Text 18 Apr 4 notes The Laffer Curve

Myth 9: An income tax cut helps everyone; not only the taxpayer but also the government will benefit, since tax revenues will rise when the rate is cut.

"This is the so-called "Laffer curve," set forth by California economist Arthur Laffer. It was advanced as a means of allowing politicians to square the circle; to come out for tax cuts, keeping spending at the current level, and balance the budget all at the same time. In that way, the public would enjoy its tax cut, be happy at the balanced budget, and still receive the same level of subsidies from the government.

It is true that if tax rates are 99%, and they are cut to 95%, tax revenue will go up. But there is no reason to assume such simple connections at any other time. In fact, this relationship works much better for a local excise tax than for a national income tax. A few years ago, the government of the District of Columbia decided to procure some revenue by sharply raising the District’s gasoline tax. But, then, drivers could simply nip over the border to Virginia or Maryland and fill up at a much cheaper price. D.C. gasoline tax revenues fell, and much to the chagrin and confusion of D.C. bureaucrats, they had to repeal the tax.

But this is not likely to happen with the income tax. People are not going to stop working or leave the country because of a relatively small tax hike, or do the reverse because of a tax cut.

There are some other problems with the Laffer curve. The amount of time it is supposed to take for the Laffer effect to work is never specified. But still more important: Laffer assumes that what all of us want is to maximize tax revenue to the government. If—a big if—we are really at the upper half of the Laffer Curve, we should then all want to set tax rates at that “optimum” point. But why? Why should it be the objective of every one of us to maximize government revenue? To push to the maximum, in short, the share of private product that gets siphoned off to the activities of government? I should think we would be more interested in minimizing government revenue by pushing tax rates far, far below whatever the Laffer Optimum might happen to be.”

          — Murray Rothbard

Text 17 Apr 13 notes Mises Converted Hayek from Socialism

"…Like many students of economics then and since, Hayek chose the subject not for its own sake, but because he wanted to improve social conditions—the poverty of postwar Vienna serving as a daily reminder of such a need. Socialism seemed to provide a solution. Then in 1922 Mises published his Die Gemeinwirtschaft, later translated as Socialism. "To none of us young men who read the book when it appeared," Hayek recalled, "the world was ever the same again" (Hayek, 1956, p. 133). Socialism, an elaboration of Mises’s pioneering article from two years before, argued that economic calculation requires a market for the means of production; without such a market there is no way to establish the values of those means and, consequently, no way to find their proper uses in production. Mises’s devastating attack on central planning converted Hayek to laissez-faire, along with contemporaries like Wilhelm Röpke, Lionel Robbins, and Bertil Ohlin…”

          — Peter G. Klein, Biography of F.A. Hayek

It is also probably worth pointing out that; there are in a sense two Hayek’s. As indicated:

  • "Some observers charge that Hayek’s later work, particularly after he began to turn away from technical economics, shows more influence of his friend Sir Karl Popper than of Carl Menger or Mises: one critic speaks of "Hayek I" and "Hayek II"; another writes on "Hayek’s Transformation."[See ft note 22 for more, as well as: Why Mises (and Not Hayek)?]
Video 16 Apr 7 notes

Rothbard on His Conversion

Murray N. Rothbard presented this speech at the 1981 National Libertarian Party Convention. This is an excerpt where he discusses the story of how he converted to anarchism.

Text 15 Apr 10 notes Argumentation Ethics: Summarised

"Argumentation Ethics states that no moral (or I argue more specifically legal; it is about property rights and the justifiability of aggression, after all) argument against the NAP can be successfully justified in discourse without performative contradiction in the act of doing so. The above looks like just another typical failure to understand AE followed by a straw man attack on things that no one actually claims. Of course, a person is capable of running around shouting about how they cannot run and shout but in that case it is harder to find people to take them seriously. So in summary, AE shows certain minimal conditions under which claims about rights can or cannot possibly be successful as valid arguments according to the laws of logic (non-contradiction). It never claims that people are incapable of making invalid and internally contradictory arguments. They certainly are known to do so regularly.”

          — Konrad Graf

Text 14 Apr 4 notes Mises and “felt-uneasiness”

Rothbard,[…] describes how, in his economic treatise Man, Economy, and State, he took care to revise precisely this Misesian doctrine:

"[Most important was a thorough revision of the very first eight pages of the work—the pages which state the original axioms upon which the entire work is based.] The revision purged the original formulation of its definite philosophical pessimism, of the idea that human beings are constantly in a state of dissatisfaction and that man could only be happy in a state of inactive rest, such as in Paradise. Such a philosophical view is contrary to the nature state of man, which is at its happiest precisely when it is engaged in productive activity. The revised part eliminates the philosophical pessimism from praxeology." (Correspondence quoted in Stromberg 2005, xl [Intro to MES])

Accordingly, Rothbard [citation] acknowledges the possibility of “satisfaction in the labor itself,” and so grounds the “disutility of labor” not in labor’s being inherently distasteful, but in the fact that “labor always involves the forgoing of leisure,” which is also a value—though not pace Mises, the ultimate value. The fact that leisure has value for us explains why we prefer to economize on labor, thus allowing Rothbard to draw all the essential conclusions for which Mises thought he needed the mistaken Nirvana premise.

I have argued that the features of Misesian praxeology that Rand found most objectionable—its aprioristic methodology, its value-subjectivism, and its claims about motivational psychology—can be reinterpreted in ways that make them congenial to Rand’s philosophical principles while still preserving the essential points that Mises was seeking to make. Hence there is no reason for those of a Randian philosophical bent to deprive themselves of the powerful methodological instrument developed by Mises and his fellow Austrians: praxeology, the a priori science of human action”.

          — Roderick T. Long, Praxeology: Who Needs It”, p12 was written for the Journal of Ayn Rand Studies but essentially attempts to clear the language up regarding the ‘differences’. Anyway the part about Mises and “felt-uneasiness” condition is enlightening. If you’re dealing with objectivist’s who aren’t fans of praxeology/Mises formulation this would be the text to refer to.

(Source: facebook.com)

Quote 13 Apr 6 notes
Friedrich Hayek once told me how much he admired the account of the business cycle in Rothbard’s America’s Great Depression, an account that rests on Rothbard’s understanding of monetary theory; and the Nobel laureate Maurice Allais has also praised the book.
Quote 12 Apr 8 notes
As a reflection of this fundamental realism-anti-utopianism-of his private-property anarchism, Rothbard, unlike most contemporary political philosophers, accorded central importance to the subject of punishment. For him, private property and the right to physical defense were inseparable. No one can be said to be the owner of something if he is not permitted to defend his property by physical violence against possible invaders and invasions.
Text 11 Apr 2 notes Just Facts, No Theory?

Indeed, there is no “presuppositionless observation of ‘facts,’[1] as Ludwig von Mises (1881-1973) pointed out:

There is no such thing as a mere recording of unadulterated facts apart from any reference to theories. As soon as two events are recorded together or integrated into a class of events, a theory is operative.[2]

The notion of “letting the facts speak for themselves” without taking recourse to a theory is nonsensical.[3] Mises was aware that people’s “reasoning may be faulty and the theory incorrect; but thinking and theorizing are not lacking in any action.”[4]

          — Thorsten Polleit

Text 10 Apr 8 notes The First-Appropriation Principle

"The relevant axioms, in the sense of irrefutable starting places, are non-contradiction, action, and argumentation. The first appropriation principle is something that logically follows. I personally have also been taking this in the direction of "self-ownership" (which is a confusing concept anyway) being a special case of the first-appropriation principle, which is the more precise and universalizable concept. Also, the word “homesteading” seems a little silly to me, as it has such strong historical associations with government-run farm and ranch land parcelling programs, and we are trying to talk in this context about timeless and universal social principles.”

          — Konrad Graf

Quote 9 Apr 7 notes
If … an action is performed that uninvitedly invades or changes the physical integrity of another person’s body and puts this body to a use that is not to this very person’s own liking, this action … is called aggression … Next to the concept of action, property is the most basic category in the social sciences. As a matter of fact, all other concepts to be introduced in this chapter—aggression, contract, capitalism and socialism—are definable in terms of property: aggression being aggression against property, contract being a nonaggressive relationship between property owners, socialism being an institutionalized policy of aggression against property, and capitalism being an institutionalized policy of the recognition of property and contractualism.
— Hans-Hermann Hoppe, A Theory of Socialism and Capitalism

(Source: conza)

Text 9 Apr 7 notes The Austrian School of Thought

"Intellectual curiosity has a habit of breaking through, however, especially among college and graduate students. As a result, the Austrian School has flourished over the last two decades, despite severe institutional obstacles.

In fact, the number of Austrians has grown so large, and the discussion so broad, that differences of opinion and branches of thought have arisen, in some cases developing into genuine clashes of thought. Yet they have all been conflated and jammed together by non-Austrians and even by some within the school, giving rise to a great deal of intellectual confusion, lack of clarity, and outright error.

The good side of these developing disputes is that each side has clarified and sharpened its underlying premises and world-view. It has indeed become evident in recent years that there are three very different and clashing paradigms within Austrian economics: the original Misesian or praxeological paradigm, to which the present author adheres; the Hayekian paradigm, stressing “knowledge” and “discovery” rather than the praxeological “action” and “choice,” and whose leading exponent now is Professor Israel Kirzner; and the nihilistic view of the late Ludwig Lachmann, an institutionalist antitheory approach taken from the English “subjectivist”-Keynesian G.L.S. Shackle.”

          — Murray Rothbard

Chat 3 Apr 8 notes Argumentation Ethics and Natural Rights
  • AEN: In applying this a priori approach to ethics, were you attempting to supplant natural rights.
  • HOPPE: No, not at all. I was attempting to make the first two chapters of Rothbard’s Ethics of Liberty stronger than they were. That in turn would provide more weight to everything that followed. I had some dissatisfaction with rigor with which the initial ethical assumptions of libertarian political theory had been arrived at. Intuitively, they seemed plausible. But I could see that a slightly different approach might be stronger. Murray never considered my revisions to be a threat. His only concern was: does this ultimately make the case? Ultimately, he agreed that it did.
Text 2 Apr 13 notes Liberty, Revolution and Mass Action

"But how can the masses understand ideas? Well, a quick answer is that they have done so before: notably in the American Revolution and for a hundred or so years afterwards: in America and in Europe. So if they didn’t read Locke, they read Paine or Cato or their popularizers, or read their followers in the press or heard them in speeches and sermons.

The American revolutionary movement was a diverse and structured one, with different persons and institutions specializing in various aspects of the struggle. The same is and will be true of our movement. Just as not everyone had to read Locke to become a full-fledged American revolutionary, not everyone now has to read all of our flowering theoretical works in order to grasp the essence of libertarianism and to act upon it.

The American revolutionaries never felt that every American had to grasp fully the fifth lemma of the third syllogism of the second chapter of Locke before they could take their place in the developing struggle; and the same should be true of our libertarians and our own theoretical works. Naturally, the more that everyone reads and understands the better; and it is hardly my point to deprecate the great importance of theory or of reading. My point is that not everyone has to know and agree to every nuance before we start moving, ingathering, and acting to transform the real world.”

          — Murray Rothbard

Chat 1 Apr 5 notes Epistemology and Mises
  • AEN: Since then, you have been the strongest defender of the Austrian method, praxeology, since Rothbard.
  • HOPPE: Independently, I had concluded that economic laws were a priori and discoverable through deduction. Then I stumbled on Mises’s Human Action. That was the first time I found someone who had the same view; not only that, he had already worked out the entire system. From that point on, I was a Misesian.
  •  Mises took the idea of synthetic a priori–the idea that there are true statements about reality, derived from axioms and logic, that do not need to be tested–from Immanuel Kant. But Mises added an extremely important insight; Kantian mental categories can be understood as ultimately grounded in categories of action. With this, Mises bridged the gulf in Kantianism that separates mental from physical; what we think from the outside, physical world.
  •  If you start with the concept of action, you immediately realize that action involves a subject and an object. Action means; I do something with something in order to reach certain goals. That implies a theory of casuality, which had been a sticking point in Kantianism and remains so in positivism. There were hints of this in Kant, but nothing as explicit as you find it in Mises.
Quote 31 Mar 7 notes
With regard to praxeology the errors of the philosophers are due to their complete ignorance of economics and very often to their shockingly insufficient knowledge of history. In the eyes of the philosopher the treatment of philosophical issues is a sublime and noble vocation which must not be put upon the low level of other gainful employments. The professor resents the fact that he derives an income from philosophizing; he is offended by the thought that he earns money like the artisan and the farm hand.

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