[porphyrogenitus]

I’ll be happy to add people from here on Facebook. ^_^

I’m http://www.facebook.com/james.ruhland.7 there.

But I doubt I’ll participate in many facebook discussions on other people’s pages, especially ones involving third-parties.

1) facebook is a time sink.
2) I used to discuss/debate things like this with people all the time in various random forums, but it’s almost always a waste of time trying to convince anyone. (I think Tom made this point on his blog awhile back, too); you can beat your head against the wall and not get anywhere. Not that it *never* happens; some people are open to good, persuasive arguments. And non-participating lurkers may very well be convinced. So I don’t want to push that point too far. And you’re more likely to be successful with your friends than a random individual would be.

2a) I’ll recommend this which I’ve seen “studies show” works best – asking people questions about their beliefs and asking them to explain why they hold the views they do, and continuing to ask in regression form (“ok, so you believe x because of y, but why do you believe y? You said you also believe n, how does that fit with y? Doesn’t it contradict it?”) can help. But I’m never very patient with that, I tend to just write out where they’re wrong and why and what I think is correct. Not very Socrates of me, but, then, Socrates was the world’s foremost pre-internets troll, and where did that lead him? (That’s what happens when you push your trolling too far. . .I mean, trolling them to give him free foods for the rest of his life?)

[porphyrogenitus]

Well I didn’t suggest he was good on everything – I mean, he’s good for a liberal – an “Atari Democrat” was someone who was less-bad. And Kaus is a bright, thoughtful guy. But I doubt he’s read much if any Austrian economics, ever.

Probably he’s more influenced by what’s called “Welfare Economics” and “Social Choice” theory – and while the “Welfare” in that doesn’t explicitly mean “welfare” in the public-policy sense, it often leads to that, plus has certain features/premises which, while grounded in the mainstream economic theory from which is derived – and which accepts supply & demand curves – often leads to conclusions that an Austrian would find bizzaro.

And if you were to send him a mail asking what he meant by that, and how he reached that conclusion, he would be able to explain it logically – and he would almost certainly concede that the market plays some role, and that markets are very important (but his definition of “market” would be very different from that of, say Mises – the definition used by people of his sort tends to *include* certain “rules-of-the-game” interventions by government as *part* of the market), but he would also say that social attitudes (such as disapproval of conspicuous consumption) and public policy incentives shape what it is suitable for people to earn.

So he shares a lot of interventionist premises with, say, Krugman. And he has no principled objection to the kind of policies Krugman advocates. He just thinks Krugman is wrong historically and wrong about what the policy effects of implementing Krugman’s solution would be.

He does make a lot of good arguments in that post, so it can be used for those arguments. But he isn’t operating from the same foundations as an Austrian would. Which in a way may make Kaus’ post useful; one doesn’t have to be an Austrian to point out that Krugman just has his facts wrong and incomplete to the point of mendacity.

[porphyrogenitus]

You’re welcome and I hope they help. Two further avenues of approach:

First, since he sees FDR as the savior, mine this site’s lectures on both Hoover and the New Deal. Then check out Mises.org for stuff on both Hoover & the New Deal. Check out the Mises Media Youtube channel for videos on both, also (there are several of them, since this is a perennial topic, and the “go-to” historical episode for American progressives of all varieties). There’s also Bob Murphy’s book, you can give it to him for Christmas. You can also give him Rothbard’s “America’s Great Depression” for free as a download.

When discussing this with him, start out by focusing on what Hoover actually did (you can get to the Federal Reserve later). Don’t go straight at talking about FDR. There are two reasons for this.

1) They often believe Hoover caused or at least exacerbated the Great Depression. This is true, but not in the way they think he did. Talk about his actual policies. IMO this is a great chart, of unemployment and events. Note that after the ’29 stock market crash, unemployment got almost to 10%. . .but then it started drifting lower, till it was back down to ~6%. Then Hoover’s interventionist policies started kicking in, and it soared.

2) Focusing on Hoover initially will help delay ideological defensiveness (if you focus primarily on FDR, even if he doesn’t say this he’ll probably be thinking “he’s just an FDR hater because he’s a right-winger”). Discuss Hoover’s policies as what they were: antecedents of the New Deal, FDR as a continuer and extender of those policies, rather than representing a break with them. (For bonus credit you can tie this into our contemporary experience, where Obama constantly says he wants “a sharp break with the failed policies of the past” but then, when questioned on any policy, always points out – accurately – that he’s not doing anything different from what his predecessor did, he’s just following through on the policies and enlarging their scope. I.E. Bush had his stimulus, and Obama turned his to 11. Bush had his bailouts, and Obama turned his to 11. Bush had his prescription drug benefit, and Obama turned Obamacare to 11. But keep the focus on the 20s/30s, just illustrating contemporary examples).

Now so far we’ve been focusing on the “these policies won’t have the intended effect” argument, which is a worthy one. But there’s also the argument “who decides what constitutes a ‘living wage,’ who decides how best to get it, and who decides who really needs one? For example, teenagers starting their first part-time job probably aren’t looking for a job that will feed a family of four, they need a job that will help them get some spending cash and acquire the job skills that will be useful to them in the future when, as adults, they want a job that will feed a family of four.”

To that end, I recommend Thomas Sowell’s books, especially “Basic Economics,” and also some of Tom Woods’ books. “The Church and the Market” covers this “living wage” argument in one of the early chapters, but I think he also brings it up in some of his more recent books. One of his favorite points is that “you don’t improve the lot of the poor by taking away the option they actually choose.”

So what does this guy want? Does he want a Federally mandated “living wage?” What will that level be? Will it vary by region, because cost of living varies by region? So will there be a whole schedule of wage minimums – perhaps one for each County in the U.S. – detailing this? Now, how will that improve the lot of, say, the poor immigrant. Noting that this is one instance where the experience of immigrants serve as a perfect example: over decades, generations, a century or more – going back to before there was any Federal minimum wage laws at all, much less “living wage” laws, and indeed from the present to the past where Federal Courts were striking down state minimum wage laws, immigrants have come into this country and started out by taking jobs at wages Americans consider low-paying. And not only did they live on those wages, but they often managed to send money home to their relatives on those wages. Not only did they manage to both live on those wages and send money home to their relatives on those wages, but they managed to save additional money, and eventually open their own business. Or they managed to live on those wages, send money home to relatives on those wages, but also get education or training despite working long hours so that they could get better jobs. (Thomas Sowell covers this quite well in a number of his books. I think – I’m pretty sure – he discusses it in “Basic Economics,” and I also think it’s in “Intellectuals and Society” – one of Sowell’s main points, repeated with example after example, is that “caring” progressives often favor policies that make them feel they are helping the poor/least well-off, but the main effects of those policies is to make the progressives feel good about themselves at the actual expense of the ostensible “beneficiaries,” who are not helped at all by the policies, and in many cases are actually hamstrung by them.

Note the word “hamstrung” – I use it because it illustrates the type of harm done: the policies hamper them from moving up on their own, long-term. Thus they remain in the condition of “needing” “help” – and progressives are happy to offer another policy in response to the ill-effects of the first one, then several other policies to counter the ill-effects of the second (none of which are directly connected, by progressives, to being the effects of their own policies), and so on.

Or, to quote apt turn of phrase by Moldbug “The general MO of the Progressive movement in attaining power was to cause problems, then appoint themselves to fix them. There is no better example than the Great Depression, which a few economists are starting to admit was the result of the bubble created by Progressive cheap-money policies under the early Federal Reserve.”

(Btw, that Moldbug post, while long, is a fun read – it rips Yglesias, and by extension, progressives as a whole, and their central fiction of being brave underdogs fighting against “The Man” and “Questioning Authoritah,” and it does it with both substance and style).

[porphyrogenitus]

Btw, here’s a pretty good post on tax progressivity & income inequality by the last-surving Atari Democrat living in the wild, doing his best impression of Bob Murphy: ripping apart Krugman’s mendacity.

You kids really should follow the link, if only because, well, “Atari Democrats”/”New Democrats” are historical artifacts of a bygone era, and this might be your only chance to see one in action before he goes entirely extinct.

[porphyrogenitus]

I’m not aware of anything that focuses specifically on that, but here’s a decent article on the wartime economy generally, and there’s this review of Robert Higgs’ book, chapters 3, 4 and possibly 5 would contain relevant information.

Then there’s this, which will point you in the direction of some books by Mises himself, which are available for free download.

Hopefully someone will know of good articles that address it more directly, though.

[porphyrogenitus]

Since it’s evident you’ve gone around and around with him on this point before, I think the key problem may be that your friend has many faulty premises, so focusing on directly rebutting this one line of reasoning – which is a conclusion he derives from his faulty premises – will never succeed.

He needs to have the underlaying premises that lead him to the conclusion that “duh, it’s a simple matter to just mandate everyone be paid a living wage, then people will be able to buy more, and the companies themselves will prosper even more than they do now, I [he] can’t understand why they don’t see it’s in their own self-interest to just do it, so, gosh darn, we’ll just have to force them to do it, then later they’ll thank us.”

As if he’s the only guy, or only the current modern progressive movement, has ever thought of it, it’s never been tried anywhere, but if they can just implement it then the greedy business owner’s noses will be rubbed in how well this works, and everyone will be better off.

Well, anyhow, you’ll have to find out what the key underlaying premises are, and show how they’re wrong or incomplete (often times the problem is incompleteness – leaving out a key factor causes people to reach incorrect conclusions).

Hopefully Tom will also chime in; I’d also recommend you re-post your question to the Austrian Economics sub-forum, with a link to this discussion, and Jeffrey Herbner will be more likely to see it, too.

Anyhow I’m reminded of something I heard that Rothbard wrote, in reaction to the argument that businesses pass on costs to consumers. He argued they can’t – at least not all of them. So they end up “eating” the cost of, say, regulations and mandates. Or at least much of it. BUT – and it’s the key but – this then means that many of them will fail. They’ll stop being viable and have to cut back or close shop. Your friend seems to be stuck in a sort of equilibrium mindset that the basic structure of an economy is “fixed,” so that if you change one variable, it only has the intended effects: increase wages by a lot, the capital structure remains the same, consumers demand more output, more output is produced, and living standards go up. However this would not happen, because much of the current economic structure would become unviable, plants and businesses would close, overall output would drop.

I’ve heard several times people used to say during the Great Depression that it wasn’t so bad as long as you had a job. That saying reflected the consequence of Depression-era wage-policies, starting with Hoover then redoubling under FDR (who put in place a lot of programs and legislation – including labour law – intended to keep wages up and drive them even higher). Sure, if you had the job, you would do well (enough) under such a policy. But it disemployed a lot of people. . .and thus, as a result – the unseen part became that, over time, as the years went by, even the people whose wages were artificially boosted were, in reality, worse-off than they would have been if such policies hadn’t been implemented, because the effects of an economy that was poorer overall ended up hitting them, and what was available to them.

Note also that even when Hoover & FDR implemented these “high wage” policies, they also implemented “price-support” policies. Again Hoover took measures to keep prices from falling, and FDR made them even stronger – to the point of sending people to gaol for selling below the government-mandated minimum price. FDR also destroyed perfectly good output (mostly agricultural) at a time people were going hungry (in the “for-real” sense, not the modern sense), in order to keep prices higher. Why? Because producers needed higher prices in order to maintain the wage levels at the artificially high rate. Of course, this also meant less output sold.

So my little story, in my initial post, was not a theoretical exercise: and it means people aren’t actually better off, at least on the whole, though some subsets (usually influential people or politically useful groups) are made relatively (key word there) better off at the expense of the majority (of both workers & firms). This also means that the policy-maker who implements such rackets can easily point to examples and say “see? My policy is working. Look how well x plant and y workers are doing?” – thus continuing to make this reasoning plausible to noobs (re-election, baby!), and the resulting dislocations and disemployment are blamed on some scapegoat.

(Note that not every policy-maker runs this explicitly as a racket. To take two contemporary examples, I bet that both Harry Reid and Nancy Pelosi are both simpleminded enough to be sincere believers in thinking “yeah, if only it were politically possible.” Guys like Barney Frank & Charlie Rangel otoh, aren’t too simpleminded. They’re intelligent brazen grifters).

[porphyrogenitus]

Btw, I forgot about this, but here are some good research tips I stole from Gary North, useful methods for analyzing anything. First, “follow the money,” who gets what (I would modify this to the power nexus – who has the power to determine who gets what); second, follow the confession of faith – ideas have consequences (“faith” does not mean simply religious faith, but any belief system). This leads to five questions to ask when examining anything (history, politics, whatever); simple questions but very difficult to assess accurately:

1) Soverignity – whose in charge here?

2) Authority – to whom do I report? (Me: Notice 1 & 2 are separate questions! Interesting and revealing)

3) Law – what are the rules?

4) Sanctions – what do I get if I obey, what happens to me if I disobey? (Me: dittoes 3 & 4!)

5) Time – does this outfit have a future?

[porphyrogenitus]

Well Hoover tried a mild version of that (a high-wage policy on the basis that it would lead to purchasing power which would lead to growth). Basically the main output of such a policy is unemployment, soup lines, and shanty towns set up in parks.

I should be less flippant because there is a superficial plausibility of such reasoning, which means its perennially attractive to noobs. But in order for it to “work” he would also have to mandate employment somehow, so that marginal workers won’t become dis-employed. And if he did mandate employment by such a means, yes, there would be other dislocations – so he would have to implement price policies. Price policies would lead to further dislocations, including probably shortages (even though one would think output would be higher since everyone is employed, this is not the case when dislocations start wreaking havoc in the system; productivity would end up declining. Note productivity declines is a explicit aspect of certain versions of crude Keynsian full-employment policies, such as Keynes’ own example of paying people to dig holes and fill them up again. The net productivity – output – of such jobs is 0. Actually it’s negative because of depreciation of shovels, work clothes, and land through repeated hole-digging-and-backfilling).

Basically it does sound like one of those schemes to inflate your way to prosperity; I mean, the reducto ad absurdum is why stop at a “living wage”? Why not just vote ourselves rich, then output will really soar, amirite?

Anyhow, here’s Gary North on a somewhat similar scheme, the Social Credit movement, which is at the root of a lot of these modern variants.

[porphyrogenitus]

“There’s a lot of discussion about the so called lack of progressivity of the tax code leading to more income inequality and its all BS.”

One aspect of it being all BS is that America’s tax structure happens to be either at the top or near the top in “progressivity” in the OECD.

I don’t have any links for this handy at the moment – I’ve come across them in the past. Perhaps our professors do. I do know that Tom recently re-linked to several pieces on the halcyon ’50s.

Though I myself am not entirely able to step outside our present circumstances, and thus lead life with a sense of deep and profound tragedy, from time to time I do manage to adopt a detached perspective. . .and when that nirvana is achieved, I recognize that what we are in, from that perspective, is A New Era of Lulz: the left is always going on and on about how the right is trying to “drag people back to the ’50s” and “wants to turn the clock back,” but in reality no one is more reactionary, no one is more opposed to changing the status quo, than the “progressive” left.

Meanwhile, for people like us, there is nothing we hope for so much as change.

[porphyrogenitus]

I’m sure Professor Jewel will answer your post but it might take a bit more time than usual because of Thanksgiving.

My answer would be that it in part depends on what type of historical research you’re doing as to what book or books are most helpful. (If you meant a helpful book on historiography – how to do research in history, Professor Jewel or Professor Wood’s recommendation would be best. I took a course on research methods in history ages ago, but I don’t remember the titles of any of the books assigned for the class. I wasn’t impressed with any of them, anyhow; that class was in the ’90s, at the height of bad methodology). But as a general rule when doing historical research, primary sources are always your best bet. These may or may not be contemporaneous books and articles but also things in historical archives and the like.

That said often the best way to find primary sources is by reading contemporary scholarly books and articles on the subject, and looking at their bibliography and footnotes. The books and articles of a historian you like can be mined for breadcrumbs leading you to other sources, which in turn will often turn up even further sources, and so on.

Note this is why I also like physical libraries. Not to knock using internet/database search-fu (which I also do), but lets say you turn up several books/articles you want to read for your research, and look up the Dewey number and go to find them in the stacks of a decent university’s research library – right around them will be other books on the same subject, and by just scanning the titles several will often jump out at me.

If you’re doing research for a course of study at a university, avoid like the plague directly citing “popularizations.” Professional historians dislike them with a passion, even if you do find them useful. Instead cite the things they cite. Depending on how open-minded and tolerant your professor is, you may also need to avoid directly citing Austrian authors, libertarian authors, fellow-travelers in those circles, and revisionist authors who have influenced them. This is unfortunate, because credit should be given where it is due, but you also need to look to your grade. What you can do, however, is cite the sources they themselves cite – after all, it is primary sources that are your best friend in historical research anyhow. (This advice, by the way, is not at all intended as a recommendation to plagarize – one must always properly attribute. However, it is an unfortunate fact that with some professors, you’ll have to winnow out things by certain authors, however much they influence your thinking, and only cite the sources their works lead you to, rather than citing them). With the better professors – who are still possible to find – this isn’t as much of a problem. They might still disagree with you, and might make some snide reference about this or that person you cite, but will still grade you fairly, so you won’t have to be as circumspect.

[porphyrogenitus]

By the by, on this Thanksgiving day it is appropriate to point out that experiments in communism – at least of the pre-Marxist kind – really are “as American as apple pie.”

To that end it’s worth checking out this book on the Plymouth colony, both the section on p.120 where the experiment was ended and an experiment with private property and freedom of exchange begun, and preceding sections. The “common course and condition” was an attempt at communism; goods weren’t owned by a State but were held in common (“several property,” collective ownership – communal ownership). Here is a FEE article summarizing the episode and here is a Forbes article. If only today’s statists & communalists “had the humility to learn from their initial mistakes and embrace freedom.”

There’s also this 1875 book on Communistic Societies in the United States, including a chapter on “New Harmony,” an experiment in Owenite communism.

[porphyrogenitus]

Well the “Long Depression” Is an artifact of modern econometric statistics.

Now, there was a real downturn in 1873 and there appears to have likewise been a downturn in the early 1890s. But that entire two-decade period was not a depression; if anything these men could be blamed for making it prosperous.

Because during those two decades industrial & agricultural production increased significantly, and standards of living went up. The thing that makes it seem like a long period of depression economics in modern statistics is that there was a significant general deflation as price levels fell even more rapidly than in the rest of the 19th century. But they fell due to rapidly rising industrial and agricultural production. That is the opposite of a depression.

Note: this brings up one of the areas where “The Men who built America” is tendentious; the series speaks often of wages being cut and efforts to cut wages “to maintain profits.” But it never once mentions that the reason for the nominal cuts in wages was generally falling prices of goods, which meant not only that this was done to keep the companies from running losses, but the new wage levels still reflected increasing purchasing power (real wages went up during this period, not down).

The faculty could probably cite the statistics better than I could.

[porphyrogenitus]

The definition of “Socialism” depends upon whether they are trying to convince you you are wrong to describe someone as a Socialist, or whether they’re trying to persuade you of the glorious wonders and diversity of Socialism. Under the first definition, Socialism is defined narrowly, in it’s putative original sense as the State ownership of the means of production. Under the later, “no, you just don’t understand, there is a wide variety of Socialisms, including market Socialism, and the Socialism espoused by European Social-democratic parties,” or the Socialism of the Newsweek cover “We’re All Socialists Now,” the Socialism of Norman Thomas, of the Fabians, and of Alynskists. These didn’t boil down to instant nationalization and de jure ownership of the means of production: after all, why be saddled with the full responsibility, when you can control them through bureaucratic directive, and retain the de jure owners for management of the details and as scapegoats when things go wrong? The wily Socialist soon realized it was possible to separate power from responsibility, and that to control a thing didn’t mean they had to outright take over full responsibility.

Communism is the state-of-affairs that never comes to pass because it is premised upon the idea that the Socialist state that owns and controls everything will “wither away” and voluntarily self-liquidate after it transforms people as Marx describes. (Note there are non-Marxist versions but these are almost trivial in their ongoing intellectual influence). “Communist” parties ran Socialist states with the ostensible goal of reaching communism, but of course the apparatchiks never had any real intention of putting themselves out of their jobs.

Note that most people define Socialism in economic terms, but while Socialists themselves, in their descriptions, originated this misconception, their interests were *always* primarily social and cultural – fundamentally transforming social relations. The economic aspect was just seen as the means for that. However, by the 1920s a lot of insightful people realized that 1) the economic predictions of Marx weren’t coming to pass but 2) they wanted the social transformation anyhow, this was their real goal and 3) it could be achieved via cultural means. So you get the strain of thought beginning with Gramsci et al, which transmitted itself to the U.S. via people like Erich Fromm, Theodor Adorno, Marcuse, et al: cultural socialism.

This has proven much, much more effective and is intellectually ascendent now. It’s a variant strain that allows itself to make a peace (of a modus vivendi sort) with bureaucratic-capitalism (the non-free market “mixed economy” we currently enjoy, with private ownership of property but under public control and direction) as a milk-cow to finance their social engineering schemes. (The later made them natural partners with the Progressive movement, so the two became inseparably intertwined).

This FEE Lecture by Bradley Thompson is pretty good on the inherent inhumanity of Marxism, despite it’s claims to and reputation of “at least they meant well, but it’s never really been tried.” Turns out it is the Marxist despots who understood it most fully and it was the most bloody of them that put it into practice most according to Marx’s original intent.

“Libertarian Socialism” is an oxymoron, probably the latest term-of-art for Left-Anarchists wanting to make themselves popular. At best it means Libertine Socialism, but it’s still everything for the mass, nothing outside the mass, nothing against the mass.

[porphyrogenitus]

Thanks tons for posting the books mentioned & links!

It’s often hard to remember after the chat (“what was that book/article he mentioned? It sounded good), or get the spelling of the author’s names right (though these ones aren’t too hard), so it’s really helpful when they’re posted in text-format too. ^_^

[porphyrogenitus]

Clever name. ^_^

SmartMuffin – your blog’s not bad at all! I like that you update it regularly, too.

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