On Social Rights: or, a Fiction Serving a Fiction

The adherents of collectivized ethics claim that "social rights" trump individual rights. Hence, on pain of logical inconsistency, they have to admit that the "social system" is supposed to serve "society", not any particular individual. This conclusion, when read without committing the fallacy of conceptual realism, says that a fiction should serve another fiction. No wonder that the benefits of shaping interhuman relations along these lines are wholly fictitious as well.

The Structure of American Financial Statism

Almost all of the highest ranking regional US central bankers (i.e., political commissars in charge of central planning of interest rates and money supply) are at the same time chief executives of various commercial banks. In other words, the shape of the modern banking industry is that of macroeconomic communism combined with corporate favouritism - the very antithesis of laissez-faire capitalism. Thus, whoever claims that the recent financial crisis (or, for that matter, any financial crisis of the last 100 years) has anything even remotely to do with laissez-faire capitalism is either a perfect victim of statist propaganda or a cynical beneficiary of the status quo. Tertium non datur.

A Brief Comment on Ron Paul vs Paul Krugman

Here is a link to the discussion. My overall impression is that Ron Paul did very well, much better than his opponent (and here I'm talking just about style, not substance). While he could have talked about the capital structure, intertemporal coordination of production, and malinvestments, he talked instead about the destruction of private American savings and the Fed as an inexhaustible source of funds for political spending (especially welfare and warfare spending). Thus, he addressed genuine concerns of a lay audience while remaining intelligible to it. Krugman, on the other hand, produced nothing except for unsubstantiated statist platitudes.

As for my few bits of friendly criticism, if I were in Ron Paul's place and had his quickness of mind, I would not bring Friedman into the debate at all, but if I happened to mention him, I would not shirk from agreeing that he was indeed a "leftist" (or, to use a much more meaningful word, a statist) on monetary issues. I would use this as an opportunity to introduce von Mises as an example of a full-blooded monetary free-marketeer, and demonstrate that the pop-intellectual discourse is chock full of elementary semantic confusions.

I would also immediately counter any mention of "fiscal stimulus" with a few concise but pithy remarks concerning the fact that siphoning funds from the free market, i.e., that sector of social relations which is the sum total of mutually beneficial interpersonal transactions, guided by price signals and disciplined by the threat of incurring losses, and transferring them to the state apparatus and its clientele, i.e., that sector of social relations which is insulated from the profit and loss system and beneficial only to the transferees, can only lead to plunging the economy further into the quagmire of parasitic attitudes, calculational chaos, and prolonged investment uncertainty. Of course, if I were Ron Paul, I could actually make that concise and pithy.

Finally, I'm confident that Krugman will try to use this very short exchange of words with Dr. Paul as a pretext for not debating any other Austrian economist in the future (including especially Bob Murphy). For all his erudition and competence, I doubt that Ron Paul cares to know all the ins and outs of contemporary academic economic jargon, which makes Murphy, an academically trained "dismal scientist", an even more dangerous debate opponent for Krugman, capable of effectively preventing the latter from being able to hide behind the veil of sophistical econobabble. This, of course, is not to say that Ron Paul's performance in this debate was any less formidable. All in all, I believe that this brief exchange provided yet another illustration that the Austrians have the Keynesians on the run, and the fact that they seem to be getting more and more opportunities to demonstrate this is a hopeful sign.