compound interest on opportunity costs

Three science fiction novels played a critical role in my conversion from uppercase Libertarian to lowercase libertarian, and from a focus only on the ethics of liberty to an interest in the economics and history of liberty as well:

1. The Stone Canal by Ken MacLeod
2. Alongside Night by J. Neil Schulman
3. The Probability Broach by L. Neil Smith

(Ironically, one result is that my reading is almost entirely non-fiction now.)

I reviewed Stone Canal and Alongside Night on BlackCrayon.com (here and here), but never did so for The Probability Broach. And I'm not about to review it now, but I do want to mention the contribution it made to changing how I think.

The libertaria that both the protagonist and reader visit in the novel -- a minarchy so minimal that I think it counts as anarchy -- is not only freer, happier, healthier than the worlds we're more familiar with, but it is vastly wealthier and more technologically advanced, not in some distant future, but in the present (albeit with an altered past).

As an ethical libertarian and an economic illiterate, I found the implicit claim pretty far-fetched. Freer, happier, healthier, yes. More prosperous, ok. But vastly wealthier? Everyone richer? And technology far more advanced?

Well, I was skeptical, but also beginning to be skeptical of my skepticism. Alongside Night had introduced me to the relevance of money, and it and Stone Canal had given me the final push I needed to start reading Rothbard.

I was beginning to grasp free-market economics, but what The Probability Broach forced me to do (and what I probably wouldn't have done otherwise) was to apply the concept of opportunity costs back two centuries!

I understood that intervention destroyed wealth, but I hadn't yet thought of the effect as cumulative through history. (I play with this idea briefly in my spectrum property article at Mises.org.)

There are a bunch of reasons I'd recommend reading Christian Michel's "THE CLASS STRUGGLE IS NOT OVER: Why Libertarians Should Read Marx And Engels ...", but at the moment, I just want to connect this one paragraph from it to the main lesson (for me) of The Probability Broach:

"...when you assess how much you are robbed by the taxman, it is not just what you pay today that you should take into account, but the compounded value of all what you have paid since the [sales tax] you incurred on your first ever purchase and the income tax on your first salary, plus the opportunity cost of all the projects and desires you could not fulfil with that money because it was taken away from you. Try to work out for yourself what these numbers add up to for yourself and you'll be staggered."