Wednesday, September 2, 2015

The Caplan Conversion Effort (Part 2)

As a follow up to Walter Block: Bryan Caplan Beat Me in Debate on Austrian Economics, the following email exchange has taken place. (Note: Daniel  Rothschild is a PhD student at GMU, Bryan Douglas Caplan is professor of economics at George Mason University).

From: Daniel Rothschild
Sent: Tuesday, September 01, 2015 11:27 PM
To: Walter Block
Cc: Bryan D Caplan
Subject: Re: more debates?

Never admit defeat.


From: Daniel Rothschild
Sent: Wednesday, September 02, 2015 11:45 AM
To: Walter Block
Cc: Bryan D Caplan
Subject: Re: more debates?

If anyone is able to change someone's mind in the span of an hour I'm impressed (though at least for me, the goal is not to change anyone's mind but for both sides to make the best argument on their side and let the viewer decide for himself which is more persuasive). It took me 10 years to go from minarchy to anarchy.


Dear Daniel, Bryan:

I’m blogging this with Bob Wenzel, assuming no objections, and no requests for anonymity.

It took Murray about ten minutes to convert me from minarchism to anarchism. He used the arguments I had garnered from Hazlitt’s Econ in One Lesson to the effect that the market is better than government because of the weeking out system for failure in the former. He asked Why doesn’t this apply to armies, courts and police, and in about 10 minutes had me seeing the light. I just couldn’t “get” Austrianism; well the praxeology. I thought, just like Bryan now does, that if a claim was apodictically true it couldn’t be referring to the real world. It had to be a tautology. And, if it did refer to the real world, it could only be provisional, based on evidence, and not absolutely true. It took my thick head a half a decade or so to see that there are economic laws, not merely hypotheses: synthetic apriori statements that are undeniable, based on pure logic, not falsifiable. I tried three examples with Bryan: trade (or the barter of pens), tendency statements, the minimum wage. I failed on all three counts.

Here is the always brilliant Hans Hoppe on this matter. Bryan, please take a peek. We’re gonna get you, boy! (J)

“Now let us turn to some typical economic propositions. Consider the validation process of a proposition such as the following: Whenever two people A and B engage in a voluntary exchange, they must both expect to profit from it. And they must have reverse preference orders for the goods and services exchanged so that A values what he receives from B more highly than what he gives to him, and B must evaluate the same things the other way around.

“Or consider this: Whenever an exchange is not voluntary but coerced, one party profits at the expense of the other.

“Or the law of marginal utility: Whenever the supply of a good increases by one additional unit, provided each unit is regarded as of equal serviceability by a person, the value attached to this unit must decrease. For this additional unit can only be employed as a means for the attainment of a goal that is considered less valuable than the least valued goal satisfied by a unit of such good if the supply were one unit shorter.

“Or take the Ricardian law of association: Of two producers, if A is more productive in the production of two types of goods than is B, they can still engage in a mutually beneficial division of labor. This is because overall physical productivity is higher if A specializes in producing one good which he can produce most efficiently, rather than both A and B producing both goods separately and autonomously.

“Or as another example: Whenever minimum wage laws are enforced that require wages to be higher than existing market wages, involuntary unemployment will result.

“Or as a final example: Whenever the quantity of money is increased while the demand for money to be held as cash reserve on hand is unchanged, the purchasing power of money will fall.

“Considering such propositions, is the validation process involved in establishing them as true or false of the same type as that involved in establishing a proposition in the natural sciences? Are these propositions hypothetical in the same sense as a proposition regarding the effects of mixing two types of natural materials? Do we have to test these economic propositions continuously against observations? And does it require a never-ending trial and error process in order to find out the range of application for these propositions and to gradually improve our knowledge, such as we have seen to be the case in the natural sciences?

“It seems quite evident (except to most economists for the last forty years) that the answer to these questions is a clear and unambiguous. That A and B must expect to profit and have reverse preference orders follows from our understanding of what an exchange is. And the same is the case concerning the consequences of a coerced exchange. It is inconceivable that things could ever be different: It was so a million years ago and it will be so a million years hence. And the range of application for these propositions too is clear once and for all: They are true whenever something is a voluntary exchange or a coerced exchange, and that is all there is to it.”

Best regards,


Daniel Rothschild
10:12 AM
to Walter, Bryan, me 

“Or consider this: Whenever an exchange is not voluntary but coerced, one party profits at the expense of the other."

This is not apodictically true. For example, "coercing" your child to eat his food when he is stubborn benefits him. So does making sure he is educated. In fact, there are many examples of coerced exchanges where later in life one realizes the benefits they received. In many instances, I'm glad I was coerced by my parents when I was a young, stupid kid. Now I'm not advocating that people should coerce people in the hope that later down the road they will thank him. But I don't think that it is necessarily an untrue statement that involuntary exchanges can only benefit one part at the expense of the other. I agree with Bryan here that it's a high probability.

And it's fine with me to use my name when blogging about this. I'm a fame whore, so the more my name gets out there the better it is for me.


  1. Good discussion. The link doesn't work.

  2. A wonderful exchange juxtaposed against the discursive failure with Steve Horwitz.

  3. Rothschild fails in proving that coercion can sometimes benefit the victim. If a child is not eating or not eating as healthy as an adult judges appropriate this is a symptom (of a real illness or perhaps a difference of opinion). And treating symptoms does not mean the victim will be better off. The same goes for education. Healthy children are naturally hungry for nutrition and knowledge and adults need only provide a safe environment and then get out of the way. However one feels about childcare, the relationship between parent and child is not generalizable to adult economic relationships. Rothschild's type of thinking results in pro-active mandates and it seems clear how that works out for the victim.

  4. Daniel Rothschild is wrong on this commentary: "This is not apodictically true. For example, "coercing" your child to eat his food when he is stubborn benefits him."

    The truth is that the child **may** benefit, or not, if you coerce him to eat. It may be the case that the child does not want to eat more because he is stubborn, but because he is sated, or because he intuitively knows that he is not feeling well and that eating more will be detrimental. He may even sense that the food is not in a good state, although the parent believes that the food is ok.

    The same can be said about education. As Caplan would said, if you force your kid to study Shakespeare's "The Merchant of Venice", that may be good for him, or may result in a complete waste of time and a very confusing torture, to the point that your kid may become an anti-semite!

    The parent believes that his coercion to the child will be good for the child, but actually he does that because it is good for himself, as he has been told that he must stuff the child or mommy will get angry, even if all evidence shows that it may not be convenient, and that he must "educate" the kid, even if that particular education might prove harmful to the kids mind.

    And all that might even result in more damage to the parent, in the form of insult, mistreatment and disrespect when the kid is an adult and starts judging his parent (which will surely happen if the kid is exposed to deadly freudian psychology, as he probably will be).

    So, yes, if there is coercion, then one party profits at the expense of the other. Find another example where coercion can be mutually beneficial. Hoppe is still right in my opinion.

  5. Rothchild bends the criteria in order to make his point. There is never a guarantee that the outcome will be what the participant expected before the exchange. The failure to meet expectations is impetus to form better expectations in the future. A child will of course be worse at predicting outcomes. The forced child IS the loser in the exchange because his or her rights have been violated. Better to help your child to grow a healthy mind (by helping him learn how to foresee predictable results from known causes) that to force a healthy diet upon him.