EDIT: Our own z1235 has posted a couple of months ago a reconciliation theory of Bitcoin and the Regression Theorem which is very similar to the one exposed below. Unfortunately I managed to miss that post in due time and was reminded of it only after publishing this.
The main idea: Bitcoin’s current rise to prominence will both mark the end of the use of Regression Theorem to discourage any alternative to the Gold Standard, and serve as the testbed of Hayek’s monetary insights.
Let yours truly add his own two cents to the substantial analyses recently published on the great performance of Bitcoin (see here, here, here or here for a few Austrian perspectives), or specifically on what the its undeniable, if perhaps temporary, success may yet show to followers of the Austrian tradition.
1. Bitcoin for Misesians
Bring it on!
Once upon a time, there was a naughty little boy named Timmy. Timmy was Webster’s own definition of a brat – spoiled without a trace of gratefulness in his demeanor, and a hateful bully to his parents at that. Finally, little Timmy pulled the last ma ‘n’ pa hamstring, and hit his father over the head with a plastic doll, bruising him. That was it – violent little Timmy was going to juvy, after countless beatings and bruises liberally administered by him. Or was he? Perhaps not, for you can imagine little Timmy’s parents’ confusion when the friendly neighborhood police handcuffed not the rugrat, but the plastic doll instead.
[This is the second article in the left-leaning LBRT101 section of the Guided Study at Liberty HQ]
paul bica / Amazing Photos / CC BY
One of the main concerns curious people have about libertarianism is that it is pro-business and pro-Big Business. If it ain’t multinational, it ain’t capitalism! But is being pro-market inherently the same as being pro-business? Do libertarians really love large corporations? These are questions that are often ignored, but are central to the discussion of economics.
So what do the questions mean? Isn’t being pro-market the same as being pro-business? In fact, the answer is a surprising “no.” To understand why this is the case, we need to understand the concept of corporatism as opposed to that of free markets. Free markets and libertarianism are about property rights and the freedom of choice that arises from those property rights. Corporatism, as we shall see, is the negation of both of these principles.
Chris Dorner believes that murdering the children of his enemy is an appropriate course of action in order to exact revenge on his enemy – after all, killing someone’s child is probably the greatest emotional trauma you can inflict on them. This is the mentality of violence, the mentality of war, the mentality of the political means. “I have been offended. Thus, I am entitled to exact revenge at all costs.”
He espouses positive rights. He has no right to be employed by anybody, let alone the Navy or LAPD. And even if he did have such a right, this would not justify murder. But here again we see the logic of entitlement. After all, if we assert that he is entitled to a job, then unjustly taking that job away is conceptually no different than stealing any other kind of property… something which most people acknowledge may justify the use of deadly force under certain circumstances.
He sees the world in wholly racial and sexual divisions. He is the very thing he claims to be opposed to. He even identifies Asian police officers who are non-racist but who say “I … just don’t want conflict” to explain their non-interference with the abuses of the public by fellow officers as “high-value targets”… that is, that he will be targeting them in these announced killings.
[This is the first article in the left-leaning LBRT101 section of the Guided Study at Liberty HQ]
The Past 12 Years
A foreign policy of war
The past twelve years have seen the US enter numerous new military engagements, many of which show no signs of fading. Iraq and Afghanistan are well known to everyone, but are far from the only ones. Despite strong evidence that the US intervention would not
improve our national security − and, in fact, would worsen
it − we continued to remain, at both a high human cost − all the lives lost (American and
foreign) − and a high financial cost (with conservative estimates at $1.5 trillion). Besides throwing the US into these wars, Bush passed into law the Patriot Act, escalating the level of government invasion of the personal lives of the public. Suddenly, everyone became a suspect in the hopeless War on Terror. How does this square with the respect for individual freedom that Bush is supposed to have? Continue reading
The prevalent view in the media over the last few years has been that high-frequency trading (HFT) is dangerous for the financial markets and that regulation is necessary to ensure market stability. From a voluntaryist perspective I will argue that HFT — as any other technological advancement and voluntary interaction — is beneficial to the markets and that most of the undesirable phenomena for which it is blamed (market instability) are the result of unintended consequences from regulation.
HFT is implemented via computer algorithms that take market data (trades and orders) as input, process it based on statistical arbitrage algorithms, and issue trading orders as output. Statistical arbitrage is a process of discerning and exploiting statistical patterns in the market data. What makes these algorithms high-frequency, as opposed to any other trading algorithm, is the quick (sub-second) turn-around time between the occurrence of the input data and the output orders. Driven by increases in computing power and network bandwidths, the technological arms race between profit-seeking firms has driven the turn-around times down to the order of micro-seconds.
Why is speed important to a HFT firm? Assume a pattern has been discerned in the behavior of IBM and MSFT shares by which a move in the price of MSFT (and IBM) is expected to be more likely over the next few seconds/minutes given a certain input of IBM and MSFT market data (trades and orders). Whoever is the fastest in (1) acquiring the input data, (2) processing it to establish the existence of the pattern, and (3) sending the orders out to take advantage of the discerned statistical edge, will take the largest piece of the profits and, at the same time, diminish or extinguish the statistical anomaly by its actions. This is why constant investment towards lower latency (smaller delay in communicating market data and orders between the HFT algorithm and the exchanges) is necessary for maintaining competitiveness. Continue reading
Francois Tremblay has responded to Voluntaryist Reader’s challenge. Needless to say, there’s a lot to disagree with, here. To start off, he tries to strawman voluntaryism:
The voluntaryist view stops at condign power and states that all other forms of power are irrelevant to freedom.
What voluntaryist ever said this? Any form of force or fraud – even if disguised, even if systematized – is “on the table” to be answered with force, if necessary.
He moves on to criticize voluntaryism but ends up apparently agreeing with voluntaryism, as far as I can tell:
… market exchange, being based on power imbalance, is itself a “manipulation” of people’s values and desires.
I don’t know what “market exchange” is as against simple exchange, but what voluntaryist has ever said that exchange in the present order is free of manipulation? Quite the opposite. The entire system is rotten at its very core – the Federal Reserve has corrupted the single most important and universal good in the economy, money. The law monopoly prevents people from forming or abandoning agreements as they see fit, interfering into the voluntary choices of individuals and presuming to know better than the parties to an agreement what their own interests are. The security monopolies render every citizen virtually helpless against the money and law monopolies. And the ecosystem of regulation-favored cartels, corporate lobbyists and crony capitalists that has grown up around this Iron Triangle force out would-be competitors who do not have access to the artificially large capitalization required to enter the market.
I cannot think of anything more painful than suffering the loss of a young child. To survive one’s child is perverse in itself but to see young lives cut short is so unbearable, I refuse to even contemplate it, except momentarily. Yet hysterical responses to public tragedies are not wise and we are well advised to reflect carefully on the social conditions which have led to the state of affairs where such tragedies are possible.
At first brush, it may seem that the spike in high-profile mass shootings this year is unconnected with other world events. However, it is clear that something has changed over the decades since the Whitman sniper massacre of 1966 first splattered the issue of multiple-victim public shootings onto the consciousness of Americans. While it is difficult to estimate firearms per capita in the US over time, there are fewer armed households than there were in 1966. The kinds of guns used in MVPS today are not anymore deadly than those that have been used in the MVPS events since 1966. But it is undeniable that events of this nature are becoming more frequent and that the total number of victims continues to escalate at a disturbing rate.
Since the election, the DC wonkosphere has been abuzz about the impending “fiscal cliff.” Frank Shostak wrote a Mises daily about the now-famous cliff way back in September. His conclusion? The hubbub about the fiscal cliff is so much nonsense that disguises the real issues.
Walking down the hallway at work last week I overheard the following snippet of a conversation:
“Well, it has to be fixed somehow.”
“Don’t worry about it, the government will pay for it.”
I have no idea what they were talking about but it was the response that really stuck with me – as if government paying for something magically dismisses all concerns about where the resources will come from. I see in this the essence of the role of government finances in scrambling popular reasoning about cause-and-effect. We have trillions of dollars flowing this way and that way. The government borrows from itself to pay itself. Then it borrows from us to pay us. And somewhere along the way, it bails us out with money it prints but which is backed by the full faith and confidence of… us.
by Michael Eliot
It is painful, as a libertarian, to watch the constitutional drama currently unfolding in Egypt, painful to watch a modern people make the same mistakes made by the Founders of America 225 years ago, painful to read of needless clashes and deaths and tortured struggle in pursuit of an impossible goal.
Americans began the modern obsession with constitutional government saying governments “deriv[e] their just powers from the consent of the governed.” That is, governments are legitimate if they have the consent of each individual they govern.
But what if some people do not give their consent, or later withdraw it? A government cannot justly govern those who do not give their consent.
There is another complication: the only powers governments can legitimately use are just powers.
So the question is, does government have any just powers?