Monday, March 31, 2008

the ghost of iceberg past

I just found an old post of mine-- okay it's not that old, but old enough that I didn't recognize the authorship as my own until I reached the end of the post.
"...Governments shouldn't attempt to regulate markets because they cannot. To the extent that they try to, they exaberate the problem on hand, and must seek to correct their earlier correction.

Secondarily, governments shouldn't attempt to "correct" markets, because to say a market has failed is a normative statement, and cannot be proven. In fact, the market is never "right" nor "wrong", as all a market consists of is billions of individuals trading property rights, and who is to say what two or more consenting adults agree to is incorrect?

Last, it's actually a joke to think that government "regulate" a market, because only markets can regulate themselves. The "regulation" that the government deems to provide is a poor substitute, and in fact in most times the regulatory bodies are captured by the special interests themselves, in a process known as regulatory capture. That's why our energy and telecommunication sector lags behind the world, and the biggest firms within that field are typically those that were granted monopolies by the same regulatory crew. And to think you call that "regulation".

As for suggesting that Wal-Mart must take their business elsewhere is to say that government has the right to dictate when, where and which private individuals are permitted to exchange goods. They are not "free" to take their business anywhere, as the word free implies that they have an un-interfered choice. Otherwise it is like saying that a person being mugged is "free" to choose his money or his life.

As for empirical observations, they are invalid as far as economic theory is concerned, since it is impossible to control for every variable. Economic theory can only be deduced from a axiomatic, a priori logic. To the extent that your observational data differs from theory, you must either admit that your data is incomplete or simply wrong."

Wednesday, March 26, 2008

the root of all evil

In concern to my last post, I meant to include a specific example indicating Murray Rothbard's even-handed approach to TPo1819, in that he would simply restate the arguments made by the differing parties without explicitly endorsing either.

For example, money-brokers were at one point considered the scourge of the early colonial American bank system. These gentle folk were guilty of the crime of purchasing discounted bank notes belonging to out of town banks, and then taking these same notes and redeeming them at their respective banks for their par value in specie. However the banks wouldn't stand these slimy two-timers who dared to impoverish their banks by withdrawing specie and so they sought to outlaw them.

It was here that I thought that Rothbard could interject that the banks had the duty to thank these money-brokers whose selfish, nefarious actions actually served to bolster the exchange value of the very same bank notes. To see why, simply imagine the lack of such money-brokers; after all if a vendor is presented with a bank note for a distant bank of which he knows almost nothing about, it would be more like that the note would have to be discounted even further before he would begin to consider it worth his trouble to accept it in lieu of specie, or in the notes of a closer banking institution.

The money-brokers in their actions thus filled a role in minimizing the discounting of bank notes of distant banks, and countervailed the tendency to further discount then what would have been otherwise.

Monday, March 24, 2008

don't panic!

Murray Rothbard's The Panic of 1819 is quite unlike any other scholarly work of his that I'm familiar with in that he let the facts speak for themselves. Though he does color the arguments presented, he does it in a fair-handed, 'just the facts, mam' manner which might mislead the unknowing reader to think that that he doesn't have a horse in the race. Honestly, I can recall seeing the term "Austrian School of Economics" mentioned just once in the entire book, a shocker considering that in it he analyzes the conditions surrounding what could have been the great depression of the early 1800's in support of the Austrian Business Cycle Theory.

The Rothbard that I'm familiar with, from the handful of his books that I've read is never dry, uncompromising, and his arguments intellectually-honed which can help the typical unmotivated reader to slog through the 1,400+ pages scholars edition of Man, Economy and State; perhaps not by the edge of his seat, but enough so.

In contrast, TPo1819 is a work of drudgery, detailing the minutia of inductive economic research, one which Rothbard clearly set aside his prejudice for utilizing the thymological method of Verstehen as pioneered by Mises in favor of appealing to those who favor a rather historical, empirical approach to the matter. After reading the first chapter I already was under the impression that Rothbard was writing not to the choir, but to mainstream historians and economic professors alike in an attempt to subtly win over academia to the ABCT.

Though this book required more patience than what I usually have to offer, I was rewarded every now and then when I found insider comments passed off as innocuous statements. One such comments appears towards the end:
"Stress on the moral virtues often took the form of attack on luxurious consumption and other extravagances of the day. Embryonic Veblenians called upon the rich to set an example in thrifty living to the lower classes, who tended to imitate the former."

Thursday, March 06, 2008

false bravado

There was jitters in the air this morning as the local news-media prattled endlessly about an early morning explosion at the military recruitment station located in Times Square, which resulted in no bodily harm and minor property damage.

Michael Bloomberg, ever the bloviating yenta, wagged his fingers and called out against the coward who perpetrated the attack, if one can call it that. 

What I can't understand is why this presently-unknown figure was labeled a coward, and why it should be considered an appropriate epithet in this case. Is it wrong that he lacked resolve to take life, and instead chose to 'attack' when it was certain nobody would be in harms way?

If anything, one can legitimately make the opposite case-- that this is one hell of a brave fellow, who is risking life and limb to deliver a middle-finger salute to the imperial U.S. war regime and her insatiable hunger of destroying human life in her relentless meat grinder of "foreign policy". I reckon that Times Square is one of the worlds most surveilled locations, up there with Orwell's London, and this courageous act sends a loud message to our oppressors in blue that we are resolved to overcome their trigger-happy, cattle-prodding enforced servitude.

Just compare this bomb-throwing 'coward' with the Hercules cavalcade of police squad vehicles which goes on pretty much every day in NYC. For those who've never heard of the Hercules
"And there are the Hercules Teams, elite, heavily armed, Special Forces–type police units that pop up daily around the city. It can be at the Empire State Building, the Brooklyn Bridge, Times Square, or the stock exchange, wherever the day's intelligence reports suggest they could be needed. These small teams arrive in black Suburbans, sheathed in armor-plated vests and carrying 9-mm. submachine guns—sometimes with air or sea support. Their purpose is to intimidate and to very publicly mount a show of force." - article link
Pray tell, what bravery do these hostile brutes exhibit? Do they suppose it to be especially courageous to parade around the killing fields of Manhattan while waving around machine guns under the protection of cover from air support? The biggest danger any one of these S.S. knuckle-heads face is painful priapism from the hard-on they get from being 'in control of the situation'.

If it were up to me, I'd reverse the conventional doublethink application of the labels for coward and courageous. But as everyone knows, Oceania has always been at war with Eastasia.

Sunday, March 02, 2008

dinah demalkhuta dinah

Among Orthodox Jews there is a consensus that government is a necessary institution, and which is legitimated by our religion. Furthermore, leading rabbis often urge that it is an obligation upon each and every eligible citizen to register and vote, for the purpose of having "our voice" heard loud and clear, in order to acquire via political means our fair share of the loot which we ought have coming to our neighborhoods maintenance and pet causes[1].

The Jewish principle which justifies and legitimizes governmental terrorism is known as 'dinah de'malkhuta dinah', which literally translates to "the law of the kingdom is the law". Most laymen are familiar with this halachic maxim, and a overwhelming majority of them take it as gospel, without understanding its applicable parameters, and make even less effort to understand the underlying principle.

A short while ago, I came across the sugya (section) in the tractate Nedarim on pages 27b-28a which discusses cases in which one is permitted to falsely declare a neder, a vow forswearing the benefit from either an activity, an object, or from a person. The three cases where one is permitted to falsely swear is to a brigand, a murderer, and a tax collector. [The purpose of the neder would be to bolster another false claim that the property they are looking to loot either belongs to the temple, or to the royalty which will dissuade them from taking it.]

In those three cases, it is permissible to make such a vow to forswear the benefit of his wife and children if he were to be lying about the ownership of the goods in question, which is of course the truth of the matter.

The commentators ask, and in regard to the tax collector, isn't the collector fulfilling a legitimate role to raise taxes for the king based on the principle of dinah de'malkhuta dinah? (Henceforth shortened to DND) So why is one permitted to lie, and on top of that to declare a false vow?

The commentators come up with an answer along the line that if taxes are not being collected equitably from the population, one is permitted to protect his property from that excessive plundering[2].

In any case, where did the commentators come up with this concept of DND?

To some commentators, DND isn't a groundbreaking rule of unique halachic origin, but one simply based upon the principle of ownership. To them, the power to tax derives from the fact the that the sovereign is the landlord, and by that right can demand payment allowing you on his land. Exactly how he comes to own the kingdom isn't discussed, but this explanation will at least frame the boundaries of what DND would entail, contrary to the all-encompassing principle some would have you believe.

Other commentators disagree and instead would like to base DND upon a social compact of sorts, that people are effectively giving their consent to abide by the law of the land by choosing to settle in that certain region. Perhaps this is a more fashionable explanation to the democratically minded who like to think that they live in a contract society, but excuse me if I feel that it's a horrid justification for democracy in search of a halachic source.

The one thing that the commentators are in agreement is to the extent which DND would require of the individual in regards to compliance with positive law. In short, it is limited to 'roads and taxes' which is to say that one is obligated to pay the tolls to use the roads and bridges, and to pay the taxes of their respective jurisdictions. Other than those two categories, a person is permitted to follow the mandates of positive law, but is in no way obligated to. Furthermore, any positive law which to fulfill would necessitate a violation of Torah laws is forbidden.

Most people I know are either unaware of these facts, or simply would like to forget them. To them, DND says what they want it to say so that they can go on accepting the statist quo in their sheeplike existence. To myself, DND does not sanction grand larceny to the tune of 25%-39% tax brackets, even as I acknowledge that yes, there are some lunatics out there who would defend a 150% income tax in the name of DND. The one thing I truly wish to accomplish with this post is to stop the bandying about of DND as a halachic principle justifying any absurdity one can dream up.

[1] Thankfully the pet causes I'm talking about are not local tennis and swimming instruction, or banal theater productions, but causes such as senior citizen foster care, food pantry programs, etc. This is no way forgives the original sin of robbery-via-taxation, but hopefully it can be viewed as a lessor evil in light of the thick-thin prism of dialectical-libertarianism.

[2] What makes the taxes inequitable in this case according to the commentators is that the tax collector is trying to burden the rich with the bulk of the taxes. It's not yet clear to me if their distaste was with a proportional or a graduated (progressive) tax rate or perhaps either one, but I think that anything other than a poll (head) tax was considered an odious tax, one which permits the victim to not tell the truth or to take upon vows which he does not intend to keep.