Why Taxation Is Not Theft

Just as all political debates inevitably end with someone making a Hitler comparison, all debates with libertarians sooner or later involve the claim that taxation is theft. It doesn’t matter whether you are discussing the welfare state, universal healthcare or a TV licence, at some point a libertarian will accuse the government of acting like the mafia and stealing people’s money (just the last day a commenter asked me to “stop promoting the use of force against me or my family“, by which he meant don’t regulate bitcoin). Of course we all know this argument is melodramatic hyperbole, but it would be useful to spell out why. Continue reading “Why Taxation Is Not Theft”

Atlas Shrugged Is A Ridiculous Book

Atlas Shrugged is a hugely popular book among American conservatives and libertarians who see it as a symbol of resistance to government tyranny. This is surprisingly because it is a horrendous book containing cardboard characters, over necessarily long speeches, absurd plot lines and at least 500 pages more than it needs. Continue reading “Atlas Shrugged Is A Ridiculous Book”

The Two Types Of Freedom

In debate libertarians argue that their ideology is based on freedom, all they want is to be free of government interference. After all, liberty is so important to them they put it in their name. But how can anyone disagree with that? Do social democrats hate liberty? What I have found is that in the debates between left and right, people are arguing past each other rather than with each other. So the left does believe in freedom, but they just view it differently. In this sense there are two types of freedom. There is negative liberty or freedom from, which is the main principle advocated by the right and there is positive liberty or freedom to, which is the main principle advocated by the left. Continue reading “The Two Types Of Freedom”

Say It Isn’t So

Few economists openly admit to believing in Say’s Law anymore. It is generally considered a relic of the past, a once dominant theory that had faded away. Although it was prominent in the 19th century, it was swept away in the Keynesian revolution like so much of Classical economics. However, economic theories never die. Say’s Law lives on in conservatives think tanks like the Heritage Foundation and when Marco Rubio (who many favour as the next Republican candidate for President) rose to reply to Obama’s State of the Union address, it was Say’s Law he invoked. Even in the world of economics, some economists unconsciously channel the spirit of Say when they preach about the worries of crowding out and through Walras’ Law which is just a weak version of Say’s. This year’s joint winner of the (pretend) Nobel Prize in Economics Eugene Fama constructed an argument against government stimulus (unconsciously) based more or less on Say’s Law. Continue reading “Say It Isn’t So”

Debunking The Broken Window Fallacy

One day a boy was playing football when he accidently broke a window. Rather than get mad, the people shrugged their shoulders and said breaking windows is good for the economy. After all, if no windows were broken, then all the glaziers would be out of a job. By breaking the window, the boy ensured money would be spent on repairs, thereby ensuring someone kept their job and giving the window making business a boost. However, at this point Bastist in his seminal essay “That Which Is Seen And That Which Is Not Seen” jumps in to point out why this is a fallacy. While we see the money spent on repairing the window, we don’t see what would have happened had the window not been broken. Instead of repairing the window, the money could have been spent on a new pair of shoes. So while the glazier is better off, we don’t see the people who are worse off as a result. Continue reading “Debunking The Broken Window Fallacy”

Why The Austrian Business Cycle Theory Is Wrong

One of the surprisingly popular theories as to why the recession occurred is known as the Austrian Business Cycle Theory (ABCT), which argues that not only is the government not the solution to the recession, but in fact, it is also the cause. It claims that the recession was caused by the government artificially lowering the interest rates and distorting the economy leading to a recession. As you can imagine this theory is very popular among libertarians eager for an excuse to absolve the market of blame for the crash. It is promoted by Ron Paul and Peter Schiff who claim to have predicted the Financial Crash (and the next one too). It is also completely wrong and dangerously so. Continue reading “Why The Austrian Business Cycle Theory Is Wrong”

Libertarianism And Society

When a Libertarian is making their case they usually frame it from the view of individual rights. They argue that individuals have certain rights, such as property rights and the freedom to choose. They reject any attempt by the government to force people to do what they otherwise wouldn’t have done. So a libertarian would argue that helping the poor is fine, but the government shouldn’t force people to do so. On its own grounds this is a plausible stance with a certain degree of logic behind it. However, it only holds so long as you view matters from an individual rights point of view. If you concede that we have responsibilities towards the rest of society, then the libertarian argument crumbles. Continue reading “Libertarianism And Society”

Capitalism And Freedom

Milton Friedman is one of the most famous economists that ever lived, yet reading his most famous book, Capitalism And Freedom; it is hard to see why. The book is surprisingly basic and doesn’t offer much of an argument. Friedman merely states things (such as the minimum wage causes unemployment) without offering any supporting evidence. It is as though simply saying it was enough to make it true. There are hardly any references or citations in the book, which makes it very difficult to know if any of what he says is actually true. There is no reference to history or current affairs or if any of his ideas have worked before or if his criticisms reflect reality. Continue reading “Capitalism And Freedom”

The Bitcoin Bubble Has Burst

Well it has finally happened. We looked at those charts of ever rising price of bitcoin and said this cannot last, and it hasn’t. The bitcoin bubble has finally peaked and now all that is left is to watch its steady and inexorable decline. But this post will not simply be full of smug gloating (though I see no reason why there shouldn’t be at least a little bit of smugness). You see, the crash of bitcoin mirrors other financial crashes and gives us an opportunity to draw some conclusions. It is best to view bitcoin as a giant experiment of how an economy would operate without a central bank. Continue reading “The Bitcoin Bubble Has Burst”

The Great Bitcoin Bubble

There’s this new idea that plans to revolutionise money. It’s called bitcoin and aims to be an online currency to replace the real thing. Unlike printed money, it is not controlled by any central bank or government and prides itself on its lack of rules and regulations. Its proponents see it as a 21st century version of the gold standard and it has been enthusiastically endorsed by libertarians and anarchists around the globe as its price sky rockets. However, it is in reality a giant internet bubble based primarily on speculation that will inevitably crash. It is open to abuse, hacking and is no more trust worthy than the government. It is an economic calamity and trapped in hyper deflation death spiral. It can teach us a lot about how currencies work, and just as importantly, why some don’t. Continue reading “The Great Bitcoin Bubble”