Monday, 30 May 2011

10 approaches in making a case for liberty or anarchy

Here is a list of 10 fairly distinct approaches that I have used in the past when making a case for liberty or anarchy.

1. The ‘Gun in the Room’ Approach

Governments require taxation; taxation is theft; theft is unethical. By advocating government, you are advocating something unethical. You are saying you have no problem with a criminal gang stealing my money from me using threats of violence.

2. The Free Market v Monopoly Approach

Calculation problem. Knowledge Problem. Incentives. With free markets comes quality, low price, efficiency, diversity and choice. Monopolies are necessarily aggressive, corrupt, inefficient, and ineffective in satisfying consumer demand. Arguments should be completely general… The monopoly on law should be emphasized: we have bad quality laws because law is currently produced by a monopolist.

3. The Secession Approach

National boundaries are arbitrary, imaginary lines drawn on political maps and set by the outcomes of historical wars. Any advocate of government must propose some ideal territorial size that a nation should be, as well as his ideal form, scope and policies of government. If a group of people within a nation want to declare independence, secede and create their own smaller nation, who should decide whether this is allowed to happen: the people seceding, or the government they are trying to secede from? The latter is clear slavery and justifies world government. And if the former, if a group of people have the right to secede, then by the same argument, individuals have the right to secede. Individual secessionism is anarchism.

4. The ‘Competing Governments’ Approach

How can we know what type of government is best? Trying them out could be a good way. Let a thousand nations bloom. Or tens of thousands. Let the many micro-national governments compete with each other, and see under which type of government the people become most prosperous? Why not even try having more than one government in one territory? ;-)

5. The Government-as-Slavery Approach

A slave is someone who has the fruits of his labor taken off him by his master. The master sets the rules, telling the slave what he can and can’t do, using threats or acts of violence. The slaves massively outnumber the masters, but the slaves have been brainwashed, confused and distracted, and have accepted their condition of slavery. They have given up on the idea on freedom; they don’t think they will be able to survive without the master around to take care of them. Let’s abolish slavery: become an anarchist.

6. The Voluntarism Approach

We can distinguish between two types of trade between individuals: free trade, and coerced trade. The former is when both individuals are making the trade voluntarily. The latter is when one individual is using threats or acts of violence to coerce the other individual into making the trade. Libertarians believe that initiating a coercive trade (aggression) is unjust. Statists, on the other hand, advocate the use of aggression; aggression is required for a state, a monolist of law in a given territory, to exist.

7. The Historical Approach

USA v USSR; East Germany v West Germany; North Korea v South Korea. Why did the Renaissance, Enlightenment and Scientific/Industrial Revolution take place in Europe? How did the US become the richest nation in the world? The historical lesson: freedom good, government bad.

8. The Paradigmatic Approach

The left-right paradigm is misleading; left and right are just forms of statism when what matters is the degree of statism; the more meaningful and useful paradigm is Liberty-Totalitarianism; all major political parties are towards the totalitarian end of it.

9. The ‘True Democracy’ Approach

Democracy can be described as ‘power to the people’. Yet anarchy is the only condition where all 'the people' have the power they need the most: the power to defend themselves. Statism is a system where the people have no power to stop a gang of thieves stealing their money and enslaving them through legislation and regulation. The state gives some privileged few people the power to rule over many others; a power that nobody should have. Democracy is a great fiction where everybody attempts to live at the expense of everyone else; everybody votes to try and get the state to use it's coercive power to benefit them.

10. The ‘Real Equality’ Approach

Only anarchy will create the only type of equality worth having: equality under the law. Anarchy is the only true classless society, where no individual is above the law. Only when there is free entry into the industry of producing law will we have acheived equality.

Post comments about which of these you have used and what seems to work best on different sorts of people.  I posted this list almost a year ago at the Mises forum and it generated a worthwhile discussion.

Saturday, 7 May 2011

Sixth Rejoinder to Eerlijke Handel on Fair Trade or Free Trade

In response to Eerlijke's post here.

The legal system is messed up because it's a monopoly, as opposed to competitive system. See The Possibility of Private Law for the kind of legal system I advocate.

Competition bids up wages and increases the bargaining power of workers like nothing else can.

I hope the companies I buy from are invested in the poorest regions, and I hope that if they are making extra-high profits because they are paying low wages, or if they cut wages or jobs to make extra-high profits, other companies will soon invest in the region and compete with them for workers. Then they will have to raise wages if they want to keep their employees.

This is what will raise poor people out of poverty: competition, and therefore choices. Unfortunately in many cases government restrictions and a poor law/protection system prevent or discourage capital investment and so limit competition and poverty-alleviation.

While it pales in comparison to the damage done by government restrictions on trade, buying Fairtrade products has a similar effect of lowering the amount of competition in the poorest areas, relative to what it would be if consumers did not value the Fairtrade label.

Friday, 6 May 2011

What is Unschooling? (video)

Dayna Martin introduces unschooling, the idea of letting children direct their own learning, choosing their own methods, subjects and teachers.  Children are self-motivated to learn, and seek out the knowledge they need to operate in the world.  They do not need to be moulded, given artificial incentives or implicit threats by parents, or forced to learn subjects when they do not want to.  Forcing them to go to school against their wishes hampers their educational and social development, and often leaves them with a lifelong hatred of learning.

What is Unschooling?

Dismantle Public Education (video)

A voiceover narration exploring the reasons why educational standards are so poor... the State monopoly. As long as we have public schools, we shall have poor quality education delivered at great cost.

The potential for the abuse of power is enormous, and widely evident today with the biased teaching of subjects like history, economics and political philosophy. Children are forced to attend public schools and then indoctrinated, taught to conform and to obey authority.

Dismantle Public Education

Gun Control (video)

A voiceover animation illustrating the effect of gun controls. Gun controls mean law-abiding citizens (LAW TAKERS) have their guns taken from them by the State (the LAW MAKERS), so they are no longer able to defend themselves from criminals (LAW BREAKERS). In fact it helps the criminals, by disarming the very people they intend to harm, and leaves the populace vulnerable to democide (mass murder committed by States).

Gun Control

Copying is Not Theft (video)

Nina Paley's charming animation illustrating the simple difference between copying and theft, which supporters of intellectual property rights seem to miss when they condemn the copying of ideas as "theft".

Nina Paley did the animation and sings the song.  She released the video with no music and encouraged others to write music to go with the video.  There are almost a dozen different versions on youtube, to suit every taste. 

The very production process for the video below (my favorite version) demonstrates nicely how much better our lives would be without intellectual monopolies... Nina Paley waived her State-granted privilege to prevent anyone "stealing her idea" by creating a "derivative work", and the result is a better product for the consumer.

Copying is Not Theft

How Intellectual Property Hampers Capitalism (video)

Stephan Kinsella talks about how patent and copyright laws, which forbid the copying of ideas, are simple monopolies granted by the State which inhibit innovation and creativity, slowing technological development.

How Intellectual Property Hampers Capitalism

Fight of the Century: Keynes vs. Hayek Round Two (video)

The sensational follow-up to Fear the Boom and Bust, the first ever economics debate in the form of a rap battle, which has over 2 million views on youtube alone.

Round One was about what causes booms and busts and what we should do about it. This one is about whether government spending helps or hampers the economy.

The question is... could round two be even better than round one?

Fight of the Century: Keynes vs. Hayek Round Two

George Ought To Help (video)

A great animation illustrating with great simplicity the true nature of the State.

George Ought To Help

Capitalism in One Lesson (video)

Nielsio's latest original video is one of the clearest short explanations I have seen of what capitalism is and how State intervention hampers the wealth-generating free market process. It also provides a wealth of useful links to video lectures that explain the points being made in more depth.

Capitalism in One Lesson

Trade is Made of Win (video)

Great new set of short videos presented by Prof. Art Carden.

Trade is Made of Win - Part 1: Wealth Creation

Trade is Made of Win - Part 2: Cooperation

Trade is Made of Win - Part 3: Conservation

Fifth Rejoinder to Eerlijke Handel on Fair Trade or Free Trade

This is my response to Eerlijke Handel's latest post in our discussion.

We seemed to be making progress in terms of agreeing on definitions Eerlijke, but your latest post seems to be several steps backwards. What is this new thing you’re talking about: “economic power”? How can it be misused (except by allying with political power)? What is “exploitation”? How can a voluntary trade possibly be exploitative? What is slavery? How can a voluntary relationship be called slavery?

I defined slavery very clearly in my post, and subsequently elaborated it in responses to you. Do you have difficulty distinguishing between coercive and voluntary? Do you think consentual sex and rape are the same thing? Do you think boxers commit the crime of assault against each other when they fight? Do you think you inviting me to your home is the same as me breaking into it?

Clearly, the most important ethical distinction between two types of trade is whether or not both parties consent to it (i.e. whether or not it’s a voluntary trade). There is no such thing as slavery or exploitation except where there is coercion, i.e. one party threatening another with violence or using violence to make him comply. Impoverished people working voluntarily are not being “exploited” by their employers, no matter how little they are paid; they are choosing to work because it’s the best option available to them right now; otherwise they would discontinue the relationship.

Regarding your criticisms of my method (especially the use of ceteris paribus, and how economic analysis relates to “the real world”), I encourage you to investigate the Austrian School of Economics. The Mises Institute has a wealth of resources on all sorts of topics, including the epistemology of economics. A discussion about epistemology (which would be necessary for me to convince you that my economic method is valid) is perhaps too far from our core topic here.

Regarding the success of Fairtrade, this is not a “flaw” in the market at all. Lots of people demand Fairtrade and the market delivers it; it is a market success. What do you think this proves? How is it relevant to my critique at all? It sounds like a circular argument: you are saying that lots of people demand Fairtrade therefore more people should demand Fairtrade. What I am saying is that no-one who has the end of helping the poorest people of the world should demand Fairtrade, because there are more effective means of achieving that end.

Monday, 2 May 2011

Fourth Rejoinder to Eerlijke Handel on Fair Trade or Free Trade

This is my response to Eerlijke Handel's latest post in our debate about Fair Trade.

I have asked questions, that you have not answered.
1. Did you supply proof that Fairtrade competes with other charities? Yes or No?
If you think my statement requires some kind of “proof” then you’ve misunderstood the nature of my statement. Fairtrade obviously competes with other charities, because all ways of spending my income compete with all other ways. This is a logical statement, evident just by thinking about the nature of human action in a world of scarcity. It cannot be falsified by any empirical evidence.
2. Is the 10p in your critique solely based on the one 2005 article by Harford? Yes or No?
That is the article I cited for my claim. I note that you have not provided any evidence that contradicts this, despite my asking you to do so. So I’ll ask again: are you claiming that a higher percentage of Fairtrade money reaches their desired recipients than Oxfam money reaches their desired recipients? If you are, please provide a source.
I have already given you many reasons why Fairtrade does not necessarily have to be more expensive than other branded products.(*)
(*) I have given many reasons why from an economical point of view Fairtrade does not necessarily have to be more expensive. Look at the past blogs.
Where? Are you referring to your hand-waving towards “economies of scale”, “better negotiation position”, “shorter supply chain”, “long term commitment”, etc? Because I have responded to all of these showing why they are red herrings. It seems like you are unable to respond to my scenario without invoking one of these concepts, which are not unique to Fairtrade in any way, and violate the ceteris paribus condition that must be maintained for economic analysis.

I will respond to each of the quotes you provide.
Tim Harford 2005:
“The truth is that fair trade coffee wholesalers could pay two, three or sometimes four times the market price for coffee in the developing world without adding anything noticeable to the production cost of a cappuccino.”
This particular quote doesn’t mention the final price, so it doesn’t support your claim at all. A few sentences earlier however, Harford says “the premium paid to the farmer should translate into a cost increase of less than a penny a cup,” so this supports my claim, not yours.
“There are now so many Fairtrade products available in the UK market that it is misleading to suggest that a product is more expensive simply because it carries the Fairtrade label – indeed, because Fairtrade staples such as tea, coffee and sugar have become so popular through consumer demand, the economies of scale now possible mean that they are usually no more expensive than their non-Fairtrade equivalents."
This also supports my claim, because it gives “economies of scale” as a reason that the increased production cost does not translate into a higher final price. (In other words, it explicitly says that ceteris paribus has been violated, so the implicit message is that if ceteris paribus were maintained, the final price would be higher.)

I say well done to the Fairtrade organization if they’ve found a more efficient way of producing (by utilising economies of scale), but this is something any organization can do, so it is irrelevant to any economic analysis of the essence of the fair trade model. There is no necessary connection between Fairtrade and economies of scale. That examples can be found where the final price to the consumer is equal for Fairtrade vs. non-Fairtrade demonstrates only that in the real world, all things are not always equal, and the world is in a constant state of flux.

So the Oxfam quote does not refute my claim that ceteris paribus, Fairtrade products have a higher price than non-Fairtrade products.
Ben & Jerry’s:
“The retail price of Fair Trade coffee is usually within the same price range as other gourmet coffee. Consumers should expect to pay about the same price as regular organic coffee. The main reason coffee farmers earn a better income under Fair Trade is that the farmer cooperatives export directly to importers, cutting out various intermediaries who typically capture more of the profit.”
This is another example of the same thing. This time it is “cutting out various intermediaries” that has meant that ceteris paribus has been violated. Again, I applaud the Fairtrade organization if they’ve found a more efficient production process, but any other firm could do this too, so it is not the essence of Fairtrade and irrelevant for an economic analysis of the fair trade model.
So your new question is not in line with my argument:
“Convince me personally to start buying Fairtrade chocolate… slightly more expensive than a non-Fairtrade brand?” “I have tried the Fairtrade bar an it tastes the same to me.”

I will answer nonetheless:
• If the price and the quality is the same, you might want to give Fairtrade the benefit of the doubt.
The price is not the same in the scenario I am asking you about. Anyway, even if the price was the same, I would still buy the non-Fairtrade product, because buying the Fairtrade product would send the wrong signals to the market: investment would be directed away from the neediest areas. 
• If Fairtrade happens to be slightly more expensive than your favorite (alternative) branded product,
then you might want to ask yourself the question:

Where does the non-Fairtrade branding money end up?
Why are you bringing up branding again? I am trying to do economics here, and that means assuming Fairtrade and non-Fairtrade pay the same for branding. Why do you keep violating the ceteris paribus principle? Let’s stick to economics, please.
So what will happen if you decided for non-Fairtrade rather than Fairtrade (all relative)?
You save a penny. The non-Fairtrade company will earn more… Fairtrade will earn less and a poor farmer will be paid less.
That’s right. And of course the farmer that produces for the non-Fairtrade company will (ceteris paribus) be even poorer than the Fairtrade farmer (remember that absent Fairtrade certification, investor-entrepreneurs are attracted to the very poorest areas). So by buying non-Fairtrade I will be benefiting the very poorest farmers (e.g. in Ethiopia) at the expense of those less poor (e.g. in Mexico). And of course I can donate the penny saved to a direct charity as well if I wish.

You are of course free to keep buying Fairtrade if you wish, but be aware that you would be helping the world's poorest people more by avoiding Fairtrade and encouraging others to do so as well.