A review of “Thorstein Veblen and Institutionalism” (audiobook)

So I recently finished listening to an audiobook about the Norwegian-American economist Thorstein Veblen, who lived from 1857 to 1929. It was called “Thorstein Veblen and Institutionalism,” and it may have been as much about his “institutionalist” philosophy as it was about him.

A review of “The German Historical School of Economics” (audiobook)

So I recently finished an audiobook about “The German Historical School of Economics,” an important school for economic thought. They were active in the late-nineteenth and early-twentieth centuries, and do not have a lot of modern counterparts. In fact, most economists today wouldn't touch them with a ten-foot pole.

A review of “Keynes and the Keynesian Revolution” (audiobook)

“But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task, if in tempestuous seasons they can only tell us, that when the storm is long past, the ocean is flat again.”

– John Maynard Keynes, in “A Tract on Monetary Reform” (1923), Chapter 3

I recently listened to an audiobook about the British economist John Maynard Keynes, who lived from 1883 to 1946. It was a good audiobook, which spoke of both his academic career and his political career. For example, he did some important diplomacy for the British government, and was responsible for some of the economic provisions of the Treaty of Versailles (the treaty that ended World War One). He also helped to secure some loans from the American government, which helped to improve his country's postwar economy somewhat – despite the interest rates which we imposed on this loan.

A review of “Struggle over the Keynesian Heritage” (audiobook)

So I recently listened to an audiobook called “Struggle over the Keynesian Heritage.” It was the sequel to an earlier audiobook called “Keynes and the Keynesian Revolution,” which covered the life and ideas of John Maynard Keynes, the great British economist. Whether one agrees or disagrees with him, Keynes was the most influential economist of the twentieth century. “Struggle over the Keynesian Heritage” is about the debate over Keynes’ ideas and legacy, among groups that call themselves “Keynesians.”

A review of Karl Marx's “Das Kapital” (audiobook)

“A commodity appears, at first sight, a very trivial thing, and easily understood. Its analysis shows that it is, in reality, a very queer thing, abounding in metaphysical subtleties and theological niceties.”

– Karl Marx’s “Das Kapital” (1867), Volume 1, Chapter 1, Section 4

Those who know me would not be surprised to hear that I’m not exactly a fan of Karl Marx. He has long struck me as a nutball who was wrong about virtually everything he said, and who had very little to contribute to economic science. Nonetheless, he is someone that is worth learning about anyway for someone who debates about economic issues. Many a liberal is a disciple of Karl Marx, and does not shy away from making Marxist arguments. Thus, knowing about Marxist arguments is helpful to anyone who wants to debunk them as I do.

Because of this, I have long thought about reading Karl Marx in the original German – reading his short work “The Communist Manifesto” in German, and even his much longer work “Das Kapital” in German. I’ve read “The Communist Manifesto” in English translation, as it turns out, and have even read parts of “Das Kapital” in English as well. But I have never yet spared the time to read all of “Das Kapital” in any language (even English). Thus, on the off-chance that I would never have the German to tackle this in the original, I acquired an audiobook about it some years ago which gives some basic background information about the book, and which helps to place Marxism as he conceived it into the context of the times – one of the best investments I’ve ever made, in my opinion.

A few problems with Rousseau’s “The Social Contract”

“Man is born free; and everywhere he is in chains. One thinks himself the master of others, and still remains a greater slave than they. How did this change come about? I do not know. What can make it legitimate? That question I think I can answer.”

– Jean-Jacques Rousseau's “The Social Contract” (1762), opening lines of Book I, Chapter I

I first read this work in English translation for a history class …

In the spring semester of 2007, my history professor of that time assigned my class to read Jean-Jacques Rousseau's “Du contrat social, ou principes du droit politique” (“The Social Contract, or Principles of Political Right”). This assignment was for a Western Civilization class that I was then taking. At that time, I read it in English translation, which would contribute to my later desire to read it in the original French. But it would be several years before I ever got the opportunity to do so. Thus, by the time that I started this later project, more than a decade had passed since my first reading of the book for this history class in 2007.

Jean-Jacques Rousseau

… but more than a decade later, I read it in the original French for my own amusement

When I started this project, I had just finished reading another Rousseau work in its original French. This work was Rousseau's “Discours sur l'origine et les fondements de l'inégalité parmi les hommes” (“Discourse on the Origin and Basis of Inequality Among Men”). I wanted to read this other work first, since it was written some seven or eight years before “Du contrat social, ou principes du droit politique.” The full English title of the work that I'm reviewing here is “The Social Contract, or Principles of Political Right.” But for simplicity's sake, I will just refer to it here as “The Social Contract.” I started this work in July 2018, and finished it some six months later in December 2018. Thus, I have now read this entire work in its original French. I can thus certify that my criticisms of this work are not based on mistranslation.

Statue of Rousseau, on the Île Rousseau, Geneva

A review of “The Communist Manifesto” (audiobook)

I once read “The Communist Manifesto” itself in English translation in 2012, because it is a shorter work that requires very little time commitment. I am not a fan of this work, and tend to find it a bit on the nutty side. Nonetheless, I'm glad that I read it, and took the time to think about its ideas. Some years ago, I acquired an audiobook about “The Communist Manifesto” which briefly discusses its main ideas, and gives some historical background about it as well. This is the audiobook that I will be reviewing here.

Setting maximum healthcare prices doesn't really help consumers (price controls never do)

You're applying for a dream job at a particular organization. You “just know” that this occupation is right for you – or, at least, that it will lead you to a great career. But then you are told that the position doesn't actually pay you. You have to work for free if you work there, and you won't get compensated with anything else, either. Are you likely to stick around by working for this organization? If you're particularly altruistic, you might stick around just for the rewarding feeling of “helping people.” But most people would quickly abandon the job, and move to something that actually pays – particularly when they've got kids or other obligations to take care of.

Rousseau's “Discourse on Inequality” is long on detail, but short on evidence …

“The first man, who, after enclosing a piece of ground, took it into his head to say, 'This is mine,' and found people simple enough to believe him, was the true founder of civil society. How many crimes, how many wars, how many murders, how many misfortunes and horrors, would that man have saved the human species, who pulling up the stakes or filling up the ditches should have cried to his fellows: Be sure not to listen to this imposter; you are lost, if you forget that the fruits of the earth belong equally to us all, and the earth itself to nobody!”

– Jean-Jacques Rousseau's “Discourse on the Origin and Basis of Inequality Among Men” (1754), first paragraph of “Second Part”

I first read this work in English translation …

In the spring of 2007, I voluntarily read Jean-Jacques Rousseau's “Discours sur l'origine et les fondements de l'inégalité parmi les hommes” (“Discourse on the Origin and Basis of Inequality Among Men”) in English translation. This would contribute to my later desire to read it in the original French. But it would be several years before I ever got the opportunity to do so. Thus, by the time I started this later project, more than a decade had passed since my first reading of the book in 2007.

Jean-Jacques Rousseau

But more than a decade later, I read it in the original French, too

But I had been laboring for some three years on another French work, which was “in line” ahead of it, so to speak. This other work was Montesquieu's “De l'esprit des lois” (“The Spirit of Laws”), which I describe here. In 2018, I finally finished this work by Montesquieu, and could thus finally start on Rousseau's “Discours sur l'origine et les fondements de l'inégalité parmi les hommes.” This book is known by many titles in English, including “Discourse on Inequality” and “Discourse on the Origin of Inequality” (both abbreviated versions of the full title). For simplicity's sake, I will use these abbreviated versions of this English title for the most part. I started this work in January 2018, and finished it some six months later in June 2018. Thus, I have read this entire work in its original French, including Rousseau's notes at the end. I can thus certify that my criticisms of this work are not based on mistranslation.

Statue of Rousseau on the Île Rousseau, Geneva

The minimum wage doesn't really help the poor …

One day, a man named Bob goes to the store to buy some milk for his family. Since the price is only $2.00 per gallon that day, he decides to buy 2 cartons of it for a grand total of $4.00. But when he goes to the store again a week later, he finds that the price has risen to $4.00 per gallon. Consequently, he decides to buy just 1 carton this time around for the same price, and wait until the price goes down to buy more. Some people would cut back more than that, and others would cut back less than that. But the demand for the product is not decided by just one customer's purchases. You have to add up the purchases of all of the consumers in that economy to get an accurate demand number. This is known as an “aggregate” figure, and represents the total demand for a given product in a given place at a given time. When you look at these “aggregate” numbers, we can say that the quantity demanded still goes down as the price goes up. Even if some people are still purchasing the same amount of milk as before, the total demand for that milk still goes down. (Applied to your own pocketbook, that logic will probably make sense, at least for some products.)

In defense of John Locke: The need for private property

"The distinguishing feature of Communism is not the abolition of property generally, but the abolition of bourgeois property. But modern bourgeois private property is the final and most complete expression of the system of producing and appropriating products, that is based on class antagonisms, on the exploitation of the many by the few. In this sense, the theory of the Communists may be summed up in the single sentence: Abolition of private property."

- Karl Marx, in "The Communist Manifesto," Chapter II

Communists believe in "abolition of private property," and Locke debunked this claim ...

Karl Marx once wrote that "the theory of the Communists may be summed up in the single sentence: Abolition of private property." (Source: The Communist Manifesto, Chapter II) Much has been said for and against this theory, some of it interesting and some of it rather dull. But one of the most interesting things - for me, at least - was written by the English philosopher John Locke, over a century and a half before.

A review of “The Forgotten Man: A New History of the Great Depression”

We've all heard stories about how bad things were during the Great Depression, with extensive poverty and massive unemployment - perhaps the only economic crisis worse than our current one. But the history classes don't often go into the question of why; leaving the complicated subject of causation to economists, rather than the historians of the subject. When history classes do comment on the "why" of the Depression, they often paint a glowing picture of big government, with some economics classes not being much better in this regard.

Poor mother and children - Oklahoma, 1936

Karl Marx and the “labor theory of value”

One of the central tenets of Marxism is the "labor theory of value," which is the idea that the economic value of something is determined by the number of hours that it took to make it. It should be acknowledged that labor really is (at least partially) relevant in determining the value of something. Nonetheless, it seems safe to say that Karl Marx takes this theory far beyond the evidence. It is his extreme form of this theory that will receive a response here. He introduces this theory early in his work, in the very first section of the very first chapter of "Das Kapital" (his longest book):

Karl Marx

Quote from Marx about "labor theory of value"

"A use value, or useful article, therefore, has value only because human labour in the abstract has been embodied or materialised in it. How, then, is the magnitude of this value to be measured? Plainly, by the quantity of the value-creating substance, the labour, contained in the article. The quantity of labour, however, is measured by its duration, and labour time in its turn finds it standard in weeks, days, and hours." (Source: Karl Marx's "Das Kapital," Part 1, Chapter 1, Section 1, as translated into English at Marxists.org)

Marx and Engels

Even Marx presented some qualifications to his theory ...

There are several problems with this theory, and much has been written describing the many flaws of using it to describe value. I will not touch on all of these problems, but only on one of them - the one that I find the most interesting. It can be demonstrated with a qualification that Marx himself made to this theory. Even Karl Marx, the greatest proponent of the labor theory of value, qualified his theory with the idea that only those labor hours that were "socially necessary" should be counted as adding value. Marx's concept of "socia[l] necess[ity]" is not very well-defined, but his definition's meaning is clear enough to show that it contradicts his labor theory of value, attacking its very basis as an explanation.

Iron and Coal, painting from 1855-1860 (during Marx's lifetime) about the Industrial Revolution

Are monopolies really as dangerous as Marx said they were?

"Competition engenders misery, it foments civil war, it 'changes natural zones,' mixes up nationalities, causes trouble in families, corrupts the public conscience, 'subverts the notion of equity, of justice,' of morality, and what is worse, it destroys free, honest trade, and does not even give in exchange synthetic value, fixed, honest price. It disillusions everyone, even economists. It pushes things so far as to destroy its very self."

- Karl Marx, in "The Poverty of Philosophy," Chapter 2, Part 3 (as translated into English at Marxists.org)

Most people today know Karl Marx was an opponent of free markets, and that he gave all kinds of objections to them in his writings. But lesser-known is an objection he gave to free competition: that competition inevitably destroys itself - through monopoly.

Karl Marx

Quote from Marx about competition "destroy[ing] its very self"

In the words of Marx himself:

"Competition engenders misery, it foments civil war, it 'changes natural zones,' mixes up nationalities, causes trouble in families, corrupts the public conscience, 'subverts the notion of equity, of justice,' of morality, and what is worse, it destroys free, honest trade, and does not even give in exchange synthetic value, fixed, honest price. It disillusions everyone, even economists. It pushes things so far as to destroy its very self." (Source: "The Poverty of Philosophy," Chapter 2, Part 3, as translated into English at Marxists.org)

Is it true that competition inevitably destroys itself through monopoly?

The idea that competition needs to be watched - that monopolies need to be guarded against - is held by many today, who are otherwise in favor of free markets. Competition is a good thing, many say; but it needs to be monitored. But ... is it true that competition inevitably destroys itself through monopoly?

Capitol Dome

My own history with this idea

I once believed that this was true, and that there was a needful function for anti-monopoly laws, such as the Sherman Antitrust Law of 1890. This was one of the arguments that fascinated me; because if it was true, then that meant that competition could be dangerous if unfettered, which would undermine my faith in the free market if true. Thus, I had to know whether or not this argument held water; and whether competition was something to be celebrated or feared.

Senator John Sherman, the principal author of the Sherman Antitrust Act

My change of heart in this matter

But I have since come to the conclusion that monopolies are not something to be feared - that there are many forces in place to prevent their rise; and which ensure that if they do appear, that they will not have much power. This might seem to be a strange argument, and I acknowledge that I once saw it as strange myself. But I have come to the conclusion that competition doesn't really destroy itself through monopoly - that free-market forces prevent this from happening, and that Mr. Marx exaggerates their dangers and effects.

Pleas for an open mind in the reader

I will present arguments in this blog post to support this point of view, and challenge Mr. Marx's objection to free-market competition. If this seems counter-intuitive to you, I ask only that you entertain my arguments with an open mind; and refrain from judging them until after you've heard them. So with that in mind, I will now turn to my arguments about free-market competition, and use some quotes from Dr. Thomas Sowell to support them. These will show why competition being destroyed through monopoly is not something that we should worry about.

Thomas Sowell

Why equalizing income conflicts with rewarding good behavior

I posted earlier that one of the most sacred tenets of liberalism is the goal of equality of condition: the idea that there should be no rich or poor, but that all should have the same amount of income and wealth, and that no one should possess any more than any other.

Bill Gates

Liberals are blind to arguments based on wealth being earned ...

In this previous post, I offered several arguments against equality of condition; but refrained from using the critical argument based on rewards. This is because too many liberals have prejudice against it to lead off with it, in a post about this subject. In liberals' minds, rewarding anyone for being productive is tasteless and vulgar; because it would mean that they would have more money than someone else. It's "vulgar" to reward Bill Gates for providing me with a nice computer, because it would mean that he would become even richer than he is now, and would thus have more money than the lazy bum on the street who refuses to work. Arguments based on people's earning the money fall on deaf ears, because liberals believe no one earns money without exploiting others, and they are thus blind to arguments based on wealth being earned.

Should we treat criminals differently?

Yet even they can see the flaws in their argument when it is applied to criminal punishment. They are perfectly okay with discriminating against criminals, for example, when they commit a violent crime like murder. The equality-of-condition argument, when taken to this extreme, would say that the criminal cannot be put in prison; because then we would be treating him worse than someone else. His treatment would be unequal to the freedom that we respect in the law-abiding members of society. Yet even liberals abandon this argument here, because even they can see clearly that the law-abiding citizens have done nothing to merit losing their freedom, while the criminal has. Equality of condition is cast aside in favor of a theory of justice based on rewards, and good citizenship is made a requirement for the otherwise-inalienable right to freedom.

Microsoft Windows

Why equalizing income is a bad goal

One of the most sacred tenets of liberalism is the goal of equality of condition: the idea that there should be no rich or poor, but that all should have the same amount of income and wealth, and that no one should possess any more than any other.

There are both practical and philosophical problems with this ...

There are several problems with this goal, and the problems include both the practical and the philosophical. I will address one example of each kind of problem, to show that this is a goal that is not only impossible to attain, but whose pursuit actually harms society; ultimately backfiring on its advocates, and making society worse off. (In doing so, I should make clear that I do not oppose equality of opportunity, as I am a fiery advocate of this kind of equality. It is equality of condition that I oppose, and it is equality of condition that I will argue against now.)

Why we should not follow Europe's socialist example

I was recently reading the Old Testament with my family, and we read 1st Samuel Chapter 8. I found an application to today which is somewhat frightening - and when I give this application and thus make an interpretation of scripture, I am not speaking for my faith (which is almost always neutral in politics), but for myself, and my own political views.

My perspective on “The Communist Manifesto”

Ronald Reagan

"How do you tell a communist? Well, it's someone who reads Marx and Lenin. And how do you tell an anti-communist? It's someone who understands Marx and Lenin." - Ronald Reagan

Vladimir Lenin

I don't think Mr. Reagan really meant that anyone who reads Marx and Lenin is a communist (I've read Marx, and I'm no communist), as the second part of the joke gives some important context for the first. Understanding Marx and Lenin usually requires reading them (as I have done), so we can take the first part of the quote to mean someone who reads Marx and Lenin without understanding them. But the second part can be taken literally, even precisely; which is why I find the joke funny. Those who understand Marx and Lenin are anti-communists.

Karl Marx

Friedrich Engels

A few problems with “The Communist Manifesto”

"A spectre is haunting Europe - the spectre of communism. All the Powers of old Europe have entered into a holy alliance to exorcise this specter ... Where is the party in opposition that has not been decried as Communistic by its opponents in power? Where is the Opposition that has not hurled back the branding reproach of Communism, against the more advanced opposition parties, as well as against its reactionary adversaries? Two things result from this fact: I. Communism is already acknowledged by all European powers to be itself a power. II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the Spectre of Communism with a Manifesto of the party itself."

- Opening lines of "The Communist Manifesto" (1848)

I was recently told that I should write a blog post about why Karl Marx and Friedrich Engels were wrong - arguing not on values as I did in another post (though there is a place for that as well), but on facts and theories, challenging their dubious factual and theoretical claims.

Karl Marx

Friedrich Engels

In discussing problems with Marxism, where does one start?

To someone who's read and understood their book "The Communist Manifesto," that might seem easy - and in some ways, it is. But in trying to debunk it, I had one big problem: where to start. Despite "The Communist Manifesto" being a tiny book (which I read through in a day), it sometimes seems when I'm reading the book like its two authors were having a competition to see who could cram more fallacies into a small amount of space. And they both won.

Marx and Engels

Discussion of Marxist fallacies is practically a genre in its own right ...

I intend this blog post to be a short one, so I will only be able to summarize this book's problems. But if you're after a more thorough treatment of its fallacies, this is practically a genre in its own right, so there are lots of works to choose from.

Debunking the myth of Obamacare making healthcare cheaper

Our healthcare is about to cost a lot more, thanks to the new taxes in Mr. Obama’s bill. (The bill was passed a while back, but it doesn’t take effect for some time.) You can see several new taxes, fees, and miscellaneous other “revenue provisions” in p. 10 of the bill’s 906-page text (in the 12-page table of contents), as reported on the Senate website at this link. Below is a summary:

• “Excise tax on high cost employer-sponsored health coverage” (Title of Section 9001). 
• “Excise tax on elective cosmetic medical procedures” (Title of Section 9017). 
• “Increase in additional tax on distributions from HSAs and Archer MSAs not used for qualified medical expenses” (Title of Section 9004). 
• “Limitation on health flexible spending arrangements under cafeteria plans” (Title of Section 9005). 
• “Elimination of deduction for expenses allocable to Medicare Part D subsidy” (Title of Section 9012). 
• “Additional hospital insurance tax on high-income taxpayers” (Title of Section 9015). 
• “Imposition of annual fee on branded prescription pharmaceutical manufacturers and importers” (Title of Section 9008). Taxing anyone who makes or imports pharmaceuticals is guaranteed to discourage making or importing them, thus reducing the supply of these needed pharmaceuticals. Some “cheaper” healthcare. 
• “Imposition of annual fee on medical device manufacturers and importers” (Title of Section 9009). Taxing anyone who makes or imports medical devices is guaranteed to discourage making or importing them, thus reducing the supply of these needed medical devices. “Cheaper” healthcare, indeed – if you can actually have access to the dwindling supply. 
• “Imposition of annual fee on health insurance providers” (Title of Section 9010). Taxing anyone who provides health insurance is guaranteed to discourage its being provided, thus reducing the supply of health insurance. “Cheaper” healthcare, my rear end. 

Obama signs "Patient Protection and Affordable Care Act," 2010

So these new taxes and fees translate to reduced supplies of pharmaceuticals, medical devices, and health insurance, not to mention the costs of the other taxes. The last three mentioned taxes alone make healthcare more expensive, either by causing people to bid up the price of what supplies are left, or by having long lines for them at artificially low prices set by government. Thus, there’s either a money price from your wallet, or a time price in a long line – and needless to say, both hurt.

Barack Obama

So if you want healthcare to be more expensive – if you like higher prices, longer lines, and bigger taxes – vote Obama.

But if you want healthcare to be cheaper – really cheaper – vote for the free market by voting Republican, and get rid of this awful bill.

If you liked this post, you might also like:

The price of being dumb (and voting for Obama)