[extropy-chat] Authenticity, extropy, libertarianism, and history (economics diversion)

[Amara Graps]

I wrote this to my family/friends last monthl and after seeing
Max's posts and the follow ups, it occurred to me some of the newer
extro readers may not know some of the terms that are used, and
which was a kind of common knowledge in discussions on this list
14 years ago. Here is some economic theory...

Amara


For those of you who don't know what is Austrian economics, I'm not
an expert, however, the following summary from the delightful book:
_Economics for Real People: An Introduction to the Austrian School_
might be helpful.

The Austrian School of economic ideas is a laissez-faire economic
policy that rests on individual actors competing in a market process
(stategic, self-interested behavior in a decentralized whole),
driven by disequlibrium and stressing the informational role of
prices. The main points of the Austrian school can be demonstrated
by the ideas of four men: Ludwig Lachmann, F.A. Hayek, Ludwig von
Mises, and Murray Rothbard, who, together, form a spectrum. (My
preferences in the spectrum are the Rothbardian views)

Lachmann: holds "Government intervention for stability", which is
the idea that the government has a role to play in stabilizing the
economic system and increasing the coordination of entrepreneurial
plans".

Von Mises: He reconstructed economics upon the solid foundation of a
general theory of human action (which he called "praxeology"). He
stressed that human action always involved the employment of means
toward some end, and he asked whether particular interventions were
the suitable means to attain the ends sought. He held that, by
destroying the price mechanism and interfering with peaceful
cooperation, all economic interventions eventually would have
repercussions that were undesirable, even to those initially favored
by the intervention. Mises concluded, however, that the state was
necessary to establish the rule of law and property rights that the
market needed as its foundation. Mises' ideal state is minarchist:
it is the "night watchman" state that acts only to prevent violence
and theft. Mises's position might be characterized as "intervention
to create the necessary condition - the rule of law - for a market
society.

F.A. Hayek: invoked "Traditionalist interventionism", meaning that
he found no reason to think that governments could outperform
profit-seeking entrepreneurs at achieving plan coordination.

Rothbard: Developed a system in which the state was seen to have no
legitimate role at all. All necessary social institutions, including
police, courts, military, could be established without coercion,
through peaceful cooperation. The Rothbardian view is market
anarchist, or "anarcho-capitalist": no intervention, and no state
that could consider intervening.

Lachmann, Hayek, Mises, and Rothbard all recognized that the main
problem facing economics is not to describe what the market would be
like in equilibrium - an impossible state of affairs -- but to
examine the interplay of forces that generate the market process. To
a great extent, their political economy reflects their opinion about
the robustness of that process. Lachmann, the most interventionist
of the four, also was the most doubtful that the market was
self-stabilizing. Rothbard, the least interventionist, felt that the
market could provide even law and defense better than the state.

The common idea in Austrian political economy is to use the minimum
of coercion necessary to create a functioning society. The above
Austrians' opinions on what that minimum might be range from "not too
much" through "very little" to "none at all." But all of them saw
the value of freeing the individual human mind to set its own
course, and preferred that freedom as far as their theoretical
musings led them to believe it was feasible. Even Lachmann, the most
interventionist of the four, recognized the tremendous power of
voluntary cooperation and the profound limitations of central
planning.

(A little economics lesson diversion)
-- 

***********************************************************************
Amara Graps, PhD             email: amara at amara.com
Computational Physics        vita:  ftp://ftp.amara.com/pub/resume.txt
Multiplex Answers            URL:   http://www.amara.com/
***********************************************************************
"Living on earth may be expensive, but it includes an annual free trip
around the sun."   --Ashleigh Brilliant