Can economists predict the future?

Joe Kent Blog, Spontaneous Order, Uncategorized

I can make a prediction that will almost definitely come true: On July 28th, 2061, a bright comet will appear in the night sky. Of course, this is not my prediction, but Edmond Halley’s — which is where the name Halley’s comet comes from. Unfortunately, Halley died before he could view Halley’s comet for himself, but he is proven correct every 76 years. In a similar way, the economist Ludwig von Mises predicted the collapse of socialism. He also died before he could view the collapse of the socialist economies of his time, but he has been proven correct again and again. How did Mises and Halley know such bold things about the future? And how can we use their insight to make our own predictions about the future? The answer has less to do with mathematics, and more to do with simple logic. For Halley, he deduced that a comet going around the sun would be seen again in the future, and he was correct. But for Mises, the problem was a bit more complex, because there was no bright object in the sky for him to look at. Mises understood the many problems with socialism, and the inevitable collapse of such a system. He wrote about his findings in, “Economic Calculation in the Socialist Commonwealth“. In this landmark essay, Mises proved that socialism could not work because the price system was broken. In a purely socialist system, prices are made up by bureaucrats, and this causes all kinds of chaos. Without real prices, no one has any clue how much anything really costs. When this happens, the entire system collapses. Mises and Halley predicted the future, but in reality, they were explaining a phenomenon, like a law of nature. Just like Albert Einstein predicted the existence of black holes, …

Is liberty a “slippery slope?”

Joe Kent Blog, Political Philosophy, Spontaneous Order

Imagine a slippery slope where big government is at the top, and way down at the bottom is anarchy. Libertarians often stand on the middle of that slope. People constantly tell libertarians, “You kids can play on the slope, but don’t go too far or you’ll fall down!” The top is assumed to be safe. That’s where the government protects everybody, right? Personally, when I heard that liberty was a slippery slope, I immediately leaped off, and chose to live at the bottom. Why not? I begin with the assumption that a world without government would probably be a reasonably safe place to live. If someone proves me otherwise, then I’ll climb up the slope again. Sure, there will be lots to debate about — what about courts, fire, police, defense, seat-belts and schools? Let’s read, debate and discuss all these topics. But I think it’s unhealthy to start with the assumption that total government control is safe. Total government control has been tried, and millions of people died because of it. I don’t understand why we are supposed to assume that it is the safest starting point. So for me, I turn the whole mountain upside down. Let’s start with the assumption that a voluntary world would be ok. If anybody wants to propose a law, just know that you’re on a slippery slope towards totalitarian government control.

Entrepreneurial Communities

Joe Kent Blog, Justice & Legal Systems, Spontaneous Order

Is a mall a community? Yes, argues Spencer H. MacCullum, an American anthropologist, business consultant and author. “The first, what you might call entrepreneurial community, was the hotel,” said Spencer. He gave the example of the Tremont House in Boston in the 1830s as the first modern hotel. After this came the development of apartment buildings, office buildings, industrial parks, and the first shopping centers. Spencer estimated that some shopping centers, for example in Las Vegas, Nevada, have populations greater than the population of some cities. “They are communities,” said Spencer, “If you look at a hotel, it has its streets and alleys, its corridors. The lobby is the city square and perhaps park, and so on. You have a prevision of utilities and you have a security office there that works very nicely, very quietly. If you misbehave, you may find yourself very quietly outside the hotel.” “It has a transportation system,” Spencer added, “which happens to operate vertically instead of horizontally.” According to Spencer H. MacCullum, this model may be better in many ways, because the public services are provided by the entrepreneurial interest of the property owner, as opposed to when property is subdivided and sold off. When property is subdivided and sold off, the owners do not have the experience to provide their own public services, “so they tend to form a political organization of some kind to finance through taxes and regulations and to enforce rules,” said Spencer. Watch the full interview below: Produced by New Media | UFM 2013 http://www.newmedia.ufm.edu http://www.ufm.edu

Is Bali More Free than the US?

Joe Kent Asia, Spontaneous Order

Is Bali more free than the United States?  In some ways, it is, said Jack Blaylock at the World Conference on Market Liberalization in Bali in 2015, hosted by the International Society for Individual Liberty. “I have more freedom and liberty in this environment than anywhere in the United states,” said Jack, about his time in Bali. Jack Blaylock moved to Indonesia from the United States 32 years ago, and he says that Bali offers individuals more freedom in may ways.  “Freedom and liberty really does work the way we all theorize it’s supposed to be — in small scale examples that I see all the time.” Jack presented many examples of spontaneous order in Bali, from legal matters, to traffic, business freedom, and resolving disputes.  He compared this to America, where it is illegal in many areas to open a lemonade stand. He also recognized that freedom can be healthy for self development.  “When you’re in an environment like this where you have so many day to day little freedoms, what it does for you, is it unleashes the power of your creative mind.  The freer you feel, the more creative you become.  And everybody values the ability to think creatively.  Not just artists.  Thinking creatively is problem solving.  Creative problem solving is one of our most important evolutionary gifts that governments try to kill.” Watch the full video here:    

Conflicts and Harmonies of Interest

Joe Kent Spontaneous Order

One day, the government told me to stop teaching piano lessons.  Yes . . . as crazy as that sounds, it’s true. I was a music teacher at a public school.  My crime was that I taught private piano lessons on the side, to some of the very same students.  From the government’s perspective, I had a “conflict of interest”, and might abuse the system somehow, to make oodles of cold hard cash. For example, I might teach less music during the day, so I could teach more music at night, during private lessons.  In this way, according to the government, I would hold kids back for my own profit. The absurdity was painful — yet the threat was very real, with thousands of dollars in fines, or jail time just around the corner.  I immediately gave up my private lessons, and soon after, quit my job working for the public school system. But I never forgot how ironic it was that the government should have any say over conflicts of interest, because the government itself is the primary conflict of interest in society. For example, the state is the ultimate decision maker in all cases, including those cases involving itself.  The government can be the judge, the jury, and the criminal in the very same case.  Predictably then, the government will tend to rule in favor of itself. Some may find this laughable, except that the government abuses this power all the time, with virtually no consequence.  If someone were to accuse the government of this conflict of interest, the government would simply dismiss it’s own case out of it’s own court. The same is true with taxation.  The state is responsible for collecting taxes, and it is also responsible for paying taxes to itself.  Predictably then, the state will attempt to pay more tax money to itself, as it …

Private Roads

Joe Kent Spontaneous Order

Here’s an experiment: The next time you go for a car ride, count the number of private roads you drive on. You may be surprised at how many private roads you drive on every day. To many people, a private road seems like a fantasy, like some sort of futuristic invention out of the Jetsons.  Yet private roads have been around for most of America’s history. It wasn’t until the 1830′s that the government began meddling in roads.  Before that, turnpikes, or toll roads, were the norm.  Even today, toll roads are a common sight in the US.  Yes, it’s kind of a hassle to stop and pay the fee, but with technology getting better, you don’t have to fumble with quarters anymore.  Today, drivers can whiz through toll booths without even slowing down, thanks to a little sticker on their dashboard.  Sometimes the fee is a couple bucks or less, and sometimes, during the off-peak hours, there’s no charge at all. Ever been stuck in a traffic jam?  Toll roads help clear up traffic by encouraging people to think outside the box.   Some drivers will car pool.  Others will go around.   Still others might want to pay the extra cash to get in the fast lane and zip home early.  That helps to clear up the road for everyone else. Still, it is annoying to think about paying all that money.  But just remember, we pay even more money to drive around right now, in taxes.  Gas taxes supposedly pay for our roads and bridges.  But if there was no gas tax, our average price at the pump in the US would be 50 cents per gallon cheaper! Without government roads, some people exclaim that there would be no free roads.  However, there are private roads today that drivers don’t …

What Libertarians Can Learn From the Ice Bucket Challenge

Joe Kent Spontaneous Order

Recently, the ice bucket challenge spread on Facebook to millions of people.  The videos featured folks talking about the charity for Lou Gehrig’s disease, and then dumping a bucket of water over their head.  This simple idea has spread so far, and so fast that the charity has raised over 100 million dollars.   So why isn’t libertarianism spreading as rapidly as the ice bucket challenge?   The answer may be found when looking at a little thing called the meme.  Richard Dawkins, who coined the term in his 1976 book, “The Selfish Gene”, said that a meme is an idea that can be replicated many times, much like a gene.   Where genes travel from body to body, the meme travels from brain to brain.   What this says for libertarians is that we need to think of our messages as self-replicating ideas, if we are to see them go viral.   In biological terms, genes travel well when they are small.  This increases the chances for replication.   The ice bucket challenge was an extremely small meme.  Each video was about one minute long, and the format was simple: talk about the charity, and then dump a bucket of ice over your head.  The simplicity of the meme helped the chances for replication.   This suggests that the philosophy of liberty is perhaps too long and complex to be passed along as quickly as the ice bucket challenge. For one, the libertarian philosophy is difficult for many people to digest. Although it can sound simple, the idea is met with cries of skepticism at every corner. This may be because the meme is competing with other memes – namely, the meme of big government. A “bigger government” perspective and a “smaller government” perspective cannot exist in the same brain, …

The Market for Morality

Joe Kent Spontaneous Order

The first time I took an online taxi cab – I was nervous.  Here I was on a street corner, using an iphone app (Uber or Lyft) to call a random driver.  Who was this mysterious person?  If anyone with a cellphone and a car can turn their vehicle into a cab . . . what is to stop him from driving up next to a cliff and pushing me out the door? The cab pulled up, and the driver immediately got out of the car, greeted me with a big smile, and opened the passenger door. “How are you?” he said, “Long day at work?” It was a long day.  It was a terrible day.  I didn’t feel like being nice to anyone.  In fact, I felt very much like being rude.  My first day on the job, I had two big zits on my face, and the contacts in my eyes were bothering me so much that I could barely even see.  I had to keep one eye closed all day . . . it was torture!  I was not in the mood to be friendly at all. But then I remembered something.  Uber uses a 5 star rating system.  At the end of the ride, the customer rates the driver, and the driver rates the customer. So I thought – “I want those stars!” When I got in the car, my instinct was to slump over and completely ignore the driver.  But because I didn’t want a horrible rating, I said, “Hi, I’m really sorry, but I’ve had a terrible day, and my contacts are hurting my eyes, so if it’s alright with you, I’d just like sit here in silence with my eye closed.  I hope you don’t think I’m being impolite . . .” “Oh …

An Unlikely Lesson in Spontaneous Order: Italian Patron Saint Festivals

rosamariabitetti Europe, Spontaneous Order

Patron Saint’s festivals are a centuries old Catholic tradition, in which a city celebrates its protector. For instance, Gubbio’s celebration of Saint Ubaldo traces back to the 12th century, or the Saint Agata festival in Catania dates as far back as the 3rd century. Every village in Italy, no matter how tiny, takes the time to celebrate its patron saint. In my home town, Ginosa in southern Italy, we have a few, but my favourite is the celebration of the Madonna d’Attoli (Attoli is an area of our countryside where there’s a small sanctuary). For centuries, even when it was a village of very poor, illiterate farmers and farm hands, Ginosa celebrated its patron saint with a horse parade, a marching band, and a decorated float carrying the statue of the holy Mary and a choir of girls who had their first communion in that year. What’s amazing is that despite how poor the population of the village these festivals were——and still are——funded by voluntary donations from the population. As a student of economics you are told that this situation would create a public goods problem. In technical terms, such a festival is considered a public good due to the fact that it is non-excludable and non-rivalrous, which are just fancy ways of saying that you cannot forbid people to come to watch the procession. Furthermore, as contribution is voluntary and anonymous, there’s is a strong incentive to for people to be free riders on the contributions of others. Thus, abstract logic dictates that this would result in a collective failure, for if all the individuals in pursuit of their self-interest opted not to contribute, counting on the fact that the others would, in the end no one would contribute. This is one of the core issues of social studies. …