I have to say that Molyneux is quite prolific. He has many, many podcasts and youtube presentations on many, many topics, from parenting to anarchism. After clicking around the podcasts a bit, I began to understand why Walter Block listened to only 10 minutes of one broadcast, before stopping. At least for me ( and I guess for Block), there is something tedious about listening to Molyneux talk on and on.
However, I wanted to get a quick sense of Molyneux's style of thinking and presentation, so I was determined to listen through a full broadcast. He lists a category in his podcasts called Economics. Since I know a thing or two about economics, I wandered over there. The first podcast under this category was titled, "Understanding Stock Market Investment versus Speculation".
Since I know a bit about investment and speculation, I chose this podcast as the one I would force myself to listen to from start to finish.
Here's the sense I got from the podcast: Molyneux seems to be a quick read on topics, is able to discuss topics in a manner that gives the impression that he knows a lot more about topics than he really does, which results in him giving out a lot of bad information that would only be caught by someone that was very familiar with the topic.
In the podcast I listened to (in its entirety), Molyneux discusses an environmental software company he sold to a publicly traded firm that traded on the Alberta Stock Exchange.
Although this isn't the main focus of my critique, it would be interesting to know more about the environmental software company that he sold. I guess it is possible that it was a libertarian environmental software company of some sort, but most environmental companies I am familiar with are either direct beneficiaries of government hand outs or beneficiaries of government regulations that force firms to act in ways that they wouldn't in a free market. So it would be helpful if Molyneux told us the name of the firm he sold, so it could be researched to see just what type of environmental software was actually created and learn more about how the firm generated its revenues.
But this is a side point, my main point about this podcast is that Molyneux sounds knowledgeable in his podcast but really has no idea what he is talking about. For example, he partly titled the podcast "speculation versus investment". However, he gives a completely erroneous definition of what a speculator is and seems to have no understanding of the value of a speculator.
In the podcast, he defines a speculator as someone who is only concerned with short-term swings in stock prices based on action in stock prices, and attributes no value to the role of the speculator.
The first point that needs to be made is that those who are watching stock prices for clues as to direction are more correctly called "technical analysts" or "technical traders". There is nothing that says a technical trader needs to be short-term in view. I often look at 10 year plus charts to get a perspective on possible long-term trends over upcoming years.
Secondly, and Molyneux implies that there is no such thing, many speculators can trade on fundamentals. A commodity speculator in wheat may be basing his trade on what he expects weather conditions to be like and how that will impact wheat prices.
Molyneux goes on further to give the impression that speculators play no important role in markets---and quite possibly a negative role. But this is simply false, speculators provide liquidity to markets and, in the case of the commodities world, provide certainty in price to farmers who want to hedge their crop, before they plant it, with the speculator assuming the risk that the farmers don't want to assume.
Thus, whereas Molyneux portrays the speculator as evil, the speculator in fact plays an important role in market activity.
Molyneux then goes on to remarkably say that Social Security money is invested in the stock market. This is flat out wrong, No money, zero, is invested in the stock market. By saying this, he misses the biggest part of the SS Ponzi scheme, the fact that all money that goes into SS is spent by the government IMMEDIATELY (or dished out to SS "beneficiaries"). SS only puts money in Treasury securities. This money then goes to the Treasury where it is then spent by the government. There is no investment in the stock market made at all---never ever. When the Treasury securities have to be paid back to SS as baby boomers age, the Treasury will either have to try and borrow the money from someone else, tax the public to pay off what is owed to SS or get the Fed to print money to payoff SS. Molyneux misses all this and thus misses some of the most significant problems with SS.
There is much more that Molyneux doesn't get about the stock market, since he seems to want to blame "speculators" and says nothing about the onerous regulations that make it near impossible for a new brokerage firm to start up, or make it near impossible for most firms (unless they are tied in with Silicon Valley connections) to go public--outside of scammers, such as the many that exist on the Alberta exchange--where the firm Molyneux was involved in first traded.
Molyneux closes his comment with a short rant in very generic terms against the state and regulations, but this simply seems to be a tack on, to sucker in less knowledgeable libertarians. In fact, Molyneux has picked up some buzzwords about the financial world, tortured the meaning of sum of those buzzwords, that is all. To anyone knowledgeable about the sector it would be clear very quickly that Molyneux is totally full of shit.
Bottom line: What David Gordon writes about Molyneux's philosophical understanding can also be said about Molyneux's financial understanding. Gordon writes:
Despite the impression I have so far given, Molyneux is by no means stupid: quite the contrary. Therein, I suggest, lies the source of the problems of his book. Because of his facile intelligence, he thinks that he has a talent for philosophical argument and need not undertake the hard labor of learning how such arguments are constructedI could very easily take Gordon's comment and write:
Despite the impression I have so far given, Molyneux is by no means stupid: quite the contrary. Therein, I suggest, lies the source of the problems of his podcast on finance and investment. Because of his facile intelligence, he thinks that he has a talent for financial argument and need not undertake the hard labor of learning how the financial world really works.