Why hasn't the market chosen LvMI??

Economics Economics Questions
1

I have to ask – as a school of thought who entrusts the market to make the decisions that are “right” (for the market), how can the LvMI explain that its own theory of thought has not been chosen as the prevailing school of thought in the market for economic schools of thought?

If the market is always right, why has the market not chosen LvMI as the dominant school of economic theory? If the LvMI followed its own logic, wouldn’t the institute itself have no choice but to find itself invalid?

(FYI, I am an LvMI supporter. I ask the question because it has been asked of me and I do not know how to support it)

Thank you all

2

You or someone else asked this exact same question in another thread a while ago. The question is flawed because we currently don’t have a free market, so it makes no sense. It’s like asking why hasn’t anarchy chosen anarchy when we live in a non-anarchic society. You’re asking why hasn’t the free market chosen the free market when we live in a society without a free market. The logic of the question caves in on itself, it’s self-detonating upon being proposed.

Furthermore, what we’re dealing with here are ideas, not markets in the economic sense of the term. Correct ideas most certainly do not naturally become commonplace, they most often start out being espoused by an extreme minority and only make their way into the general fabric of society over a long period of time. Good or correct ideas are not automatically accepted on the basis of their merits.

3

I think the first problem with that line of thinking is the assumption that the market needs to always be right in order to advocate it. The market simply reflects what people want and are willing to pay other people in order to get. The argument in favor of markets is that the price system communicates the desire for certain products in a very clear way that creates an incentive for other people to provide for those desires. A classic essay on this is F.A. Hayek’s “The Use of Knowledge in Society,” which you can find online for free. Basically, the argument that Austrians have historically relied on is that central planners face serious problems in being able to know how best to provide for what people want, and the signals communicated by the price system create a structure of incentives that often has the capacity to bring about better solutions (by everyone’s standards) than could be implemented through government action, through the decentralized actions of market actors. This argument is augmented by the Public Choice school of economic thought, which points out that when we acknowledge that government agents have their own personal motivations for action, and so can be prone to acting outside of the public interest, the picture becomes even more grim for government’s ability to solve problems. So when we talk about the market being desirable, what we have in mind is that central planning is generally not the best tool for solving social problems and addressing the needs and wants of the people, and the market has a really great track record with these sorts of things.

But just like how the market chooses Britney Spears over Pink Floyd, we can’t necessarily offer any defense of market outcomes besides that they reflect what people actually want. So far as people, for whatever reason, do not understand that Britney Spears makes really crappy music, they will demand to listen to her, even though I personally think they’re stupid on that account. In the same way, most people really do think that the economics practiced by the mainstream is the best way to go about things, and the market seems to reflect that perfectly. And surely, I would love to see people making better choices, because I think that they would be much happier if they did.

This, however, is where the libertarian in most of us speaks up, and points out that if people didn’t try to force their opinions on each other all the time, none of this would really be an issue. Objecting to market outcomes would be, essentially, like me saying that I hate the world because Britney Spears is more popular than she deserves to be. Maybe that’s true, but it’s not really important. That’s because Britney Spears fans don’t force me to give up listening to Pink Floyd, and I have no interest in forcing them to stop listening to Britney. But in an important sense, mainstream economists force their views upon us all when they come out in favor of government policies which Austrian economists believe to be misguided and ill-advised. So it becomes really important for us to try to go out and convince people that we’re right about this stuff.

Notice, that has nothing to do with the market itself; that has to do with the fact that the political order of a society is inextricably tied to the dominant paradigm in that society, and insofar as today’s mainstream economists are generally accepted as being correct, our political order will reflect their ideas. That’s why the LvMI is working hard to change people’s minds, and to educate people about what’s right.

It occurs to me, though, after writing all of that, that your question was likely addressed to the idea of a “marketplace of ideas” which is a metaphor (not a very good one) which has absolutely nothing to do with the Austrian advocacy of the free market. If someone objects to free economic markets on the grounds that free economic markets are not supported by the dominant ideas within the “marketplace of ideas,” then you have my permission to smack them across the face and tell them to go learn some economics. And for good measure, have them go learn about communication theory and social psychology.

4

If you disqualify all economic schools of thought that are funded by the government (and thus non-market), then the LvMI is by far the dominant school of economic thought, as chosen purely by the market.

5

Hoppe also offers an explanation in The Economics and Ethics of Private Property, namely that the proponents of flawed social scientific theories can foist their costs onto third parties, and given the lack of deterministic constancy in the realm of the social sciences, always plead that some other factor was operative when the theory failed to predict as it was supposed to. IOW, it is much harder to assess the “quality” of a theory in the social sciences than with the natural sciences. All this, to the extent that the marketplace metaphor works in the case of ideas. It may not, and given how much of science is warped by the elite’s preferences, it probably is not.

-Jon

6

Well the biggest problem with the metaphor is simply that unlike in a real market, people don’t have to voluntarily agree to take on a new idea in order to start believing it. So it’s not like the success of an idea demonstrates its ability to satisfy people’s preferences.

7

Marketing.

Period.

8

It seems like everyone has a different answer for this. Well, here’s mine.

This is similar to the question, “If the free-market is so powerful, how come the free market hasn’t taken over?” My thought is that, possibly like Austrian Economics, it has been doing so, it just takes a really, really long time. For thousands of years humanity was encased in dictators and tyrannies. Only two-hundred years ago did even the thoughts of natural rights and liberty begin to take hold, and it wouldn’t surprise me if the process took just as long.

9

Because the market failed.

10

Austrian and classical economics were abandoned because federal funding went into other schools, especially during the Great Depression with the wrongly perceived failure of free market capitalism. Additionally, it is in the interest of many special interest groups - like unions and big businesses - to favor anti-laissez faire policies like quotas, minimum wages, strong union control, tariffs, regulatory burdens, etc.

11

We don’t have a free market. Plus, the market is not all there is. The state is not a free market entity, it is not itself a product of a free market, and it prevents a free market from operating. Your question must assume that the state was chosen in a free market rather than free market principles and methods, but framed this way it becomes obvious that the question is incoherent, no?

12

Most of the responses in this thread are what I call classic “loser talk”. This is what people who are losing often do, they make lots of excuses for why they are losing. Obviously the state is providing something better than what we in the freedom movement are providing. Until we start producing a better product for people to start using we will continue to lose, its that simple.

13

Knock off the condescension already. Most of your posts are filled with straw men chiding people on a personal level, and demonstrate a severe lack of understanding of the ideas in question.

The state is not a voluntary buisiness that is subject to free competition, as has been pointed out multiple times, so the last two sentences of yours simply make no sense from any libertarian perspective.

Apparently it’s “loser talk” to point out that the assumed premises of a question are flawed and that a question is logically incoherent. Under your paradigm, apparently the libertarian has an obligation to concede to logically incoherent premises and they are nothing but apathetic wussies if they try to stick to their guns.

14

Voluntarily or not, a mass of the populace not only goes along with it, they believe it is voluntary because they chose to consent!

That’s the issue. Democracy is seen as good. Independence and Secession are seen as bad. And until that misconception is cleaned up, libertarianism, anarchism, et al will continue to be niche or fringe philosophies.

The problem is marketing, and that is not condemnation of LvMI. It’s here, they are doing what they can with their resources to push and present the message. But what do we each do to promote it? How are we helping to advance Austrianism?

That’s the meat of the discussion. As usual, whenever someone brings up tangible, individual action and risk-taking or capital investment, there are a class of Mises forum posters who kick and scream.

15

Unfortunately, all Max does is reinforce the misconception and concede to the arguments of statists.

The problem is the gun in the room, and all I see is Max obfuscating the gun in the room so that he can attack libertarians. I can hardly think of anything that can do more to help advance the cause of liberty than pointing out the gun in the room. Max seems to think that we should function on the premise that the gun isn’t in the room, because if we point out the gun in the room apparently we’re just making excuses and being apathetic wussies. His strategy for “winning”? Playing the very game that one is supposed to oppose to begin with and attacking libertarians for making libertarian arguments.

Max did nothing of the sort, he insulted the bulk of posters as “losers” and proceeded to reiterate the very misconception or logical incoherancy that the original question is based on. The lengths you go to defend him even when he is blatantly being silly I find to be strange.

16

I don’t see how. Max is challenging the anarchist/libertarian establishment. If the logic is that voting has accomplished nothing, then surely whatever the current tactics are called, also are susceptible to this criticism.

Fear of violence will remain a copout. As long as people fear violence, more than they value their beliefs then tyrants will win. Again, people are not looking for a rational moral philosophy. They are looking for security. A failure to understand your “customer” will lead to ineffective marketing. Agree or disagree, Max’s LC is about creating a secure zone, a working model, and resisting state violence through secession or confrontation. It’s certainly not for people who are not willing to take risks, or willing to get shot at. Personally, these things bother me less and less each day.

I saw him attacking the responses as loser responses. I didn’t feel the need to call them out as such, but I do agree. Blaming the lack of a free market, or the state is a copout. We’re either working against/around the state, or we’re passive and accepting our fate.

Of course you find my defense of his statements strange. He takes risks, and says what he believes, correct or not, popular or not. I don’t agree with him on everything, but I will respect an underdog, particularly if I believe his message has value.

Besides, the library libertarian crowd had no problem taking or continuing to take pot shots at his ideas. Funny how the critical crowd can’t handle criticism in return.

17

Not through internal constructive criticism, but by basically destroying the whole point through conceding to unlibertarian premises and unfairly attacking everyone - calling people “losers” for making very simple and logical points.

The question posed was essentially why hasn’t the free market chosen the free market. Pointing out that the environment is not free to begin with (I.E. that there is no such free market at the time, hence making the question logically incoherant) is not a cop-out, it is a logical answer to the question.

You’re failing to understand the matter. It is not a cop-out to point out that we don’t currently have a free market because the state intervenes in it in the first place - that is simply the logic of the matter by definition. Blaming libertarians for this, for circumstances that precede them and are outside of their control, is absurd. The circumstances are a huge part of the answer to the question of why the status quo is what it is. To act as if such circumstances are irrelevant to explaining the matter is absolutely absurd. I see this approach as no different than blaming slaves for their own enslavement and saying that they are engaging in a cop-out when they explain that they are slaves because of the circumstances (and force) that put them in such a position to begin with. “I’m a slave because men in funny hats enslaved me”. Max’s response: “You loser! You’re just making excuses! Why don’t you have personal responsibility?”.

18

BP, where was the word FREE in the OP?

Nowhere.

The lack of a “free market” was used as a copout for personal responsibility. Instead of people saying, “we need to do more”, “I’m going to try this”, “yeah, we need to make more progress, how can we do it?”, the response was. “Well, the market isn’t free, so we haven’t really failed, and until it is free, we probably won’t win”

Which is a great circular argument for inactivity and ineffectiveness.

The market has not selected LvMI because it is not being marketed as well, or on a scale comparable to the other mainstream institutes or philosophies. The statists have violence on their side, but they rarely if ever have to use it. They control hearts and minds. Their operation is so much more sophisticated and they are so much more committed to long term planning, sacrifice and their ideology, that we’re simply not competing. We’re not. We’re like the Jamaican bobsled team. A novelty act.

19

You’re misconstrueing the question entirely. The question did not ask what we should do now, this is what you keep disingenously shifting the question to. Indeed, you seem to have a tendency to shift the question to that when it is not necessarily relevant. Again, the question was not “what should we do?”, the question was “why is this the way it is, and shouldn’t it be different based on our own theory?”. The proper answer to a “why” question is “because X”, or if the question has some kind of logical flaw the proper thing to do is point out the logical flaw to explain why the question doesn’t make sense.

People are not personally responsible for circumstances beyond their control and that which precedes their very existance. The notion that it’s the fault of free market proponents that we don’t have a free market is absolutely absurd. The notion that pointing out that we don’t have a free market by definition because the state intervenes and restricts competition to begin with is somehow a cop-out is absolutely absurd, it’s simply a logical explaination of the matter. We don’t have a free market by definition because the market is controled by central authorities. What’s so hard to understand about this? It’s elementary, really, it is.

What’s circular is the very logic of the OP’s question. I don’t get why you can’t understand why this is the case.

20

How we are going to achieve liberty is always relevant. Always.

Au contrarie, you simply have failed to answer it. He said “the market”, not “the free market”. There is nothing circular about the OP’s question.

If you believe that LvMI can only be selected in a free market, then why is LvMI struggling in an unfree market to promote itself?

Now that is circular!