Why Capitalism?

I am inclined to side with LS on this. My own local Ancap group has swelled in size exponentially. We no longer can host meetups and hold everyone in small apartments or venue’s. On occasion a meetup will demand space for up to 50 people. And I have mode no effort what so ever to advertis since the group was first created two years ago. It just ballooned on it’s own.

I suppose thats why I am optimistic. People are really starting to do their homework.

But at the same time that doesn’t mean we stop trying to educate those around us.

I suspect that, in my zeal to play Devil’s advocate, I missed some important things. This is one of them.

You’re right, of course, that one doesn’t have to convince the existing minority of bright minds to sway (part of) the majority. One can try to serve as a bright mind and sway people in the majority himself. Then again, does that refute the idea of a sharp dichotomy between an opinion-forming minority and an opinion-following majority? Or am I attacking a straw man?

I won’t pretend to have a good answer, but instead wait to hear from Danny, LS, or someone else.

Adrian can correct me, but I think he meant natural law not in the way natural rightsists mean it, but in the broader way someone like Lon Fuller meant it. That is, a ‘procedural naturalism’ rather than a belief in objective substantive laws. Law being a purposive effort to subject human conduct to the governance of rules, there are certain constraints on just what is and is not possible. The praxeological man, in seeking to create effective law, is subject to natural constraints (e.g. if a law is contradictory, retroactive or unknown, then the subject is simply incapable of altering his behavior to act in accordance with the law; the lawmaker fails in his endeavor qua lawmaker). I think Fuller, without knowing it, was the first to apply praxeology to the study of law, with his ‘eunomics’ being a branch of praxeology alongside economics. One can sense a praxeological flavor in this explanation of his ‘procedural naturalism’, and here’s a short piece in Liggio’s Literature of Liberty.

I think you’re ultimately saying the same thing, as you (Danny) say, “The utilitarian tradition then picked up the thread by also recognizing that laws were subject to an extralegal standard, but understood that the only possible coherent standard against which to judge laws is that of human utility.” That extralegal standard is, I presume, what Adrian means by natural law, in sharp contrast to legal positivism.

That’s the old guard. I like to think about something Gary North said (I believe). Paraphrased, “the gatekeepers are at the gate, but the walls are down.”

5 years ago, it wasn’t conceivable we would have Tom Woods and Ron Paul banging out Austrian inspired NYT best sellers. Or a Mises Academy. Or thousands of Youtube views of Austrians speaking and lecturing. Or swelling attendance at Mises Circles.

Check out the attendance and scope of Mises University and the Austrian Scholars Conferences. We’ve come a long way in a short time.

And that’s not even taking into account what I was trying to express (and failing miserably) to Lilburne Danny about the fact that capitalism manifests itself in all human action, regardless of ideological persuasion. Even the most hardened Soviet or central planner behaves capitalistically in some way. I really feel humanity takes that next leap when it decides to turn over rocks to see what is underneath. To make that second logical progression before choosing a course of rational action. That’s what I see our job as. Taking that second look. Pointing out the unseen. Explaining cause and effect.

Agreed. And I agree with Lilburne Danny that education is so very important. I just think we’re winning. If I’ve had one gift it’s been the ability to spot a trend early, and I feel really good about the way the world is heading.

I’m not sure the dichotomy is as sharp as it might have one been. Listen to any of Jeffrey Tucker’s talks on publishing, you can see the effect of de-centralizing, and removing privilege from the transmission of ideas. That’s the most powerful thing underneath Kinsella and Tucker’s push for intellectual freedom.

In Mises’ time, it was hard to organize, hard to transmit, and hard to get access. That has all changed and is changing. Danny is a great example of a storm of intellect and enthusiasm no one saw coming until it was on top of them, propelling powerful ideas deep into the future.

I would question the basis of this question. I’d imagine you’d see yourself taking on the role of the Atheist Utilitarian in the following kind of dialogue:

Atheist Utilitarian (AU): Why do you only eat kosher food?

Jewish Deontologist (JD): Because God commands it.

AU: Oh really? Not because it’s healthy?

JD: Well, now that you mention it, kosher food is healthier than non-kosher food. But still, the reason I eat it is just because God commands it.

AU: So, if it were shown that kosher food was actually catastrophically unhealthy, would you still eat it, just because God commands it?

JD: [frantic attempts to repair this cognitive dissonance]

Now, the type of deontology espoused by libertarians (e.g., Rothbard, Hoppe…) is not “divine command theory” providing an objective ultimate end and saying that certain actions must (not) be performed under any circumstances, regardless of what any persons’ preferences are. Rather, the only purpose of these theories is to resolve disputes between people whose preferences conflict. So,

  • If people agree on an ultimate end (e.g., prosperity, happiness, and long life for virtually everybody), then there is no fundamental dispute to resolve – it is not necessary to call upon a deontological theory in the first place.
  • Only if people disagree at such a fundamental level that their preferences cannot be reconciled by pragmatic arguments (like Mises’s), does it become necessary to invoke deontology.
  • In that case, however the dispute is resolved, someone is going to be happy and someone is going to be unhappy – it’ll never end up that both of them are unhappy.

What do you think? Do we ultimately have to involve an interpersonal utility comparison to object to deontology in this way?

Sorry, I haven’t been able to respond for a while. Work is crazy busy right now. Will definitely address people’s posts as soon as I can though.

But how would it make sense to try to “reconcile” two ultimately conflicting points of view?

It might be interesting to organize a group and watch Roderik’s long philosophy seminar together (http://mises.org/media.aspx?action=category&ID=90) because I don’t think I’m able to do justice to his argument.

I think it goes something like this - but keep in mind that this good be a (semi-)wrong interpretation - "well, something that is good for people, is also morally good. But something that is morally good, obviously is also good for people in a more economic sense. So there is no real need for a strict dichotomy.’

Related, I personally think that both ‘natural law’ and ‘economics’ is both based on praxeology, i.e. the logic of action. Praxeology in the economic sense investigates the logic of action in a world with multiple relevant actors, where it can be shown that ‘interventionism’ hampers people achieving their goals by using ends. Praxeology applied to ethics investigates the logic of action in a world with multiple relevant actors, where it can be shown that interventionism harms people - else they would have agreed to it - so there vision of the world gets hampered. Praxeology recognizes different actors and proofs that in order for there to have a economy that satisfies and coordinates human ends we have to have independent actors (differentiated from others by property rights). On the other hand; these differences are also morally relevant, i.e. because I’m not you and you are not me, we need a way to settle on any given situation if we disagree on what ought to happen with a specific means. E.g. If I want to kill you and you oppose it, than there is a different vision in using a certain means for a certain end. Economics can show that as a general rule: allowing people to kill each other, would hamper other ends that could be achieved. But if we have independent actors, why would it be impossible to construct an ‘ought’, i.e. we ought not to hamper other actors in the world?

Obviously; I’m not a full pledged philosopher (yet) and I can’t give a clear and cut bullet proof intellectual framework. But thinking along these lines doesn’t seem completely idiotic.

"From your later post, it is clear that you meant “legal positivism”. You present a false choice.

Mises, from Theory and History.

(…)

To sum up the above, the natural rights thinkers were right to reject the legal positivists who claimed that a law could not be held up to any standard other than itself or the standard of power. However the standards which the natural rights thinkers tried to hold laws up to were either ill-defined, illusory, arbitrary, or some combination of those things. The utilitarian tradition then picked up the thread by also recognizing that laws were subject to an extralegal standard, but understood that the only possible coherent standard against which to judge laws is that of human utility.

In Human Action, Mises characterized utilitarianism as the spiritual emancipation of man from mystical and/or heteronomous ethics. Here in Theory and History he traces its intellectual heritage back to the Greek Sophists (Protagoras said “Man is the measure of all things”). In Human Action he recognized Epicureanism, eudaimonism, and hedonism also as its forebears. He noted that the early utilitarians (Bentham, Mill, etc) had imperfect formulations, but that it was the modern economists who finally perfected the doctrine (actually it was Mises himself who did). On a side note, Hazlitt was right to recognize Hume as the founder of rule utilitarianism, and as having, not only an earlier, but also a much more sound formulation of utilitarianism (although he didn’t use the term) than Bentham.

To understand what utilitarianism evolved to be in the mind of Mises (it is one of the most misunderstood aspects of Mises’ thought), and to see how for him, as Mises himself wrote, “Utilitarianism, on the other hand, does not deal at all with ultimate ends and judgments of value. It invariably refers only to means.” please read my reply to Krazy Kaju."

<= I’m not convinced by the ‘false dichotomy’ accusation. What Mises is saying that legal positivism claimed that laws can’t be upheld to any outside standard, which is not true. Legal positivists don’t (just) say: ‘well, everything the state does can’t be criticized’. They are saying ‘there is no outside source of law. That is the law.’ Obviously, this can be criticized - as Mises himself often did - because it lacks x, y and z. But it’s still the law and it doesn’t make sense to talk about anything outside of what is created by the law as the law.

The dichotomy between natural law and legal positivism isn’t ‘can one criticize the law from a certain viewpoint?’ (which legal positivism accepts), but can we analyze what the law ought to be in the absence of someone saying what the state says it is. Can we, in fact, have a science of what law ought to be?

If Mises accept that, there in fact, can be a science of what the law ought to be - on an abstract level, of course - than he accepts the idea of natural law, as it is understood by modern natural law thinkers. If he doesn’t, than he accepts legal positivism. I don’t see how there can be a third way: either you can investigate what law ought to be (absent of any historical circumstances of what the law on that point in time ‘is’) or you deny that there is any possibility to have a rational discussion regarding what law ought to be and it’s just preference satisfaction - ‘I think it would be better if the law was x and instead of y’.

The way you explain it, it seems that Mises actually is part of the natural law tradition.

If this interpretation is correct, it’s interesting to see that Mises explains it in terms of ‘human utility’. But again; human utility presupposes the idea of different people. Misesian utilitarianism accepts the fact that there are different people with different ends and different means. Why not conclude from this that it ought to be morally right to accept these differences and respect these differences? That it is morally right to accept these differences? That there is a natural difference between all people and that we can recognize - at least in theory, sometimes you have border line cases - objectively what domain in reality belongs to someone and what domain belongs to someone else?

Given this explanation, does this part of my previous post make more sense:

"Edit: as far as I see it. ‘Natural law’ doesn’t necessarily mean ‘libertarian law’, though. But still: either differences between humans can be decided - and the human relevant for law is the praxeological man - based upon an analysis of the world or differences ought to be created by an agency. "

The idea of natural law says that we can investigate what law ‘ought’ to be. Everybody owns himself, nobody owns anybody else, everybody is a sovereign related to his own means and has no ownership over anyone else his means. If we accept that there is an objective difference - I’m not you and you are not me - than this fundamental principle of law follows quite logically. And than the only thing that is left, is to apply this to the world where we live in.

Oh, and I’ve reread your post, but I don’t think you have answered to this:

"ut where did the impossibility to apply the logic of action to a science of law come from? Is there actually an argument, or is it an assertion by lack of knowledge of any possibility? ‘Proving that something is impossible’ is not the same as ‘I can’t proof that it is possible’. I belief you are doing the second, not the first in this post. Could you actually give an argument, or is it a proof out of lack of knowledge of any real possibility of doing so? "

Oh, and please, don’t feel rushed. I’ll be around.

When I first started posting here a long time ago, I didn’t fully understand capitalism and the harmony of interests. Also, I thought that perhaps there was a biological near-universality in the consciences of men that stemmed from natural selection, that this near-universality was only disrupted because people were perpetually in a biological emergency mode due to their erroneously thinking that without the state, the lifeboat of society would sink and everybody would drown. Because of that, I even indulged in strident moralizing language from time to time (“evil statist” this and “criminal organization” that), rationalizing that I was just speaking the voice of the “natural” human conscience. I never contended that that made for any kind of objective justice or morality. (From the moment I read Rothbard try to refute Hume’s fact/value dichotomy in Ethics of Liberty, I perceived that Rothbard was wrong and Hume was right, even though I had not read a word of Hume’s theory of morals before that.) But I thought the supposed fundamental near-universality in conscience might make for the possibility of a near-universal inter-subjective agreement among men with similar consciences. But now I deem that dubious, and certainly not applicable to the finer points of property rights delineation. I recognize now that emotive moral approval and indignation are predominantly formed by custom, and that emotionally indulgent moralizing language only coarsens and often shuts down discourse, thereby making it more difficult to teach people how the liberal social order, through its concomitant capitalism, is the most effective means to their highest-ranked ends.

I still think that a near-universal agreement among men is possible, but not based on some alleged harmony of conscience, but rather a harmony of interests.

In other words, I took a break from my unmoored theorizing, finally carefully studied Mises, and found out how society works.

People here often over-estimate how much the general public associates capitalism with corporatism, largely because of the hullabaloo created by left-libertarians.

Many average folk are familiar with the term “crony capitalism”. They wouldn’t feel the need for the modifier, if they thought that all capitalism was crony capitalism. People really do generally and erroneously think that the state needs to partially supplant and intervene in the market process for the sake of general welfare. They don’t want complete capitalism, not because they think of it as fundamentally harmful (as they do with “crony capitalism”). Most think of capitalism as essential, and even basically beneficial, as long as it’s firmly “reigned in” by the government.

Furthermore, mainstream economic science, and the correction of mass opinion (and thus the progress of civilization) that depends on it will get nowhere until the former becomes fully acquainted with the system of thought of (and thus the oeuvre of) Ludwig von Mises, which heavily uses the term “capitalism”.

If anything, the fact that left-libertarians dislike the term is a good thing. What they often refer to as the “free market” (which, depending on the left-lib, might do without wages, land-ownership, non-labor shareholding, etc) is critically different from what Mises described as the unhampered market. So, if Misesians use “capitalism” and left-libs don’t, all the better, as they’re talking about things that should be seen as distinct, because they really are.

Lots of effort has gone into it. Every time a historian makes a judgment about the ends pursued by men in the past, he is using thymology. Every time an entrepreneur makes a judgment about the ends pursued by men in the future, he is using thymology. They just don’t call it that.

It need not be defined in strictly material terms for men to agree, in their own interest, to liberalism and capitalism, only in predominantly material terms and only for most men. And the material wants don’t even need to be that “cherished” upon reflection. They only need to be high enough in actual priority. As Phillip Wicksteed said, “A man can be neither a saint, nor a lover, nor a poet, unless he has comparatively recently had something to eat.”

It is true that a Robinson Crusoe, or even someone living in somewhat less autarkic conditions, like a primitive tribesman, can store up resources, and thus engage in a limited degree of roundabout production. But with the present and foreseeable size of population on the earth, the prevention of the very likely starvation of most any given individual depends on the kind of capital accumulation that is only possible with a vast intertemporal division of labor. And the latter is only possible with the economic calculation that can only be found in a capitalist system of social cooperation.

Practically speaking, it means forcing one of the disputants to back down. Theoretically, it means showing that one side’s position is somehow untenable (i.e., cannot be supported by any doctrine other than might-makes-right). I guess it would depend on what type of deontologist you ask – but the important point is that both modes of reconciliation are separate: even the best verbal argument will not necessarily deter an attack.

It is true that I certainly do not mean the latter, in that Mises’ conception of capitalism includes joint ownership of means of production. (And I really hope that people do their own research enough that I don’t have to write up an explanation of the difference between joint and collective ownership. Rothbard covered it well in MES.)

“Private ownership of the means of production” is not the full definition of capitalism. Capitalism, or market economy, is “the social system of the division of labor under private ownership of the means of production.” (Mises, HA) That excludes, not only state ownership of all the means of production, but any allegedly possible collective ownership of all the means of production. A stateless world in which everyone’s inner conscience drove them to choose to pool all their resources collectively (anarcho-communism) could not be said to have private ownership of the means of production. (Although, Mises argued that the “state-free” socialism of Marx and others was impossible in practice.) Furthermore, a world in which there was no state, but nonetheless everybody chose not to exchange with each other (autarky) would not be a “social system of the division of labor” at all, and therefore would not be capitalism.

There are only two conceivable ways in the activities of man qua producer can be guided for the sake of man qua consumer in a division of labor.

(A) Private people can own the means of production (which means they control both the means itself and the product), and therefore are guided by wanting to serve themselves via serving their fellow man through mutual exchange (because of the superior productivity of the division of labor concomitant with the manifoldness of nature found in the real world).

Or (B) the public can collectively own the means of production, in which case production, if directed with any kind of rationality with regard to serving consumers at all, must be directed centrally. As Mises proved, although, unlike syndicalism, the latter (socialism) is at least conceivable enough to analyze, it is not realizable in the least degree as a social system of the division of labor for production, because it can have no recourse to economic calculation, and therefore cannot guide production with any kind of rationality for the sake of consumers.

No, there is an “ownership” in the economic sense that is distinct from “ownership” in the juristic sense. See the first chapter of Socialism on this. And, as I intimated above, ownership implies disposal of both the means itself and its product.

Of course it is, otherwise we wouldn’t be in this mess. I never said the persuasive minority of bright minds was always correct in their propositions, only that the public is ultimately guided by them.

The vast majority of the bright minds of this world would benefit more handsomely in a materially ascending social system of production than in a stagnant or disintegrating one.

Just curious, are you then in favor of using noble lies and quasi-religions to try to establish a liberal social order?

Man is homo agens. We have flourished because of our capacity for goal-seeking behavior. If we were as pathological and dead-to-purpose as you seem to think we are, we would not have been able to accomplish an iota of what he have.

Like I said above, it makes perfect sense to try to convince the existing minority of bright minds, because ultimately their ends would be served better by the what we are proposing.

As for the majority, there are two considerations:

  1. The truly dull minds in the majority will never be able to fully understand the market process. This does not mean we, as the elite “remnant”, just look down upon them, and seek each other out to accomplish the little we can in spite of them. Nor does it mean we resort to divisive and counterproductive rabble-rousing with them. It simply means we explain as much as they can grasp so effectively to them that we instill in them a sense of intellectual respect and trust for us. This is what Ron Paul does in his finest moments (of which there are many). Most of his listeners don’t fully understand why inflation is harmful. But they get the picture enough to believe that Ron Paul himself does understand it. Even Ron Paul himself doesn’t know all the catallactic implications of increasing fiduciary media, but he understood enough of Mises’ writings to believe that Mises himself did. This is the way real ideological progress is made. (And no, in spite of what you might have heard from Marx and Molyneux, ideology is not a dirty word.)

  2. There are many seemingly dull minds who are actually latently bright minds. The immortal accomplishment of the Mises Institute’s popular approach is that it stirs so many such individuals into intellectual life.

I think Fuller, without knowing it, was the first to apply praxeology to the study of law, with his ‘eunomics’ being a branch of praxeology alongside economics. One can sense a praxeological flavor in this explanation of his ‘procedural naturalism’, and here’s a short piece in Liggio’s Literature of Liberty.

Just a small point but I think Adolf Reinach (student of Edmund Husserl) needs to be recognised as the first to apply praxeology to law, in his work “The A Priori Foundations of Civil Law”, which actually precedes Mises praxeology.

http://blog.mises.org/11041/adolf-reinachs-the-apriori-foundations-of-the-civil-law/

Yes, insofar as people mean this kind of stuff when they say “natural law” I have very little (or at least much less) to object to it. There certainly are praxeological factors with regard to successful legislation (whether that legislation be formal codified by a legislator or effectuated without formal codification by, say, an ancap private court). But, then, that is the case with the success of any goal-seeking endeavor. And it must be remembered, that the judgments arrived in such a study are meaningless without taking the purpose of the lawmaker as a given. Thus, law can only be an art, and not, strictly speaking, a science. Studying the praxeological factors as such are part of praxeology proper, and not part of law (just as any praxeological insights utilized by an entrepreneur are not thereby part of entrepreneurship). The art utilized by goal-seeking lawmakers may involve applied praxeology, but that does not make law a branch of praxeology. (Please note, Michael, I’m not saying that you’re saying otherwise.)