By Dean Peng I am an Austrian school economist. The reason is purely logical: Austrian economics is the only logically consistent economics. However, I will not continue contrasting Austrian economics with other “schools” and argue why Austrian is correct others are wrong. This has been done already, probably too much. First thing first, I want to argue that the term “school” is misused. There are schools in science and mathematics. Each school is good at some subjects. Warsaw school, headed by Alfred Tarski, was the best in mathematical logic. There was a Chinese school of mathematics, which was leading the studies of value distribution. Obviously, “school” is misuesed in economics. There are no schools but only doctrines. Different schools should learn from each other, while different doctrines only fight each other. The doctrine proposed by John M. Keynes is called Keynesianism, which has been falsified. Karl Marx proposed a theory of economics, which is a part of Marxism. Marx himself was aware that it was wrong. He couldn’t finish his Das Kapital. However, some people continue claiming that it is the ultimate truth, immune from criticism. Austrian economics was founded by Carl Menger and was developed by others. It is the only economic theory that is self-consistent. I am going to outline this theory, while leaving the origination and development of other doctrines to the subject of the history of economics. Strange enough and sad enough, students of other disciplines spend little time studying the history of their science (students of physics study theories of physics instead of history of physics), while students of economics are dumped in various different doctrines. Now, I will briefly outline this valid theory of economics (so-called Austrian school). 1. The object that economics studies is not natural phenomena. By studying the unintended yet necessary consequences of …
Why libertarians are not good at organizing
I’m a passionate libertarian organizer who works for at least three liberty non-profits, and sometimes I get frustrated at how difficult it is to help libertarian movements. Part of the problem is that libertarians are highly independent and intelligent, so it’s a bit like herding cats at times. But another part of the problem is that many libertarians have an old socialist idea rattling around inside, especially when it comes to changing the world. Socialists thought that one day, a “socialist man” would evolve. That man would be completely altruistic, sacrificing his entire life doing back breaking work simply to better the world for others. Of course, now we know that this is a fairy tale. Human beings are self-interested. In general, people care more about their own lives first before they care about the lives of others. But what about libertarian movements? Plucky libertarian organizations across the world are often run by one person doing all the work and everybody else chipping in occasionally. Many libertarians wait for the world to, “wake up”, and suddenly become enlightened. Perhaps they think that a new “libertarian man” will evolve to lead everyone on the road to freedom. Many Libertarian political parties are run by an all volunteer staff, usually of one or two people carrying the brunt of the weight fueled by their passion for liberty. Granted, libertarians like voluntary action, but does that mean their organizations have to be run by an all volunteer staff? Libertarian non-profit think tanks are often run through a donation model, which also assumes that people will be altruistic enough to chip in some money. But few people ever want to pay for the cost of the staff — most people would rather have their money going towards a project instead of payroll. This leaves little …
The Overpopulation Bomb — Defused
For many people, the idea of a world based on liberty is flawed. As long as people are free to keep having babies, then eventually we’re going to run out of resources. At the time of this writing, the population of the world is over 7.2 billion people, and that number is rising fast. At this rate, the population will grow to 8 billion people by 2030, and 9 billion by the year 2050, according to the United Nations. However, surprising as it may seem, the overpopulation bomb has been defused. Why? Because women in developed countries tend to have fewer kids. The above graph shows birth rates are falling below two babies per woman, across the developed world. In the United States, fertility rates are at a record low, at 1.8 children per woman. A similar phenomenon is happening in the rest of the developed world: women are having less than 2 children. By contrast, in the undeveloped world, women tend to have more children. Niger’s average birth rate is a record 7 children per woman, however, this is going down too, as these countries become more developed. In general, women around the world are having fewer babies. The solution to the overpopulation bomb then, is prosperity. And the best way to achieve prosperity is liberty. According to the Fraser Institute’s Economic Freedom of the World Index, countries with more liberty experience more prosperity, in general. Countries at the top of the Economic Freedom of the World Index tend to have the lowest birth rates in the world. Aren’t We Running Out of Resources? Still, some may be worried that a population of 7 billion cannot be sustained indefinitely by the amount of resources available in the world. As resources like oil, timber, and natural gas continue to be used up, surely 7 …
Why are Businesses Run Like Socialist Countries?
Many libertarians have a problem with authority. We don’t like rulers at the top, dictators, kings and queens, or even strict parents. We think life should grow like a garden, from the bottom up. It’s a beautiful philosophy, and it’s easy to see why so many libertarians and entrepreneurs just love the idea of a bottom-up approach to the world. So why are so many businesses run like a socialist country – from the top down? After all, many businesses have a Chief Executive Officer – he’s like the Dictator. He can issue orders and boss people around. Underneath him is a chain of command that would remind anyone of a government. The Vice President, the Treasurer, the Chief of Staff . . . all very autocratic and superior sounding. At the bottom of the list are the lowly workers, the janitors, the forklift drivers, and the cooks. Employees at the bottom listen to orders from the top, and carry out the orders. This all sounds very totalitarian. Of course, real totalitarian regimes are quite different (they aren’t voluntary, they don’t offer incentives, etc.). But many business at least resemble a director at the top telling the folks at the bottom what to do. It’s funny then, that libertarians should sing the praises of the free market, when the free market itself is filled with businesses voluntarily creating ‘islands of socialism’ in a ‘sea of capitalism’. Why do businesses do this? Is it because socialism just works better? Does this prove that a socialist structure is actually the most productive? Well, according to one businessman, the bottom-up approach works better. Charles Koch, the CEO of Koch Industries wrote in “The Science of Success” that understanding the principles of a free society can help a business succeed. And …
Reflections on Kazakhstan: Ideas & Performance
I’ve traveled a lot, but never to such an exotic destination as Kazakhstan. The country and the people are a mix of everything Asia—Russian, Mongolian, Turkish, Indian, modern, prosperous, intellectual, traditional, proud, friendly, and aware. I landed on the vast steppes of Astana, the amazingly glamorous new capitol fueled by vast new oil riches of the Caspian Sea. And departed from Almaty, the old capitol nestled at the foot of spectacular snow-capped peaks that skirt the ancient Silk Road. Through the auspices of Pavel Kotyshev, Executive Director of the Institute for Development and Economic Affairs (IDEA), and the Entrepreneurship Development Fund (DAMU), I was fortunate to have been invited to join 10,000 other participants at the Astana Economic Forum & the UN World Anti-Crisis Conference. It was truly a gala affair. I am grateful to Aigerim Zhumadilova, Galiya Zholdybayeva, and all wonderful folks at DAMU for their extraordinary hospitality. If you are looking for a man of action to promote entrepreneurship and the ideals of liberty in Central Asia, Pavel Koktyshev is the star. Pavel is efficient and capable, he is a superior intellect, and he is good friends with everyone. At every turn, there were people and projects familiar to him. Why such global events in Central Asia? I think the preeminent purpose was to showcase the strategic prominence of Kazakh oil and the leadership of President (for life), Nursultan Nazarbayev (above left). On a tour of a local park I found this quote from the national constitution: “The Republic of Kazakhstan proclaims itself a democratic, secular, legal and social state whose highest values are an individual, his life, rights and freedoms.” This was surely music to a libertarian’s ears. Yet, one could wonder if this was a reference in practice to the natural rights of all—or to one individual …