Tuesday, October 15, 2019

David Gordon on Fire

David Gordon
David Gordon, the philosopher and the Rambo of book reviewing, is on fire. He is out with two book reviews at the Mises Institute in the same week. 

He torches one book and raises a mug to the other.

On Monday, in a review published at Mises.org, he put under the microscope Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society, the book written by Binyamin Appelbaum the main writer on economics for The New York Times.

The key takeaways from the review:

Appelbaum’s arguments against the free market are not convincing. They do not in all cases lack merit, but they suffer from two fundamental failings. The first of these is that his arguments take this form, “The free market has such-and-such good features, but there are competing values which it neglects. That is why we need to bring in government to limit the market.” The trouble with this argument is that, even if you accept Appelbaum’s account of the competing values, he offers no systematic way of assessing the benefits and costs of the free market...

How might Appelbaum reply to this objection? His answer is that people should decide democratically how the values of the free market should be balanced against competing values. This is an odd response, because Appelbaum himself recognizes that special interest groups often use the government to advance their own ends, though he resists the implications of this point...

There is a further problem with Appelbaum’s “democratic” response. It transpires that he is hardly a democrat at all. He thinks that businesses can readily manipulate the ignorant consumer...

Appelbaum is caught in a contradiction. If people are too irrational and uniformed to resist business propaganda, why should they be trusted to elect public-spirited leaders through democratic voting? Murray Rothbard long ago called attention to this faculty. In Man, Economy, and State, he says: “[T]he partisans of intervention assume that individuals are not competent to run their own affairs or to hire experts to advise them, but also assume that these same individuals are competent to vote for these experts at the ballot box. They are further assuming that the mass of supposedly incompetent consumers are competent to choose not only those who will rule over themselves, but also over the competent individuals in society. Yet such absurd and contradictory assumptions lie at the root of every program for ‘democratic’ intervention in the affairs of the people.” (p.886)

Let us now turn to the second of the fundamental failings in Appelbaum’s assault on the free market. He often blames the free market for the failures of government. In the most glaring instance of this fallacy, Appelbaum rightly notes how many of our current economic problems stem from risky speculation by banks. Why does he consider such speculative ventures, made possible by fractional reserve banks joined in the Federal Reserve System, a failure of the free market rather than a government failure?...He ought to read Dr. Ron Paul’s End the Fed...
Appelbaum’s book is not without value. He has done a great deal of research and he has a good eye for anecdotes. But as a criticism of the free market, the book is a manifest failure.
Here is David a couple of days earlier from his review of Socialism Sucks: Two Economists Drink Their Way Through the Unfree World by Robert Lawson and Benjamin Powell:

Robert Lawson and Benjamin Powell are well-known free market economists, and they do not look with favor on a disturbing trend among American young people. “In the spring of 2016,” they tell us, “a Harvard survey found that a third of eighteen-to twenty-nine year olds supported socialism. Another survey, from the Victims of Communism Memorial Foundation, reported that millennials supported socialism over any other economic system.” (p.8)
Unfortunately, the young people in question have little idea of the nature of socialism. Lawson and Powell would like to remedy this situation, but they confront a problem. Ordinarily, one would urge students to read Hazlitt’s Economics in One Lesson, Mises’s “Economic Calculation in the Socialist Commonwealth,” and similar classic works, in order to understand the basic facts about the free market and socialism, but the millennials are unlikely to do so. One must attract their attention. What can be done?
Lawson and Powell have had the happy idea of presenting elementary economics in a humorous way that will appeal to those “turned off” by serious and sober scholarship. In the latter adjective lies the key to their approach. Both of the authors enjoy drinking beer, and they travel around the world to various socialist countries in pursuit of their beloved beverage, making incisive comments about the economy of each country as they do so. They write in a salty style that will make millennials laugh, though some readers will find it jarring...
I confess that I approached the authors’ project of a drinking tour of the socialist countries with skepticism. Would it be more than ajeu d’esprit? Reading the book has laid my skepticism to rest. Socialism Sucks has the potential to do great good, if it gets into the right hands, and its impressive sales suggest that it will do so.

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