extended analogy

It turns out the fallacy has a name!

Hi Mr. Marcus,

You have no idea how delighted I was to read your essay "In Defense of Referencing Hitler"! For many years I've been infuriated by people misunderstanding my attacks on their underlying principles as "comparing" two things, and many times it has come up in the same scenario you describe: citing an extreme counterexample to a general principle assumed by the other person. You will be happy to learn (if you didn't already know) that this fallacy actually has a name and is listed on the Infidels.org Web site as the fallacy of the Extended Analogy." I have no idea where they got this arcane name, though. I've been trying to think of a better name but haven't thought of one. Anyway, here's their explanation, which I think is right on the mark:

The Extended Analogy:

The fallacy of the Extended Analogy often occurs when some suggested general rule is being argued over. The fallacy is to assume that mentioning two different situations, in an argument about a general rule, constitutes a claim that those situations are analogous to each other.

Here's real example from an online debate about anti-cryptography legislation:

"I believe it is always wrong to oppose the law by breaking it."

"Such a position is odious: it implies that you would not have supported Martin Luther King."

"Are you saying that cryptography legislation is as important as the struggle for Black liberation? How dare you!

What's really frustrating is that even after you explain this to the person, about eight times out of then they still don't understand what you're talking about. The problem is that most people simply don't understand logic, which is to say that they don't understand the very structure of thinking, of making statements and supporting those statements with arguments. They don't see that when they make a statement like "X is a good policy because the majority supported it," their statement is resting on the very broad, hidden premise "All policies supported by the majority are good," which opens them up to up to a slew of "extreme" -- and totally valid -- counterexamples.

BTW, one of my favorite counterexamples to this statement comes from Murray Rothbard: "So if 80 percent of a population voted to kill the other 20 percent, that would be morally right?" Of course, this is only likely to prompt the other person to say, "Oh, come on, you can't compare killing with Proposition 13! [or whatever the topic is]. One classmate of of mine in college used to say, "False comparison, dude," as if he were brilliantly detecting an obscure fallacy on my part.

Another dumb reaction I often get when offering extreme counterexamples is, "You're using an overly extreme example." And I say: "Exactly! The fact that your general principle covers such an extreme example proves just how extreme and misguided your principle is. That's why I chose Stalin as my example. What better way to disprove your statement?" They don't even realize that the extremeness of my example is their problem, not mine. A caller on Harry Browne's radio show pulled this move on him, and although he knew the guy was wrong, he was groping for how to explain it. I e-mailed the show and Harry read my explanation on the air, to my relief.

Finally, one more reason I am glad you addressed this subject is that a couple of months ago during an e-mail exchange with several coworkers, one of them "invoked" Godwin's Rule after I used one of Stalin's policies as a counterexample to something he proposed. Of course, everyone had a good laugh at my expense, as if this guy had destroyed my counterexample. At least ow, if someone commits the Extended Analogy or invokes Godwin's Rule again, I can retort by sending a link to your essay!

BTW, aside from the Extended Analogy" entry on Infidels.org and your essay, I've never seen any other acknowledgement of this fallacy, and I've even looked in dozens of logic and fallacy books. I find this incredible. Do you know of anyone else that has discovered this fallacy independently? There must be some logic professors out there somewhere who know about it. If we can come up with a better name for it, I'd like to post an explanation of it on my blog.

Dave

objection

So which part do you find objectionable?

The voluntary or the exchange?

connotation

If you think there's a difference between voluntary exchange and free market then connotation is holding your mind hostage.

impartiality

If anecdotal evidence counts for anything (and it certainly has to count for something) then American students are in the hands of some very scary "educators"*:

Mr. Marcus,

I just finished reading your article about referencing Hitler on LRC. Thanks for sticking up for this valid tactic.

I had something similar[...] happen to me when I was in college a few years ago. The philosophy department decided to have a debate about reparations for slavery, and being the only student on my campus actually willing to speak out against such nonsense, the department chair asked me to take the anti-reparations side and to find a friend who would join me.

During the debate my friend made a point to the effect that reparations and the idea of collective guilt are based on a kind of thinking (i.e. thinking of people as part of groups and not as individuals) that debases individuals and allows for such things as slavery and racism to exist. At this point, the professor who was supposed to be moderating the debate blew up at him, claiming that he was saying reparations were as bad as slavery and that we were being ridiculous. Rather than stop and question the logic behind their thinking, most people would rather just blow you off and call you names.

Some people just don't get it, do they?

This story astonished me, so I wrote back:

That's amazing. The professor said that? Was he a phil prof?

I majored in philosophy and as bad as one or two of the professors were, I have a hard time imagining them doing something so blatantly fallacious.

No, it turns out that the moderator was an African American Studies professor.

Now, I'm sure it would have been considered offensive to suggest before the debate that he might not make the most impartial referee. What about after the debate? Is it offensive for me to suggest that in retrospect, he wasn't the fairest choice?


* btw, I hadn't realized that the term "teacher" now needed a PC euphemism.

brevity

Here are my favorite of the two shortest emails I got in response to LRC3.

The first one deserves its very own page, but I'm combining best and worst in this one post.

1. Good essay on LRC. I liked your analysis. Here is mine.
   
   On the right hand side of the brain most people are instinctively collectivists. I would say about 90%. On the left hand side only about 10% are capable of logical analysis such as that which you discussed. Therefore about 1% of the people are anarchists or libertarians. Call it Ferguson's Law.
   
   Dave Ferguson
   http://shurl.org/ferg

   [Retired professor emeritus (economics) teaching part-time at the University of Arizona.]



2. AND,,,,,HOW did you get "in-office"?,,,,,,,,
   It is quite evident that YOU do_not know what you are talking about!!!!

I did not change that second one to red. That's the color of the original email message.

I do understand that ALL CAPS can make for a good quick-and-dirty emphasis ... but why emphasize AND? Also, I've been warned about messages that use multiple exclamation points, but what do I do with so many commas? And why are there scare quotes around "in-office"? (And why the hyphen?) Most puzzling of all, I think, is the underscore in do_not ...

OK, enough with the syntax. What do you make of the semantics? I can't do more than guess, but it seems to me this person assumes that only elected officials are allowed to speak with authority. In other words, the unapologetic confidence of my prose presumed an authority not sanctioned by the collective.

---

Similarly, someone else asked, "What objective criteria do you use for determining what is a 'good parallel', a 'bad parallel', or an 'absurd parallel'? Or do we have to assume your (subjective) criteria on authority?"

How tiring. The implication that verbal logic yields only subjectively valid conclusions is an argument that undoes itself, since any aparent validity to the subjectivity argument must itself be merely subjective. Therefore no one can talk about anything with any confidence.

It's just, like, how you feel, you know?

(Notice also the implicit tie-in to questions of authority: universally valid logic makes natural authority potentially available to anyone with a brain and some discipline; the subjectivists must therefore either banish all authority, or fall back on the coercive variety. Even when they claim the former path, they tend to follow the latter.)

in reference to defending Batman Begins

In his LRC article, "Libertarian Themes in Batman Begins", economist Robert Murphy mentions my review of the film, and my thoughts on economic depressions and criminal conspiracies.

I'm glad I'm not the only one who sees the Austrian connection.

Now if only I could find a Misesian to endorse my take on the Batcave...

nuance

Several times in my life, I've found people seemingly agreeing with me when I don't at all agree with them.

This is probably a typical experience for people who attempt to introduce principled arguments rather than "taking sides".

So I shouldn't be surprised if anyone takes my latest LRC article as support for inane Hitler comparisons.

Mr. Marcus:

I am an educator who read your article in Defense of Referencing Hitler. I engaged an MSN member on the topic of education. A recent statement called for the destruction of government schools.

To me, that call is offensive and aligned with Hitler on a smaller, but none the less, equally significant scale. That comparison is justified because the poster wrote;

"government schools must be destroyed."

Schools are people. Teachers, students, parents, support staff, an elected school board and administration. Schools are not buildings. They are ideas of thought. First and foremost, they are the people involved with that thought.

"government schooled children are like potted greenhouse plants."

"Government schooled children are caged animals in a zoo."

"Government schooled children are herded about like sheep to the sound of Pavlov's dogs. They are all the same size, generally uniform in race, and economic and class.

Government schooled children are like diseases. Parents, protect your children from these diseases by removing your children immediately from government schools and consider home schooling."

Calling for the the destruction of a specific targeted group of people in order to justify and advance an agenda is exactly what Hitler did. The only difference is he mislead a nation. In a largely ignorant and uneducated society, one might be able to gather enough support to lead a cause. Not at this time, in this nation, and comparison with Hitler serves as a reminder of that. Great horrendous endings began as small rants that few took seriously.

Children who attend public schools were dehumanized as plants, animals and disease. Exactly what did Hitler did to the Jews in order to rally German hatred of them to the degree that their destruction was seen as a disagreable but necessary action. Mein Kampf contains some of the same language about Jewish people as written about government schools above.

I stand by my conviction and assessment. Comparison with Hitler can be relevant, even though extreme.

I've decided to reply here, rather than in email:

government schooled children are like potted greenhouse plants [...] are caged animals in a zoo [...] are herded about like sheep to the sound of Pavlov's dogs. [...] Parents, protect your children from these diseases [...]

I would agree with you that the dehumanization of the victims has disturbing parallels to Hitler's modus operandi, but I don't think you'd agree with me that these government-schooled children count as victims. Rather, it seems you are comparing a modern call for the end of coercion to one of history's most infamous calls for its increase.

government schools must be destroyed.

Schools are people. Teachers, students, parents, support staff, an elected school board and administration. Schools are not buildings. They are ideas of thought. First and foremost, they are the people involved with that thought.

And if your opponent were advocating the literal destruction of people -- as opposed to the the roles they play under a system of involuntary funding and compulsory attendance -- I'd be far more inclined to endorse your comparison. As it is, I think you have things backwards.

in defense of "in defense of ..."

Much email on the LRC piece, just as expected.

So far they fall into 3 broad categories:

1. Thank you thank you thank you!
2. The Holocaust never happened and Jews are evil!
3. Hitler was never elected!

It's true that Hitler never won a majority. In one draft, I had a parenthetical comment next to "majority rules" about the multi-party democratic tradition of "plurality rules" but I took it out because it was awkward, seemed irrelevant, and slowed things down. Now I wish I had kept it in just to cover my ass.

What I'm wondering is this: do these letter writers

1. think the majority-versus-plurality distinction invalidates my argument?
2. believe that it is somehow impossible for a genuine 51%-or-greater majority to vote for evil?
3. just care about historical precision as much as I care about semantic and logical precision?
4. [fill in the blank]

of course, 'best' is relative ...

Whenever I publish something to a larger audience (LRC, LvMI, TLE), I get a temporary upsurge in traffic to my website. This gets me looking over what's old or broken or stupid. Like cleaning up before guests visit.

Today's LRC article has prompted me to do now what I was planning to do next month, as a way to mark the first anniversary of this blog -- I've created a "best of lowercase liberty" page:

Best of ...

[2004] [2005]

July, 2004

Aren't I worth saving?

August

On Atheism, Agnosticism, and Faith

lefties

September

complementary material (re Gilligan)

3rd-world, uneducated, & primitive (ditto)

defense contractors (re Straw Men)

The Samsara Fallacy

essential to national security

the thing most feared

labels

more on labels

everything bad that begins with A

October

the C-word

grammatical inversion

look for the union label

economic illiteracy

November

signals to myself

signal interference

conspiracy theories

liberal anarchism

That Girl!

rising costs

Will the real fascists please stand up?

Thanksgiving & Private Property

The Ministry of Truth

December

where to begin? [to learn economics]

Let's put the X back in Xmas!

---

January, 2005

Ivan Illich & Deschooling

Murray N. Rothbard, R.I.P.

dreams can be deceiving (re MLK2)

Monogamy vs. Integrity

the principal principle of principles

February

In Defense of Referencing Hitler

cigarette money

March

unemployed former philosophy major

fish-n-chips (w/ fries)

April

I like traffic lights

assertions & assumptions, arguments & fallacies

May

implied consent revisited

---

(You can find longer pieces here.)

These are my more substantive posts -- little mini-essays that caught other people's attention or that I find myself linking back to often.

LRC3

Hey, check it out -- top billing at LRC:

Thursday, June 23, 2005 In Defense of Referencing Hitler Of course it makes sense, and is absolutely fair, says B.K. Marcus.

I wrote this one last fall, but didn't submit it to Lew Rockwell until the other day, after I read Butler Shaffer's "The Hitler Icon" about the trouble Democratic Senator Richard Durbin is in because "he used the Hitler metaphor beyond the boundaries licensed by the gatekeepers of 'politically correct' rhetoric."

Durbin was referring to the Guantanamo Bay prison, of course. So who's mad at him? People who think he's not treating the Holocaust with sufficient gravity? People who deny the possibility that Americans could behave like Nazis? Probably both and more.

My friend Carolyn tells me that there's been more public outcry over the senator's Hitler reference than there has been to the treatment of the prisoners. Whether or not Durbin went overboard, I think Carolyn's point should be the real story.

I guess there's no reason to be surprised at any of this.

Ethical libertarians (and rationalists in general, I suppose) are always being accused of caring too much about abstractions. But what the Durbin brouhaha and the renewed anti-flag-burning idiocy demonstrate is that politically, people care more about their symbols than they do about anything else.

I think the real difference between them and us is (1) we are aware that our symbols are abstractions, (2) we know where and how the abstract connects back to the concrete, and (3) our abstractions are about principles, not affiliations.

We are all Bismarckians now.

When Rothbardians talk of our opposition to the "Welfare-Warfare State" we are often taken to be implying that the enemy is a coalition of left- and right-wing statists, with Welfare on the Left and Warfare on the Right. This works in the recent American context, but from a larger historical perspective it doesn't work at all.

The first modern welfare state was a Machiavellian strategy on the part of Otto von Bismarck, the architect of the German Empire. There was nothing ideological about it. Bismarck knew that the impoverished masses were in favor of liberalism. The poor of the 19th century understood that free markets and free trade would improve their lives, and they recognized mercantilism, protectionism, and other forms of statist privilege as the enemies and oppressors of common people. By creating a new generation of dependents, Bismarck effectively denied the German liberals the support of the masses.

(Just as the state monopoly on education created a class of dependent academics and denied the liberals their old position in the intellectual mainstream.)

This was clearly socialism of the welfare-statist variety, but notice that it was not at all what we would currently call left-wing. It was not remotely egalitarian.

Left-wing socialism -- the kind most people think of when they hear the S-word -- is an egalitarian attack, not just on the economy, but on all the institutions of culture and civilization, both Old Regime and bourgeois. Right-wing socialism, in contrast, is the coercive attempt to give permanence to the current power establishment -- The Establishment -- a power base in constant fear of the changes that liberalism brings. Ironically, the bourgeoisie (the very "class" created by liberalism) and the poor and working masses (whose lot is improved by liberalism and ultimately made worse by the state) become the populist coalition behind right-wing socialism.

Right-wing socialism is also known as corporatism, national socialism (the Nazis), and fascism. In my BlackCrayon dictionary, I define fascism in 4 parts:

FASCISM

An authoritarian form of statism that advocates

1. private property
2. State-centralized economy
3. militarism
4. nationalism

(I also blog about fascism here.)

In Joe Salerno's summer seminar, he uses the 6-part definition of John T. Flynn, the great journalist of the Old Right. Flynn begins with a 4-part definition of economic fascism, what he called the "prologue to fascism":

1. "Planned Consumption" -- a government that borrows and spends huge amounts on the Welfare State;
2. Militarism as an economic institution -- a way of stimulating economic activity
3. Imperialism, the handmaiden to militarism -- global military adventurism (the Warfare State);
4. a Planned Economy, consisting of systematic government interference into prices, wages, rents, and interest rates.

Flynn believed that economic fascism preceded full political fascism, which required two more criteria:

5. a Totalitarian State;
6. a Dictatorship -- the leadership principle with one charismatic strong man at the top, e.g., Hitler, Mussolini, Tojo ... Churchill, Roosevelt ...

I think the 4-part definition is very useful, and I think the 6-part definition is even more useful, but rather than adding ever more criteria, I am currently using a much simpler working definition, based on my recent readings in 20th-century history.

Fascism is anti-egalitarian collectivism in control of (or seeking control of) the government.

So that's just 3 parts:

1. anti-egalitarian
2. collectivist
3. statist

And practically speaking, you can use only the first two, since every political philosophy other than anarchism presupposes an attempt to run the government.

My new working definition results in part from my current political map:



Rothbard had various ways of mapping Left and Right to Liberty and Power, but none of them really work for me, except as historical explanations.

The only way I can make sense of the various Lefts and Rights of the 20th century is to translate "left" into "egalitarian" and "right" into "anti-egalitarian". If the equality under consideration is an equality of rights (which Rothbard called a universality of rights) then I am with the original left-wing of classical liberalism. If the equality under consideration is an equality of results or distribution or talents, etc., then I am very much a right-winger. When I use the word 'egalitarian' I tend to mean it in this second way.

So why do I think the greatest threat to America comes from the Right?

Because most anti-egalitarians aren't libertarians -- they're fascists.

In the German-speaking world of the late-19th- and early-20th-centuries, Marxism (the dominant left-wing socialism) was generally perceived to have failed. Marx had predicted two things that never happened: (1) the immiseration of the masses under capitalism; (2) a working class consciousness that would transcend national loyalty.

The strange thing is that you can find 21st-century leftists who still, against all evidence, believe prediction #1. The socialists of the early 20th-century were far less historically illiterate. It was obvious that industrial capitalism had improved the conditions of the working classes. The remaining objections were of the form (a) "It's not enough!" or (b) "It's still not fair!"

Actually, there was another common objection to capitalism: (c) "It's all going to the Jews!"

What many German ex-Marxists did was abandon egalitarianism and embrace nationalism. Their new brand of socialism would become the National Socialism of Hitler.

This is fascinating to me, and it's yet another thing completely left out of my schooling. I was taught in effect that Communism and fascism had entirely different etiologies, but came to employ similar totalitarian means. That's true if you treat Marx and Bismarck as the relative starting points. (It's much less true if you replace Marx with the early French socialists.)

But whoever started right-wing socialism, and for whatever reasons, it rose to power under the energy and support of ideological ex-leftists.

This brings us to the New Right of William F. Buckley, Jr. (Which I can barely tell apart from the neoconservatives who supposedly came later.)

This is from Justin Raimondo's biography of Murray Rothbard, An Enemy of the State:

[Rothbard] mourned the fate of the old liberals, who had allied with the pre-World War II Right -- men like John T. Flynn, historian Charles A. Beard, and Harry Elmer Barnes -- who were crowded out of the picture by the ex-Trotskyist James Burnham, former spy for the Kremlin Whittaker Chambers, Will Herberg, Eugene Lyons, J.B. Matthews, Frank S. Meyer, Willi Schlamm, and other defectors from Communism. In the old days "there was no question as to where the intellectual right of that day stood on militarism and conscription: it opposed them as instruments of mass slavery and mass murder." Then the rise of McCarthyism shifted the mass-base of the Right from the Midwest to the eastern seaboard, bringing in a whole new crowd "whose outlook on individual liberty was, if anything, negative."

pp. 174-175

Right-wing statism seems to be an alliance between Bismarckian political capitalists and ideologically fervent ex-leftists. The current Republican incarnation is no exception. All that changes are the particulars of the populist appeal.

der Fledermaus Mann fängt an

Joe Salerno must be feeling a void after his great summer seminar, June 6-10 at LvMI.

(I've listened to 9 of the 10 lectures, so far. I'd better finish #10 tonight so I can focus on Tom Woods's summer seminar starting tomorrow.)

Salerno seems to have turned to film reviews, starting with this critique of Batman Begins.

I've just returned from a sold-out matinée.

Salerno says, "This is the best Batman movie yet." I agree.

He says, "Bale's Batman is dark, dangerous, disturbed, dehumanized and vengeful -- as he was meant to be." Right on.

He says, "The new menacing-looking, tank-like, car-crunching, building-smashing Batmobile is a better reflection of Batman's spiritual being than the sleek Batmobile of earlier movies." I agree enthusiastically, and I add that it's clearly based on Frank Miller's vision of the revamped Batmobile in the great 1985 graphic novel, The Dark Knight Returns. (My impression is that this movie began as a film adaptation of Miller's follow-up series, Batman: Year One. If so, little of the original remains, but I certainly think Batman Begins is the most "Milleresque" of Hollywood's attempts to tell Bruce Wayne's story. To whatever extent modern audiences can imagine Batman as "dark, dangerous, disturbed, dehumanized and vengeful" instead of the high-camp grinning idiocy of Adam West, we have Frank Miller to thank for it.)

Salerno says, "The slow-paced and meandering build-up in the first half hour or so ultimately pays off handsomely in the movie's climactic scenes, with plenty of action and suspense along the way." While we both enjoyed the movie, my review is the opposite of his: my favorite part of the movie is the "slow-paced and meandering build-up" -- the best superhero origin backstory I've yet seen on film. Was it only half an hour? Felt more like an hour to me, and I was enjoying all of it. Felt like we didn't even get to see the hero costume for the first half of the film, and for my tastes, the story deteriorated from that point on. Not much. It would still have been the best Batman movie ever, even if they'd started at what I'm calling the downturn. But I definitely preferred the character of Bruce Wayne to the character of Batman.

So why is an Austrian School economist reviewing a superhero movie?

I'll say that before I read Salerno's review (which I saved for after the movie), I was already thinking that this was the most self-consciously economically minded comic book movie I've seen. Some of this economic mindedness is revealed in the standard myths and misunderstandings of economic illiteracy, but there were two points I thought Austrians could readily embrace.

Point #1:

The first one turns out to be something Salerno did not at all embrace, but put into the economically illiterate column of the tally:

The notion that a conspiracy of bad guys can "use economics as a weapon" to cause a depression in Gotham City is ridiculous -- unless they have somehow infiltrated the Federal Reserve System.

Well, yes, exactly. Why shouldn't we believe that this is precisely what the bad guys have done?

No, it's not specifically explained that way, but what is both explained and demonstrated is that the bad guys have infiltrated every level of every aspect of Gotham City government. How much sense would it make for them to have kept their hands out of the federal government's mechanisms?

Do I assume that the screenwriters understand that government monetary inflation is responsible for the business cycle? No, I don't assume that. (But if they did understand, they'd be wise to keep the details of their insight out of the script. After all, they're trying to turn a tidy profit, and therefore want the overwhelming population of young Marxoids to buy film tickets and recommend the movie to their young Marxoid friends.)

What I embrace in this detail is the perception that depressions are created! They are not natural, not just an inevitable symptom of market economies. They are artifacts of intervention, and this is what I take to be the point.

The film posits a criminal conspiracy behind a devastating economic depression. That's only half the story -- Austrians know that the criminal intervention is a conspiracy of bankers and politicians -- but that's already more than I ever expected to get from Hollywood film writers. As Murray Rothbard would say: their suspicions are right, even if they don't have all the details (although when Rothbard said it, he was referring to people's suspicions of bankers -- not of criminal secret societies).

Point #2:

"Where does he get those wonderful toys?"

-- Jack Nicholson as The Joker, Batman (1989)

When I was a smart-alec kid, watching James Bond marathons, my smart-alec friends and I would question the logistics of the bad guys' lairs. How did Dr. No arrange for the construction of a secret volcano fortress? Fine, the bad guys had plenty of money from past bad-guy activities, but how did they turn it into so much advanced infrastructure and technology.

What we never questioned was how MI6 managed to do the same. We grew up in an era when most people took for granted that governments had technology more advanced than we had on the private market -- and feared that the Soviets' infrastructure and technology were just that much better than MI6 and the CIA's. That was the Cold War mentality, and even those of us who opposed the Cold War often failed to question its most basic assumptions -- like the idea that command economies could out-compete free economies.

After the fall of the Soviet Union and the discovery that we'd been lied to for decades by both Left and Right (each for their own reasons) about the strength of the Soviet economy and military, and after finally learning some of the economics behind the reality behind the lies, I now find every adventure movie to come out of the 1960s, 1970s, and even 1980s to be based in the economic misunderstandings of Cold-War thinking. (Even the supposedly somewhat libertarian The Incredibles suffers from this ignorance -- though I suppose we can forgive a movie that is consciously playing with an already established superhero tradition. PoMo, donchaknow.)

But how can Batman have such an elaborately constructed Batcave? Well, in this movie, he doesn't. The cave looks like a cave, not like an underground military installation. There are no hydraulic lifts, no supercomputer, absolutely nothing it would take negotiations with teamsters to construct. We even see Bruce Wayne himself rappelling down from the cave ceiling where he's been putting in the lighting. Faithful butler Alfred stands by the small gas-powered generator that provides the electricity.

And how can Batman have such high-tech crime-fighting gadgetry unavailable on the market?

The old answer was the Bruce Wayne is a billionaire -- same answer for James Bond's supervillains.

But Batman Begins offers no such pretense. We see Alfred and Bruce Wayne planning how to buy which parts of the costume from which foreign manufacturers, without attracting attention. We learn that the department of the Wayne Corporation originally funded to develop defense technology has been all but shut down, as the new WayneCorp management focuses on government weapons contracts.

Of course Bruce Wayne didn't build the Batmobile! What were you thinking?

Batman's high-tech costume, vehicles, gadgetry -- they are products of the market, abandoned with changes in demand. (Though the demand comes from government, not consumers.)

Batman's gadgets are what economists call "sunk costs". They already exist and have already been paid for, whether or not anyone wants or can afford to buy them. They're too expensive to mass-produce, given the lack of demand, but they've already been produced as prototypes.

Batman Begins is not Austrian, not even as much as "The Berlin Batman" (1, 2, 3), but it is by far the most market-oriented superhero movie I'm aware of. Many libertarians celebrated The Incredibles for its Randian individualism and bourgeois family values, and I can join them in much of that, but The Incredibles also showed the private insurance corporation as criminally malicious while giving a complete pass to the secret government agency that enforces the ban on private security (a.k.a. superheroes). I guess libertarians have to take what we can get. But for my money, the more interesting questions are asked by Batman Begins -- even if the answers it hints at are sometimes less than satisfactory.

6 weeks

Professor Marcus is in France. I miss her already.

what my schooling never learned me

"TWENTY YEARS AGO I was an extreme right-wing Republican, a young and lone 'Neanderthal' (as the liberals used to call us) who believed, as one friend pungently put it, that 'Senator Taft had sold out to the socialists.' Today, I am most likely to be called an extreme leftist, since I favor immediate withdrawal from Vietnam, denounce U.S. imperialism, advocate Black Power and have just joined the new Peace and Freedom Party. And yet my basic political views have not changed by a single iota in these two decades!"

So opens Murray Rothbard's 1968 essay, "Confessions of a Right-Wing Liberal".

I've added the next line to my Rothbard quotes file:

My personal odyssey is unimportant; the important point is that if I can move from "extreme right" to "extreme left" merely by standing in one place, drastic though unrecognized changes must have taken place throughout the American political spectrum over the last generation.

Murray N. Rothbard,
"Confessions of a Right-Wing Liberal"

Think of it: changes that were "drastic and unrecognized"! How drastic these changes were is obvious once you know them. The unrecognized part I (or any of us who were schooled after 1968) can attest to simply by asking, "Was I ever taught any of this?"

My own schooling was left-wing by 1948 standards, left-wing by 1968 standards, and left-wing by 1988 standards. My history teachers made much effort to tie it all together so it seemed coherent. Specifically, there's this tricky problem of how to teach the Old Right: how can you explain the fact that opposition to both world wars was conducted by Quakers, communists, anarchists, and the Old Right? Simple: just claim that the Old Right were pro-German, even pro-Nazi. They weren't so much anti-war on principle as anti-this-war-against-their-own-kind.

This is FDR's propaganda (investigated by his own Justice Department and found to be utterly without evidence) still being taught a half-century later as history. Disgusting. I can't believe I ever considered my education to have been high-quality. (All I had to compare it to was government schooling, where even the statist indoctrination is less efficient!)

How's this for Orwellian? One of the main figures of the anti-imperialist, anti-war, anti-centralization, anti-leftist Old Right was president of Quaker-founded Haverford College, where I went after Quaker high school. I had never heard of him until I read about him in Jude Blanchette's brief primer on the Old Right:

While there are many who comprised the Old Right, three are worth singling out for the volume of their writings, and the influence they had during the late 30s and early 40s. The first is Felix Morley, the Pulitzer Prize winning editor of the Washington Post (1933-1940), president of Haverford College, co-founder of Human Events and prominent critic of American imperialism. See Joseph R. Stromberg's Felix Morley: An Old Fashioned Republican Critic of Statism and Interventionism (Journal of Libertarian Studies, Vol. 2, No. 3, pp. 269-277) and Felix Morley: An Old Fashioned Republican. Leonard Liggio, in Felix Morley and the Commonwealthman Tradition: The Country-Party, Centralization and the American Empire (Journal of Libertarian Studies, Vol. 2, No. 3, pp. 279-286) looks at Morley's historical analysis of the libertarian movement and the rise of the state. Of Morley's books, Freedom and Federalism (Indianapolis: Liberty Fund, 1981 [1959]) and The Power in the People (Nash Publishing, 1972 [1949]) are his best critiques of imperialism abroad and the welfare state at home.

Furthermore, the heroes of the Old Right, according to Rothbard, were "such men as Jefferson, Paine, Cobden, Bright and Spencer; but as our views became purer and more consistent, we eagerly embraced such near-anarchists as the voluntarist, Auberon Herbert, and the American individualist-anarchists, Lysander Spooner and Benjamin R. Tucker. One of our great intellectual heroes was Henry David Thoreau, and his essay, 'Civil Disobedience,' was one of our guiding stars. Right-wing theorist Frank Chodorov devoted an entire issue of his monthly, Analysis, to an appreciation of Thoreau." [links added by me, obviously]

Gosh, in high school, we were practically taught to worship Thoreau. We spent most of one semester reading primary and secondary texts. It's interesting that "Civil Disobedience" wasn't among them, as I recall. Certainly it was mentioned over and over again, to give some historical weight I suppose to the civil disobedience of the 20th-century Left, but the emphasis was the title, and the connection between Thoreau's opposition to slavery and American imperialism and the Left's campaign for civil rights and against the war in Vietnam. So far so good -- I'm sure Thoreau would have opposed Jim Crow and Vietnam, just as Rothbard did. But what about the fact that the Left (and the later civil rights movement) wanted to build up the size and scope of government while Thoreau's essay is an early American anarchist manifesto?

The soldier is applauded who refuses to serve in an unjust war by those who do not refuse to sustain the unjust government which makes the war.

Henry David Thoreau

If a thousand men were not to pay their tax bills this year, that would not be a violent and bloody measure, as it would be to pay them, and enable the State to commit violence and shed innocent blood.

Henry David Thoreau

I heartily accept the motto, "That government is best which governs least"; and I should like to see it acted up to more rapidly and systematically. Carried out, it finally amounts to this, which also I believe--"That government is best which governs not at all"; and when men are prepared for it, that will be the kind of government which we will have.

Henry David Thoreau

My American history teacher in high school (whom I loved at the time -- I loved all my history teachers at the time) taught us to think of the Left in terms of liberals and radicals and the Right in terms of conservatives and reactionaries. I'm not making this up. He really did spend part of one class making sure we used a one-dimensional left/right ideological map based on the progressive theory of history (without identifying it as such) and made sure we'd use the words the way he wanted us to. Imagine my surprise when I read the following forgotten history in Rothbard's essay:

Anti-communism was the central root of the decay of the old libertarian right, but it was not the only one. In 1953, a big splash was made by the publication of Russell Kirk's The Conservative Mind. Before that, no one on the right regarded himself as a "conservative"; "conservative" was considered a left smear word. Now, suddenly, the right began to glory in the term "conservative," and Kirk began to make speaking appearances, often in a kind of friendly "vital center" tandem with Arthur Schlesinger Jr. [emphasis added]

Well, I won't try to summarize Rothbard's great great essay. Please read it.

I will mention, however, that I've added a line or two to my Black Crayon dictionary, under the definition of Big Business:

As Kolko pointed out, all the various measures of federal regulation and welfare statism that left and right alike have always believed to be mass movements against Big Business are not only now backed to the hilt by Big Business, but were originated by it for the very purpose of shifting from a free market to a cartelized economy that would benefit it. Imperialistic foreign policy and the permanent garrison state originated in the Big Business drive for foreign investments and for war contracts at home.

Murray N. Rothbard,
"Confessions of a Right-Wing Liberal"

[rothbard]

"In the long run, we are all dead."

The little "About Me" section at the top right of this blog tells you what I think of John Maynard Keynes and his disciples and minions.

When Murray Rothbard was asked if he had anything positive to say about Karl Marx, he replied, "At least he wasn't a Keynesian!"

Q:

Did Keynes actually believe his policies were viable for the long run?

A:

[download longrun.mp3] (27 seconds) (56k)

As I mentioned earlier, Joseph Salerno is doing a 10-part lecture series this week at the Mises Institute. I'll come back and comment later on the lesson of the French Liberal School. Meanwhile, I point you to this morning's lecture:

Keynes and the 'New Economics' of Fascism
Austrian School of Economics: Revisionist History and Contemporary Theory -- Joseph Salerno

(Note that Salerno is slotted to deliver what I assume will be a related talk at the upcoming LvMI conference on The Economics of Fascism: "The Keynesian and Chicago School's Early Infatuation with Fascism".)

For more details on the specific macroeconomics of Lord Keynes, here are 2 more lectures from Mises Audio:

Critique of Keynesian Macroeconomics
Mises University 2003 (1:03:39) -- Jeffrey Herbener

The Utopianism of Marx and Keynes
Mises University 2003 (1:03:39) -- Jeffrey Herbener

And here's Murray Rothbard's review of Keynes's specific political ideology:

Keynes the Man: Hero or Villain?
Recorded 04/29/1989 at the Keynes and Keynesianism Conference, Harvard Square, MA (41:16) Uploaded 05/25/2004 -- Murray Rothbard

hieroglyphs

mutualist rebuttal

As Kevin Carson says in his response to my post on value theory, "If you're not already paralyzed with boredom, and you actually want more discussion of these issues..." then read on ...

And if that's still not enough for you, you can always review an older exchange between Mr. Carson and me on how "the state subsidizes the diseconomies of large scale."

The French Liberal School

Readers of this blog know I have a special place in my heart for the French Liberal School, which reached from before the French Revolution up to WWI, but which dominated French economic thought in the 19th century.

For a couple months now, I've been looking forward to Joseph Salerno's summer seminar at the Mises Institute, because his first lecture was listed as

1. Forerunners of the Austrian School: The French Liberal School [mp3 audio]

It happened this morning, and as the link above reveals, it's already available for those of us who aren't there!

(I think this is one of my favorite things about living in the early 21st century.)

value

I might as well break these up. Here's some of what I wrote PK about Mengerian value theory:^*

Value is always value to someone. I've been heavily editing a chapter on value theory so my mind is filled with this stuff at the moment.

(You can probably check most of these names in Wikipedia:)

Before Adam Smith, the Continental tradition was to treat economic value as subjective, but the subjectivists didn't understand the relevance of marginality -- that decisions are made on the margins, so to speak, and that the subjective value of X always means the subjective value of the next relevant concrete unit of X and not of all units of X in some abstract aggregate. Prior to the discovery of marginality, it was thought that because there tended to be a uniform price for X, there must also be a single value for X. What marginality reveals is that the price of X is determined by the lowest valued use of X, given the available supply. A single glass of water is very valuable to a man dying of thirst, but the millionth glass of water can be used to wash his dirty bits or to spray litter off the sidewalk, or to irrigate, flush sewers, etc. It's the value of that millionth glass that determines the price of all glasses of water, even the one you drink to survive.

Smith seems to have started the tradition of objective value theory. Somehow labor was supposed to impart an intrinsic, objective value on the products of labor. Smith and Ricardo and others are referred to as the British Classical School. Marxism and all other western 19th-century socialisms come from this tradition. The labor theory of value is the basis for leftist exploitation theory and the secular attacks on "usury".

The marginalist revolution was the near-simultaneous discovery of marginality by three men: Jevons in Britain, Walras in France, and Menger in Austria. Marginality requires subjectivity, since different people experience different marginal decisions, revealing different values and manifesting in different price-tolerance. But Menger (and the following Austrian School tradition) conceived the nature of value entirely differently than did Jevons and Walras (and the following "neo-classical" tradition that currently constitutes mainstream economics).

Neo-classical value theory is a psychological theory, called marginal utility. Utility is want-satisfaction, which is a psychological phenomenon. An economic good is anything that can satisfy your wants. More highly valued goods are those that can more greatly satisfy your wants. They are said to have more utility. But again, it's the utility of the next unit of X (the marginal utility of X) that ends up determining its price.

Austrian theory is entirely different. Technically, it should be called marginal value theory, not marginal utility theory, since Menger saw no reason to conjecture about unobservable abstractions such as psychological want-satisfaction. Menger's claim is that we see people prefer X to Y, as demonstrated by their choice of X when it means forgoing Y. That's all we need to know for economics. The reason someone foregoes Y to gain X is economically irrelevant; all we care about is that he chooses one over the other. The "value" of a good, in the Mengerian theory, is the subjective ranking it gets in someone's array of options. Value is evaluation.

[...]

The neo-classicals like utility because they conceive of it as a quantity. An orange gives me 5 utils and gives you only 4 utils so I value it more than you do. (And according to social cost theory, which comes later, it is best if I get the orange and you don't.)

For Austrians, value is ordinal (ranked) not cardinal (counted). Austrian economics is therefore a qualitative science, not quantitative. (Always brings me back to Gregory Bateson's complaint that modern scientists think science has to be about numbers, rather than patterns, directions, and other qualitative phenomena with which we can be just as rigorous.)

* This is what I wrote, but I won't be at all surprised if someone wants to point out where I've been sloppy or gotten something wrong.

Also, PK questioned my claim to iceberg that there are 2 paths to wealth: "You can't mean only two."

So I amended:

[...] you're right that I skipped over the Robinson Crusoe stage. Still, I think it is more than rationalization to describe an individual's isolated pursuit of goods as exchange, if not trade.

Crusoe lies exhausted on the beach. He realizes he's hungry. He drags himself up and wades out into the surf where, after an hour, he's able to catch some sea creature and pop it in his mouth. He has exchanged something he valued less (another hour of rest) for something he valued more (seafood). It is impossible to pursue wealth without exchange. Everything has an opportunity cost.

But you're right, that's not quite the same thing as trade.

Still Crusoe's wealth potential is so limited that he might soon starve to death. By trading both rest and fishing for the creation of a spear (capital formation) he increases his future wealth. So I still do mean only two paths. I'll just swap out "trade" for "exchange" and recognize trade as the dominant subset of exchanges within civilization.

Autarky is poverty.

wealth

I'm usually pretty good about backing up, but a few Fridays ago I didn't, and two days later my hard drive up and died. I lost a couple weeks of work. I've been scrambling since. I haven't been reading blogs and I obviously haven't been writing any.

I'm still playing catchup, but I thought I could at least post a few emails I've written in lieu of original posts. I've been meaning to post something on Austrian value theory and the nature of wealth for a while, but I seem to respond better to direct questions than my own vague intentions. This is why iceberg is such a valuable correspondent.

I am not an economist, just someone who has been reading economics for a couple of years and focusing on the Austrian school for the past year. I'm also editing a book on the evolution of Mises's thought, so my Austrian reading has been particularly intense for the past half-year.

Iceberg was asking about the wealth-generating potential of government-business projects, such as tax-funded sports stadiums.

What is the Austrian explanation of how true wealth is created/generated?

This is my favorite question. Focusing on this one question -- and on the answer -- has revealed plenty to me about the workings of the free market and the dysfunction of government. It is the one question I emphasize with economic newbies and illiterates, especially leftists.

When I was a kid, I seem to remember being schooled to believe that wealth was in natural resources. The US was wealthy because of the continent's resources. This explanation was important to my New Deal "liberal" schoolers, because it implied that culture, attitude, division of labor, etc. had nothing to do with the successes of the West. I didn't know enough back then to ask about Hong Kong or Japan, to contrast them with Africa and South America.

Not until I started to read economics and learned a little value theory did I see how simple wealth is. Unfortunately, it's so simple (and so abstract) that few people are able to sit with it easily. Even if they "get it" they also soon forget it.

I'm still trying to disentangle neo-classical and Austrian value theory, so please forgive me if this comes out a little muddled.

Wealth is our ability to satisfy our wants.

(And for good economists, as I understand it, there are no needs, only different degrees of wants.)

There are two (related) paths to wealth:

1. trade;
2. capital formation.

If I trade you my apple for your orange, it's because we valued these fruits differently. You valued what you got over what you had, and I valued what I got over what I had. In the exchange, we have created wealth. That's the part that's so hard for so many to grasp. Without increasing our resources, without inventing anything or digging anything up, just by the simple act of exchange, we've increased the amount of wealth in the world.

Oranges and apples are consumer goods. Consumer goods directly satisfy our wants. They are, in a sense, the basis of wealth, although the fruit-swapping example should caution us from thinking of the fruit as wealth, since we had the same amount of fruit before and after our swap. Rather than saying that wealth is in the consumer goods, we might say that wealth is in the arrangement of consumer goods.

The other kind of good is capital goods. Capital goods are those indirect means we have of satisfying our wants. The ladder I used to climb the apple tree does not directly satisfy any desire of mine, unless I just like climbing. But it allows me to get more apples than I was able to get by picking the low-hanging fruit, or shaking the tree, or picking the few still-good apples that have fallen to the ground. The more capital goods, the more wealth, but again, the wealth isn't in the goods.

Here's another interesting feature of the Austrian emphasis: the structure of capital. The tools I use to build the ladder are even further away from the satisfying apple than the ladder was. Some capital goods produce consumer goods, and some capital goods produce other capital goods. The division of labor and the structure of capital are closely related, and understanding them is the basis for understanding Austrian Business Cycle Theory. Meanwhile, I'll just say that more division of labor and capital isn't necessarily more wealth. The most wealth will be created by the most productive divisions and structures, where productivity is the ability to produce the goods that consumers want most. You therefore can't measure either capital or wealth with dollar signs, because dollars can't tell us which structure is most productive. (This is the fatal flaw in traditional macro-economics -- thinking in terms of numerical aggregates.)

As I said, there are some critical conflations of neo-classical and Mengerian value theory in the above. Want-satisfaction is what neo-classicals mean by utility. Austrians don't think in terms of want-satisfaction, which posits unobservable psychological states. Austrians speak in terms of preference and ranking. This is what Mengerians mean by value -- how I rank something in my array of preferences, as demonstrated by my actions. Wealth is my ability to have more of what I prefer more by giving up some of what I prefer less. I'm going to have to do some work integrating my understanding of the production of wealth with Austrian value theory.

But here is where the neo-classicals and Austrians split most critically: neo-classicals believe that we can do arithmetic with our wealth, you and I. They treat wealth as quantitative. Austrians, if I understand properly, see wealth as qualitative. You can talk of more or less wealth, but you can't talk in terms of arithmetic units of wealth.

So for instance, if I have an apple and you have an orange, and you hit me over the head and take my apple, you have increased your wealth (assuming you don't suffer too bad a conscience from injuring me -- let's just say that some hypothetical robber might increase his wealth by stealing from me). In contrast, I as the victim have less wealth, both because my apple is gone and because I'd rather not be in pain. Trade is a positive-sum, win-win game. Robbery is considered zero-sum or win-lose. (Or possibly negative-sum, lose-lose.)

The neo-classicals are now willing to ask how much was gained compared to how much was lost. Austrians deny the very possibility of such quantitative, intersubjective comparisons. The neo-classical model became Coasean Social Cost Theory. I reference the Coase article in my Spectrum essay at Mises.org.

And I might as well interrupt to quote some of the relevant section, Trespass: Rothbard versus Coase ...

In other words, it is not only the case that the mugger harms me if he takes my wallet, but also that I harm the mugger if I keep him from doing so. The question of social cost is: does the thief gain more than the victim loses? If so, then society benefits from the mugging. If not, then society is hurt by the mugging. Any claim I might make that the wallet is mine by right is irrelevant to the question of social cost: "The comparison of private and social products is neither here nor there."

We might go on to say that the mugging has negative costs beyond the immediate context, that society loses out if I now divert critical energy into protecting myself from muggers, or if the location of the mugging develops a bad reputation and business is harmed. But the cost-benefit analysis is to be done in a value-free, utilitarian calculus, without any interfering concepts of right or wrong.

[...]

Rothbard, of course, rejects the entire social cost theory. There is no cumulative "cost" borne by "society" -- there is only the cost to individuals. You can't sensibly add my pain to your pain and deduce a measurable sum called our pain. Same with pleasure. Same with value. Same with costs.

And back to the email:

A good article from the Austrian perspective is Rothbard's "Toward a Reconstruction of Utility and Welfare Economics" [PDF].

If you're an iPodder, like me, you might want to listen to Hoppe's "Law and Economics" or Hülsmann's "Foundations of Welfare Economics".

In theory at least (according to the Chicago School / neo-classical / Coasean Social Cost Theory model), we could say that the robber benefited more than I lost. In his talk, Hoppe tries to illustrate some cases in which this might be the case. So the Coasean model allows for a net gain in wealth as the result of involuntary win-lose "exchanges" such as confiscation. To the Austrians, such intersubjective comparisons are absurd, and to Rothbardians (as opposed to value-free Misesian economics) the confiscation is wrong no matter what the aftereffects.

So from an Austrian perspective, you can compare different government spending projects either for the damage done by them or the good achieved by them, but you clearly cannot compare voluntary investment-based projects to involuntary taxation-based projects. To do so would require ignoring the wealth-destruction involved in the initial confiscation.

And we haven't even gotten into incentive problems with tax-funded projects, or the calculation problems inherent in all government projects. When someone asks you to compare equally successful business ventures, one funded voluntarily and the other funded coercively, they're already asking you to imagine something that is economically impossible -- or so unlikely that I'm willing to call it impossible.

The market has to eventually respond to consumer demand. The satisfaction of consumer demand is the creation of wealth. Coercively funded projects are famous for going over-budget, for producing less after-project business than officially projected, etc. That's what's seen. What's unseen is the market-based projects that don't take place because

1. potential investors were taxed, and
2. the resources that went into the "public" project can't be used in private projects.

If you ignore the inherent damage of taxation, and then you posit away the indirect damage of taxation (and imagine a miracle: economic efficiency on the part of a coercive institution), then you can begin to compare public and private projects. But that seems awfully close to assuming away reality.

I think it's significant that such comparisons would require Coasean models, and yet most Coaseans disapprove of government-business partnerships of the sort we see in the building of sports stadiums. Even when your model allows for the possibility of net-wealth-gain from coercion, you tend to find in reality the same things Austrians see: wealth destruction.

computadora cubana

Still procrastinating on that book-meme post, but meanwhile, since we're on the topic of the glories of socialism, here's something sent by a Cuban friend of my godmother's, with the Subject: Cuban workstation ...