‘It’s the thought that counts’ is a phrase sometimes uttered at the unwrapping of a gift held in low esteem by its new owner. Although gift-giving can often be justified based on the thoughts of goodwill from the giver to the recipient, there is, unfortunately, sometimes little to justify the actual substance of gift-giving. Despite the good intentions – and the many hours and dollars spent – in obtaining gifts for others, there exists an enormous amount of waste in gift-giving as a result of the inability on the part of the gift-giver to know the true preferences of the recipient.
I thought that I would let everyone know about a great new libertarian radio show started up by Chris Bronson. Some more information:
“Current events and news opinion/discussion from a libertarian perspective. Featuring interviews with authors, experts, and leaders within the American liberty movement. The show is decidedly anti-establishment and likely to deeply offend doctrinaire Republican and Democrat lock-steppers as well as those indoctrinated by government schools or otherwise unable to think critically.”
I highly recommend the show, and I hope that you can all tune in.
Friedrich Engels (1820-1895) is considered, with Karl Marx, the founder of Marxism. In his work The Origin of the Family, Private Property, and the State (1884), published after Marx’s death, but based strongly on his work, one finds the following passage describing the role of merchants:
“Now for the first time a class appears which, without in any way participating in production, captures the direction of production as a whole and economically subjugates the producers; which makes itself into an indispensable middleman between any two producers and exploits them both. Under the pretext that they save the producers the trouble and risk of exchange, extend the sale of their products to distant markets and are therefore the most useful class of the population, a class of parasites comes into being, “genuine social ichneumons,” who, as a reward for their actually very insignificant services, skim all the cream off production at home and abroad, rapidly amass enormous wealth and correspondingly social influence, and for that reason receive under civilization ever higher honors and ever greater control of production”
In this one passage we find the key error in the entire Marxian system: the failure to understand the role of uncertainty and the importance of entrepreneurship in the market.
In response to my recently posted article on Bitcoin and the Regression Theorem of Money, Smiling Dave has written what he believes is a rebuttal of the points contained in that article. I welcome this exchange. Unfortunately, he has mostly misunderstood the points I was making, and so I must address those errors. The arguments that Smiling Dave brings up have already been addressed by me and others on the mises.org forums. I shall still, however, counter them here:
Bitcoin is a digital currency, and, with a total market cap at over 100 million USD, the most widely used alternative to state-issued money. Importantly, it does not rely on a central authority for its creation, but is instead administered through a decentralized peer-to-peer network and produced through a process referred to as ‘Bitcoin mining’. Bitcoin has become popular amongst those who see the harmful effects of the current fiat money regimes and who see Bitcoin as a possible escape from the centrally controlled and continuously debased state currencies. It is possible that if something like Bitcoin was able to grow in popularity to such an extent that it rivalled the fiat currencies of the world, great pressure would be put on central banks’ money creation activities, as people would have in Bitcoin an easy to use and anonymous medium of exchange to escape to, and which does not suffer the same inflationary flaws as the state’s monopoly money. Bitcoin, therefore, could be a means to strike a major blow for liberty. Despite that, it has its sceptics even within the libertarian community.
Some, such as Smiling Dave (who operates a blog and posts on the Ludwig von Mises Institute Forums), say that the idea that Bitcoin could emerge as true money is contradictory with a part of economic theory known as the Regression Theorem of Money, and, due to that contradiction, it could never be considered money and is in fact doomed to failure. In that view, it is merely a bubble inflated by speculation and Bitcoin fanboys, and ripe for bursting. In response to the view that Bitcoin violates this Regression Theorem and that it therefore should not be taken seriously, some proponents of Bitcoin have gone to the length of rejecting the Regression Theorem altogether. Is such a step warranted? Or could there be a third view, which demonstrates a harmony between the demand for Bitcoin and the Regression Theorem, and allows for the possibility of Bitcoin becoming more widely accepted as money in the future? In this article I will attempt to make that very case.
FA Hayek’s final work, The Fatal Conceit (1988), is in essence a lengthy argument against what its author calls ‘constructivist rationalism’. By that term he means the assumption that cultural evolution occurs not by a process of natural selection as in biological evolution, but instead as the result of deliberate design guided by human reason (p. 22). In the constructivist framework, societal, economic, and political institutions are assumed to have developed as the result of a guiding mind or minds. Such a view, Hayek argues, smacks of a fatal conceit.
Throughout the above mentioned work, Hayek demonstrates that in many areas, the constructivist assumptions are not warranted, and that the existence of various social institutions can be understood as resulting from the interplay of acting individuals without a single guiding force – that is, as a result of human action, but not of human design. He refers to such emergence as spontaneous, and this process can be particularly understood in regard to the development of languages and economies. In his discussion of the fatal conceit, Hayek recognises that a great deal of the constructivist-rationalist view on political economy owes much to the work of ancient philosophers Plato (424/423 – 348/347 BCE) and Aristotle (384 – 322 BCE):
“The unsatisfactory character of our contemporary vocabulary of political terms results from its descent largely from Plato and Aristotle who, lacking the conception of evolution, considered the order of human affairs as an arrangement of a fixed and unchanging number of men fully known to the governing authority – or, like most religions down to socialism, as the designed product of some superior mind.” (p. 109)
In this he recognises a particular strand of Platonic-Aristotelian rationalism, which was not necessarily universal in Greek thought (p. 46). It was this strand, however, that was to become the most influential one in Western philosophy from the time of the Scholastic movement in the Middle Ages. Expanding on Hayek’s work, it must be realised that this constructivist-rationalist view extends to the very root of Western philosophy in the works of Plato, and goes far deeper than questions of political economy.