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Libertarian Economics - Part 1

Which concepts do you disagree with?


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Xerographica

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A few people here disagree with libertarian economics. So I thought I'd create a survey to see exactly which economic concepts people disagree with. There are quite a few concepts so I had to split the survey into two parts. This is the first part.

Make sure you base your survey responses on the descriptions of the concept rather than on the label.

Scarcity...

The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics. - Thomas Sowell

Opportunity cost...

The concept of opportunity cost (or alternative cost) expresses the basic relationship between scarcity and choice. If no object or activity that is valued by anyone is scarce, all demands for all persons and in all periods can be satisfied. There is no need to choose among separately valued options; there is no need for social coordination processes that will effectively determine which demands have priority. In this fantasized setting without scarcity, there are no opportunities or alternatives that are missed, forgone, or sacrificed. - James M. Buchanan

Human action...

We call contentment or satisfaction that state of a human being which does not and cannot result in any action. Acting man is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness. A man perfectly content with the state of his affairs would have no incentive to change things. He would have neither wishes nor desires; he would be perfectly happy. He would not act; he would simply live free from care. - Mises, The Prerequisites of Human Action

Demonstrated preference...

The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale. Similarly, if a man spends five dollars on a shirt we deduce that he preferred purchasing the shirt to any other uses he could have found for the money. This concept of preference, rooted in real choices, forms the keystone of the logical structure of economic analysis, and particularly of utility and welfare analysis. - Rothbard, Toward a Reconstruction of Utility and Welfare Economics

Incentives matter...

Difficulties and hardships are often but an incentive to exertion: what is fatal to it, is the belief that it will not be suffered to produce its fruits. - J.S. Mill

The Invisible Hand...

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. - Adam Smith

Fallibilism...

It follows, then, that a less centralized society has the advantage of a greater diversification of its performance across a larger number of preceptors. This is because diversification here dilutes the impact of the ability, or the lack thereof, of each preceptor on the aggregate societal performance. - Raaj K. Sah

The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. - Hayek

Apparently, then, the legislators and the organizers have received from Heaven an intelligence and virtue that place them beyond and above mankind; if so, let them show their titles to this superiority. - Bastiat

Consequences of failure...

For this is the salient point: private organizations, whether for-profit or non-profit, perform or lose their customers or their donors. When a private entity fails to deliver on its promise, or actually causes harm, it is held liable for the failure and pays the damages. When government fails, it gets a bigger budget and even more power. - Mary L. G. Theroux

Supply and Demand...

The instruments of intervention became the tools with which to apply government knowledge. Resources were directed and allocated by the state, by political and bureaucratic decision making, rather than by the elemental forces of supply and demand - forces shaped by the knowledge of those in the marketplace. - Daniel Yergin, Joseph Stanislaw

Partial knowledge...

The problem is thus in no way solved if we can show that all the facts, if they were known to a single mind (as we hypothetically assume them to be given to the observing economist), would uniquely determine the solution; instead we must show how a solution is produced by the interactions of people each of whom possesses only partial knowledge. To assume all the knowledge to be given to a single mind in the same manner in which we assume it to be given to us as the explaining economists is to assume the problem away and to disregard everything that is important and significant in the real world. - Hayek, The Use of Knowledge in Society

It is a world of change in which we live, and a world of uncertainty. We live only by knowing something about the future; while the problems of life, or of conduct at least, arise from the fact that we know so little. This is as true of business as of other spheres of activity. The essence of the situation is action according to opinion, of greater or less foundation and value, neither entire ignorance nor complete and perfect information, but partial knowledge. - Frank Knight, Risk, Uncertainty, and Profit
 

JP Hochbaum

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A few people here disagree with libertarian economics. So I thought I'd create a survey to see exactly which economic concepts people disagree with. There are quite a few concepts so I had to split the survey into two parts. This is the first part.

Make sure you base your survey responses on the descriptions of the concept rather than on the label.

Scarcity...

The first lesson of economics is scarcity:
Actually the first lesson is supply and demand. You might as well start over.
 

Bigfoot 88

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"Economics, as we have now seen again and again, is a science of recognizing secondary consequences. It is also a science of seeing general consequences. It is the science of tracing the effects of some proposed or existing policy not only on some special interest in the short run, but on the general interest in the long run."
-Henry Hazlitt
 

Xerographica

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Actually the first lesson is supply and demand. You might as well start over.

You can't understand supply and demand without first understanding the concept of scarcity. You know why? Because then you'll think there's nothing wrong with chartalism. Read Economists and Scarcity by Steven Horwitz...

When economists say, “We will never run out of resources,” what they often mean is that faced with increasing scarcity of one resource, we will always find new solutions to the problem that that resource originally solved. In an important sense, the actual economic resource was not copper but “the ability to convey voice and data.” And that resource has become “less scarce” by the substitution of sand. This illustrates Simon’s point that the “ultimate resource” is the human ingenuity that finds new and better ways of using physical resources.​

That's why just having resources is not as important as what you do with them. Markets work because we all have the freedom to give our money to the people who are finding new and better ways of using society's limited resources. This concept is just as applicable in the public sector as it is in the private sector. Taxpayers should have the freedom to give their taxes to the government organizations that are doing new and better things with society's limited resources. This freedom is the key to progress, prosperity and abundance.
 

Jetboogieman

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Still peddling your idiotic idea I see.

You're like a ****ing energizer bunny.
 

Xerographica

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Still peddling your idiotic idea I see.


You're like a ****ing energizer bunny.


You could have critiqued any of the passages that I shared in the OP...yet you choose not to. Why? My guess is that you've got nothing. If you had a devastating...or at least decent...critique then why wouldn't you have wanted to share it?
 

Jetboogieman

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You could have critiqued any of the passages that I shared in the OP...yet you choose not to. Why? My guess is that you've got nothing. If you had a devastating...or at least decent...critique then why wouldn't you have wanted to share it?

I've already shared my critique across a multitude of your threads, you found it so astute you even put it in your own blog...

I've destroyed your idea a long time ago as have many others... to which you had absolutely no reply except to keep peddling the same idiotic idea over and over again.

Your idea sucks.

Plain and simple.

You can try to peddle it any way you like, with the bible, with space aliens... nobodies buying it.
 

Paul Austin

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That's why just having resources is not as important as what you do with them.

I touched upon this in another thread the other day, talking about productivity.

Someone was arguing that when one has reached their physical capacity that their productivity couldnt increase, & I used the example of Henry Ford to show that ingenuity actually allowed him to increase productivity, without increasing the physical man hours.

In this case the resource was man power, & the secret to his success was how he utilized it within the framework of the production line.
 

Xerographica

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I've already shared my critique across a multitude of your threads, you found it so astute you even put it in your own blog...

Can you quote me where I asked you for a critique of pragmatarianism? I asked for a critique of the passages that I shared in the original post.

I didn't put your critique of pragmatarianism on my blog because I found it astute...I put it on my blog because it proved my point that people don't understand how the invisible hand works. You would have known that if you had actually read the blog entry...Unglamorous but Important Things.

I've destroyed your idea a long time ago as have many others... to which you had absolutely no reply except to keep peddling the same idiotic idea over and over again.

You've destroyed pragmatarianism? Let's review your critique...

The vast majority of Americans don't have the ability, the time or the mental capacity to understand every program and department in the Federal Government and wouldn't even begin to understand how each of these programs and departments actually benefits them.

Yes, because it would make sense for every single individual to evaluate every single solution to every single problem. Do you not understand the division of labor concept?

What about rational ignorance...do you understand that? Assuming that taxpayers truly are rationally ignorant...then why might that be? Oh wait...I know! It's because they have absolutely no control over how their taxes are spent in the public sector.

You'd single handedly tear apart the federal government as Federal Agencies would be forced to advertise in order to get money for programs. Imagine the idea of having to spend federal dollars informing people that they need to give money in a certain direction in order to have clean water, early detection warnings for tornados or hurricanes...

Government organizations would have to persuade us to give them our money? How is this an argument against pragmatarianism?

This whole idea is one of the most idiotic things ever thought of. You can barely trust voters to make responsible choices in who they vote for. Churchill once said the greatest argument against democracy is 5 minutes with the average voter. I wouldn't want your average joe deciding what gets funded and what doesn't, much as I distrust politicians.

Where does the average joe taxpayer get his money from? You! He gets his money from you. If you don't trust him with your money...then why do you give it to him?

Your idea sucks.

Plain and simple.

You can try to peddle it any way you like, with the bible, with space aliens... nobodies buying it.

Errr....people don't buy my idea because it sucks? Now you want to give consumers credit? Make up your mind.
 

Xerographica

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I touched upon this in another thread the other day, talking about productivity.

Someone was arguing that when one has reached their physical capacity that their productivity couldnt increase, & I used the example of Henry Ford to show that ingenuity actually allowed him to increase productivity, without increasing the physical man hours.

In this case the resource was man power, & the secret to his success was how he utilized it within the framework of the production line.

Yeah, it's a good example of how a division of labor can increase productivity. So what are your thoughts on allowing taxpayers to directly allocate their taxes? Do you think they'll be able to find any human ingenuity in the public sector to support with their taxes?
 
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