When the original 1980 Free To Choose was aired, inflation was starting to make life tough in the U.S. We were in the waning days of the Carter era. And the economy wasn't looking so good. It's interesting that Friedman was able to augur a long era of relatively low inflation in the U.S.
That said, a lot of people are under the impression that Friedman was perfectly happy with the Federal Reserve System we have today. But it's better to say that Milton was a pragmatist on such matters. As with many other issues, Friedman understood that well entrenched systems don't just get trashed with a penstroke. One might say Friedman was an early, pragmatic inflation Hawk.
The international banking system is set up to benefit private interests, but when those interests fail, they socialize the losses in the form of bailouts -- bankrolled, as it were, by taxpayers. The Europeans are getting hosed right now. (Watch the Irish reporter in the video above.)
Because these private interests are so big and so powerful, they can always argue that their failure will cause economic catastrophe. But the socialization of losses will eventually cause catastrophe, too. In fact, we're now seeing Europe -- starting with Greece -- teeter at the precipice. So where does that leave us?
As a fan of Robert Nozick's Anarchy, State and Utopia (1974), I was delighted to come across this "Tale of the Slave" video presentation. Here's the original text, so you can follow along. It's a terrific thought experiment.
Noam Chomsky embodies the problem with progressivism: He confuses the symptoms of state power with the disease. Government power is the problem, after all, because there is no such thing as corporate power without state power. Without the state's favor, you have to be responsible to an army of customers. With a large, powerful state, it's always possible to buy favors. That's a tough thing to swallow if you're worldview is pegged to loathing corporations. But Chomsky has built his own intellectual empire on a notion that gets the causal story precisely backwards.
A video blogger captured this conversation. The debate is about "public goods." It's interesting because neither arguer wants to cede any territory. The protester has a half-baked definition of a public good -- which is generally defined as non-rivalrous and non-excludable. The anarchist fellow seems to think that every free-rider and collective action problem under the sun can be resolved through voluntary association. And he'd be right up to a point. But perhaps not in the way he thinks.
I feel a strange mix of emotions when I watch this. The reptilian brain is thinking one thing. The higher order processes are thinking about something else. It's difficult to focus. But let me not digress. The emergence of new, self-styled, econ-minded voices like Praxgirl is evidence of really interesting currents of change. Consider:
Are you tired of the "Move to Somalia" shtick? If you haven't heard it, whenever you claim to be a libertarian or a classical liberal, critics say you should move to Somalia because they have "anarchy."
Peter Leeson sits down with the guys from The Motorhome Diaries and explains how, surprise!, life in Somalia is better under anarchy than under a predatory regime (an apples to apples comparison). So the next time you hear someone give the move to Somalia shtick, here's a nice video for them. But there's more.
The state is force. That's a better title for this video, in my view. People sometimes get locked in dualities like capitalism versus socialism. But as Friedman suggests, fascism -- crony capitalism by whatever degree -- is always waiting in the wings. We should start to think of any question about the role of government as a question about the extent to which we are prepared to accept the use of force against us. And we should be prepared for a world in which powerful special interests are able to bid for state power as long as it works in their favor. It's the winners and losers state.
Cooperation is not collectivism. Community does not require coercion. If we come to acknowledge these facts, we may come to conclude that individualism is the most communitarian game in town.
To make such a statement, one has to understand that communitarians see ideal community as:
1. Situated in time and geography. 2. Composed of people who share memories, traditions and history. 3. Composed of people who have face-to-face contact and are governed by forces of trust, cooperation and giving.
A History of Libertarian Countries at Sea from Jason Sussberg is a brief profile of failed attempts to settle the sea. So the question that remains is: why do seasteaders think things will work now? Here are a few suggestions:
First, consider what Patri Friedman says at the end of the video. "You have to break things down into small steps." Incrementalism is preferable to utopianism in almost all respects. As any good Hayekian or former Soviet apparatchik will tell you, grand plans almost always fail.
