If you’ve been interacting with run-of-the-mill right-wing voters, you won’t be hard-pressed to find the phrase, “the Democrats are the evil party, and the Republicans are stupid.” It shouldn’t be a surprise given what has happened during the years of the Trump administration and now with the Biden administration. Everything is against the aspirations of these right-wing voters, from Big Tech censorship to an endless horde of career politicians and bureaucrats constraining their attempts to vent their anger and message their dissatisfaction. During the time before Elon Musk bought Twitter, the boundaries were tight: when Hunter Biden’s laptop and emails came into question, Twitter immediately locked the New York Post article from being accessed, then came the usual “intelligence community experts” and the vast left-wing media ecosystem echoing about how the laptop may be a “Russian disinformation campaign.”
Also, the pervasiveness of the private sector’s willingness to crack down on criticism has become routine and harsher. Even before the Hunter Biden email story, Silicon Valley implemented algorithms meant to hide any “untrustworthy” sources and any articles or links that were critical of the Democrats and the DC-left. However, mere defense wasn’t enough. Then came the need to “promote virtue.” The commandments of companies that mandate environmental, social, and governance (ESG) principles are to “do more” for the broader society rather than merely focus on their customers and shareholders, with one prominent theme being the promotion of progressive causes and the proliferation of “diversity.” Across the pond, politically incorrect individuals like Nigel Farage being “debanked“ because of their views is a warning for what’s next.
If anything, like the three-letter acronym ESG, the de facto direction that traditional institutions have adopted can also be aptly described in three ways: contain, propagate, and crack down. Many on the right have become increasingly disillusioned with the laissez-faire rhetoric concerning the economy from run-of-the-mill Republicans, or the GOP, as well as for their inaction. Many on the right seem to be thinking, “When will the GOP actually commit to reforming Section 230, institute fairness, and enforce free speech amid the cruel environment of light regulation?” It was among the primary reasons why “national conservatism” became so prominent and why Sohrab Ahmari’s Tyranny, Inc. became a success.
The book is, without a doubt, a repudiation of laissez-faire from a conservative perspective, which attracted a lot of attention from left-wing outlets. Ahmari himself defended left-wing champion Franklin D. Roosevelt during an interview with Voxabout the book. It wasn’t the first nor will it be the last time where openness to economic progressivism is supported by the national conservatives, or “natcons.” Many on the antiwar Left like Glenn Greenwald and Matt Taibbi have been close to the natcons, not just because of their antiwar attitude but also because of their views on harnessing the power of the private sector by setting aside their social differences. Before Musk’s Twitter takeover, fellow natcon Nate Hochman relied upon the work of socialist Victor Pickard to argue in favor of an implementation of the Fairness Doctrine for social media by defending the legacy of, well, the Fairness Doctrine.
The Unfortunate Cycle of the Statist Quo
The censorship that has happened on Big Tech’s sites, the continuous promotion of left-wing propaganda by large corporations, and the “soft” political persecution—like debanking or refusing service (as when Amazon stopped providing servers to Parler)—are undeniable facets of the ongoing crackdown on growing discontent with the status quo. The future of basic civil liberties looks bleak, and in the face of more wars and economic stagnation, Republican voters want an alternative, but they cannot vent or be heard. It is no exaggeration to argue that the current censorship, the propagation of ever-more aggressive woke identity politics, and the crackdown on well-known opposition individuals are lighting up a powder keg.
No longer able to bear the censorship, ideas once loathed by the conservative movement are being resurrected. Once-hated policies and far-fetched ideas like following the Fairness Doctrine, using antitrust, and enacting greater oversight to ensure fairness are no longer taboo. The so-called freedom conservatives, or “freecons,” have also been rallying against the shift toward progressivism of the conservative movement by rallying around the banners and supposed champions of the free market. For any person who supports libertarianism, while the “national conservatives” may be better on foreign policy, other ideas proposed by them on the economy and the regulatory state are just as bad as the current vision of the Beltway consensus.
However, the freecons and other Beltway libertarians have little to no authority among the populist, national conservatives on these matters for a reason. The way both factions (like the CATO Institute and Reason) responded to concerns of then-not-yet natcons on Big Tech but did not account for some of the intricate details about Big Tech censorship and the foreign policy establishment during the time of the ideological formation of these natcons is deeply damaging. To call Big Tech private is flawed, especially with the Twitter Files in mind. Before the Twitter Files, the fact that people who get to sit on Silicon Valley social media moderation boards are the former staff of establishment Democrats and Republicans was the first warning sign, especially when the government is talking about the dangers of “disinformation” and “hate speech.” These factions should have called out government interference rather than talking about how Big Tech are private corporations that can do whatever they want on their own property.
There are also more reasons to consider. Consider the Donald Trump impeachment saga the tense relations between the North Atlantic Treaty Organization and Russia over Ukraine, and Trump’s 2016 campaign rhetoric on the need to stop relations with Moscow from deteriorating even further. The sheer voracity the Democrats and hardline neoconservatives of the pundit and politician classes had is remarkable; remember the Steele dossier, the claim that Facebook may have hosted numerous Russian bots, and the craze over Russian disinformation, as well as any form of “disinformation” and “hate speech” later? Such claims on democracy being threatened are repeated often by politicians and bureaucrats with high prestige—retired or not—in the Beltway with similar views on foreign policy. With Russia seen as an existential threat to the international liberal order, why wouldn’t these politicians and bureaucrats smear and control the narrative around Trump to block an obstacle to solving a problem they regard as the most urgent until he was proven not guilty long after he left office.
Moreover, per Ahmari’s comments, the average American is more keenly aware of government abuse. However, the main form of government abuse people are accustomed to are direct and shocking abuses like the gulags or direct expropriation seen in socialist Venezuela. Ahmari is right. In order to not entice an extreme reaction, a blanket ban on “misinformation” had to be ruled out as it would be seen as what it is: an overt attempt to censor dissent. The blurry nature of the interference of the deeply entrenched and all-powerful state means it’s easy but wrong to argue that private businesses ought to be regulated further to protect individual liberty, and it’s extremely difficult but right to pinpoint what the government has been doing. By nature, this helps the very establishment the conservatives are now eager to dismantle as the current talk from the natcons is little more than rehashed Democratic talking points on domestic policies.
The most terrifying point is that the damage already done by the freecons and Beltway libertarians with their analytical blunder gave the natcons a free ticket to “debunk” the free market rather than realize that the government is the problem. Now that we know that Mark Zuckerburg was pressured by the FBI to throttle the Hunter Biden laptop story, it may just be too late. This kind of thinking will spread elsewhere, as the average American doesn’t know how deep the effects of government interventions are. The average American already doesn’t know much about fractional-reserve banking, and they’ll blame the manifestations of the problem (Big Banks) rather than the Federal Reserve. They don’t know how Big Unions profit at everyone’s expense when a tariff is declared. What happens if one of the natcons gains an influential role or becomes president and declares war on Mexico trying to stop the flow of fentanyl? The principal blame for this failure to turn the next generation of conservatives into libertarians lies with the Beltway libertarians and many of the freecons.
Because California’s government has hamstrung electricity producers in the state, its legislature now wants EVs to be “bidirectional,” that is, to put power from their batteries back into the grid.
Historically, inflation always referred to an increase in the money supply, whereas nowadays it refers to an increase in prices.
This shift in the definition of inflation lets central banks get away with their fraudulent business. Thus, the original definition must be reestablished. We must, by all means, switch the focus from the symptoms to the disease.
The CPI Deserves Less Attention
The lure of the Consumer Price Index (CPI) doesn’t just undermine price inflation, but also camouflages monetary inflation. Everywhere in the media and academic circles CPI is used as the main measure of “inflation.” Along with this index, “experts” sometimes talk about producer price indexes and personal consumption expenditures.
Although these indexes can provide an estimation of where the economy is headed, they are lagging indicators. Price inflation is a symptom of monetary inflation. Hence, a good economist must identify the cause of rising prices, just like a good physician must find the disease that causes the symptoms.
Monetary inflation is not always the cause of rising prices, though. Market prices change by the means of supply and demand. Thus, an increase in the price of a good or service is the result of the demand for it exceeding the supply of it.
Some prices on the pseudo–free market will change due to natural changes in supply and demand. Such changes depend on people’s tastes and preferences. Yet, often, the changes in supply and demand are unnatural. Some unnatural changes include market regulations, price controls, and monetary inflation.
Consequently, the CPI will not reflect only monetary inflation since prices fluctuate with both natural and unnatural changes in supply and demand. Another thing to consider about price inflation is the Cantillon effect. The largest price increases will typically be where large amounts of money are first injected.
Not only must the Cantillon effect be considered, but the growth rate of goods and services must be considered too. Suppose there was a price index that could include all prices in the economy. In this hypothetical economy, the money supply is increased by 10 percent at the same time that the total amount of goods and services is increased by 30 percent.
All things being equal, we should expect a drop in the price index, just as we should have had the money supply remained unchanged. However, since it didn’t remain unchanged, the price index dropped less than it would have otherwise.
Focus on Money Supply
The true money supply (TMS) metric, created by Murray Rothbard and Joseph Salerno, is the best money supply metric and thus the best measure of inflation (and deflation). It is based on the Austrian definition of money, on which Rothbard writes, “Money is the general medium of exchange, the thing that all other goods and services are traded for, the final payment for such goods and services on the market.”
Thus, the TMS must include all money substitutes used as a medium of exchange. Also, it must exclude all substitutes that other economic schools count as money.
The Mises Institute provides regular updates on the TMS, along with the M2 money supply. It’s a great tool for every market forecaster to use in addition to other tools.
The best use of the TMS, however, is to show everyday people that the money supply is inflated. Perhaps they would raise their eyebrows if they could see the sevenfold growth in the money supply during the past thirty years.
While F.A. Hayek is known for his term “spontaneous order,” Mises saw institutional development as coming from growth in human understanding of things.
Original Article: Mises versus Hayek on the Future of Civilization
Public goods, in mainstream economic theory, are goods that are nonrivalrous, where one person using a good does not preclude anyone else’s capacity to do the same, and nonexcludable, where owners of the public goods are generally unable to restrict anyone’s access to the good. Commonly touted examples include public lighting, like streetlights, radio, firework shows, military defenses, and flood defenses.
To the mainstream, public goods present an economic and social problem. According to their understanding, the lack of rivalry and excludability allows free riders to exist, which eliminates the profit motive for providing the good and thus the incentive to provide it in the first place. This means that the market on its own would not produce enough public lighting, radio, and defense. Therefore, because the market has failed, the state must provide these goods in as close to their optimal quantity as possible.
Most Austrian economics critiques focus on the erroneous claim that the state’s coercion is more “efficient” than the voluntary actions of individuals. Others may opt to debunk the mainstream view of a good, which is wrongly fixated upon physical material rather than the subjective wants of the individual that have made it a means to an end. While both critiques are important, there is a forgotten angle. Few have focused on the mainstream’s claim that there is no profit potential (or no adequate potential) for goods that anyone can consume and access at any time, meaning that, in mainstream theory, the market for that good will always be in disequilibrium. This claim is the entire basis for the problem existing and is why the mainstream formally uses public goods to justify state intervention. Assuming good intentions, this is primarily a mistake arising out of the mainstream’s failure to incorporate the entrepreneur into their economic theories.
The business structure in traditional industries centers primarily around excludability. Because of a good’s excludability, entrepreneurs can charge prior to exchange, like someone purchasing from a grocer, or entry, like admission to a movie theater. Other industries that have excludability but that feature the entrepreneur charging after consumption have a similar business structure, like in most restaurants, where the bill is presented after eating rather than prior. This is relevant to the entrepreneur’s business structure, in particular, as the consumers pay the entrepreneur because they value having the good more than the money.
With excludability removed, the entrepreneur no longer explicitly has the revenue generated from providing goods to the consumer. This is still an issue of business structure. The entrepreneur must still generate a profit by serving consumers but now also has to account for free riders, so the logic is different. Since the consumer’s acquisition of the good is not conditional upon payment, the entrepreneur must not only convince the consumer to choose his good over the other available options, but he must also convince the consumer that the provision of the good in the future is worth paying for. The business structure, then, must account for marketing, in whatever form it may take, not just toward the consumer for immediately choosing the entrepreneur’s good, but also toward the future. The entrepreneur must market toward and emphasize the consumer’s patronage as a means of the continual provision of the good.
A small industry that developed within my lifetime has arisen around a public good that demonstrates these principles. Video essays, gaming videos, vlogs, educational videos, and any other kind of video regularly uploaded to YouTube or similar platforms are public goods. The producer of the videos has no way to exclude anyone from watching the video until they pay the producer, and no one person’s viewing of the video meaningfully prohibits anyone else from viewing the video.
According to mainstream theory, because this form of entertainment is a public good, it cannot be sufficiently provided by private actors. Its audience would have some portion of free riders that would prevent the industry from reaching equilibrium levels of supply. While it would be silly to suggest that the state must assist in providing videos as a result, this is the logic used to justify the state’s provision of other public goods. As anyone can see from the profits generated by any number of YouTube video producers and the abundance of videos regularly uploaded to the website in the pursuit of profit, the mainstream theory falls flat. While some people may have complaints about a specific kind of video being produced or going unproduced, the complaints result not because videos are a public good, but because an entrepreneur, in this case a video producer, has not yet provided them or has already provided them and was unable to turn a profit.
These successful video producers can enjoy a continuous stream of revenue from their productions primarily because of their marketing. In the fashion mentioned earlier, successful producers communicate to their consumers that the future production of more videos is more valuable than some amount of money held by the consumer. Because people think they will enjoy the future videos more than the money, they pay the video producer.
The logic that we see with video production and payments can apply to any other public good. It is very easy to imagine that, with proper communication to the consumer, entrepreneurs could supply public lighting to towns without any state intervention, convincing consumers to pay for the future provision of public lighting. The same reasoning applies to defense, where the provider of the service could clearly communicate that if the venture is not profitable, the consumers will in the future go without the defense provided. In short, it is possible to profit from providing public goods.
In advocating for interventionist policies, the mainstream has neglected the entrepreneur, a major error in reasoning, and is wrongly using that error to justify state intervention. Reintroducing the entrepreneur and his business structure to the economic reasoning has solved the problem of profit motive and the incentive to provide public goods. This invalidates the mainstream’s entire conception of public goods being an issue in a free market, meaning the market has not failed. It is therefore nonsensical for the state to provide them in place of private actors.