Mises And Hayek Or Extinction: Civilizing The Slightly Smarter Myth-Following Apes Before It Is Too Late
1974 Nobel Laureate in Economics F.A. Hayek can be considered the first person in the history of mankind to provide a complete evolutionary understanding of how the world works. Hayek is still is so far ahead of our times that even today’s leading thinkers like renowned York Times bestselling science writer Matt Ridley are, by their own admission, ‘still catching up with him’. Ridley humbly acknowledges this in a 2011 speech where he mentions:
”As someone who came to Friedrich von Hayek comparatively late in life, I’m still catching up with him…Indeed, many of the insights I thought I had discovered in my own readings and writings on the frontier of evolutionary biology and economics it turns out Hayek had long before me…It’s Hayek who first puts it all together.” — Matt Ridley
So how does Hayek ‘puts it all together’? Hayek realized that if one understands how information coordinates the biological and social orders then one understands how the entire world works. Let’s briefly try to get a feel for how Hayek saw the world and how dangerously lost we are without his (and friends’) wisdom.
‘Natural selection’ in general can be said to have created two mechanisms for creating two types of orders, biological and social. The biological order is created via the well-known mechanism of ‘biological evolution’ with genes being like the sentences which store the information necessary to create/coordinate life/order. Mutations cause new genes and thus new information to arise which leads to a different life-form which is then ‘naturally selected’ as it inadvertently competes with others with the winner reproducing more and thus passing on more copies of the better-adapted/”fitter” genes/information/design to future generations.
The social order, or what the great British 19th century thinker Herbert Spencer referred to as “The Social Organism”, is coordinated by what Hayek and his great mentor Ludwig von Mises referred to as ‘The Market Process’ and the “parts” it is composed of like money, prices, economic competition, interest rates, and the legal/religious/governmental frameworks that sustain it. Just like cells are unaware of how over billions of years natural selection crafted the respiratory, nervous, digestive, etc. “systems” that coordinate their actions to create multicellular life, so is mankind utterly clueless of both, how ‘The Market Process’ coordinates individuals to create ‘The Social Organism’(how the economy really works), and how it has arisen over the last 20,000 to transform solitary bands of vicious tribal slightly smarter apes into our modern global socioeconomic order. Widespread ignorance of these vital facts which were explained by Mises/Hayek/friends is what has mankind mired in tribal/political conflict, militarism, and now gripped by CovidMania.
‘The Market Process’ and resulting global socioeconomic order inadvertently emerges from the tradition of private property. Private property means that matter/property is under the exclusive control of a single person/mind/CPU. Generally speaking each person/mind is motivated to discover the best information with which to transform or reorder their private property in a manner which increases its value so that we can then trade it for as much property/wealth with others. Most of us transform our bodies in a manner that maximizes the value of the labor we produce and trade with groups of other people (companies). Some transform bread and beef to increase their value as hamburgers which are then traded with others, etc. From our freedom to use/transform our private property emerges the ‘freedom to trade’ it with anyone in the entire planet which inadvertently transforms mankind into a global supercomputer where people/companies are motivated to innovate and learn from each other(competitors) thus inadvertently cooperate to discover and spread superior information and subsequent order. It is our freedom as consumers to trade our life/order-sustaining wealth for the best cars, and as producers to go into the auto-manufacturing business, which motivates existing auto manufacturers(competitors) to innovate/compete/learn to produce the best cars lest they not get enough revenue/wealth with which to pay their employees a competitive wage so they use their ‘freedom to trade’ their labor to join the better-informed and thus more productive/efficient orders/companies. A mind/CPU anywhere in the planet that comes up with an improvement will benefit everyone in the world if they are ‘free to trade’ for its products/services which will also motivate all competitors in the world to likewise improve their actions/order. Just like in the Olympics we can discover the best athletes in the world due to global competition, so does having the ‘freedom to trade’ with everyone in the world allows the best ideas to compete/spread globally thus ensuring the best possible global order. Via advertising, competitors are motivated to spread the potential usefulness and superiority of their products/ideas as well as the defects/inferiority of their competitors thus accelerating the need to compete/copy/spread superior information and subsequent order. As cost-cutting ideas emerge and inevitably spread via competition leading relative prices to continuously fall, new profitable ideas easily arise and once again spread via competition in an endless cycle of knowledge generation/innovation. For example, computers were once very expensive, but once the price of making them came down enough, people easily realized that every home could have them, which gave birth to our computerized world and the Internet and all the great things that flow from it.
Envision people coming together/apart as companies/orders emerge and dissolve in ever-changing conditions. Superior information arising and rippling/restructuring the social order thanks to competition. Each person/company/order constantly consuming/using/reordering wealth like food, energy, materials, etc. as it produces wealth in terms of labor/products/services, constantly trying to produce more wealth than it consumes thus being profitable inadvertently reordering a small section of the planet in a manner that increases the amount of wealth/life/order. As companies/orders get more productive/profitable they lure people to ‘trade-with’/‘join-them’ by offering more money/wealth for their labor, eventually causing the least productive companies/ideas to dissolve as their ‘factors of production’ like labor, buildings, etc. are bid away to be parts of more productive plans/ideas. Thanks to the finance/banking industry people are motivated to produce more than they consume and thus increase the amount of saved/unconsumed wealth, which is then loaned to and borrowed by entrepreneurs as they nourish their consumption while they produce wealth at a rate greater then the prevailing interest rate. This allows the quick and easy pooling of large quantities of saved wealth to sustain the creation of large projects/buildings/factories which would have been impossible to do if people were limited to the savings/wealth of friends and family members. And, very importantly! It also gives a ‘computational boost’ to society by both, motivating the accumulation of saved/unconsumed wealth, and placing it under the control of entrepreneurs/CPUs whose superior ideas can grow the economic pie quicker than prevailing interest rates. This also helps us understand one of the reasons why Christendom eventually pulled ahead of the Islamic world since the Islamic world had strong prohibitions on charging interest on loans which kept its finance/banking sector relatively cumbersome/backward/ineffective. And also further helps us understand some of the economic fallacies which led to antisemitism since for considerable time Christendom forbade charging interest on loans, but Jews, not being subject to the Church’s control could charge interest and by becoming bankers/financers greatly helped the European order even though the practice was often hated by the economically ignorant(everyone). Historian Paul Johnson writes:
“The Jews reacted by engaging in the one business where Christian laws actually discriminated in their favour, and so became identified with the hated trade of moneylending. Rabbi Joseph Colon, who knew both France and Italy in the second half of the fifteenth century, wrote that the Jews of both countries hardly engaged in any other profession” (Johnson, Paul. (1988). A History of the Jews. , p. 174)
Given the above we can see how a swarm intelligence emerges as the freedom of consumers to calculate and trade-with what is best nourishes the growth and spread or superior orders/companies/information, inadvertently expanding the worldwide “division of labor and information” as entire neighborhoods/cities morph themselves in specialized ways as complementary pieces of information/orders segregate themselves in distinct geographical locations like the software industry in Silicon Valley, California and manufacturing in Guangdong, southern China. As Mises reminds us “The division of labour is a fundamental principle of all forms of life.” The division of labor is a pattern/way which natural selection rediscovers to enable smaller units/orders to efficiently compartmentalize labor/information as they contribute-to (and are nourished-by) a larger organism they become parts of(Organelles -> Cells -> Organs -> Humans -> Social Organism). Mises again:
“It is by virtue of the division of labor that man is distinguished from the animals. It is the division of labor that has made feeble man, far inferior to most animals in physical strength, the lord of the earth and the creator of the marvels of technology.”
Morals are ways of acting, they too are knowledge which also emerges and spreads via economic competition to considerable degrees. It is hard-working, tolerant, courteous people who thanks to competition inevitably motivate everyone else to be likewise. As Hayek writes:
“Competition is, after all, always a process in which a small number makes it necessary for larger numbers to do what they do not like, be it to work harder, to change habits, or to devote a degree of attention, continuous application, or regularity to their work which without competition would not be needed.”
As millions of Britons, Germans and others from all over the world came to America, it was ultimately the competition which grows from ‘private property’ and thus individual liberty/freedom which stripped these people of their otherwise nationalistic/ethnocentric/tribalistic identities and evolved what came to be seen as the classic American character/ethos of wanting to be seen as a reputable/honest businessman/professional who treats everyone with respect and wears a business suit as opposed to older religious/ethnocentric dress. Thus freedom and emerging ‘competitive knowledge discovery’, as opposed to leading to chaos, 1) civilizes us, 2) is what enables and motivates the discovery and spread of superior information which continuously increases the rate at which mankind reorders a tiny fraction of the earth’s massive volume of 260 billion cubic miles into the wealth that easily feeds/clothes/expands nearly 8 billion people, 3) protects us from being coerced into doing things we don’t want to do, or losing the wealth we have traded a part of our very lives to create or acquire, and 4) is vital for discovering THE MUTHERFUCKING TRUTH!
SOCIALISM/COMMUNISM AND THE PUBLIC SECTOR
The role of governments should be to set the framework/laws that maximize such freedom/‘competitive knowledge discovery’ and NOT to attempt to manage/order society because governmental/‘public sector’ bureaucracies, being COERCIVE MONOPOLIES which get their life/order-sustaining wealth through taxes/compulsion are immune to the competitive-information-spreading incentives/pressures which motivate/force private sector entities to keep up with the competition in terms of hustle, and the copying and innovation of ideas. Government information is monopolistic/competition-less information which is always bound to be inferior to private/competitive information. Hayek:
“The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.”
Central/government plans can’t work if people are free to not go along with them so they inevitably require compulsion/tyranny. For example, it is a criminal act in Communist countries like North Korea and most of Cuba to start a business, in other words, to attempt a superior restructuring of society because it interferes with the plans of “the experts” who run the government. It is also a criminal act everywhere to not pay taxes that sustain public/monopoly sector bureaucracies like “public education” so there is little incentive or wealth to sustain other, more desirable/superior competitors/ideas. For example, the NYC public(monopolistic) school bureaucracy consumes about $29,000 per year to “educate” a K-12 student. Refusing to pay a single dollar that goes to this bureaucracy is a criminal act. Taxes and all transfers of wealth from the private sector to the government, besides being an obvious coercive burden to the people that had to sacrifice a part of their lives to earn such wealth and now have less wealth to trade for the things they want, simply destroy the more productive/efficient private sector jobs the taxed-away spending would have sustained and replaces such productive/efficient and pie-increasing jobs for inefficient government/monopoly ones, or worse, like militarism/wars. The former Soviet Union had plenty of highly educated scientists/‘experts’ whose plans required the coercion of millions as still happens in Cuba, but they were thoroughly crushed by free Americans and their ‘competitive knowledge discovery’. Socialist regimes and government in general also face an “incentive problem.” In free societies, or the private sector, each person is incentivized to be as productive and careful as possible and keep inefficiencies/risks to a minimum since he owns/keeps the additional wealth or losses in terms of unprofitable ideas or law suits. On the other hand, the government employee or bureaucrat gets the same pay (ability to then consume) whether his department did a good job (produced a lot) or not, and is also not risking his own wealth since that comes from the taxpayers. The image below helps explain the difference between competitive/private/free orders(South Korea) and monopolistic/government/coerced orders (North Korea). Keep your eye on how information arises/spreads via competition and continuously restructures the social order.
In his essay “Overlegislation” Herbert Spencer beautifully captures the differences between governmental(law-made/competition-less) orders and private/competitive ones:
How invariably officialism becomes corrupt every one knows. Exposed to no such antiseptic as free competition — not dependent for existence, as private unendowed organizations are, upon the maintenance of a vigorous vitality; all law-made agencies fall into an inert, over-fed state, from which to disease is a short step. Salaries flow in irrespective of the activity with which duty is performed; continue after duty wholly ceases; becomes rich prizes for the idle well born; and prompt to perjury, to bribery, to simony. … Officialism is habitually slow. When non-governmental agencies are dilatory, the public has its remedy: it ceases to employ them, and soon finds quicker ones. Under this discipline all private bodies are taught promptness. But for delays in State-departments there is no such easy cure. …
Consider first how immediately every private enterprise is dependent upon the need for it; and how impossible it is for it to continue if there be no need. Daily are new trades and new companies established. If they subserve some existing public want, they take root and grow. If they do not, they die of inanition. It needs no act of Parliament, to put them down. As with all natural organizations, if there is no function to them, no nutrient comes to them, and they dwindle away. Moreover, not only do the new agencies disappear if they are superfluous, but the old ones cease to be when they have done their work. Unlike law-made instrumentalities…these private instrumentalities dissolve when they become needless. …
REGULATORY PARALYSIS
A government regulation is competition-less/monopoly information that is forced upon the entire social order from the top-down via the law. In the free/private/competitive sector information moves from the bottom (individual minds/entrepreneurs/innovators) to the top/others/influencers as it is ‘tested’/refined/preferred/adapted by the comparisons to other information by billions of minds thus ensuring superior information spreads. This is bypassed by top-down regulation and all government/monopoly action which ultimately comes at the expense of wiser private/competitive action. The more the government regulates, the more it paralyzes competitive knowledge discovery. As government regulations have increased in the health care sector, turning it into a sort of island of paralyzed top-down competition-less/socialist central planning, so have costs. These increased costs have led the sector to grow from consuming just 4% of the American economic pie in 1960 to over 20% in 2021. What a person must learn in order to legally offer medical advice via licensing of doctors, where he must learn it via licensing of medical schools, what chemical compounds can be legally consumed, how to test drugs, how the medical insurance industry should work, and countless other gigantic bodies of knowledge/information are dictated by monopolistic competition-less bureaucracies like the American Medical Association (AMA), the Food And Drug Administration (FDA), CDC and numerous others. By comparison, the Information Technology sector has very few government regulations so competition motivates the creation and spread of superior information at breakneck speed and is obviously transforming our world right before our eyes. Teenagers can work at Google/Microsoft/Amazon and write the software that keeps planes in the sky or people alive via software in medical equipment, yet there is no American Association of Computer Programmers dictating what or where such knowledge can be obtained. There is no government monopolistic bureaucracy ensuring the proper functioning of the software that runs PCs, smart-phones, the Internet, or ensuring the lack of malware or viruses in software. Thanks to this lack of monopolistic centralized decision making/regulating/paralyzing, education in the Software Development/IT world is astounding. At places like www.freecodecamp.org thousands of people are going from 0 experience to highly-paid computer programmers in just a few months for free. Economic ignorance leads many to believe that since one has to be seemingly more careful with medicine, such monopolistic regulatory oversight is somehow necessary. This is irrelevant, if it is superior knowledge that is needed, which includes figuring out how careful to be, freedom and competition is the best way to discover it, period. Nobody knows who the greatest programmers in the world are, there is rightly no Nobel prize for them, the nearly 30 million lines of complex computer code that make up the Linux Operating System that runs most of the world’s computers and is now an integral part of the ‘Social Organism’ were created not so much by ‘smart’ people, but by pure competition. If the medical sector, or better yet, the entire world-wide economy was as deregulated and thus as competitive/innovative as the Software/IT sector, the rate of innovation and prosperity would skyrocket and in all likelihood people who as of today have 5–10 years left to live might be able to beat dying of old age. Only the truly economically woke can easily accept the feasibility of this statement. In graph below one can see how the more regulated a sector is (Hospital Services) the more expensive/paralyzed/consumptive it becomes.
MONEY CREATION IS ADDITIONAL TAXATION
We must emphasize that the production of wealth requires the consumption of wealth. If 10,000 men are to spend 2 years producing an airplane factory, they must consume/use the concrete/materials/food/energy/wealth that they (as well as their dependents/family) need while they produce the factory. More money does not equal more wealth. Would the men above be able to produce the factory if instead of having real previously saved/unconsumed wealth to use/consume had to consume pieces of paper with dead presidents on them? Of course not. The creation of money just means that there is now more money per existing unit of wealth thus a higher ratio of money per wealth thus higher prices. The creation of money by governments is just a hidden tax that transfers wealth from the public to the people who get the newly created money. For example, Let’s say you have saved $1,000 which can buy you 1,000 items at $1/each. The government via the central bank (Federal Reserve in US) and a convoluted process eventually creates billions of dollars which are given to military personnel so they can trade them for the wealth they need to consume/live as they fight the evildoers, and because of this money-creation prices go up 5% so each item is now $1.05 and your saved(or future earned) $1,000 can only buy you about 952 instead of 1,000 items. The 48 items/wealth that you (and other taxpayers) can no longer obtain because prices have increased, can be seen as an estimate of the amount of wealth that was taxed/transferred from you/society to the military personnel. Again, money is not the same thing as wealth, when governments create money they are simply creating an additional tax or transfer of wealth from savers and the public at large to those who get the money.
The graph above helps us understand how when the US was still on a gold standard, since gold can’t be increased by adding 0s at the end of bars, politicians/‘great leaders’ could not just create money to transfer the necessary wealth from millions of minds in the private sector to their centrally planned/inefficient bureaucracies. This forced them to attempt to raise taxes which would allow millions of minds to calculate whether the transfer was worth it, and it would also prevent the new money-creation(inflation of the money supply) and subsequent rise in prices. Up to 1971 the US would give foreign governments an ounce of gold per $35 dollars, but to acquire enough wealth from the public without taxing them directly in order to feed/clothe/nourish military personnel during the Vietnam War, the US was creating more dollars than what it could honestly exchange to gold. French president Charles de Gaulle, who wanted the war to end, knew this money/debt-creation was allowing the US ideologues to dishonestly acquire the needed wealth to finance the war so he demanded many dollars to be exchanged into gold. The US had enough for France, but was running very low on gold and knew it could not meet further obligations so it just completely stopped dollar-to-gold convertibility and thus end the gold standard. Thus from 1971 onward the US government thanks to Fed(Central Bank) money-creation has been able to additionally tax workers/savers causing prices to rapidly increase. The rallying cry “no taxation without representation” loses all meaning when ideologues/bureaucrats can take an unlimited amount of wealth from the public to do whatever they want by just creating the money.
The graph above shows how from early March to mid May 2020, the Federal Reserve created about 3 trillion dollars which were given to people and businesses during the Covid-Lockdowns so they could consume without any production leading to a shrinking of the economy and accelerating rise in prices(In 2020 real estate went up 15%, lumber 340%…). Again, this is just a transfer of wealth from workers/producers/seniors/some to others as the economy continues to shrink and prices rise compared to what they would have otherwise been without the money-creation.
FAKE SAVINGS AND BUSINESS CYCLES
When governments via their central banks create money to lend it to businesses and “stimulate” the economy, they are doing immense harm and leading to the ‘Boom and Bust’ cycles. Such money-creation, or inflation of the money supply, creates fake savings. It gives the illusion that there exists real saved/unconsumed wealth that can be consumed/used/transformed by businesses as they produce wealth when in reality it doesn’t exist. Imagine there is enough saved/unconsumed wealth(bricks/food) that can be used/consumed while 9 skyscrapers are completed, but because the government via the central banks created a bunch of money (fake savings) it gives the illusion that there is enough saved/unconsumed wealth(bricks/food) which can be consumed/used to create 12. Unfortunately only 7 can be completed instead of 9, because much wealth/savings/bricks were misallocated creating the bases/scaffolding for 12, thus 5 skyscrapers/projects had to be abandoned after much wealth was consumed for nothing. The new money(loans/‘credit expansion’) coupled with the reality that the needed wealth/goods simply does not exist ultimately causes prices of factors of production(bricks/laborers/wealth) to go up more than expected as entrepreneurs use the new money to compete for the limited existing wealth, causing the original profit/loss calculations and plans to eventually reflect the reality that there just isn’t enough wealth/bricks for all the newly attempted skyscrapers/projects to profitably complete. As Mises explains:
“However conditions may be, it is certain that no manipulations of the banks can provide the economic system with capital goods[wealth/bricks]. What is needed for a sound expansion of production is additional capital goods[wealth], not money or fiduciary media. The boom is built on the sands of banknotes and deposits. It must collapse.” ([brackets] added by me)
THE ABSURDITY OF MAINSTREAM ECONOMISTS AND MILITARY SPENDING
It may seem hard to believe, but John Maynard Keynes, the economist whose theories underpin mainstream economics believed that creating fake savings by adding money to banks(inflation), in his own words, “are just as genuine as any other savings” Keynes also believed that “…activity of one kind or another is the only possible means of making the wheels of economic progress and of the production of wealth go round again” which is absurd because in order to increase life/order/prosperity people must be ordered in a manner in which they produce more life/order-sustaining wealth than they consume otherwise you are just shrinking the economic pie/life/order. Hello McFly! And the information needed to guide this profitable order can only be acquired and acted upon by free individuals using profit/loss calculation at the individual/household/corporate level, NOT some ‘great leaders’ in a centrally-planned/competitionless bureaucracy. This also helps us easily understand how war and military spending is the worst thing for society as you have millions of people consuming useful wealth like food/housing/energy as they produce pushups, tanks, bullets which are then used to destroy more wealth/life leading to an obvious shrinking of wealth/life/order even though they are all “working” and thus engaged in “activity of one kind or another”.
So the erroneous belief that real savings/wealth can be created by just creating more money to then “stimulate the economy” or “get everyone working” (i.e. ‘activity of one kind or another’ even if you have 0 regard for whether the people are ordered in a way that produces more than it consumes), provide the one-two punch of fallacies that keep the mainstream slightly smarter apes making the same errors over and over, culminating in the most horrific economic fallacy that could possibly exist, that war is good for the economy and its corollary, that WWII is what got the USA out of the Great Depression of the 1930s. Consider the following absurdity by 2008 Nobel Laureate in Economics Paul Krugman:
“Think about WWII…it brought us out[of the great depression]. If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat…this slump would be over in 18 months”
How could some fake alien threat which gets millions to consume useful life/order-sustaining wealth to the produce non-life-sustaining stuff be anything but a calamity? Krugman’s statement is the perfect example of what Mises once told students:
“Don’t be afraid to speak up. Remember, whatever you say about the subject and however wrong it might be, the same thing has already been said by some eminent economist.” — Mises
Every year, over 1.2 trillion dollars worth of civilian wealth in terms of homes, cars, food, energy, etc. (an amount similar to the entire productive output of Mexico which has the world’s 15th largest economy at $1.04 trillion GDP), is consumed from the economic pie by the millions of people employed by the USA’s national security bureaucracy and its associated contractors as they produce push-ups, military drills and weapons of destruction which have needlessly destroyed Iraq, Libya, and fortunately we are done with Afghanistan. The economic damage by America’s 1.2 trillion dollar military is astounding. In 2015, the world’s ten biggest corporations as measured by the amount of research and development spending they undertook, companies like Amazon, Google, Microsoft, Volkswagen and six others, consumed about 109 billion dollars as they sustained some of the brightest and most productive people in the world whose innovations are truly transforming the world right before our eyes. The National Security bureaucracy consumes that much wealth in less than 1.5 months. For every dollar that sustains the wonderful research and innovations they create, nine dollars worth of wealth are consumed and used to sustain people whose jobs ultimately add very little real value to society and have inadvertently . Perhaps even more startling is the fact that for the year 2012 the entire planet’s top 2,000 R&D-spending companies spent about 700 billion in R&D which is still 300 billion less than what our National Security spending was at the time. It might very well be the case that the USA’s National Security related yearly consumption of wealth is similar to that which is consumed in corporate research and development by the entire planet, which is not only a gigantic detriment to the taxpayers who have to forego the enjoyment of 1.2+ trillion dollars worth of wealth which is then used to sustain all the people associated with the bureaucracy, it also greatly slows down mankind’s technological progress.
BIN LADEN’S SECRET WEAPON — BASIC ECONOMICS
Obviously a basic understanding of economics is the key to realizing just how disastrous unnecessary military-related expenditures are, and this is precisely what Osama bin laden had, which made him undoubtedly one of the greatest military leaders ever. Perhaps no military leader has managed to inflict so much damage on his opponent given the relatively scarce means he had. Osama bin Laden studied economics and business administration at King Abdulaziz University and his understanding of economics became his main weapon. He tells us his strategy:
“We, alongside the mujahedeen, bled Russia for 10 years until it went bankrupt and was forced to withdraw in defeat,”
“We are continuing this policy in bleeding America to the point of bankruptcy. Allah willing, and nothing is too great for Allah,”
“All that we have to do is to send two mujahedeen to the furthest point east to raise a piece of cloth on which is written al Qaeda, in order to make generals race there to cause America to suffer human, economic and political losses without their achieving anything of note other than some benefits for their private corporations,”
“Every dollar of al Qaeda defeated a million dollars, by the permission of Allah, besides the loss of a huge number of jobs,”
“As for the economic deficit, it has reached record astronomical numbers estimated to total more than a trillion dollars.”
“And it all shows that the real loser is you,”…“It is the American people and their economy.” — CNN
FROM TREE-DWELING APES TO CIVILIZATION
About 6.5 million years ago we shared a common ancestor with Chimpanzees and Bonobos and were herbivorous tree-dwellers where it was relatively safer, but eventually certain environmental pressures forced us to come down from the trees and become the ultimate carnivorous predators. Unlike herbivores which need more laborious/complex digestive systems to extract/create the necessary fats/proteins/calories from plants, carnivores move up in the food-chain by eating and easily absorbing such nutrients from the bodies of other animals that have already “done the work”. What could possibly have the perfect combination of nutrients needed to build a human brain, kidney, liver, muscles, etc. than the brain, kidney, liver of a biologically similar mammal/animal(or human (cannibalism seems to have been popular in our past)). Our guts changed in important ways from those of our closely related primates. The small intestine which absorbs nutrients grew while the large intestines where bacteria helped break down, ferment, and extract/create nutrients from plants shrank. Bacteria that have evolved to pray on plants are mal-adapted to doing the same on animals, this allows herbivores to have slightly acidic stomachs(pH around 4.0), but if you are a carnivore (pH 2–3) bacteria that can pray on fellow animals can also harm you thus the need for a more acidic (lower pH) stomach. Scavenging and eating rotting animals with large quantities of such bacteria requires even more acidic stomachs which is precisely what humans have (pH 1.1–1.5) During this 6+ million years man lived in small communal tribes where egalitarian share-the-wealth instincts were vital for survival. For example, imagine 3 groups in a tribe go hunting and thus get to cover a greater area than if they all went together on a single path, this will increase the chance that one group is successful in the hunt and can then feed the rest by sharing. Thus jealousy/envy/hatred of those that have more and don’t want to share, as well as the altruism that motivates us to share, are intuitive, while understanding the aforementioned economic concepts is not and requires a tolerance and respect for private property (no coerced sharing) which goes against out tribalistic/communist instincts. As Hayek explains:
“…man’s instincts…were not made for the kinds of surroundings, and for the numbers, in which he now lives. They were adapted to life in the small roving bands or troops in which the human race and its immediate ancestors evolved during the few million years while the biological constitution of homo sapiens was being formed.”
Being the social slightly smarter apes that we are, fellow humans are our biggest assets which helps explain the evolution of altruism/compassion, as well as our biggest competitors which helps us understand our horrendous violence and cruelty towards fellow men. To a significant degree we have been naturally selected to be vicious killers and to enjoy violence. Warfare/predation was perhaps the optimal evolutionary strategy and one of the main reasons we are social and have evolved big brains to begin with. As Steven Pinker writes:
”… men go to war to get or keep women –not necessarily as a conscious goal of the warriors(though often it is exactly that), but as the ultimate payoff that allowed a willingness to fight to evolve. Access to women is the limiting factor on male’s reproductive success. Having two wives can double a man’s children, having three wives can triple it, and so on. The most common spoils of tribal warfare are women. Raiders kill the men, abduct the nubile women, gang-rape them, and allocate them as wives.” ( Steven Pinker’s “How the Mind Works” 1999, p. 510)
First you increase the economic pie available to your self/tribe/gene-pool by coordinating a raid and killing other men (eating them too since cannibalism seems to have been popular in our evolutionary past), and then you increase your reproductive success by raping the women and making them yours. To be successful in war/hunt you need a strong sense of unity which translates itself into the strong tribalistic/nationalist/militaristic/patriotic tendencies we are so susceptible to and has the planet littered with nuclear weapons and “civilized” taxpayers believing we must have them. The bond men make as co-warriors is likely stronger than male/female love. A female is easily replaceable (another raid, etc.) but the loss of that co-warrior that will help get the next female and/or defend you when you only get one chance at life is probably even more important. Just like natural selection has shaped us to enjoy sex due to the vital biological/evolutionary importance, it has also shaped us to enjoy war/violence and easily segregating ourselves into the in-group/us/”good” vs. out-group/them/”evil”. Given its importance, war/patriotism easily fills us with a great sense of purpose. England’s prime minister during WWII and national hero Winston Churchill shows us how inspiring, exciting and purposeful WWI was to him when he mentioned:
“I think a curse should rest on me — because I love this war. I know it’s smashing and shattering the lives of thousands every moment — and yet — I can’t help it — I enjoy every second of it.” (Churchill)
And in another occasion:
“My God! This is living History. Everything we are doing and saying is thrilling… Why I would not be out of this glorious delicious war for anything the world could give me…” (Churchill, per Margot Asquith)
Towards the end of WWII, Russia’s Red Army is estimated to have raped over 2 million German women. Equally human, the Allies/Americans weren’t much better and generally saw the Japanese as an inferior race and cared little for their suffering or views, as US president who nuked Hiroshima and Nagasaki, Harry S. Truman, mentions in a letter:
“The only language they seem to understand is the one we have been using to bombard them. When you have to deal with a beast you have to treat him as a beast.” (Truman letter to Samuel McCrea Cavert, General Secretary of The Churches of Christ in America)
We shouldn’t be shocked when the slightly smarter apes murder, rape and torture, or masturbate to tentacle porn, the real miracle that has taken thousands of years of cultural/legal evolution to create, are the modern cultural values/laws/ideologies/software we absorb that program homo sapiens into respecting the body/property/thoughts of all human beings regardless of age, sex, beliefs, and race.
About 30,000 years ago, due to numerous evolutionary pressures involved (megafauna extinction/etc.), agricultural/grain/bread-based society, although inferior and suddenly out of synch with our evolved carnivorous biology in terms of nutrition at the individual level, was more conducive to trade, the resulting division of labor/information, and thus a large more productive/powerful social order at the group level. Nomadic tribes can’t carry around large buildings/granaries, increasingly-complex tools/weapons/etc. Instead of sharing things which was vital for tribal existence, privatization became more important/productive. The privatization of land/resources/others(slavery)/women/children and accompanying/enforcing myths/taboos/religions began to be naturally selected for. Our very concept of the “self” became more individualistic and less tied to a tribal/communal identity. We went from animalistic promiscuity/gang-bangs(women can have multiple orgasms and enjoy sex for longer uninterrupted periods than men due to sex with multiple males for millions of years), to a stricter and more privatized family structure with the necessary taboos/myths/software needed to enforce them (“…you shall eat bread…” Genesis 3:19, Ten Commandments…). Pre-agricultural man didn’t even have a word or linguistic construct for a biological father, this cultural concept/language arose due to the natural selection of agricultural and pastoral societies which benefitted from such privatization, over the tribalisitc/hunter/gatherer/communist groups that didn’t. Egyptian civilization, although populated by relatively malnourished agrarian people, had an advanced division of labor, could feed/equip large armies and thus ultimately became one of modernity’s cultural great-grandparents.
Rules relating to sex are crucial given the biological importance and potential turmoil relating to it. For example, at some point we developed strong taboos/punishments for sex with animals. For example, the Hebrew Bible mentions:
“Whosoever lieth with a beast shall surely be put to death.” Exodus 22:18
“And thou shalt not lie with any beast to defile thyself therewith; neither shall any woman stand before a beast, to lie down thereto; it is perversion.” Lev. 18:23
For the Hittites we have:
“If a man has sexual relations with a cow, it is an unpermitted sexual pairing; he will be put to death”
However,
“If a man has sexual relations with either a horse or a mule it is not an offense”
Some form of marriage custom has evolved to help deal with sexual issues and currently the ‘one man’/‘one woman’ rule has been the winning/selected strategy for many cultures, but it is impossible to predict that this arrangement is the best thing for mankind going forward. We certainly know that biologically we are polyamorous and much more like our primate cousins the chimpanzees and bonobos. Fake boobs, genetic engineering coming down the line, birth control, women’s freedom and who-knows-what-else-the-future-holds makes predicting what might emerge impossible. Some people mistakenly believe that if certain traditions or social norms “break down” society will suffer greatly, but this will likely not be the case if people understand basic economics. Theoretically and in all likelihood we can go back to having sex with animals and other practices today most consider barbaric(not that I’m encouraging this), what we can’t do is abandon/forget/abolish private property and resulting economic freedom. Here we see some of the roots of the modern political Left(Darwinian/irreligious) / Right (religious/tradition) divide. For example, to various degrees “the Left” tolerates/encourages the human animal in his natural state and thus attacks the culturally evolved gender roles, increasingly allows sexual activity by youth at whatever age may arise naturally, and is far more tolerant of things like prostitution, while “the Right” finds such things as sick perversions and recipes for socioeconomic decline.
Knowing that ‘private property’ is the simple concept/institution that leads to a chain-reaction of incentives which creates ‘the market process’/‘competitive knowledge discovery’/civilization, we can easily see that those tribes/orders/cultures whose customs/religions/myths inadvertently became more peaceful and thus less violent, extended peace/friendship/trade to those outside the tribe, etc., in other words, those who tended to respect ‘private property’ and thus individual freedom more and more, would inadvertently gain the benefits of superior ‘competitive knowledge discovery’, become more advanced/powerful, and as they grew, they would inadvertently spread the very customs (increasing respect for private property, tolerance, and commercial culture that emerges from it) and evolving economic system (capitalism) that allowed them to reach such relative heights.
Essentially 100,000 years ago there was a sort of petri dish of cultures/tribes, and ‘natural selection’/competition selected those whose sort of ‘cultural mutations’ led to a more productive/fitter/powerful social order, with respect for private property ultimately being the most important tradition given the ‘competitive knowledge discovery’ that inadvertently emerged from it. This ‘cultural evolution’ happened mostly without the design/intention/reason of the slightly smarter apes.
An example of this process was the Protestant Reformation. For centuries the Catholic Church/myths held immense coercive/monopoly/competitionless power which prevented/retarded individual freedom and resulting ‘competitive knowledge discovery’. In the early 1500s Martin Luther preached that a person could be saved by believing in Christ without the Catholic Church’s approval, and that the Bible itself, not the Pope/Church’s edicts/interpretations, was what mattered. This helped reduce/eliminate the coercive/monopoly power of the Church and spark a pro-freedom and thus emergent ‘competitive knowledge discovery’ that would lead to skyrocketing rates of innovation/production/prosperity per graph below.
Now, very important! Did Martin Luther reason that his religious/mythical interpretations would accelerate ‘competitive knowledge discovery’ leading to our relatively advanced civilization? Of course not. Again, just like solitary cells billions of years ago inadvertently created the respiratory/circulatory/nervous/etc. “systems” that led to multicellular organisms without ‘designing them’, so is free-market/Capitalism “indeed the result of human action, but not the execution of any human design”. The ‘free-market’/Capitalism is mankind’s greatest invention, yet it was not the result of our reason! As Hayek explains:
“…we may owe to these religions the preservation — admittedly for false reasons — of practices that were more important in enabling man to survive in large numbers than most of what has been accomplished through reason.”
“We have never designed our economic system. We were not intelligent enough for that. We have stumbled into it and it has carried us to unforeseen heights and given rise to ambitions which may yet lead us to destroy it.”
And regarding private property:
“…I am quite convinced nobody invented it for a known purpose, and to me the proof of this is that even now hardly anybody yet understands what the advantages of private property and the market society are.” (Hayek essay “Individual and Collective Aims” published in “On Toleration” ISBN 0–19–827529–3)
As the French Revolution(1789–1799) was getting rid of the Church/Monarchial/Traditional ruling class, science was accelerating its breakthroughs and inspiring influential thinkers like Saint-Simon, the founder of French Socialism. Saint-Simon wanted to organize a great “Council of Newton” made up of “three mathematicians, three physicists, three chemists, three physiologists, three authors, three painters and three musicians” who would then use their supposedly superior genius to tell everyone else what to do. Saint-Simon explains:
“All men will work; they will regard themselves as laborers attached to one workshop…The supreme Council of Newtown will direct their works”
Hayek comments that:
“Saint-Simon has no qualms about the means that will be employed to enforce the instructions of his central planning body: “Anybody who does not obey the orders will be treated by the others as a quadruped” ” (Hayek F. A., 1979, pp. 221–2)
By the late 1800s, especially after Darwin, the slightly smarter apes had realized that their moral values and laws had been grounded on religious myths, so they began replacing the evolved wisdom/information/laws espoused by religious mythology (private property, freedom and family) which had tamed/brainwashed the savages into civilization, by the “reason” of “expert/scientist” apes. Not having the slightest clue how the vital information that orders/creates civilization “emerges” from ‘private property’/freedom since this amazing mechanisms/order had been designed, not by clever men, but by an evolutionary process we didn’t even really understand at the time, they understandably fell for all the usual anti-Capitalist and central planning fallacies. They saw economic freedom as a recipe for chaos, exploitation and ‘social injustice’. Some like Hitler (a socialist) erroneously saw many aspects of finance/banking/stock-markets, especially due to the at-times overrepresentation of Jews, as some sinister and malicious way for Jews/Capitalists to enrich themselves at the expense of others. Most ultimately believed that a competitionless coercive tax-funded monopoly of “experts”/ideologues/“great leaders” could better order society, and increasingly saw religion and its traditions of private property and family as something backward, unnatural, and a tool of the growing business/Capitalist/”Bourgeoisie” class, or just selfish people in general that “don’t care about others”. Just like complex environmental factors create selective pressures that favor the spread of certain genes, the environment was ripe for the emergence of a new religion/mythology, Socialism/Communism/Statism. Eventually some slightly smarter arrogant ape would describe these increasingly popular fallacies/myths in a manner that was bound to go viral and that is what happened with Karl Marx and his bite-sized ‘Communist Manifesto’:
“the theory of the Communists may be summed up in the single sentence: Abolition of private property”….”Abolition of the family!”
The slightly smarter apes via Vladimir Lenin’s Bolshevik revolution in Russia (1918) and other apes throughout the world (Mao/China, Castro/Cuba, Pol Pot/Cambodia, etc.) with the utmost arrogance and cruelty went wild using their “reason”/“the science” and instincts to destroy the ‘competitive knowledge discovery’ the much smarter ‘cultural evolution’ had created and thus their own socioeconomic order.
Hayek summarizes the inevitable result:
“Among the founders of religions over the last two thousand years, many opposed property and the family. But the only religions that have survived are those which support property and the family. Thus the outlook for communism, which is both anti-property and anti-family(and also anti-religion), is not promising. For it is, I believe, itself a religion which had its time, and which is now declining rapidly. In communist and socialist countries we are watching how the natural selection of religious beliefs disposes of the maladapted” (Hayek F. A., 1989, p. 137)
Lenin, as well as most people, believed that “the key feature is people, the proper choice of people”, and if we could just have the right apes/experts/Faucis/’Great Leaders’ with the right values/ideas government/‘central planning’ would work. But Lenin was wrong of course, it is not so much the individual cells/people that matter, it is the system, it is freedom and its emergent ‘competitive knowledge discovery’ and socioeconomic order spreading mechanisms. It makes perfect sense how a bunch of economically clueless viscous slightly smarter apes would go wild looking for and pledging support to the ape they feel has the right personal qualities (courage, honesty, intelligence, toughness, etc.) and coercing everyone to go along with the “master plans” as they inadvertently destroyed the very customs/traditions like private property which gave them life to begin with.
It is important that we see Communism/’Central Planning’ and Lenin’s Bolshevik Revolution not as some ‘nefarious conspiracy’, but as an almost inevitable spread of viral self-reinforcing ‘echo chambers’ of economic fallacies and disastrous ‘incentive structures’ that were just bound to finally spark in truly sustainable reactions as the social order got more complex and thus more fertile for economic fallacies. A young idealistic Russian could worry about how to make a good living in the always-uncertain and competitive private sector, or by joining Lenin and his Socialist Bolsheviks(government) he could become a hero to mankind by just forcing farmers/‘private sector’/others to give up (share) their grain/wealth to feed a bureaucracy/monopoly of “experts” who would plan a superior order. Sign me up! We must focus on how the ideas create intellectual ‘echo chambers’ and ‘incentive structures’ that lead the slightly smarter apes into either carnage via the run-away growth of government/coercion, or civilization. Mises:
“It is ideas that group men into fighting factions, that press the weapons into their hands, and that determine against whom and for whom the weapons shall be used. It is they alone, and not arms, that, in the last analysis, turn the scales.”
We should also highlight the fact that the apes ultimately stumble upon the realization that in order to carry out their wonderful central plans, they must either coerce the public directly via edicts/taxes/regulations, or even better, simply control the ability to create money. It becomes a lot easier to create an ‘incentive structure’ where most people go along with your wonderful ideas when you can create the money and assure the public that you can provide the money/wealth they need. The money=wealth fallacy/myth easily causes the slightly smarter apes to self-destroy as 1) It allows transfers of wealth from the productive/innovative private sector to the centrally-planned inefficiently ordered bureaucracies which will consume more than they produce thus destroying social order 2) It easily motivates the apes to peacefully fool themselves and even clamor for such an ultimately disastrous rearrangement and attack the critics(obviously “right-wing extremists”). The apes go from fear and uncertainty to the comfort of working towards the ‘master plan’ by the ‘trusted expert apes’ and see how they are getting the money they foolishly equate with wealth. As this happens, more wealth is transferred to the minds that want to spread the ‘central planning’ fallacies/myths/‘echo chamber’ from those that don’t, making it harder for the latter to resist. As Herbert Spencer explains:
“Increasing power of a growing administrative organization is accompanied by decreasing power of the rest of the society to resist its further growth and control.”
We can easily see the inadvertent evolution and repetition of this process today where what increasingly matters to politicians/ideologues/masses is who will appoint or control the technocrats who run the ‘central banks’/’Federal Reserve’ and will thus be able to keep creating money/“stimulus” to seemingly accomplish anything like having millions not work/produce and stay home during CovidMania, the Green New Deal, free education and healthcare, ‘racial/gender equality’, etc. The central banking technocrats are the new Popes/Oracles of the new faith/religion of ‘central planning’, not via Soviet Style direct threats/edicts, but by nonetheless using money to attempt a similarly disastrous/fateful ‘centrally planned’ rearrangement of society. Visit gatesnotes.com for an up-to-date list of all potential ‘social problems’ and how the 3 pounds of flesh in Bill Gates’ head has a ‘master plan’ that can fix them all, or we die.
Socialism/Communism/Nazism/’viral economic fallacies/myths’ did not spread and destroy much of the 20th century because of a few bad apples or tyrants; they first spread through the minds of well-meaning citizens and intellectuals which then gave the future leaders the moral and intellectual justification for their actions. Hayek writes:
“It is necessary to realize that the sources of many of the most harmful agents in this world are often not evil men but high-minded idealists, and that in particular the foundations of totalitarian barbarism have been laid by honourable and well-meaning scholars who never recognized the offspring they produced.” (Hayek F. A., 1973, p. 70)
“Most people are still unwilling to face the most alarming lesson of modern history: that the greatest crimes of our time have been committed by governments that had the enthusiastic support of millions of people who were guided by moral impulses. It is simply not true that Hitler or Mussolini, Lenin or Stalin, appealed only to the worst instincts of their people: they also appealed to some of the feelings which also dominate contemporary democracies.” (Hayek F. A., 1976, p. 134)
Economic ignorance leads to errors and even dictatorial personalities which repeat themselves. To my knowledge Bill Gates has NEVER mentioned Ludwig von Mises or F.A. Hayek so he simply does not have the slightest clue how the world really works and thus inevitably, with the best of intentions/negligence/arrogance or whatever the combination of factors might be, becomes a coercive ‘Central Planner’/Totalitarian. Mises easily predicted their personalities and inevitable totalitarian aims:
“The outstanding fact about the contemporary ideological situation is that the most popular political doctrines aim at totalitarianism, the thorough abolition of the individual’s freedom to choose and to act. No less remarkable is the fact that the most bigoted advocates of such a system of conformity call themselves scientists, logicians, and philosophers.”
As Hayek mentions:
”If socialists understood economics they wouldn’t be socialists.”
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
People like Fauci, Gates, World Economic Forum Chairman Klaus Schwab and that increasing number of like-minded ‘single-minded idealists’ who have invested so much of their lives and gain so much satisfaction from feeling like their central plans are so beneficial or vital for mankind, just like with Lenin and the Socialist/Communists, are often the most dangerous, negligent and detached from the immense suffering and tyranny they will cause. Hayek explains:
“The movement for planning owes its present strength largely to the fact that, while planning is in the main still an ambition, it unites almost all the single-minded idealists, all the men and women who have devoted their lives to a single task. The hopes they place in planning, however, are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost. This is not to underrate the great pragmatic value of this type of men in a free society like ours, which makes them the subject of just admiration. But it would make the very men who are most anxious to plan society the most dangerous if they were allowed to do so — and the most intolerant of the planning of others. From the saintly and single-minded idealist to the fanatic is often but a step.”
Unfortunately the religious traditions of looking at the world’s problems as the result of “good”/moral vs. “evil”/immoral did not work against the atheistic Socialists/Communists/Scientists who thanks to scientific progress/Darwin could easily discard deity-based moral arguments, in other words, mankind was stuck in what Mises referred to as “the moral sphere”.
“The problems involved are purely intellectual and must be dealt with as such. It is disastrous to shift them to the moral sphere and to dispose of supporters of opposite ideologies by calling them villains. It is vain to insist that what we are aiming at is good and what our adversaries want is bad. The question to be solved is precisely what is to be considered as good and what as bad. The rigid dogmatism peculiar to religious groups and to Marxism results only in irreconcilable conflict. It condemns beforehand all dissenters as evildoers, it calls into question their good faith, it asks them to surrender unconditionally. No social cooperation is possible where such an attitude prevails.” (Mises’ “Human Action”)
ON AMERICAN RACE RELATIONS
Besides a more private-property-respecting/enterprising/business culture crafted by generations of relative freedom, the legacy of slavery and still thorny relations between blacks/whites made it considerably more difficult for share-the-wealth Socialist myths/fallacies to take hold in the USA as they did in the more homogeneous populations in Europe/China/Africa since this would have obviously meant significant transfers of wealth from wealtheir whites to blacks. But as white Americans and people all over the world fell in love with our numerous black musicians and athletes, in other words, as America became ‘less racist’, the more white Americans tried to sympathize with and understand the relative poverty of blacks/minorities. Many whites/liberals, with the best of intentions, might be ashamed of the imperialist past of their ancestors or of the racism of their parents/uncles/friends/etc. or their own “shameful” preference for perhaps blue-eyed blondes and erroneously believe that such a past/racism/preference is a significant factor in the relative underachievement/problems of other groups/minorities. A well intentioned economically ignorant person can easily find some “racist CEO” who discriminates based on race and “voilà! this racism is the root of the problems!”. This sort of collective sense of guilt is what allows Black Lives Matter rioters to destroy cities virtually unopposed. Given the deteriorating racial and economic situation brought about by economic ignorance, the public is looking for answers, unfortunately they are understandably drawn to the same simplistic ‘central planning’ fallacies which we can summarize as “Capitalism is the racist white man’s tool to enrich himself at the expense of women and minorities and the third world as the history of European colonialism proves” For example, books like Critical Race Theory proponent Angela DiAngelo’s “White Fragility” are spreading the usual simplistic “identity”-based and anti-capitalist and thus anti-freedom and pro-coercion fallacies. For example, she writes:
”…the US economy was based on the abduction and enslavement of African people, the displacement and genocide of indigenous people, and the annexation of Mexican lands”(p. 15–16)
Wrong. Those things certainly occurred, but they were NOT the “base” or most important factors leading to the rising standard of living Americans and the entire planet would enjoy as US-made discoveries and innovations spread globally. The US economy was “based” on Capitalism(albeit a very imperfect one of curse), on a relatively strong respect for private property and the emergent competitive knowledge discovery and superior social order it leads to, as well as the “identity” of the fellow slightly smarter apes that best reflects the TRUTH, that regarding the things that really matter all human beings are equal slightly smarter apes regardless of the cultural/tribalistic baggage we have inherited from by-gone centuries. Thus Mises:
"History speaks only to those people who know how to interpret it on the ground of correct theories."
HOW MISES/HAYEK/FRIENDS SAVED CIVILIZATION
Fortunately for mankind Ludwig von Mises nearly single-handedly put the brakes on Socialist intellectual expansion when he showed the impossibility of central planning via his essay “Economic Calculation in the Socialist Commonwealth” and persuaded Austrian politicians away from Communism in the early 1920s when the Bolshevik/Socialist revolution was rapidly expanding thus helping stop the falling dominoes in Europe:
“There were few who recognized the state of affairs clearly. People were so convinced of the inevitability of Bolshevism that their main concern was securing a favorable place for themselves in the new order. The Catholic Church and its followers, the Christian Social Party, were prepared to befriend the Bolshevists with the same eagerness with which the bishops and archbishops would embrace National Socialism 20 years later.…I knew what was at stake. Bolshevism would lead Vienna to starvation and terror within a few days. Plundering hordes would take to the streets and a second blood bath would destroy what was left of Viennese culture.”.. “The most important task I undertook…was the forestalling of a Bolshevist takeover… The fact that events did not lead to such a regime in Vienna was my success and mine alone.” –Mises (Memoirs)
Later Hayek’s classic book “The Road to Serfdom”(1944), but perhaps more importantly, the brilliantly written ‘condensed’ version which “Reader’s Digest” magazine placed in millions of US homes in 1945, would play a vital role in educating future freemarketeers like future British PM Margaret Thatcher, and 3-time presidential candidate Dr. Ron Paul who writes:
“My introduction to Austrian economics came when I was studying medicine at Duke University and came across a copy of Hayek’s The Road to Serfdom. After devouring this, I was determined to read whatever I could find on what I thought was this new school of economic thought — especially the works of Mises”
WHAT MUST BE DONE
Mises/Hayek/friends, not only explained how the world works and already saved us once, they also provided the wisdom needed to secure prosperity once and for all. We summarize below with some key quotes.
We are potentially viscous tribal slightly smarter apes that inadvertently respected enough private property/freedom leading to the emergence of ‘competitive knowledge discovery’ and resulting civilization/‘Social Organism’. The fact that this process has had little to do with our reason/design is vital for helping us understand how/why we have this amazing civilization/matrix and technology yet are surrounded by tribalistic economic ignorance/mythology and constantly coerce/tyrannize each other via our massive competition-immune governments.
Our problems are not the result of some mythical concept of “evil” or “stupidity” on the part of the masses and their leaders/“experts”. Although it is easy to find clearly malicious/corrupt politicians in our massive governments this does not change the vital fact that what is destroying civilization is economic ignorance, ignorance of the evolution of a social order that is “indeed the result of human action, but not the execution of any human design”. Hayek:
“When I stressed that is genuine intellectual error that we have to fight, what I meant to bring out is that we ought to remain aware that our opponents are often high-minded idealists whose harmful teachings are inspired by very noble ideals. It seems to me that the worst mistake a fighter for our ideals can make is to ascribe to our opponents dishonest or immoral aims…if we have not yet convinced them, the reason must be that our arguments are not yet quite good enough…Our chief task therefore must still be to improve the argument on which our case for a free society rests.”
Thus Mises:
“Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man’s human existence…All present-day political issues concern problems commonly called economic. All arguments advanced in contemporary discussion of social and public affairs deal with fundamental matters of…economics. Everybody’s mind is preoccupied with economic doctrines…Everybody thinks of economics whether he is aware of it or not. In joining a political party and in casting his ballot, the citizen implicitly takes a stand upon essential economic theories…As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake…all reasonable men are called upon to familiarize themselves with the teachings of economics. This is, in our age, the primary civic duty. Whether we like it or not, it is a fact that economics cannot remain an esoteric branch of knowledge accessible only to small groups of scholars and specialists. Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.”
Mises also:
“Liberalism is rationalistic. It maintains that it is possible to convince the immense majority that peaceful cooperation within the framework of society better serves their rightly understood interests than mutual battling and social disintegration. It has full confidence in man’s reason. It may be that this optimism is unfounded and that the liberals have erred. But then there is no hope left for mankind’s future.”
In other words, we have to believe that we can educate “the immense majority” even if it proves to be futile, otherwise “there is no hope left for mankind’s future”.
Many people, even those who already understand some economics mistakenly believe that the best thing to do is to prepare for an inevitable next socioeconomic calamity, but this is greatly mistaken. Some think moving to another country is the solution, many foolishly want to go ‘off grid’, become “preppers”, push for secession. These strategies are massive deviations from Mises’ advice and will likely prove to be catastrophic. Mises:
“Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”
Consider the following, right now you are an incredibly complex order, yet going without oxygen for a few minutes will cause a minor sort of “economic chaos” in your body that will make it impossible to recover from even if oxygen becomes available again. Too many biochemical processes dependent on a steady flow of energy to move/transform stuff in proper order will break down, too many proteins will fold the wrong way and become useless/damaging. In a few minutes the chaos will be too great to recover from. The same thing WILL happen to the social organism if the world-wide division of labor and monetary system breaks down, perhaps even for just a few months or less, or if a few key cities or financial institutions/system are disabled in either a cyber-attack or inevitable bug/error. Or if just an oil-pipeline hack lasts weeks instead of a few days as already recently occurred and idiotic politicians attempt to “fix” the issue via a massive increase in ‘central planning’. Just imagine what would happen if the electronic systems that coordinate how the banks interact with the Federal Reserve breaks down for just a few weeks, and that for whatever reason credit cards and checks or transfers don’t work during that time thus leading to a complete breakdown of monetary profit/loss order-sustaining calculations leading to a rapid pie-decreasing chaos/riots. Totally clueless bureaucrats/apes and “great leaders” might succeed in getting enough people behind them to carry out some master plan, but the slightly smarter apes would consume more wealth/order than it actually produces as it “succeeds” in carrying it out thus continuing the socioeconomic destruction because ONLY freedom and privatization with a sound monetary system and profit loss calculation in the private sector can create socioeconomic order. What good will it do one to last 3 more months thanks to ‘prepping’?
As things stand today in mid 2021, we’d be lucky if there are 1,000 people in the entire planet who have had the truly miraculous fortune of stumbling upon the Mises/Hayek intellectual duo necessary to really understand the aforementioned concepts and thus how the world works. The fact that so few people understand this, and how little relative influence in actual politics they have, is further proof of how little ‘reason’ currently plays a factor in the workings of our socioeconomic order. Below two Nobel Laureates, James Buchanan (1986) and Hayek (1974) summarize our current situation in interview that took place in 1978:
Hayek: “If the politicians do not destroy the world in the next 20 years, which is very likely, I think there is a hope for afterwards… Perhaps 20 years is too short….but one thing which gives me confidence is I’ve watched the United States for 50 years and you seem to change your opinions fundamentally every 10”
And Buchanan highlights how little economic understanding has had to do with our prosperity and we essentially just got lucky that our government(legal framework) was created in a Federalized/Decentralized manner which helped slow down the inevitable trend towards disastrous monkey central planning:
Buchanan : “It seems to me that we in the United States have really never had much understanding of sort of the principles of markets…the sort of interventionist collectivist socialist thrust has always been present and really the only reason we had burgeoning markets and rapid growth and so forth was largely because the government was decentralized federalized and so forth”
Again, with the proper understanding of economics/Mises/Hayek it is easy to see that mankind is essentially ‘flying blind’ with the statistical certainly of another massive central planning coercive calamity like the current CovidMania. We must go over the parapet and join Mises in his “intellectual battle” NOW!
