Posts Tagged ‘Ludwig von Mises’

The World’s Fastest Failure – (Built to fail?)

November 3, 2013
Ludwig von Mises

Ludwig von Mises (Photo credit: Wikipedia)

The World’s Fastest Failure – Liberty Crier:

by Jeffrey Tucker
Obamacare certainly has made history. It has set the record for the fastest-failing Big Government program in world history. This isn’t only about a website flop; it is about the failure of government to accomplish the aims of Obamacare in general, and in a way that has profoundly touched millions of individual lives.

“Train wreck” is a good term here. You know it is coming. You can see the maps. You can predict the timing and the damage. But there is still something stunning about seeing the spectacular explosion actually happen in real life. For students of shoddy government attempts to mimic the market, it’s been a beautiful confirmation of everything we know.

Back to the speed of the disaster. It took decades for Social Security, Medicaid, Medicare, and all the rest to enter into the unsustainable, unintended-consequences phase. It was a generation before the costs blew up and the service dwindled. Most welfare programs begin with at least the appearance of a net win.

Not this one. It took only a few days after Obamacare was released for it to enter the archetype phase into which all forms of compulsory government systems eventually collapse. Never have the rotten tomatoes flown so fast and so furiously.

The ridiculous cost overruns were, of course, there from the beginning. The website alone: $600 million. More striking has been the astonishing fact that that program designed to give more people access to health care has already resulted in the exact opposite. More people have been kicked out of their existing service than have successfully signed up for a new one. The intended beneficiaries — the uninsured — have little or no interest in it, while the already insured are more scared about the future than ever.

The American health care system has been a mess for a long time, but this much can be said about it: It has been somewhat stable. The costs have been high and rising, but not completely unaffordable. And because of the genuine market-based elements remaining in the existing system, American health care has at least been innovative with lifesaving technologies. Doctors got paid and medical services were profitable.

Suddenly, the future seems uncertain and even scary for nearly everyone. If one day you can get a letter from a provider that doubles premiums and makes them equal to the full wages of a salaried employee, there is a serious problem. Not even the worst predictions about Obamacare imagined such a thing.

All the more maddening has been the way the president himself seems hopelessly confused about the nature of the technological failure of the main delivery system. He seems to be living in the past, in which a website was nothing but a billboard or a static information provider.

That’s not the way websites are today. Websites are both portals to and extensions of the real world. They must mirror and even drive thinking and behavior of all users. And contrary to what people believe, they are not easy to build. A great website is every bit as complex as an elaborate good in the material world.

To build one requires a blithering array of decisions among trade-offs. Most people see only the user interface, but this is like paint on a car. The engine itself can be enormously complex and subject to infinite bugs. You can write code or go with existing structures. You can choose among thousands of possible languages and management systems or build your own. Database structures are a science unto themselves.

It is a challenge enough in the private sector. To build a website for something like The New York Times or Twitter is a monumental task that never ends. This is one reason that startups are better at building websites than large corporations. Large corporations have to cut through their own bureaucratic apparatus to get it done right, whereas startups are fortunate to have a clean slate from which to build code.

For government, it is far more difficult, if not impossible. Governments are not used to having customers in a traditional sense. They have consumers of their products, but their profitability does not fundamentally depend on them. The government way is to extract revenue by force and spend it according to political priorities. Profit and loss do not matter and, in fact, can’t even be calculated. That’s because government is not a wealth producer. It is a wealth consumer.

There is a reason that governments can’t build websites. A website is like the market itself. It is always in development. For a site to be useful, it must always be adapting to change. There is no final release that is also not a tombstone. Governments are horrible at this task. Governments want to freeze time and enforce compliance with the plan, users be damned. So the failure of is not an accident; it is a reflection of the failure of government itself to be a productive, efficient, and useful part of the social order.

This is why a website fix seem so untenable. Note from the congressional hearing that politicians doing the grilling do not understand the first thing about computer code. They can’t understand the language. They can’t understand the functionality. What’s more, it is not clear that Republicans have any real incentive to intervene in the meltdown. This is the first time in perhaps six years that the Republicans have a chance to ride high.

The prospect of how Obamacare can permanently wreck the legacy of this administration is tantalizing, indeed!

What lessons can we learn here? This is about the failure of one type of socialism, but it is a different type from nationalization. Obama and his friends never attempted to end the market. They attempted to set up a market that operates like a real one, but with politically expedient results. In other words, they are attempting to “play market” while subverting crucial market institutions like fees, private property, freedom of choice, authentic competition between providers, and experimental entrepreneurship.

The idea that government could “play market” was the fallback position of post-socialist planners of the 1940s and 1950s. Austrian economist Ludwig von Mises predicted that this would never work. You can assemble the world’s smartest people, give them maximum power, throw massive resources at the problem, and still end up with what Mises called “planned chaos.” That’s the best description of the health care world since Obamacare was unleashed on the world.

Some predictions for the future of Obamacare: It will not be repealed. It will be intolerably tightened. More physicians will leave the system. More of the uninsured will choose fines over premiums. The market will continue to provide ever more options outside the system. Leaving the country for surgery and other services will become more common. Buying prescriptions from emerging markets will become mainstream.

Through fits and starts — and with many victims along the way — a market for health care will emerge, but it will be outside the official channels. Eventually, Obamacare will collapse of its own weight.


Jeffrey Tucker

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Types of government

July 2, 2013
Ludwig von Mises

Ludwig von Mises (Photo credit: Wikipedia)



Find a good video here that explains different types of government:


Especially good is the demonstration that the best “political spectrum” goes from Total Government to No Government.


The usual “meme” they foist on our brains, the left-right “political spectrum”, is a blatantly false one if you inspect it thoughtfully. Just think about it: on the “extreme left” is totalitarian dictatorship by the state; on the “extreme right” is the totalitarian dictatorship by a corporate-state partnership.


So the “moderates” are caught without an ideological escape to freedom from tyranny.


The “powers that be” have indoctrinated generations of schoolchildren into this mind-set of non-thinking. With China and Russia introduced a few controlled, guarded, so-called “free-market reforms” into its production infrastructure, note that it didn’t fit easily this right-left diagram they use for the United States.


So they made a temporary exception to the usual definitions, and called the ones pushing for more freedoms as “liberal” and the ones pushing for more state control as “conservatives”, as if “conservatives” only want status quo and “liberals” want to change things for better.


That’s the way the powers that be report it in the West, especially the USA. The word “liberal”, however, when Ludwig von Mises wrote his books about real-world economics, the word “liberal” meant letting people do what they want, “laissez faire”.


There is another form of government not mentioned in this video. It is anarchism, but not of the sort portrayed in the clip. There are “anarchists” for sure who are better described as “nihilists”.


But if you go to the www lewrockwell dot com web site you’ll find definitions there for “anarcho-capitalism”. This is the idea that relations among people should be constrained by the “non-agression principle“, defined like this by Walter Block: “It states, simply, that it shall be legal for anyone to do anything he wants, provided only that he not initiate (or threaten) violence against the person or legitimately owned property of another.”


In an example of an “anarcho-capitalist” society, we have the Biblical time of the Judges. There was no government as such, no provision at all for a permanent police force, no standing army, and disputes were adjudicated by the priests or by judges who simply were judges because people looked to them for an arbitrator’s wisdom. When they were oppressed by invaders, individuals rose among them (God rose them up) to form volunteer armies to repel the oppressors. And then they disbanded.


I don’t want to bring back the laws of Moses like some Christians do, not just Orthodox Jews. But it’s just to show that where at least the dominant culture respects the principles, it can work. In fact, when they people of Israel demanded a king of Samuel because his children were bad boys and apparently there was no respected alternative, God told Samuel that they had not rejected Samuel but God himself!



“Leftist” and “Rightist” Are Meaningless, What matters is Less Government Control vs. Less

September 17, 2012

During the 1930s and into the 1940s, the Nazis were often referred to as leftists. That’s right, leftists. What makes sense anyway?

What’s the difference between international socialism and national socialism? None, the only difference being whim of the dictators’ club.

Note that the free market advocates in the Soviet Union were called “liberals”, the same as in the 1930s and 1940s. Go read Ludwig von Mises. He “liberally” refers to “the liberals”. Guess who he’s talking about? Free marketers! This is what is meant by “classical liberal economics”, in fact.

“Left” and “right” mean nothing of consequence today in American political campaigns, especially reporting. Those words were hijacked for different meanings at journalism schools and political science departments of colleges that trained the government-media complex central planning writers of today’s propaganda media. The left/right language is used to Pavlov as many media consumers as possible into associating good things to bad things, confusing them.

The political spectrum that matters is command-and-control “government” on one end, versus total freedom on the other. More government control vs. less government control. Whether you want somebody telling everybody else what they can and cannot do, or whether you prefer the freedom to do whatever you like as long as you respect the rights of others. Respecting others’ rights means you cannot compel them to do anything, or not do anything, and they cannot compel you.

I call this “Golden Rule Government”.

Therefore all things whatsoever ye would that men should do to you, do ye even so to them: for this is the law and the prophets. – Matthew 7:12

July 26, 2012

Raising taxes in January won’t knock off ANYTHING from the budget deficit. Raising taxes by letting the Bush-Congress tax cuts expire at all, especially on the higher brackets, will not help the budget deficit at all, because the net effect will be to reduce tax revenues.

The most direct and lightning-quick effect will be to immediately damp down the stock market, the small businesses will start letting people go that live on narrow margins (supermarkets). There will be less money in banks, fractional reserve banking will shrink it.

This is a major economic catastrophe.

There a reinstatement of the taxes pre-Bush-tax-cut they’ll say as if we had the same economic situation. Obama said in January 2009 that a time of recession is the wrong time to raise taxes, and he was talking about exactly this.

He and his closest confidants and sponsors know, they know, that this will be a big jobs-killer. They know that regulations are job-killers too, which is why they put off their intended regulatory job-killers off to 2013.

Some of the circle of cronies know this, but some are just stuck in Keynesian fantasy-land, where printing money magically creates wealth by kicking off a spending cycle.

But what spending fiat money really does is it takes resources out of the productive economy and makes them serve the political purposes of the spending, the whims of a a government-guaranteed monopoly on currency values. It concentrates on spending at the consumer level instead of the wealth-producing investment level. Creating more wealth creates more production for later consumer spending as an effect, with a lot more supply to spend it on, and a lot more genuine consumer wealth too.

Taxes and central-planning command regulations are jobs-killers. Especially per capita taxes.


What is a liberal?

March 26, 2012

Some people are saying, like one in another forum, that Ayn Rand held the idea that only a very few hand-picked individuals have the ability to lead and we should turn the whole job of leadership over to them. He said that’s pretty much a Royalist point of view. Actually

Actually, in today’s political discourse, that is known as the “liberal” position.

But what is a liberal? Sometimes it gets weird reading von Mises and Hayek‘s writings, because when they use that word “liberal”, they are obviously using it to mean the philosophy of letting people run their own lives and make their own economic decisions.

I wonder when that got flipped 180 degrees in common usage, to mean the exact opposite of what it did before?

So I looked it up. Definition #4 fits von Mises’ use of the word, but there are others that can be stretched:
4. favorable to or in accord with concepts of maximum individual freedom possible, especially as guaranteed by law and secured by governmental protection of civil liberties.

Actually, “liberals” used to be the ones who advocated freedom from government, but then yes, “governmental protection” fits the modern demands that we need more government protect us from itself.

But wait a a minute, then they pointed to this quote from 1933 by Susan Sontag:

… liberal intellectuals … tend to have a classical theory of politics, in which the state has a monopoly of power; hoping that those in positions of authority may prove to be enlightened men, wielding power justly, they are natural, if cautious, allies of the “establishment.” Read more at

So, go figure… Um, wait another minute! That does figure! Today’s liberals do count on government to right every wrong, restore every loss, fill every need, and stop every scoundrel.

And then there is the definition by context, centuries old, as in the King James Bible:

The liberal soul shall be made fat: and he that watereth shall be watered also himself. (Proverbs 11:25)

And there, it means generous with your own resources.

Where do they find money for “studies” like this?

January 23, 2012
Scope of Government (liberal spectrum). For di...

Image via Wikipedia

Quarterly Journal of Austrian Economics
Image via Wikipedia

I posted a few days ago on this liberal/conservative/brain study and after reading another blog post elsewhere on the subject of the study I had a couple of comments.

Always these “scientific” studies trying to find how to “fix” people who the researchers don’t agree with.

Ludwig von Mises

Ludwig von Mises (via wikipedia)

This “liberal/conservative” so-called “spectrum” is itself detached from consistency anyway. In the 1960s, so-called “liberals” opposed all manner of police state actions like surveillance, property seizure without warrant, national ID and the like, whereas now in 2012 these are things the current “liberal” administration push and their “liberal” friends cheer.

Plus how did this word “liberal” get so messed up? In the days of von Mises, Austrian school economist, “liberal” meant free market and freedom from government intrusion. Now it’s a “liberal” who never gets enough.

The real spectrum should be between those who want complete freedom from government (libertarians) and those who want the government to save us from everything and control everything. Socialism and fascism are twins.

Socialism is theft by dictator or by majority vote and drives AGW

November 10, 2011

“The power to tax and the power to spend = the power to enslave”. It’s a paraphrase from a decision written by Chief Justice John Marshall, in writing the Supreme Court’s decision in McCulloh vs. Maryland, where they said Alexander Hamilton‘s Central Bank was constitutional (one of the earliest unconstitutional decisions). Maryland opposed the Central Bank and so imposed a tax. The Court’s answer was that it was an attack on the supremacy clause, that the federal government had implicit power (there they go again) to empower such a bank, even if it was run by a bunch of private bankers.

They said if Maryland’s claim to power to tax it was the same as the power to destroy it (Marshall’s word).

Pure “democracy” is two wolves and a lamb voting on what to have for dinner. It must be restrained by respect for individual rights.

In these two following sentences is subtly hidden one of the most popular and most wrong ideas about wealth:

Capitalism: Concentration of wealth.
Socialism: Dilution of wealth.

The idea that a majority vote makes confiscation of the fruit of a man’s labor, his “wealth” is okay, is a misguided notion that had me once fooled. It’s an easy delusion.

Confiscation of other people’s wealth, rich or not, is not “democracy”. When one robs his neighbor, it’s theft. The government makes it illegal because it wants to have a monopoly on taking what is yours.

People go along with it because they’ve been indoctrinated into thinking majority vote to rob from the rich is somehow good.

I used to be Leninist gullible idiot myself, duped into buying into the socialist deceit.

This book from Ludwig von Mises lays out the scientific economic analysis of what economics is really all about, what socialism is and why it has led to both dictatorship and economic poverty where it has been done:

Capitalism: “An economic system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market.”

Capitalism doesn’t “concentrate” wealth. One might “accumulate” wealth by investing, but Steve Jobs accumulating wealth did not prevent Bill Gates from accumulating his. George Soros would be a better example of “concentrating wealth”, because he uses his government cronies to game the system where he has trashed currencies for his own benefit, and greased the financial meltdown for his own treasure trove. “Crony capitalism” is not “capitalism”.

But I don’t care so much about capitalism as I do free market principles, wherein everybody is free to engage under the same rules.

Socialism does indeed dilute wealth, it is confiscation without recompense, and destroys the best incentive for wealth creation, that of one’s fruit of his labor, or the fruit of knowing what other people want to sell it to them.

Socialism is a zero sum game where everybody loses except the rulers on top, the “deciders”.

Socialism in the US meets definition of #2 from The American Heritage® Dictionary:

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.
2. The stage in Marxist-Leninist theory intermediate between capitalism and communism, in which collective ownership of the economy under the dictatorship of the proletariat has not yet been successfully achieved.

But in principle the idea that the government (supposedly elected in a fair election or not) takes what it wants and lets you have what’s left, is the socialist idea at its very core, the idea that it owns it whoever has the nominal “title” to it.—


Peer review is status quo enforcement. There are (totally non-creationist) alternative theories to origins that don’t get the first look in peer review journals. Genuine alternate energy technologies such as at are blacklisted from peer review journals but basement labs keep plugging at it.

Besides AGW big name Phillip Jones just blew the whistle on it too. At its best ideal, peer review is a status-quo-enforcement mechanism when it comes to basic establishment paradigms. It’s a formalization of Thomas Kuhn‘s concept of old science stamping down dissent.

Richard Muller published his study straight up so it could get lots of eyeballs immediately. Peer review is under criticism in scientific journals, muted since the journals depend on it.

Hey, that’s what I’ve been saying all along, for years and years! And yet so many people are so gullible to swallow the media-hyped and regime-approved stuff packaged with the label “science”, and accept it, and think they’re smart because somebody told them that the big bad oil companies would oppose it, and of course even though you’re supposed to blame big bad oil companies for the scientists calling foul, except don’t say they’re “scientists”.

Big Money Media is made up of the same things too.

Eventually, though the truth comes out for those who want it.

If you kick off the spin, the packaging and the hype, Richard Muller’s study only corroborates what the AGW-dissenter scientists have been saying all along.

Big Money Media has successfully Pavloved even smart people into confusing AGW with GW in their thinking, so much so that Big Money Media’s writers see this as their own corroboration.

And everybody’s ignoring another fact that one genuine climatologist pointed out: Muller’s own data actually shows that global warming has stopped cold for a decade, and counting.