You need to challenge the idea of exploitation directly - if businesses can exploit their workers without limit, why are any of us earning more than minimum wage? If businesses really could pay whatever wages they please, then no one would make a penny above minimum wage. Since people make more than minimum wage, there are only two possibilities… either some businesses are charitable (including heartless giants like Wal-Mart) or business really can’t pay just any wage they please because there is a… (hold for it)… market for labor! If you pay me less than I know I can earn elsewhere, guess what I’m going to do? Leave your sorry ass! If you’re making so much cash off of me by paying me slave’s wages, then you had better hop to it and give me a raise. The government is the largest corporate organization of all and even the government cannot suspend the law of supply and demand. People inexorably pursue the best opportunities available to them, which ceaselessly forces the price of labor to its market price.
I think you’re letting her set the tone of the debate - she herself has suggested that what she thinks is the root problem is that wealthy people come by their wealth through illegal means. This line of thinking should be pursued further. Surely, she also agrees that people should be presumed innocent until proven guilty. So, my question would be this: What evidence is wealth (qua wealth) of wrongdoing? Someone has $1m in their bank account. Of what crime are they guilty? Another person has $10m in their bank account. What crime did he commit? Another has $100m. What was his crime? Oprah Winfrey has more than $1b in her bank account. Who did she defraud or hurt to get her riches? There are a few people in the world with more than $10b in their bank accounts. Probably most of these folks are crooks… but you know what, most of them are in bed with politicians, judges, regulators and lobbyists! Look at George Soros, Mr. “I know exactly what is going to happen to the dollar but I am not at liberty to say.” How did you come by such divine foreknowledge, Mr. Soros? I think “George Soros has Ben Bernanke on speed dial” is a much more likely explanation than “George Soros owns a functioning crystal ball.” Until your girlfriend comes to understand that the State is biggest crime racket of all, she is condemned to the same cognitive dissonance in which 99.999% of the population exists.
If wealth is not evidence of wrongdoing, then by what right do you and I (or the poor) come to have legitimate claims to the property of the wealthy? Larry Page and Sergey Brin (founders of Google, Inc.) earned their riches fair and square. How do they owe you, me or anybody a penny that they do not freely agree to give out of their own philanthropy?? The answer: they don’t!
Before the 19th century (a mere two hundred years ago), family and religion provided almost all of the social safety net. Yes, there were a few outliers but there are outliers in our system, too. The real question is not whether poverty is a tragedy - of course it is - but whether one man’s tragedy can morally justify violent aggression against another man. Consider my blog post on a similar topic that deals with the same moral principle.
The real history of communism belies this whimsical belief. The Soviet experience was one of constant under-supply and over-supply so that needful goods in one area were so scarce as to be a matter of life and death while the same good in another area was in such abundant supply as to be a commodity that no one wanted. Goods were not moved from areas of over-supply to areas of under-supply due to the absence of the much maligned price system and speculative arbitrage… in other words, no one made any profits from moving goods from one place to another because goods did not trade on markets. Instead, situations like this stagnated until the crisis became large enough to attract the attention of Moscow bureaucrats who would then re-arrange the pieces on the game board only to create new shortages and surfeits in the process.
I learned most of what I’m telling you from one book which I’m strongly recommending you read in order to survive these discussions with your girlfriend, intact. That book is Thomas Sowell’s Basic Economics. The books available on mises.org are also great but many of them tend to be a bit pointy-headed or unconcerned with application to actual political events. Sowell’s book is deeply researched and counters the many economic misconceptions out there with sound arguments and hard facts. This book literally resulted in my “conversion” to classical liberalism from borderline neo-conservatism. Each chapter felt like I was having my mind blown. YMMV.
Absolutely. That’s the whole modus operandi of all philosophical discourse. If a principle does not work in the boundary cases, then it must be modified or discarded completely. At the very least, you must say “X is always true except in boundary cases Y, Z and W.” If you just say “X is always true” but it’s not in cases Y, Z and W, then the statement is simply false.
It’s OK, but only OK. The reason it’s only OK is you’re not getting to the heart of the problem. The flaw behind every intervention is aggression and the key to defeating arguments for State intervention is to find the aggression, then ask whether the aggression is morally justified by the good that is supposedly being done by means of the aggression. In the case of welfare, the aggression occurs when the taxes (or government “debt” or inflation) are imposed, on threat of jail (and, in extreme, death). So, is threatening violence (pay taxes for this welfare program) justified by the ends to which the purveyors of violence intend to put it?
Since I’m guessing your girlfriend is left-wing, I hope she is generally opposed to the waging of war, especially gratuitous, imperial, expansionist wars. I hope she is repulsed by the wars in Iraq and Afghanistan and the US occupation of 170 nations worldwide (85%!) by over 700 overseas US military installations. Ask her whether she thinks the government justly collects from her and you and me and every other American the funds which are then used to pay for these illegal and immoral wars. This should get her thinking about the fact that just because the government does it as a matter of open policy, doesn’t mean it’s right. A lot of people have a hard time encountering this very simple fact… but once you open her mind to see that what the State does is often criminal in nature (in matters of war), then maybe she can begin to see that what the State does in matters of domestic policy and supposedly “charitable” things, like welfare, is also criminal.
Finally, please read this booklet by Frederic Bastiat. It’s a short read, it will only take you a couple hours. It will help you immensely in understanding the basics of liberalism. Watch this video to get the quick version (then go read the book). It is so important that I think everyone ought to read it, it’s the only book I say this about.