Day 24 – Response to Comments

January 24, 2009

Today’s post is a response to the numerous comments that I received, both online and in person, on my post about President Obama’s Inaugural Address. Please read the comments before reading this post.


I want everyone to know that I appreciate the comments. If you ever need clarifications on what I write, just leave a comment and I will do my best to explain. Also, I enjoy reading individuals’ thoughts on what I write, especially if they disagree or find an error. Anytime errors that can be corrected benefit us all by bringing us closer to the truth.


First, I want to start out with a few clarifications of what I do and do not support, in case it was not clear in my last post. From some of the comments that I received, there seems to have been a little confusion with this.


I do not support the Republican Party or the Bush administration. Both have strayed far from their original goals and I think that the Bush administration brought more socialism to the United States since the 1930s than any other administration through massive intervention into the financial markets, the attempted take over of the auto industry, massive intervention into the medical industry, and a very large growth of government. That said, I do not support any political party, so in criticizing President Obama’s ideas, I am not in favor of any other candidate.


I do not support ad hominem attacks on the new president. Calling him by his middle name, Hussein, is trying to make a connection between him and terrorists and is nonsense. He clearly is not a terrorist and, though I do not know him personally, I suspect he is most likely a morally upright man. Calling him a terrorist makes one sound like a jingoistic, nationalistic, talk-radio host. We should look at what President Obama advocates rather than the correlations between his name and the name of a man who slaughtered hundreds of thousands of people. I also want to remind everyone that ideas expressed in the comments on my blog are not my own unless posted by me under the name “cagrimmett”. Each person takes responsibility of his or her own comment.


When I say “government”, I mean government as is seen in the world today. Technically, the word government can mean the regulation of any relationship between any two or more entities. What I mean here when I say government is the coercive body which regulates and controls a nation, state, or community, which we see in the world today. (All governments proper in the world today employ coercion to stay in power.) I am not arguing government in its regulation of some sort of relationship between entities should not exist, because that is impossible. Any time there is a regulation, even if both sides contractually agree, there is government. What I am against is coercive government, a.k.a. the kind that we see most often in the world today. When I say government, I mean the coercive sense rather than the regulation of any relationship between any two or more entities unless I specify. If it is ever unclear, ask.


When I talk about the free market, I am not talking about the market that we see in America, I am not talking about “American Capitalism” as we see today, and I am not talking about the so-called free market that the Republicans advocate. Such things are not the free market. There has not been a free market in America, or anything relatively like it, since the 1800s. In fact, I do not think a clear example of it can be seen in the world today. I am talking about the free market that Mises, Hayek, Rothbard, Menger, Hazlitt, and others advocated. If you do not know what I am talking about, ask me. What we see in America today is a market with very large interference and control by the government. Some people call it a free market, but it really is not. 


Happeningfish, this part is addressed to you: A large part of what I wanted to reply to you with was said in the free market paragraph and the government paragraph above, so I will not repeat myself. You wrote, “To say that more government necessarily means less freedom is naive in the extreme and displays a lack of familiarity with different shades of government and policy in effect around the world.” I agree that I do not know all of the different shades of government and policy around the world. I do, however, understand how government exists and I understand the necessity of freedom. I agree with Mises when he says, “Government is essentially the negation of liberty.” If you can show me a situation where more government proper produces more personal and economic freedom than less government proper can, I would be very interested and it would, if your example is true, change the way I view things and what I believe.


Sean, this part is addressed to you: I think that our country’s biggest problem is not intolerance of race, religion, or lifestyles (though certainly those are problems, I agree); it is that we do not have a firm foundation of property rights and what we do have is not entirely protected. I think once property rights are fully in place and respected, it will do more for fixing the problems that intolerance causes than President Obama can fix by trying to unite people. We have discussed this before. I think it works the opposite way as well, though. Once people are “united” and people are more tolerant, property rights will be respected. The more difficult of these two tasks is in getting people united, though. Like I said, once property rights are respected–by the government as well as people–the problems caused by intolerance will be minimal to non-existent. 


Also, Sean, when I say “sheep”, I mean people blindly following what they hear without fully examining the consequences. I admit that I am occasionally a sheep, as is everyone at some point in time) but I try to minimize the amount of time I am by continually learning and questioning.


Alex (and partially, Mort), this part is addressed to you: Monopolies can not happen under an actual free market. Artifically high prices can not be sustained for any long length of time unless there are government barriers to entry. If prices are too high, the “monopoly” has to contend with the possibility of competitors entering the market and producing goods and selling them at lower prices. If the original firm once afforded to sell its goods at a lower price, chances are their competitors can do the same and the artificially high price becomes unsustainable. On the other hand, Rothbard extends Mises’ socialism argument to show that a free-market monopoly cannot persist anyway. If a firm has no competitors, it becomes subject to the same calculation problems inherent in a socialist system, and will become uncompetitive and lose its position of dominane. The real monopoly is the government. Do you have any choice to start another form of government in an area? No. Force will be used to subdue you and tear down what you started. As of now, your only choice is a coercive government here or elsewhere and the degree of coercion (forced confiscation of wealth or slaughter). I will write more about my understanding of monopolies, and why they do not exist under a free market, in the future.


Also, Alex, a choice between two individuals in government is not the same in any respects to a choice between two goods in the free market. You are correct, the majority of the people wanted Obama. I am not saying that if they want to be happy they should go against what “they feel in their own hearts is correct.” Being happy is a subjective thing. I am saying that if they want to be free, the LAST place to turn is the government. I do not know “more about what they want and need than they do.” If they want Obama, that is fine. I am just telling them what is likely to be the consequence of their decisions. (By the way, you might want to check your basis of what is a right. In my opinion, “the most important right[s] in the history of the world” are property rights.) Also, I do not like democracy. Like our government, I think it is illegitimate.


I have a few more comments about President Obama’s address. If he wants to extend opportunity to every willing heart, he needs to immediately stop government subsidies of all kinds, because they are selective and amount to favoritism. They help out inefficient businesses and encourage the misallocation of resources. Additionally, he needs to read up on the Austrian Business Cycle Theory. If he is worried about these booms, busts, and recessions, the best thing to do is deregulate the financial markets. A basic understanding of the ABCT tells us that these conditions which cause recessions and economic downturns are caused by the Federal Reserve artificially lowering interest rates. Artificially low interest rates amount to printing money and “is an artificial means of recovering from a very real effects of an artificial boom.”  To quote more of Dan Mahoney, “Money _is _property, and under a monetary system which makes it appear that more property exists for production than actually exists, failure is inevitable.” Instead of allowing markets to clear malinvestment, the current monetary system keeps propping it up until the bottom drops out. What happens then? A recession, until entrepreneurs have time to liquidate. Only though the process of converting malinvestments to productive capital can the foundation for growth be achieved.


One thing I am positive about in Obama’s presidency is that he loves technology. He promises to set up a website,, to show where tax dollars are spent. He also promises to digitize the nation’s health records within 5 years. Anytime the government becomes more accountable (if you can trust their information), it is a good thing. He also is doing a weekly YouTube address.


Also, keep perspective in mind over the next four years. The bar has been set pretty low by the socialism and false promises of the Bush administration, so it is difficult for Obama to look bad.

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