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The Two Flaws Of Libertarian Economics

64 points by bdfh42 18y ago

thomasmallen 18y ago
For impatient types like myself: Proposed flaw #1: That is basically the first flaw of libertarianism: If you shrink the government down to nothing and have corporations in control then you won’t have a rule of law. Proposed flaw #2: That leads me to the second flaw of libertarian economics: efficiency. ... economists use the term “efficiency” differently than programmers. You see, most libertarians think of efficiency as “Fast! FAST FAST FAST!” They think it means lean and trim companies all working to gain the maximum profit with the least effort necessary. --- Of course, at no point does Mr. Shaw prove that libertarians think this way, but that would put a stick in his spokes, I suppose, and boy, is he riding quickly down the hill of psuedo-political invective. And as for flaw #1, libertarianism is not in any way, shape, or form, anarchy. Rather, libertarianism preaches that the government should be as small as practical.
- deleted 18y ago
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- Rod 18y ago
  You're right. Zed is confused. Libertarianism is NOT Anarcho-Capitalism. Libertarianism advocates that the government should be reduced to the minimum which is necessary to protect the citizens' rights. Anarcho-Capitalism advocates that corporations should replace government.
  - halo 18y ago
    But that can quickly devolve into arguments as to what counts as a 'right': the most obvious examples being food, water, shelter, healthcare and education. That 'minimum' is an arbitrary line.
    - Rod 18y ago
      You made a very good point. I don't know what to answer. Defining what a "right" is and what it is not would lead to endless discussion. In any case, I would say that instead of discussing in rather vague terms whether more government is better / worse than less government, it would be sensible to think of what kind of government. By principle, I believe that goverment bureaucracy and interference should be kept to a minimum. However, I would rather live under a Scandinavian-like government (even though it's big government) than in a Somalia-like anarchy. We all agree on the goals: freedom, prosperity, etc. Sometimes we disagree on how to get there. I vote for pragmatism over ideology.
      - mseebach 18y ago
        > However, I would rather live under a Scandinavian-like government [...] We all agree on the goals: [...] prosperity, etc. Yes, I've totally cut up your point, and I'll take this over Somalia any day. But Scandinavian government (Denmark in this case) couldn't care less about prosperity. Right out of college, you're in the top tax bracket, paying 63% on everything above $64.000 annual income (and just under 50% on everything below). Buying a car? 180% registration tax, and slap 25% sales tax on top of that. But yeah, we've got worse schools than Portugal and free mediocre healthcare, but most importantly: we have high economic equality. So no, unfortunately we don't agree on the goals.
        Rod 18y ago
        With all due respect, compared to 90% of the world's population, Danes are pretty prosperous IMHO.
        pelle 18y ago
        More than 50% of people in working age in Denmark work for the government or make their living through some sort of welfare program. This means more than half the population of Denmark is prosperous exclusively because of income taken from the productive part of population. Denmark and most of the rest of Scandinavia used to have a very classically liberal (~libertarian) mind set. It is the work ethic that has maintained much of the prosperity. Many of Denmarks large successful export businesses come out of this period. As I like to say. Denmark is prosperous despite their welfare state and not because of it.
    - gaius 18y ago
      The classic answers are that a government should protect its citizens from attack (the military, the police) and should act as a neutral ajudicator in contractual disputes (the courts) and that's it. What about "the poor"? The classic answer is "you will not be prevented from helping them".
      - cchooper 18y ago
        It's those 'classic answers' that are the important part of Libertarianism. If you get rid of them then Libertarianism just becomes 'The government should be the size required to do whatever it should do, and be neither bigger nor smaller', which would be completely vacuous.
    - mseebach 18y ago
      > what counts as a 'right' Freedom from coercion, baby. Simple as that. For a more thorough discussion, see http://en.wikipedia.org/wiki/Negative_and_positive_rights http://en.wikipedia.org/wiki/Negative_and_positive_rights
      - cia_plant 18y ago
        That's not "simple" at all. Coercion has always been part of human relations. People have conflicting interests, and when these rise to the level of open conflict, there needs to be some sort of coercive solution. What libertarians propose is that all coercion be in defense of property ownership. This seems "fair" until you realize that "property ownership" is itself a complex historical object. The feudal system is named after a form of property ownership - the feodum or fief. The colonial system created property for Europeans by appropriating it from natives. The system of slavery was also based on a certain kind of property definition. Saying "don't use coercion except to defend legitimate property rights" is like saying "don't use military force except to defend against legitimate threats." It seems like common sense, but all the complexity of politics is swept under the rug in these phrases "property rights" or "threats". In my view, no one is born with a "right" to property, property is just a concrete representation of the political equilibrium that exists at a certain time.
        mseebach 18y ago
        The problem of property ownership is inherent in any society that (obviously) permits ownership of property. Most property in the world can be traced back to an original owner, from whom it was stolen (war, colonization and similar events). That original owner might have stolen it from someone else. But that is a completely different point, that really has nothing to do with libertarianism, or any reasonably capitalist society, where property ownership is permitted. It's my impression that a symptom of a mature capitalist society is that historical property disputes are settled in a sense that can be considered fair. That someone might not accept property rights is an interesting discussion, and it certainly rules out any form of capitalist system, but it doesn't really apply in this discussion. Nobody is born with a right TO anything, but rather a right to NOT be coerced. The consequence of this is that you have the right to do whatever you want with your property (which includes your body and anything you do with that, i.e. work), as long as you don't interfere with other peoples right to do the same - i.e. coerce them. One important distinction between libertarianism and anarcho-capitalism is how to resolve conflicts that will inevitably be over property. A-C doesn't accept any state-like structures like police and courts, but libertarianism does, and the only people that get to coerce other people physically are the police, answering to the courts.
    - dantheman 18y ago
      libertarians only acknowledge negative rights; you can't do X to me. There is no such thing as a positive right; you must give X to me.
      - yummyfajitas 18y ago
        Some (such as myself) also believe it legitimate for the government to provide public goods: goods which are nonrivalrous and nonexcludible. Protection from contagious disease falls into this category, for instance.
        steveplace 18y ago
        And that's being known as a "practical libertarian"
        olefoo 18y ago
        No, it's known as being a socialist. //not that there's anything wrong with that.
        yummyfajitas 18y ago
        This is probably the first time since adulthood that I've ever been called a socialist (I was a socialist for a short time during my teenage years).
        steveplace 18y ago
        I'd actually like to define it as extreme moderatism.
        william42 18y ago
        Actually it's being known as "having taken econ 101".
        thomasmallen 18y ago
        That's where I stand. I want a small government, and I think it's crazy that a government as hulking as ours doesn't provide something as essential as healthcare. On the other hand, I'm against social security and think that a general welfare system will do fine to take care of poor people, young or old.
  - cchooper 18y ago
    Maybe his point is that the amount of government required to protect rights is actually quite large. There's a general assumption in Libertarianism that it would be small, and he's disputing this.
    - mightybyte 18y ago
      This argument is actually interesting, but I didn't get the slightest hint that it was what Zed was really talking about.
      - cchooper 18y ago
        It's probably not, but it would make sense of why he describes libertarians as "corporatist". He's driving a wedge between small government and the defence of natural rights, and assuming that libertarians would choose the former over the latter.
  - stcredzero 18y ago
    If you need proof that Anarcho-Capitalism doesn't work, just play Eve-Online for a year in 0.0 security space.
    - corentin 18y ago
      I too kill people and do a lot of very nasty stuff in video games. But for some mysterious reason, I don't do them in real life.
      - narag 18y ago
        But for some mysterious reason people does that in real life.
      - stcredzero 18y ago
        You completely missed my point. At the time I played Eve, success for organizations in 0.0 space in Eve depended on the establishment of a logistical infrastructure. It's economics. I've witnessed groups of players hobbling their own economies and logistics by making short-sighted decisions. I've also seen all manner of scams and Ponzi schemes. From what I've seen in that particular simulation, you really do need the rule of law for capitalism to work well. Killing people and blowing up ships is completely irrelevant. The game could be about planting trees and picking flowers, and the same principles would apply.
        corentin 18y ago
        I've also seen real-world governments ruin their own economies by making short-sighted (or just plain stupid) decisions. And I've seen Ponzi schemes in a lot of government plans as well.
        stcredzero 18y ago
        In those cases, too, the rule of law is not quite working. The letter of the law is often being obeyed (and there is some debate about even that concerning things like the establishment of the Fed) but the system is being gamed. What it comes down to is this: is the general populace comfortable enough to engage in open economic activity? You can see that there is a lot less confidence in the US and the rest of the world, in large part due to various stupid decisions. But this doesn't prove that anarcho-capitalism works. It just shows that corrupt capitalism doesn't work well either.
  - deleted 18y ago
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  - Prrometheus 18y ago
    >"Libertarianism is NOT Anarcho-Capitalism." Anarcho-capitalists would consider themselves libertarian, and many famous ones are also leading lights of the libertarian movement. Murray Rothbard is clearly a libertarian, and Lysander Spooner belongs to the classical liberal tradition that the libertarians adopt as their forefathers. The problem is that "libertarianism" is a medium-sized tent. So when you criticize "libertarians" for position X, well some hold that position and some don't.
    - pelle 18y ago
      Also by definition we are at liberty to believe whatever we want. Kind of by definition we don't have any leaders to define what we think, even though many of us read lots of stuff by Rothbard, Mises, Hayek, Rand etc. Me I am definitely a libertarian, classical liberal, randian, anarcho-capitalist and several other labels that I might invent. But in reality we all have our different ideas of whats important and what isn't. And we do laugh at ourselves about this. Check out Peter Bagge's great comic about what happen when Libertarians gather... http://www.reason.com/news/show/28655.html http://www.reason.com/news/show/28655.html
  - tjic 18y ago
    No, anarcho-capitalism does not say that corporations should replace government. Anarcho-capitalism merely says that government should go away. 90% of everything that government does wouldn't get done at all in a free society, and the other 10% would be done by multiple competing firms.
  - natmaster 18y ago
    My thoughts: Most scientists (myself included) tend to prefer models that accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o http://www.youtube.com/watch?v=LfascZSTU4o What Zed describes is in no way libertarianism. What the following to understand exactly what it is (HINT: It's the opposite of Libertarianism.) http://www.youtube.com/watch?v=ticytEUvVhQ http://www.youtube.com/watch?v=ticytEUvVhQ
    - anewaccountname 18y ago
      Funny, Peter Schiff was totally wrong about the Euro. Dean Baker also predicted the housing meltdown, you're falling into the trap of anecdotalism.
- deleted 18y ago
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- peakok 18y ago
  There is a hypocrisy in libertarianism à la Mises. When you read his hyper-logical texts (wich should be appealing to the HN crowd btw), he claims that we should remove any sort of ideology from our political and economical systems. Reason and logic only should govern our lives, and it is the duty of economics to aim at this goal. Sure, sounds attractive ! But there is a big assumption here, and it is that libertarianism is special and different, it's not an ideology like marxism or catholicism. It's THE way. It is the only path to reason and logic and science, because when we reduce the role of the state, we reduce the part of ideology in society. Therefore it must be the less ideological system of all, the most logical, and thus the the right one. Of course, liberatarians turn out to be just like any other political sensibility. They agree on broad things that makes them look like unite only because they are a tiny minority in the political landscape. But like any other sensibility, you reach a point in the debate where their own camp is split up in two and they will fight each other, etc. It wouldn't be the case if it wasn't an ideology, and they would all agree on core issues like the private/public fire stations, or even health wich should be considered like any other good for some, but not for some others (I can tell because I have some libertarians friends). The above comments about the protection from plagues are very interesting. It leads to the very interesting history of sewers. Mises is the reflect of his century when we were too optimistic about science, we believed it would soon answer all the questions even in fields that looked like non-scientific, like human organization. It turned out science is indeed good for changing our lives in an indirect way, but unfortunatly not so good outside real scientific fields. It doesn't answer philosophical questions (if such a science existed, then it would be the right one to follow for organizing human societies).
  - thomasmallen 18y ago
    You cite a single author as a representation of a vast political ideology and quickly drop in some fluff that guides the rest of your comment: But there is a big assumption here, and it is that libertarianism is special and different... Libertarianism is a slightly more detailed political idea than convervatism. It represents the desire for smaller government that only acts when necessary. Another core tenet is that you're free to do as you please until your actions infringe upon the rights of others.
jmtame 18y ago
The best solution I've heard proposed was Socially Responsible Libertarianism. Which means the public is held responsible (not the government). So basically when pollution problems arise, for example, it is the obligation of the general public to boycott or pressure the corporation to change (instead of the government fining the corporation, which ultimately may pay for the people in office to carry out the litigation in the first place). Another downside is that the government can easily be inflated with lobbyists to carry out a corporation's dirty work. Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day.
- corentin 18y ago
  > Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day. Whereas with big government, they'll never ever hire lobbyists to ask for bailouts, subsidies and protectionist legislation...
- justindz 18y ago
  This is where you attempt the defense that such activity is "initiation of force." The ability to make many varieties of libertarian philosophies practical hinges on how broadly you can handle interpreting initiation of force and the government's responsibility to stop that. Monopolistic behavior could be considered initiation of force in the sense that it unfairly and aggressively limits someone else's success or freedom for gains without right. Then, of course, you get to decide whether drunk driving is initiation of force, whether very noisy neighbors late at night are initiating force, and so on and so forth. This is not a critique of libertarian philosophies. Pretty much every philosophy is made practical through interpretation and compromise because life is more complicated than policy (and even poetry).
gaius 18y ago
This sort of thing always happens when people who know a bit about computers stray outside their area of expertise.
- hc 18y ago
  this sort of thing is known as argument ad hominem.
  - gaius 18y ago
    Dude has just made up his own definition of a word in order to have something to rant about. What would you call it?
    - likpok 18y ago
      But you are still attacking the person, rather than his argument.
      - stcredzero 18y ago
        Okay, then, Zed's argument fits the pattern of something formulated by someone outside of their area of expertise. Zed has exhibited difficulty with the precise use of terminology before. In the recent talk that was posted, you hear him saying for people not to come up and correct him on his use of terms like "Turing Complete." http://blog.cusec.net/2009/01/05/zed-shaw-the-acl-is-dead-cusec-2008/ http://blog.cusec.net/2009/01/05/zed-shaw-the-acl-is-dead-cu... There are other terms that he unintentionally abuses in the talk. (left as exercise) Still, I think it's a great talk and agree with a lot of what he says. He reminds me of a coworker of mine. This coworker is hazy on things like the laws of Thermodynamics and some aspects of Object Oriented Programming, but he seems to get things done, and I'd have to say he's a good programmer.
        gaius 18y ago
        I shudder to think what Zed's code is like. Did I say rm? I meant cp...
Dauntless 18y ago
I would just like to point out that Enron pushed for deregulation and always blamed government regulation of the market for the huge price rise that followed the deregulation, even though it was made on purpose by their corporation. Check out this documentary Enron: The Smartest Guys in the Room: http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the... http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the..., it's nice to learn from history. I agree that government regulation can be as dangerous as out of control police force, but libertarians (similar to communists) are completely oblivious (sometimes on purpose) of how absurd their idealistic word is and lack basic understanding of human nature. It's better to have an open, accountable, public police force than nothing at all.
DanielBMarkham 18y ago
There's nothing like attacking something you are oblivious to. I think I have a new maxim for the internet: Never have so many people said so much about that which they knew so little about. (And yes, I count myself in that)
- walterk 18y ago
  > There's nothing like attacking something you are oblivious to. This is why, when it comes to rejecting a particular ideology, I believe you need to have adopted that ideology to the point that you genuinely grok it. If you can't replicate the mental operations that allow a subscriber to make sense of the world, what its problems are and how to solve them, and the ways they derive comfort and validation from those operations, then you're guilty of being uncharitable to their worldview. And if you're uncharitable, you're unlikely to develop an argument that demonstrates how an ideology is flawed given its own values and assumptions, or how that ideology actually conflicts with one's pre-ideological values and assumptions. The ideologies that survive are always more resourceful at countering counterarguments than a non-grokker will expect. Which is as good a reason as any to actually try it out, first.
  - DanielBMarkham 18y ago
    Absolutely agree. Which is why the goal of any net conversation should not be to persuade, but to understand how the other ideology deals with arguments against it. That can sometimes sound like bickering, but the real goal should be understanding, not to "win" or "lose".
    - walterk 18y ago
      Yes, exactly. As a recent fortune cookie fortune put it: "The purpose of argument, should not be victory, but progress."
  - Retric 18y ago
    One of the problems with that viewpoint is reality is harsh. Pollution is a classic cases of the tragedy of the commons and all successful forms of government need to deal with this and thousands of other issues. Maximizing prosperity is something with many local minimums over the short and long term. IMO saying X is correct when you are wrong should lead to ridicule lest others assume it's a reasonable argument. PS: Read http://en.wikipedia.org/wiki/The_Selfish_Gene http://en.wikipedia.org/wiki/The_Selfish_Gene works as an analogy for ideologies. They don't need to help their followers as ideology only needs to propagate faster than it's killed off.
puzzle-out 18y ago
"Greenspan and friends were all major libertarians, and even Greenspan said he was full of shit." Oh well, at least that line made it worth reading.
- jordanf 18y ago
  Greenspan was a self-proclaimed libertarian who used to support a gold standard. Of course then he gained virtually unlimited power by controlling the entire US economy. Power naturally corrupts, he renounced his views, encouraged every American to spend more than he or she possessed, artificially lowered interest rates and caused the entire housing boom. Article is a joke. Can't believe this crap gets out there.
  - zzzmarcus 18y ago
    This is, however jaded it sounds, is basically correct. Read Greenspan's book (Age of Turbulence) to get it in his own words. While he was running the fed he was definitely not a libertarian. In fact, I'd argue that that you can't be a member of the fed and be a libertarian, their entire purpose is to artificially manipulate the economy through government... or quasi-governmental intervention.
paddy_m 18y ago
The thing for me is, I don't just distrust the government, I distrust large organizations in general (government, fortune 500 companies, religions), I find that they are fairly inefficient. I am not interested in replacing one inefficient system (government) with another inefficient system (corporations). I don't want a corporatist society at all, I do want a strong rule of law. I would welcome a world where we have an efficient market, not only of companies but of governments. There is a market for governments now, but it has very high transaction costs (moving to another country is expensive and dificult, often requiring years of residency to establish yourself as a citizen). One way to make for a more efficient market for government in america would be to have a less powerful federal government, note I didn't say "and more powerful state governments", at the state level you can break it down to counties and then cities. Ideally you could have (and actually do now) a world where people choose the government they want (not so much by voting but by moving). Voting by moving sends a much more powerful message than voting at a booth. Here's the thing, if we had a small government, there would be no point in lobbying (rent seeking) because having the government's favor wouldn't get you much. Campaign finance reform attacks the wrong side of the problem, like using insecticide around your garbage can instead of taking out trash to get rid of flies. Notice also that zed asked for a strong rule of law. We don't have that. The result of a bank becoming insolvent is not known, sometimes they will get a bailout, sometimes they won't. Many of the regulations for financial industries wouldn't be necessary if the companies thought they would be held accountable for their actions, they didn't think they would be held accountable, and they weren't, so given that set of rules they played the game properly. Zed alludes to a couple of concepts. I think the efficiency that he is referring to is better thought of as maximizing utility. No one can be made better off without making someone else worse off. A state where the above is true is known as a pareto optimal state. http://en.wikipedia.org/wiki/Pareto_efficiency http://en.wikipedia.org/wiki/Pareto_efficiency Sorry if this was rambling, just my thoughts.
- eru 18y ago
  The EU (or more specifically the Schengen agreement) eases migration in Europe --- making voting by moving easier. Unfortunately they also tune down the competition between regimes by making the differences smaller.
alexandros 18y ago
What most people do not see is that libertarianism is against big corporations as well as big govrnment. In fact bigcos can not exist without government support. Reducing government and allowing the market to work should result in smaller, not larger organizations, a dinosaurs to mammals transition.
- nfg 18y ago
  "In fact bigcos can not exist without government support" That is a mighty big claim which flies in the face of practical experience.
  - likpok 18y ago
    Not that I necessarily disagree, but you could argue that in the time there have been corporations, there was also government support.
  - michaelkeenan 18y ago
    alexandros might be referring to the argument was made by Roderick Long in Cato's lead essay in November: http://www.cato-unbound.org/2008/11/10/roderick-long/corporations-versus-the-market-or-whip-conflation-now/ http://www.cato-unbound.org/2008/11/10/roderick-long/corpora... He points out that government funding of highways acts as a de facto subsidy of Walmart and similar chains by partly socializing the costs of shipping, making it easier to compete with local businesses; and that regulations (which large companies can more easily understand and comply with than smaller companies) provide barriers of entry to industries. He concludes: "In a free market, firms would be smaller and less hierarchical, more local and more numerous" (I don't have a strong opinion on this. It sounds plausible but it's a bit anecdotal for my taste.)
    - bmj 18y ago
      I'm sympathetic to this, but at the same time, most local sellers (outside of those who exclusively sell locally-produced goods) rely on the same transportation system.
alecco 18y ago
>First off, the unstated goal of most libertarian doctrine is basically the following: > > 1. Corporations are more “efficient” than the government because of the > “natural selection” of our capitalist system. > 2. Corporations are therefore better than the government at everything. > 3. Corporations should be the government, or at least in control of it. > and >> But that means that the only way to get government out of business is to get business into government. >> There's already a lot of money in Libertarian think tanks; it comes from business. The explosion of dedicated Libertarian volunteerism necessary to transform the United States has yet to materialize, even though the Republican Party has harnessed an explosion of socially conservative volunteerism in the service of the same business interests that benefit from Washington's "Libertarian" bullshit factories. Money from business interests provides the only real political pressure pushing policy in a Libertarian direction. Yes, the libertarian "movement" in USA is quite undefined. Very often statements by referents get out of the core of the concept. For example: * Privatization of large public sectors, but not making a proper market and destroying regulation, therefore placing monopolies or oligopolies (e.g. Enron's abuse of pricing.) * Keeping a systems of taxes and special bailouts or credit lines to large corporations that never reach small business or individuals. * Keeping the system of immunity of owners of corporations for the behavior of the organization (something that appeared after Adam Smith, and is more aligned with his economic rivals.) * The backers of US mainstream (alleged) Libertarians (save Ron Paul) are mostly backed by the US military-industrial complex, an industry completely against free market and almost exclusively based on tax-dollars supplied by a gigantic war-mongering government. And the list goes on. I'm sure there are true good Libertarians but the masses seem to be enchanted , yet again, by large anti-free market interests. IMHO, Libertarians shouldn't support any large organization as it would just replace government with similar flaws. And a true Libertarian can't be part of the Republican Party.
- demallien 18y ago
  Hey! Put some carriage returns in there! You're screwing up the page rendering...
  - thomasmallen 18y ago
michaelkeenan 18y ago
I would like to see a social news aggregation site, such as Reddit and Hacker News, focused on quality debate. Users would tag each submission with its label in Paul Graham's disagreement hierarchy (http://www.paulgraham.com/disagree.html http://www.paulgraham.com/disagree.html). This submission, for example, would probably be tagged "Level 4: Counter-argument". And, probably, also with "Strawman". You could filter out all submissions rated lower than Level 5 or 6 or whatever your threshold is.
- chasingsparks 18y ago
  That would be fantastic.
- pauldino 18y ago
  And we could call it "The Argument Clinic" (Tagline: "The right room for an argument")
- walterk 18y ago
  I actually think this sort of functionality should be present throughout all forms of online communication. If that happened, the same standards of discourse might leak into offline communication as well.
blergh 18y ago
I like Zed, but this is full of bullshit. Every economist worth the name (fuck that Krugman/keynesian bullshit, read some Tyler Cowen, Peter Boettke, Steve Horwitz) knows that the Fed is to blame for the current episode of the business cycle. They printed too much money, it causes inflation and, even worse, disastrous malinvestments. In short: printing money fucks up the structure of production. Moreover, the Fed isn't even a libertarian institution. He tries to discredit libertarianism by proclaiming that an airhead like Greenspan is a libertarian. He's not. He might once have said he was one, his actions have proven otherwise. The Fed is a government monopoly on money. And that's a bad thing.
- likpok 18y ago
  The Fed doesn't print money. It does affect the size of the money supply, but it does this with interest rates, securities, and the reserve rate (or can do this). The reserve rate is generally not touched (it causes shocks in the money supply). The last two generally affect lending and saving rather heavily (make the interest rate high enough, it's not worth it to invest; low enough, not worth it to save). The fact that the dollar is fiat has little to do with the problems we ran into (printed money is only a tiny fraction of the money supply).
  - blergh 18y ago
    "Printing money" is only a euphemism for "expanding the money supply." I thought that would be obvious. I know the Fed doesn't actually print the currency or mint coins.
    - likpok 18y ago
      But printing money and expanding the money supply have different effects on the economy. Printing money necessarily causes inflation; expanding the money supply does not ( it depends on where AD and AS are relative to each other).
- waratuman 18y ago
  Yes, usually I find Zed to be better able to back what he is saying. I don't know what happened this time.
chasingsparks 18y ago
His article made me angry enough to write a rebuttal post. It can be found at http://justlikejesse.com/2009/01/08/re-the-two-flaws-of-libertarian-economics/ http://justlikejesse.com/2009/01/08/re-the-two-flaws-of-libe... for all two of you that may be interested
- awt 18y ago
  Good point about gov't encouraging home ownership. It is extremely frustrating to hear all the rhetoric about the failure of capitalism and free markets when the markets are anything but free due to government subsidies designed to encourage home ownership.
biohacker42 18y ago
Zed's point 3 is fascism not libertarianism. Fascism the the standard straw man to throw at libertarians. And because I can't bare to go through this again, let me just say: Hitler was a vegetarian, and if you're a vegetarian you're a nazi. Good day and Goodwin!
anthonyrubin 18y ago
I think Zed should stick to Ruby rants.
mightybyte 18y ago
Zed's essay is actually pretty good after applying the following transformation: sed 's/libertarian/republican/' Without that transformation, the essay is positively enraging. I should note that republican here refers to the republican party who at times has espoused libertarian ideas. Don't throw the baby out with the bath water.
- mmmurf 18y ago
  Excellent point. There has been nothing remotely libertarian about the Bush administration.
KirinDave 18y ago
This is the first well-written, lucid piece of writing on zedshaw.com in a long time, and it's actually quite good. For those of you turned off by just the name Zed Shaw, put that aside for a second. I'm not sure I agree with what he's saying, but there is no cursing, complaining about mean people, or talking about how unfair the ruby/rails community has been. Maybe he is going to keep that no-rant promise.
kingkongrevenge 18y ago
Libertarianism is fundamentally about liberty, not efficiency or anything to do with government vs. corporations. The "unstated goal of most libertarian doctrine" is to prevent people from getting bossed around or stolen from at gunpoint. He can't even comprehend such an approach from his "let's tinker with society for optimal outcomes" political vantage point.
Prrometheus 18y ago
Thank you, Zed, for debunking internet-forum libertarianism. To the non-naive libertarians among us, however, you have provided no new information. If you have the time, you should pick up some Friedman or Hayek. Friedman's "Free to Choose" is a mass market book on libertarian economic policy. Hayek's "The Use of Information in Society" is a beautiful exposition on the function of a decentralized market. But there are plenty others. You might also benefit from a well-reasoned, economic critique of regulation. "Regulatory capture" is a real phenomenon, as is self-serving bureaucracy. If hundreds of thousands of pages of rules and a multi-trillion dollar budget weren't enough to fix the market, there is probably something wrong with the process. "More rules and money" probably isn't going to fix things. I can find such writing for you if you don't have the time. Drop me an email. However, you will find that writings by competent libertarian economists are not so easy to "debunk" when compared to forum posts written by 16-year-olds. Or Misesians. Those guys are crazy.
- mhartl 18y ago
  Or Misesians. Those guys are crazy. How so?
jpwagner 18y ago
See how pointless BSchool is?
smydsmyd 18y ago
Essentially Ruby is not good for the environment. I agree
logjam 18y ago
Zed. There are many more than two. For starters: http://world.std.com/~mhuben/libindex.html http://world.std.com/~mhuben/libindex.html http://en.wikipedia.org/wiki/Criticism_of_libertarianism http://en.wikipedia.org/wiki/Criticism_of_libertarianism Notwithstanding these and the adolescent, Platonic fantasyland in which libertarians reside, it's a source of predictable and endless amusement how libertarians perenially attempt to present (and poorly camouflage) simpleminded greed as supposed societal good. Odd, that dishonesty. And the last eight years, if not the last three decades, further show the lie of libertarian economics. Any libertarians celebrate the 24th anniversary of Bhopal (and all the subsequent "market corrections" of Union Carbide) back in December?
natmaster 18y ago
I stopped reading when he misstated everything about Libertarianism: " 1. Corporations are more “efficient” than the government because of the “natural selection” of our capitalist system. 2. Corporations are therefore better than the government at everything. 3. Corporations should be the government, or at least in control of it." This guy obviously not only misunderstands what Libertarism is, or Austrian economics. But also grossly misunderstands the cause of our economic collapse. I tend to trust the scientists that have models that can accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o http://www.youtube.com/watch?v=LfascZSTU4o
- chasingsparks 18y ago
  He also misunderstands evolution; That's a greater offense.
natmaster 18y ago
In case you were wondering what this guy is describing. It's basically our current system of corporatism (where corporations control government) - which is not only the very opposite of Libertarianism, it approaches Fascism. More info: http://www.youtube.com/watch?v=ticytEUvVhQ http://www.youtube.com/watch?v=ticytEUvVhQ
sutro 18y ago
Zed's political commentary is a ghetto.
wustl07 18y ago
Maybe I missed the day where they fed us the bullshit that it all is a zero sum game. You cannot "make a fortune" at the expense of others, but only by offering others a better deal and, thereby, making them richer.

64 points by bdfh42 18y ago

For impatient types like myself: Proposed flaw #1: That is basically the first flaw of libertarianism: If you shrink the government down to nothing and have corporations in control then you won’t have a rule of law. Proposed flaw #2: That leads me to the second flaw of libertarian economics: efficiency. ... economists use the term “efficiency” differently than programmers. You see, most libertarians think of efficiency as “Fast! FAST FAST FAST!” They think it means lean and trim companies all working to gain the maximum profit with the least effort necessary. --- Of course, at no point does Mr. Shaw prove that libertarians think this way, but that would put a stick in his spokes, I suppose, and boy, is he riding quickly down the hill of psuedo-political invective. And as for flaw #1, libertarianism is not in any way, shape, or form, anarchy. Rather, libertarianism preaches that the government should be as small as practical.

deleted 18y ago
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Rod 18y ago
You're right. Zed is confused. Libertarianism is NOT Anarcho-Capitalism. Libertarianism advocates that the government should be reduced to the minimum which is necessary to protect the citizens' rights. Anarcho-Capitalism advocates that corporations should replace government.
- halo 18y ago
  But that can quickly devolve into arguments as to what counts as a 'right': the most obvious examples being food, water, shelter, healthcare and education. That 'minimum' is an arbitrary line.
  - Rod 18y ago
    You made a very good point. I don't know what to answer. Defining what a "right" is and what it is not would lead to endless discussion. In any case, I would say that instead of discussing in rather vague terms whether more government is better / worse than less government, it would be sensible to think of what kind of government. By principle, I believe that goverment bureaucracy and interference should be kept to a minimum. However, I would rather live under a Scandinavian-like government (even though it's big government) than in a Somalia-like anarchy. We all agree on the goals: freedom, prosperity, etc. Sometimes we disagree on how to get there. I vote for pragmatism over ideology.
    - mseebach 18y ago
      > However, I would rather live under a Scandinavian-like government [...] We all agree on the goals: [...] prosperity, etc. Yes, I've totally cut up your point, and I'll take this over Somalia any day. But Scandinavian government (Denmark in this case) couldn't care less about prosperity. Right out of college, you're in the top tax bracket, paying 63% on everything above $64.000 annual income (and just under 50% on everything below). Buying a car? 180% registration tax, and slap 25% sales tax on top of that. But yeah, we've got worse schools than Portugal and free mediocre healthcare, but most importantly: we have high economic equality. So no, unfortunately we don't agree on the goals.
      - Rod 18y ago
        With all due respect, compared to 90% of the world's population, Danes are pretty prosperous IMHO.
        pelle 18y ago
        More than 50% of people in working age in Denmark work for the government or make their living through some sort of welfare program. This means more than half the population of Denmark is prosperous exclusively because of income taken from the productive part of population. Denmark and most of the rest of Scandinavia used to have a very classically liberal (~libertarian) mind set. It is the work ethic that has maintained much of the prosperity. Many of Denmarks large successful export businesses come out of this period. As I like to say. Denmark is prosperous despite their welfare state and not because of it.
  - gaius 18y ago
    The classic answers are that a government should protect its citizens from attack (the military, the police) and should act as a neutral ajudicator in contractual disputes (the courts) and that's it. What about "the poor"? The classic answer is "you will not be prevented from helping them".
    - cchooper 18y ago
      It's those 'classic answers' that are the important part of Libertarianism. If you get rid of them then Libertarianism just becomes 'The government should be the size required to do whatever it should do, and be neither bigger nor smaller', which would be completely vacuous.
  - mseebach 18y ago
    > what counts as a 'right' Freedom from coercion, baby. Simple as that. For a more thorough discussion, see http://en.wikipedia.org/wiki/Negative_and_positive_rights http://en.wikipedia.org/wiki/Negative_and_positive_rights
    - cia_plant 18y ago
      That's not "simple" at all. Coercion has always been part of human relations. People have conflicting interests, and when these rise to the level of open conflict, there needs to be some sort of coercive solution. What libertarians propose is that all coercion be in defense of property ownership. This seems "fair" until you realize that "property ownership" is itself a complex historical object. The feudal system is named after a form of property ownership - the feodum or fief. The colonial system created property for Europeans by appropriating it from natives. The system of slavery was also based on a certain kind of property definition. Saying "don't use coercion except to defend legitimate property rights" is like saying "don't use military force except to defend against legitimate threats." It seems like common sense, but all the complexity of politics is swept under the rug in these phrases "property rights" or "threats". In my view, no one is born with a "right" to property, property is just a concrete representation of the political equilibrium that exists at a certain time.
      - mseebach 18y ago
        The problem of property ownership is inherent in any society that (obviously) permits ownership of property. Most property in the world can be traced back to an original owner, from whom it was stolen (war, colonization and similar events). That original owner might have stolen it from someone else. But that is a completely different point, that really has nothing to do with libertarianism, or any reasonably capitalist society, where property ownership is permitted. It's my impression that a symptom of a mature capitalist society is that historical property disputes are settled in a sense that can be considered fair. That someone might not accept property rights is an interesting discussion, and it certainly rules out any form of capitalist system, but it doesn't really apply in this discussion. Nobody is born with a right TO anything, but rather a right to NOT be coerced. The consequence of this is that you have the right to do whatever you want with your property (which includes your body and anything you do with that, i.e. work), as long as you don't interfere with other peoples right to do the same - i.e. coerce them. One important distinction between libertarianism and anarcho-capitalism is how to resolve conflicts that will inevitably be over property. A-C doesn't accept any state-like structures like police and courts, but libertarianism does, and the only people that get to coerce other people physically are the police, answering to the courts.
  - dantheman 18y ago
    libertarians only acknowledge negative rights; you can't do X to me. There is no such thing as a positive right; you must give X to me.
    - yummyfajitas 18y ago
      Some (such as myself) also believe it legitimate for the government to provide public goods: goods which are nonrivalrous and nonexcludible. Protection from contagious disease falls into this category, for instance.
      - steveplace 18y ago
        And that's being known as a "practical libertarian"
        olefoo 18y ago
        No, it's known as being a socialist. //not that there's anything wrong with that.
        yummyfajitas 18y ago
        This is probably the first time since adulthood that I've ever been called a socialist (I was a socialist for a short time during my teenage years).
        steveplace 18y ago
        I'd actually like to define it as extreme moderatism.
        william42 18y ago
        Actually it's being known as "having taken econ 101".
      - thomasmallen 18y ago
        That's where I stand. I want a small government, and I think it's crazy that a government as hulking as ours doesn't provide something as essential as healthcare. On the other hand, I'm against social security and think that a general welfare system will do fine to take care of poor people, young or old.
- cchooper 18y ago
  Maybe his point is that the amount of government required to protect rights is actually quite large. There's a general assumption in Libertarianism that it would be small, and he's disputing this.
  - mightybyte 18y ago
    This argument is actually interesting, but I didn't get the slightest hint that it was what Zed was really talking about.
    - cchooper 18y ago
      It's probably not, but it would make sense of why he describes libertarians as "corporatist". He's driving a wedge between small government and the defence of natural rights, and assuming that libertarians would choose the former over the latter.
- stcredzero 18y ago
  If you need proof that Anarcho-Capitalism doesn't work, just play Eve-Online for a year in 0.0 security space.
  - corentin 18y ago
    I too kill people and do a lot of very nasty stuff in video games. But for some mysterious reason, I don't do them in real life.
    - narag 18y ago
      But for some mysterious reason people does that in real life.
    - stcredzero 18y ago
      You completely missed my point. At the time I played Eve, success for organizations in 0.0 space in Eve depended on the establishment of a logistical infrastructure. It's economics. I've witnessed groups of players hobbling their own economies and logistics by making short-sighted decisions. I've also seen all manner of scams and Ponzi schemes. From what I've seen in that particular simulation, you really do need the rule of law for capitalism to work well. Killing people and blowing up ships is completely irrelevant. The game could be about planting trees and picking flowers, and the same principles would apply.
      - corentin 18y ago
        I've also seen real-world governments ruin their own economies by making short-sighted (or just plain stupid) decisions. And I've seen Ponzi schemes in a lot of government plans as well.
        stcredzero 18y ago
        In those cases, too, the rule of law is not quite working. The letter of the law is often being obeyed (and there is some debate about even that concerning things like the establishment of the Fed) but the system is being gamed. What it comes down to is this: is the general populace comfortable enough to engage in open economic activity? You can see that there is a lot less confidence in the US and the rest of the world, in large part due to various stupid decisions. But this doesn't prove that anarcho-capitalism works. It just shows that corrupt capitalism doesn't work well either.
- deleted 18y ago
  [deleted]
- Prrometheus 18y ago
  >"Libertarianism is NOT Anarcho-Capitalism." Anarcho-capitalists would consider themselves libertarian, and many famous ones are also leading lights of the libertarian movement. Murray Rothbard is clearly a libertarian, and Lysander Spooner belongs to the classical liberal tradition that the libertarians adopt as their forefathers. The problem is that "libertarianism" is a medium-sized tent. So when you criticize "libertarians" for position X, well some hold that position and some don't.
  - pelle 18y ago
    Also by definition we are at liberty to believe whatever we want. Kind of by definition we don't have any leaders to define what we think, even though many of us read lots of stuff by Rothbard, Mises, Hayek, Rand etc. Me I am definitely a libertarian, classical liberal, randian, anarcho-capitalist and several other labels that I might invent. But in reality we all have our different ideas of whats important and what isn't. And we do laugh at ourselves about this. Check out Peter Bagge's great comic about what happen when Libertarians gather... http://www.reason.com/news/show/28655.html http://www.reason.com/news/show/28655.html
- tjic 18y ago
  No, anarcho-capitalism does not say that corporations should replace government. Anarcho-capitalism merely says that government should go away. 90% of everything that government does wouldn't get done at all in a free society, and the other 10% would be done by multiple competing firms.
- natmaster 18y ago
  My thoughts: Most scientists (myself included) tend to prefer models that accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o http://www.youtube.com/watch?v=LfascZSTU4o What Zed describes is in no way libertarianism. What the following to understand exactly what it is (HINT: It's the opposite of Libertarianism.) http://www.youtube.com/watch?v=ticytEUvVhQ http://www.youtube.com/watch?v=ticytEUvVhQ
  - anewaccountname 18y ago
    Funny, Peter Schiff was totally wrong about the Euro. Dean Baker also predicted the housing meltdown, you're falling into the trap of anecdotalism.
deleted 18y ago
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peakok 18y ago
There is a hypocrisy in libertarianism à la Mises. When you read his hyper-logical texts (wich should be appealing to the HN crowd btw), he claims that we should remove any sort of ideology from our political and economical systems. Reason and logic only should govern our lives, and it is the duty of economics to aim at this goal. Sure, sounds attractive ! But there is a big assumption here, and it is that libertarianism is special and different, it's not an ideology like marxism or catholicism. It's THE way. It is the only path to reason and logic and science, because when we reduce the role of the state, we reduce the part of ideology in society. Therefore it must be the less ideological system of all, the most logical, and thus the the right one. Of course, liberatarians turn out to be just like any other political sensibility. They agree on broad things that makes them look like unite only because they are a tiny minority in the political landscape. But like any other sensibility, you reach a point in the debate where their own camp is split up in two and they will fight each other, etc. It wouldn't be the case if it wasn't an ideology, and they would all agree on core issues like the private/public fire stations, or even health wich should be considered like any other good for some, but not for some others (I can tell because I have some libertarians friends). The above comments about the protection from plagues are very interesting. It leads to the very interesting history of sewers. Mises is the reflect of his century when we were too optimistic about science, we believed it would soon answer all the questions even in fields that looked like non-scientific, like human organization. It turned out science is indeed good for changing our lives in an indirect way, but unfortunatly not so good outside real scientific fields. It doesn't answer philosophical questions (if such a science existed, then it would be the right one to follow for organizing human societies).
- thomasmallen 18y ago
  You cite a single author as a representation of a vast political ideology and quickly drop in some fluff that guides the rest of your comment: But there is a big assumption here, and it is that libertarianism is special and different... Libertarianism is a slightly more detailed political idea than convervatism. It represents the desire for smaller government that only acts when necessary. Another core tenet is that you're free to do as you please until your actions infringe upon the rights of others.

jmtame 18y ago

The best solution I've heard proposed was Socially Responsible Libertarianism. Which means the public is held responsible (not the government). So basically when pollution problems arise, for example, it is the obligation of the general public to boycott or pressure the corporation to change (instead of the government fining the corporation, which ultimately may pay for the people in office to carry out the litigation in the first place). Another downside is that the government can easily be inflated with lobbyists to carry out a corporation's dirty work. Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day.

corentin 18y ago
> Libertarianism by itself is flawed because many corporations will establish monopolies or duopolies, stop innovating, raise prices, and call it a day. Whereas with big government, they'll never ever hire lobbyists to ask for bailouts, subsidies and protectionist legislation...
justindz 18y ago
This is where you attempt the defense that such activity is "initiation of force." The ability to make many varieties of libertarian philosophies practical hinges on how broadly you can handle interpreting initiation of force and the government's responsibility to stop that. Monopolistic behavior could be considered initiation of force in the sense that it unfairly and aggressively limits someone else's success or freedom for gains without right. Then, of course, you get to decide whether drunk driving is initiation of force, whether very noisy neighbors late at night are initiating force, and so on and so forth. This is not a critique of libertarian philosophies. Pretty much every philosophy is made practical through interpretation and compromise because life is more complicated than policy (and even poetry).

gaius 18y ago

This sort of thing always happens when people who know a bit about computers stray outside their area of expertise.

hc 18y ago
this sort of thing is known as argument ad hominem.
- gaius 18y ago
  Dude has just made up his own definition of a word in order to have something to rant about. What would you call it?
  - likpok 18y ago
    But you are still attacking the person, rather than his argument.
    - stcredzero 18y ago
      Okay, then, Zed's argument fits the pattern of something formulated by someone outside of their area of expertise. Zed has exhibited difficulty with the precise use of terminology before. In the recent talk that was posted, you hear him saying for people not to come up and correct him on his use of terms like "Turing Complete." http://blog.cusec.net/2009/01/05/zed-shaw-the-acl-is-dead-cusec-2008/ http://blog.cusec.net/2009/01/05/zed-shaw-the-acl-is-dead-cu... There are other terms that he unintentionally abuses in the talk. (left as exercise) Still, I think it's a great talk and agree with a lot of what he says. He reminds me of a coworker of mine. This coworker is hazy on things like the laws of Thermodynamics and some aspects of Object Oriented Programming, but he seems to get things done, and I'd have to say he's a good programmer.
      - gaius 18y ago
        I shudder to think what Zed's code is like. Did I say rm? I meant cp...

Dauntless 18y ago

I would just like to point out that Enron pushed for deregulation and always blamed government regulation of the market for the huge price rise that followed the deregulation, even though it was made on purpose by their corporation. Check out this documentary Enron: The Smartest Guys in the Room: http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the... http://en.wikipedia.org/wiki/Enron:_The_Smartest_Guys_in_the..., it's nice to learn from history. I agree that government regulation can be as dangerous as out of control police force, but libertarians (similar to communists) are completely oblivious (sometimes on purpose) of how absurd their idealistic word is and lack basic understanding of human nature. It's better to have an open, accountable, public police force than nothing at all.

DanielBMarkham 18y ago

There's nothing like attacking something you are oblivious to. I think I have a new maxim for the internet: Never have so many people said so much about that which they knew so little about. (And yes, I count myself in that)

walterk 18y ago
> There's nothing like attacking something you are oblivious to. This is why, when it comes to rejecting a particular ideology, I believe you need to have adopted that ideology to the point that you genuinely grok it. If you can't replicate the mental operations that allow a subscriber to make sense of the world, what its problems are and how to solve them, and the ways they derive comfort and validation from those operations, then you're guilty of being uncharitable to their worldview. And if you're uncharitable, you're unlikely to develop an argument that demonstrates how an ideology is flawed given its own values and assumptions, or how that ideology actually conflicts with one's pre-ideological values and assumptions. The ideologies that survive are always more resourceful at countering counterarguments than a non-grokker will expect. Which is as good a reason as any to actually try it out, first.
- DanielBMarkham 18y ago
  Absolutely agree. Which is why the goal of any net conversation should not be to persuade, but to understand how the other ideology deals with arguments against it. That can sometimes sound like bickering, but the real goal should be understanding, not to "win" or "lose".
  - walterk 18y ago
    Yes, exactly. As a recent fortune cookie fortune put it: "The purpose of argument, should not be victory, but progress."
- Retric 18y ago
  One of the problems with that viewpoint is reality is harsh. Pollution is a classic cases of the tragedy of the commons and all successful forms of government need to deal with this and thousands of other issues. Maximizing prosperity is something with many local minimums over the short and long term. IMO saying X is correct when you are wrong should lead to ridicule lest others assume it's a reasonable argument. PS: Read http://en.wikipedia.org/wiki/The_Selfish_Gene http://en.wikipedia.org/wiki/The_Selfish_Gene works as an analogy for ideologies. They don't need to help their followers as ideology only needs to propagate faster than it's killed off.

puzzle-out 18y ago

"Greenspan and friends were all major libertarians, and even Greenspan said he was full of shit." Oh well, at least that line made it worth reading.

jordanf 18y ago
Greenspan was a self-proclaimed libertarian who used to support a gold standard. Of course then he gained virtually unlimited power by controlling the entire US economy. Power naturally corrupts, he renounced his views, encouraged every American to spend more than he or she possessed, artificially lowered interest rates and caused the entire housing boom. Article is a joke. Can't believe this crap gets out there.
- zzzmarcus 18y ago
  This is, however jaded it sounds, is basically correct. Read Greenspan's book (Age of Turbulence) to get it in his own words. While he was running the fed he was definitely not a libertarian. In fact, I'd argue that that you can't be a member of the fed and be a libertarian, their entire purpose is to artificially manipulate the economy through government... or quasi-governmental intervention.

paddy_m 18y ago

The thing for me is, I don't just distrust the government, I distrust large organizations in general (government, fortune 500 companies, religions), I find that they are fairly inefficient. I am not interested in replacing one inefficient system (government) with another inefficient system (corporations). I don't want a corporatist society at all, I do want a strong rule of law. I would welcome a world where we have an efficient market, not only of companies but of governments. There is a market for governments now, but it has very high transaction costs (moving to another country is expensive and dificult, often requiring years of residency to establish yourself as a citizen). One way to make for a more efficient market for government in america would be to have a less powerful federal government, note I didn't say "and more powerful state governments", at the state level you can break it down to counties and then cities. Ideally you could have (and actually do now) a world where people choose the government they want (not so much by voting but by moving). Voting by moving sends a much more powerful message than voting at a booth. Here's the thing, if we had a small government, there would be no point in lobbying (rent seeking) because having the government's favor wouldn't get you much. Campaign finance reform attacks the wrong side of the problem, like using insecticide around your garbage can instead of taking out trash to get rid of flies. Notice also that zed asked for a strong rule of law. We don't have that. The result of a bank becoming insolvent is not known, sometimes they will get a bailout, sometimes they won't. Many of the regulations for financial industries wouldn't be necessary if the companies thought they would be held accountable for their actions, they didn't think they would be held accountable, and they weren't, so given that set of rules they played the game properly. Zed alludes to a couple of concepts. I think the efficiency that he is referring to is better thought of as maximizing utility. No one can be made better off without making someone else worse off. A state where the above is true is known as a pareto optimal state. http://en.wikipedia.org/wiki/Pareto_efficiency http://en.wikipedia.org/wiki/Pareto_efficiency Sorry if this was rambling, just my thoughts.

eru 18y ago
The EU (or more specifically the Schengen agreement) eases migration in Europe --- making voting by moving easier. Unfortunately they also tune down the competition between regimes by making the differences smaller.

alexandros 18y ago

What most people do not see is that libertarianism is against big corporations as well as big govrnment. In fact bigcos can not exist without government support. Reducing government and allowing the market to work should result in smaller, not larger organizations, a dinosaurs to mammals transition.

nfg 18y ago
"In fact bigcos can not exist without government support" That is a mighty big claim which flies in the face of practical experience.
- likpok 18y ago
  Not that I necessarily disagree, but you could argue that in the time there have been corporations, there was also government support.
- michaelkeenan 18y ago
  alexandros might be referring to the argument was made by Roderick Long in Cato's lead essay in November: http://www.cato-unbound.org/2008/11/10/roderick-long/corporations-versus-the-market-or-whip-conflation-now/ http://www.cato-unbound.org/2008/11/10/roderick-long/corpora... He points out that government funding of highways acts as a de facto subsidy of Walmart and similar chains by partly socializing the costs of shipping, making it easier to compete with local businesses; and that regulations (which large companies can more easily understand and comply with than smaller companies) provide barriers of entry to industries. He concludes: "In a free market, firms would be smaller and less hierarchical, more local and more numerous" (I don't have a strong opinion on this. It sounds plausible but it's a bit anecdotal for my taste.)
  - bmj 18y ago
    I'm sympathetic to this, but at the same time, most local sellers (outside of those who exclusively sell locally-produced goods) rely on the same transportation system.

alecco 18y ago

>First off, the unstated goal of most libertarian doctrine is basically the following: > > 1. Corporations are more “efficient” than the government because of the > “natural selection” of our capitalist system. > 2. Corporations are therefore better than the government at everything. > 3. Corporations should be the government, or at least in control of it. > and >> But that means that the only way to get government out of business is to get business into government. >> There's already a lot of money in Libertarian think tanks; it comes from business. The explosion of dedicated Libertarian volunteerism necessary to transform the United States has yet to materialize, even though the Republican Party has harnessed an explosion of socially conservative volunteerism in the service of the same business interests that benefit from Washington's "Libertarian" bullshit factories. Money from business interests provides the only real political pressure pushing policy in a Libertarian direction. Yes, the libertarian "movement" in USA is quite undefined. Very often statements by referents get out of the core of the concept. For example: * Privatization of large public sectors, but not making a proper market and destroying regulation, therefore placing monopolies or oligopolies (e.g. Enron's abuse of pricing.) * Keeping a systems of taxes and special bailouts or credit lines to large corporations that never reach small business or individuals. * Keeping the system of immunity of owners of corporations for the behavior of the organization (something that appeared after Adam Smith, and is more aligned with his economic rivals.) * The backers of US mainstream (alleged) Libertarians (save Ron Paul) are mostly backed by the US military-industrial complex, an industry completely against free market and almost exclusively based on tax-dollars supplied by a gigantic war-mongering government. And the list goes on. I'm sure there are true good Libertarians but the masses seem to be enchanted , yet again, by large anti-free market interests. IMHO, Libertarians shouldn't support any large organization as it would just replace government with similar flaws. And a true Libertarian can't be part of the Republican Party.

demallien 18y ago
Hey! Put some carriage returns in there! You're screwing up the page rendering...
- thomasmallen 18y ago

michaelkeenan 18y ago

I would like to see a social news aggregation site, such as Reddit and Hacker News, focused on quality debate. Users would tag each submission with its label in Paul Graham's disagreement hierarchy (http://www.paulgraham.com/disagree.html http://www.paulgraham.com/disagree.html). This submission, for example, would probably be tagged "Level 4: Counter-argument". And, probably, also with "Strawman". You could filter out all submissions rated lower than Level 5 or 6 or whatever your threshold is.

chasingsparks 18y ago
That would be fantastic.
pauldino 18y ago
And we could call it "The Argument Clinic" (Tagline: "The right room for an argument")
walterk 18y ago
I actually think this sort of functionality should be present throughout all forms of online communication. If that happened, the same standards of discourse might leak into offline communication as well.

blergh 18y ago

I like Zed, but this is full of bullshit. Every economist worth the name (fuck that Krugman/keynesian bullshit, read some Tyler Cowen, Peter Boettke, Steve Horwitz) knows that the Fed is to blame for the current episode of the business cycle. They printed too much money, it causes inflation and, even worse, disastrous malinvestments. In short: printing money fucks up the structure of production. Moreover, the Fed isn't even a libertarian institution. He tries to discredit libertarianism by proclaiming that an airhead like Greenspan is a libertarian. He's not. He might once have said he was one, his actions have proven otherwise. The Fed is a government monopoly on money. And that's a bad thing.

likpok 18y ago
The Fed doesn't print money. It does affect the size of the money supply, but it does this with interest rates, securities, and the reserve rate (or can do this). The reserve rate is generally not touched (it causes shocks in the money supply). The last two generally affect lending and saving rather heavily (make the interest rate high enough, it's not worth it to invest; low enough, not worth it to save). The fact that the dollar is fiat has little to do with the problems we ran into (printed money is only a tiny fraction of the money supply).
- blergh 18y ago
  "Printing money" is only a euphemism for "expanding the money supply." I thought that would be obvious. I know the Fed doesn't actually print the currency or mint coins.
  - likpok 18y ago
    But printing money and expanding the money supply have different effects on the economy. Printing money necessarily causes inflation; expanding the money supply does not ( it depends on where AD and AS are relative to each other).
waratuman 18y ago
Yes, usually I find Zed to be better able to back what he is saying. I don't know what happened this time.

chasingsparks 18y ago

His article made me angry enough to write a rebuttal post. It can be found at http://justlikejesse.com/2009/01/08/re-the-two-flaws-of-libertarian-economics/ http://justlikejesse.com/2009/01/08/re-the-two-flaws-of-libe... for all two of you that may be interested

awt 18y ago
Good point about gov't encouraging home ownership. It is extremely frustrating to hear all the rhetoric about the failure of capitalism and free markets when the markets are anything but free due to government subsidies designed to encourage home ownership.

biohacker42 18y ago

Zed's point 3 is fascism not libertarianism. Fascism the the standard straw man to throw at libertarians. And because I can't bare to go through this again, let me just say: Hitler was a vegetarian, and if you're a vegetarian you're a nazi. Good day and Goodwin!

anthonyrubin 18y ago

I think Zed should stick to Ruby rants.

mightybyte 18y ago

Zed's essay is actually pretty good after applying the following transformation: sed 's/libertarian/republican/' Without that transformation, the essay is positively enraging. I should note that republican here refers to the republican party who at times has espoused libertarian ideas. Don't throw the baby out with the bath water.

mmmurf 18y ago
Excellent point. There has been nothing remotely libertarian about the Bush administration.

KirinDave 18y ago

This is the first well-written, lucid piece of writing on zedshaw.com in a long time, and it's actually quite good. For those of you turned off by just the name Zed Shaw, put that aside for a second. I'm not sure I agree with what he's saying, but there is no cursing, complaining about mean people, or talking about how unfair the ruby/rails community has been. Maybe he is going to keep that no-rant promise.

kingkongrevenge 18y ago

Libertarianism is fundamentally about liberty, not efficiency or anything to do with government vs. corporations. The "unstated goal of most libertarian doctrine" is to prevent people from getting bossed around or stolen from at gunpoint. He can't even comprehend such an approach from his "let's tinker with society for optimal outcomes" political vantage point.

Prrometheus 18y ago

Thank you, Zed, for debunking internet-forum libertarianism. To the non-naive libertarians among us, however, you have provided no new information. If you have the time, you should pick up some Friedman or Hayek. Friedman's "Free to Choose" is a mass market book on libertarian economic policy. Hayek's "The Use of Information in Society" is a beautiful exposition on the function of a decentralized market. But there are plenty others. You might also benefit from a well-reasoned, economic critique of regulation. "Regulatory capture" is a real phenomenon, as is self-serving bureaucracy. If hundreds of thousands of pages of rules and a multi-trillion dollar budget weren't enough to fix the market, there is probably something wrong with the process. "More rules and money" probably isn't going to fix things. I can find such writing for you if you don't have the time. Drop me an email. However, you will find that writings by competent libertarian economists are not so easy to "debunk" when compared to forum posts written by 16-year-olds. Or Misesians. Those guys are crazy.

mhartl 18y ago
Or Misesians. Those guys are crazy. How so?

jpwagner 18y ago

See how pointless BSchool is?

smydsmyd 18y ago

Essentially Ruby is not good for the environment. I agree

logjam 18y ago

Zed. There are many more than two. For starters: http://world.std.com/~mhuben/libindex.html http://world.std.com/~mhuben/libindex.html http://en.wikipedia.org/wiki/Criticism_of_libertarianism http://en.wikipedia.org/wiki/Criticism_of_libertarianism Notwithstanding these and the adolescent, Platonic fantasyland in which libertarians reside, it's a source of predictable and endless amusement how libertarians perenially attempt to present (and poorly camouflage) simpleminded greed as supposed societal good. Odd, that dishonesty. And the last eight years, if not the last three decades, further show the lie of libertarian economics. Any libertarians celebrate the 24th anniversary of Bhopal (and all the subsequent "market corrections" of Union Carbide) back in December?

natmaster 18y ago

I stopped reading when he misstated everything about Libertarianism: " 1. Corporations are more “efficient” than the government because of the “natural selection” of our capitalist system. 2. Corporations are therefore better than the government at everything. 3. Corporations should be the government, or at least in control of it." This guy obviously not only misunderstands what Libertarism is, or Austrian economics. But also grossly misunderstands the cause of our economic collapse. I tend to trust the scientists that have models that can accurately predict the future: http://www.youtube.com/watch?v=LfascZSTU4o http://www.youtube.com/watch?v=LfascZSTU4o

chasingsparks 18y ago
He also misunderstands evolution; That's a greater offense.

natmaster 18y ago

In case you were wondering what this guy is describing. It's basically our current system of corporatism (where corporations control government) - which is not only the very opposite of Libertarianism, it approaches Fascism. More info: http://www.youtube.com/watch?v=ticytEUvVhQ http://www.youtube.com/watch?v=ticytEUvVhQ

sutro 18y ago

Zed's political commentary is a ghetto.

wustl07 18y ago

Maybe I missed the day where they fed us the bullshit that it all is a zero sum game. You cannot "make a fortune" at the expense of others, but only by offering others a better deal and, thereby, making them richer.