Dmitry Chernikov’s Blog

David Friedman has authored a penetrating article on how game theory can help escape the Hobbesian jungle. In it he uses the notion of Schelling points to make his case.

A Schelling point is (in a game) a unique choice among many which is chosen by all people playing the game who cannot talk with one another precisely because of its uniqueness. It makes possible coordination without communication. Thus, if two people are given a series of numbers 2, 5, 9, 25, 69, 73, 82, 96, 100, 126, 150 (David’s example) and can win a prize if both select the same number, they can succeed if they know which number the other person interprets as uniquely special, even though the concurrence in picking any number will suffice. Thus, 2 might be picked by both, because it is the only smallest prime number. 100 might be picked, because it is a nice round number. Since there are three perfect squares in the series, it is less reasonable to try to pick one of them, because even if both for some reason like squares, they will still have only 1/3 chance of selecting the same one. Thus, a Schelling point is “each person’s expectation of what the other expects him to expect to be expected to do.”

Now having read David’s article, ask: Is the Constitution a Schelling point as an agreement between the federal government and the people / states? The federal government can be either limited or unlimited; but if it is unlimited, then no one knows exactly which form it will take or how big it will be. This uncertainty will please no one. But if it limited, then we can specify or enumerate all of its legitimate functions. This can be a small list or this can be a big list, but it will limit the government. Such a government is a Schelling point; it is a unique solution to politics. It so happened that the point settled initially on a very small government. As the ideology has changed from the days of the founding of the US into something far more statist, it would still have been better to obtain the vastly bigger government that we have now by amending the Constitution than by retiring it altogether, which is the de facto situation today. For that would have still kept the government limited, with precisely named if perhaps numerous functions rather than unlimited and unaccountable.

The recommendation to the people then is not to wait until “a long train of abuses and usurpations” has left its mark on the country but rather to revolt at the smallest sign of corruption of which they should be eternally vigilant. This is because any exceeding of government authority, if not checked right away, will embolden the government to try to do the same again and again, thus moving the agreement further away from the Schelling point and encouraging the government to make unlimited demands. For if the first abuse is tolerated, then what argument remains for not tolerating all the future abuses? Give the government an inch, and it’ll take a mile. So, punishing unconstitutional acts immediately and ruthlessly (e.g., by tarring and feathering the President) is a good policy even if it seems initially out of proportion to the crime committed by a public figure. This strategy will install essentially a revolution in permanence, because the government will always try to evade its restrictions.

So, it seems that enforcing Schelling points is deterrence with a vengeance.

Jefferson thought there ought to be rebellions at least every 20 years or so, so that the rulers are “warned from time to time that this people preserve the spirit of resistance.” He underestimated the folly of the American people. From a shining city on the hill America has turned into an ant hill. And this has been partly due to disregarding game theory.

The contemplation can be of something external or of something internal to a person. If it is of something external, such as of God, then the sight of it causes enjoyment. If it is of the internal state, then it brings about a realization that one is content, at least in some aspect, and no action is required further to improve one’s lot. Enjoyment is rational in five ways: (1) because it was brought about by action that called for an inquiry into how to attain it; (2) because pleasure necessitates knowing the good in your possession; (3) because the highest pleasures are often the result of discovering the truth; (4) insofar as the mind is attending to the pleasure and is not occupied by weightier things still in pursuit; and (5) because it generates the rest not only of appetite, such as the will, in the good attained but also of the intellect and the bodily powers. The rest of the intellect is two-fold, corresponding to (1) and (3) just mentioned. First, there is no longer a cranking out of the means to the ends chosen, as the end or ends have been attained. Second, there is no longer studying which is the paramount means to happiness, as the truth has been learned; e.g., all truth is present in God upon seeing Whom all wonder ceases, having come to be replaced by knowledge of the first cause and all of its effects.

In order to prove that being and (2nd-level metaphysical) goodness are the same “really,” we have to show both that whatever has being is good and that whatever is good has being. Aquinas’ argument in (ST, I, 5, 1) proves the second part of the conjunction. To sum it up: that is good which is desired; everything is desired to the extent of its perfection, i.e., suitability for him who desires it; perfections are such only when they are actual; and existence “makes all things actual.”

Here is how Aquinas interprets the saying of Boethius in his reply to Objection 1. “I perceive that in nature the fact that things are good [simply and are relatively in their complete actuality] is one thing; that they are [simply and good relatively in their primal actuality] is another.” By this I take Aquinas to mean that when we consider a thing as a substance as such, its “relative” (that is, possibly imperfect) goodness is derivative from its “simple” being; while when we consider it as something perfect, it becomes “simply” good with no admixture of evil in it, and its actuality goes beyond its essential being (e.g., to wisdom or virtue or happiness in a man), which means that it exists “relatively” (that is, with some “superadded actuality”).

The first part is proved in (3). Consider, say, a rock located a thousand feet beneath the Earth’s surface. Obviously, it has being. It has actuality and can act, for example, by supporting the rocks around it. It has perfection in a manner of speaking. Granted. But is it good? Certainly, no human desires it either as a useful, virtuous, or pleasant good (see (6)). No human even knows about its existence. Or how about a virus that causes disease? From the human standpoint it is positively evil. To whom then are the rock and the virus desirable? Surely, to God. “God saw all that he had made, and it was very good.” (Gen 1:31) So God loves all things for two reasons: one, as Being itself subsisting, for everything that exists is like God insofar as it has being, and like naturally loves its like (one near-death experiencer said that he would have been satisfied being a single atom in God’s created universe); and two, insofar as everything that exists contributes to the perfection of the universe. Perhaps we can best imitate God by loving all things, even viruses, for the same reasons why God loves them, as it is written, “Be imitators of God, therefore, as dearly loved children and live a life of love” (Eph 5:1-2), even though it is reasonable to hate their actions, such as causing illness, for which we would be justified to inflict death on them.

Hence we can conclude that being and goodness are the same.

Psychological egoism states that people do actually seek their own happiness and their own happiness alone. I think that this view is unimpeachable and true. Therefore, ethical egoism, the view that man ought to maximize his pleasure, is superfluous, in that it is pointless to ascribe a duty to do what is performed out of self-interest. On the other hand, psychological utilitarianism, in which one loves his neighbor as himself, is certainly a rare occurrence in the world, and therefore ethical utilitarianism is useful as a teaching tool, for it enjoins upon a man a duty to take into account the happiness of others. But once one has been trained to consider that happiness in his deliberations and has become a good utilitarian, the duty to maximize general welfare fades away as no longer necessary. For its task, in demanding certain sacrifices, is not to destroy self-love but to enhance and civilize it by instructing a man to love everyone in the whole world and make other people’s happiness his own. Once this sublime state of affairs, called holy will, is reached, the utilitarian duty no longer serves a purpose.

Reposting with an update. There are several ways to think about the four causes:

(1) Form and matter are concerned with an object’s essence, while the efficient and final causes, with its existence. The former two ask, What is X? (E.g., such and such form-in-matter.) The latter, What makes X exist? (E.g., such and such forces hold X together; X exists for such and such purpose, because Y wanted it to exist or it was useful to Y.)

(2) The final-formal causes belong to the maker/creator, whereas the material-efficient causes belong to the thing made/creature. The former inhere in the maker’s will and intellect, with the formal cause being in the mind before it is in the thing; the latter, in the the thing made’s matter and energy, with energy keeping matter together.

(3) There are 3 causes on the level of the creator: the final cause, the designing cause, and the efficient cause. For example, it is possible that the designer of an object is different from its creator. Thus, the form and matter are subordinate to the mind expressed as the final/designing/efficient cause. The mind is privileged in my scheme. Now, of course, the thing made can, too, have a mind. But that only means that the effect can imitate the cause faithfully.

According to Locke, primary qualities are qualities like extension, figure, motion or rest, and number. These “inhere” in bodies; that is, the simple ideas produced in human minds by them somehow resemble them. The idea here is that the collection of corpuscles that we perceive as a cup really is shaped like a cup; we perceive certain heaviness when holding it, and it really does weigh so many ounces; we see it moving at such and such speed, and it really is moving. This is the sense in which our ideas resemble the object. Secondary qualities are those constitutions of a thing’s “minute and insensible parts” which produce certain sensations in us, such as colors, tastes, and the rest; yet with them, there is no resemblance between the cause of our sensations and the sensations or ideas themselves. For example, we perceive blueness, but the object we are looking at is not really blue; what it really has is a certain surface structure with the power to absorb all but the blue range of light. Thus, we perceive extension and the body is really extended, while with respect to a fire, for example, we perceive yellowness or warmth, but the fire is not really yellow or warm (though it may have “high” temperature or temperature which is usually correlated with the experience of warmth); rather, the fire, thanks to its internal constitution (plasma, as we now know), has a power to appear to an observer as yellow and warm. (An Essay Concerning Human Understanding, II, viii, 15)

Just as it is obvious that pain one feels from being too close to the fire is not actually in the fire, neither is warmth, which is merely a sensation generated by a certain power of the fire. A warm hand put in lukewarm water feels cold, while a cool hand put into the same water, warm. This implies that if heat as it is experienced were really in the water, the water would have to be both cold and warm at the same time, which is impossible. Heat then is relative to the perceiving mind; the same thing can seem warm to one person and cold to another. So, the secondary quality of temperature has to do with the quickness of movement of the molecules in a substance, and it is capable of producing different sensations in different observers.

The operation of the physical causes of secondary qualities is mysterious, at least to the science of Locke’s day; these operations “are hid from us, in some things by being too remote, and in others by being too minute.” (IV, iii, 24) Locke thinks that we can never know the underlying arrangement of corpuscles that cause our ideas of secondary qualities. This is because all of our ideas come from either experience and reflection, and the insensible parts are simply too tiny to see. (Reflection does not apply here at all.) We cannot predict what effects the minute parts of an object will have on us; nor can we, having seen the effect, know how it was produced. (IV, iii, 25) Finally, we cannot know how the structure of our immaterial minds permits us to experience ideas caused in us by material corpuscles. (IV, iii, 28)

It follows that only the ideas of primary qualities really exist. (II, viii, 17) They are “real” in the sense that they persist in the object even if there is no one around to observe it. But the ideas of secondary qualities vanish as soon as the observer, so to speak, leaves the room. These qualities are reduced back to their causes: an array of corpuscles making up the object with the power somehow to produce ideas in us yet which do not in any way resemble these ideas.

That’s what Mises calls labor which is done for reasons other than the consequences or output of labor, that is, other than the end product of working. Here are some examples of such labor.

1. Work as exercise, “to make his mind and body strong, vigorous, and agile.” (Human Action, 587)

   Here the disutility of labor is an indispensable part of the purpose of work. Without it, there could be no overcoming it and therefore no proper workout. In other words, one does not economize on labor in this case; on the contrary, one seeks out hardship.

2. Work as a means to eternal reward.

   Note that here there is an artificial separation of the means and the end. The heavenly inheritance is given for work itself, simply for trying and doing your best, not for the successful attainment of the end. As Mother Theresa once pronounced, “We are called upon not to be successful, but to be faithful.”

3. Work to kill time and boredom, “in order to forget, to escape from depressing thoughts and to banish annoying moods.” (587) This is a form of refined play, as Mises points out.
4. Work to relax by temporarily abandoning some productive activity that has become cloying. This is also a form of game.
5. Work of a creative genius, who “lives in creating and inventing. For him there is not leisure, only intermissions of temporary sterility and frustration. His incentive is not the desire to bring about a result, but the act of producing it.” (139)
6. Work as naturally pleasurable, such as a sexual act or exercise divorced from the end of self-improvement as asserted by (1), such as getting up after sitting for hours and stretching.
7. Work as intersubjective communion. Here one does not work to attain an end, to grasp and enjoy an object in one’s possession but to enjoy another subject’s company. Labor that constitutes an expression of love and such communion is an end in itself.
8. Work as forced or coerced service. Here the end is avoidance of external punishment; little concern is given to the qualities of the actual output of labor, except insofar as one is required to produce something no worse than some given standard.

In managing large projects it is customary to set up milestones, i.e., intermediate targets to be achieved. This is useful not only for dealing with the project’s complexity but also in order to create quasi-marginal units. Here’s what I mean: until the project is done, you have nothing. The marginal unit, that is, the unit that is significant for human action and for human happiness, is the whole project. No matter how much time and effort and money you have invested into the project, representing the costs, the profit will not be realized until you sell the completed thing. That can be bad for the morale of your employees and even of the manager who can get discouraged with such risk-taking. So, the milestones are like small marginal sub-units. You are neatly tricked into believing that you have succeeded at something whenever you have reached a milestone. Hey, whatever works.

Sidgwick writes that “many pleasures, — especially those of sight, hearing and smell, together with many emotional pleasures, — occur to me without any perceptible relation to previous desires.” (The Methods of Ethics, 45) Suppose that you go outside and breathe some fresh air and are delighted at the good weather. It seems that you have received pleasure without having achieved any goal that you consciously had in your mind and took steps to achieve. So, it appears that you can be relocated from a less satisfied state to a more satisfied state without acting to bring about the change; it can happen “by itself,” and the move can even take you by surprise.

A person is said to have a holy will when he enjoys doing his duties. At first this seems like a strange notion. For duties are categorical: you must not kill, you must fulfill your part of the bargain, etc. They constrain your free will. So, enjoying performing your duties is like enjoying being in prison: good for you, I suppose, but what is it to the duties? You still have to do them. Also, the idea is not that you enjoy doing whatever the duty happens to specify, whether it is or it is not obligatory. It must be then that what is enjoyed is being a just person.

Now duties are intimately connected to justice. If you say: “I must do my duty or what?” the answer is, “Or you’ll be a sinner, not true to social reality.” You will fail to conform to what ought to be, and in that is the essence of injustice. Thus, duties are not arbitrary, nor is performing them a mindless ritual, but rather they specify which actions match what’s been committed to. Insofar as duties make the future more determined, their performance is aligned with what everyone involved expects the future to be. Failing to perform a duty means failing to respect that settledness of the future. People must know that you can be counted on. Thus, doing a duty is the practical equivalent of knowing the truth: the latter consists in the thought corresponding to reality; the former, in the action corresponding to the same thing.

The evil is at both sides of the coerced “transaction.” The receiver may be paid for some services, e.g., as a government teacher, or simply because he is poor. In the first case the socialist calculation problem arises, as the bureaucrat cannot know if his salary is justified by his productivity. The consumers have no choice about whether and how much to pay this guy. Only as voters do they have some choice, and a highly attenuated one at that. In the second case a person receives benefits without working for them. If the purpose of the world is soul-making, then he defies God’s plan in that he fails to exert himself in seeking happiness and in so doing “make” himself. Good things just fall into his lap. He is a nobody; nobody needs him; in fact, other people would be better off if he dropped dead, in which case he would cease to be a drain on them. Yet he is laughing, chaffing, and nectar quaffing while feeling no shame for giving nothing to society in return.

Rothbard has trenchantly put it this way:

Any way that it may be considered, parasitic predation and robbery violate not only the nature of the victim whose self and product are violated, but also the nature of the aggressor himself, who abandons the natural way of production — of using his mind to transform nature and exchange with other producers — for the way of parasitic expropriation of the work and product of others. In the deepest sense, the aggressor injures himself as well as his unfortunate victim. (The Ethics of Liberty, 50)

On the other side we have the victim of parasitism who labors or have labored greatly, yet his actions to further his welfare or the welfare of his loved ones are made less successful. He works yet fails to reap the full benefit of his work, some of which is expropriated for the sake of parasites who feed on him. He is a slave for a good part of the year, working for others for whom he has no special feelings such as loving desire to help. It’s as if somebody has deliberately hampered his powers of production, e.g., by forcing him to work while carrying a heavy bag of cement on his back or while constantly listening to rap music to dull his intelligence. He is made into a fool or a dupe who seems to waste his energy stupidly. He is used in a most disgusting manner as parasites use a host without asking the host’s consent. He is a tool, a thing; yet, unlike market transactions in which we don’t have to worry about people’s making use of each other, because we know that everyone is satisfied with the results, in coercive legal plunder one side is treated with utter contempt, as subhuman, exploited as an animal, someone without the most elementary human rights.

Under a system of purely private charity being supported is considered shameful, as something to be avoided for fear of social scorn, as indicatory of one’s failure in life, at best a temporary burden to bear. (Thus, it is being given money that is a burden, not oneself giving to charity which is fundamentally honorable.) But when a legal title is given to certain specially privileged people or groups to other people’s property, being on welfare or being employed by the government become normal and not a sign of social worthlessness. Moreover, under the welfare state the crucial property of parasitism is its perpetuity. It’s a permanent imposition on the host, and its forever, for after all, what are the paradigms of inevitable things but death and taxes, with taxes bleeding the host dry precisely until his very death?

The difference between freedom and power is a bit subtle. Freedom is not being acted on in a disagreeable manner. Power, on the contrary, is acting or ability to act in an agreeable manner. Freedom often has a social connotation, being associated with other human beings’ not acting on you contrary to your desires. But it need not have such a connotation. Lack of freedom is linked with some necessity forcing you to do something against your will. Something imposes a demand on you when you’d rather ignore the demand or prefer that the demand did not exist.

Three things can diminish one’s freedom: violence, deception, and duties. Thus, (1) if a cop handcuffs you, then he is acting on you against your wishes. Your body is moving but not according to your commands. (2) If you act on false information, then your actions are futile, in that something causes your actions to fail to satisfy the desire that prompted the action in the first place. You can be said to lack freedom, inasmuch as you are prevented from acting according to your desires. (3) A duty can be thought of as a device for making humans more like machines; predictable. No matter what you want to do, you ought to do some particular thing. Your desires have no sway when it comes to performing your duties. There is a necessity attaching itself to your actions which disregards your actual wants.

The social notion of freedom attaches rights to you and duties to others. It prohibits various types of trespassing or violence against person and property by other human beings (the idea of violence presupposes the ideas of property and its legitimate or just possession and acquisition). You are free when others do not interfere with your use of what you own as you see fit.

To go back to the original question, insofar as you are forced to report to jail despite your wish to remain within society, you lose freedom. You are dragged off to jail by force; your property in your body is given short shrift. But insofar as the prison walls and razor wire and guards prevent you from escaping and doing as you please, you lose power.

Henry Sidgwick makes the following startling statement:

For though doubtless a man may often best promote his own happiness by laboring and abstaining for the sake of others, it seems to be implied in our common notion of self-sacrifice that actions most conducive to the general happiness do not — in this world at least — always tend also to the greatest happiness of the agent. …

[C]ircumstances are conceivable in which a man is not unlikely to think that he could best promote the Excellence of others by sacrificing his own. But no moralist who takes Excellence as an ultimate end has ever approved of such sacrifice, at least as far as Moral Excellence is concerned; no one has ever directed an individual to promote the virtue of others except in so far as this promotion is compatible with, or rather involved in, the complete realization of Virtue in himself. (The Methods of Ethics, 9ff)

But virtue is for the sake of happiness. Apparently, then, there are two kinds of happiness: one which is produced with the help of some excellence of character, virtue, or art, and another, not produced in that way. The former can under no circumstances be sacrificed for the sake of another; the latter can be and is, at least according to utilitarianism. What are the properties of these kinds of happiness?

We can approach the answer by reading St. Thomas. He first distinguishes between imperfect happiness which can be attained in this life and perfect happiness, which consists in the contemplation of God. In II-I, 1 through 5, he considers these issues, in particular, (1) those things that can generate imperfect happiness but that are neither necessary nor sufficient for perfect happiness (that is, things without which one can still be happy) in Q. 2; (2) things that are necessary for perfect happiness (among which he numbers pleasure, comprehension, righteousness, and, with qualifications, perfection of the body) in Q. 4; and (3) the one thing that is sufficient for perfect happiness, namely the vision of God in Q. 3. Commenting on (1) and foreshadowing the economists’ (correct) claim that human desires are for all intents and purposes unlimited, Aquinas writes:

the desire for artificial wealth is infinite, for it is the servant of disordered concupiscence, which is not curbed… Yet this desire for wealth is infinite otherwise than the desire for the sovereign good. For the more perfectly the sovereign good is possessed, the more it is loved, and other things despised: because the more we possess it, the more we know it. … Whereas in the desire for wealth and for whatsoever temporal goods, the contrary is the case: for when we already possess them, we despise them, and seek others: which is the sense of Our Lord’s words: “Everyone who drinks this water,” by which temporal goods are signified, “will be thirsty again.” The reason of this is that we realize more their insufficiency when we possess them: and this very fact shows that they are imperfect, and the sovereign good does not consist therein. (2, 1, ad 3)

… it is evident that naught can lull man’s will, save the universal good. This is to be found, not in any creature, but in God alone; because every creature has goodness by participation. (2, 8)

(I disagree, however, that the distinction between natural and artificial goods is tenable.)

Thus, wealth, honor, fame, power are such that if you fail to obtain them, you would lose little, for the will is not truly rested in those goods but seeks still something else. Therefore, if utilitarianism demands that you forgo some of these goods, it may have a case. But it is precisely perfect happiness that is the reward for virtue. Hence if you were to be deprived from the beatific vision, e.g., through viciousness of character, you would lose everything. And no one could be asked to make such an enormous (infinite) sacrifice for the sake of the merely imperfect (and finite) happiness of others. It is conceivable that God’s providence might trade off one person’s perfect happiness for another’s perfect happiness or one person’s imperfect happiness for another’s imperfect happiness. But one can never be obligated to exchange his perfect happiness even for an improved imperfect happiness of the rest of the world. Nevertheless, just as grace requires nature, and glory, grace, so does everlasting happiness with God require striving for happiness in general, of whatever kind. For example, though Aquinas denies that ultimate happiness “consists in the consideration of speculative sciences,” still, such consideration might be one’s vocation and therefore the source of merit and therefore glory and reward. He agrees that wealth “cannot be man’s last end, rather is it ordained to man as to its end” but in being so ordained, it can at least be a useful good, a means to perfect happiness.

When considering the economy, we decide: “As long as we have each other, let’s make the best use of each other.” This use is called “social cooperation,” sometimes with “under division of labor” added in. (This is because cooperation without division of labor — for example, a clique of hunters killing a mammoth with spears or several lumberjacks felling a large tree is an unstable group. It can be disbanded as soon as the prey is divided up or the tree is down. It can never result in the establishment of permanent social bonds, as the recognition of higher productivity of human labor under division of labor can and does.) On the market proper it is extravagant to ask: “Who are you?” or “Do you love me?” Instead, the paradigmatic question is “What can you do for me?” or “How can you serve my needs (for a price, it is assumed)?”

As recounted in Simple Rules for a Complex World, Ronald Dworkin makes a distinction between “personal” and “external” preferences. Apparently, personal preferences are those made without the input of other people; external preferences depend on “the views that others have for him or for his way of life.” (314) This distinction is tenable only if construed in a certain way. For example, the science of economics can be considered to deal with how an arbitrarily picked person X can best benefit from the existence and actions of other people. In so doing economics objectifies other individuals; the latter are treated as objects, tools, or instruments to X’s happiness. (Note that it can always be said that X can gain a great deal from others if there occurs some wealth redistribution from others to him; e.g., X will be very pleased if every person in society gives him $100. For that reason we must insist that the rules governing human interactions do not privilege anyone, so if X is a beneficiary of redistribution, then so must be everyone else which defeats the purpose.) So, economics is social technology describing how any individual can squeeze the most out of social cooperation under conditions of universalizable laws.

In other words, economics gives each individual information to decide what kind of society he wants to live in, given that he must a part of that society and equal in legal status to everyone else.

And if it is the conclusion of economics that, for example, a laissez-faire partially anarchist economy will serve any arbitrary person best, then it follows that this economy will serve everyone best.

Personal preferences, to use Dworkin’s terminology, then, extend to the entire spectrum of market interactions. The impersonal order of the market does not shape external preferences but facilitates the satisfaction of personal ones. External preferences will have to be truly intersubjective, wherein there is some kind of friendship between persons who do not take each other as mere instruments to each other’s well-being. It is only in such relationships that one can have “concern and respect” for the others’ personalities. The market requires only abstention from force and fraud and perhaps incompetence. We must therefore judge the market to be immune from any criticism based on the allegation that the preferences of its participants are not purely subjective or not autonomously made.

Dear Congressman Ryan,

I would like you to support Congressman Ron Paul in his efforts to reestablish the gold standard and even take the power of money creation away from of the Federal Reserve and the federal government. The idea is to de-monopolize money, allow private minting, let people use any medium of exchange they like, repeal legal tender laws, enforce 100% reserve banking and honor the distinction between deposit and loan banking, eliminate deposit insurance, and abolish all legal barriers to entry into the banking industry.

We desperately need these reforms, as the monetary crisis is upon us. But regardless of the present situation, these reforms would always be welcome, as they will ensure no unjust wealth redistributions, no threat of hyperinflation and the destruction of the dollar, in fact, no inflation at all beyond that effected by the precious metals mining industry and therefore security of our savings, sustainable growth without business cycles, and an end to the US empire built almost entirely on the ability to monetize debt through the central bank.

Government will be dramatically limited when it can no longer create money out of thin air and use to finance both the welfare and the warfare state.

Please consider becoming a champion of sound money; I promise that history will look kindly upon you.

Thank you,

Dmitry Chernikov

Choosing one’s employees or customers is a corollary of freedom of association, a freedom as important and as obviously “natural” as the right to own one’s body and right to make contracts. And a crucial part of freedom of association is freedom not to associate. But Michael Levin is surely right when he says that people want to make sure this freedom is not abused. He then undertakes to show that blacks differ from whites in ways that make many forms of racial discrimination rational.

I think that anti-discrimination laws exist because the market is thought to be ideally an impartial institution, such that a businessman ought to care only about his company’s efficiency and profitability to the exclusion of all other concerns. But that is a naive view of the market. First, there are numerous situations when persons of particular race or sex or abilities are required for the needs of production. Second, prohibiting arbitrary discrimination is government interference with consumption of pleasant associations. And a person should be able to spend his money in any way he sees fit. As Mises writes:

The businessman who owns the whole firm may sometimes efface the boundaries between business and charity. If he wants to relieve a distressed friend, delicacy of feeling may prompt him to resort to a procedure which spares the latter the embarrassment of living on alms. He gives the friend a job in his office although he does not need his help or could hire an equivalent helper at a lower salary. Then the salary granted appears formally as a part of business outlays. In fact it is the spending of a fraction of the businessman’s income. It is, from a correct point of view, consumption and not an expenditure designed to increase the firm’s profits. (Human Action, 241)

So, discrimination can be costly, but it may be a cost one agrees to pay. That is why Rothbard preferred the phrase “individual sovereignty” to “consumer sovereignty,” because an entrepreneur can always disobey the dictates of the consumers, though at a cost to himself.

Another problem is enforcement. One must needs read the employer’s mind in order to find out the real reason for refusing to hire or for firing or for failing to promote a worker. Any worker becomes a lawsuit waiting to happen, especially the disabled, a fact which deters employers from dealing with them at all. Thus, the laws, such as Americans with Disabilities Act, result in an outcome opposite to that which their very supporters claim they want to achieve. They further hamper the labor market considerably. On the contrary, the best way to integrate the outcast groups into social cooperation is to abolish all legal barriers to entry into all lines of work. The ADA also requires business owners to make expensive additions to their properties to accommodate the disabled, as though scarcity of resources has been abolished. Resources are thereby wasted in uneconomic uses.

And as Lew Rockwell has pointed out, why would you want to work for someone who doesn’t want you at his company, anyway? It’s impolite to force yourself on another. It’s a mild form of rape.

Another thing is that the government is portrayed as enlightened, and the people, and especially businessmen, as callous or stupid, not knowing their own self-interest. This time it is a naive view of the government. One could argue that the ADA, for example, has been enacted in order for big business to hamper their smaller competitors.

Finally, I’ll mention the insuperable problem of choosing between two persons who belong to different official victim groups. Should you hire a black man or a woman? Would a black woman working for you satisfy the diversity mongers in terms of both race and sex?

That’s an actual bumper sticker I saw today. It did not occur to the sticker’s owner that the reason for drug-related violence is precisely his very efforts to resist drugs via outlawing of them.

In the spirit of rule utilitarianism, let me say that what is worth conserving are only good laws, morals, manners, etiquette, institutions, virtues, and practices. If I saw that our rules of living and doing business were indeed worthy of preservation, I would happily join the most traditionalist of SJ Guardian conservatives in protecting these rules. Unfortunately, the present rules are very far from perfect and are getting worse with every act of Congress, executive order, and court decision. I can’t in good conscience approve of them: they fail to satisfy a utilitarian ethic. Therefore, I must disassociate myself from natural conservatives and try to impart into them the admittedly difficult to stomach for them view that radical reform is necessary.

For that reason conservatives must voluntarily cede power and authority for the time being to those who will effect the reforms. And those people today as ever are libertarians. They must let us — lawyers, economists, and political philosophers — re-evaluate the rules of society from the ground up on the principle of how well they promote general welfare, though they have a right to insist that the less obviously absurd rules are to be considered innocent until proven guilty.

Insofar as conservatives cling to permanent things, they will in the long run be better off, as the most stable laws are those which are in accord with human nature. As Rothbard writes from the natural law perspective which I have called the ethics of human powers, “The natural law is, in essence, a profoundly ‘radical’ ethic, for it holds the existing status quo, which might grossly violate natural law, up to the unsparing and unyielding light of reason.” (The Ethics of Liberty, 17) One can re-phrase this in the language of utilitarianism by saying that it is the nature of human beings to seek happiness. Yet such laws, once instituted, will only rarely need to be revised, bringing the longed for permanence and social calm to the conservatives.

Mises insists that the human mind has a logical structure. Experience is not written upon a blank slate; it is interpreted by the mind. That which receives experience has its own properties. The properties Mises calls “categories.” “The categories are a priori; they are the mental equipment of the individual that enables him to think and — we may add — to act.” (The Ultimate Foundation of Economic Science, 12) With respect to the controversies of geometry, we need to account for the problem of how an axiomatic-deductive geometric system, any system, whether Euclidian or not, is able to describe the real world correctly and to allow human beings to succeed in their effort to use it for the satisfaction of their needs. After all, things in the world work according to the theorems of geometry. Even if the choice of axioms is somehow arbitrary, these axioms are still a priori and the connection between the mind’s output and reality needs to be established. Mises’s answer is that the categories of the human mind are somehow adjusted to reality. The a priori categories “provide some information about the reality of the universe. They are not merely arbitrary assumptions without any informative value, not mere conventions that could as well be replaced by some other conventions. They are the necessary mental tool to arrange sense data in a systematic way, to transform them into facts of experience, then these facts into bricks to build theories, and finally the theories into technics to attain ends aimed at.” (16)

Mises narrows the meaning of a priori to “impossible to think the opposite of.” The categories are essential to our making sense of the world. These are human categories; they are not those of beings below or above humans. “We cannot preclude the hypothesis that there are features of reality that are hidden to our mental faculties but could be noticed by beings equipped with a more efficient mind and certainly by a perfect being.” (19) But how do we become aware of these a priori concepts? I think Mises would say that we do so by introspection and during their application in daily lives. These tools of thinking and acting are self-presenting, in that one cannot fail to become cognizant of them if one reflects on what he is doing. “Some authors have raised the rather shallow question how a praxeologist would react to an experience contradicting theorems of his aprioristic doctrine. The answer is: in the same way in which a mathematician will react to the ‘experience’ that there is no difference between two apples and seven apples or a logician to the ‘experience’ that A and non-A are identical. Experience concerning human action presupposes the category of human action and all that derives from it.” (42)

Action is a far-reaching category. It “comprehends the concepts of means and ends, of preferring and putting aside, viz., of valuing, of success and failure, of profit and loss, of costs. As no action could be devised and ventured upon without definite ideas about the relation of cause and effect, teleology presupposes causality.” (8)

And causality is yet another crucial category. Mises defines it in the Humean fashion as regularity in the succession of events. Without causality there is no action, because there could then be no attunement of means to ends. All experience would be a record of past events with no import for predicting of the future. Since acting is what makes men essentially human, no one could be unaware of the connection between cause and effect. In this sense causality is a priori. It makes action and even thought possible: indeed, thinking itself is regular, obeying the laws of logic. That is Mises’s solution to the Humean riddle of induction. The riddle is as follows: we believe that if A was followed by B a sufficient number of times in past, then it will do so in the future, as well, by induction. But that induction itself is a valid technique of inference is justified by the fact that it has worked in the past. So, we are reasoning in a circle. Mises says that we do not learn of causality and regularity by experience but enjoy a priori knowledge of them as categories of our minds. Just as when a child is developing, the brain expects to find in the body functioning arms and legs, so the human mind expects to find regularity in the world. This is a safe assumption to make for the mind, for if regularities are not forthcoming or are not detected, the person will swiftly die.