Sunday, January 30, 2011

Hi fellow SWEAPP (Students Who Enjoy Austrian Political Philosophy) scholars.

As we're just starting this work, and my education in this area is more lacking than I'd like, a lot of what I have to say is limited to first impressions, and hopes for the rest of the work.

Forgive me if I start by recapping the intro and chapter 1:

My understanding of the introduction, is that Hayek believes the beliefs of the West are poorly defined, that the West is unsure of itself, and that this work will try to be general (and not referring to specific nations) while clarifying a number of vague things like "liberty."

Unfortunately, his initial statement that old truths be restated in modern terms to be most effective holds true, as he makes too many allusions to "others" and the Not-West that I'm left a bit confused at times. If he'd have just said communism when he meant it, people like myself who weren't alive until decades after this work was first published might understand it a bit better.

For the first chapter, Hayek discusses the four different kinds of liberty or freedom: Individual, Political (which in the form of democracy has been the West's most firmly held belief in the last few decades), Inner (e.g. free from judgment affecting addictions), and the kind that Hayek hates to call liberty: power, or the ability to affect an end that one wants.

Alright, now that's over with, there's a few things I want to know a little bit more about at this point:

1. What's coercion and what's not?
I feel freedom and especially coercion are kind of poorly defined at this point. Hayek says freedom is solely in relation to other men, but does that include an environment created by other men? A environment of penalties and fees with regards to a basic service such as cellular or land-line phone could easily be described as coercion, as could a larger system of chronic debt or disincentives to capital acquisition that encourage chronic poverty. Yet I get the sense that we're only going to discuss direct "do it or I physically restrain you" coercion with malovent and equally direct intent, even though Hayek specifically mentions environment creation as counting, too.

Say I need Internet to continue to perform my job both as a student and as an IT worker, as well as do things like post in this blog. Then I need to pay GCI (a local monopoly for broadband Internet) a certain amount to do so, and their monopoly status lets them charge an exorbitant rate. I'm still free in the sense that the rock-climber who has the choice between falling and a grueling climb is free, except my situation is an environment entirely engineered by man. Yes, I'm likening my need/want of the Internet to the need/want to die (hey, I chose fast Internet over running water, after all). Or, ff your boss threatened to fire you unless you worked you worked overtime, would that not be coercion? You may object that I placed myself in this situation by choice, but then that objection applies to just about real-life situation I can imagine; if you drive, you expect a possibility of getting pulled over, or if you don't move into International Waters, you expect to pay taxes and be part of civil (as in political) society.

Is taking away wealth taking away liberty? I've certainly gotten that impression from a number of self-professed Austrians who seem to care more about their control over their wealth (specifically protection of it from government) than social issues like gay rights, or more political liberty issues like immigration and citizenship.

For that matter, how is property itself not a restraint? In my econ 101 class, I learned how property is not a relationship between a person and a thing, but a relationship between two or more people (with regards to a thing). E.g. government or other people tell you that you can't do something with regards to an item, such as whether it's eat bread that's not "yours" or a small portion of wages that is "the government's"

2. A constitution solely about liberty? Or Who cares about liberty?
At this point, I hope Hayek isn't going to propose maximizing just the one variable, individual liberty, in creation of a constitution.

The only reason that liberty and freedom from coercion are important is because they protect and promote outcomes on higher indifference curves, right? I may be naive, but right now the only thing people seem to actually care about is the ability to affect ends that they want, right? I'll be watching to see if a different definition of moral "rightness" comes up.

Alright, that's all I have time for, see you folks Thursday.


  1. Part 1:

    "A environment of penalties and fees with regards to a basic service such as cellular or land-line phone could easily be described as coercion"

    Were these services basic 100 years ago? Do they exist in nature, or does their function rely on the work of others (at some expense)? Is drawn copper or fiber abundant to the extent of the price reaching zero? Wouldn't mandating that they be provided at zero cost to you necessitate forcing someone else to spend their own money and time maintaining and operating them? How would this be different from computer illiterate folks forcing you to spend your time fixing their stuff while providing you with zero compensation?

    Economics informs us that scarce goods (those not occurring so abundantly as to render economization redundant) command a market price due to the very fact of their scarcity. Without scarcity there is no need to economize. Prices go to zero. This is the point of the "Garden of Eden" metaphor. Except there was no internet (free or otherwise) in the Garden of Eden. Shows what God knows about utopia! In areas where transmission media is less scarce (larger population centers) prices for transmission of ones and zeros is approaching zero (and have been approaching asymptotically approaching zero ever since the idea was first implemented). Moore's law has nothing to do with legal mandates. It has everything to do with an exponentially scalable technology in the hands of entrepreneurs and inventors. Intel, AMD, Broadcom, Cisco, Hynix, Infineon, VLSI, etc operate for profit, and yet, continuously lower the cost of computing by orders of magnitude over a period of a couple years. Now we have the memristor thanks to HP labs. Had they been force to give their computers away would they have had the resources to develop it? Would we be complaining about the cost of internet had Bell Labs not employed Shockley and paid him with the service fees paid voluntarily by their customers? I don't think you can switch at much over a few Hz with relay-relay logic ... and not much more than kHz with tubes ... and the cost is massive.


    "Then I need to pay GCI (a local monopoly for broadband Internet) a certain amount to do so, and their monopoly status lets them charge an exorbitant rate."

    Interestingly enough, AlasConnect has recently entered the market (making three participants in total) using the finally FCC certified McWill wireless broadband technology ... which eliminated the need to get on GCI's coax (which lies on stolen property) or ACS's copper pairs (which lie on stolen property). Obviously they felt that the prices the other two participants charged were inefficient. To the extent they generate profit, they will have been correct. As for GCI, if you look back to their entry into Alaska, it was the State government that granted them all of the legal privileges that have allowed them to operate in a semi-monopoly environment. There's much to read about that if you're really curious and would like to be informed on that particular issue.

    Again, the undersea fiber that carries all data out of the state can neither be operated or maintained at zero cost. Who should pay? The users (subscribers), or those who don't use it (the "public")? It is not free, the resources have to come from somewhere.

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  4. Part 2:

    "Austrians who seem to care more about their control over their wealth (specifically protection of it from government) than social issues like gay rights, or more political liberty issues like immigration and citizenship."

    Austro-Anarchists ("Austrian" refers specifically to the study of economics as a value-free science. Mises makes this distinction clearly throughout Human Action) do not believe that everyone is free to do whatever they wish as long as they do not use force to get others to act as they would like. When specifically reading about Austrian Economics, you can expect the themes to center around wealth, as economics is about wealth and not a system of rights or ideologies (tho these form the basis of the environment in which economic activity takes place).

    If you want to know what Austro-Anarchists think in a broader (i.e. political) sense, you have to read what they have written on these topics, rather than inferring what you think they might believe based on strictly reading about their Economic theory. In the same way, one cannot credibly criticize or advocate the economics or politics of Marx, Keynes, etc without having studied their works and constructed reasoned, logical arguments in opposition or support.

    Justin Raimando has written extensively on Austro-Anarchist gay rights (and what an effective strategy might look like), and all Austro-Anarchists oppose war, which is the ultimate infringement of rights that only the extreme minority of self-proclaimed liberals, progressives, and conservatives oppose on principle alone.

    For example:

    To advocate for a state license for marriage is contrary to the idea of "rights" themselves, so of course you would never see anti-state advocates lobbying for the "right" to a license (and all the regulation it imposes)? Instead they would simply do what they wish and instead advocate not to be penalized for it as it does not harm anyone.

    Austro-Anarchists do not believe that "immigration" or "citizenship" exist. These are labels assigned to sovereign individuals by the State so that it can decide who to steal from (primarily citizen, sometimes foreigner) and who to kill (foreigner, sometimes citizen). In the de-facto state of existence, there are only property owners, welcome visitors (invited or uninvited), renters, and unwelcome visitors (trespassers). People are people, no labels.

    The side of an imaginary line they happened to leave their mother's womb on has no bearing on their right to do as they please ... unless you believe that the state grants rights ... but then they are not rights, are they? They are privileges. "Political" libertarians advocate chmod 777 through the government. Austro-Anarchists say that a right by definition cannot become a privilege. You can't advocate for rights, you can only assert them.

    Comes back to one of my favorite quotes:
    Humans exist in perfect freedom. Obedience in a choice. Government is therefore an illusion.

    Good stuff! :-D

  5. Man, David, do you do anything not-Austrian with your spare time? Not sure I have the free time for a similarly 1000-word response, but I’ll see what I can do.

    “Were these services basic 100 years ago?” Let me ask you a return question: would I need these services to continue to exist in the society I was born in 100 years ago? Did I need to give a phone number on a job or credit application 100 years ago? Opting out of these services is akin to opting out of living in the United States in many crucial ways. One might as well move out to the middle of the Pacific on a boat to escape taxes.

    I feel that saying I’m asking for a “free” provider is misreading me heavily (you don’t need to have the “there’s no such thing as a free lunch” discussion with me). I’m not complaining about paying for my cell-phone or my internet service. This is hardly my best example, but I’m commenting on a system of convoluted early termination fees etc. that no rational person – besides those employed to do so – wants to spend their time trying to understand. It then becomes an asymmetric information problem, which we discussed a bit last Thursday. It’s like a government inventing complicated tax rules for the explicit reason of making sure you make a mistake and have to pay more than your correct amount. People have alternatives but only costly ones. It generates profits for the company involved, yes, but it’s not “wealth-creating” (I hope I’m using that correctly).

    I’m concerned with the productive efficiency of the economy, same as you.

    This is deviating from Hayek and personal liberty a bit, but that’s okay:

    When I said “local monopoly” I meant for my location specifically (though it applies to other places as well). I was aware of AlasConnect, Starband etc. (one company per technology) when I called GCI a local monopoly. Unfortunately, ISPs in the United States tend to be local monopolies or duopolies, and people generally seem unsatisfied. Often, these local monopolies leverage their monopoly status to sell competing products, like Cable TV. Having a higher price because I don’t want their cable TV service is what I deal with, but the addition of a lower bandwidth cap really puts a crimp in my plans of enjoying relatively competitive video services like Hulu Plus or Netflix. That’s why we have the “Network Neutrality” debate.

    Like you (I presume), I want more competiveness. You may know more about Shockley’s role in the creation of the Internet and ARPAnet, but for right now, we have the issue of how to encourage more competiveness among ISPs. I’m not sure just saying “ISPs can do whatever they want now!” would actually solve that issue (which I’m guessing is closer to your idea of a solution), but I’d certainly be willing to listen to arguments for that. And if you have anything specific on GCI/ACS being granted their favored regulatory status by the state, I’m all ears. I haven’t gotten much further than GCI’s/Wikipedia’s limited accounts, and wading through legislation is hard (boohoo woe is me =P).

    Personally what I think would help is having one company build the infrastructure (coax, fiber, whatever) and have ISPs lease that infrastructure, based in part on things like this:

    OR: for the original report, if you have time to read 230 pages.

    Also worth noting: population density alone definitely doesn’t explain ISP competitiveness.

    “You may have noticed that ID Insight didn't identify population density as a clear direct or inverse factor in determining competition. That's because the study couldn't find that relationship.”

    OR for the original report (registration wall)

  6. One other unrelated point, about your stolen property point (as if the radiospace above my property isn’t mine, too!)

    David, you realize that when you start talking about “stolen property,” people are less likely to take you seriously, right? Regardless of whether you're right or not. It makes you seem zealous and closed-minded. Are you trying to convince others that your beliefs are correct when you talk to them? If yes, you may wish to reconsider some of your tactics and tone. I know more than one person who did not want to return to SWEET scholars specifically because they felt they weren’t being listened to unless they had an Austrian view point on an issue.

    Then again, perhaps I seem the same way to you, if I’m reading the first comment talking about “zero cost” right.

    Anyways, it was good to hear from you. I’ll get to part two when I have time to read your links.