Video: Whose Property Is It, Anway?

"Side by side with the word 'property' in the program of [classical] liberalism one may quite appropriately place the words 'freedom' and 'peace.' "~~~Ludwig von Mises  Liberalism: The Classical Tradition

Have you ever wondered if your property is, well, actually your property?  Silly question, right?  By definition, if something belongs to you that something is your "property"; the word, "property" denotes ownership by someone somewhere.  So the phrase "your property" is somewhat redundant, a bit like "wet fish."

All fish are wet so why, then, are you being asked to doubt ownership of your property?  

Because pundits and politicians are talking about income and estate taxes!  I've found people generally do not think of their income and their estates---the products and fruits of their labor, time, and talents---as their property.  Your income is your property; it is the monetary compensation of your time and efforts.

Our vote-fishing representatives in Congress never refer to your income as property.  If they were to refer to property as "property," they would have a terribly difficult time explaining why you are being permitted to keep x% of your property versus y% for blah, blah, blah reasons.  Chances are their reasons would come across as thinly-veiled demagoguery. 

More difficult still would be the job of justifying the noxious and logically flawed premise that underpins the income and estate tax. That premise?  If government has a moral right to 1% of your property it has a moral right to 100% of our property.  All the public wrangling is simply about numbers and details.

Consider all the political claptrap that orbs around the income tax debates as you view this commentary by Brit Hume.  And this holiday season, please don't thank your government for the gift of your own property, whatever the tax schedule for 2011.

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It's The Market, Not a "Sector"

"Human society is an association of persons for cooperative action."~~~Ludwig von Mises,  Liberalism: The Classical Tradition  

Talk of the "private sector" is just irksome.  When I hear it tossed around I wince, much when the phrases a whole nother, suposebly, or anywho crops up within earshot.  Fingernails down a chalkboard would be an euphonious melody if said fingernails were raking and slashing these phrases on the chalkboard, starting with "private sector." 

There is no such thing as a "private sector" of the economy.  The phrase implies the economy has parts and that private free enterprise is just one part of the overall economy.  Further implied is that the economy would be incomplete or unbalanced if "the private sector" was responsible for all economic activity.

Private enterprise and the market---you, me, and every other individual voluntarily participating as producers, consumers, and savers---is the economy.  The market is the sum total of the free actions of individuals who participate and contribute to its existence and movement.  Without individuals seeking their self interests there would be no market.  This is no mere sector of the economy. 

(Did one day, deep in the past, government authorities somewhere declare, "Let an economy come forth from nothingness, and we shall determine which sector will be private"?  Or did individuals, respectively seeking their own self interests and making mutually beneficial transactions voluntarily cooperate themselves, and thus their societies, out of hand-to-mouth existences?) 

Furthermore, when individuals voluntarily participate in the market, of which they are by definition a part, they can only contribute to the the economy.  By contrast, when government "participates" in the economy, it, by definition of being outside the market that is had nothing to do in creating, can only interfere with the operations and voluntary interactions of individuals, that is, the market.  And when it interferes, it does so using the force of law and regulative coercion, something individuals in the market cannot do, minus the legislative assistance of the government.  (Think of GE lobbyists stealthily working for Cap and Trade legislation.)

Basically, individuals create wealth, therefore economic activity.  Government confiscates, retards, and interferes with wealth creation, therefore creating uncertainty and instability in the economy.  These two mutually opposed entities cannot therefore constitute two sectors of the same enterprise.  There is the market and there is the government. 

Yes, government has a role in the economy, but that role is always from outside, hence its role is interference. How much interference is desirable, just, counterproductive, etc. is a matter for another time.  One might even say it is a matter for a whole nother Chalk Talk.

If I Had To Recommend One Book...(Video)

Repeat, had to.  My one recommendation for anyone interested in freedom, and both its friendly and hostile forces, would be Henry Hazlitt's Economics in One Lesson.  Hazlitt's conversation masterpiece is oncise, grounded in fundamental economic principles, illuminated with historical examples, void of arcane economist-speak and pointy-headed graphs (Sorry, economists.  You know it's true.), and crisply written.

Line one, chapter one: "Economics is haunted by more fallacies than any other study known to man."

Here is a good introduction to the book, Hazlitt, and the enduring impact of this brief book, compliments of the Ludwig von Mises Institute:

Who Said That?

 Who said this:

"The only way America succeeds is if businesses are succeeding.  The reason we've got a[n] unparalleled standard of living in the history of the world is because we've got a free market that is dynamic and entrepreneurial...That free market has to be nurtured and cultivated."

Speaker-elect John Boehner?  No.  Milton Friedman?  Nope.  Thomas Sowell?  Strike three.

President Obama said it.  The day after the the midterm election, in his televised news conference,  he said it.  And, much to my surprise and delight, he did not appear to throw up a little in his mouth right after the words, free market.  (Although, there was a significant pause there somewhere.  Could be a slight case of acid reflux...)

Begin at the 46 minute mark.  Comments follow the video:


Explanations for such a public statement from a president who gives every indication of a deep hostility to an unplanned free market can abound.  Let's entertain just three:

1. Timing.  It was said the day after the midterms.  The Tea Party influence on the results was significant, what, with all this talk and rally signage about socialism and free markets.  With all this talk of compromise and working together, it makes sense to pretend you've just read the dust cover to one of von Mises' tracts.  (It was Mises who said, "The people of the United States are more prosperous than the inhabitants of all other countries because their government embarked later than the government in other parts of the world upon the policy of obstructing business.") So It could just be prudent political posturing, or at least reflexive lip service.
2. Politics.  Surprise!  Related to #1, and probably interchangeable with it, he felt the calculating urge to drop a little homage to free marketeers on the Hill.  (All four were probably listening.)
3.  He actually believes it or at least acknowledges the historical fact that our prosperity and standard of living are the result of the level of freedom we've always enjoyed.   The progressive Left can indeed acknowledge so much and still embrace a radically different vision for the future of American society.  After all, who should be running the fate of the country, hordes of unorganized and uncoordinated free people pursuing their own self interests or the wiser-than-thous with Ivy League degrees?  That's a no-brainer, depending on who you're talking to, of course.

Actually, after considering all three possibilities I really don't care what the motivation for saying was.  Yes, forget all that conjecturing.

The important matter is that he said it.  Just as importantly is the fact that only the most strident outspoken socialists publicly denounce capitalism, individual freedom, and constitutional limitations on government that protect so much.  In America one still has to at least pay lip service to that whole freedom thing, and most times pay lip service to that whole Constitution thing, too.  As has been stressed here and will be stressed again and again, we have much reason for---dare I use the term---hope that politicians still feel the political urgency to give a public tip-of-the-hat to freedom.  This belies what their advisers and pollsters and focus groups tell them: "Americans are still hung up on being the freest people in the world.  Demagogue over it, prevaricate around it, bulldoze your way  over it, but you have to deal with it."

This is still the home field for freedom.  If we want to be the visiting team we can move to Europe and slug away there.

I wanted to discuss what follows these words, comments about the financial crises, health care, and BP but am running long.  Just remember to ask: How free is the market in health care, the financial markets, and petroleum?   But that's for another Chalk Talk.

Video: Economics In One Lesson

I'm working my way through Thomas Sowell's book, Intellectuals and Society.  Many of the points he articulates reminds me of the importance of acquainting and reacquainting ourselves with the first principles of freedom and freedom in the market.

Freedom makes sense; convoluted policies that suppress freedom do not make sense.  Society is broadly trained to accept bad policy.  Hence, we instinctively want to be free but reflexively reject free market capitalism.

Below is a very good video to explain why.  Here is a book to counter the trend: Economics In One Lesson

"Planning For Freedom"--A Book Recommendation

"The alternative is not plan or no plan.  The question is: whose planning?  Should each member of society plan for himself or should the paternal government alone plan for all?" Ludwig von Mises, Laissez Faire or Dictatorship, an essay in Planning for Freedom

I just received Planning for Freedom, a collection of essays and addresses by Ludwig von Mises, and delved into the first essay for which the book is titled, Planning for Freedom.  The subject matter is a good one for the weekend's Chalk Talk.

Although I have not read all of Planning, I see it would be a valuable resource for anyone generally interested in the virtues of freedom in the market, and for those particularly interested in Mises' penetrating intellect and writing style on the matter. 

The collection is broken into four sections: 1) The Free Market Economy versus Government Planning; 2) Money, Inflation, and Government; 3) Mises: Critic of Inflationism and Socialism; and, 4) Ideas.  This is a resource, then, that can be consumed and enjoyed piecemeal and topically, not requiring a cover-to-cover reading.  

Onto Chalk Talk: "Planning For Freedom"

Historically there have been two diametrically opposed views of how to deal with the organization of society and its material welfare.  On the one hand there are the proponents of free market enterprise and private property, with markets of free individuals determining the organization and direction of human affairs.  This we know as capitalism, or classical liberalism.  On the other hand there are the socialists who decry inequality, depressions, and unemployment as necessary outcomes of capitalism.  They insist on government ownership of the means of production of material goods, and the concomitant direction of all economic activity through central bureaucratic planning, not the capricious will of free and uninhibited consumers.

Mises, in Planning for Freedom, addresses not the socialist dogmas and their historic failings as a system of social organization, but rather the "third way" thinking of progressives.  Such "progressives" seek not the paths of outright Soviet-style socialism, nor the uninhibited free market enterprise system of classical liberalism; they believe in and argue for a "third way" in which freedom is preserved by a series of moderate government interventions in the otherwise free market, thus preserving the freedom of the market while avoiding the excesses of totalitarian socialism on the one hand and the perceived excesses of unrestrained capitalism on the other.

Enter Mises' paradoxical title, planning for freedom.  "They declare they are planning for a free society."  How, from a practical or philosophical view, can it be said that by controlling the market through government planning that the resulting market would be free?  This is simply illogical.

Semantics aside, Mises moves on to reveal that this "third way" between socialism and capitalism is nothing more or less than interventionism.  This idea was nothing new at the time progressives pushed for confiscatory income taxation, minimum wage laws, old age pension (Social Security), and union compulsion on wage rates.  Bismark in the late 1800s set up the first old age pension scheme, for example.  (This is good to remember the next time you hear classical liberalism and freedom apologists dismissed as "old fashioned" reactionaries!)

Ultimately, interventionism leads to the very deleterious social and economic situations that are blamed on free market capitalism:

"I contend...that such measures must needs bring about results which from the point of view of their supporters are more undesirable than the previous state of affairs they wanted to alter."

Examples? 

"Depression is the aftermath of credit expansion; mass unemployment prolonged year after year is the inextricable effect of attempts to keep wage rates about the lever which the unhampered market would have fixed.  All those evils which the progressives interpret as evidence of the failure of capitalism are the necessary outcome of allegedly social interference with the market."

There is no third way, "moderate" policy between socialism and freedom.  Attempting to do so leads to the very problems that becomes the pretense for more and more government intervention in freedom.  We've seen it with the Great Depression, the stagflation of the 1970s, the recession of the early 1980s, the internet bubble of the late 1990s, and now with the housing market crash and resulting current recession.  

We needed more freedom then, and we need more freedom now.

"I, Pencil"

I am happy to report that The Ludwig von Mises Institute has posted the complete version of Leonard Read's classic I, Pencil.

Read manages to artfully compress in to a short essay a tremendous lesson about the workings of the free market, its wondrous diversity, and the unfathomable presumption of believing governments can centrally plan markets at all, let alone more efficiently than the free individuals that compose markets.

Read's classic essay is as timeless and as instructive today as it was when he composed it in 1964.  (Freedom has no expiration date.)  

One section of I, Pencil is titled, "No One Knows".  That reminded me of a past Freedom Lessons post about Barney Frank.


Click here for I, Pencil.