Free Market-Neoclassical-Austrian-Classical Liberalism-Libertarian Economics

That’s a Mouthful; that’s what she said.

I believe that my understanding of Economics is a superior one just as you might believe that your atheistic view of the whole religion dilemma is a superior one. While a brief survey of car bumper stickers would seem to indicate that we have the higher ground in these debates intellectually, neither of us can be sure that we are in the right.

And that’s true. As you can never be sure that a God in the form of a Duck Billed Platypus with reindeer antlers is not tweaked out on mescaline embroidering a quilt made of papaya displaying the group Westside Connection dressed in wedding dresses doing charity work with Common at a Racist-Children’s Burn Hospital just beyond the Event Horizon that defines the observable universe, I likewise cannot be sure that hosts on major news network programs, newspaper article authors, talk radio hosts, and most people I encounter are really spouting off economic fallacies right and left.

The Discriminating Skeptical Type

Now to be sure, it is very hard, even for the discriminating skeptical type, to discern who has anything worthwhile to say especially when people arguing from all directions will use language like, “You have to look at it logically,” “the data is clear,” “when you look at the facts,” “it’s not rocket science,” “we can’t have another 4/8 years of ________,” “what I’m talking about is the principles on which our country was founded on,” “We’ve all seen what’s worked and what hasn’t and it’s time for a change.” The discriminating skeptical person can tell that these people, beyond being very impassioned, have put together a worldview that to them is very robust and fleshed out. It is so manifest and clear in their minds that they hardly feel that they should have to repeat it. (Nonetheless they do not seem to have any problem doing so ad nauseam.)

How then, is it that all the facts and all the “common sense” in the world seem to validate two or more mutually incompatible worldviews? The discriminating person might suspect that there are others out there like him. And that those other discriminating people, whichever ones they turn out to be, assumedly the ones with the relatively more accurate (or at least logically consistent) worldview, would eventually find time, to not only debunk what they see as erroneous trains of thought, but also to delve into the psychology of the impassioned yet erring people. The discriminating types, would hopefully be working on picking out and naming logical fallacies and trying understanding where they came from. Not necessarily yelling back at their intellectual rivals while hyperventilating but perhaps giving serious thought to how these other people might be influenced, that is, led to work out their logical fallacies.

As an Atheist and author of “The God Delusion,” Richard Dawkins talks about memes and cultural space when he investigates and tries to explain how notions of God are implanted in peoples’ minds, like fresh papaya embroidered into a quilt. Maybe there are people working on doing the same for fallacies in the economic realm…

Austrian Economics

“Is there an economics that doesn’t proclaim the virtues of mathematical virtuosity? Does that economics appreciate the ability of the entrepreneurial-competitive process to generate social order and cooperation? Does that economics therefore search for the causes to the present situation, not in animal spirits, but in the rules of the game that gave rise to perverse incentives? Unfortunately, [the referenced author of a New York Times article] never asks these questions, but the answer is in the affirmative: Austrian economics.” (Sanford Ikeda, “A Triple Whammy for Austrian Economics”)

The Austrian branch of economics motivates a lot of the libertarian political philosophy, though it has not been part of the mainstream since the middle of the 20^th century. “However, recent disillusionment with mainstream economics (even from within the mainstream itself)^[7] and the accurate predictions of some Austrian School economists regarding the 2007–2009 financial crisis, have recently led to renewed interest in the School’s theories.” (Wikipedia)  Below are probably the three most prominent organizations spouting libertarian, hence Austrian wisdom:

Give me Libertarianism or Give me Death

http://fee.org/ (As a rich philander-the-rapist I would definitely give this place a few million…maybe I could get “some of that internet money”)

www.cato.org/ (Often appearing on Penn & Teller’s Bullshit!)

http://reason.org/ (Drew Carey has a video podcast for Reason Magazine)

I am not going to get into defining, distinguishing, and coalescing all of the concepts, branches, ideologies, and/or philosophies in the title. All you have to know for now is that the amalgamation most commonly results in the classification as libertarian. (I should say that Neoclassical makes up a significant portion of mainstream economics, and while many Austrians might criticize it as being unrealistic in terms of defining “rational individuals” and its use of mathematical modeling, it has tools which are useful for understanding how things work and still motivates a lot of free market thinking). As you already know, in addition to the libertarians there are two huge camps in America, the democrats and republicans, and both include a large portion which will lay claim to the “logical superiority” of their opinions and the downright stupidity and inferior nature of their intellectual opposition. Hey that sounds a lot like our religious friends!

We’re all just Apelike Creatures

So getting back to the hypothetical that you have this stance called atheism. We know that the great majority of people in America disagree with you, not because they are bad people, it’s just that the evidence for the Platypus is too great to be ignored. Seriously though, we are all subject to the environment we grow up in, we learn whatever language our parents and friends speak. We inherit whatever accent. We adopt social customs. We have to make due, we have priorities you know; survive and replicate. You can see how both political and religious ideology are relevant here; we evolved in an environment in which we counted on fitting into a tribe for survival. A tribe with weird rituals and practices is better than being in a jungle on your lonesome. To an extent, we will pretty much say or do anything to fit in. Remember how every movie about high school touches on the anxiety caused by not being in the “in crowd” and therefore not being able to mate with the choice-ist replicators? (I’m sure that’s how the most romantic of you would have phrased it.)

I am no exception, I doubt you are. We’ve all agreed with/to something out of social expedience rather than rational deduction at some point or another and we shouldn’t feel guilty about it, it’s human nature. “Sure, I like that band too,” “No way! I’m not friends with her,” “Yeah, one more tank of NOS, why the fuck not!?” As far as religious folk go, while proselytizers abound in some regions, many are happy to let their faith (maybe I should say their tribe) give them quiet strength because they genuinely believe that the positive hard working and benevolent traits they possess come from the gospel. Or maybe they are just being good tribe members and it just doesn’t better their survival and replication chances to fight that meme. Whatever the case, they shouldn’t harass you too much. These are the types that probably feel guilty for not going to church enough (just like all of us feel guilty for not eating healthier, working out more, studying harder, doing more chores), for not praying enough, for not virgin sacrificing enough because they believe that these are good and noble things to do according to the mantras of their tribe: “A virgin sacrifice a day keeps the dancing tribesmen at bay.”

Bill and Larry

This prototypical religious person, while he or she might believe that his or her essence is perfused with Jesus-y goodness, he or she won’t necessarily take every opportunity to push it on other people. Granted, many will, but a topical discussion on current events doesn’t get very far that way:

“Morning Bill! How’s it going?”

“Hey Larry! You know, same old story [somewhat haggardly]. Another Monday, so of course I’m fighting fires and getting hassled by corporate!”

“Ooh, yeah, ooouuuuch, know what that’s like…Well on the plus side at least we have jobs in this down economy. You know [voice gets soft and distant] I find that even in these tougher times, having faith can give us the perseverance to ride through the storm, and [grinning goofily] more often than not there’s a glorious sun on the other side.

“Right…yeah, well, okay Larry, you know…like I said, busy day, so…”

“Take care Bill.”

“Yep, see ya” [scurries down the hall]

Now even if Bill wasn’t creeped out and was of the mind to agree with Larry (and that contrived scene was less Family Guy-ish) the farthest that conversation probably would have gone is that they exchange some vague positive generalizations about how they really, truly are fortunate to have God in their lives, talk about the upcoming church (of course I’m picking on Christians) events and be on their way. Let’s see how that could have panned out had our buddies from work been on the same “end” of the “political spectrum:”

“…Well on the plus side at least we have jobs in this down economy. Of course [hushed tone], if it wasn’t for those bleeding heart liberal democrats/ greedy fat cat republicans we wouldn’t be in this mess.”

“Tell me about it! More like demo-lition-crats. As in demolish the country!/ more like re-stupid-cans. As in, uh… stupid! RIGHT?! AM I RIGHT?! [fervently shaking head and showing a lot of teeth] HIGH FIVE! FUCK YEAH!!” [Giving each other hand jobs until chaffing is prohibitive]

My point is that while religious people won’t spend all their time debating, the “politically minded” will. (By the way, does anybody else notice how awkward people get when they slip into Jesus mode all of a sudden?) I suspect the fact that topics such as government, economics, and the actions of political leaders are more grounded in reality than “Sweet Zombie Jesus!” gives them more to talk about.

Popular Radio Hosts

Let’s take radio hosts, their job is to find things to talk about, the really successful seem to have a few things in common including that they are highly intelligent and that they did not go very far in formal education. Arguably, these characteristics make them at once highly interesting and highly relatable to broad audiences. The funny thing is, regardless of how little formal university training, how free from the brainwashing by Biology departments in the form of indoctrinations to evolutionary history, the demagoguery of Physics departments and their notions of the origins of the universe, these highly successful men (they are usually men too) often come to the same conclusion that the majority in [scientific] academia do:

By the by, if you are trying to poke holes in these examples which are used, more than anything else, to add color to, than to supply evidence for this view, let me say this:

1. It should already be understood that citing a prominent person with your opinion is not a valid way to make a fundamentally scientific claim, asshole.
2. Keep in mind these guys were respectively the morning and afternoon commute for the most competitive market in America until the station changed its format.
3. “You get pitted, so pitted!”

I’ll show you dispassionate!!!

Just as atheists such as Adam and Tom must routinely rebut the charge that they are cold and emotionless, libertarians are invariably accused of being phlegmatic by nature. So are librarians. I contend that those we consider to be feeling people, people having emotions, should include those having the judgment to gauge whether those emotions are serving them well for their current purposes. The person who can feel, but at the same time caution their feelings with an even head, is someone I see as virtuous not callous.

Now I know this all sounds as basic as the kindergarten aphorisms “count to 10,” “breathe,” “use your words,” and “stop having sex with your teacher 30 years your senior” but it is important to reiterate because all of these human emotions leave the playgrounds with us and we don’t get that much better at controlling them. It is frequently because one does not act hysterically, not in spite of the fact, that he or she is able to show compassion towards his or her fellow man or woman. We don’t over-parent and let kids learn from their mistakes, we tell our employees we are optimistic about 4^th quarter job growth, and we show poise when our soccer team is down 3-1 in the second half because we are looking out for them.

Here’s another example that we all can relate to, let’s imagine talking to an extremely attractive member of the opposite sex. If you are an aspiring young lady in an enchanted conversation with an established dream boat that is well dressed (yes, including his shoes), has an unusual air of confidence and a glint in his eye, it might be a good idea, despite what you feel, to hold back the crazy and refrain from asking him what he is doing each and every day for the next 4 and 1/2 months. If you are a man, smitten at the sight of, let’s say, a nubile freak, it would perhaps be wise, despite your emotional state, not to glaze over and telegraph the fact that you would gladly give your right nut to spray your left one on her. “All this talk about abortions is making me super wet.”

So being an atheist yourself, hypothetically at least, you know that being accused of having no emotions makes you very sad… and when that happens, you might turn to that libertarian guy you know, because you are starting to suspect that you might have some common ground. As your conversation moves away from the unfair attacks you are both victims of, you start to realize that you may have even more in common. In fact, the foundational “truths” that motivates each of these two views, atheism and libertarianism, is dependent on almost the same thought process, a similar “function” of the human brain. The acumen that affords you an understanding of evolution also bestows this new friend of yours with an understanding of free market economics. If you have not already come to that realization on your own, or reading this just now does not give you an awe-stricken Neo-Whoa-Moment, then “for the love of all that is good and [logical],” think about this more.

Whoa

They are both mechanisms. They are both selection processes. They involve bazillions of interactions amongst self interested players. “Survival of the fittest.” More advanced things result. Entropy, that is randomness, seems to be decreasing.

“In the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed.”               -Charles Darwin

Because the two phenomena are so conceptually similar, if someone tells me that A makes sense to them but B does not, I am immediately skeptical of their understanding of A. The real kicker is that most people seem to do just that, to “get” one and not the other. The inhabitants of each end of the traditional (and retarded) political spectrum (I am saying that the spectrum itself is asinine, not the people who populate it), [Neo]liberals and conservatives will often claim, respectively, that A is barefaced but B “doesn’t work” and contradictorily that B is self-explanatory but A is absurd. Here is an example of someone attesting to that fact, “The protests of libertarians notwithstanding, social conservatism (i.e. evolution does not make sense) and economic conservatism (i.e. free market economics makes sense) tend to go together” (“Are Liberals Smarter Than Conservatives?”). What was that? A concession to libertarians? Maybe we were on to something with them…

Powerful Podcasts

I had already received a minor in Economics from UCSD but for the better part of a year I listened to the audio lectures from the Foundation for Economic Education at fee.org religiously. Here I compile a short list of podcasts that I found to be very interesting. If you ever store up an hour or so of intellectual curiosity and an ear libre I recommend giving one of these a listen (No economics coursework required!):

Liberty and Power (If this thought experiment doesn’t trip you out of your skull I don’t know what will)

Separating School and State (For the love of science! Why does the DMV run education?)

The Myth of the Robber Barons (Hey, that’s not how they said it went down!)

The Myth of the Rational Voter (Kinda depressing.)

Privatizing Roads and Oceans (If you live in Southern California and you think the road system works, put your address in the comments section and I’ll come over and face fuck you right now.)

Public Choice (Former engineer tries to understand how incentives work in the public sector.)

What does this all mean for you?

I’m not advocating that everyone who checks out this post hits the streets,  pickets, parades, writes his or her congressman or gives Matt Damon a donation. Don’t run out of the house naked like Archimedes yelling “Eureka! I’ve figured it out,” and say that you know the true path our country should be taking. Why? Because doing those things will most likely not benefit you directly (unless it gets Matt Damon off your back) or indirectly for that matter, and as an arbiter of useful information it is not my goal to make you my plaything, my marionette on a string to go out there and do my bidding and make me feel important. But if you really want to, make sure you wear assless chaps and reindeer antlers.

It’s not that I don’t have any sense of the “common good,” I just wouldn’t be able to take myself seriously if I was claiming to give you, you hypothetical atheist you, legitimate advice that resulted in you spinning your tires and getting nothing in return. Taking the kind of action that your excitatory liberal arts professors advocate (canvassing, boycotting, striking, sit-inning) probably won’t better your situation, I mean it may if you get an intrinsic benefit from spreading awareness which is fine too, but otherwise that action isn’t rational. When the perceived cost to you is higher than the perceived benefit, that action is not rational. Smart people tend to act rationally and that’s the problem, libertarians are too smart. It is said that herding libertarians is like herding cats (I myself am not registered libertarian; I don’t like to be categorized), and it’s not that they aren’t trying.

So have you gone through all this only to realize it was a futile waste of time? Maybe I’ve been preaching to the choir, eh hem… lecturing to the TAs.  Alternatively, you may be glad to be violently slapped awake out of your coma only to realize that you looked stupid lying there without anything intelligent to say. Maybe a lot of this has made sense but you are too attached to your “tribe” and will therefore gladly shut it all out and develop cognitive dissonance if it means Stewart and Colbert continue to make you feel as though you’ve got it “right” (that’s right, Jon Stewart and Steven Colbert).

I want the Truth, the Whole Truth, and Nothing but the Truth

If you are in that last category, let me pose a few questions:

• If communism does not work for an entire economy (see Soviet Union) why would it work for part of the economy? -Jaybe
• Why does hearing the phrase “trickle down” (and associating it with Ronald Reagan) make you feel like you understand a branch of economic theory?
• Is it possible that I have made solid analogies relating two large social topics and the psychology that underlies them? This is to say:
  • Between religion and political philosophy.
  • Between the origins of life and the nature of the market.
  • Between evolution and economics.
  • The charged emotions behind them.
  • The intuition that propels them.
  • How our evolutionary history has shaped our thinking.
• Has the fact that you are in the majority emboldened you to think that you are definitely “right?”
• Do you base your opinions off those of your parents, your peers, your professors without doing all the work that forming an opinion entails because a) their values most resembled your own, b) they had the best presentation, or c) they just happened to get to you first?
• Do you have the humility to reassess?
• Do you actually care if you know what you’re talking about or do you just like to have a “side?”

A dream that you were so sure was real

To be brutally honest, if you are in that latter category to which I was posing questions, I hold no notion of being able to pull you out of your “delusion.” I am instead going after the “agnostics” of the economic/ political realm. Those of you who never really bought what their peers would say though they may have ran with it out of expedience. The ones always dumbfounded that their high school classmates were so harshly opinionated and sure of how right they were (even in high school!). Essentially, I’m going after those of you who have that subtle feeling that they’re in a dream they can’t wake up from.

Neo: I can’t go back, can I?

Morpheus: No. But if you could… would you really want to?

Morpheus: I feel I owe you an apology. We have a rule. We never free a mind once it’s reached a certain age. It’s dangerous. The mind has trouble letting go. I’ve seen it before and I’m sorry. I did what I did because… I had to.

Platypus be with you.