The Righteous Mind’s Blindside: The Ethics of Means

Allow me to be the fist to point it out: Jonathan Haidt is not an economist. Why then is he getting attention on a site dedicated to slamming economists who aren’t Austrian? The answer is obvious: Haidt has some significant insights and tremendous truths to share, but because he is not an Austrian he misses out on some key points. So here we are.

I’ve got to say I love his book, The Righteous MindEpisodes 429 and 676 of The Tom Woods Show are two of my favorites just because Haidt was the guest. He was also one of the most interesting guests Stephen Colbert ever had.

My issue with Haidt is that throughout his book he deals only with ultimate ends. This may be obvious in the field of religion but is often confusing when it comes to politics. Sometimes the issue is one of ultimate ends – such as pro-life versus pro-choice – where values collide. Autonomy and self-ownership versus the value of life itself.

Sometimes the issue is one of mere means, such as debates about education. Perhaps if it were ever to be proven that children were educated better under a condition of free market education, all those who attack school voucher programs and support teacher unions would change their tune. If it were proven in favor of the other side, perhaps homeschoolers and advocates of free market education would vote for higher taxes to support better government schools and send their children there accordingly. The goal for both sides is that children be well-educated. Despite what each side might say about the other, neither wants the next generation to be illiterate, innumerate, and dull-witted.

It is this very type of disagreement, with all its vitriol and hostility, that I expected to be explained and remedied when I first picked up Haidt’s book and read the title. Much, maybe most of politics is a lot more exciting than it should be.

Let’s look at a few supposed “hot button” issues that aren’t all that hot at all:

Minimum Wage – Neither side wants people to be poor.
Foreign Intervention – Neither side wants terrorists to attack America.
Gun Control – Neither side wants people to die from mass shootings.
Education – Neither side wants children to be uneducated.
Central Bank/Monetary Policy – Neither side wants recessions.
Government Healthcare vs Free Market Healthcare – Neither side wants high medical costs nor difficult to attain health services.

That’s just the tip of the iceberg. I would venture most of the disagreements we have are over “means” issues rather than “ends” issues. Haidt has no answers for this predicament, but he does have a great theory about riders and elephants. (If you read my blog, but don’t listen to the The Tom Woods Show, you deserve to be confused. Listen to Episode 429) In The Righteous Mind, as well as in his first episode with Tom Woods, Haidt explains that our rational mind has the sort of unbiased decision making much as a Judge would fair riding on an elephant. He essentially argues that the elephant (our emotions or intuitions) are what guide our decision making while the rider (or Judge, our reason) is mostly there to justify the action taken. While the Judge can rein in his elephant and act according to reason rather than emotion, most of the time the elephant is allowed to be in control and the Judge is just hanging on for the ride.

A problem such as working on a Rubik’s cube isn’t in an intuitional burden until you are frustrated enough to stop working on it and you crush the damn thing with your bare hands. The question I want answered by Haidt is simple: Why do so many people remain emotional with problems and fail to go into problem-solving mode? Why do libertarians get called names for advocating a monetary system that can’t be controlled by political appointees? I don’t think I will ever again argue about abortion, or gay marriage, or other such hot button issues. Not because I don’t have strong feelings about them, but because they are disagreements over ends and as Mises alluded to in Human Action: If you can’t quickly convince someone that they have the wrong ends, you never will.

But the crux of most matters relate to disagreements over means and not ends. Whatever the dispute, I feel duty bound to argue the case for freedom, because that is what works. Here Haidt’s book only scratches the surface. Why can’t people analyze these problems like chess players analyze a chess position? Why are they so emotional, sometimes just plain hostile, to those who disagree? How can people fail to see the winning move even when it is shown to them by another? Why are they so stubborn? And why do people get, or remain, emotional over a controversy based purely on logic and reason and not at all on subjective values?

Yet, might there be a seventh pillar? You can teach your kids how to eat the right way: to use a fork, or chopsticks, and chew with their mouth shut.  If they don’t get it right, they haven’t hurt anyone. At worst they are offensive in certain settings, but people remain unscathed. However, there are right ways and wrong ways to do things. If a man builds a bridge ineffectively and it collapses and kills those traveling across it or if a “doctor” uses the old Anglo-Saxon trick of rubbing horse manure into a wound and the patient becomes septic, these people have made situations and lives worse. If it can be reasonably demonstrated through logic or experience that one method is preferable over another or certain practice is ill-advised, would it not be immoral to purposefully ignore this evidence and continue on with policies which negatively affect people? I think so.

At some point you have to admit doing things in certain ways, the means, is immoral. A command economy is immoral. We could use the extreme example of North Korea, whose policies lead to the death of hundreds of thousands or millions through starvation. The minimum wage is immoral because it hinders young people without a skill set from entering the work force or people in need of a second chance might not be able to get an honest job because no one wants to take the risk to hire them when they are required to pay them the same amount as another who has kept his nose and record clean. The War on Drugs is a near perfect example of immorality because it invigorates black markets, encourages violence, increases reckless drug use, and causes more broken homes and more death.

Haidt does touch on one subject that is a means issue when he discusses libertarians towards the end of his book. He makes the case for healthcare reform, but it seems that he entirely misses the fact that he has transitioned from argumentation over the ends to argumentation over the means. It is the only example anywhere in his book that deals with means.

In another place of note, he brings up the death penalty; an unusual issue as it can be argued on either the merits of ends (“It is always wrong to kill another human,” or “Justice demands the life of a murderer.”) or of means (whether or not the death penalty works as a deterrent or a counter deterrent). The death penalty is one of the few issues where there are four possible sides to take.

In some ways perhaps my criticism isn’t fair. Maybe Haidt, like many other great scientists and philosophers, answers one question only to raise a dozen more. While Mises had a firm handle on means versus ends and addressed it nearly 100 years ago, I hope one day Haidt or another psychologist can help break down the barriers for those who stick to their elephants of emotion rather than grappling with matters pertaining to logic and reason. It is a wonderful idea to consider what a sequel book would look like if Haidt were an Austrian. If you read Human Action directly before you read The Righteous Mind you can come up with some ideas as to what that book might look like. Perhaps Mises’ The Anti-Capitalist Mentality would be a heavy influence on such a paper.

But Haidt isn’t an Austrian and I’m not a psychologist. As a combined result of reading Mises and Haidt, I have decided that in any argument I’m in I should ask what is the other person’s aim. I will try to get them to dismount their elephant of intuition and sit down at the chess board of logic and reason.

“Why do you want ‘X’ to happen!?”

“WOW! What do you know? I want that too!”

“What if we could get there better by another route? Would you be interested? If not, why?” 

The question “Why?” is indispensable. Whether “X” is providing for the poor, children being educated, or a reduction in drug use we have to ask what is the best way to get there.

The 4th of July, An International Holiday! (And the most exciting footnote you’ll ever read)

The Fourth ought not be strictly an American holiday, there is no reason for it to be so, It is a symbolic day that summarizes the efforts of so many people around the world and throughout history.
It is a day to celebrate the resistance to central power and tyranny wherever it arises and whatever form it comes in. Not for a certain people or only those people who were successful as the American colonists were. Because we are not celebrating our actual gaining of independence, but merely our declaration of secession. The 4th is iconic because the revolution was so successful in the face of overwhelming odds. It is an Amercian holiday, but folks around the world should reflect on the struggle for liberty, of their own people and of others around the world and down through history.
Today is a day for all people to remember those who stood up to tyranny! From Boudica’s uprising against the Romans over 2,000 years ago, to the Romanian revolution in 1989. From the Texas secession from Mexico to the fight for freedom in South Sudan.
Indeed even those who are the scions of those who merely fought to maintain their freedom, the fourth should be a day when every child is taught the Declaration of Arbroath¹ and reminded that it was never broken.
And in America we should have more of a reverence for the ideal than we do. It isn’t a celebration of “‘Merica.” It is a celebration of secession and of Rebellion.

It is for Bacon’s Rebellion, for the whisky Rebellion, Oh Yes! Even for John Brown’s Rebellion! And especially for what is officially known as the Great Rebellion!
To all those who have ever wished to sever the political ties that bind them to the central authority and who wish to be free and self governing. This is your day! From English resistance to Norman oppression, to Brexit! Self determination, secession, and home rule are the words of the day!

I hope ya’ll had a good Fourth, I’ve been absolutely swamped lately. Maybe things will settle down after rodeo season ends.

  1. The Declaration of Arbroath is perhaps the most stirring historical document I have ever read. It was written by the Nobles of Scotland in 1320. It was an appeal to the Pope for justice, that the Pope would stop the illegal war of aggression that the English had been waging against the Scottish people. But in it also was a promise that they would never yield, not merely in their own lifetime, but ever, “… as long as but a hundred of us remain alive, never will we on any conditions be brought under English rule. It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom — for that alone, which no honest man gives up but with life itself.”  It is not merely a promise to resist virtually to the last man, but to teach their children, and to command them to instruct their children, and their children’s children, that nothing is so precious as freedom, not even life itself.After reading this Pope John XXII must have been moved because he put pressure on the English to make peace but Edward II pressed on another 7 years, until political pressure at home forced him to quit the fight.Do remember that the war began in 1297. And it carried on all the way to 1327. That’s a 30 year war. Men were fighting at the end of that war who hadn’t even been born when King Alexander III had died 1286, or when his only clear heir Margret, the maid of Norway, died in 1290 which lead to the succession crises which opened to door for English invasion by Edward I. Perhaps the colonists would have kept fighting for 30 years. It doesn’t seem like that was ever a possibility. But the Scots had a long time horizon, and they were prepared to fight for generations! And lasting peace didn’t come until 1357 after the 2nd war for Scottish independence.

    Here is a link to where the Declaration of Arbroath can be read in full. Thomas Jefferson has nothing on Bernard of Kilwinning (the man believed to be the actual author of the document) Declaration of Arbroath

Dave Smith vs Gary Johnson vs Mises vs Rothbard on “No Fly, No Buy”

Ever heard of Dave Smith? He’s a libertarian comedian and host of the podcast “Part of the Problem.” He is very funny, and he has a great podcast.  His podcast has become part of my regimen along with Tom Woods and Marc Claire.

I actually have no beef with Dave but his show from June 18 brought up some very interesting ideas which build upon my most recent post that dealt with arguing means instead of ends.

Dave Smith ripped Gary Johnson to shreds and rightfully so, regarding Johnson’s recent comments concerning the “no fly, no buy proposal”. Gary Johnson is on the right side of the issue. He is in opposition to the proposal, but only because “these lists don’t work.”

And just like any good Rothbardian, Dave Smith latches onto Johnson like a dog on a bone. And the route that Johnson takes is embarrassing. Johnson argues,”Hey these lists don’t work…there are sitting members of congress on these lists.”

And Dave Smith just goes to town on Johnson from a Rothbardian framework. Dave says that the lists not working is no argument and is weak, that a real libertarian would argue about natural rights; about the immorality of using force to take guns away from people, about our natural rights to trade and to own guns, to overthrow a tyrannical  government and all of that. It really was good. (link to The relevant show, gets relevant about 46 minutes into the show.)

And while I find no flaw at all in this line of argument, and use it myself sometimes, I see a tactical flaw in using it. And this is where my last post and Jonathan Haidt come back into play.

In my last column I wrote about the differing categories of disputes. About how we can argue over ultimate ends, such as abortion and gay marriage. Or over means, such as our bitter disagreements over education, rent controls, minimum wage laws, drug prohibition, central banks, and regulations on the medical sector, where both sides are seeking the same ultimate ends, such as well educated children, an end to homelessness, help for the poor etc., and that there is only a disagreement over how to get there.

In this case I think it’s important to take note that Dave Smith is arguing along the lines of ultimate ends. He is arguing down the Rothbardian Ethical line. And I agree with it and love it.

The only problem is that our opponents are arguing along utilitarian lines. If people were never killed by murderers who used guns, they wouldn’t care about people owning “assault rifles.” but the thing is, things like Sandy Hook and Orlando do happen. And they have a point. if no guns existed, then shootings wouldn’t happen.

Think back to the broken window fallacy of Fredrick Bastiat. They can see clearly enough the seen, that people die from gun violence, but what they fail to see is what is unseen, the alternative, the opportunity costs. If no one was allowed to have guns, more people would be victimized, more homes would be invaded. If no one was allowed to have guns where would that put the police? It’s not like the police are nobodies, they are people too.

Of course those on the left aren’t complete crazies, they just want to keep the bad guys from having guns. Hence the no fly no buy policy.  Their ends are the same as ours. They don’t want people to be slaughtered by the dozens in mass shootings, and neither do we. Yes we believe in the principle of self ownership, the right to trade, and the right to property. But these are ultimate ends. And they are arguing means. So in a sense we are arguing past one another. It may feel good to pound your fist and shout defiantly “Fiat Justistia Ne Pereat Mundus,” But It isn’t going to win many arguments.

This means that Gary Johnson’s line of attack is the right one. But he does it poorly. He says that he would be in favor of the no fly-no buy IF it were ever effective. Mises would have argued that we should be against such a policy because it can never be effective! You can never prevent guns from falling into the hands of the bad guys. Because
1. They can merely obtain the gun illegally on the black market.
2. They can learn what to do to get placed on these lists and then not do those things and obtain a gun legally.
3. Good people can go bad. Hard to believe I know but it happens. If this is too hard to swallow, let me state it another way – that bad people can pass as good people for a very long time before they actually do anything bad.

That should be our argument, and that given bad people can always find a way to get guns, the best solution is to make sure that good guys can get a gun as easy as they can get a pie. No bad guy stops shooting until a good guy with a gun shows up to shoot him. So gun proliferation among good guys is the answer.

The ends is to prevent mass shootings. The way by which that happens is not by outlawing “assault rifles.” That will only make things worse. Instead we should let people carry everywhere. This will save lives. If it doesn’t deter mass shooters in the first place, it will ensure that a good guy with a gun is much closer. and fewer lives will be lost.

I like Gary Johnson’s reasoning, except that he sucks at explaining it. It isn’t that the lists are flawed, it is that the entire notion of creating a list is flawed! It can never work.

I do use the Rothbardian approach, but if that doesn’t quickly change their mind I switch over to full on Mises Mode!  Rothbard will convince the non political, and those who aren’t in the 2 party system maybe. But the Misesian line is the one that will work on the die hards, If they’ll listen, and if they are convinced we are all seeking the same ends.

In this instance I think Gary Johnson does have the more appropriate arguments, the problem is he doesn’t know how to use it. And he doesn’t do the Ron Paul Double-Down. It isn’t enough to oppose government intervention, one must roll it back. This is where a good Austrian would also go on the offensive and attack the current no fly list for being ineffective, and contrary to the ends which its advocates wish to attain.

As a closing note, I’d recommend “Liberalism” by Ludwig von Mises.  As always you can find it here for free.   And if you’re looking at a 7 hour round trip drive, you can have the book read to you for only $12 if you’re a member at audible. (That’s a link for a 30 day free trial which includes 1 free audiobook if you’re not already a member. So just use that link, and get it free!)

Sowell’s Basic Economics: Deflation, Part One

Note: Though there are still a lot of errors and misrepresentations in this short section (pp. 373-378), it is not nearly as convoluted as the one on inflation. So we are going to take our time and enjoy this.

On page 373 Sowell writes, “From 1873-1896, price levels declined by 22 percent in Britain, and 32 percent in the United States … output was growing faster than the world’s gold supply. While the prices of current inputs and outputs were declining, debts specified in money terms remained the same – in effect, making mortgages and other debts more of a burden in real purchasing power terms than when these debts were incurred.”

First, it should be noted that the Western world was on the Gold Standard and the money supply was not shrinking. In other words, no deflation was occurring. Inflation and deflation, in a technical sense, refer only to the supply of money increasing or decreasing.

The most important thing about the money supply is that, ideally, it does not change. If it does change, it should neither increase nor decrease by very much, very quickly. There is no real optimal supply level. If newer techniques of production and better tools are invented which push down the costs of production and thereby put downward pressure on the prices of consumer goods, this ought not to be seen as a bad thing as it demonstrates than man is making advancements in his struggle against scarcity.

Now let us address the debt issue. Over the 23 year period from 1873-1896, prices fell by 32% in the United States. That is an average drop in price of 1.4% per year and is far more stable than 2% inflation per year that we experience today.  The fact that prices were falling and the overall purchasing power of the dollar was increasing put pressure on debtors to make extra payments toward their debts and pay them off or avoid going into debt unless it was unavoidable. Contrast that with today’s economy where the money is losing purchasing power and most people are in debt as a lifestyle. Debt is now a cultural norm. With the dollar losing its value at about 2% a year, it almost makes sense to buy everything you can on credit.

Have you heard of time preference? The basic idea is that – all things being equal – supposing there is not any interest and the values involved are perfectly stable over the allotted time, a man will prefer a good sooner rather than later. It is more desirable to have a it all now: a candy bar today rather than a candy bar tomorrow, a laptop next week rather than a laptop next month, a new car next month rather than next year. As the saying goes, “There is no time like the present.” When the value of money is decreasing the way it is now, inflation magnifies the time preference and makes it even more acute. Not only would I prefer a new car next month – heck, right this minute – but why should I hold my savings in the bank where it is losing value while I continue to save toward the future purchase of a new car? Next year a new car will be more expensive than the one on the lot today and my money will be worth less. I would rather use any savings as a down payment and take out a low interest loan to cover the rest.

On the other hand, when the money is increasing in value relative to the price of goods and services this usually has a tempering effect on time preference. The consumer will look at the car market and determine that though he might like to have a car right this minute, the wise thing is to continue saving his money. The money saved will be worth more in a year or two and the price of the new car will be even lower than it is now. 

As far as debts being more of a burden, there is some truth to this, but those already in long term debt can always refinance to more favorable terms or buckle down and pay off their debts early. 

While something in the amount of the average mortgage would be a pain in such circumstances, it would also be much easier to save and buy a home with cash, or with a greater down payment than what anyone approaches today.  Besides, a fellow locked into a mortgage in a “deflationary” economy could be said to be paying more in real terms. We should not forget that everything else he has to buy is getting cheaper.

Sowell finishes off the paragraph by saying, “Farmers were especially hard hit by declining price levels because agricultural produce declined especially sharply in price, while the things that farmers bought did not decline as much, and mortgages and other farm debts required the same amounts of money as before.”  

There is only an inkling of truth to this. You need to consider the time that separates investment from return. A man might spend money today, in 2016 prices, to buy apple trees and then have to wait 4 years before his first crop of apples appears that he will then sell at 2020 prices. In a deflationary setting the farmer may be said to lose money, but apples may have been one dollar a piece when he planted the trees and only 90 cents a piece the first year he sold his crop. The purchasing power of the 90 cents was the same when he sold as one dollar was four year earlier when he planted.  When you look at what his money would exchange for on the market from one time to the next, not much has changed.

Nevertheless, times were hard for farmers in this era and that has to do with tariffs. Tariffs were extremely high in this era, and it was these tariffs and not an appreciating dollar that put a burden on farmers. I have written on tariffs in previous posts, but I think they will get covered again as we work through this book.

See you soon.

Inflation. Yes, again.

Note: I had written a whole play-by-play analysis of this section (pages 366-373) of Basic Economics by Thomas Sowell, but it is so boring and long I’ve decided it isn’t worth being put on a blog. 

We are going to whittle this down drastically and not trouble ourselves with all the different ways Sowell errs on inflation. I’ll try to simply give an explanation of what inflation is while keeping his errors in mind. There will be coverage of this section of Basic Economics in more detail in an eventual upcoming e-book and you can join The Mean Austrian email list for updates on that.

So, let’s get down to it: (Pry those eyelids open and try to not run away. It may sound familiar, but I promise it’s – relatively -short.) 

– The Mean Austrian

 

Scarcity is one of the key features of money and an important feature to keep inflation from drastically hitting an economy. When government has control over the money supply, and that money supply is paper backed by nothing of true worth – as the U.S. currency is today – there is nothing to stop the government from printing out more money. And more money. And more money still. This inflates the money supply (i.e., inflation).

The result is that as more gold comes on the market, it is valued less. The more there is of something the less it is worth. On the flip side, generally speaking, the less there is of something the more valuable it becomes. This is true of everything from bread to baseball cards. Pretty basic stuff.

“Hold up, Mean Austrian! Might gold ever be affected by inflation?”

Yes, inflation can happen even with gold. Enter, History:

After the New World was discovered by Europeans, gold mines in America were opened and gold flowed back to the old country where this new money bid up the price of goods. But it was very minimal and happened gradually over the course of a century.

The difference between gold mines in the New World and printing presses in the U.S. is that to mine gold out of the ground and ship it across the Atlantic was a costly and risky venture. It took a lot of tangible resources to bring that gold into circulation and thus the inflation was limited by the pocketbooks of the entrepreneurs and their backers. Under the Federal Reserve, there is nothing limiting the the increase in money. It is little more than a matter of paper and ink. No risk, high “reward”.

While there can be inflation with gold-based currency, that inflation would never be runaway inflation. The only thing keeping us from experiencing the runaway inflation the Wiemar Republic went through, and that Venezuela is currently experiencing, is the relative good sense of Janet Yellen.

WHY GOVERNMENTS CAUSE INFLATION

Governments, in some sense, ultimately rest upon the acquiescence of the people. If the taxes get too high, people become unruly. The solution then is to tax as much as you can get away with, and for whatever expenditures remain unmet, simply print the money.

Yes, you guessed it: This inflates the money supply! It devalues the money already in circulation and it steals the purchasing power of every consumer in the country. This is a hidden tax and the most regressive tax. A sales tax may be at 8% of every dollar a poor man spends, but inflation takes 2% of every dollar the poor man doesn’t spend every year. This flat-out discourages saving money and if the man wishes to improve his current financial situation it makes it all the harder.

I’m pretty sure we’ll deal with other aspects of inflation as we move forward.  Deflation is right around the corner, so I’ll leave it here for now… I wouldn’t want to overexcite anyone all in one post.

I should also apologize for the delay. Blame my cows and computer. I know I do. For those of you who are still following along despite the delay, I really do appreciate you!