Tracing consequences both seen and unseen.
Wirkman VirkkalaReasoned Out, Reasoned In
Posted at 11:31 am on October 8, 2013, by Wirkman Virkkala

This weekend, Justin Stoddard brought up Arthur Koestler’s views on faith, in the context of Mises on human action. The discussion at first struck me as tangential to the main thrust of the first chapter of Human Action, which we both read as part of an attempt at a tandem, co-ordinated reading. But considering that in that first chapter Mises tries to mark the differences between praxeology, the theory of action, and other domains of thought, such as psychology, epistemology, metaphysics, etc., and that faith would normally be thought to reside somewhere in these other domains, perhaps it is not so tangential. Perhaps it is a good prefatory discussion.

Like Justin, I see that the common maxim that warns us that you “cannot reason a person out of a position that person did not reason himself into” is obviously false. It may be that I did not “reason myself into” the religion of my family; it was “in the air,” a part of my heritage as much as the house I lived in the and the forest nearby: I did reason myself out of it, though.

Most people never accomplish any task of a similar nature. They fall into a religion, or an ideology, like they fall into love: the object of adoration was near at hand, and quite serviceable, and seemed willing to reciprocate and meet some basic needs of the psyche. Most people become liberals or conservatives in this way, and I’m sure some libertarians are born this way, too.

It was Justin, also, who brought up matters of belief as an element of reason, rationality. This is not the primary object of Mises’ interest, in Human Action. But, to clear the way for future commentary, I’ll consider, briefly, the doctrine of the minimum wage legislation, which Justin mentioned as if a stand-in for the many positions of libertarianism (a social philosophy Justin and I both hold to). And I’ll do this in frank autobiography.

When I was a teen, and extricating myself from the faith of my mother and my aunts, et aliae, I was also beginning the process of settling on a political ideology. I considered myself a liberal. I deemed my basic attitudes liberal, and on some important issues I favored liberty over regulation. But I had been taught in school and from the TV (and in part from my encyclopedia set) that concern for the poor had led to laws like those establishing a minimum wage, and I was basically accepting of the practice, and many others of our society and its government.

But I had the wit enough to see that minimum wage laws were comparable to laws about marriage and sex (say, the prohibition of prostitution) that I objected to. So I thought the only rational thing to do was consider the case against the minimum wage, as made by some economists and most libertarians.

That case involved scarcity, wealth production, supplies and demands, etcetera, and I became convinced that minimum wage laws didn’t have the univocally good results hoped for and trusted in — as, I could see, a matter of faith — by proponents of the dirigiste state. I knew some folks who, without blinking, supported minimum wage laws and legal prostitution, both, without blinking an eye. And yet it was obvious that laws against prostitution were of a similar nature to minimum wage laws. Both prohibited certain contracts at certain rates. Both had seemingly plausible arguments in their favor, but neither worked as their proponents thought.

The “faith” element, here, is the belief in the advisability of a program while refusing to believe in the negative effects of the program in question, or of judging the program on the general results, or with reference to those results. Some evidence must not be not considered.

And the world is a complicated enough place that one can easily shield one’s eyes from things one doesn’t want to see. There’s always something else to look at.

In the case of the political opponent of prostitution, it’s the inherent vileness of the activity as it is when the practice is illegal, and the pure morality of sexual activity confined to pure barter in bilateral monopoly. The negative effects of anti-prostitution laws are just a “cost of promoting the good.” Or, it is asserted, though without much careful thought, “the cost of ameliorating a great evil.”

Mutatis mutandis, it is just so with the opponents of low wage contracts. The suffering of the people who must endure low-paid work gets concentrated on, as does, even more so, the imagined alternative: higher wages — hooray! The idea that the actual alternative under minimum wage laws is that at least some segment of the low-skill labor force will suffer no employment? Blankout. Not addressed.

I noticed this at the time. I was the only liberal I knew who had looked squarely at the arguments made against minimum wage laws. And when I would relate these arguments back to fellow liberals, they dismissed them, not merely with lack of interest, but derision. These people who made them did not care about the poor!

And I have heard this reaction many times since.

My own take was that a person who wishes to help the poor, upon hearing that one’s chosen means to do the work would not work, instead of rejecting the news, would be concerned, and look into it. Why? Because of the ostensible aim, helping the poor. If one did not look closely at the challenge, then it was obvious that helping the poor was not the real aim. The real aim might be something more like “seeming to help the poor” or “appearing moral.”

And this is where my commonality with Mises becomes clear. He aims to provide reason to the processes of causation from human choice, to clear up the confusions, and to find the regularities in social causation. His science, that of a rather formal ends and means structure, he calls praxeology. It is the underlying principle to much of the work done by economists up to his time.

As Mises saw it, the main opponents of the development of such a science have been those whose approach to social life and public policy relied too heavily on faith and defensive inattention. And so Human Action, in the course of developing the principles of praxeology, also elaborates quite a few critiques of the dominant faiths of the age — many of which remain dominant after all the years since Mises first published his great book.

Praxeology does not itself require faith. It requires careful reasoning to figure out. One reasons one’s way into an understanding of economics.

But it is possible to sloppily approach a doctrine of laissez-faire, and proceed on faith. I know many libertarians who rely entirely on their bets about the world, and do little actual investigation into the reality of the underlying claims. That’s only natural. Human beings have limited time. Not everyone can be an economist, or philosopher.

But I don’t think we should equate those libertarians whose approach is almost entirely intuitive with those who have engaged in deep study. The libertarian faith and the libertarian wisdom have at least some differences. Much of it relies on what we bring to the issues. A deep prejudice for freedom is a great thing in a person, and it often leads to the full flower of a libertarian individual. But it’s not enough. Not if you really want to understand the world.

I am not sure that I’ve addressed what Justin was broaching. I’m pretty sure I have not in any way summarized the first chapter of Human Action.

But perhaps now we can proceed to a discussion of the book? We can return to the issue of faith — and, in general, of non-rational approaches to belief and action — as we proceed.

Filed under: Economic Theory, Philosophy
Comments: Comments Off on Reasoned Out, Reasoned In

Wirkman VirkkalaRepurposing Capital: Human Action
Posted at 8:54 pm on September 23, 2013, by Wirkman Virkkala

In an economic downturn, when massive business failures appear simultaneously, owners of the means of production need to find new uses for their discarded capital-intensive production processes, and investors need to find new forward-looking enterprises to place their funds, in hopes of some future return.

This is part of the recalculation necessary during the cluster of business errors called a depression.

The terminology I’m using is that of the Austrian school, of its capital theory as well as its theory of the business cycle.

And I’m applying it to this very blog.

Which has been comatose for some time.

I invite the former participants in The Lesson Applied to give Ludwig von Mises’ Human Action: A Treatise on Economics, a careful reading. Or re-reading, as your case may be. Writers, contact me on Facebook and I’ll sign you up for Reading Matters, a Facebook group that will handle some of the technical matters of our co-ordinated reading. I propose to read this long treatise chapter by chapter, moving on when a consensus of active readers agree.

This blog will be location for our ruminations. That is, we will discuss the book and its ideas here.

Perhaps after we’ve read Human Action, the blog will revive back to its original purpose, of exploring the ramifications of policy upon market society, beyond stage one, as Thomas Sowell so neatly put it, in a Hazlittian spirit.

Always, lingering in our thoughts, will be Bastiat’s insight: where in Mises’ work does it fit?

Filed under: Economic Theory, Education, Philosophy
Comments: Comments Off on Repurposing Capital: Human Action

Wirkman VirkkalaThe Method of Sachs
Posted at 1:43 am on January 20, 2012, by Wirkman Virkkala

There exist trenchant criticisms of the libertarian idea. Henry Sidgwick, in his The Methods of Ethics (seven editions, 1874-1907), provided a concise set of challenges to the doctrine as he understood it. Each of his points is well worth addressing. And yet when today’s major thinkers muster up their inner dialectician to rail against the freedom philosophy, they usually fall flat, get caught up in inessentials and absurdities.

Take Jeffrey Sachs. In “Libertarian Illusions” he attempts to unveil and discredit the ism behind the Ron Paul phenomenon. It’s a pretty lame attempt. Here’s his basic characterization of his target:

Libertarianism is the single-minded defense of liberty. Many young people flock to libertarianism out of the thrill of defending such a valiant cause. They also like the moral freedom that libertarianism seems to offer: it’s okay to follow one’s one desires, even to embrace selfishness and self-interest, as long as it doesn’t directly harm someone else.

Yet the error of libertarianism lies not in championing liberty, but in championing liberty to the exclusion of all other values. Libertarians hold that individual liberty should never be sacrificed in the pursuit of other values or causes. Compassion, justice, civic responsibility, honesty, decency, humility, respect, and even survival of the poor, weak, and vulnerable — all are to take a back seat.

A well-educated liberal-leaning friend of mine gave the exact same rap years ago. He also referred to “liberty as a value,” so I’ve long pondered that odd phrasing. I think of liberty as a condition dependent on relationships (with other people). I don’t primarily think of it as “a value.”

I value liberty, yes, and will agree with Sachs that it is not my only value; I have many others. Nearly all freedom-lovers do. They have lives. Personal lives, communal lives, careers, hobbies, interests . . .

Yet, I do value liberty highest in the political and legal context(more…)

Filed under: Philosophy
Comments: Comments Off on The Method of Sachs

Wirkman VirkkalaCoke Buyers Are Sovereign
Posted at 9:42 pm on December 1, 2011, by Wirkman Virkkala

The good folks at Coca-Cola really want to innovate. They probably admire the late Steve Jobs. They’ve lots of neat ideas. Helping polar bears is one of them. So, to honor the polar bears (or at least ballyhoo their cause and plight), Coke folk changed the color of the can of their main product, Coca-Cola™. They made it white. You know, “polar” color.

And then came the uproar.

Coke buyers didn’t like it. Many returned the product, thinking that it was either Diet Coke (whose silver can is, actually, very similar to the new white can) or else a modified product. A few Coke drinkers said that the drink tasted different. There was general confusion, as reported in the Wall Street Journal:

Mel Cyr, a 17-year-old Coke drinker from Sheboygan Falls, Wis., said she and other teenagers attending this week’s National 4-H Congress in Atlanta scratched their heads after seeing the white cans. “You can’t change something that’s classic,” said Ms. Cyr.

4-H delegates from Wisconsin said their chaperone was mistakenly served a regular Coke on the flight to Atlanta from Milwaukee after requesting Diet Coke. “The flight attendants were really frustrated” and apologized for the mix-up, said Sara Harn, 17, of Brooklyn, Wis.

Obviously, this is another innovation from Coca-Cola that didn’t take – reminiscent of the infamous “New Coke” of a few decades ago. Coca-Cola’s clientele was so negative that the august Atlanta company switched plans, and is now switching back to the red cans we all know and love, far ahead of schedule.

A lesson for us all. Consumers are sovereign. You can innovate up and down your line, but if consumers aren’t buying, you aren’t selling.

The doctrine of consumer sovereignty was defended, in the 20th century, by two curmudgeonly economists, W.H. Hutt and Ludwig von Mises. The word choice was spot-on. “Consumers are sovereign” doesn’t mean that producers are meaningless. But the sovereign(s) have the last word, it’s the sovereign who must be pleased.

And that’s what capitalism is all about.

This lesson is probably hard on the innovators at Coca-Cola. Take the lame ending of that Wall Street Journal article:

But Ed Rice, the 81-year-old chief executive of Ozarks Coca-Cola/Dr Pepper Bottling Company, a longtime Coke distributor in Springfield, Mo., thinks the white can was innovative and engaged consumers. He downplayed confusion between the cans.

“If you put the cans side by side and blink, you might have to take a second look,” said Mr. Rice, who loaded his first Coke truck in 1945. “But I think there’s a distinct difference.”

Yes. But not distinct enough.

And besides, the customer is always right. Well, right in the one way that matters most on the market, right in being sovereign.

Note: I’m quite aware that the concept of consumer sovereignty is a metaphor, really, and not a technically pristine term. It was introduced by Hutt and Mises to counteract the nonsense now once again popular, the idea that corporations “push” us to do things against our will. This is patent nonsense, at least when it applies to the trades we make, the things we buy. We are pulled by producers, yes. But not pushed. We have the means to object. We can take our money elsewhere. We can simply not buy the product. As proven, once again, by the folks who drink Coke.

Filed under: Economic Theory
Comments: Comments Off on Coke Buyers Are Sovereign

Wirkman VirkkalaAgainst the Simple Scenario of Rescue
Posted at 6:03 pm on January 30, 2011, by Wirkman Virkkala

Social causation cannot be simply drawn on a line, so public policy cannot be conceived in a one-dimensional fashion. See a goal? Find a means. Stick to it.


It doesn’t work, because each cause has more than one effect, and the selected effect, the end, is not all that must be considered.

You will often hear conservatives complain about progressives’ lack of understanding in this department, how those on the left too often have a one-dimensional view (more…)

Filed under: Unintended Consequences
Comments: Comments Off on Against the Simple Scenario of Rescue

Wirkman VirkkalaAnatomy of a Character Assassination
Posted at 10:40 pm on October 4, 2010, by Wirkman Virkkala

A writer named Mark Ames has written a profile of a man named Will Wilkinson. He titled it “Anatomy of a Libertard,” and it is very nasty.

I encourage you to read it not because it is in any way exemplary or honest or commendable. Instead, it is a great example of base rhetoric and unthinking partisanship. There’s so much hypocrisy and double standard, in evidence — and behind that a vast reservoir of thoughtless hate — that it almost boggles the mind.

Indeed, it contains no real argumentation. The business about income inequality, allegedly at the heart of the piece, is all invective and ridicule on Ames’s part. He simply mocks Wilkinson and lets it go at that.

Now, I am not a friend of Will Wilkinson, and I defend him not because of any connection that I know about, but simply on the grounds of decency and some sympathy. I haven’t exactly been following his career. From the few episodes that he participated in, and that I watched, he struck me as an intelligent person who loves liberty but fails to follow any else’s plumbline. So perhaps I identify with him in that sense. I, too, love liberty, hate coercion; I oppose bullies, thieves, and vindictive advocates of mass imprisonment or regimentation, whether such lockstep marching orders hail from the lightning left or the thunderous right.

That is, I’m a libertarian.

But I have an independent streak, and keep on finding new avenues of thought to explore. Wilkinson seems of similar cast. I vaguely recall his interest in evolutionary psychology.

Ames insinuates that libertarians argue what they do and believe what they do because some billionaires have poured money into a bunch of libertarian institutions, one of which is Cato Institute (wrongly identified by Ames as “the first libertarian think tank”). He gives us no reason to believe this. In fact, he gives us reason not to believe that. Wilkinson, he chortles, was fired from Cato (he says) for not being on the Tea Party bandwagon, which the Kochs also fund.

I don’t know if that’s true, half-true, or just a large hair ball of falsity. But I do know that you cannot call Wilkinson the Kochs’ “whore” (as Ames does, with that very word) and then deride him for being unemployed for an ideological stance which offended some Mr. Moneybags’s other commitments.

Note to Ames: Being paid to do something you love is not tantamount to whoredom. Indeed, I assume that many people on the left (who love complaining about rich people’s spending habits . . . or very existence) get paid out of funds donated by (shock of all shocks) rich people. Indeed, I know that this is precisely the case with nearly every major “liberal” and leftier journal extant.

Pot, see the kettle? It, too, steams up over heat. And it, too, sheds little light.

Filed under: Rhetoric
Comments: 4 Comments

Wirkman VirkkalaOffshore Drilling
Posted at 9:12 pm on September 7, 2010, by Wirkman Virkkala

A rising tide of legal saber-rattling against Craigslist for its “Adult Services” listings has finally achieved something: The good people at Craigslist took down the listings. In their place, the company put up a stark, white-on-black CENSORED sign.

So I have to ask: Is making the U.S. less free (or even seem less free) a victory of some kind?

The prosecuting attorneys who pushed this — most importantly “Connecticut’s insufferably self-righteous” Richard Blumenthal — say they want to curb prostitution (and of course bring up “child prostitution”). That they’re willing to do this by attacking an online classified listing service rather than the services themselves is interesting.

But are they really getting anywhere? The offensive listings are quickly migrating to other services, many of them on the Web but hosted in other countries.

So, a Pyrrhic victory, at best.

More likely, though, it’s a definite loss, not only of the liberty of the press, but for polite society’s continual fight against crime.

You see, there are other crimes associated with prostitution, other than the proscribed contractual activity itself. Johns sometimes beat up hookers; pimps sometimes beat up johns. Such acts of extreme violence are far worse than prostitution as such, and must be fought.

By forcing the Internet listings for “Adult Services” off-shore, police and prosecutors now have less access to the means of actually fighting very violent crimes. Getting personal information (by warrant) from the ISP? Now not possible.

The ability to “drill down” through server information to get at real criminals has been undermined. By our public servants.

I fail to see the logic of this, unless all it ever really amounted to was a publicity operation for up-and-coming prosecutors.

Even at best, it’s an example of the kind of narrow-bandwidth thinking that politicians habitually apply to markets: Concentrate on one element of a problem, and forget about the more dispersed secondary and tertiary effects.

Indeed, the biggest hurdle to preventing child exploitation and slave-based  prostitution is the continued illegality of prostitution as such. The best way to protect children and weak folk is to make “capitalist acts between consenting adults” legal even in cases of sexual interaction — that is, recognize the inherent peaceful and contractual nature of prostitution — allowing police to work with prostitutes against abusive pimps and clients, enabling police to side with the adults in the sex-worker community to patrol the market for the horrendous abuses against children prosecutors say they are against.

Cross-posted at Wirkman Netizen.

Filed under: Child Policy
Comments: Comments Off on Offshore Drilling

Wirkman VirkkalaBubblin’ Crude
Posted at 8:22 pm on June 18, 2010, by Wirkman Virkkala

As billions of gallons of “Texas Tea” bubble up into the Gulf of Mexico, I understand the rising tide of ill will directed against BP. The company’s smarmy, eco-friendly logo seems radically dissonant with the catastrophe they caused.

And yet, demanding that the company pay for every dime of recovery, every opportunity squelched, every harm to life and property (as Rosie O’Donnell did, as many on the left are wont to do), this is a bit disingenuous, no?

The Gulf is a commons. (more…)

Filed under: Environment, Regulation
Comments: 2 Comments

Wirkman VirkkalaProgressive Prohibition
Posted at 7:14 pm on June 9, 2010, by Wirkman Virkkala

From personal experience with self-styled “progressives,” I define Progressivism as the belief in no sort of progress, whatsoever, that is not tied to the growth of the state.

Historically, that’s not a bad definition, either. The Progressive Movement changed the Constitution of the United States with a series of amendments to the Constitution: The income tax, the direct election of senators, prohibition of sale and transportation of alcohol, and women’s suffrage. Each of these amendments grew government. (more…)

Filed under: Drug Policy, Nanny State
Comments: Comments Off on Progressive Prohibition

Wirkman VirkkalaBetter Than the Golden Rule?
Posted at 1:37 pm on April 22, 2010, by Wirkman Virkkala

Attempts to summarize all morality into a simple principle are ancient. Long before Kant’s categorical imperative we were blessed with the Silver and Golden Rules. Indeed, there is a sort of progress in the development of these rules:

Silver: Do not do unto others that which you do not want done to yourself.

Golden: Do unto others that which you want done unto you.

Cat. Imp.: Act only in such a manner that you can at the same time will that your act should become a universal law.

But the progress may be illusory. (more…)

Filed under: Economic Theory
Comments: 1 Comment

Next Page » previous posts »
Henry Hazlitt"[T]he whole of economics can be reduced to a single lesson, and that lesson can be reduced to a single sentence. The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups."
Henry Hazlitt, Economics in One Lesson






Recent Entries