Sunday, May 15, 2011

The Austrian School is not ready for prime time

Tea Party godfather and Austrian School advocate Ron Paul put his foot in his mouth and let his inner neoconfederate slip out during a recent episode of the Chris Mathews Show. Physician Paul revealed that he would not have voted for the 1964 Civil Rights Act. Watch Ron Paul's blunder here. How does the Austrian School think it can ever go mainstream when it's most prominent advocate reveals himself to be a defender of oppressing his fellow man?


Tom Hickey said...

This is actually a debate that needs to unfold further, and it is related to the foundations of capitalism and free markets.

Conservatives, and Austrians are arch-conservatives hold that property right trump human and civil rights because property rights are foundational. All other rights are built on property rights. Rights are about freedom and a person cannot become free (financially independent) without property rights.

Liberals hold that human and civil rights trump property rights because the human person in inherently more valuable in the metaphysical or spiritual sense than property.

This was fought out in the wording of the Declaration, and liberals won, making the US a liberal democracy. Some want the wording to be, "God created all men equal and endowed them with the inalienable right to life, liberty, and property." The final version replaced "property" with "the pursuit of happiness.

But many conservatives understood "happiness" to mean utility in the sense of material satisfaction based on ownership, and many conservatives still think that "the pursuit of happiness" means ownership of property.

Notice also that "men" excluded women and slaves in the understanding of the time. In fact, many held the traditional view that women and children are included in a man's chattel.

There is still a strong undercurrent of this in US politics and now it is coming to the surface.

David said...

Tom, I don't think most libertarians really want to live with the consequences implied by their thinking. The Pauls attract to themselves the racists, bigots and militia-ists, while claiming innocence of the sentiments which animate such people. The crazies are not, however, drawing incorrect inferences from the pristine libertarian ideas of a Ron Paul.

Monetary historian Alexander Del Mar summed up the "wages of libertarianism" pretty well:

"If you fear to trust the government you may indeed preserve the size of coin in your pocket, but you cannot secure the profits it may earn you; and persistence in this course will force ruin upon others and probably upon yourself."

Matt Franko said...


I think at core a lot of the people politically attracted to the depraved Pauls just dont want to pay as much taxes as they are required to pay now, with govt thinking that they have to tax to be able to spend.... they may get all puffed up about "liberty" and other BS, but I believe that is all smoke... they want more net income now, and think their taxes are going to be raised in the future to extinguish govt sector liabilities (pay off the "debt", etc..).

Warren Mosler has often opined (and I agree) that the current lagging output and employment is really just the real aftermath of this over-taxation, so on some level I have to sympathize with these morons.

If we ran the correct fiscal policy to be able to both consume AND save, the Pauls I would hope would have just a few truly fringe people show up for their speeches....


Tom Hickey said...

I know some of these people by acquaintance or have interacted with them online, and my take is that they have not really thought things through.

They would be quite disappointed in the result for them if they got their way. There are very few John or Jane Galts, and these people would end up working for the Galts of the world for a subsistence wage. But they would not have to be concerned about inflation anyway. Little comfort on a subsistence wage.

David said...

I certainly agree with you that if the federal authorities were doing their job with respect to demand that much of the argument about taxes would lose its acuteness. I don't entirely agree with you and Mosler that being overtaxed is our main problem. Insofar as it is true, it is mostly at the state and local levels. This is a direct reflection of the failure mentioned above.

My sense about conservatives/libertarians is that their policy preferences often have little to do with practical reality. For example, when Clinton raised the gas tax by a few pennies in the '90s conservatives went ballistic but have had little to say about the blatant rent-taking by the oil companies in recent years. Many of them think "big government" is behind it. While Warren's anti-tax approach should appeal to libertarians/conservatives and the JG would seem to satisfy some of their stated concerns about welfare, etc., I don't see that too many of them will get past their hardened ideological biases and accept something that could improve their lives as well as others.

I feel that more could be accomplished by getting people on the left to understand/get comfortable with basic chartalist ideas. I'm sure you are aware that the greatest opposition to reducing/eliminating the payroll tax comes from the left. This is of course tied up with misperceptions about taxing and funding. If we can get the people who understand the concept of societal interdependence to understand that social provision need not involve "dismal tradeoffs" I think we will have accomplished something.

Tom Hickey said...

The US is overtaxed because of persistent unemployment. State and local taxes can be shifted to federal block grants, FICA can be done way with, and most of the income tax, too, by taxing economic rent instead. This discourages rent-seeking and encourages productive investment and work. The advantage of fiscal policy is that it can be targeted.

Tom Hickey said...

To clarify: we know that the US is overtaxed because of persistent unemployment.

beowulf said...

"Conservatives, and Austrians are arch-conservatives hold that property right trump human and civil rights because property rights are foundational."

The conservatives-- well call them what they are-- the Neo-Confederates controlling the GOP don't want people to remember that the first Republican President had rather different ideas.

"It is not needed nor fitting here that a general argument should be made in favor of popular institutions, but there is one point, with its connections, not so hackneyed as most others, to which I ask a brief attention. It is the effort to place capital on an equal footing with, if not above, labor in the structure of government... Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.
ABRAHAM LINCOLN, State of the Union
December 3, 1861

Matt Franko said...

Right Tom,

This is the true or 'real' account of what is going on: UNEMPLOYMENT and LOST OUTPUT.

Most folks who dont realize this instead look at some sort of accounting record of deficits or debt or some other govt liability or whatever that then is usually applied from the household perspective.

It's more appropriate to FOCUS ON THE REAL. This gets back to the Narcissus story for me...


Tom Hickey said...

Thanks for that, beo. Nice to know that Honest Abe was Marxian at heart.

beowulf said...

Karl Marx seemed to think so. Marx was quite the Republican supporter, the very first Red Stater you could say.
Sir: We congratulate the American people upon your re-election by a large majority... [The workingmen of Europe] consider it an earnest of the epoch to come that it fell to the lot of Abraham Lincoln, the single-minded son of the working class, to lead his country through the matchless struggle for the rescue of an enchained race and the reconstruction of a social world...

beowulf said...

Speaking of Marxist Republicans (ha ha), I see that Newt Gingrich is tacking to the center, Trump-style, on Medicare.
On House Budget Chairman Paul Ryan’s plan for a Medicare voucher program: “I don’t think right-wing social engineering is any more desirable than left-wing social engineering...

Of course the essence of Country & Western Marxism (as the National Review described George Wallace's platform) is to move left on economic issues and also move right on cultural issues. Newt does not disappoint.

Gingrich did, however, defend himself when host David Gregory asked him about recent comments he made about unemployment calling Obama “the most successful food-stamp president in American history. Gregory said some critics are suggesting Gingrich was using “coded racially tinged language.


Septeus7 said...

Here's a quote from another of our Marxist Founding Fathers.

"All Property, indeed, except the Savage's temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it." -Ben Franklin

Libertarians are monarchists for what is a kingdom under a Monoarchy but where all land is the private estate of the King?

Since I don't have the right to freedom of speech, of the press, etc.. on private property without a commons I am but a surf without rights on the private estate of the owner who is an absolute dictator over me for without land I cannot do but agree to the the dictates of the private land owner.

Property not subjected to to the idea of human progress and liberty for ALL is slavery.

I learned all freedom depends on a golden balance of public and private the day I tried to hand out Anti-Obama healthcare information on private property where I learn that on private property you don't have rights.

If all land is privatized as Neoconfederate libertarians want then I wouldn't have any rights anywhere if I didn't own any land and that was the day I became a Lincoln "socialist" or Geo/physio Libertarian because the only time I've had my freedom threaten was by the State in the name of protecting "private property."

Once you see property owners cold hearted willingness in using violence against free speech you're become
"socialist" in a heart beat.

Slavery has always been defended in the name of private property.

Tom Hickey said...

It gets worse. Murray Rothbard proposed privatizing the oceans.

Anonymous said...

And I had people argue that Austrians are not crazy. This debate does need to go further - and thanks Tom for tying the political struggle to the the progressive struggle in a very direct manner.

Crake said...

All the posts with quotes from figures of history and the topic at hand reminded me of Albert Einstein’s essay, Why Socialism?, which is a well thought essay on this subject. His point is largely based on the native instinct of man and how those instincts are counter to society, and how the norms of society allow more for all but at the same time cause stress to the individual instincts.

Two excerpts:

The individual is able to think, feel, strive, and work by himself; but he depends so much upon society -- in his physical, intellectual, and emotional existence -- that it is impossible to think of him, or to understand him, outside the framework of society. It is "society" which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word "society."

I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make-up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning in life, short and perilous as it is, only through devoting himself to society.

Tom Hickey said...

What's So Great About Portland?

beowulf said...

Its a wonder that conservatives don't recognize that Keynes was their ally. As Bruce Bartlett has pointed out, Keynes presented a third way between socialism and capitalism that preserved existing wealth while providing full employment to workers.

Of course, by taking socialism off the table, Keynesian aggregate demand management became the new left wing position or "thesis" (as Marxians would say) that conservatives countered to produce a new "fourth way" (McCarthyism spooked Paul Samuelson into teaching a watered down American Keynesianism), which over time was deformed by conservative pressure to result in a "fifth way" (New Keynesianism) that was endorsed by Republicans as recently as, well, the last GOP President (Greg Mankiw served as Bush's CEA chair).

President Obama has broken new ground (a "sixth way"!) by endorsing austerity in the midst of a weak economy, something that would not have occurred to Bush and Mankiw to try out. Of course, it hasn't stopped the attacks on Obama as a left wing socialist Keynesian (which I'm convinced many American think means he was born in Kenya).

Oliver Davey said...

Here's a good discussion about the Ron Paul comment with some whacky Libertarians for us to gang up on:

Crake said...


This post on that forum you linked made a very good point:

Bloix 05.15.11 at 2:06 am

” And private discrimination, while properly subject to disapproval, is not a violation of anybody’s rights, because you don’t have a right to have other people engage in transactions with you.”

Private discrimination is not private. It depends on the coercive power of government contracts and police protection to enforce it. Imagine a restaurant that will not serve black people – no Jim Crow laws, just an owner who chooses to cater to a racist clientele. Now a half a dozen black people come in and refuse to leave. The owner calls the cops and says, “these people are trespassing.” What do the cops do? Do they use force to evict the black people? Ron Paul and Brett Bellmore think that the answer is yes, because the rights accruing to ownership of property must be enforced by the state, and these right include the right to preclude access to that property.

The rest of us understand that property rights are not God-given but are a creation of the state, and like all other state-created rights, they can be limited and modified.We understand that the state has no obligation to deploy the police power on behalf of racists. But it you worship at the altar of property rights, as libertarians do, then a little human sacrifice is not merely acceptable, it’s positively sanctified.