Vaclav Klaus hits the right notes before the European Parliament

What a follow up Vaclav Klaus is to Sarkozy! Read his speech before the EU parliament. He basically says (my liberal paraphrasing), wait a minute, I thought we in Eastern Europe already escaped from that lovely blend of socialism, one-party rule, and economic basket-case-ism. Now we're all marching right back to it under the banner of an EU central planning board!?

His argument that the positive meaning of the EU rests precisely in the taking down of artificial state borders to trade and migration and the facilitation of broader and more integrated free markets across borders is trenchant. The value does not lie in centralized regulation and state control of all economic activity. That is the path back to the exact antithesis of the value of the integration enterprise itself!

Of course, the media will promptly ignore most of what he says, at least relative to its fanboy coverage of Sarkozy and his beloved rock-star pop superstatism.

As it was, superstatist parliamentarians actually walked out during the speech at the moment Klaus was calling for tolerance of dissent and open discussion!

(HT to Tom DiLorenzo at LRC).

My year by the numbers

While the application of false but popular economic theories continues to wreak havoc on civilization, it is comforting at least to know that there are a lot of people out there who have better ideas than the ideas that have led directly to the need for the current depression (a depression, by the way, which is essential to correct all the damage that was already done during the boom).

I'm trying to do my bit to learn and eventually make a contribution. Just for fun, I thought a short quantitative performance review of my year might be good for New Years' Eve, especially since so much of my work is highly qualitative in nature. So I put together some numbers.

Review of 2008 profession-related achievements by the numbers

Number of English words of investment research reports translated out of Japanese (this is my "day job," read: the one that generates a current cash flow). This equates to roughly 800 pages of text.

Number of words of notes, ideas, and observations added to my New Ideas file for future project development.

Number of non-fiction books read

Number of blog posts published

Number of fiction books read (on paper)

Number of fiction books listened to (thanks Audible)

[43: Book total]

One of the problems today is people not reading enough books. Even reading a lot of Web pages and blogs on a regular basis, which I also do, cannot equal the systematic development of knowledge and understanding available in books. Blogs are also good for connecting ideas with current events and for discussing new ideas, but systematic understanding is essential, and it is this that is most lacking today. It takes time to read a book. It is an investment. It pays off. Especially if you choose the titles wisely.

2009 Goal
To greatly increase the number of non-fiction books read!

A formula to help with the "Inevitable Question"

A blog post I took note of the other day over at NoThirdSolution, and elements from a recent conversation with my German teacher congealed into one formula that may help avoid pitfalls for those of us who sometimes face what I will call the Inevitable Question: “(But) How would the purely free market society handle X?”

The post

The post cited argued that the New Orleans/Katrina fiasco was a result of government intervention. Thus, to the question, “how would the purely free market society handle X?”—X being the flooding of New Orleans—a simple answer would be that no city would likely have been built in a known recurring flood zone without extensive and systematic government subsidization and encouragement. The fact that the city was there and not somewhere else safer may well already have been a creature of government subsidies, regulations (badly distorting the operation of the insurance market), and make-work programs (Army Corp of Engineers building the dikes, etc.).

Thus, the answer to the question, “How would the free market have built those dikes?” may well be, “only a government would have been stupid enough to waste resources on building those dikes and encouraging the growth of a city in a known flood zone.”

One lesson from this hypothetical little interchange is that there is not always a need to struggle to come up with a creative free market scheme for building useless or dangerous structures of the kind that the state might build.

The conversation

The second input to my thought process was a conversation with my German teacher in which the concept of a statefree political philosophy came up in response to a question about my preference for US president (none). She struggled for a moment (since I usually seem like a reasonable sort of fellow) to mentally frame what I had said until her mind hit upon the conventional strawman terms in which we are all taught to consider and dismiss this possibility: “you mean you don’t think there should be any rules.”

I noticed later that even this summation can be easily translated into the form of the Inevitable Question: “How would the purely free market society handle X?” with X in this case being a strawman situation in which there are no rules or enforcement mechanisms in a society: in other words, Hobbesian anarchy, the war of all against all. This meme operates in conventional discourse to immediately and irrefutably discredit the statefree position.

But Hobbesian anarchy is, of course, the exact opposite of the position of advocates of statefree civilization. Advocates of a free civil society argue instead in favor of a small set of very crucial basic rules, for their consistent enforcement, and for their equal application to all human beings.

The state as we know it exempts itself from such consistent rules when it taxes, hands out favors and special privileges, wages war, and so forth, and the result of this is a great deal of unpredictability, chaos, and destruction of life and wealth. Indeed, from this perspective, Hobbesian anarchy may approach a fair description not of a statefree civilization, but of states themselves in action, their employees only modestly checked by a modicum of justice and the rule of law.

Spotting the trick in the Inevitable Question

The first thing to realize about the Inevitable Question is that it presents a stacked deck. This is because X is almost invariably a serious problem, but it is most often a problem that is created by the activities or existence of the state itself. Thus, the Inevitable Question can seem useful in one sense, but in another sense can be dangerously misleading and may even be inherently nonsensical.

At some point during an often long study of history, economics, law, and other disciplines, after wading through endless swamps of misleading history, fanciful economic theories, false conventional wisdom and plain-old propaganda, some of us have eventually reached the stage of advocating shrinking the state, building civil institutions, and moving toward a civilization that is free of the proven and inevitable corruption, interference, and disruptions of the state.

Why? Because, among other reasons, the state creates unending problems in society, such as X.

Thus, one productive approach to the Inevitable Question might well take a general form like this:

“The purely free market would handle X by being the purely free market, in which case X would not be a problem, because X is a problem that is caused by the poisonous influence of the state. This is, in fact, among the very reasons we advocate the purely free market. Thus, a statefree civilization would not have to handle X, by definition. That’s why we recommend it.”

After trying out this formula with a few sample values for X: war, business cycles, inflation, homelessness, unemployment, lack of education, and a surprisingly long list of other possibilities, it seems that it might come in handy in many cases. It might help keep advocates of consistent justice in society from spending valuable time inadvertently defending negative effects of the state that we do not really wish to defend.

Most importantly, it might help keep us from trying in vain to construct ingenious methods by which a purely free market society might successfully build massive and idiotic monuments to the state. Indeed, most of us would probably just say let's skip those.