My sixth AOTP post is up: Regulation: The Cause, Not the Cure, of the Financial Crisis. I start out with the Austrian theory of the business cycle and end up with anarchy. š
Tag Archives | Praxeology
Risky Business
Just saw Keith Olbermann opining that itās racist to blame the mortgage crisis on a rules change that encouraged the making of riskier loans in order to attract black customers; this, proclaimed Keith, is the equivalent of āblaming the crisis on black people.ā
Um, no it isnāt. If the law forces you to make risky loans to black people that you wouldnāt make to white people, itās the fact that the loans are riskier, not the fact that the recipients are black, that causes the problem. If the law had mandated lower risk standards for left-handed borrowers than for right-handed borrowers, that too could lead to a greater number of risky loans ā and pointing that out would not constitute prejudice against left-handed people.
Mind you, I donāt think affirmative action in the lending market is anything like a major cause of the mortgage crisis; and focusing on that as opposed to more fundamental institutional problems might itself be a symptom of racism ā but it hardly need be.
I Thought the Law, and the Law Won
Greetings from Orange Beach! I got in tonight at 9:30, a bit later than Iād intended, but thereon hangs a tale.
I gave a midterm in class today, and Iād planned to leave right after. But while I was invigilating (as the British say) the midterm, I was reading Michael Thompsonās new book Life and Action: Elementary Structures of Practice and Practical Thought (a great book, though with a lousy cover ā Brownian motion is not a good visual metaphor for Thompsonās conception of life and action), and I came across a passage that gave me an idea for some remarks to add to my Spooner paper.
Thing is, Iām giving a version of the Spooner paper as my presidential address at the APS this weekend (my second presidential address here; check out the first one, from 2002), and I wanted to include my latest thoughts. So I paused to ponder, write, and print; hence my tardy departure for the Gulf. Anyway, hereās the new material:
In his recent book Life and Action, Michael Thompson considers an example from Rawls involving a society whose practice of promising differs from our own in various ways we would regard as unreasonable ā regarding promises as binding even in emergency situations, for example, or even when made while talking in oneās sleep. If one holds, as Rawls does, that such a society simply does not have our institution of promising, but has a different, unreasonable one instead, and if one further holds that the binding force of promises depends on the reasonableness of the institution of promising, it would seem to follow, Thompson points out, that none of the promises made in that society should be regarded as binding, even the ones that our own institution would approve. (Analogously, if one holds that the duty not to steal depends on the reasonableness of the institution of property, it would seem to follow that in any society whose property institutions have any unreasonable features, such as slavery, their institution of property is unjust overall, and so no act of theft in that society warrants condemnation.)
Finding such implications counterintuitive, Thompson suggests that we keep the claim that the normative status of individual instances depends on the reasonableness of the practice as a whole, but abandon the claim that the deviant cases are genuinely part of the practice:
No one will hold that just any series of actions … can exhibit the sort of unity we intend in bringing things under a single practical disposition. And there is no reason to imagine that just any general schedule of action might be employed to describe such a thing, or, equivalently, that to any subtle diversity of such schedules there must correspond a possible diversity of dispositions. … Suppose, for example, that I return a deposit someone has made to me, a book for example, thinking āIt is his: I must give it backā … and that I have often done this sort of thing. Later, though, I return some autumn leaves that have blown from someoneās red maple onto my lawn, again thinking āThey are hers; I must give them back.ā Need we hold that the practical disposition manifested in my earlier acts must or could have shown up in an act of leaf-return? Need we hold that the disposition that was manifested in those sensible earlier acts is any different from that displayed in the like acts of a more reasonable person who would have let the leaves go? That returning the book and āreturningā the leaves struck me as āthe sameā, that I didnāt feel any difference, cannot be supposed to establish the identity. The disposition that operates in my intuitively reasonable acts of return, we might think, is no different from the one that operates in all the acts of return of a person who lets leaves blow by; something else is at work in me in cases where I busy myself returning them. (Michael Thompson, Life and Action (Harvard 2008), p. 190.)
On this reading, the āinner constitution of the practiceā (say, of promising) is the same in our society and in societies that count promises as binding when made in sleep and so on; itās just that this inner constitution āis associated, in the deviant communities, with a widespread error or a superstitious religious conviction or something on the order of a fad ā disturbance, at all events, and mere dross ….ā (p. 186) I suggest that for Spooner, the legal institutions of nonlibertarian societies likewise have the same libertarian āinner constitutionā as those of libertarian societies, while their nonlibertarian practices are alien accretions ā so that when a judge in the deviant society condemns a murderer and commands the return of an escaped slave, she is in the first case, but not the second, expressing the same practice as her libertarian counterpart ā and so in the first case is applying law while in the second case she is applying something that stands to law as foolās gold stands to gold.
Tomorrow and Tomorrow
Tom Tomorrow is sometimes accused of satirising only the right and never the left. But I seem to recall one This Modern World strip in which someone accidentally drops a lit match and then quickly steps on it to extinguish it ā while the punditocracy immediately goes into overdrive, speculating on how, if the match hadnāt been snuffed out, it might have caused forest fires that would devastate whole cities; they conclude: āI think this shows the need for more regulation.ā Anyone know of a link to that?
In other news, Iām off to FEE again tomorrow for an Austro-Virginian bash.
Hodgskin, Lum, and Molinari Online
[cross-posted at Liberty & Power]
Iāve just posted an 1842 work by English individualist anarchist Thomas Hodgskin titled Peace, Law, and Order; Hodgskin objects to the common conjoining of these three terms, on the grounds that law is the greatest threat to peace and order, not their guarantor.
Iāve also finished posting American mutualist Dyer Lumās 1890 Economics of Anarchy, along with a shorter work by Lum from 1887 titled On Anarchy. These works deal with many of the same issues as Tandyās book, though Lum is a bigger fan of cooperative association than Tandy and is not quite as firmly committed to nonviolent methods.
Elsewhere in the libersphere, Shawn Wilbur has also located and posted an 1890 anti-tariff piece by battlinā Belgian Gustave de Molinari titled āThe McKinley Bill in Europe.ā
Socialism Is Here At Last!
[cross-posted at Liberty & Power]
Iāve finally finished posting Francis Tandyās 1896 individualist anarchist work Voluntary Socialism. Chapter 9 defends the occupancy-and-use theory of land ownership, and criticises the Georgist alternative. Chapter 10 is a critique of intellectual property. Chapter 11 criticises the assumption that workersā cooperatives would dominate the post-capitalist economy. Chapter 12 takes on the postal monopoly. Chapter 13 defends education over electoral politics and violent revolution as a method of advancing anarchism. Chapter 12 ā the most depressing for a present-day anarchist ā points to signs that the cultural power of statism is waning (in 1896). Finally, an appendix offers suggestions for future reading.
Iāve also posted a contemporary review by one K. C. Felton (who seems not to have read Tandyās book very carefully).
Coming soon: more Dyer Lum!