Why Establishment Libertarian Party People Hate on Hoppe

It is odd that establishment Libertarian Party people tend to hate on Hans-Hermann Hoppe, especially considering he is responsible for the ultimate justification of libertarian ethics. Hoppe outlined a strategy for libertarians in a recent talk. Perhaps, one of his points will shed some light on the Libertarian Party’s apparent opposition to his ideas…

“Don’t put your trust in politics and political parties. Just as academia and the academic world cannot be expected to play any significant role in a libertarian strategy for social change, so with politics and political parties. After all, it is the ultimate goal of libertarianism to put an end to all politics and to subject all interpersonal relations and conflicts to private law and civil law procedures. To be sure, under present or pervasively politicized conditions and involvement in politics and party politics cannot be entirely avoided.

However, in any such involvement, one must guard against the corrupting influence of power and the lure of money and perks that comes with it. And to minimize the risk and temptation that comes from this, it is advisable to concentrate one’s effort on the level of regional and local, rather than national politics and they are to promote a radical agenda of decentralization, of nullification, and peaceful separation, segregation, and secession.

Most importantly, however, we must take heed of Ludwig von Mises’s life motto: do not give in to evil, but proceed ever more boldly against it. That is, we must speak out whenever and wherever, whether in formal or informal, in gatherings against anyone affronting us with a by now only all-too-familiar political correct drivel and left egalitarian balderdash and unmistakably so no, hell no, you must be kidding. And in the meantime, given the almost complete mind control exercised by the ruling elites, academia, and the mainstream media, it already requires a good portion of courage to do that.

But, if we are not brave enough to do so now, and thus set an example for others to follow, matters will become increasingly worse and more dangerous in the future and we and Western civilization and the Western ideas of freedom and liberty will be wiped out and vanish.”

Hans-Hermann Hoppe, Libertarianism and the “Alt-Right” (PFS 2017)

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Mike Pence: Conservative in Name Only

Vice President Pence left the Indianapolis Colts game on Sunday, October 8th apparently outraged at the national anthem protest that occurred. Some are speculating that this outrage was planned, to make a political statement.

According to Pence’s Twitter account:

According to Trump’s Twitter account:

It seems that Trump and Pence had planned this outrage as it was extremely likely that players would kneel during the anthem. According to MarketWatch.com:

That players would kneel during the anthem was a near certainty. The protest movement that has swept the league began with then-49ers quarterback Colin Kaepernick last year, and some 49ers players have knelt during the national anthem every game for the past two seasons.

There have even been reports that media was told to wait in a van because Pence would be leaving the game early:

According to a CNN White House Reporter, the cost for Pence to fly was upwards of $30,000 per hour. He flew 2.5 hours from Las Vegas to Indianapolis and another 2.5 hours to Los Angeles after leaving the game. This political activism, if you will, likely cost taxpayers more than $150,000. Trump and Pence are showing that they are conservative in name only. Repeal Obamacare and cut taxes rather than spending tax dollars on this nonsense.

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Episode 1

Listen to an informative and interesting discussion on price gouging, universal basic income, and more on this episode of the Lessons in Liberty Podcast!

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On Health Care and Insurance

This excerpt on health care and insurance was originally published in, “Teaching Economics to Bernie Sanders.”

Many Americans conflate health care and insurance, which are in fact two very different things. In this tweet,

Bernie is referring to the GOP’s health care plan that would stop subsidizing insurance for an estimated 23 million people. Of course, taking away insurance is not the same thing as preventing medical care. Historically, routine visits were paid out-of-pocket by patients and were relatively cheap compared to today’s health care costs. Insurance wasn’t as necessary in the past.

Health care includes goods and services provided to prevent illness, treat/cure illness, or maintain health. Such goods and services include doctor check-ups, emergency stitches, casting a broken arm, MRIs, drugs, etc. Procedures, tests, check-ups, prescriptions, and any other goods and services can vary dramatically in price. A prescription for a common medication may cost a few dollars or even less (small costs for average consumer), whereas a risky procedure could cost hundreds or even thousands of dollars (large costs for average consumers). While it is easy to save
smaller amounts of money in case of small accidents, doctor visits, prescription costs, etc., it is much more difficult for the average consumer to realistically keep enough money on-hand to cover the costs of a catastrophic incident, such as one requiring a very expensive operation.

This is where health insurance comes into the picture. Rather than trying to save up money for a possible catastrophic incident, insurance offers the insured to regularly pay a premium and in exchange the insurance company will cover agreed upon health care costs in the future. Insurance companies use the premiums they receive and pool them together to pay for the insured when they need it. Insurance plans can vary immensely which gives consumers a variety of choices in planning their lives. If one can afford routine doctor visits, small procedures, tests, etc. (as most people would
be able to in a free market), then it doesn’t make sense to pay a higher premium for a plan that covers those routine expenses. Rather, it would make sense to have catastrophic insurance to cover unforeseen and expensive illnesses such as cancer. If one is paying out-of-pocket for regular medical care they are incentivized to live healthier, to avoid frequent doctor visits whose costs will add up over time if utilized too often.

For-profit insurance companies are a business like any other. They must maintain profit to stay in business. This means rationing their services, just like any business must. Insurance companies ration their services (which is the accumulating of money to insure customers’ expenses) by discriminating based on risk. It may be unfortunate, but it does not make economic sense for an insurance company to provide insurance to someone with a preexisting condition such as cancer. To make such an arrangement possible for the insurance company to break even or profit, the insurance company would have to charge outrageous premiums to the cancer patient (much more than a
healthy person’s premiums) to cover the cost of cancer treatment (assuming cancer treatment is more expensive than what the average consumer can afford).

Over time the state has intervened more and more in the health care industry, with disastrous effects for consumers. Health care and insurance are regularly conflated in popular media. Many Americans use insurance to cover routine doctor visits as prices have increased due to government intervention. The Affordable Care Act, or, Obamacare has been a disaster. Some people less sympathetic to my reasoning demand a full takeover of the health care system by the state. Contrary to politicians like Bernie Sanders, I realize the way for Americans to have access to affordable health care is to roll-back government’s involvement in the health care and insurance industries. Do these politicians and citizens who demand more government involvement in health care ever ask themselves why the costs of health care are so high?

Tom Woods has a great FREE e-book on health care, “Your Facebook Friends are Wrong about Health Care“.

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Universal Basic Income

I respond to an article from The Libertarian Republic, “Top 5 Reasons for Libertarians to Support Universal Basic Income.”

1. “UBI is still less convoluted than the current system”

This may be true, but rather than installing a new system that is less convoluted, I propose dismantling the current welfare state. This is done not only by reducing welfare benefits but also by deregulating markets and removing barriers to entry that keep people from having an income. Licensing for barbers and hairdressers is an example of government interference in markets that keeps people unemployed and reduces entrepreneurship by acting as a barrier to entry. Remove regulations and minimum wages which make it more difficult for people to work and they won’t rely on the welfare state.

2. “UBI could actually encourage work”

I find this argument to be problematic. The author correctly points out, “As it stands, they have to choose between sitting around on welfare, or spending their time and energy to work for less money.” This is the fundamental problem that makes the welfare state unsustainable. That is, some people are better off monetarily by collecting government benefits than by working. This reduces the incentive to work. The author argues that the UBI would encourage work because, “People can take up what they’re good at, knowing that they have a little extra cushion.” While having a guaranteed income would certainly allow people to pursue their interests more, this does not mean anyone will find employment because of this. People work to have an income to sustain themselves. Ideally, your interests will coincide with your work. Giving people free money to pursue their interests does not mean they will be able to turn those interests into a marketable good or service. What is more likely is that free money given to people by the government will be squandered or spent mostly on consumption, rather than being invested or used to create new employment opportunities.

3. “If applied properly, UBI could increase employment”

By this the author means, if UBI were instated the minimum wage could be abolished which would increase employment. “With the UBI cushion, there is no reason to force employers to pay wages above productivity.” Well, there’s no rational reason to force employers to pay above productivity. Abolishing the minimum wage should be done regardless of the method of wealth redistribution being used.

4. “The current system is unsustainable”

The current system is unsustainable and I do not propose replacing it with another unsustainable system. Giving thousands of dollars to people would result in price inflation. Depending how UBI would be funded, it could also result in monetary inflation. Giving people money increases demand for goods and services they can buy, thus increasing prices. If UBI is funded by the fed printing money, this will result in monetary inflation. More likely, UBI would be funded by taxpayers. More specifically, UBI would be funded by high-income-earning taxpayers. This has the effect of redistributing wealth from savers and investors to consumers. This would result in less wealth creation from production. An economy based on consumption is not sustainable.

5. “UBI could secure protection for the weakest, while promoting innovation”

The author claims, “libertarianism is, if nothing else, the realization that people should follow what makes them happiest as individuals.” This is mostly true, but it does not apply to UBI. Libertarianism does not promote the pursuit of happiness at the expense of others and their pursuits. UBI can only benefit people at the expense of other people. I don’t view UBI as a safety net for the poor, weak, unskilled, etc. It would have the effect of redistributing wealth from individuals to large businesses. We know that higher-income-earners tend to save more while lower-income-earners tend to consume more. By redistributing wealth from savers to consumers, that wealth will end up being spent on consumption. That is, wealth will be spent on burgers, fries, and soda rather than investment in capital goods that will create new wealth.

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On Equality

Is equality really what a society should strive for?

Originally published in, “Teaching Economics to Bernie Sanders.”

Some people are more intelligent than others. Some are more attractive than others. Given no individual is exactly alike, no one can truly be said to be equal. Consider this implication of equality as an ethical norm: Some people have 2 working eyes, some 1, and some 0. This inequality could be addressed by surgically removing and redistributing eyeballs so that everyone may have 1 working eyeball. This way, the blind can now see, those with 1 eye will now be equal with everyone else, and those who originally had 2 working eyes are only marginally harmed as they can still see through their other working eye.

Child rearing by different parents will yield different results as far as the quality of their offspring. Whether it is genetic or a result of their parenting, different children born and raised by different parents will necessarily be unequal in certain skills and abilities. The implication of equality is that children would have to be raised by some central authority. Mandated public schooling has been a tool for the radical egalitarian in this way.

When seriously considered, the idea of equality as an ethical norm falls into absurdity or contradiction. I cannot say that LeBron James and I are equal. He’s taller and much more athletic than me which allows him to earn an enormous income as a professional basketball player. I could try my best, but it is very unlikely for me to ever have the same market value as LeBron James. This is clearly an inequality. How can me and LeBron James be made equal? By redistributing his income to me and everyone else who doesn’t earn an income as high as him. Should me and LeBron James be made equal? No. Any property acquired because of one’s labor, voluntary exchange, or contractual agreement must belong solely to that property owner. Who else can be said to have a rightful property claim to LeBron James’s income except LeBron James?

Lebron James is not earning a higher income than me at my expense. He earns an income because he is a very good basketball player who fans enjoy watching, thus bringing in revenue for the NBA and whatever team he plays on. Given the low supply of professionally skilled basketball players relative to the world’s population, the high demand of basketball fans naturally results in a high price for the labor (playing in games, attending practice, press conferences, etc.) of professional basketball players. James only earns an income at my “expense” if I buy a ticket to a basketball game or buy a jersey of his, and even then, it is not really at my “expense” because I am profiting by gaining the jersey or the experience of watching the basketball game.

In the same way, the owner of a company who provides a product demanded by consumers for a profit cannot be said to profit at anyone’s “expense.” (I don’t have time to fully refute the Marxist claim that wage laborers are necessarily exploited, but anyone proposing such a theory fails to understand the subjectivity of value as well as what interest is and how that explains the owner taking the “surplus value” from the laborers). Although I may purchase his product, I am profiting by gaining the value of that product. Such a mutually beneficial and voluntary exchange can’t be said to harm anyone. Yet, many politicians and their constituents demand for wealth to be confiscated from people who earn large sums of money through mutually beneficial exchange.

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Minimum Wage

A $15 minimum wage is radical. In fact, any minimum wage is harmful to workers.

Excerpt from “Teaching Economics to Bernie Sanders”…

Price controls, including price controls on labor are harmful. If the cost of bread in a free market is $1 per loaf, assume a consumer may typically buy 5 loaves of bread a week. If a government intervenes in the market and decides that the cost of bread is too low, the government may set a minimum price for a loaf of bread (this could possibly be done by larger companies lobbying government to keep prices high or to limit competition). The government decides that the bread bakers deserve and extra $2 per loaf of bread, setting the minimum price at $3 per loaf. There becomes a decrease in demand for bread as the cost of bread rises. Instead of buying 5 loaves of bread a week, a consumer may only be able to afford 1 or 2 loaves. Due to the government intervention, consumers will buy less bread.

The same principle applies to labor. Wages are a price like anything else. A wage is a transaction between employee and employer. Increasing the price of labor immediately decreases the demand for labor, meaning not as many people will be hired. Manufacturers still need to produce, so they will have to automate to replace the jobs they can’t afford to hire a person for. If they don’t invest in automation, they risk jeopardizing even more employees as the manufacturer won’t be able to sustain or grow the business while taking losses due to the excessively high wages.

Minimum wage mandates decrease an employer’s demand for labor. An employer who typically pays employees $10 per hour may hire 5 employees at that rate, but only 3 employees if a $15 minimum wage is mandated. With the price of labor artificially increased by government intervention, an employer cannot afford to pay for the same amount of labor. If an employer pays the artificially high wages rather than adjusting to the change in prices, there must be a contraction in some area of the company while there’s an expansion in the company’s labor costs.

This contraction could mean less resources allocated to research and development or less investment in new capital goods. Capital goods refers to the means of production which allow workers to be more productive, thus able to earn a higher wage. If resources go into wages rather than investment in capital goods, workers will be less productive in the future than they would be if there was no artificial wage increase and resources were free to be invested in capital goods. So, if an employer is forced to pay artificially high wages and chooses not to adjust his or her demand for labor, the workers and employer will suffer in the long run as less resources are allocated to improving the production process.

If a minimum wage is set at $15 per hour, but a worker is only able to produce, say, $10 per hour, the worker won’t get that job. It’s easy to see who benefits from a mandated minimum wage, but the people who are harmed the most are the ones who have been literally priced out of the job market. Just like a $3 loaf of bread isn’t attractive to someone who can only afford a $1 loaf of bread, it isn’t in an employer’s interest to pay someone $15 per hour for $10 per hour of productivity. This would cause the company to eventually go out of business by practicing such a wage policy (unless they are successful in reducing the amount of labor required), depriving the world of that good or service being produced.

Value is not based on labor. One can spend hours laboring in the mud, trying to build some sort of dwelling space out of it. Yet, those hours of labor would most likely be useless to anyone because mud isn’t a good material to build with. Value is subjective. Value is determined by what a given individual is willing to give up in exchange for that good or service.

If one wants to sell a pen for $2, then at that moment, the person who owns the pen values $2 more than the pen. The person who wishes to buy the pen values the pen more than the $2 they have. The $2 and the pen are valued subjectively by both people involved in the transaction. This is what allows the transaction to happen. If the pen and the $2 had an “objective value”, then one would always be valued more than the other by everyone. In that case, all parties would want the thing that has a higher value.

From a subjective value perspective, it doesn’t make sense to assert that all labor must require a minimum of $15 per hour. We know that some labor will be valued less than $15 because value is subjective and based on productivity rather than labor or effort. Anyone who accepts the subjective value theory cannot honestly be a proponent of a minimum wage.

According to the Bureau of Labor Statistics, “Among those paid by the hour, 701,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.5 million had wages below the federal minimum. Together, these 2.2 million workers with wages at or below the federal minimum made up 2.7 percent of all hourly paid workers. The percentage of hourly paid workers earning the prevailing federal minimum wage or less declined from 3.3 percent in 2015 to 2.7 percent in 2016. This remains well below the percentage of 13.4 recorded in 1979, when data were first collected on a regular basis.”

As the economy grew, more people could earn higher wages. Over time, less people were earning the minimum wage. This occurs by increasing productivity by investing in new capital goods, not by artificially increasing wages.

The population making minimum wage is a population with very few marketable skills. Luckily, they can produce $7.25 per hour or they would be unemployed. If an individual wish to provide for his or her self by being a member of the workforce, that individual must improve his or her skills as a worker to be more productive, thus able to be paid more for his or her work. One shouldn’t expect to be able to support a large family, mortgage payments, groceries, etc. from a minimum wage.

Bernie’s rhetoric might lead you to think that most people are working 40 to 50 hours per week and living in poverty. This is demonstrably false as I have shown. The people living in poverty are the ones who can’t produce at the minimum wage. These people are left unemployed. In a free market, these people would have opportunities to generate income and learn skills on the job. So, it’s the price control on labor, a minimum wage, rather than the “greedy capitalist” that hurts the unskilled worker.

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The Real Economic Spectrum

The purpose of this article isn’t to redefine left and right, but to correctly identify the distinctions between the two and to put left and right in the appropriate context.

Left and right are largely misused in mainstream discussion and media. The left and right spectrum is an economic spectrum with opposite property norms. Starting in the center, moving left on the spectrum moves closer to communism or collective ownership of property. Again, starting in the center, moving right on the spectrum moves closer to capitalism or private ownership of property. Somewhere in the middle of the spectrum lies a mixture of the two that would describe the U.S. economic system.

With this understanding of the left and right as an economic spectrum, we can see that much of the rhetoric about the “far-right” doesn’t really have to do with being on the right at all. The mainstream refers to neo-conservatives like George W. Bush “right-wing” when there really isn’t much difference between his policies and Obama’s policies. Bush did no more to promote private property than Obama and actually infringed upon individual liberties and property rights on a historic level.
Another example of this is calling Donald Trump “right-wing” and grouping Nazi’s, white supremacists, and white nationalists all into the same category. Trump isn’t very different from Hillary Clinton, as he continues to demonstrate. He sounds like a progressive when he talks about creating jobs repairing infrastructure and building a giant wall. If he ran as a Democrat, the left would have embraced Trump’s big-government sympathies.

Some think of the right as socially conservative. Individuals on the right may be socially conservative or not, but the economic right (private property rights) in no way limits individual liberty. Rather, capitalism restricts the infringement on individual liberties. This is another distinction that is inherent due to the nature of each side’s respective property norms: left stands for collectivism while right stands for individualism. The left fights for the rights of groups or classes while the right fights for the rights of individuals.

The horrors of statism are only possibly when individuals in a society lose their individual rights and certain groups of people (politicians, bureaucrats, police, etc.) are somehow delegated the right to infringe upon the rights of everyone else. My intention isn’t to define libertarianism as right-wing for the sake of the right-wing, but to unify the philosophy of libertarianism under property rights and individual liberty. To be clear, Republicans and Democrats fall near the center of the spectrum. There is little, to no difference between the two parties and the Libertarian Party fails to effectively promote libertarianism as something very different from a mixture between the two parties. Only by restoring the sanctity of private property rights can liberty begin to overcome statism.

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The Current State of the Libertarian Party

Can anything be done to get the Libertarian Party (LP) back on track?

“If I’m acceptable to the New York Times, I’m a failure. And I think our movement’s a failure.” – Tom Woods on the Jason Stapleton Program, Episode 642.

Many who consider themselves right-libertarians, Austro-libertarians, and/or conservative-libertarians have become increasingly disgruntled by the LP. I’m not a member of the LP, though I am a libertarian. Libertarianism, to me is about promoting private property norms and free markets, thus a more peaceful way of life for all.

However, the LP and various “Libertarian” Facebook groups seem to be full of people who don’t know up from down when it comes to theories on the ethics of private property (more on this here). These people who focus on promoting all freedoms, rather than private property rights are more like “libertines” than libertarians. By this I mean they promote a “anything goes” philosophy of liberty rather than a private property philosophy of liberty. Of course, you can’t have libertarianism and the non-aggression principle without private property norms.

One recent controversy in the liberty movement involved Nicholas Sarwark, current Chair of the Libertarian National Committee (LNC) and various members of the Mises Institute. Tom Woods, Ph.D. historian and fellow at the Mises Institute, seemed to be hit the hardest by the more “mainstream” so-called libertarians. The situation was covered very well by Jason Stapleton and Tom Woods in episode 642 of the Jason Stapleton Program (watch it here).

I recently wrote an article where I described the current trend of what I call “virtuetarianism”: a word to describe virtue-signaling libertarians. Rather than promoting individualism and private property rights, “virtuetarians” tend more to appeal to collectivism by focusing on issues like racism, LGBT issues, feminism, etc. This has the effect of watering down the libertarian message of strict adherence to private property rights and somewhat mixes with the left’s egalitarian philosophy. This leaves the liberty movement in disarray, as so-called libertarian-socialists to Austro-libertarians (like myself) all refer to themselves as “libertarians.”

These issues matter because it makes any political action by the LP next to impossible when you have people with opposite ideas of liberty fighting inside the LP. I don’t speak out against left-libertarianism because I want libertarianism to be known as right-wing, but because libertarianism needs to have a consistent philosophy to have an actual movement towards liberty. I argue that libertarianism is a philosophy based on three principles: self-ownership, non-aggression, and private property. It is my hope that all libertarians can unite under these 3 principles to truly promote the ideas of liberty.

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