21 Aug 2017

Jordan Peterson

Philosophy, Religious 5 Comments

I joined the bandwagon and started listening to Jordan Peterson’s podcast. Note, however, that this has NOTHING to do with his controversial stance regarding pronoun usage. I heard him on Tom Woods’ show when that issue was breaking, and didn’t think anything about his actual work.

Rather, I know some people who were huge fans of his work even before the controversy (and in fact wish that whole thing had never happened). Peterson is fascinating because he is well-read in a variety of disciplines and links them in unusual ways. I have never heard anybody like this guy. He mixes psychology, philosophy, Darwinism, and a profound appreciation for Biblical narratives in a way that blew me away when I first heard it.

I’m by no means an expert, but as of now I’ve listened to the first 3.5 episodes of his podcast. Just give Episodes 1 and 2 a chance. If you aren’t hooked, then thank you for your time.

Here are some notes I jotted down from Episode 3, “The Necessity of Virtue.” The time stamps are not (necessarily) exact; they just indicate the minute in which the discussion occurs.

17.50 — Humans have remarkably good vision (second to birds of prey). One researcher has a compelling theory that it developed in order to avoid snakes. Thus, the serpent gave us the ability to see.

21:00 — People who are bored and think life is meaningless also think they are ineffective. But actually you are a loaded weapon. You are capable of great evil. But if you realize that, you can also become a force for good.

26:00 — People embrace meaninglessness because there is no responsibility. Who cares what you do, if it’s all pointless? But if there is profound meaning in every action, then you must be very deliberate in each choice you make.

29:00 — The people who participated in horrific “utopian” projects of the 20th century just used the utopian vision as their cover story. Really they wanted to do horrific things to others.

43:00 — If you’re not honest, you can’t trust your own intuition. If you lie to yourself, you corrupt the structure you use to interact with being; it will then mislead you.

19 Aug 2017

Helping People to Understand Why Some Are Talking About a “Bubble” or “Hypnosis”

Politics 50 Comments

We all know at some level that people suffer from confirmation bias, that they see what they want to see, etc. But lately this phenomenon has gotten so extreme, it’s amazing to behold.

Look at this screenshot from a recent CNN article, talking about Trump’s initial reaction to the tragic events in Charlottesville:


I’m not even asking whether you agree with the CNN writer’s position. All I’m asking is: Can you understand how millions of Americans–say, the people who voted for Trump–would look at the lines I put in red underline, and think they were taking crazy pills?

Now if you click the article, you can see that the writer’s problem was the “many sides” stuff. And yet, that statement is obviously correct, as this new CNN (!) story on antifa clearly proves.

On Facebook I’ve heard people say, “Well, the problem is that Trump said antifa was just as violent and bad as the history of white supremacists.” I don’t think I heard Trump ever say that, but I’m open to it. Can someone provide a link in the comments?

Last one: I’ve seen memes showing D-Day and comparing that to Trump’s remarks. Well, OK, but if the German troops had first gotten a permit (not under duress) from the French government to march into their cities, then it would be more analogous.

I would offer my normal disclaimer about not liking Trump etc., but I think that’s superfluous at this point, given the screenshot above. You are either going to read what I wrote, or you are going to see through to what I “really mean” by my words.

19 Aug 2017

Contra Krugman Twin Spin

Contra Krugman No Comments

I wish I weren’t bogged down with so much stuff, because Episodes 99 and 100 of Contra Krugman are special.

In #99, we take on Krugman regarding business cycle theory. I joked on Facebook that this is probably what you thought every episode of Contra Krugman would be like.

In #100, we have a special guest… Who will it be?

17 Aug 2017

Thoughts on the “Vice” Episode on Charlottesville

Libertarianism, Pacifism No Comments

Partly because I had technical hang-ups and partly because I wanted to collect my thoughts, I’ve waited a bit before saying anything publicly about this shocking video on Charlottesville. So here are my reactions, and again I’m closing the comments on this because I think that will help to contain further fighting.

==> It will possibly be the case that this post will anger/disappoint everyone who reads it. If so, I hope that’s because I am truly trying to step outside of the standard reactions to the episode, i.e. either “we told you so” or “but what about antifa!” It’s also true that some of what I say below is self-serving but I’ve waited a couple days to search my motivations and I hope my remarks are helpful.

==> I used the word “shocking” quite literally when I’m describing the episode. I know people post that kind of crap (said in the video) online from anonymous accounts, but I was truly shocked that people would sit there with a camera rolling and say those kinds of things. So for some of you who may have thought (based on past reactions from me to concerns about the “alt right”) that I was being naive, fair enough, I am admitting that it’s still hard for me to believe that people are actually marching with Nazi flags and saying things like that on camera.

==> For those in certain circles in the libertarian community, the worst aspect of this video is that it features a guy Chris Cantwell. He used to be a part of what we can call the “liberty movement.” It’s because of his presence in the video that I am making this post.

==> However, before I talk about Cantwell, I want to first say that to me, the fact that former self-described libertarian(s) have anything to do with this stuff, is not nearly as disturbing as the fact that self-described Christians do. It’s not simply that Christians are supposed to show they are Jesus’ disciples through their love, but that on the specific issue of anti-Semitism, God’s chosen people were Jewish. Their Lord is Jewish. His inner circle were Jews. The author of much of the New Testament (Paul) was Jewish, an expert in the Mosaic Law. As far as “They killed Jesus, His blood is on their hands!” well yes, but the Bible teaches that we all killed Jesus through our sins. His blood is on all of our hands, and it’s what cleanses us. So in addition to being repugnant, to hear self-described Christians preaching hatred of the Jewish people is nonsensical to me.

==> Regarding Cantwell: Since I have interacted with this guy and to see him end up in that HBO episode, it is shocking and sad. I could tell from the transcript of a speech he gave (years ago) that he was very depressed, and it looks like he apparently descended further into his own personal hell.

==> For those who don’t know the backstory, this guy had started out as an “edgy” comedian / political commentator type. He built up a following on social media of people who appreciated his lack of concern for “PC thought police” for his jokes. The more outrageous he got, the more people began backing away. (To be clear, these were just crude and mean things, I had never even heard about the anti-Semitic stuff until watching the Vice video. But then again, he really hadn’t been on my radar for a while so perhaps people who were more familiar with him were not surprised by the Vice video.)

==> I struggled a lot with this last major point, because believe me, I realize how defensive and “but what about!” it sounds. But I really do mean the following sincerely. Recently I’ve had a run in with someone demanding that I sign this pledge to demonstrate that I oppose the ideas of Nazi Germany. In general, I think lists like this are goofy, and in particular I’m not signing something because somebody demands that I do.

In light of Cantwell being in that video, I imagine the people who agree that libertarians should sign that pledge will be thinking, “See? Even if you and your close buddies don’t personally endorse those views, it’s problematic that for some reason, it attracts a certain type.”

I am pushing back against that argument right now; that is the sole purpose of me bringing this up. First of all, Cantwell rejected libertarianism precisely because it did not allow for enough violence, in his book. He literally wrote a blog post criticizing Rothbard’s writings on proportionality. So that’s very good for the integrity of the libertarian movement; its principles–enunciated by Rothbard–eject someone who likes violence.

Second, one of the people who signed that pledge has literally endorsed the legitimacy of mass murder of rich people on Twitter. This is well known in libertarian circles; it’s not like I follow the guy’s Twitter account. This guy also subscribes to the labor theory of value and is definitely a leftist as opposed to a right-wing libertarian.

So, does anyone think we need to stop and set up a pledge, showing that as libertarians we reject mass murder and are familiar with all of the communist purges of property owners in the 20th century? No, nobody thinks we need to do that. I have no idea if that guy’s tweet was just a bad joke or what, but nobody is accusing the people around him of wink-winking at left-wing radicals who smash property and kill capitalists.

So yes, the HBO video was truly shocking to me and I am reflecting on whether my reactions to all the chaos is still correct. Yet I don’t think there is any real danger of white supremacists gaining power anytime soon; these people are all being ridiculed, fired, and threatened with violence to the applause of the entire world. (Ask yourself: Five years from now, one college professor tells his class, “Sure Stalin killed millions, but he did some good things too,” and another college professor says, “Sure Hitler killed millions, but he did some good things too.” Which one gets fired? Do you seriously think there is any doubt on that question?) Even so, a week ago I would not have predicted what I saw on that HBO video, so I am reflecting on my overall assessment of the situation.

What I am quite certain of is that the work I’ve been doing, and that of my closest colleagues, is conducive to human liberty and peace, and that none of us is at all trying to make the type of people in that video feel welcome. If I haven’t engaged in public denunciations on social media, it’s because I think that is counterproductive. The people featured in that episode all grew up in this country learning that our society thinks Hitler is literally the worst person who ever lived. (Seriously: When you do a philosophical thought experiment in the US, you say, “If you had a time machine and could kill baby Hitler…”) It’s not that these people didn’t get the memo, and were simply misinformed on this point. For whatever reason, they have decided to go down a path where they are utter social pariahs. I truly do not think public denunciations of Nazi Germany are what will help the country right now.

In contrast, I think people saying, “Initiating violence is always wrong, even if it’s against people espousing hateful ideas” are doing a great service, at risk of being denounced themselves. They are the truly courageous ones right now, in my book.

11 Aug 2017

Responding to Steve Landsburg on Government Debt

Debt 29 Comments

Steve graciously commented on my recent talk from Mises U, in which I rehashed the Great Debt Debate of 2012. (Steve left a comment here and here.) Below, I will respond to Steve’s points individually. But before doing that, let me give an analogy.



PAUL: It’s impossible for handguns to hurt our grandkids, so long as they are wearing bulletproof vests.

BOB: What the heck are you talking about? I could shoot the grandkid in the head. Dead.

STEVE: Well no, actually it would be the bullet that would cause the actual pain there; the handgun is incidental. Indeed, I could kill someone with a rifle or indeed any device that accelerated a bullet. Furthermore, a handgun without bullets can’t hurt our grandkids. So Bob, you are actually wrong on this, and Paul is right.



PAUL: It’s impossible for debt to hurt our grandkids, so long as they hold the Treasuries.

BOB: What the heck are you talking about? We could have overlapping generations like this. Utility up for earlier generations and down for later ones.

STEVE: Well no, actually it would be the taxes that would cause the actual pain there; the debt is incidental. Indeed, I could cause utility movements with simple transfer payments. If the government ran up big debts today but never taxed anybody to pay the interest or principal, clearly our grandkids would not be harmed in the way you think. So Bob, you are actually wrong on this, and Paul is right.


Now on to Steve’s specifics, with his words in italics and mine in normal text:

Your chart and your presentation are very clear and engaging (as one expects from Bob Murphy). Also, a big thumbs-up on the beard. 

I always liked Steve.

1) Your chart does not display the effect of govt borrowing; it displays the effect of a Social Security system (with old people receiving transfers of various amounts in various generations). If you financed exactly the same system through taxation, you’d get exactly the same results. In year 1, we tax Young Bob 3 apples and give them to Old Al. In year 2, we tax Young Christy 6 apples and give them to Old Bob. Et cetera.

All of the effects you’re illustrating would have been exactly the same if you’d financed all the transfers by taxation instead of borrowing. It’s the transfers that are having all the real effects.

Your particular assumptions lead to different sized transfers in different years. But any pattern of transfers you care to specify can be achieved equally well by appropriate timed borrowing or similarly timed taxation.

See my analogy above.

There is no doubt that Krugman thought it was our grandkids owning the bonds that made all the difference. This is why I was so frustrated with Steve at the time of the debate. Steve was making a series of correct statements showing how government financing was a red herring, but in that framework, “we owe it to ourselves” is still a non sequitur. And yet that was literally the mantra of Abba Lerner, and it was explicitly adopted by Krugman and Dean Baker.

That’s all Nick Rowe and I were doing with our simplistic thought experiments. We were trying to show as simply as possible that Lerner and Krugman were simply mistaken when they argued that “we owe it to ourselves” therefore meant government debt (and yes the taxation to service it) couldn’t hurt our grandkids to our benefit.

I myself believed this at first. Then I realized Nick was right. (Don Boudreaux was right too, but it was Nick’s specific numerical examples that made me realize I was wrong.) Dean Baker himself later admitted that theoretically his original position was wrong, and switched to an empirical defense. To my knowledge, Krugman never realized the problem.


2) You’ve assumed a 100% interest rate. This means that in each year, people adjust their bond purchases until, at the margin, they consider two apples in old age a perfect substitute for one apple in their youth.


Al is a winner.

Bob is neither a winner nor a loser. (He gains 6 “old age” apples, which exactly compensates him for his loss of 3 “youth” apples.)

Christy is neither a winner nor a loser.

Dave is neither a winner nor a loser.

Eddy is neither a winner nor a loser.

Frank, George, and the rest are losers — because they get taxed. The bottom line is that you hurt people by taxing them. Again, this would be true with or without the borrowing program.

I didn’t go back to check this, but I *think* you said Bob, Christy, Dave and Eddy were winners. If so, I think that’s a mistake.

No, in the very simple example I sketched out, there is no private borrowing. I specified actual utility functions and so the Excel sheet told me who had more or less utility, relative to the consume-your-endowment baseline.

In a more general framework, yes we have to allow for private credit markets, but even there the government can improve the utility to lenders by offering a higher interest rate (relative to default risk) than the market. I will do more work on this once I see how far things have been taken in the literature.

(Steve anticipates a bunch of these subtleties in the following, but I don’t see how it overturns my position:)

3) Your simplifying assumptions mask the most interesting (to me) issues. Namely: Because the govt is essentially doing people’s saving for them, they face a reduced incentive to save on their own. This isn’t an issue in your model because they can’t save without the govt anyway. But in the real world, this means people will engage in less private saving, so there will be less investment (and in fact suboptimal investment) which hurts
all generations going forward above and beyond what your chart shows.
(This is the essence of Martin Feldstein’s calculations of the social cost
of Social Security.) But once again, this effect will be exactly the
same whether you finance your program through taxes or through borrowing.

I should add, though it’s a second-order effect, that some borrowing is inframarginal, so the govt, by making borrowing possible, can make some people better off. For example, we know that the last apple Bob borrows is, for him, a perfect substitute for 1/2 a present apple (otherwise he’d borrow more). But his first and second borrowed apples might be worth more to him than 1/2 a present apple apiece. So Bob can be a winner here, though I think this is a relatively minor point in the context of the issues you’re trying to get at. (Or maybe it’s a major point, if I haven’t fully understood your purpose.)

09 Aug 2017


Potpourri 1 Comment

==> Tom Woods interviews Federico Fernandez on the real legacy of Che.

==> Rob Bradley writes a tribute to Milton Friedman on 105th anniversary of his birth, esp. his views on energy.

==> I take issue with Tyler Cowen’s recent post when he implied that the serious conservative intellectuals were all fine with a carbon tax. (Tyler had been, in his mind, defending the honor of conservatives from Paul Krugman.)

==> I want to alert readers (especially European ones) to the Xoán de Lugo Institute. (I just linked to the English-language version of it.) Here’s how they describe themselves:

The Xoán de Lugo Institute seeks to produce and disseminate studies and opinions in the field of social sciences to promote the values of free market, private property and a society of free individuals. Its geographical scope is primarily the galician society, but studies and considerations about other areas of interest, in accordance with these values, will be included.

Especially if you can read Spanish / Galician, the site has a lot of original articles (with some reprints from Mises Brasil). I was pleasantly surprised to learn of this hotbed of anarcho-capitalist theory.

09 Aug 2017

Tom and Bob Triple Play

Contra Krugman No Comments

I am swamped with work so I can’t really do more than just point you to these, but…

==> For Liberty Classroom, Tom and I did a Q&A with some of his subscribers, which he then made episode 960 of his show. It’s not as polished as a regular podcast episode but if you can get into the rhythm then it has some good content.

==> Ep. 97 of Contra Krugman was recorded in front of a live audience at Mises U. We talked about Cantillon effects and central banking.

==> Ep. 98 of Contra Krugman is on Irving Kristol and the “skinny repeal.” Plus Easter egg at the end.

07 Aug 2017

I Throw Scott Sumner Under the Bus

Market Monetarism 16 Comments

In a recent EconLog post, Scott writes:

You are about to take a bus from Zurich to Milan, right over the Alps. You have three buses to choose from:

1. Bus A is a self-driving machine, fitted with a rear-mounted camera and the latest automatic steering mechanism, designed by noted Swiss engineer Johan Taylor. When the camera sees that the bus has deviated too far to the right of the road, it automatically steers the bus to the left, and vice versa.

2. Bus B is driven by Johanna Yellen, widely regarded as one of Switzerland’s best bus drivers.

3. Bus C is a complicated human/machine hybrid. It has forward looking cameras, that feed road images into a large building, in real time. About 10,000 bus drivers sit at the controls of a simulator, and steer the bus as they think is appropriate. The average of all of their steering decisions is fed back to the bus in real time, in order to adjust the steering mechanism. To motivate good steering decisions, the 10,000 bus drivers are rewarded according to whether their individual steering decisions would have led, ex post, to a smoother and safer drive than that produced by the consensus.

Which bus would you take?

Put aside your views on monetary policy for a second. The answer to this is CLEARLY (2). We know this is the case, because people routinely take buses all the time. These buses are not self-driven or driven by 10,000 people, but instead by a driver. If people knew, “This particular driver has been rated one of the best in the country,” then they would be even more comfortable with it.

And yet, Scott obviously thinks the right answer here is (3), which corresponds to his monetary proposals. My comment:

I’m being dead serious: Anyone who answered “C” to Scott’s question is having his or her hand forced by prior commitment to NGDP targeting. There’s no way in the world you would get on that kind of bus if it were driving through the Alps. You would first want several years of tests on flat county roads.

And I’m not just quibbling with the analogy. For the exact same reason, you should be very wary of NGDPLT proposals.

For what it’s worth, Scott responded to me: “Bob, i’ve written papers on how the proposal can be tested, and gradually implement to reduce risk of error.”