Dudley North on Free Trade

by Don Boudreaux on July 13, 2011

in Other People's Money, Trade

One way to state the case for free trade is to note that government has no business protecting politically influential producers from consumers who spend their money in ways that naturally enhance their (the consumers’) satisfactions rather than in ways that artificially enhance others’ (the privileged-producers’) profits.

As the 17th-century champion of free trade Dudley North observed,

That to force Men to deal in any prescrib’d manner, may profit some as happen to serve them; but the publick gains not, because it is taking from one Subject, to give to another.

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{ 99 comments }

muirgeo July 13, 2011 at 10:39 am

As if our trade policies are not written by and for the multinational corporations for to their preferential benefit. They literally have their lawyers and lobbyist in there writing and promoting the policy.

Anyone who buys cheap plastic from WalMart and thinks they are a participant in free trade needs to look into the facts a bit more.

There is no logical consistency between our trade policy, what you believe our trade policy to be and what you believe it SHOULD.

So yeah, Mr. North was right and I’d guess he’d be appalled if he knew the true nature of our policy and policy making… Oh wait… take that back… he was an apparent protector of royalty wealth…. I guess he WOULD love our modern trade agreements. He likely would have sided with King George III and the East India Company over the colonist. Today he’d be President of the Chamber of Commerce.

STATISTICULOUS July 13, 2011 at 11:00 am

Muirgeo,
Maybe you haven’t noticed, but most free trade proponents don’t support a trade policy. We support the absolute removal of all policies. No legislation governing what I can buy and from who.

We don’t support corporations lobbying for trade privileges – we are opposed to those privileges. You seem to think free trade is a system of trade agreements. It is not. Truly free trade would be characterized, on our end, by the gov. staying completely out of it. No agreements, no policies, no opportunity for multinationals or domestic corporations to gain advantage by lobbying, only by competing.

LogicalFallacy July 13, 2011 at 11:51 am

“We support the absolute removal of all policies. No legislation governing what I can buy and from who.”

I just sold your 9 year old a loaded gun. Problem?

Dan J July 13, 2011 at 11:59 am

No you didn’t, I taught him better than that. Not my kid.

Dan J July 13, 2011 at 12:01 pm

Besides, if you are willing to do so, there isn’t a govt watchdog following you around to prevent you from doing such a thing.

Methinks1776 July 13, 2011 at 12:05 pm

True!!

LogicalFallacy July 13, 2011 at 2:40 pm

No gov’t agency can’t prevent a first offense (outside of a bad Tom Cruise movie) but they are great at preventing the second offense from happening for many years.

Problem?

Dan J July 13, 2011 at 2:57 pm

Really!?!?! Guess all those gang murders don’t really happen… Time after time again… They were prevented…. Often, the same guy.
Don’t go looking in your newspaper. The cops and paper agencies work together on not reporting incidents. Gangs take pride in their work and look for the paper clips, so they are not reported on. Learned that being a juror for a trial of a gang murder.
Murder, rape, theft, etc.,….. It would be easier if govt outlawed ski masks and pantyhose….

vikingvista July 13, 2011 at 5:28 pm

“but they are great at preventing the second offense”

Once an offense is known to public, the government has little to add, although they sure take the opportunity to seize wide powers because of it. Case in point, just about everything the SEC has ever been empowered to do.

But in their defense, there are some things government regulatory agencies do accomplish:

1. Crowding out of less abusive and more efficient competitive private solutions.
2. Give people a false sense of security.
3. Document events after the fact (along with newspapers, insurance companies, and other private organizations).
4. Deter people who respect the law (i.e. the same people who wouldn’t be interested in committing offenses anyway).
5. Jump to the front of a free market solution parade.
6. Give violent offenders a legal tool for suppressing their competition.
7. Destroy the lives of peaceful people who intoxicate themselves but offend nobody.
8. Harass non-disruptive motorists over petty offenses for the sake of raising government revenues.
9. Monopolize certain services and then shut those services down so politicians can show the public how much government is needed (most recent example in MN).
10. Give religious zealots a way to impose their will when people laugh at their attempts at peaceful persuasion.

anthonyl July 14, 2011 at 11:59 am

Dan J July 13, 2011 at 2:57 pm
Gang formation and as consequence murders are a result of de facto POLICY and POLICE forcing blacks and latinos to live in certain neighborhoods of major cities. It is a direct violation of freedom of trade and property that resulted in gangs. They are part of a lifestyle forced upon people living in discriminatory economic hardship.

Ken July 13, 2011 at 12:07 pm

I hope he got a good deal. The first time I bought a gun, when I was 11, I didn’t really know how to bargain.

Regards,
Ken

vikingvista July 13, 2011 at 1:02 pm

Awesome.

James N July 13, 2011 at 7:22 pm

Why bother commenting on LogicalFallacy’s post? His query represents one of the most classic, the straw man.

Ron H July 14, 2011 at 2:46 am

Ken, you beat me to it. Why would anyone assume that a 9 year old hasn’t been taught to handle a gun safely? That seems to be LogicalFallacy’s illogical premise.

My 9 year old grandson seldom has much money, so I’m sure he got a good deal.

vikingvista July 13, 2011 at 12:28 pm

First of all, no government regulation has an effect on that. If you want to do that, you hardly give a damn about the law.

And even if it were a result of ending regulation, it would be an easier social problem to deal with than allowing greedy thugs the power to tells us all what we can and cannot buy.

Ken July 13, 2011 at 12:58 pm

_Your_ nine-year-old might do that, but mine knows better. So it’s really a personal problem, ain’t it?

Paraphrasing the old song: If you can’t even run your own life, I’ll be damned if you run mine.

Jonathan M. F. Catalán July 13, 2011 at 1:51 pm

The government gave your 18 year old a rifle, a plane ticket to Iraq, and a casket… all for free! What a deal! Got a problem?

vidyohs July 13, 2011 at 8:30 pm

LIKE

And, the hell of it is the 9 year old had a choice but the 18 year old didn’t.

Methinks1776 July 13, 2011 at 9:23 pm

Well done, Jonathan. I hear the government is magnanimously handing out tickets to Libya now too, while the rest of us submit to anal probes to open a bank account (notice how starved of funding the terrorists are now that we have the Patriot Act? ).

Liberty 1 July 13, 2011 at 4:03 pm

Most would think this is a problem: My dad bought me a BB gun at 4, a 22 caliber rifle at 6, a double barrel shotgun at 10, and a high powered rifle at 11. If you added up the years of gun ownership in my family (three generations) they total around 135 years without an accident, injury or unlawful act.
My dad taught me how dangerous firearms were, how to respect them and how to use them properly.
At age 13 I used to pick the lock on the gun safe and move dad’s 44 magnum pistol out of the way to get to the Atari that my sister and I knew my parents bought us for Christmas and weren’t allowed to have.

P.S. He bought my son a 22 caliber rifle for his third birthday this past May.
I hope dad is around to teach my son how to use the 22 he bought my son.

vidyohs July 13, 2011 at 8:37 pm

Age 11, I would walk through the middle of downtown Ajo, Arizona, on the way to the desert to hunt Jackrabbits, carrying my Dad’s 22, with my pocket full of shells I bought myself. No one, official or private blinked an eye or every accosted me.

I lived in that town for 3.5 years and never did anyone in town, man, woman, or child ever have a gun related accident.

muirgeo July 13, 2011 at 2:20 pm

And if we lived in La LA Land that might be good… but we don’t. We live in a real world were nations and corporations compete in any way possible to one up themselves. That’s why it is written into the constitution that the state has the right and ability to institutue tarrifs because back then when they wrote the constiution they were aware of the fact that we do not live in La La Land and that it might be a long time until we get there.

Being a realist and a pragmatist is important when planning things in the real world. Being an idealist when professing beliefs is good for the classroom and dangerous when let loose in the real world.

Dan J July 13, 2011 at 2:31 pm

Indeed, tell that to progressives and their collectivist idealism. Because in the ‘the real world’ collectivism has led to misery, pain, and impoverishment followed by strife, death, and destruction.

muirgeo July 13, 2011 at 8:49 pm

No it hasn’t. Collectivism in the form of our modern social democracies has lead to the greatest prosperity the world has ever seen while what yo believe in exist no where in the real world. Hell communism is more effective than libertarianism in that it actually exist in the real world.

But in La La Land where libertarianism does exist it kick ass for sure dude…

Ghengis Khak July 14, 2011 at 1:15 am

“Hell communism is more effective than libertarianism in that it actually exist in the real world.” — muirgeo

And lemon jello is and forever will be a better source of energy than cold fusion because the latter has never existed.

Also, I thought free markets (since surely freedom means a monopoly currency, tens of thousands of pages of regulations, the distortions of double-digit tax rates, etc.) were the cause of the financial crash. Maybe you can just pick a consistent narrative from now on and stick with it instead of cherry picking the response that happens to support the topic at hand?

vikingvista July 14, 2011 at 1:47 am

“Hell communism is more effective than libertarianism in that it actually exist in the real world.”

Apparently the little muirde is unaware of the existence of the Soviet black market.

He’s been enlightened numerous times to the fact that free and unfree actions exist to some degree in any society, but this all-or-nothing idibot don’t learn.

Ken July 13, 2011 at 3:15 pm

muirgeo,

“Being a realist and a pragmatist ”

A realist and pragmatist doesn’t ignore actual facts and keep doing the same stupid thing over and over, claiming this time is different.

Regards,
Ken

Sam Grove July 13, 2011 at 3:41 pm

Being a realist and a pragmatist is important when planning things in the real world.

You call yourself things that observation shows don’t really apply.
You can’t make yourself something merely by attaching labels to yourself.

Kirby July 13, 2011 at 7:23 pm

Just curious, if it profits me to sell arms to North Korea, I should be able to do so?

muirgeo July 13, 2011 at 8:53 pm

Sure… if a country sells human meat and you like it you should be able to buy it all you want… See as a libertarian you mainly care about your own individual liberty so it’s OK to support communist and slave traders and dictators , and human meat providers.

anthonyl July 14, 2011 at 9:54 pm

Just as today your own person is your property so it would be in any libertarian society. Your rights end when they interfere with another’s.

Tim July 13, 2011 at 11:33 am

Correction. The multinational corporations lining up at the trough to write our trade agreements as you say are there to make sure they get as much protectionist benefit as possible. In other words, yes, they are there to make sure their interests are protected. Yet one more reason muirgeo to RESTRICT the power of government to confer such benefits!

muirgeo July 13, 2011 at 8:56 pm

“Yet one more reason muirgeo to RESTRICT the power of government to confer such benefits!”

You guys like to make this claim but I don’t think a one of you’s has ever thought about how you would enforce this… how would that look? Who restricts the power of government in general or of government by the people?

I bet you really haven’t thought about this anymore then the sentence you typed claiming it the solution. Think it through with me.

anthonyl July 14, 2011 at 12:30 pm

When a law is about to be passed… Vote no! I vote no on all propositions presented to Cali voters. There ought not be a law! Legislatures around the would could really reduce their workload be discussion on what really shoul be a law and what they should stay out of.

Upton July 14, 2011 at 5:19 pm

A well-armed populace is a great way to keep tyranny at bay. We’ve come full circle!

muirgeo July 14, 2011 at 9:20 pm

My point exactly….

Dan J July 13, 2011 at 11:46 am

All the more reason to restrict govt. Govt powers lessened and corporations powers are lessened.
This, in assuming your ‘corporations are evil’ and taking over the world rant.

anthonyl July 14, 2011 at 10:00 pm

All corporations try to take over the world. The only thing that stops them are other companies. Competition. Only governments can stifle competition and create monopoly. That’s why govt. just gets bigger!

CRC July 13, 2011 at 2:29 pm

You are correct. Most of the so-called “free trade” agreements the US has entered into are named to mislead. They are properly called “managed trade” agreements. To simplify this the US could adopt this (possibly even into the US Constitution) as the free trade agreement and policy of the United States:

“Congress shall not lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by Congress on Imports or Exports, shall be for the use of the Treasury of the United States.”

Done.

Dan J July 13, 2011 at 2:35 pm

How about uniform tariffs. Want protectionist 25% tariffs on pickup trucks from Korea, then there must be 25% tariffs on all goods from sugarcane to cornhusk dolls made in Honduras.

CRC July 13, 2011 at 3:12 pm

That’s not a bad idea. In regard to general tax policy I’ve long thought that a simple rule that says everyone pays the same rate whether income tax (which I suggest eliminating) or sales tax (which is least of the tax evils) would provide at least a moderate governor on tax increases. The way it works now is everyone else is happy taxing everyone else but themselves.

vikingvista July 13, 2011 at 6:32 pm

Clearly rules against the government are not long effective. There is no appropriate tax, but as a transition, while government services are being privatized, there is one rule that is the most important for regulating the level of taxation and growth of government:

The taxes should be easy to avoid.

The government likes you believe the nonsense that you must make up for the taxes that others don’t pay. The reality is that growing tax receipts means growing government means growing taxes for you. Tax cheats may be, sadly, our only effective defense against that growth.

Milton Friedman and his FDR-lackey brethren struck a fatal blow against that important regulatory mechanism when they came up with income tax withholding during WWII. The great libertarian can be thanked, in part, for the monstrosity we have today. Add to that the unforgivable sin of virtually wiping out whatever opposition to central banking might have been left.

MF: So much to love, and so much to hate.

anthonyl July 14, 2011 at 10:15 pm

So why just 25% on stuff that crosses the border? Why not 25% on everything bought or sold in the US just to make it even and non-discriminating toward imports. US will get 50% of any economic transaction regardless of where it comes from and 25% of US GDP. That should be enough revenue and fair to all. In truth it wouldn’t be fair at all because it would affect some sectors more than others. It would skew things just like tariffs do today.

Rugby1 July 13, 2011 at 4:16 pm

“There is no logical consistency between our trade policy, what you believe our trade policy to be and what you believe it SHOULD.”

You are absolutely correct. So how would giving more power to politicians protect the common consumer? How would better regulation protect the common consumer, doesn’t the greater the regulation the greater the complexity lead to just more gaming of the system by the very politicians and businesses you decry.

What if we had one free trade agreement, with every country and it just said… “trade is free.” Wouldn’t that reduce the very power of the corporation’s (not to mention the politicians) you decry.

anthonyl July 14, 2011 at 10:18 pm

That would be a great experiment! Let’s just try it for one year! We can always go back to protectionism if it fails.

Ricardo July 16, 2011 at 9:10 pm

The influences of international corporations and the negotiations of industrialized nations have thrown international economics for a loop. But the pressures exerted by global economic trade between many countries will eventually override it. http://www.basiceconomicstoday.com/index.html

DG Lesvic July 13, 2011 at 10:43 am

The publick gains not from taking from one Subject to give to another?

Let us be even more precise: the publick loses, and the poor especially lose, always, and, the more you take from the rich to give to them, the more they lose.

Don Boudreaux July 13, 2011 at 10:48 am

DG: I fail to see why you insist upon making the point that if G steals from A to give to B that B is also a loser. B MIGHT lose over the long run – say, by becoming lazy, by being stripped of his dignity, by becoming unexpectedly beholden to A, and the like – but it is also certainly possible for B to gain not only in the short-run but over the long-run as well. I’ve little doubt that, for example, members of American K-12 teachers’ unions gain substantially overtime from the special privileges they receive from government.

Slappy McFee July 13, 2011 at 11:49 am

Don:

Doesn’t your response here refute both the broken window fallacy and economists focus on the unseen versus the seen? Sure the shopkeep could have spent the repair money on something more productive but its as likely that he would have just pissed it away.

Sure the majority of government teachers are seen to be better off via the government monopoly, and possibly even the parents since they don’t have to shop for schools, but isn’t it a basic premise of everything we discuss here that we are not accounting for the unseen consequences of this monopoly?

Thuggish interference in the free trade of individuals, be it the government or my wife, alters my behavior and the incentives available.

Your response seems to back up Muirgeo’s assertion that free trade harms “American” producers and through them, other American’s are harmed.

In the end, I still believe that when G steals from A to give to B, as time reaches infinity, G, A and B are all worse of.

*BTW – I’m sure this isn’t what you meant, but after reading it 3 times, this is all I am seeing.

Economiser July 13, 2011 at 1:32 pm

I think Don is just saying that B himself may be better off. To take the broken window fallacy, the glazier himself is better off. The shopkeep is worse off, and societal wealth as a whole goes down. But the glazier’s lot is improved.

If small boys keep breaking windows over and over again, the glazier keeps getting better off. This is especially true if the government grants the glazier a monopoly (a la the K-12 teachers’ unions) by preventing others from competing with the glazier and using public coffers to fund the glazier’s work.

As long as the rest of the population is sufficiently productive, the government could enrich a small minority of glaziers indefinitely. Society as a whole is made worse off but the glaziers are enhanced.

Slappy McFee July 13, 2011 at 1:38 pm

Right — this is why I included an edit at the end of my post. I don’t believe that my understanding of Don’s opinion was matching his actual opinion.

Don Boudreaux July 13, 2011 at 2:26 pm

Right. It’s absurd to deny that A can gain if he succeeds in stealing from B. The society in which A and B are a part loses, because B’s losses are almost surely larger than A’s gains. But – I ask DG and Slappy – what’s so controversial about recognizing that a thief (and those with whom the thief shares his ill-gotten booty) gain from the thievery?

Slappy McFee July 13, 2011 at 3:25 pm

Oh, I agree that that the thief benefits from the theft. That is not in dispute. What is in dispute is how long do those benefits last? A person mugged on a street corner will eventually alter their behavior. Eventually the mugger will not have any more victims to prey on. Does this mean that he would have been better of getting a job rather than mugging people? No, not necessarily. The question remains, what happens to the muggers over time as his victims change their behavior? He was better for the day with the extra $20 but he is worse off with a couple 9mm slugs in his chest.

And yes, government teachers in 2011 are better off because of the government monopoly (if you only compared the average free market teacher vs the government teacher). If they didn’t derive any benefit from being Government employees, I would think in a rational world, the government employees wouldn’t exist. But as a parent and a tax payer, not only am I and my son worse off because of the monopoly, the costs wasted by said monopoly have to be overcome in time, thereby making even the teachers worse off.

But, we agree. Like I said before, I read your response to DGLesvic over and over and just couldn’t grasp the argument you were making.

vikingvista July 13, 2011 at 4:32 pm

Let’s say Congress hands me $50 million to research the psychological effects of reading and posting at Cafe Hayek. Then I never hear from them again. How does that not benefit me?

Free markets may open the door for each individual to great prosperity relative to a self-sufficiency standard (as it certainly does in spades for the vast majority of people), but that isn’t good enough for some people who aren’t too good at, or too interested in, the process of satisfying other people’s wants or evoking other people’s sympathies. A person like Kim Jong-il may be a king in his world, but may very well have been a deranged street person in ours.

Ron H July 14, 2011 at 3:06 am

Slappy: “Sure the shopkeep could have spent the repair money on something more productive but its as likely that he would have just pissed it away.

What? Whose judgement is that? Whatever he spends his money on, he considers it to be his best choice. Other opinions aren’t relevant.

anthonyl July 14, 2011 at 10:32 pm

The best choice is made by the owner not the thief. There are real extra costs involved in taxing the money from A and distributing it to B. No such costs occur when A spends as they wish!

DG Lesvic July 13, 2011 at 12:14 pm

Don,

You’re setting up a straw man and knocking him down.

Your straw man Lesvic says that, if the gov takes from Bill to give to John, John will be the worse for it. Or, even if the bank robber makes a clean getaway, his balance sheet will be lowered.

The real Lesvic says that, if you take from the richer to give to the poorer, among the employed themselves, you will make the poorer even poorer, and in proportional as well as absolute terms, and in the short as well as the long run.

You’ve shown that you can knock down your straw man.

Now, let’s see how you do with the real Lesvic.

DG Lesvic July 13, 2011 at 12:17 pm

And I trust you understand that, when I say, the poor, I mean the poor as a whole.

DG Lesvic July 13, 2011 at 1:33 pm

I can’t understand why Café Hayek is having so much trouble differentiating between the “micro” and “macro” effects of redistribution, its effects on isolated individuals and on social classes. Hayek himself certainly had no such difficulty. Analyzing the labor union policy of forcing wages above market levels, he said that such gains could be attained only for some at the expense of others of the working class, who, because of the unions’ policy, will be forced into either lower paying occupations or unemployment. So some lose while others gain. But what is the net effect overall?

“The result must be that the overall average will be lower.”

That is the issue. The overall average. Not the effect on isolated individuals here and there, nor even isolated groups here and there, such as your teachers’ union. It isn’t to deny that some individuals within the group could profit at the expense of the group, nor even that some sub-groups within the overall group could profit at the expense of the greater group. Bill or John may indeed prosper. Your union members may indeed prosper, but, when some of the poor prosper at the expense of society as a whole, is it just at the expense of the rich or of the poor as well, and not just of other individuals among the poor but the poor as a whole. I repeat: the poor as a whole.

That’s the issue.

Economiser July 13, 2011 at 1:35 pm

DG – can you put that into a graph for us?

Muchos gracias,
Economiser

DG Lesvic July 13, 2011 at 1:45 pm

And, if that point was good enough for Hayek, why not for Cafe Hayek?

DG Lesvic July 13, 2011 at 1:48 pm

Economiser,

I’m sure you were just trying to be funny, and I appreciate that, for that’s how graphs and charts should be treated, as a joke, and not serious economics.

Economiser July 13, 2011 at 1:52 pm

DG,

So you would say there’s an inverse relationship between the number of graphs/charts and the quality of the economic analysis?

For example:

Qe = 1 / Nch

Where Qe = quality of economics and Nch = number of charts?

;)

vikingvista July 13, 2011 at 4:56 pm

Or to quote Mises’ great student Murray Rothbard (pp. 471):

FP + FΔP – PF – PΔF > 0
FΔP – PΔF > 0
FΔP > PΔF

Therefore,
ΔP/ΔF > P/F

DG Lesvic July 13, 2011 at 5:01 pm

Vike,

You could the bullshit right out of my mouth.

DG Lesvic July 13, 2011 at 5:09 pm

How can a man as brilliant as Don all of a sudden become so dense?

Reminds of the time maybe 35 years ago when I presented my theorem to my teachers at an off campus (UCLA) series of seminars conducted by Jack High, David Friedman, Hollywood Hazlett, and Larry White.

Friedman pointed out what he thought was the error in my thinking. I didn’t get it. Hazlett pointed out the same alleged error. I still didn’t get it. White then did the same, and I got it, I got the point, and admitted to White that my theorem had been wrong. I later retracted that, but for the time being, at least, saw their light, but only when presented by White.

As I said, in the front of my book:

Special thanks to Janice Allen of Dissent School, and to Larry White, who opened my mind by kindness. I might even try that someday.

I still might.

DG Lesvic July 13, 2011 at 5:11 pm

Vike,

Sorry, another typo.

I means to say that you took the symbols (the bullshit) right out of my mouth.

vikingvista July 13, 2011 at 5:36 pm

Well DG, as the great Austrian economist Murray Rothbard once put it,

vikingvista July 13, 2011 at 5:55 pm

Or perhaps we can find a more insightful reply from your hero Ludwig von Mises from your favorite quotable tome, _Human Action_(p. 128),

“If it is at all possible
to increase the return from p to p1 by increasing the quantity of one of the
complementary factors only, namely by substituting cx for c, x being greater
than 1, we have at any rate: p1 > p and p1c < pcx."

vikingvista July 13, 2011 at 6:00 pm

But perhaps Mises said it best when he wrote in _Human Action_(pp. 711-712),

We call the present day D1 and the day the equilibrium will be established Dn. Accordingly we name the following magnitudes corresponding to these two days: the scale of valuation of the goods of the first order V1 and Vn, the total supply of all original factors of production O1 and On, the total supply of all produced factors of production P1 and Pn, and summarize O1 + P1 as M1and On + Pn as Mn. Finally we call the state of technological knowledge, T1 and Tn. For the solution of the equations a knowledge of Vn, On + Pn = Mn, and Tn is required. But what we know today is merely V1, O1 + P1 = M1, and T1.

DG Lesvic July 13, 2011 at 7:10 pm

Viking,

As I had already told you, I know that Rothbard was inconsistent on that matter. As for Mises, that sort of thing was most atypical of his work, and I always felt that he did it in that instance just to show that he could play that game too.

You and I already had this discussion, and you exited with your tail between your legs. Now you want to go through the whole thing all over again. No thanks. You had your chance.

We’re on to something else, now. What do you have to say about that? I ask that as one who would value your opinion, when you’re being serious.

vikingvista July 13, 2011 at 8:19 pm

“I know that Rothbard was inconsistent on that matter.”

Rothbard wasn’t inconsistent, he just didn’t subscribe to absurd DG silliness.

“As for Mises, that sort of thing was most atypical of his work”

So you agree with Mises that mathematics can be useful in explaining economics, or not?

Methinks1776 July 13, 2011 at 9:25 pm

Viking, I adore you!

The Other Tim July 13, 2011 at 12:20 pm

If you believe there’s a distinction to be made between what you claim to be the strawman argument and what you claim is the real argument, you haven’t actually spelled it out yet. Both take the general form that if you take from A to give to B, B becomes poorer.

DG Lesvic July 13, 2011 at 1:12 pm

Tim,

The straw man’s A and B are single individuals, Bill and John.

The real Lesvic’s A and B are the rich as a whole and the poor as a whole. The theory is that taking from the rich as a whole to give to the poor as a whole will make the poor as a whole poorer. It may make individuals within the whole richer, but the whole poorer.

The Other Tim July 13, 2011 at 1:48 pm

Then you’re not taking from A to give to B, you’re taking from A to give to C, C being a subset of B. If you want to argue that giving to C makes B poorer, you may, but your original statement “the poor especially lose, always, and, the more you take from the rich to give to them, the more they lose” follows the former format wherein there is no B/C distinction.

DG Lesvic July 13, 2011 at 4:59 pm

This Tim or Whatever Tim,

I am not concerned about this one or that one, but all the Tims.

Hayek was not concerned about this poor man and that poor man, nor this group of poor men and that group of poor men, but the poor overall, the poor as a whole. That’s what this is all about? What else could it be all about? How could economics be concerned with what happens to this Tim or that Tim, or this group of Tims and that group of Tims, but not all of the Tims as a whole?

I’m beginning to think I couldn’t penetrate your skulls with an atomic-powered harpoon.

M July 13, 2011 at 10:54 am

This post makes me think of the ridiculous series that ABC news is running this week. The installment that caught my attention was when the intrepid reporters removed from the family’s home all items that were not made in America. ABC was basically saying, “You disloyal American family! Why did you buy the $500 couch from China when would could have bought a similar one for $1,000 from North Carolina?!”
I’d love to see Boudreaux’s thoughts on the series.
http://abcnews.go.com/WN/MadeInAmerica/

Kyle July 13, 2011 at 11:04 am

I am glad that ABC is pointing out the disloyal subjects to the Government Throne by using cameras, vehicles, and other odds and ends most likely made in foreign countries.

I am also pleased to see that the media is bold enough to finally take its rightful place as Consumption Director. Instead of wasting my money on things I actually want, I’ll just wait for my local news anchor to drop by and force upon me all the products I “need” to buy.

M July 13, 2011 at 11:08 am

Excellent post, Kyle. Wonder what ABC would do if my “green” lightbulbs were imports.

I_am_a_lead_pencil July 13, 2011 at 11:26 am

Quite true.

Do you think that (following the logic that trade harms the importing country) ABC might suggest that its parent company (Disney) should stop accepting foreigners from visiting their parks as it takes jobs away from their native country’s own theme park industry?

They might also suggest that Disney remove all of their licensed toy offerings – as an outlandish percentage are made out of country.

W.E. Heasley July 13, 2011 at 1:51 pm

“That to force Men to deal in any prescrib’d manner, may profit some as happen to serve them; but the publick gains not, because it is taking from one Subject, to give to another.” – Dudley North

Here is a little different perspective.

Keynes was wrong about business cycle theory. Sorry, but in fact markets do clear and agents act in their own self interest.

Current economic decisions, regarding economic agents, depend on forecasts of future variables, optimally formed via behavior of past variables. However, politicos through the mechanism of government can and will create an environment of distortion-intervention which causes optimal to be displaced/distorted hence markets do not clear regardless of agents self interest.

Hence “….force Men to deal in any prescrib’d manner” is distortion-intervention leading to agents inability to reach optimal positions leading to “…but the publick gains not” which is the failure of markets to clear. When markets do not clear due to politico distortion-intervention, the politico more times than not is creating willingly or unwittingly an environment producing “may profit some as happen to serve them”.

Daan July 13, 2011 at 5:32 pm

Off topic. I wonder why café hayek is not discussing THE real issues that we are currently facing. One trick pony café. Last post on this blog for me, ever.

Have fun

vikingvista July 13, 2011 at 6:06 pm

Please don’t go. You will be sorely missed.

Methinks1776 July 13, 2011 at 9:29 pm

Daan,

I’m assuming you’re spelling your name phonetically in “Southern”, a dialect which requires each word to have a minimum of two syllables.

What are the “real” issues we are currently facing?

anthonyl July 15, 2011 at 12:25 pm

Let’s discuss the real issues according to Daan… Daan? Daan? The real issue please?

DG Lesvic July 13, 2011 at 7:22 pm

Fellows,

I have nothing to say about taking from Bill to give to John.

I have nothing to say about taking from all of us to give to the members of the teachers’ unions.

Here is what I have to say, and that I ask you to focus.

Taking from the rich to give to the poor can only make the poor — as a whole — poorer than they would otherwise have been, and in proportional as well as absolute terms, and in the short as well as the long run.

It is not that it makes every single poor person poorer, nor even every special interest pressure group among the poor poorer, but that it makes the poor — as a whole — poorer.

Let me repeat that: the poor — as a whole.

Now, may we proceed from there, or do you still have more red herrings you want to drag in?

DG Lesvic July 13, 2011 at 7:39 pm

“Redistribution” is “the crucial issue on which the whole character of future society will depend” and “it would be disingenuous to avoid discussing” it.

Hayek

DG Lesvic July 13, 2011 at 9:13 pm

Viking,

As I said, you and I have had this discussion before, and we’re on to another now, from which I shall not be distracted.

anthonyl July 15, 2011 at 12:00 pm

Redistribution robs important areas of the economy of capital. It directs capital to areas that are less “useful” and denies those most capable of providing our need valuable resouces. Redistribution should be called misalocation. We will misallocate funds through higher taxes to the less useful goal of mandated healthcare and support of less valuable products.

DG Lesvic July 14, 2011 at 4:08 am

Apparently Viking and Methinks are trying to fill the gap left by Daniel Kuehn’s defection to Coordination Problem. Daniel was the great practitioner of fighting and running away and living to fight another day, running and hiding from the fight he was losing and then resuming it at another time, as though he hadn’t already run and hid from it, and then, of course, congratulating himself if you fail to repeat the trouncing endlessly.

Some Viking. He must have been one of those that stayed home.

And she must miss the Gulag.

The discussion here is not math. It is redistribution.

I guarantee you that those obscurants will not dare say anything about that.

They’ll just try to distract attention from it.

With friends like that, does freedom need enemies?

DG Lesvic July 14, 2011 at 4:57 am

If you really want to have the discussion of math all over again, with the whole Megillah, it’s alright with me if it’s alright with our hosts. But this time it’s got to be a fight to the finish, no more of this Daniel Kuehn fighting and running away and living to fight another day baloney. You have to respond to everything I say, either agree or disagree, and come to a once and for all conclusion. But first things first. We were talking here about redistribution and Hayek said it would be disingenuous to avoid discussing it, as you have been doing. Do you want to discuss it or go on being disingenuous?

And this is your chance to demonstrate your sincerity, by answering the question.

Prediction: Ha!

vikingvista July 14, 2011 at 10:56 am

I think I’ve finally figured you out. You don’t WANT to be taken seriously.

DG Lesvic July 14, 2011 at 11:17 am

Viking,

Ha!

DG Lesvic July 14, 2011 at 11:42 am

Friends,

Once again, I’ll let Hayek speak for me.

“Redistribution” is “the crucial issue on which the whole character of future society will depend” and “it would be disingenuous to avoid discussing” it.

What have we seen here, but pretexts for not discussing it, first, a gross misrepresentation of the problem, as though it were one of isolated individuals or groups among the poor rather than the poor as a whole.

And now, changing the subject.

We have it not only from Hayek but Mises and Boudreaux as well that redistribution is not just the greatest but ultimately the only issue.

And we still can’t get a discussion of it, and, according to Viking, the only one here who wants to discuss it is the one who doesn’t want to be taken seriously.

Well, then, neither did Hayek, Mises, nor Boudreaux.

I’ll settle for that company, even if it means losing Viking’s.

DG Lesvic July 14, 2011 at 2:02 pm

It looks as though we’re not going to have a follow-through of the discussion of redisribution that we had started out with. That’s a shame, but the sad fact we must face. So, if Vike wants to follow through with the discussion of math that he initiated here, I’ll go along with him on that, if our hosts don’t mind.

How about it, Vike. Are you serious about it?

kyle8 July 14, 2011 at 2:23 pm

Look, free trade is just a choice, like any other. One society may be happy funding it’s government with tariffs, or propping up it’s exports with a devalued currency, or propping up it’s domestic markets with protectionism.

The most important thing is that the people realize that those choices have a cost: greater inefficiency, and much much higher consumer prices. Oh yeah, and probably somewhat lower economic growth as well.

vikingvista July 14, 2011 at 11:55 pm

“Look, free trade is just a choice, like any other.”

No. The only time everyone has a choice, is with free trade. With anything else, someone’s choices are being violently suppressed.

anthonyl July 15, 2011 at 12:41 pm

It is the tyranny of a minority seeking approval by a majority to supress one. Nations don’t make choices people do.

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