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A Tale of Two Conspiracies

In the last month I have become intimately acquainted with two conspiracies afoot in the libertarian economics community:

CONSPIRACY #1

James Buchanan was a founder of Public Choice economics. Its scholars are actively seeking to end injustice perpetrated by the State, and to advance individual liberty. Buchanan invited an outspoken opponent of apartheid to his school, during the height of the U.S. debate over desegregation.

Nonetheless, according to some critics, because segregationists were able to use some of Buchanan’s policy positions (like getting the government out of schooling altogether), Buchanan has a cloud of suspicion over him. Indeed, he used some political principles and phrases in his work that were also used by John Calhoun and Donald Davidson. (It doesn’t matter if Buchanan’s defenders can point out non-bad-guy precedents for that language.) Also, one of Buchanan’s fans said that “the weakening of the checks and balances” in the U.S. political system “would increase the chance of a very good outcome.” Yikes! Now it’s true, Buchanan’s fans come back and try to explain the context of that quote, but give us a break–what kind of person writes like that?

So even though any one of the specific arguments used against Buchanan and his followers might be a non sequitur, it doesn’t really matter. The critics have known these Public Choice types for decades; these people are just a bad crew. They obviously don’t care about poor minorities; if they did, then obvious racists wouldn’t flock to them and hide behind their “free market” rhetoric. Some of the critics might be more nuanced and admit that maybe Buchanan himself isn’t a huge racist or segregationist, but c’mon, he should’ve known better than to be used by such types and advance their racist agenda.

CONSPIRACY #2

Ludwig von Mises was a Jewish economist who had to flee Nazi persecution. (Don’t take my word for it: Ask Batman.) The Ludwig von Mises Institute was founded in 1982, with its intellectual leader being Murray Rothbard, another Jewish economist.

Last week, the Mises Institute held its annual “Mises University” conference, in which more than 100 students come to learn about Austrian economics and applications of libertarian political theory.

The week was kicked off by a lecture from Tom Woods. As is his wont, Tom took the opportunity to promote the 1000th episode of his podcast, which is going to be hosted by a black guy. (And not a Clarence Thomas, respectable-to-National-Review kind of guy, but someone who writes on Facebook [I’m paraphrasing but very close]: “I can’t stand grown ass men who act like whiny little b*tches!” kind of guy.) For what it’s worth, Tom himself is a Catholic, and not in a hey-is-Joe-Biden-Catholic kind of way, but in a “Let me tell you why Vatican II was an abomination” kind of way.

During the week, two of the prominent lecturers are David Gordon and Walter Block, both Jewish. By far the lecturer afforded the most respect is Judge Andrew Napolitano, whose public talk and then restricted academic lectures are about the alarming loss of personal and economic liberties with the eroding of the U.S. Constitution, and how the students need to wake up to protect their ability to speak out against the government.

The week also featured Matt McCaffrey speaking on the Economics of War, in which he was *against* the practice. He closes with a quotation (around 42:40) from Mises about how peace is the father of all things, as a direct rebuke to the nationalist militarists of his day. McCaffrey explicitly says that Mises rejects militarism, autarky, and nationalism, and promotes peace and commercialism.

For my own humble part, I learned the most I’ve ever heard about Islam from a very traditional Muslim woman–who was a Summer Fellow at the Institute and was dressed in a way that would make her faith quite clear to anybody. During one of my talks–in which I explained ways that we could avoid the warfare of the State and how to minimize police brutality–I literally made fun of Nazis. (My talk from this year isn’t up yet, but you can see the slide from last year’s talk at 39:13 where I have an X crossing out a Nazi event.)

Notwithstanding the above, on the last day the president of the Mises Institute, Jeff Deist, concluded a speech on how to market libertarian ideals to the average person in this way:

I’m sure all of us would fight for our physical persons if we were attacked, or for our families if they were attacked. We might fight for close friends too. And perhaps even our neighbors. In fact we might like to think we would physically defend a total stranger in some circumstances, for example an old woman being attacked and robbed.

And we probably would fight for our towns and communities if they were physically invaded by an outside force, even though we don’t personally know all of the people in our towns and communities.

We might fight for property too, maybe not as fiercely. We certainly would protect our homes, but that’s because of the people inside. How about cars? Would you physically tangle with an armed robber who was driving away in your car? Or would you let him go, and not risk death or injury, just to save your car? How about your wallet? How about someone stealing 40% of your income, as many governments do? Would you take up arms to prevent this?

We probably wouldn’t fight for bitcoin, or net neutrality, or a capital gains tax hike, by the way.

How about an abstraction, like fighting for “your country” or freedom or your religion? This is where thing get more tenuous. Many people have and will fight for such abstractions. But if you ask soldiers they’ll tell you that in the heat of battle they’re really fighting for their mates, to protect the men in their units–and to fulfill a personal sense of duty.

In other words, blood and soil and God and nation still matter to people. Libertarians ignore this at the risk of irrelevance.

Thank you very much.

Now that part I put in bold: Because this was a Nazi slogan (which they actually took from Oswald Spengler, a German conservative who would end up condemning Hitler and the Nazis), some critics concluded that the Mises Institute was actually secretly doing what it could to advance neo-Nazis. To be sure, Deist’s defenders responded that he wasn’t invoking the Nazis, but instead was reacting to a Jeff Tucker article from a few weeks earlier that had “blood and soil” in its title. (To be clear, Tucker wasn’t attacking Deist or the Institute in this article.)

Didn’t matter. The critics after all would never have written such a phrase, so the issue was settled. And in any event, even if this particular quotation has an alibi, that doesn’t erase the fact that these critics have followed the Auburn people for decades and just know how awful they are. Oh sure, they might officially say they oppose war and want to break up the strong centralized State so diverse people can pursue their own idiosyncratic lifestyles, but they have to say that. Really, if we read their minds, we know that what they are really doing is giving a nod and a wink to neo-Nazis. Is it any surprise that bigots flock to this “Rothbardian libertarian” rhetoric? It favors their agenda, and the people in Auburn should know better than to aid and abet these people.

Also, to be fair, some of the Institute’s critics are more nuanced. They aren’t saying we ourselves are actual racists just that:

(That guy is the current chair of the Libertarian Party, which is why I didn’t block out his name.)

WHAT DID WE LEARN?

I could understand how Nancy MacLean and her fans could believe in both of the above conspiracies. It’s perfectly consistent to do so: Why wouldn’t a bunch of segregation-loving racists also like Hitler? It all fits.

I could also understand how some people would reject both of the above conspiracies as utterly baseless and palpably absurd. For example, Tom Woods, Tom DiLorenzo, and David Gordon have in the past crossed swords with some DC-based libertarians, and yet they all went on record saying how crazy MacLean’s accusations are.

But what really strikes me as ironic is that some people reject Conspiracy #1 as monstrous, going so far as to question MacLean’s standing as a scholar and demanding that her peers throw her under the bus, while at the same time the same people endorse Conspiracy #2, or at least keep their mouths shut about the whole thing because it’s just so awkward.

I’m not asking such people to speak out against the critics of the Mises Institute; I realize how awkward that really is, especially if jobs are at stake. But I’m asking you to relax now that you understand the motivations of MacLean and her fans. You really can’t be that upset at them anymore; their behavior should be perfectly comprehensible after the last week of Facebook drama.

LOOSE ENDS

1) I’m closing the comments on this post. I don’t want to add even more fuel to the fire.

2) If you think we are overreacting to this, here are two examples of the kind of crap we have now had to endure:

First, on Facebook Tom had to clarify to people that we are not having fascist events on our Cruise:

Second, here’s a text I got last night from a woman whom I had invited to the event (her first time at the Mises Institute):

Third, since I’ve seen some of the critics of Deist’s speech wondering aloud what he could possibly have in mind when contrasting his approach with the more “libertine” one favored by other libertarian groups, here’s something I saw on Twitter yesterday. Normally I wouldn’t have brought it up, but like I said, I see people guffawing like Jeff is complaining about Elvis shaking his hips:

My Talk on the Paris Climate Agreement

This mostly summarizes the articles I’ve posted here, but some of you might prefer to see me hamming it up.

Jesus on ObamaCare

This is where we now stand in US politics:

Looks like it's Captain Obvious time: Jesus healed people through His own mercy and power, not by taking from others against their will. https://t.co/dYp6ChTUj4

— Robert P. Murphy (@BobMurphyEcon) July 30, 2017

Article on Climate “Insurance”

The title is the best part, but here’s an angle I haven’t stressed much:

What people often overlook in the climate change policy debates is that the severe outcomes that occur in the computer simulations typically don’t kick in until many decades down the road. Even if governments “do nothing,” so long as they get out of the way and allow conventional economic development, the future generations dealing with climate change (and AI, and biological warfare, and killer asteroids, and all sorts of other problems we can’t even imagine) will be much richer than we are today.

For example, just throwing together some ballpark calculations (from here, here, and here), it’s a decent guess to say that in the year 2100, real global economic output will be more than seven times as high as it is today, while the world population might be a bit higher than 11 billion. So, if current estimates put real GDP per capita at around $17,000 per year, by the year 2100 each Earthling on average will enjoy a standard of living of more than $70,000 per year.

So let’s say disaster strikes and the global economy is cut in half by the year 2100 compared to what otherwise would have been the case without climate change. Even so, with our ballpark figures that still means per capita income will have more than doubled rather than quadrupling.

 

RC Sproul on Romans

I’ve been listening to RC Sproul go through the book of Romans.  

This is something that took me a long time to get, even though I had gone to religious schools for years and had accepted Jesus as my personal Lord and Savior. Nonetheless, when I was going through counseling with the preacher who was going to officiate at my wedding, one of the questions he had on a take-home worksheet was, “When you die and stand before God, what will you say to gain entrance into heaven?” (Or something to that effect.)

So I wrote something like, “I will say that I always tried to tell the truth even when it came at great personal cost.”

After he had had time to read the answers, he basically took out a Bible and proved to me that I was wrong. What startled me about this demonstration was:

(a) That apparently the Bible did *not* teach that there was a certain bar and your life had to be good enough to “pass” and make it into heaven.

(b) That somebody could actually use the Bible to settle such a question in the first place. I somehow had the idea that “this is ultimately up to God and who are we to know such a thing?”

I realize that my original viewpoint relayed in (a) seems natural and obvious, and I realize that even many Christians today believe (b). (I’ve had them argue with me on this blog in the past, and perhaps they’ll do so now as well.) But I am encouraging people (especially followers of Christ) who have never thought about (a) and (b) above to investigate more fully. For example you can try listening to Sproul and see if he suits you.

In a nutshell, the perspective my pastor shared with me was this: The works of men and women are but filthy rags compared to the righteousness of God. People are prideful and don’t like to admit their error. They look around at others and think, “Well I’m not a murderer.” (My pastor in Houston once dealt with this trait by saying, “Convicted murderers in prison say without irony, ‘I never killed kids.'”) But compared to God, we are all abominable sinners. We sin dozens of times daily. (Remember that if you’re a married man and look with lust at another woman, you’ve committed adultery in your heart.)

So you deserve hell. God is just and so He can’t just turn a blind eye. But Jesus takes our sins upon Himself and died on the cross for us, reconciling us with the Father. If you are willing to accept the gift of grace provided through Jesus’ self-sacrifice, then you can enter the kingdom of God.

Note, sometimes people say, “Oh, so God says I will burn for eternity if I don’t love him. What a tyrant.” But no, He is saying you will burn for eternity which is a just punishment for your sins. You might disagree with that, but then again most convicted criminals probably don’t agree that they deserve the punishment they get. But Jesus provides a means by which God’s love and forgiveness can rescue us while still satisfying His righteousness and His law.

I am not trying to give elaborate defenses of any of the above, and I’m also sure that even other Protestants would quibble with my wording. But I wanted to at least give a succinct post laying out a perspective that would have blown my mind, even after I had accepted Jesus as my Lord and Savior. (Which shows that I didn’t fully understand all it entailed when I sincerely took that step.)

Explaining Current and Capital Accounts to Scott Sumner

(If that title sounds hostile and/or presumptuous, it’s only because I sat here for about 3 minutes trying to think of something funny.)

Over at TheMoneyIllusion, Scott first quotes from a news story:

The National Association of Realtors released a report Tuesday that said foreign buyers and recent immigrants spent an estimated $153 billion on American properties in the year ending March 2017. That was a 49% increase over the previous year and the highest level since record-keeping began in 2009.

The purchases accounted for 10% of the total value of existing home sales in the U.S. The report did not include new homes.

The breakdown of sales between foreigners and recent immigrants was about 50:50.

Then Scott writes:

Of course the sale of homes to immigrants is not an export, but it does have a similar economic impact.  However the sale of homes to foreigners does represent a US export, and creates lots of goods jobs for American blue collar workers.  (Note that it doesn’t really matter whether they buy new or existing homes; the net effect on the housing market is the same.)  So the protectionists should be rejoicing, right?

Actually, just the opposite.  The US government does not even count these as exports.  Instead they are treated the same as net borrowing.  They are considered a part of America’s current account deficit, leading to all sorts of silly hand-wringing about how America is borrowing too much and living beyond our means.  

I wrote in the comments:

Scott,

If you think selling a house sitting on U.S. land to a foreign buyer is the same thing as exporting a car (of comparable market value), would you be OK if the IRS treats the revenue from your Boston house sale the same as a bonus check from Bentley? I mean, in both cases you’re selling something for money, so they’re both “exports” from Scott Sumner, right?

(I am referring to Scott’s other post where he says he is moving from Boston to somewhere in California.)

In case my smug comment is too opaque for you, try this:

SCENARIO #1: Your teenage son tells you, “I bought $20 worth of materials at Home Depot and made a bed that I sold to the neighbor for $100. I made $80 profit, woo hoo!”

SCENARIO #2: Your teenage son tells you, “I bought $20 worth of materials at Home depot and made a bed that I sold to the neighbor for $100. I also sold him my bedroom for an additional $200. So now I have to sleep in the family room on the couch, FYI. But at least I made $280 of profit, woo hoo!”

Admittedly, Scott doesn’t believe that “income” is a meaningful concept in economics, so I don’t expect him to be troubled by my zingers. However, some of you may see my point when I have been arguing these last few years that sometimes Scott and Don Boudreaux are a tad too glib when they go after Trumpistas.

UPDATE: Ryan Murphy knocks me on my heels on Twitter regarding this. The whole thing is subtle.

Potpourri

==> Oren Cass says climate alarmists are the real science deniers.

==> Excellent advice from Jordan Peterson for all of you super-intellectuals.

==> A lot of people have wondered if the mechanism by which expanded ACA (Medicaid) coverage has been correlated with mortality, is through opioid addiction. This guy thinks it’s a tenuous link.

==> A young Milton Friedman apparently assigned readings from Mises and Hayek in his class on business cycles.

==> In Contra Krugman episode 95, we talk about the history of economic thought. Plus: Easter egg at the end.

==> Speaking of the history of economic thought, I chime in concerning Rick Perry and Say’s Law. An excerpt:

But that’s not (of course) what J.B. Say was claiming. Look, if we are going to be uncharitable, I can do the opposite trick and mock all the people who said Perry had confused supply and demand. All the people who argued, “No Perry, the real rule is that consumers have to demand a product and then business will supply it,” are equally ignorant. After all, I hereby announce my willingness to spend up to $10,000 on a vacation to Mars. There’s my demand, entrepreneurs. Now where’s the supply of that service? Hmm, so much for Keynesian demand-side explanations…

Of course, I’m being tongue-in-cheek. There is truth to the proposition that “demand creates supply” if we interpret it charitably. But on the other hand, there is truth to the proposition that “supply creates demand” if we interpret it charitably. And a more sophisticated explanation would say that supply and demand interact.

To sum up, what J.B. Say actually wrote about the “law of markets” was quite sophisticated, and it would be very refreshing if today’s pundits and policymakers took 20 minutes to review his arguments. Say never wrote “supply creates its own demand,” and he never endorsed the obviously false proposition that a business putting out any product whatsoever will automatically find buyers.

Christian Professor Who Loves Harry Potter Novels

This was interesting and lines up with my thinking: