Sunday, June 21, 2009

Gullible's Travails

I was recently forwarded this by a friend who wanted to know what I thought of it. It's sort of a primer on libertarianism. I ended up giving it the FJM treatment, and it took me a couple hours, so I figured I'd post it here. Bold face is, of course, the original text.

The Philosophy of Liberty is based principle of self-ownership.

As an former philosophy major, among many majors that I failed to follow through on, I'm interested.

You own your life.

Fair enough, although I'm not sure if I have a free and clear title on it. Or what this means, really.

To deny this is to imply that another person has a higher claim on your life than you do.

As a moral argument, I'll buy this. But I think we're going to run into problems with reality here.

No other person, or groups of persons, owns your life.

I guess what makes me a little skeptical of this argument is that I don't know what it means to own your life. Does it mean you can do whatever you want with it? Are there restrictions? If so, who decides what those restrictions are? Maybe I'm getting a little ahead of myself. I just think the word "own" is a little strange here. Also lacking is a definition of life. Does he mean life as in physically living? Because if I own that, I'm more of a silent partner. There are plenty of other things in the known universe that can terminate it without my consent.

Maybe he means that I can do with it what I want as long as I'm alive. But this would imply that I could decide to have no restrictions on what to do with it.

Nor do I own the lives of others.

No, but I can do things that affect the lives of others, or, conversely, I can not do things that will affect the lives of others.

You exist in time: Past, Present and Future....This is manifest in Past, Present and Future...To lose your life is to lose your future.

Some people would say that you only exist now. But I am hoping that this is a rather meaningless yet catchy way of saying nothing; if this philosophy is based on theories of existentialism, then it's foundation will be rather shaky.

To lose your liberty is to lose your present.

As a statement of fact, this is undeniably false. I personally prefer to be free, but there are some quarter million people incarcerated in the state of Texas alone who have a present, although it's not necessarily the one they always dreamed about. But I happen to think there are worse things than to be unfree, depending on your point of view. If you're alternatives are death, or say, living free but with a horrible disease and no insurance or way to pay for treatment, then, realistically, you may reconsider your desire for liberty. And in any case, while liberty is generally preferable, all things being equal, the problem is that all things are generally not equal. And you certainly will not "lose your present."

And to lose the product of your life and liberty is to lose that portion of your life that produced it.

I don't really know what to make of this. If someone takes away everything I own, it will be as though I never existed? I don't want anyone to rob me, but this is making a little too much of the things I own. The things in my past that are valuable are my memories, my experiences, my relationships with other people. These aren't going to disappear simply because my property is taken. And I have to assume he means property here, as given the context I don't know what else he could mean.

A product of your life and liberty is your property.

The use of the indefinite article now seems to imply that there are other products of your life and liberty.

Property is the fruit of your labor, the product of your time, energy, and talents.

That is one type of property. But not all property is the fruit your labor, and your labor only, as this implies.

Inherited property is generally the fruit of someone else's labor. And in fact, most property could not be produced without the help of society. Sure, you may put in time, energy, and talent, but don't kid yourself into believing that, without the help of others, including the hundreds of years of western civilization, its institutions, its triumphs and its crimes against humanity, you would be able to invent, say, Windows.

Property is that part of nature which you turn to valuable use.

This would seem to leave out intellectual property and inherited property.

Property is the property of others that is given to you by voluntary exchange and mutual consent. Two people who exchange property voluntarily are both better off or they wouldn't do it.

I suppose this makes sense in an idealized economic environment. The problem is that those never exist. This is one of those theories that underpin free-market ideology, and that try to neatly describe the world, and have to simplify things and ignore reality to make the theory work.

This becomes clear when you consider that people exchange property constantly and often end up worse off. There are millions of people who exchanged cash property for over-priced real estate just in the last few years, and for many of those transactions, there was a clear winner and a clear loser.

The theory here is that voluntary trade is always good, when the reality is that it is sometimes good and sometimes bad. The biggest reason for people making trades that are not in their best interest is because of the problem of information asymmetry, which simply means that one party knows more than the other. This is a real issue, and it's one that doesn't fit into radical free-market economics, and so it's often ignored.

Only they may rightfully make that decision for themselves.

I would agree with this, in those cases where both parties have all the information. But those cases almost never exist. The question then becomes whether society has a responsibility to intervene, in cases where people can cause themselves harm in inequitable exchanges.

The libertarian ideological response is always no. But let me pose an example. Suppose your grandfather dies, and your grandmother is left with a life insurance benefit of $300,000 to see her through the rest of her life. She goes down to her local financial advisor, and he recommends that she invest it all in, say, at the height of their stock price in February 2000. He thinks it's going to be the next big thing. She buys 27,273 shares at $11 a pop, and on her advisor's advice, continues to hold them as they rapidly decline later that year, finally selling all of her shares in November of that same year (just before the company announced it was liquidating) for $0.19 per share. Which leaves her with a mere $5181.82 for her retirement.

Now, there is no force or fraud here. There is only a lack of information. In fact, we can posit that the advisor was being truthful and honest in everything he said.

I'll repeat the previous statement, as it's one that is integral to free-market economics. Two people who exchange property voluntarily are both better off or they wouldn't do it.

It seems that sometimes, people may wrongfully make those decisions too. True free-market economics require you to say, "Tough luck. It can't be helped." Ignoring the fact that, yes, this actually can be helped. And it requires perfect information and rational behavior. These are two things that markets in the real word are notable for lacking.

At times some people use force and fraud to take from others without voluntary consent. The initiation of force or fraud to take life is murder. To take liberty is slavery. To take property is theft. It is the same whether these actions are done by one person alone, by the many acting against the few, or even by officials with fine hats.

I will agree with this as a general description of murder, slavery and theft. I'm not sure why we need to talk about people with fine hats.

You have the right to protect your own life, liberty, and justly acquired property from the forceful aggression of others, and you may ask others to help defend you. But you do not have the right to initiate force against the life, liberty and property of others.

Fine. With limitations, which I'm sure we'll get to.

Thus you have no right to designate someone to initiate force against others on your behalf.

I can see where this is leading.

You have the right to seek leaders for yourself but you have no right to impose rulers onto others.

Oh, boy.

First, note the rhetorical sleight of hand here. They're leaders when they are for you, but rulers when they are for someone else.

But really, this is just nonsense. Are we each to have our own leader? Is this possible? Has there ever been a civilization in the entire history of the human race where some people did not want the leaders that they have? What system is he proposing?

The best system ever devised is democracy, and democracies can really only work best in a relatively small number of current societies, and even then, nearly half of the citizenry is unhappy with the leader of the government, and almost everyone is unhappy with someone that represents them.

So basically, democracy is the imposition of rules on the minority by the majority. This does, in fact, make me a little uncomfortable. But the alternatives truly frighten me. Including what seems to be promoted here: anarchy.

Here, again, we have a total disregard for reality because it doesn't fit in with the ideology at hand.

No matter how officials are selected, they are only human beings and they have no rights or claims that are higher than those of any other human beings. Regardless of the imaginative labels for their behavior, or the numbers of people encouraging them, officials have no right to murder, to enslave, or to steal. You cannot give them any rights which you do not have yourself.

In fact, the historical definition of rights precludes them from being given at all, as they are granted at birth. But I won't argue with this.

Since you own your life, you are responsible for your life.

Again, I don't know what this means. Does it mean that I'm responsible for my actions? Sure.
But really, unless a better explanation of what "own your life" means is forthcoming, I'm guessing that any argument which rests on this premise is going to be on pretty shaky ground.

Come to think of it, reread that statement. Since you own your life, you are responsible for your life. Does this mean anything at all?

The more I read it, the more i think it's just feel-good tripe that people read, accept, and then unconsciously rely upon in some specious argument. In fact, I reject that premise as meaningless.

You do not rent your life from others who demand your obedience.

Is that even possible? If not, what business does it have in a philosophy of liberty?

Nor are you a slave to others who demand your sacrifice.

This is true. I am not. But the reality is that people are enslaved all the time. And no one is truly free. We all depend on the whim of others, even if only to the smallest degree.

You choose your own goals based on your own values. Success and failure are both the necessary incentives to learn and to grow. Your action on behalf of others or their action on behalf of your is virtuous only when it is derived from voluntary, mutual consent, for virtue can exist only where there is free choice.

Definitions of virtue have abounded since Socratic time, and here is yet another. Virtue is voluntary, mutual consent. And it cannot exist without it.

I suppose that is one definition. I do not think that it is an exhaustive one, however. Nor is it sufficient. Again: voluntary, mutual consent is generally good. But it depends on the situation. And it's not the only thing. Justice, truth, beauty, happiness, wisdom, symmetry....these have all been claimed by people as virtue, and they have just as much right to lay claim to it as anyone.

This is the basis of a truly free society. It is not only the most practical and humanitarian foundation for human action; it is also the most ethical.

The funny thing is that I used to be a libertarian because I wanted to live in this society, which was easy to understand (you can explain its working in 8 minutes) and everyone seemed to get along well and make good decisions. I couldn't understand why it didn't exist. And then I realized that many people have different views of what's ethical, and that many people had different priorities than me. Plus, this utopia requires rationality from people and from markets, and in case this is not yet clear -given the recent financial turmoil- people and markets are categorically not rational.

If people behaved as free-market economists want them to, and as libertarian ideologues wish they would, then this would be a fantastic place to live. I'll be the first one in line. Until then, I'm going to continue living on earth, with all of its irrationality, injustice, and intractable problems that seem easy to solve until you look a little more closely.

Problems in the world that arise from the initiation of force by government have a solution. The solution is for the people of the earth to stop asking government officials to initiate force on their behalf.

Seriously? This is a solution? Thank you! Why has no one thought of this before? And the solution to murder is to stop killing people. The solution to the problem of ugliness is to stop being ugly.

Oh, well. At least these are pleasant fantasies.

Also. note the anti-government bias here. It's always good people who have a bad government which starts wars.

Evil does not arise only from evil people, but also from good people who tolerate the initiation of force as a means to their own ends. In this manner, good people have empowered evil people throughout history.

So sometimes bad people do bad things. And sometimes good people do bad things. So what makes bad people bad, then?

Having confidence in a free society is to focus on the process of discovery in the marketplace of values, rather than to focus on some imposed vision or goal.

What if the imposed vision or goal is one of freedom and choice, and the ability to choose a leader for yourself? What if the marketplace for values includes values such as ensuring that all Americans have health care?

Using governmental force to impose a vision on others is intellectual sloth...

Wait? Why is this lazy? It's not lazy. It may or may not be desirable (depending on the context), but it's not lazy. Lazy is categorically labeling diverse types of actions so as to fit them into an ideological framework.

...and typically results in unintended, perverse consequences.

Every action results in unintended consequences. Sometimes they are perverse, sometimes they are not. But here's the kicker: every inaction does too. In fact, we just don't know the future. And making decisions on whether or not to do things is hard. So is figuring out how to do them correctly. It's so hard, in fact that some people have come up with philosophies of inaction, so that they can just not do anything at all, because something bad might happen.

Achieving a free society requires courage to think, to talk, and to act.

I do want a free society. And so I'm doing these things. But I don't want one at any cost.

Especially when it's easier to do nothing.

Fair enough.

Look, I'm what I guess you could call a cultural libertarian. I don't want government to enforce its morals on me. But that is only one of the two sides to modern libertarianism. The other side is a free-market radicalism that is completely detached from reality. It has constructed elaborate theories of how people should act, and ignored how they actually do. It has, through the Chicago school of economics, dared to predict the workings of a market, and it should have been discredited once and for all when Myron Scholes' and Robert Merton's theories on rational markets disintegrated in the irrationality of Long Term Capital Management's implosion in 1998.

Free-market radicals are always full of excuses about why their theories fail. They complain that someone did something irrational, or that external forces interfered, or that politics got in the way. It's as though people have up until then behaved rationally, or external forces had not existed prior to then, or that politicians behaving like politicians was something that just shouldn't happen. They play with their perfectly constructed models, in which everything is insulated and predictable, and then are surprised and indignant when a toddler walks by and smashes it. They say the toddler could not have been predicted, yet they do not see the irony of a completely predictive theory being ruined by something unpredictable.

I believe that markets should be generally free. But it's a giant leap to go from generally to always. The devil, as always, is in the details.


  1. Pete, most arguments challenging free markets are poorly thought out and are illogical. For the most part, your comments are clearly well thought out and logical. I shall offer some scattered brain droppings (RIP George C.):

    Milton and the Chicago gang certainly were not TRUE free market folks... and I would agree that their pseudo-capitalism stance was destined to fail. I am more of a Ludwig von Mises guy... but would hardly call myself an expert in economics! :)

    I agree that there are many complexities that radical free market folks like me are challenged with... and I don't think that a decision by our rulers tomorrow morning to make a complete change to freedom would be without problems!

    I appreciate your mention of information asymmetry and distinction that the merits of society or state responsibility for evening it out is arguable.

    The widow's poor choice is a risk I am willing to accept. I think that if a government could ever exist that could do a better job sorting things out than the free market... I would entertain its potential for being of value.

    The rationality of people is certainly not great. I wish we were all well versed in important areas... but because I am spending this time chatting with you about philosophy ... I am not learning about the best brand of bread... so when I purchase a loaf later... I will have to take a risk and just grab a loaf off the rack. A nutritional expert that skipped philosophy will have better information and can choose a better loaf. I might make an irrational decision based on the color of packaging,propaganda about plastic being environmentally unsound or something else.

    My belief is up to each of us to choose. Should we marry a dude or a gal? Should we learn more about bread or Should we send our children to a "school?" Should we consume battery acid, cigarettes or marijuana?

    Leaders -v- Rulers:
    I see a distinction. Being led is voluntary. If I choose not to follow a leader and she forces me to obey; she becomes a ruler.
    I don't think we need "leaders" in most situations. Advisers? Yes, I might choose advice about some issues.

  2. A challenge to my line of thinking is my absolute "stealing is always wrong" argument... if I make lousy choices and wind up destitute wandering the countryside with my toddler ... and he needs to poop in the woods that belong to another... and I use steal leaves to clean him...

  3. First let me say I really appreciated reading your detailed analysis. It it carefully worded and not inflammatory. Also you seem very pragmatic and realistic. This makes for a good discussion.

    I agree that the language in the video is not completely rigorous, but it seems to aim vulgarization first.

    Inheritance fits in voluntary exchange, it's a gift. Charity too.

    There is a strong case showing that intellectual property is actually not property, it's a misnomer.

    Regarding the "after the fact" value of an exchange, you are correct. In a voluntary exchange, both sides expect a benefit, but that may turn out to be a mistake (even in the absence of fraud). But the grand'ma ultimately bears the responsibility of her decision. She may choose to inform herself better, not trust people's advice blindly, manage her risks. All those things I would actually expect a grand'ma to do better than a teenager ;-)
    Also, you don't need government to solve information asymmetry problems. The market actually solves them. The used car business is still vibrant. See the "Akerlof problems, Hayek solutions" paper on turning lemons into lemonade.

    The point about government and laziness is that using force is breaking the framework of voluntary transactions. It takes more effort to convince people than to state "this is the new majority regulation, you have to behave this way from now on".

    Regarding the Chicago school of economics, I would encourage you to learn about the Austrian school of economics instead. It makes none of the common assumptions (some perfect rational behavior, perfect information, some utility functions describing individual preferences, etc.).
    Like you, I am annoyed when economists seem surprised that people don't behave like they expected ;-) But I have seen no such thing from Austrians (probably because they make very few assumptions).

  4. More on the "property is the result of your labour" argument...
    This is nearly always an oversimplification / utter falsehood.

    His ‘wages’ of under £7 ($10) a week are sent to his widowed mother in a poverty-stricken rural village hundreds of miles away in the east­ern state of Bihar.

    That 7-year-old boy works a 90-hour week for 10 US cents an hour.

    According to the free-market theory, he does this because both he and the manufacturing company both profit from the contract.

    Give me a break, people!

    This 7-year-old boy "decided" to move HUNDREDS OF MILES away from his mother to do this so that his mother won't die of starvation.

    The manufacturers no doubt inherited a large part of their wealth and didn't have to go out to work at age 7. Their parents may have sent them to England to go to Eton and Oxford, where they formed close life-long friendships that will allow them to make ADVANTAGEOUS contracts for the rest of their lives to go from millionaire to billionaire status. This boy, even if he is sent back to his mother and is miraculously allowed to go to school, will NEVER be able to compete with such advantages.

    Most of the world lives in poverty

  5. I applaud those who have taken the time to post their opinions about the video. It's RARE indeed to actually read contrasting political views without stumbling over the sharp, pointed spikes of ad hominem traps. The above responses prove one major thing to me at least.. That verbage perfectly wrapped in such intellectualized packaging is a sure key to open a Pandora's Box. I would not claim to have the patience to dissect any concept and respond to it with the expertise displayed above, but I can say that I feel a certain spiritual rapport with Shepard as opposed to Pete. Pete's detail leads me to sense a lack of any considerable stand in life.. as if he has experienced no reliable or trustworthy foundation from which to build an unwavering stand. I am always at odds with people who appear to rationalize themselves out of any real value system. I seem to feel an instability after reading such open ended comments. Shepard, on the other hand has a grasp on something and is willing to go out on a limb by accepting some risk for such a stand. Whether that risk be failure, discourse or rejection. He presents a side I can digest. It seems to project the basic precept that after all is said and done the real deal is that life is a game of winning and losing.. Of survival of the fittest.. a sense of some trust in a higher power other than oneself, but that which commands certain responsibilities and control of oneself.. That we can't be our brother's keeper without sacrificing the very aspirations and level of achievement that is divinely bestowed each individual. I guess I just find his truth much less elusive than Pete's. But that's just me and who am I to say.