The Libertarian Refuge

New Site

2008-04-27T07:43:00.000-07:00

I have a new site at www.insurgocasca.com

On the NonExistence of Natural Rights

2008-04-26T10:57:00.001-07:00

Before I begin, it is important to get through the semantics that may arise in the reader's mind before they arrive to the crux of the issue. When I use the word "right" what I mean is that which is inalienable and has been passed down from a higher being. A right is not that which a government allows its citizens to do. Rights can not come from any material being but must come from a source that is immaterial or nonexistent. This factor usually depends on the status of your religion; are you a theist or an atheist? I am an atheist and believe that when I die there will be no deity that will cast judgement upon me, either good or bad, for what I did during my material life.

To those who are theists, or better said believe in a afterlife judge, the concept of rights may be very different. For instance, if I were a Christian I would believe that judgement will be brought down upon me by god in the afterlife for having disobeyed its laws the many times I did. I also may believe that this deity gave its creations certain rights that if infringed upon would be punished. In example, if I were to murder another individual, and if I believed in god, I would suppose that the deity would punish me for the act. This punishment is a necessity for rights to exist. That is, punishment must exist in all instances for rights to exist.

Now, if you were to take an atheists stance on the issue, the afterlife judge would not exist and circumstances change drastically. Lets analyze the following scenario for clues as to why right do not exist in an atheists interpretation of reality. Lets take for instance that there are only two individuals who live on Earth; they are named Rothbard and Mises. Lets also presuppose that they live fairly close to each other. If one day Mises becomes angry that Rothbard because he has been able to harvest more wheat in a certain year, he may decide to commit an act against Rothbard. If Mises acts on this feeling and kills Rothbard there will be no punishment for him. Mises will live out his life either happy of his actions or unhappy but his mood does not change the reality of the situation. Mises will die as naturally as most individuals.

Therefore the right to life, right to ones property, the right to education, the right to due process, et cetera, are nonexistent. These rights are fabrications of humanity and many of them are mutually exclusive such as the right to ones property and the right to education. In order to grant education to all individuals some level of coercion is necessary and as a result the private property of individuals must be seized to serve this supposed greater good. Now, I am not saying that rights both exist and do not exist depending on ones beliefs. What I am saying is that rights do not exist because there is no afterlife. Those theists who believe in an afterlife and god-granted rights are merely delusional.

Lets also tackle the concept that government grants rights. If this were to be true then one would believe that those of Jewish faith in National Socialist Germany did not have a right to live, as Hitler believed. Most individuals would say that this is an extreme case but under the above premises is it really that extreme? This was a government with certain laws and certain beliefs "gave" and "took" rights from select groups. Just as our government did during the times of slavery, we refused to "give" the right of freedom from slavery to the african captives. Now most moral individuals would believe that these groups had a right to their life and liberty but that government was wrong but then I ask, where did this supposed right to life and liberty come from? It is one thing to believe in a set a morals that you believe to expand your happiness, others happiness, and move society in a forward direction but can anyone claim that which is moral is also a right? I think not. There may be some readers that are confused at the points I have made, many may think that I have defended the historical actions of this government or that of National Socialist Germany. This is false, their actions were morally abhorrent. That said, the Jews had no right to life, the slaves had no right to freedom from captivity but on the same premises those governments had no right to do what they did to those groups of individuals. No deity, no afterlife judge has given these "rights" to either government or man. What is accomplished or not accomplished in this world is under influence of one word: force. Man can only accomplish things, goals, actions, et cetera, by the implementation of force.

This leads us into the crux of the argument. Man, in every sense of the word, is a user of force. When one consumes fruits, vegetables, animals, builds houses, swims in the ocean, there is force being used. Man is extracting resources by force from the land and manipulating the status quo of nature to fit his desires. In addition, when a man kills, steals, trades, gives, et cetera, he is doing these actions under some guise of force. In the cases of violent interpersonal interactions, force is more directly noticeable. When a man kills another, force is used upon the victim by the assailant; the same holds for the thief. The situation becomes a little more complex when speaking of peaceful interpersonal interactions. When individual A buys a banana from individual B it is a mutual reduction of force against one another for mutual benefit. Individual A hands money to individual B believe that individual will not leave without handing over the rights of force over the banana. In other words, when something is bought it is simply a peaceful transfer of force, as opposed to a violent transfer in the case of a murder or theft. Now individual B may leave without giving over the banana to individual A, thus having sequestered the others money by use of force. Individual A could then decide to allow the individual B to have the control of the money or A may decide to run after B and retrieve the money by force. Either way, A is either giving the control of the money to B or will take it back by force. In both cases, force is either being used or not being used. It is by using force or not using force that purposeful human action occurs.

Another example I like to conjure in describing this theory of the nonexistence of rights is that of the man and the mansion. Lets take it that there is an individual, lets call him Frank, who lives in mansion in the middle of no where and his neighbor, William, is a very devious person. William has always been envious of Frank's wealth and decided to overrun a portion of Franks mansion and claim it as his for as long as possible. William gathers an arsenal, breaks into a wing of the mansion, sets up the necessary materials to defend the area, and just sits there. Now a few things can occur, either Frank never notices because his mansion is just that big, Frank notices and decides to leave that wing in Williams hands, Frank tries to take back the wing of the mansion by force, or Frank can not or does not desire to take back the wing of the mansion by his own force and calls mercenaries and/or police for aid. In all of these cases you can see that what determines if Frank will have dominion over that section of the mansion is a force that will out due the force provided by his devious neighbor William. Now the reader may claim that Frank still owns that section of the mansion even if William has sequestered it but I ask you, how is that so? Can an individual own something without being able to use force against anyone who tries to take it from them? What I am saying is that ownership is totally dependent on force. William will own that part of the mansion until he is removed by either Frank, his mercenaries, or the police. Now one can argue the William is being morally unjust but morals are simply a value system; morals are an indication of preference in extra-personal and personal actions, not a statement of reality.

Therefore, from these premises comes the following: humanity's is totally dependent on the use or nonuse of force against other humans or nature. Government is nothing but a group of individuals that impose their will on others through the use of force; the same holds with murders, rapists, thieves and all antisocials. Voluntary interaction between individuals is a spoken, written, or assumed mutual agreement to not use force in the acquisition of the other's goods but only in the protection of their own property.

Back In The Game

2007-09-10T21:43:00.000-07:00

It has been sometime since I last posted and it mostly has to do with the incredibly busy schedule I've had over these last few months. Hopefully I will be able to make it up to those who still visit my blog. I am working on a project that I have wanted to complete for quite a long time. It is an economics research paper into certain epochs of Cuban history. All the details haven't been laid out yet but the train will be moving along soon. Stay tuned.

Ron Paul 2008!

Austrian Scholars Conference Speech

2007-03-12T20:23:00.000-07:00

This is a sneak preview for all those who will attend my session at the 2007 Austrian Scholars Conference

Since the early days of the Vienna school, dating back to Carl Menger, the Austrians have had a devoted connection to methodological individualism and the rejection of historical interpretation of data as a foundation for theory. It was important to understand the inner workings of a market and the importance of the role individual decisions played in the unraveling of the economic system. The use of statistical data, averages, aggregates, and other forms of interpreting economic events has always been shunned by the Austrian school. As a result, the strength of Austrian theory truly lies in its embrace of concepts that capture the heart of the market and a purposeful rejection of statistical methodology which does little more than misdirect the attention of fruitful study. It is this use of averages and aggregates that have brought about some of the most conflicting and foundation-less theories in the field of economics. Keynesianism is notorious for its incredible aggregation of economic data and all the confusion it has brought about for both non-Keynesians and Keynesians alike. Simply stated, the use of averages and aggregates in economic theory do nothing more than develop incorrect doctrines and remove the focus of economics away from individual decision and human action. That said, the embrace of averages and aggregates is not only applicable to non-Austrian economists, but can be found in the writings of Eugen Böhm-Bawerk and even in the early writings of Ludwig von Mises and Friedrich von Hayek. More specifically, what I am going to speak about is the past acceptance of the failed concept of the “average period of production.” Before this, however, it is of the utmost importance that some time be spent discussing the period of production and those elements that effect it.

The importance of capital theory in Austrian economics, especially when dealing with the Austrian theory of the business cycle, is undeniable. It is only through constant study and understanding of the workings of the structure of production in a modern economy that the field of economics can begin to understand that true effects of central banking monetary policy. Since the publishing of Principles of Economics in 1871 capital theory has been an integral part of Austrian market theories. All Austrians recall the Mengerian example of the bread industry and the subsequent explanation of higher order and lower order goods. That those goods that are closer to consumption are to be referred as “lower order goods” and that those farther away from the ultimate product are goods of a “higher order.” The need for this distinction lies in the fact that these intermediate goods respond differently to varying occurrences in the market and that there structure is inherently ordinal. In other words, in order to properly contemplate changes in the structure of production, one must acquaint oneself with the differing stages of production and how they interact with one another in order to produce the final output. Alfred Marshall in his Principles, attacked Menger’s use of the terms “higher” and “lower” order, stating that they were too ambiguous and that little of importance could be attached to them. His reasoning was that if a train can be used to transport bread, bread machinery, and parts used to make machinery which, in turn, produce bread, that this train would be at the same time a 2nd, 3rd, and 4th order good; this he deemed was a sheer impossibility. The counter-argument here is brought to light when we realize that Marshall was simply looking at the physical nature of the train and not the role the train was playing in the production of the various goods. In all reality, the train can be a good of a 2nd, 3rd, and 4th at the same time, all that is of importance is the role it plays in the creation of final output. In an economy where different processes are going on simultaneous and where there are interactions with all stages of production, it is only natural that some goods play a role in every stage of production. Therefore, what is important is not the physical attributes of any specific economic good but, instead, what must be noted is its contribution to the continuing, simultaneous production processes of the modern economy.

This leads us into the discussion of the period of production and the relevance of such a concept in the analysis of a modern economy. The period of production is simply that time-span which elapses between the raw beginnings of a good and its ultimate consumption. In the case of a knife, one can think of the mining of iron ore, the smelting of the metal, the molding of the iron into a knife, its sale to wholesale and then retail and its final use by the consumer. This entire process is encompassed in the period of production. As changes in certain elements occur, namely the rate of interest, there will be a direct effect on the length of the period of production. As the rate of interest decreases there will be this tendency to shift the period of production outwards, towards a lengthier structure of production. On the other hand, if there is an increase in the rate of interest there will be a shortening of the period of production. In both of these scenarios, market participants had dictated their will through the rate of interest as to how forward-looking entrepreneurs should become in their ventures. The rate of interest, which is governed largely by the time-preference schedule of individuals, will shift according to any changes in the saving patterns of society. If individuals begin to save more and decide to convert theses funds into investments, this will bring about a decrease in the rate of interest. Through higher rates of saving, individuals are indicating to entrepreneurs that they should become more forward-looking and elongate the period of production to accommodate increased future consumption. Vice-versa, if individuals become less thrifty, they will reduce the amount of funds they are willing to lend and, as a consequence, they will increase the rate of interest. In such a scenario, market participants have decided to be less future-oriented and are demanding more current consumption in exchange for less future consumption. This shift in the time-preferences of individuals comes up on the economic accounting books as a reduction in the profit margins of some business ventures and an increase in the profit margins of others. By a simple alteration in originary interest -that is the ratio between future and present consumption decided by social time-preference schedules- economic actors are decreasing the profitability of creating some goods in order to shift resources to the creation of others. It is this alteration in the period of production that manifests the will of market participants. That said, if individuals increase their consumption and reduce the supply of capital, there will be this regression in the overall standard of living and the production process will be said to be less “capitalistic.” As von Mises has taught us, it is only through a constant increase in the amount of funds, up and above the quantity needed to replace existing capital stock, which will elevate the standard of living and further isolate society from a hand-to-mouth existence. It only because of a lengthening of the period of production that society can, in the long-run, increase the standard of living of all individuals. Though a positive analysis of changes in originary interest explain the effects of such an alteration on the capital structure, it is the role of normative analysis to indicate what is best for society.

As has been discussed, it is correct and proper to speak of a shortening or an elongation of the structure of production with respect to changes in various factors, including but not limited to changes, originary interest. That said, all discussions of a period of production are not as fruitful. For instance, the Böhm-Bawerkian concept of the “average period of production” does little in properly expressing the extent and length of the structure of production. The average period of production was developed by Böhm-Bawerk as an alternative to what he saw as the absolute period of production. This “absolute” period of production was the estimation of a structure of production that dated back centuries, if not millennia. From the first achievements of primitive peoples to the technological advances of modern-day scientists, it can all be encompassed in an absolute period of production. The idea is that because of the early discoveries of primitive societies and efforts of ancient peoples, modern economic processes can exist. Böhm-Bawerk uses the example of a boy who “whittles a willow whistle with his pocket knife” and is enjoying the ultimate good of a production process whose initial stages can be dated back centuries in the past when the first hole was dug to make the iron mine. It was then that the iron collected from the ancient mine was molded, given its final touches and eventually sold to the boy. Even though this may seem correct, there are many fundamental problems with this approach to calculating the period of production. In general, the idea that a period of production can be traced into the past is nonsensical. As Ludwig von Mises writes in Human Action, “acting man does not look at his condition with the eyes of an historian” and that as a consequence “the length of time expended in the past for the production of capital goods available today does not count all.” In other words, economic actors value capital goods -and all goods for that matter- on account of how they can best satisfy their immediate or more remote wants. The value placed on capital goods is totally dependent on the originary interest of modern-day market participants and thus, any discussion of previous laboring is not applicable. Though modern-day capital stock has grown to such an extent, much due to the past saving of previous generations, this capital stock can immediately be withered away if a change in the time-preferences of individuals wills it so and consumers are driven to “consume” part of their capital stock. Therefore, it is important to understand that the period of production does not begin thousands of years in the past but instead, how Professor de Soto notes, “the first stage of production begins precisely at the moment the entrepreneur conceives of the final stage in the process (a consumer good or a capital good).”

In an attempt to distance himself from the unattractive “absolute” period of production, Böhm-Bawerk sought to develop an alternative method of reaching a more proper period of production. As a consequence, Böhm-Bawerk developed the “average period of production” which takes a weighted arithmetic mean of all investment periods in an effort to illustrate the intensity of “roundaboutness” in any given economy. By using this average, Böhm-Bawerk believed that it was much simpler to understand the extent of a society’s capital stock and the sophistication of an economy’s productive structure. Any lengthening of the structure of production would come about as a positive shift of the average period of production and vice-versa with respect to a shortening of the structure of production. The problem with this approach was correctly summed up in a 1902 submission to the Quarterly Journal of Economics by Frank Albert Fetter in which he notes that Böhm-Bawerk’s average period of production commits a serious fallacy, namely the fallacy of averages. The average period of production fails because it indicates that the average length of time of the totality of the production process found in an economy has a direct connection to the extent of an economy’s output. As Fetter shows, some different industries have differing maturities with respect their production inputs. If capital is moved around so that it will increase the overall yield of an economy, it may decrease the average period of production. Under such a scenario, the average would have decreased indicating a decrease in economic output but in all reality output has been increased due to this negative shift in the average period of production.

Hayek also had his qualms with the concept of an average period of production. In part, his writing The Pure Theory of Capital had to do with his detachment from the average period of production. Hayek wrote that “while Böhm-Bawerk was fundamentally right, his exposition in terms of an average period of production was so oversimplified as to mislead in application.” Hayek argued that because of the nature of the average period of production, only when all capital goods are homogenous will there be a definite connection between the quantity of capital and the overall level of output. If different capital goods were weighted in value, this weighing process would have to factor in the rate of interest, something the average period of production does not include. Hayek also notes a point given by Knut Wicksell in his Lectures on Political Economy where he uses the existence of compounding interest as a counter to the average period of production. Because of compounding interest, the matured value of any production process is directly dependent on the rate of interest and not only simple interest. Hayek understood that the market is made up of complex phenomena and to assume homogenous capital or simple interest is quite unrealistic. Therefore, it must be concluded that, as Hayek puts it, “the amount of waiting involved in a particular investment is not simply proportional to the length of the investment period and the value of the input invested, but is dependent also on the rate of interest.” In addition, the mere fact that the implementation of different inputs in different ways at varying rates of interest will produce distinctly different averages makes the whole attempt of arriving at such an average pointless.

One last thing I must speak about that I have discussed in my paper is a critique given by Sir John R. Hicks in his work on capital theory, titled Value and Capital. In his literature, Sir Hicks attacks Böhm-Bawerk’s average period of production as being fundamentally incorrect. Though the average period of production is faulty, Sir Hicks’ reasons for the incorrectness of the concept is theoretically unsound. Sir Hicks believes that Böhm-Bawerk was wrong in stating that the average period of production could be discussed in terms of a period of time (e.g. 5.6 years, 2.5 years, etc.) and that in order to properly make use of the concept, it must be stripped of its time-based nature. Sir Hicks writes that “once the Austrian theory is put behind us, the only important thing which emerges is the general conclusion....that changes in the rate of interest affect the ‘tilt’ or crescendo of the production plan.” John Hicks disagreement with the average period of production was not due to the illegitimacy of discussing the structure of production in terms of a single average but, instead, that this average was in terms of a time-interval. To Sir Hicks, simply discussing a shift in the crescendo or height of the average period of production was sufficient and that referring to a period of time is pointless. What is important to note is that the use of an average in discussing periods of production is what is fundamentally wrong and not simply its time dimension. As analyzed, the problem inherent in the average period of production is due to what Frank Fetter saw as the “fallacy of averages.” Sir Hicks published a book later in his life titled Capital and Time: A Neo-Austrian Theory in which he again discusses, yet much more briefly, the average period of production and does not claim to reject any of his previously stated arguments.

In sum, it is necessary and proper for any economic school of thought to develop a correct theory of capital and understand how various different elements may effect the structure of production. For the Austrian school, Böhm-Bawerk laid the foundation for the brilliant expositions of capital theory found in Hayek’s The Pure Theory of Capital and Mises’ Human Action. Though Böhm-Bawerk’s refutations of various incorrect interest theories and his deduction of time-preference as a determinant of capital value are to be forever remembered, there were some concepts present in Capital and Interest that has, still to this day, had a negative influence on what Rothbard believed was capital theory in its “real form.”

Chavez: The Inflationator

2007-02-21T21:24:00.000-08:00

Chavez, in all his infinite wisdom, has discovered a method of curbing inflation in Venezuela and Latin America in general. The elected Fidelista has decided to strip the bolivar of three zeros, thus converting a 1,000 bolivar note into a 1 bolivar note and so on with the rest of the denominations. As ridiculous as it sounds, this is an attempt by dictator Chavez to end the strong presence of inflation in Venezuela. Economists and bankers disapprove of the plan saying that businesses will most likely increase prices in the process of rounding up their inventories to meet the new bolivar specifications.

Being an Austrian, this is one of the funniest articles I have read. Its incredible that people still believe that central banking and inflation are independent of one another. If Chavez really wanted to end inflation in his country, strengthen its economy and currency, then all he would need to do is abolish the central bank and allow a free market in money. That said, communists and free markets obviously don't go together. Communists, like Chavez, love price-fixing, and interest-rate/inflation targeting is no different. Individuals tend to think that price controls on commodities and goods are harmful but apparently the same doesn't apply the financial sector. We have come along way in the field of economics to still believe in central planning, central banking, and financial-market price-fixing.

We'll see where Chavez and his cronies go. It seems that Venezuela will be the Cuba of the 21st century and the Venezuelan people will have egg on their face.

The CPI and Government's House of Mirrors

2007-02-13T14:37:00.000-08:00

The Consumer Price Index (or CPI) was first released by the Bureau of Labor Statistics in 1919 and has been published every month since. It uses a statistical measurement of market prices to capture inflationary trends in select markets. The Bureau of Labor Statistics believes that by observing changes in the prices of a wide variety of goods over a period of time, inflationary tendencies can be accurately tracked. Therefore, the CPI aims to measure the rate of inflation every month and what effect this is having on the prices of certain goods.

The CPI is, generally, pretty straight forward but there are different types of indexes. The CPI-W (or CPI for Urban Wage Earners and Clerical Workers) seeks to calculate the rate of change in the prices of goods that clerical or wage earners consume. The CPI-U (or CPI for All Urban Consumers) observes the rate of price changes for goods that are purchased by all urban consumers. The reason a certain CPI is cited over another depends on what the statistic will be used for. Laborers and wage earners tend to use the CPI-W to calculate the needed percentage increase in wages so that their salaries can keep up with inflation. The CPI-U is primarily used to understand the effect of inflation on the average consumer in an urban setting. For most intents and purposes, the CPI-U is what is primarily used when discussing inflation and positive changes in the general price level.

There is yet another CPI and it is called the "core" CPI. The core CPI also tries to measure changes in prices of goods and services that urban consumers purchase. The main difference between the core CPI and the CPI-U is that the core CPI discriminates against certain "volatile" products. "Volatile" products are consumption goods that are said to have very "unstable prices" and would subsequently bring about unwanted sporadic movements in the CPI if not otherwise removed. As a result, the core CPI usually excludes commodities such as food products and energy goods which are said to experience sudden seasonal changes in price.

The core CPI is not used as often anymore and has been overshadowed by the Federal Reserve preferred "core Personal Consumption Expenditures Price Index" (or core PCE) that is published by the Bureau of Economic Analysis. The core PCE uses data on personal consumption expenditures -calculated by the National Income and Product Accounts- to arrive at the rate of inflation. The core PCE also leaves out "volatile" food and energy prices. The difference between the core PCE and the core CPI is in method and not necessarily what basket of goods is chosen.

The Austrian school position on indexes such as the CPI and the PCE is best understood via business cycle theory and the effects of monetary inflationary policies. First of all, the CPI is an average of the changes in price of particular goods and services that consumers enjoy purchasing. When mainstream economists and politicians obtain at the rate of inflation put out by the CPI, they use it as a yardstick with which to measure the price changes of all goods. If there is a good that is increasing in price quicker than the CPI then it must mean that there is some non-inflationary explanation for the occurrence.

In all reality, inflation is not a positive change in the general price level but an increase in the money supply. When the Federal Reserve prints out money, certain industries get the newly-printed money first. This "new money" is then used by the industry workers to purchase the certain goods and services that they desire. Austrian business cycle theory holds that the prices of those goods that come in contact with the "new money" first will rise first and a chain reaction will then occur with almost all prices throughout the economy. It would be too complex to get into a discussion here as to why these prices rise and in what manner they rise but the idea is that increases in the income of wage earners -propagated by Federal Reserve inflationary policy- increases the monetary demand for certain goods and also tends to increase the real demand. Sometimes, inflationary spending is concentrated in one or two industries. This results in what has come to be called economic "bubbles" or isolated pockets of inflationary price movements.

In addition, the use of such measurements as the CPI tends to steer the public's focus away from the idea that inflation could be anything other than a general increase in prices. It is because of CPI indexes that individuals have come to think of inflation as a positive movement of the prices of goods and not an increase in the quantity of money brought on by Federal Reserve Open Market Operations. In other words, the CPI informs people that the cause of a rise in prices is, well, a rise in prices. The CPI hides the idea that inflation can be independently measured from an increase in prices.

What has been discussed is more of a normative economic analysis of CPI as opposed to a positive economic analysis yet there are many economists who also have problems with the way the CPI is actually calculated.

So there you have it. The CPI and the PCE are just two more ways government gets away with the crimes it's committing.

Libertarianism: Beyond Left and Right

2007-02-05T10:02:00.000-08:00

It seems that the time has come for me to briefly explain the libertarian philosophy and set it aside from the modern “right” versus “left” construct. The concept of “right” versus “left” is one that is highly skewed and does not address the vast differences in the philosophy of individuals on either extreme. In fact, there are many people that fit into neither "right" nor "left." For instance, an individual who adores capitalism and believes that individuals should be able to consume marijuana at their own risk does not fit into the conventional "left" versus "right" construct; this individual displays elements of both philosophies. Can it be that this person is confused or is it that we have a false understanding of the make-up and determination of political orientations? The answer is: most likely the latter and libertarianism provides the proof. Libertarianism does not see the political atmosphere as simply “right” versus “left,” healthcare spending versus war spending, trees versus guns, socialism versus capitalism, etc. but instead libertarians view the make-up of ideologies as a spread between anarchism and totalitarianism.

On one end of the spectrum there are statists and on the other end there are anarchists. One group favors a government that intervenes in all human affairs -both economic and social- while the other believes that no government has the right to dictate actions between individuals, regardless of the circumstance. Such extremist groups exist but more common are variations of either side. Libertarians tend to think that "rightists" and "leftists" are actually one in the same, namely, statists. We believe that the true emphasis is not how government spends the money of the people but that it is in fact spending it at all. We do not necessarily care in what direction government is growing larger but instead that it is growing at all. It is nothing short of an exercise in ignorance to label a libertarian a "leftist" or a "rightist" for true libertarians find very few fundamental agreements with either sect.

As a result of this interpretation of political ideologies, libertarians would tend more to the anarchist side of the political spectrum. That said, an overwhelming majority of libertarians are not anarchists and believe that government, as much of an inefficient force as it maybe, is necessary to carry out certain tasks such as maintaining a military, police force, and a court system. It is not that libertarians favor anarchy over any other type of extreme political orientation but instead it is anarchy that most resembles the minimalist government libertarians tend to drift towards.

In essence, libertarianism is the philosophy that the individual knows what is best for their life and that they know how they must conduct themselves so as to reach their goals. Libertarians are champions of capitalism in that they understand that human productivity is engaged through the profit and loss mechanism. Capitalism is what naturally arises by way of profitable human interactions and it is the logical result of individuals trying to maximize their utilities. Libertarians see socialism as a destructive system that ruins the productive mechanisms of free human interaction and trade. It is socialism (government ownership of the means of production) and fascism (government ownership of the direction and totality of output) that rob the people of their natural productive abilities. These governmental institutions try to mimic an economic system that can only exist outside of central planning. Only when there is an absence of central planning and business regulations can capitalist productivity reach it's crescendo.

Individuals also tend to believe that fascism and socialism are diametrically opposed; this can not be further from the truth. In reality, socialism and fascism are ideological cousins and variations of the same line of thought. Both systems are embrace certain aspects of central planning and both try to forcefully manipulate the social and economic normalities of the citizenry. These institutions also seek to control their economies or the output of their economics and as a consequence force society to accept the lifestyles of another group of individuals.

One will find that there are strong black markets in societies that are or were under the grip of socialism or fascism. This is a result of their respective governments banning certain economic transactions and criminalizing select "anti-social" behaviors. For instance, the United States Federal Government has been immersed in a drug war since Franklin D. Roosevelt and as a result has spent billions of dollars fighting the use of drugs in the United States and abroad. Though the government can attack the supply side of the drug community all it wants, the demand side will never recede. In fact, many will argue that the demand for drugs has increased significantly because of the existence of the drug war and the "taboo" nature of illegal drugs in modern social circles. Before the drug war, crack-cocaine never existed but a few years after Richard Nixon increased funding for the drug war, crack-cocaine was introduced as a cheaper version of cocaine. In essence, because the drug war had run the price of cocaine through the roof, the black market sought new ways to deliver to their clients the same effects but at a cheaper (both in quality and price) rate. The market for heroine also changed dramatically since the inception of the drug war. A drug that used to be diluted is now incredibly pure and has caused -as a result of its increasing purity- a number of overdoses. People believe that whenever an individual overdoses on heroine or cocaine it is because of the inherent properties of the drug itself yet this is not the reality of the situation. If heroine and cocaine were legal, the market would regulate it's purity down to a level that minimized overdosing.

Many individuals also believe that libertarians are "doves" and that they fear or are inherently against war; again, this is also false. The mainstream libertarian opinion of war is that in certain incredibly rare cases, war is necessary. That said, we are also against "jumping-the-gun" and understand that war is not only incredibly costly in terms of dollars but also in terms of lives. Many times wars wipe out an entire generation of individuals and not at a profit either. All wars have a certain direct cost but few see the indirect costs of the war. For instance, everyone speaks of the billions of dollars spent on the war in Iraq but few add-in the lost lifetime productivity of those killed in the conflict. Libertarians understand that not all countries or individuals are moral and just, this is why we believe very strongly in the right to bear arms as a method of self protection. At the same time, we believe that only true threats should be engaged and that there have been very few instances in the history of the United States that serious threats have arisen overseas. With respect to certain tragic events such as 9/11, libertarians would see such occurrences as the logical conclusion of an overgrown government. Aside from the negative effects our government has had in the middle east during the entirety of the 20th century, the government has severely limited the second amendment rights of it's citizens. On 9/11, thousands of people were murdered by terrorists with simple box cutters. If individuals were able to carry guns -as allow in the second amendment-the events of 9/11 would have never occurred. Those terrorists wouldn't have been able to even mention that the planes were being hijacked before a passanger stood up and shot them.

It would be impossible to explain the totality of libertarian thought within the constraints of a single essay. That said, what all individuals must understand is that libertarianism can not be comprehended using the "right" versus "left" false dichotomy but must be understood using the "no-government" versus "totalitarianism" spectrum. Libertarianism is the only philosophy that aims at preserving individual liberty, laissez-faire capitalism, and confronting all threats with a sound heart and mind. Therefore, a libertarian would state that they are the most anti-communist of all political ideologies and that many of those non-libertarian individuals that label themselves as anti-communist are out-of-touch with the reality and that they themselves practice variations of the same ideology they supposedly despise. As Ayn Rand once said when asked to explain her philosophy while standing on one foot:

My philosophy, Objectivism, holds that:

1) Reality exists as an objective absolute—facts are facts, independent of man's feelings, wishes, hopes or fears.

2) Reason (the faculty which identifies and integrates the material provided by man's senses) is man's only means of perceiving reality, his only source of knowledge, his only guide to action, and his basic means of survival.

3) Man—every man—is an end in himself, not the means to the ends of others. He must exist for his own sake, neither sacrificing himself to others nor sacrificing others to himself. The pursuit of his own rational self-interest and of his own happiness is the highest moral purpose of his life.

4) The ideal political-economic system is laissez-faire capitalism. It is a system where men deal with one another, not as victims and executioners, nor as masters and slaves, but as traders, by free, voluntary exchange to mutual benefit. It is a system where no man may obtain any values from others by resorting to physical force, and no man may initiate the use of physical force against others. The government acts only as a policeman that protects man's rights; it uses physical force only in retaliation and only against those who initiate its use, such as criminals or foreign invaders. In a system of full capitalism, there should be (but, historically, has not yet been) a complete separation of state and economics, in the same way and for the same reasons as the separation of state and church.

Libertarian Activism at the University of Florida

2007-01-24T10:03:00.000-08:00

The front page article for "The Independent Alligator" today was an analysis of the reaction of different political groups on the University of Florida campus to President Bush's State of the Union address. The Libertarian Activist Network -of which I am a cofounder and vice-president- received the feature picture of the article and received an acceptable amount of mention in the text itself. We have yet to see how this unexpected amount of publicity will effect the growth of libertarian activism at the University of Florida but we can only hope that it will be favorable. It is certainly refreshing to see libertarians in the spotlight for a change and the media deviating away from it's blind acceptance of the Republican/Democrat false dichotomy.

The Cantillon Effect

2007-01-20T20:01:00.000-08:00

The history of economic thought gives individuals the understanding that the economic theories of today were built upon the foundations laid by past theorists. When it comes to understanding the effects of an inflation of the money supply on the economy, there are only a handfulful of theorists that truly shaped what is now called the Mises-Hayek theory of the business cycle. Probably the most important figure in the development of economic thought in this field was a failed moneylender by the name of Richard Cantillon.

Richard Cantillon is regarded by many economists, such as Murray N. Rothbard and William Stanley Jevons, as having written the first modern concise treatise on economics. Jevons stated that Cantillon had developed a "systematic and connected treatise, going over in a concise manner, nearly the whole field of economics...it is thus...the first treatise on economics." Cantillon focused on a wide array of economic phenomena in his treatise Essai Sur la Nature du Commerce and drew conclusions from observations he was making at the time with respect to monetary and price phenomena. Cantillon understood that an increase in the supply of money would ultimately raise the general price level yet what was not immediately evident was in what manner these prices were rising. Cantillon wrote that "everybody agrees that the abundance of money or ites increase in exchange, raises the price of everything" yet these individuals "have not considered how it does so."

To Cantillon, finding a connection between an increase in the supply of money and the general price level lay "in knowing in what way and in what proportion the increase of money raises prices." Essai Sur la Nature du Commerce offers an answer to this fundamental economic problem by analysing the "injection points" at which money enters or leaves the economy; that is, those industries that receive the newly created money first. Cantillon uses the example of gold and silver mines as being able to essentially extract new money from the earth. With the new gold and silver ore found at the mines, the mine owners melt the metal into coins or bars in order to use it in daily transactions. These new coins are thus given to workers as compensation for their labor and these individuals eventually spend this new money on the market. As they spend their new money on specific goods, the prices of those goods rise due to the increased monetary demand for them.

Therefore, as long as new money is being pumped into the market via mines, the prices of those goods that first come in contact with the recently extracted ore rise and will continue rising until the increase monetary demand has ceased. The rising prices of these specific goods then spread throughout the economy effecting the costs of certain production processes the use these goods and the prices of other related goods. By using the newly extracted money, the miners are able to enjoy an overall higher purchasing power and directly effect the price of those specific goods they come in contact with. In essence, the individual who receives the new money last has less purchasing power than the individual who received the new money first. Professor de Soto correctly states that Cantillon "produced a highly significant study of the influence and increase in the quantity of money in circulation exerts on prices" and that "variations in the quantity of money mainly affect the relative price structure, rather than the general price level." This is called the "Cantillon effect" or the "new money effect."

The discussion of Cantillon and the analysis of prices changes due to an increase in the quantity of money present in Essai Sur la Nature du Commerce offers Austrian business cycle theory an important foundation. It gives Austrian economists a theoretical starting point for understanding the effects of changes in the quantity of fiat money by the Federal Reserve System on the macroeconomy. Though Cantillon's explanation of price changes due to increases in the quantity of gold are correct, such occurrences are quite insignificant and the rate of increase in the supply of gold tends to be of such a nature that it would have little to no effect on the prices of specific goods or the general price level in our modern economy. Instead, Cantillon's theory must be applied to the drastic changes in the money supply found under the existence of an inflationary central banking system. Next week we will see how Austrian business cycle theory uses Cantillon's observations in order to find a solution to the seemingly endless boom and busts present in the modern economy.

First Serious Economic Task

2007-01-13T09:04:00.000-08:00

Apparently, the Costa Rican government needs the help of a handful of economic students in order to prepare their economy for CAFTA and advice on how to dismantle the existing monopolies. I was fortunate enough to be included in that group and find it to be a great opportunity to get Austrian monopoly price theory some coverage. Either way, I am going to have to write up a fairly long analysis with three other peers with respect to the effects of eliminating the current government monopolies in utility services.

LewRockwell.com Post

2007-01-10T08:53:00.000-08:00

Mr. Rockwell has graciously posted my essay on Fidel Castro on his blog. Take a look at it here and digg it!

The Impending Death of Castro: Better Late Than Never

2006-12-31T10:56:00.000-08:00

In light of Castro's impending death, there are quite a few communities, especially the Cuban-Americans, which are ecstatic of the recent turn of events. The death of Fidel Castro may unfortunately turn him into another popular icon -such as that of the late Ernesto “Che” Guevara- to be reproduced in silhouette on T-shirts for college students to buy. Though this may occur, it is absurd to believe that such a murderer would be revered for any of his cruel acts against the Cuban people.

The island of Cuba has been plagued by this dictator since 1959 and countless crimes against humanity have ensued since. Castro first obtained power by recruiting youths near the Sierra Maestra, a mountain range on Cuba's southeast coast. By the late 1950s, the Batista regime was more corrupt then ever and things seemed out-of-hand with the way Havana was being run politically. Much of Cuba desired a political change to the mobs running the capital but few expected that what Fidel had to offer would turn out to be too much to handle. The political climate of Cuba has been in turmoil for sometime, one may say since its independence from Spain. The Cuban rebellion against the Spanish was a bloody war that many Cubans hoped would be the last time the island would see such death and destruction. This sadly was not the case and the Spanish-Cuban conflict would not be the last time a civil war would ensue on the island.

The Cuban presidency was often taken over by militants and the island’s political climate was never truly stable. Though Cuban politics prior to the Communist insurrection was not optimal, the economy of Cuba was doing quite well and a multitude of immigrants were flowing into the country yearly, spurring the nation's economy. There were many prominent United States companies that were based in Cuba such as Hershey’s and new Cuban companies were springing up such as Bacardi. It is apparent now more than ever that the cry for a political change in Cuba brought about more than the people bargained for and by supporting, or simply not resisting, the Castro brothers the Cuban people bit off more than they could chew.

Fidel first began his crusade against Batista by taking over cities on the east-side of Cuba and slowly making his way over to the capital city of Havana. Castro often recruited young college students and farmers in surrounding areas by promising them that he would bring democracy back to the island of Cuba. Once the individuals would be recruited, deserting would not be allowed. On many occasions, deserters were hunted down by Fidel, Raul (his brother), or Che (chief attack-dog of Fidel) and shot at point-blank range. It seemed that once you were part of his army, there was no turning back. As Castro moved across Cuba, he never hesitated to spread his support of Communism and the supposed riches it would bring the Cuban people. Ernesto Guevara saw Cuba as an opportunity to correct his militant strategies in order to spread Stalinism throughout the western hemisphere. Ernesto Guevara had previous tried to spark Communist revolutions in other Latin- American countries but they failed miserably. The Cuban communist revolution of the 1950s was a successful attempt by Guevara and the Castro brothers to, amongst other things, create a satellite of Russia's Communist empire in the western hemisphere and a nexus from which to spread the oppressive gospel that was Stalinism.

In one of the most infamous moments in Cuban history, when Castro entered the capital city of Havana in 1959, he was asked by a local reporter when the elections would take place and Castro replied that he would not be holding elections because the people had elected him to the office by their support for the revolution. This was the moment that many Cubans realized that the man few had fought against -and many supported- was in fact going to subdue the country under a dictatorial regime. The years after Castro's usurpation of the presidency of Cuba secured these fears and went down as one of the worst moments in the history of the island. Tens-of-thousands of political prisoners were executed as "counterrevolutionaries" or individuals plotting against Cuban society. My father was one of the individuals taken prisoner after constant harassment by Cuba's military police. He was sentenced to hard-labor in a concentration camp for 18 months and kept under inhumane conditions. Luckily, my father was not executed, like many of the other individuals who defied the newly formed government. My mother was also driven from her land by the forth-coming mob of Communists moving in from the southeastern side of the island during the early days of the revolution. Both of my parents lost their land and assets to the Cuban government. The excuse given for the seizures by the government was nothing but cliché; that their property now belonged to Cuban “society.”

Individuals during Castro's harsh regime were also placed in “Military Units to Help Production (M.U.H.P.)” facilities which were concentration camps that would work prisoners to bone and treated individuals as though they were now the slaves of the communist government. Homosexuals, Jehovah's Witnesses, and political prisoners were placed in these labor camps without trial and many were driven to suicide. Their lifestyles and opinions were deemed "counterrevolutionary" and a negative influence on Cuban society. Any movement that opposed Castro's government within Cuba was often automatically linked with the Cuban exiles in Miami and the United States Central Intelligence Agency.

After the communists captured Havana, Guevara began a wide-scale crackdown on Cuban dissent through the creation of one of modern history's most infamous prisons, La Cabana. Guevara was the chief administrator and executioner of the prison. The prison held several thousand political prisoners and Cubans who found fault in the newly established government. One by one the prisoners were taken from their holding blocks, paraded around the prison, abused in front of their family members and then finally executed at point blank range. The victims of La Cabana often shouted "Viva Cuba Libre!" just before their execution, denouncing Guevara and the communist government. Once it was evident that the inmates were verbally defying his authority even in the face of death, Guevara ordered all prisoners to be gagged before execution. This was a way of keeping the victims in check and his power over the populous secure. Also on Guevara's long list of atrocities at La Cabana, it was reported that Guevara periodically found it amusing to slit open the throats of several political prisoners while they were sleeping. According to scholars such as Armando Lago, Castro’s regime has brought about the deaths of nearly 105,000 Cubans, mostly in prisons such as La Cabana. These deaths are attributed to both executions and death while in prison.

With Castro's iron fist and Che Guevara's obedient actions, Cuba was well into its darkest times yet. Many of Castro's leading officials were defecting and many were convicted of crimes with no public trial and sentenced with the use of "secret evidence" that the state had acquired. One such case was that of General Arnaldo Ochoa who was arrested on charges of drug trafficking even though none of the evidence was brought to light. The average sentence for drug trafficking in Cuba was 20 years but Ochoa was sentenced to death. The unorthodox trial of Ochoa was said to be a ploy by Castro to foil a possible attempt by Ochoa to defect.

The Mariel boat-lift was another instance in which Castro tried to purify the island of what he believed to be de facto "counterrevolutionaries." Castro stated in April of 1980 that any individuals that wanted to leave the island would be permitted to and that their families in Miami could sail over to Cuba in order to retrieve them. This created an impromptu exodus in which tens-of-thousands of individuals began to leave the island. To the surprise of many families, once they had arrived in Cuba to pick-up their relatives, Cuban military officials began forcefully loading individuals they deemed “anti-social” such as political prisoners, convicted criminals, homosexuals, Jehovah's Witnesses, and the mentally-ill. Many of Cuba's jails were evacuated and prisoners were subsequently sent to the United States on various barges. Over 125,000 individuals left the island of Cuba, many forcefully.

Though Castro slowly limited his human rights abuses over the years, one recent event sparked the rage of Cuban exiles in Miami and individuals around the world. This was the "13 de Marzo" incident in which a group of Cubans left the island in a World War II era tugboat and were then sank by Cuban government authorities. In one of Castro's most vile acts against humanity, the Cuban government allowed 41 adults and 23 children aboard the vessel to drown in the waters off the coast of Cuba. The United States Coast Guard managed to recover 31 survivors from the incident but was too late for most of the individuals originally aboard the vessel. One of my friends during elementary school was a survivor of the “13 de Marzo” and the stories he told were heart-breaking. Tragedies similar to the "13 de Marzo" occurred many times with different vessels but never in this magnitude.

Castro's dictatorship also brought with it a tide of racism that few Americans know about but is nonetheless quite visible. Fidel Castro was the first all-white Cuban head of state; something most non-Cuban individuals don’t know. Many believe that Castro has a nasty strain of racism in his oppressive rule and accounts are rampant of white Cubans getting away with crimes that mulattos would be executed for. In April of 2003, three young black Cubans were executed by firing squad because they attempted flee the island. This was the first time that any Cuban was executed for this victimless crime and likewise was one of the only moments that all those who attempted to flee were of African decent. Laws have also been passed in Cuba to deter individuals from moving to the Habana in order to find high-paying tourist jobs. Many claim that these laws were aimed predominantly at the poor black community in Cuba. A University of Miami study also concluded that black Cubans makeup an overwhelming percentage of the poor in Cuba and have some of the worst jobs on the island, even though Cubans of African decent makeup 62 percent of the island's population. 85 percent of Cuba's prison population is of African decent and none of the top 10 generals in Cuba are black, nor any of the 15 provincial heads of the Communist Party. Many think that Castro's white lineage and upper-class background has greatly affected how his dictatorship is run and how an overwhelming amount of blacks are treated on the island.

Recently, there have been quite a number of epidemics on the island including a rampant spread of dengue fever. Cuban hospitals have been flooded with cases of individuals with dengue fever and as a result much of the equipment found in Cuban hospitals have either broken down due to lack of maintenance or have been stolen by individuals claiming that they are stricken with the illness. Much of the infrastructure in Cuba, including water systems, have undergone very little maintenance which has led to running water being shut down in certain parts of the island. There have recently surfaced digital images of Cuban children drinking from filthy puddles, families rummaging through near-empty garbage cans for food and clothing, individuals walking amongst fallen power lines months after a storm has passed, and Cubans riding in automobiles pulled by horses. What Cuban officials say is the condition of the island is obvious more than ever to far from the truth. Cubans may not be periodically shoved into concentration camps anymore but the conditions that communism has brought the island is torturously equivalent to those of a third world country.

The terror that was Castro's reign will never be forgotten and his dictatorship was a testament to the danger present when the citizenry transfers its power to a single individual. The power structure in Cuba will soon be shaken –if it has not already- and high government officials will compete for some of the most influential positions on the island. The effect of Castro’s death on the governmental structure of Cuba will be for sometime unknown but whatever the outcome, the Castros have come out winning at the people’s expense. By sapping the wealth that has been accumulated in Cuba over the decades, Fidel, Raul, and the rest of the high officials have been able to live the life of kings. They have been able to feast everyday on tens-of-thousands of dollars in food and drink while the people are left to starve. These dictators and their followers are the parasites of nations, draining the citizenry of its precious resources and humanity. Fear, hatred, and envy are the weapons of the wretched and Fidel is no stranger to these tactics. Even after the death, destruction, ignorance, and tragedy that has been Cuba, there is still some hope that the future will bring drastic improvements for the island.

It is interesting to point out that the Cuban constitution is modeled in such a way that it mirrors the direction in which current United States government is going. The Cuban constitution outlines the “fundamental rights, duties and guarantees” that any socialist country claims should be provided such as the right to work, social security, rights to protection, safety and hygiene, free medical and hospital care, and free education amongst other rights. Though these “positive rights” are “guaranteed,” quality amongst these services is anything but satisfactory. Could it be that when government is expected to provide these “rights” it shames in comparison to the market? It should be noted that in a country with a semblance of free and open markets -such as the United States- capitalism provides these services at low cost and at unsurpassed quality. The United States government is constantly extending its reach into these fields, blocking the very market mechanisms that have made its economy great. The next President of the United States may well be an individual who openly agrees with many if not all of the “positive rights” found in the Cuban constitution but will never admit to the defeat that is inherent in the adoption of these rights. If we, the citizenry, allow politicians with such communist beliefs to attain public office, we will be sunk into the tragedy and despair that is the Cuban nation in no-time. For example, once we give government the ability to control the healthcare market, individuals will no longer have the freewill to consume trans-fatty acids, smoke cigarettes, or drink alcohol because these habits bring about direct costs for socialized medicine. Therefore, politicians will state that these consumption habits are de facto illegal and not up for debate because they impinge negatively on socialized healthcare. All of a sudden someone else’s nasty habits directly effect the wallets of all taxpayers when prior to socialized medicine only the health bill of the trans-fat, cigarette, or alcohol consumer was affected. As an intelligent individual once said, fascism will come to the United States in a white coat, wearing a stethoscope.

Cuba is evidence of the fact that when government promises these services, they are often not met and if they are met, it is normally at incredibly reduced quality. The United States is heading down a course that will allow the government to take over markets vital to the well being of the citizenry and it should be obvious that when the government claims to do a service better than the market, it is simply using unproven rhetoric. “Free this” and “free that” is simply non-existent. What economics has taught us -and can teach government rhetoricians- is that everything has a cost yet only the market seeks to reduce its costs in order to increase output. Free healthcare, social security, education, etc. must be paid for with the hard-earned income of the people and because government inherently does not respond to market signals in the same way as businesses and entrepreneurs, it can not be efficient. Though the Cuban government has traditionally claimed to provide these services, it hasn’t performed nearly as well as the market could on the island. In addition, aside from market efficiency, when the government controls markets such as education, it will teach students what it wants. In the case of Cuba –and one can say the United States as well- when government controls education, the brainwash that is infused into teaching curriculums is overwhelming and often times children are taught information that is simply incorrect or virtually useless. Cuba has provided some of the cruelest conditions human beings have had to live under and this reality can only be tied with the government seizure of those markets that are most vital to human existence (healthcare, education, prescription drugs, et al.).

There may be socialists out there who claim that Cuba isn’t “really” communism and that if they were in power it would all be different. As Ludwig von Mises taught us in his epic Socialism, the failure of communism is inherent in its inability to respond to market signals and its lack of a viable medium of exchange. Socialism does not fail because of Castro or Pol Pott or Stalin or any other cruel dictator but fails because it is socialism. In other words, socialism does not work because it can not accurately structure the productive mechanisms of an economy in such a way that it can satisfy the desires of individuals.

Castro has also recently stated that capitalism is depleting the world’s non-renewable resources and has been the cause of rampant pollution. Fidel urged the Cuban people to continue their fight against the deadly imperialist machine that is capitalism. What is so strange about this is that it has been capitalism that has extended the life of non-renewable resources and has used resources efficiently, bringing the most value out of the smallest quantity of resources possible. It is capitalism that calculates in terms of money in order to minimize costs so as to not overuse precious resources. When resources are used efficiently and are not wasted via capitalism, the result is an increasing standard of living for all individuals. When socialism -that has been proven inherently not be able to economically calculate- attempts to use resources efficiently, it fails and produces nothing but waste. This is evident in the massive pollution existent during the Soviet Union throughout the 20th century and is visible today in Castro’s Cuba. What is interesting is that this battle between the supposed “polluting capitalism” and “germless socialism” is being fought most vigorously in the political circles of the United States. It is the agenda of the progressive liberals to destroy the resource efficiency of capitalism and bring about the misery that is socialism. It is through the advocacy of progressives for a “greener” market that the very system that has made our standard of living so much higher than those in any other country, especially in comparison to Cuba, will be decimated. Few comprehend that the greatest polluters of all are governments and that businesses have monetary incentives not to pollute. While businesses get hit hard with hefty fines and lawsuits when they so much as touch someone else’s property, the government has “sovereign immunity” and is able to place whatever it wants, wherever it wants. Castro is at an advantage when stating such ridiculous falsehoods for he does not need a soft bed, nor nutritious meals, nor working automobiles, he has already sapped all his wealth from the Cuban people. It is easy for the tyrant to denounce capitalism while it was socialism that gave him all his luxury and power.

Time has yet to give us even a hint as to what is to come after Fidel Castro's death. Many believe that Raul Castro will be much more lenient then his brother, some believe more ruthless, and others believe that a revolution will once again erupt on the island. Any of these scenarios might occur but regardless, the position of the United States towards Cuba should be nothing more than a drive to once again resume trade with the island and end the misery that the Cuban embargo has brought. The United States government should end all trade restrictions with the island, withdraw any import tariffs with Cuba (and all nations for that matter), and openly support a humanitarian, capitalist, classical liberal Republic in Cuba. The United States should in no way send any military troops to Cuba, Iraq is empirical evidence that such ventures only end up in social and economic disaster for both nations. As long as our ties with Cuba are friendly and our trade open, the Cuban people will be able to prosper under the semblance of a freer market. Cuba could once again become the jewel of the Caribbean and open its arms to all. The horrible legacy that was Castro will be remembered for what it truly was, murderous and oppressive. I will always be a Cuban-American at heart and I will never forget what my family, parents, and friends had to go through in order to escape the terror that was Castro. Jose Marti, one of Cuba's patriots during the Spanish-American War, once wrote that "only oppression should fear the full exercise of freedom." This is a truth that all peoples should hold on to dearly for it is only by the consent of the governed that the State may continue its actions, good or bad.

Technology and Capital Accumulation

2006-12-25T16:15:00.000-08:00

The release of a new method of engaging in life-saving surgery by robotic machines has sparked in my memory the lessons of Ludwig von Mises. Laymen often compare technological growth with the insights of the scientists and natural science intellectuals. Many fail to realize the role that capital accumulation plays in these scenarios. It is due to the accumulated capital and the abstention from consumption by capitalists that the scientist may perform their research and receive wages. The scientist receives the wages from the entrepreneur that in turn receives their capital by the savings of lenders and capitalists. The role that economics plays in the growth of technology and thus, the standard of living of all individuals has over the decades been suppressed. It is important for the masses to understand that only when individuals engage in saving can entrepreneurs begin to contemplate, experiment with technologies, pay the wages of their laborers, and thus increase the value of future goods in comparison to present goods. Only with lowering time-preferences will peoples enjoy the fruits of the natural sciences and ability to test previously unprofitable technologies. As we extend our vision into the future, Americans must understand that it is through capitalism that we have been able to increase our lifespans and enjoy greater technologies and luxuries inconceivable to the kings of yesteryears. Therefore, we must not lose sight of the role that economics and capital accumulation play in our ever increasing standard of living. Because it is only through the existence of savings and capitalistic production that natural science and human innovation can take root.

End of Semester

2006-12-14T23:09:00.000-08:00

The end of the semester has arrived and it feels like a huge burden has been taken off my shoulders. I also feel somewhat saddened that the semester has ended even though it will promptly begin once again in a few weeks. Looking back on the semester, I am very glad that I accomplished a lot with respect to independent writing in Austrian economics, learned a decent amount of mainstream neoclassical economics, and have regained my passion for mathematics. In addition, I believe that I have matured much during the semester and I have patched up a few holes in my life. I have also grown much closer to my friends and my girlfriend, which is always great. That said, one sad aspect of this semester is the fact that my libertarian roommate, and very good friend, is going to be moving back to his home state of Louisiana to pursue school and possibly a career there. Hopefully, in the future, all of my libertarian friends will reunite in New Hampshire to fight for freedom, a righteous cause. I am very excited as to see what happiness, adventure, learning, and sadness the next semester will bring. Only time will tell what will become of the spring. I hope that everyone has a great winter break and, as always, stay safe.

Praxeology: The Study of Human Action

2006-12-09T18:39:00.000-08:00

Methodology is an incredibly important topic in economic science and it is what guides the totality economic understanding. Each school has their own methodology, most modern schools intertwine mathematical analysis with certain philosophical underlying truths or economic laws. A mathematical approach to economic analysis has been most vigorously criticized by the Austrian school of economics which has adopted a form of methodological subjective-individualism called praxeology. Praxeology was first coined by the philosopher Alfred Espinas in his Revue Philosophique but has been introduced and expanded most fully by the Austrian school economist Ludwig von Mises. Von Mises came from a school of thought that shunned mainstream methodologies and proclaimed ordinal subjective value theory as true economic analysis. This introduction to subjective valuation led von Mises to dwell into a more sophisticated use of such methodologies and thus, expanded on such theories developing a concise understanding of praxeology.

The father of the Austrian school of economics and one of the main developers of marginality in economic theory was the Viennese economist Carl Menger. In developing a new approach to economic analysis, Menger divided himself from other "continental" schools of economics and more specifically the German Historical school of economics. The German Historical school sought to explain economic science via the study of history and trends in statistical analysis with respect to economic data. The Vienna school believed that it is only through deductive logic and the discovery of certain economic laws that economics could be understood. What is lost in this empirical process of "theory" creation is the knowledge that in other epochs there may have been different scenarios that have arisen. In essence, no economic theory can be based on statistical data gathered from a single or even multiple occurrences.

Empirical data is powerful in identifying problems and may also possibly prove certain theories not to be incorrect, proving them in the negative. That said, empirical data and statistical analysis can not prove economic theory in the positive sense and can not give any detailed contributions to economic theory. The latter is a view shared by Hayek in his monumental work Prices and Production and Monetary Theory and the Trade Cycle as well as Ludwig von Mises in his opus magnus Human Action. Hayek in Monetary Theory and the Trade Cycle on page 31 cites the once well-known economic statistician and empiricist E. Altschul stating that "in economics, especially, the final decision about the significance of a certain phenomenon can never be left to mathematical and statistical analysis. The main approach to research must necessarily lie through theoretically obtained knowledge." Statistical data can not be relied upon to form economic theory and the events of a specific era can not be generalized to all occurrences. A true economic theory is applicable to all circumstances.

In an attempt to divide themselves from the Vienna school during what has come to be called the Methodenstreit, the German Historical School labeled the Vienna school the Austrian school of economics. This is where the name originated, differences in methodologies and an adherence by Carl Menger in his Principles of Economics and his students to subjective-individualist analysis. Menger and the "Austrian" school believed that only through understanding the actions of rational man and observing marginal changes in economic phenomena can economic science be expounded.

As time passed, the Austrian school further developed its methodologies and constant belief that the acting man is the crux of economic analysis. Ludwig von Mises, Bohm-Bawerk's greatest student, went on to be the heir of the third generation of Austrian school economists and thus further developed Austrian school methodology into a more concise version of Espinas' praxeology. Rothbard states in Man, Economy, and State that praxeology "takes as its fundamental premise the existence of human action. Once it is demonstrated that human action is a necessary attribute of the existence of human beings, the rest of praxeology (and its subdivision, economic theory) consists of the elaboration of the logical implications of the concept of action." This logical implications are that

"1) Asserting A- the action axiom. In essence, that all humans act.
2) If A, then B; if B, then C; if C, then D, etc.- by rules of logic.
3) Therefore, we assert (the truth of) B, C, D, etc."

These are the rules of logical deduction that come from the assertion that humans in fact act. If we believe that humans act then we can claim and prove various other fundamental truths that are vital to economic analysis. Praxeology asserts that humans act to meet certain ends and does not value these ends. Austrian methodology is "value-free" and does not claim that certain ends are inherently better than others but that they are all ends; these claims can and are made by other fields such as philosophy and psychology. Praxeology can be used to deduce such economic laws as the law of marginal utility and the law of diminishing returns. The law of marginal utility does not depend on physiological or psychology grounds (the belief that the more of an item that is consumed the more "satisfied" the individual is) but instead relies on the fact that individuals will use the first amount of a good consumed to their most urgent need, the second amount of a good is used to their second most urgent need, the third to their third most urgent need, etc. The productivity or use-value of these goods fall as the quantity increases due to the fact that each additional amount of the good is used to satisfy a less and less urgent need. Praxeology then, Rothbard states, includes the study of the "isolated man (Crusoe economics) and, especially elaborate, the analysis of interpersonal exchange (catallactics)."

In a nutshell, praxeology is the study of human action and that man value certain ends and therefore engage in select means to reach those ends. Praxeology and human action can not be elaborated further at this time but it is the crux of Austrian methodology. Praxeology is a study in itself and is but a tool of Austrian economists to guide economic thought in a direction so that certain positions are made on given issues. Praxeology is not an end to economic science but a means to understanding the totality of economic phenomena.

Problems in the Structure of Production

2006-12-03T14:57:00.000-08:00

It has come to my attention during my research that within Austrian theory, there is a number of different views with respect to capital and business cycle theory. In particular, there are significant differences between the Misesian and Hayekian analyses. Over the past few months, I have been building a paper that touches upon some of these problems present in Austrian capital theory, old and new. Within the Austrian school, there seems to be this shift away from economics and more towards political economy or even simply social theory. This, I can not stand for. I believe that business cycle theory is one of the most important subjects in economics and has many practical applications, unlike anarchist theory. I still hold that the Austrian school must revert towards a concentration in the fields of interest, capital, monetary, and business cycle theory.

In Response

2006-12-02T22:26:00.000-08:00

This post is in response to the concerns of an individual at the University of Florida that believes that private companies are like mini-totalitarian states and that companies facilitate the creation of unconstitutional taxes such as the income tax.

Economics is a very important element of libertarian thought because it is through the market that individuals manifest their desires. The market allows a demand for certain services and goods to exist via money and these demands are then supplied by producers anxious for a profit. Where your logic seems to be flawed is in your approach of the word "control." Control if a definite in a market society (i.e. private property). That said, control is only legitimized if gained voluntarily. When two individuals trade, it benefits both parties as long as the trade is voluntary. If the trade is not voluntary, then it is the job of the government (if you believe in one) to prosecute individuals for breaking both verbal and written contracts.

Private companies gain what material possession they do by trading items for money which they can in turn use to buy goods. Companies do "control" items but it is only because they have allowed other individuals to "control" other items. In essence, the market is the trade of private property for private property.

A company is made up of individuals voluntarily contracted to form a productive union. That is, I, as the capitalist entrepreneur, save up enough capital to hire individuals to build products that consumers want. The capitalists and their workers both voluntarily contract with each other to reach certain goals. This does not fit the mold of a totalitarian society. Such a society does not allow for voluntary transactions but involuntary transactions. In a totalitarian society, you are told what you can specialize, what you can buy, and who you can work for. In a capitalistic market society, you have a pick of working for whomever you want to (if you want to work at all), where you want to shop, what you want to buy, and where you want to live; this is all true as long as these trades are made voluntarily. Therefore, unlike corrupt states, companies hire individuals, they do not obligate them to forced labor. It is essentially the difference between forced and voluntary labor.

The video you link shows what happens when government allows certain companies to "rent-seek" or lobby for the power given to the state by the people. Government grants certain companies power, not vice-versa. In such scenarios, it is the government that is the culprit, not the market in general. If the state did not give such powers to select companies and industries, they would be subject to the same market forces as their competitors and would have to deliver what individuals desire. In essence, if the market was left alone by the government, they would have to actually compete to gain a profit. Companies, therefore, can gain profit in one of two ways: rent-seek by asking for government privileges or compete in the market for profit.

The income tax was put into place by a Congress in order to pay for the interest on the loans of select banking institutions that they decided to give power to. The government is who gave the bankers power, not vice-versa. If the government did not mess with the banking system, the banks would actually be liable to the citizens via the market.

It is the market, not the government, that fulfill the needs of individuals. Once government favors one company over another, then it is the government that is using their power in a manner that will hurt the market and therefore the citizens. The market after all is made up of the entirety of the nation while the government is an elite group of individuals who claim to have the right to extort money from the citizens. Therefore, as long as certain companies are not favored by government, the market will drive them to compete for the hard-earned dollars of individuals and therefore produce in greater amounts while minimizing costs and increasing efficiency.

LewRockwell Post

2006-11-30T22:34:00.000-08:00

My recent open letter to Hannity and Colmes was graciously published by Mr. Rockwell on his blog LewRockwell.com. Check out the story and digg it if you'd like.

An Open Letter to Fox News' Hannity and Colmes

2006-11-29T20:40:00.000-08:00

Dear Sean Hannity and Alan Colmes,

On November 29th, your show's administrators contacted the local University of Florida libertarian group in an effort to have a discussion over a recent issue involving the separation between church and state. The Libertarian Activist Network, of which I am a cofounder, was chosen by your staff and we proceeded to conclude when and where we could have this discussion. I agreed to represent my organization and have meaningful discourse with the show regarding the subject at hand. The issue involved a monument to the Ten Commandments that was erected at the Dixie County Courthouse near Gainesville, Florida in an effort to connect the laws of our nation with that of Judeo-Christian religions.

As I was getting mentally prepared for the television broadcast, your administrators notified me that they had gotten another individual to take my spot: the leader of the atheist and agnostics on the University of Florida campus. Sadden by the change of heart on part of the Hannity and Colmes staff, I thought hard and well as to the reasons why a libertarian representative would be replaced with an atheist instead. One conclusion might be suggested that by inviting a representative of an atheist group to present the counterpoint in the Ten Commandments discussion, the show would immediately turn the impending deep and important political discourse into a religious ramble. The matter at hand has less to do with Christianity in itself and more to do with the Constitution and the separation between church and state. It is vital that the state not favor any specific religion over another, and by displaying monuments to the commandments of the Judeo-Christian religions at a courthouse, the state is doing just that. In essence, it is a matter of the constitutionality of the subject and not of the importance of Christian themes in our moral systems.

In addition, many of the individuals in favor of these Ten Commandment displays, such as you, Sean Hannity, claim that the United States of America is a Christian nation founded on Christian laws; this can not be farther from the truth. In all reality, one of the principle reasons for the creation of the United States was freedom of religion and the separation of religion from the state. This is something the British crown did not practice and which led to many acts against minority religious groups by the English government. It was the intent of the Founding Fathers that the United States government be free from all ties to any specific religion.

An additional argument in favor of this belief is the famous Treaty with Tripoli, signed by the 5th Congress and President John Adams, that states in Article 11 that "the government of the United States of America is not, in any sense, founded on the Christian religion." I know this is a old and dusty paper, Hannity and Colmes, but it is one that clearly states the position of this government with respect to its supposed embrace of the Christian religion. In fact, many of the Founding Fathers were not Christians, but Deists who believed that God could only be understood through scientific insight and not faith. Thomas Jefferson himself urged us to "question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear." This wasn't (nor is it today) a popular opinion of Christian individuals, yet it was this man that wrote the very document that separated the colonies from the British crown. James Madison understood that "the general government is proscribed from the interfering, in any manner whatsoever, in matters respecting religion." In fact, Madison believed that by government interfering in matters of religion and binding religion to its laws would inevitably lead to a decrease in the faith of individuals in religion. Madison writes that "religion flourishes in greater purity without than with the aid of government."

It was Deism, not Christianity, that was the belief of a large part of the Founding Fathers and it is the duty of government not to respect any sect of religion, including Christianity. This is clearly not the case when government courts find it justified to place religious icons at the top of courthouse steps.

These are the points that you, Sean Hannity, the self-proclaimed libertarian, would not have wanted to hear come out on his show. In essence, by making the problem at hand into a religious conflict rather than a legal and political issue, your show could simply argue over the validity of the atheist's claims and label them inherently biased. This is what Hannity and Colmes proceeded to do on the show, to label any individual opposed to the union of the state and Christianity as an infidel and atheist. In the blink of an eye and the execution of a phone call, the discourse of the show was changed from a meaningful and intellectual discussion to the religious ranting of a member of the Christian right. Individuals should be more concerned about the rights that are being stripped away from them by the religious right and less passionate about the unconstitutional union of the state with Christianity. This administration has been given the unconstitutional privileges to suspend habeas corpus, intrude into the private lives of law-abiding citizens without warrants, and gather the national guardsmen without regard to the wishes of the governors. If your show ever wants to have serious discussions on the many controversial subjects of our time, you know where to find us. Otherwise, your show can continue to perpetuate the dull and empty talking points found in modern political circles. It now seems clearer than ever that libertarianism and truth are out of fashion, while meaningless rants are all the rage.

Sincerely,
Alexander Villacampa
Cofounder of the Libertarian Activist Network

Emma Goldman on General Manuel Villacampa

2006-11-27T17:29:00.000-08:00

The other day I was reading some anarchist writings, specifically the literature of a famous feminist socialist-anarchist Emma Goldman. She wrote an extensive essay on a famous Spanish rebel by the name of Francisco Ferrer. Ferrer was part of a band of rebels led by a well known soldier who had become disillusioned with the royal crown of Spain and believed that government should be elected by the people. Ferrer would later write much on the topic of republics and the supposed divine right of kings. In summation, to my surprise, the soldier that led the band of rebels to sack the royal house at Madrid was General Manuel Villacampa, a past relative of mine. The band of rebels failed but their reputation lived on and General Villacampa was sentenced to life in jail, where he died. Personally, I am very proud of General Villacampa and his courage to stand up to the supposed divine right of kings. This interesting find lends to my respect for my family's name.

"Francisco Ferrer was not only a doubter, a searcher for truth; he was also a rebel. His spirit would rise in just indignation against the iron régime of his country, and when a band of rebels, led by the brave patriot General Villacampa, under the banner of the Republican ideal, made an onslaught on that regime, none was more ardent a fighter than young Francisco Ferrer. The Republican ideal,--I hope no one will confound it with the Republicanism of this country."