A Theory of Capitalism & Socialism (review: 4.5/5)

A Theory of Socialism & Capitalism: Economics, Politics, and Ethics
The first book by Hans-Hermann Hoppe that I read was the most excellent Democracy: The God That Failed. In the introduction to that book, Hoppe talks about competing social theories and, in face of conflicting arguments about society or politics or economics, how we can decide between them:

The data of history are logically compatible with… rival interpretations, and historians, insofar as they are just historians, have no way of deciding in favor of one or the other. If one is to make a rational choice among such rival and incompatible interpretations, this is only possible if one has a theory at one’s disposal, or at least a theoretical proposition, whose validity does not depend on historical experience but can be established a priori, i.e. once and for all by means of the intellectual apprehension or comprehension of the nature of things.

In other words, disagreements can’t be solved only by appealing to historical data. In the end “a priori theory trumps and corrects experience (and logic overrules observation), and not vice-versa.” A Theory of Capitalism & Socialism: Economics, Politics, Ethics [full text, pdf] takes this deductive approach. Hoppe starts by building a theory of property. We only need property because things are scarce; where there is no scarcity (e.g. ideas) there is no property…

And the rest flows from that. Sorry I don’t remember much more than that off-hand, because I finished the book almost a year ago. This draft has been sitting neglected for months and months. Just wanted to clear out the archives. Highly recommended, though.

Crisis & Leviathan (review: 5/5)

Crisis & Leviathan
I had been meaning to read Robert Higgs‚Äô book for years and I’m very glad I got to it. And I’ve been sitting on my review for a while because I always fear sounding like a shrill, libertarian paranoid.

Crisis & Leviathan: Critical Episodes in the Growth of American Government explores the past century of American history, the national response to the nation’s worst crises (whether genuine or contrived), and the aftermath of each. The government’s scope and power exploded in response to World War I, the Great Depression, and World War II. And after each, the powers were mostly disassembled.

Mostly. The so-called ratchet effect meant that after each event, the government never fully relinquished all its powers. Some of that was due to bureaucratic inertia or cronyism—some agencies never disappeared, but continued or assumed new roles in the aftermath. And a large part was of course due to changing ideology and public support for the government’s new roles. There were the lingering effects of decades of propaganda and new generations raised in those times. We grew comfortable with the new role, learning that it “wasn’t all that bad”—we could still worship as we pleased, and the news wasn’t yet nationalized. We looked to the progressive examples of the European states. The costs of the larger government were hidden with clever schemes like income tax withholding—you never miss what you never had—and the ever-growing number of people included in the tax base. Mind-blowing trivia: in 1913, the highest income tax bracket was 7% and 98% of the population owed no income tax. Times change.

One of the big assumptions in the book, one that makes me uncomfortable for our present, is that “government has substantial autonomy in its policy-making”. Like we saw recently, even with widespread opposition to the first bailout, we got one anyway. And the strategy seems to change with every day. We probably have even more on the way. Especially in these crisis situations,

Few people outside the government have enough information to identify the precise contours of the emergency or to formulate comprehensive plans for dealing with it. Citizens tend simultaneously to demand (a) more governmental action and (b) less research, public consultation, debate of alternative, and general “due process” in governmental decision-making.

Higgs’ study of each era ranges through the socionomic and political conditions before, during and after; the prevailing ideologies; the leading elites and interest groups; emergency orders and agencies; court challenges and decisions; and the institutional fallout—what society learned. He ranges through statistical analyses, Supreme Court decisions, legislative studies, executive backroom dealing and more. While there is a clear growth trend, Higgs makes the distinction between big government and Big Government. The first is an issue of size, the second has more to do with intrusion in peaceful affairs. We’ve had increase in both. I find it astounding that, during World War II for example, we so easily accepted conscription and price controls—even the courts went along with it. And once you give in to those, what are a few other small sacrifices here and there?

The book was published in the late 1980s, but you can see the same patterns repeated in the wake of 9/11 and our current financial awkwardness. This does not bode well.

By the second week of March 1933 an extraordinary conjuncture had developed: 1) a genuine economic crisis, especially the massive unemployment and the pitifully depressed production and consumption; 2) and artificial economic crisis produced by the nationwide banking shutdown; 3) a widespread sense of crisis and a feeling that only extraordinary measures could prevent an even greater catastrophe, sentiments manifested in the numerous and diverse calls to “do something” even if dictatorial powers were required to do it; and 4) a new administration taking office unencumbered by perceived responsibility for past ill fortunes and unchecked by opposition from a partisan Congress eager to obstruct and embarrass the President.