In the September 11, 2020 issue of the New York Times, Kurt Anderson wrote a critique of Milton Friedman entitled, “How Liberals Opened the Door to Libertarian Economics.” There are numerous errors in Anderson’s assessment. Let us try to correct at least some of them.
He starts off on the wrong foot, characterizing Friedman’s view as “extreme free-market libertarianism.” In the libertarian movement of Ludwig von Mises, Murray N. Rothbard, Ron Paul and Robert Nozick, the 1986 Nobel Prize winner in economics was regarded (along with his fellow University of Chicago colleague, Friedrich A. Hayek) as a very moderate supporter of free enterprise, barely a libertarian. One market fundamentalist libertarian commentator even probed, seriously, as to whether or not Friedman was a socialist, given his many and serious deviations from pure laissez faire capitalism (the negative income tax, tax withholding, anti-trust, support for school vouchers and the Fed, rejection of gold as money). No one who claims “We’re all Keynesians now” can be located at the furthest reaches of free enterprise.
It, of course, cannot be denied that Prof. Friedman opposed unions – they unfairly restrict entry into the labor market; that he wanted fewer pernicious business regulations; and he opposed socialist medicine. He was as least a moderate supporter of economic freedom after all.
Mr. Anderson states, “The New Deal … out of which our well-functioning, prosperous postwar political economy grew.” Not so, not so. It grew in spite of this policy, not because of it. This Hoover-Roosevelt bout of economic interventionism prolonged the depression of 1929 for a decade. Compare this to the depression of 1921 which lasted months, not years, as a result of a “do nothing” (don’t interfere in the market) governmental policy.
Our author conflates libertarianism and libertinism. The former maintains that “capitalist acts between consenting adults” in the felicitous phraseology of Robert Nozick, all of them, commercial ones and also those regarding drugs and sex, should be legal, but takes no position whatsoever as to whether or not these practices should be followed. The latter urges participation in them, the weirder, the better.
Mr. Anderson characterizes the desire to maximize profits as “coldheartedness,” lacking “decency or virtue,” “selfish, callous and reckless,” and sets as the ideal operating “somewhere in the broad range between break-even and absolute-maximum profitability…” In doing so, he demonstrates a lack of understanding of this economic phenomenon. When a hiker is lost in the woods, in order to be rescued he shouts, “Help” (whether verbally or in some other way). Accepting “slightly smaller profit margins” when a businessman could maximize them is akin to imposing a decibel control over the endangered hiker. Profits are in effect a cry for help. When a firm accepts lower profits than were otherwise obtainable, it is reducing the economic welfare of the very “employees, customers, communities, society at large” championed by stakeholder supporters.
Jones now earns 5% profit. How could he increase this rate? Why, by producing more of what consumers are clamoring for. If he sticks to the status quo, he will not be rescuing as many “lost hikers” as he could have. True, he could also increase profits by lowering salaries. But if he decreases them below marginal revenue productivity levels, he will lose his best employees and reduce profits, not increase them. Profits can be maximized by paying optimal compensation, not a penny more, but not a penny less, either. Yes, Scrooge in A Christmas Carol and Mr. Potter in It’s a Wonderful Life, are the true heroes, and only economic illiterates can fail to see this primordial point. Friedman is to be congratulated for trying to educate people in that regard.
No, it is simply not true that in Friedman’s view that “Any virtuous act by businesses beyond what the law requires is simpering folly.” Rather, it is fraud. Suppose you deposit your money in a bank, and the officer of that institution gives these funds to good charitable, stakeholder, causes. Not kosher! It is one thing to be kind and generous with your own property. It is quite another, to do so with other people’s wealth. That is a violation of the fiduciary relationship of the savings institution. The CEO has a responsibility to the shareholder, not to the stakeholder. There is nothing wrong, a la Friedman, with both of them, all of us, with being “decent” and “virtuous” with our own money. But the very opposite obtains when accomplished with, in effect, stolen cash.
Mr. Anderson attributes Friedman’s support of free enterprise to “screw-the-Establishment confrontationalism” of the Woodstock 1970s. I have known this Chicago economist for many decades and never did I discern even a whiff of this sort of thing. Who knew that my friend Milton was a secret hippie?
Our critic accuses Friedman of wanting to “rewrite the social contract.” But no one ever signed this “contract,” so it is without any legal power to control our lives. He all but criticizes him of hypocrisy for using “his noncommercial government-subsidized PBS platform to argue that the Food and Drug Administration, public schools, labor unions and federal taxes, among other bêtes noires, were bad for America.” But Friedman also used public parks, the U.S. post office, museums, sidewalks, even though he might have wanted to privatize them.
Mr. Anderson, presumably, is an egalitarian. Yet, he undoubtedly lives in a nice neighborhood, has a quality car, air conditioning, color tv, a computer. Why doesn’t he give most of this away to the poor? But a retort is open to Friedman: The government financed these amenities, in part, with Friedman’s tax dollars. He is hence justified in using them. Mr. Anderson has no such defense against the charge of hypocrisy.
To the extent that Friedman can take credit for Gordon Gekko (greed is good), it is a feather in his cap. Here, Mr. Anderson’s target is merely channeling Adam Smith’s “invisible hand;” a basic premise of economics: People are led by the lure of profits to cooperate with others for mutual gain. The “Wealth of Nations” is based on just this sort of consideration.
Our critic is particularly exercised about a “S.E.C. rule change (which) effectively gave free rein to public companies … to buy up shares of their own stock on the open market in order to jack up the price.” But what, pray tell, is wrong with voluntary exchanges of this or any other sort, which are necessarily mutually beneficial at least in the ex ante sense, and usually so ex post? He is also upset that “U.S. executive pay … shifted from consisting mainly of salary and bonus to mainly stock and stock options.” Banks sometimes give out toasters and radios to depositors. Must all financing consist of cash? There are also good and sufficient reasons for this alteration in terms of taxation and the aligning of incentives.
Our critic then bewails the fact that “the richest 10th of us have 84 percent of all stock shares owned by Americans, and a ravaged economy in which the stock market is close to an all-time high.” Should we also regret that a similar proportion of NBA players are African American? Thomas Sowell, a student of Milton Friedman’s, has done more than any other economist to pierce the myth that if strict proportionality does not prevail everywhere, it is untoward.
Mr. Anderson mentions “the full Friedmanization of our economy for the last four decades (which) has generated such greed-driven extremes of inequality, insecurity and immobility that the system is now on a path that looks crazily self-destructive.” This man is living in a dream world. Full Friedmanization would include a world with no tariffs or interferences with free trade, the end of licensing, not only for hair braiders, Uber, AirBnB, but also for medical doctors! Governmental tax would be in the neighborhood of 10% not 50% of GDP. Such “destruction” of the economy, to the extent it exists, stems not from Friedman’s public policy proscriptions, but mainly from their rejection.
Walter E. Block is Harold E. Wirth Endowed Chair and Professor of Economics, College of Business, Loyola University New Orleans, and senior fellow at the Mises Institute. He earned his PhD in economics at Columbia University in 1972. He has taught at Rutgers, SUNY Stony Brook, Baruch CUNY, Holy Cross and the University of Central Arkansas. He is the author of more than 600 refereed articles in professional journals, two dozen books, and thousands of op eds (including the New York Times, the Wall Street Journal and numerous others). He lectures widely on college campuses, delivers seminars around the world and appears regularly on television and radio shows. He is the Schlarbaum Laureate, Mises Institute, 2011; and has won the Loyola University Research Award (2005, 2008) and the Mises Institute’s Rothbard Medal of Freedom, 2005; and the Dux Academicus award, Loyola University, 2007. Prof. Block counts among his friends Ron Paul and Murray Rothbard. He was converted to libertarianism by Ayn Rand. Block is old enough to have played chess with Friedrich Hayek and once met Ludwig von Mises, and shook his hand. Block has never washed that hand since. So, if you shake his hand (it’s pretty dirty, but what the heck) you channel Mises.
The image shows a portrait of Milton Friedman by Lindsay Mitchell.
We are greatly pleased and honored to present this conversation with Professor Walter Block, the leading libertarian thinker in the US. Professor Block holds the Harold E. Wirth Eminent Scholar Endowed Chair at Loyola University New Orleans. He is the author of over two dozen books and more than 600 articles and reviews. Just recently, a petition was started by some Loyola students to have Professor Block fired for his “views.” Professor Block (WB) is here interviewed by Dr. N. Dass (ND), on behalf of the Postil.
ND: Welcome to the Postil, Professor Block. It is a pleasure to have you with us. For the benefit of our readers, who may not be aware of what has been happening to you at Loyola University, New Orleans, would you please tell us how the Cancel Culture decided to come after you?
WB: A Loyola student, M. C. Cazalas, who had never taken any class of mine, not ever once spoken to me, started a petition to get me fired for being a racist and a sexist. As of 8/5/20 she garnered 663 signatures, some of them Loyola students, but not all of them. An actual former student of mine, Anton Chamberlin, started a counter petition to get me a raise in salary. As of this date it has been signed by 5,646 people, again some of them Loyola students, but not all of them. I’m not likely to be fired for two reasons in addition to this gigantic signature disparity. One, I have tenure; that still means something, even in these politically correct times. Two, the president of Loyola University, Tanya Tetlow, bless her, responded to this get me fired initiative with a statement strongly supporting academic freedom and intellectual diversity. She and I do not see eye to eye on political economy, so this is even more of a credit to her than would otherwise be the case.
ND: What do you think lies behind this Cancel Culture? Is it a failure of education? Is it an excess of humanitarianism? Or, it is simply an expression of student radicalism, which has always been part-and-parcel of university life?
WB: My guess is that all of these explanations you mention play a role. According to that old aphorism, “If a man of 20 is not a socialist, he has no heart; if he is still a socialist at 50, he has no brain.” There must be something in human development that renders young people more vulnerable to socialism, cultural Marxism, cancel culture, snowflakeism, micro aggression fears, etc., than their elders. Unhappily, far too many middle aged and older people also succumb to the siren song of socialism. I think the general explanation for this general phenomenon is biological: most of us, except for a few free enterprise mutants, are hard-wired for government interventionism. A zillion years ago, when we were in the trees or in the caves, there was no biological benefit to be open to free enterprise, markets, capitalism. Hence, these genes had no comparative advantage.
ND: Should we regard Cancel Culture as dangerous? Is freedom really in peril? Such questions come to mind, given the tragic end of Professor Mike Adams.
WB: Yes, very dangerous. Economic Marxism was a dismal failure. Everyone can see the results in Cuba, North Korea, Venezuela, the old USSR, Eastern Europe, Mao’s China. But cultural Marxism is more insidious; it is more difficult to see its errors. Yes, there are racial and sexual divergences in wealth and income, and it is far too easy to attribute these results to economic freedom.
Poor Mike Adams. His is an extreme case, since he committed suicide, presumably due to the Cancel Culture. But apart from his demise, that case is only the veritable tip of the iceberg. There are hundreds if not thousands of academics who have been canceled, fired, forced to endure re-education camps, demoted, etc. The university with but very few exceptions is now a totally owned subsidiary of people who call themselves “progressives.” They really should be called “retrogressives” since they oppose civilization, freedom, prosperity. That is, they are really opponents of human progress.
ND: Lenin famously said that Communism was Socialism plus electrification. Likewise, can we say that the Cancel Culture is Socialism plus the Internet?
WB: Wow. That’s a good one. I wish I had thought of it. I’m grateful to you for sharing it with me. Before the internet, there were NBC, CBS, ABC, the New York Times and the Washington Post. Between them, they almost totally dominated the culture; they had an important impact on the outlook of the nation. Now, with the internet, one would think there would be far more heterogeneity. And, to some degree, there is. But the main players, nowadays, that “Big Five” now plus the electronic major media, keep canceling out libertarian and conservative voices. This does not constitute censorship, only government can do that (on the other hand, it cannot be denied that they are dependent on the state for favoritism). But until and unless people with divergent views set up successful alternatives, the voices of the left will continue to dominate.
ND: The student petition against you cites, among other things, your supposed “defence” of slavery. Of course, this is a misunderstanding of your position. Perhaps you could clarify for our readers what you actually say about slavery, especially the concept of the voluntary slave contract, which indeed goes back to the Classical world.
WB: Suppose, God forbid, my child had a dread disease that would kill him. He could be saved, but only at the cost of $10 million. I do not have anything like that amount of money. You, on the other hand are very rich. You’ve long wanted me to be your slave. So, we make a deal. You give me these funds, which I turn over to the doctors who save my child’s life. Then, I come to your plantation to pick cotton, give you economics lessons. You may whip me even legally kill me if I displease you. As in all voluntary interactions, we both gain, at least ex ante. I value my son’s life more than my freedom. The difference between the two is my profit. You rank my servitude more highly than the money you must pay me for it, and you, likewise, gain the difference.
Is this a valid contract? Should it be enforced? This is highly controversial even in libertarian circles, but in my view, you should not be accused of assault and battery if you whip me, nor murder if you kill me, since I have given up my legal right to object (this is very different than indentured servitude, which does not allow for bodily harm).
In 2014 The New York Times interviewed me about libertarianism (they were doing a hit piece on Rand Paul), and I gave them this example as a hypothetical. They quoted me as saying that actual slavery, of the sort that existed in the US up until 1865, was legitimate. I sued them for libel. We settled the case. I received monetary compensation, plus an addendum to their original article. It reads as follows: “Editors’ Note: Aug. 7, 2018. An earlier version of this article referred imprecisely to the views of Walter Block on slavery. While Mr. Block has said that the daily life of slaves was ‘not so bad,’ he opposes slavery because it is involuntary, and he believes reparations should be paid.”
I defended, only, this hypothetical slavery, in order to draw out the logical implications of voluntary interaction. As for actual slavery, it is an abomination, an evil, a horrid rights violation. That the New York Times would write as if I favored the latter, when I only supported the former, certainly counts as “fake news.”
ND: Given the fact that you are the foremost libertarian thinker in the US today, and your book series, Defending the Undefendable I and II, which came out in 1976 and 2008 respectively, is widely regarded as a libertarian “cult classic,” from a libertarian perspective, is Cancel Culture a just use of political and social coercion?
WB: You are very kind to say that of me. Thank you. There is no one who hates cancel culture more than me. I am tempted to say that it is coercive. It is, but only indirectly. Suppose all universities, without exception, were privately owned, and under the control of faculties and administrations all of whom were leftists. They did not relish heterogeneity of opinion, and thus only hired professors, outside speakers, invited visiting scholars, who represented their viewpoint. Would this be coercive? Of course not. People should have the right to do as they wish with their private property, provided, only, they did not violate the persons or property rights of others. Religious organizations, nudists, tennis players, all have the right to exclude those who do not subscribe to their tenets. However, the cloven hoof of government is all over the educational system. It is based on coercive taxation. “He who pays the piper calls the tune.” Money mulcted from the long-suffering taxpayer is funneled into institutions of higher learning, where Marxist studies, feminist studies, black studies, queer studies, are the order of the day. It is only due to coercive taxes that Cancel Culture is coercive; but for this element, it would not be.
Of course, without government putting its big fat thumb all over education, there would be more intellectual diversity in this industry. So the cure for the Cancel Culture is separation of education and state, similar to what all men of good will support in another arena: separation of church and state.
ND: This brings us to the nature of education itself. Is there a proper libertarian theory of education, given the underlying libertarian idea that any acceptance of an institution is enslaving?
WB: Yes, there is indeed a proper libertarian theory of education: it should be totally privatized. My motto is, “If it moves privatize it, if it doesn’t move, privatize it; since everything either moves or does not move, privatize everything.” I have applied this aphorism to pretty much everything under the sun in my publications, including streets and highways, rivers and oceans, space travel and heavenly bodies. Certain, I would include education under this rubric. Information generation should be as private as bubble gum, haircuts, piano lessons, shoes or cars. You want some, pay for it. You want to offer your services in this regard? Open up a school and attract customers.
But what about the poor? Will they not get an education? Of course they will. They obtain bubble gum, haircuts, piano lessons, shoes and cars; schooling would not be an exception. For people who are too poor, the tradition in private education, at whatever level, was to award scholarships to bright recipients. There would be no such thing as compulsory education (a 12 year prison sentence for those whose inclination leads them to want to work instead), any more than there should be compulsory purchase of bubble gum, haircuts, piano lessons, shoes or cars. Any acceptance of any coercive institution may not be enslaving (we should reserve that word for far more serious rights violations), but it is despicable. Education should not be an exception to the general rule of privatization.
ND: Perhaps we can draw back a little and turn to some larger issues. You describe yourself as an Austrian School economist. Would you please explain what that is?
WB: Austrian economics has no more to do with that country than Chicago School economics involves that city. It is so named because its originators, Menger, Bohm-Bawerk, Mises, Hayek, all were born there. It is sometimes called the free enterprise school of thought, since the public policy recommendations of virtually all of its practitioners strongly support economic freedom, private property rights, laissez faire capitalism. But Austrianism is an exercise in positive economics, not the normative variety.
Its main contribution is that economics, properly understood, is not an empirical science, but, rather, an exercise in pure logic. It starts with certain basic premises which are necessary and undeniable, and deduces all of economics from them. For example, man acts. To deny this is itself to perform a human action; therefore the criticism necessarily fails. Austrian economics consists of synthetic a priori statements, which are both necessarily true and also have real world implications; they explicate economic reality.
We have already mentioned one of them above: all voluntary trade is necessarily mutually beneficial at least in the ex ante sense. Here is a more pedestrian example. I buy a shirt for $25. I inescapably value it more highly than that amount, otherwise I would not buy it. Well, there was something about that shirt, maybe not the shirt itself, that I ranked in that manner. Perhaps I had pity for the shirt salesman, or wanted a favor of him, etc. Ditto for him. He valued my money more than the shirt, so he also profited. The Marxists might say this is (mutual?) exploitation (perhaps the richer person always takes advantage of the poorer one?), but this is abject nonsense. Voluntary exchange is not a zero sum game, where the winnings of the winners must equal the losings of the losers. No, in commercial interaction, both parties gain, otherwise they would not agree to participate.
Since laissez faire capitalism consists of nothing more or less than the concatenation of all such events (buying, selling, renting, lending, borrowing, gift giving), we may conclude is it necessarily beneficial to all participants. True, ex post either party may later come to regret the commercial interaction, but that is entirely a different matter. Can we test this economic law? The mainstream would aver that if we cannot, it is not a matter of science. Well, yes, it is not a matter of empirical science, rather, it is an aspect of logic. No one in his right mind “tests” the Pythagorean Theorem, or that triangles have three sides or the claim that 2+2=4. But that doesn’t mean these laws are not “scientific” in the sense of providing important true knowledge about reality.
Austrians also disagree with mainstream economists on a whole host of other issues. For example, monetarism (we tend to favor free market money, not fiat currency), business cycles (we claim they emanate from government money and interest rate mismanagement, not markets), monopoly and anti trust (Austrians see no role for the latter), indifference, cardinal versus ordinal utility, interpersonal comparisons of utility (mainstreamers support, Austrians oppose).
ND: The term “fiat money” is much bandied about nowadays. Is the concept of fiat money misunderstood or misused, given that money as the legal tender of a state does give paper money legitimacy as a medium of exchange? Or do you think such legitimacy does not exist?
WB: Milton Friedman was the host of the justly famous “Free to Choose” television series. However, when it comes to monetary matters, this scholar’s views are not at all compatible with that title. Most times when people were really free to choose the financial intermediary which overcomes the double coincidence of wants, they selected gold (and sometimes silver). Nevertheless, Friedman was a fervent opponent of this free market money. Why? Because it costs resources to dig it up initially, and more to store it. These expenses could be almost entirely obviated with fiat money, created by the printing press and/or central banking, he argued. But shoes, fences, chairs, also cost money. The proper question is not Can we reduce expenses? Rather, it is, whether or not these outlays are worth it? Even more important, the issue is, Who gets to choose whether or not they are worthwhile? Central planning oriented Friedman chose to ignore the decision in favor of gold of the free market; he urged the imposition of fiat currency.
Why do statists support this type of currency? There are three and only three ways for the state to raise funds. First, taxes. But everyone knows full well, even low information voters, who is responsible for that. Hint: it is not the private sector. Second, borrowing. Ok, those with the meanest intelligence might not be too sure of who is behind this mode of finance; but everyone else knows it is the government. Third, fiat money, created out of the thin air by the state apparatus. The beauty, here, from the point of view of the centralists, is that the resulting inflation can be blamed on all and sundry: on capitalist greed, on nasty consumers buying too much, even on otherwise beloved labor unions. Economists in the pay of government always stand ready to demonstrate that the correlation between prices rising and the stock of fiat currency in circulation is not a perfect one. Well, of course it is not, given varying expectations. But it is an insight of praxeology, the Austrian method, that the more money in circulation, other things equal, the higher prices will be.
ND: Much of your work centers upon anarcho-capitalism. Would you explain how you understand this concept, and why you feel it is important? And how would you answer the charge that anarcho-capitalism is utopian?
WB: Anarchism is important, because one of the basic building blocks of the entire libertarian edifice is the non-aggression principle (NAP). This means that all human interaction should be voluntary. No one should coerce anyone else. But the government, necessarily, engages in taxation. That is, it levies compulsory payments. One of the beauties of libertarianism is its uncompromising logic. Its willingness, nay, passion, to apply the NAP to all economic actors, with no exceptions. Well, if we apply the NAP to the state, we can see that the latter fails. Oh, their apologizers have all sorts of excuses. The income tax is really voluntary. Tell that to the IRS! That taxes are akin to club dues. Yes, if you join the tennis or golf club, you have to pay dues. But you agreed to do so. In sharp contrast, no one ever contracted to be part of the US “club.”
The “capitalist” part of “anarcho-capitalism” is also important. It distinguishes us from the left wing or socialist anarchists such as Noam Chomsky. They oppose the government, to their credit, but would also outlaw profits, money, private property, charging interest for loans, etc., in violation of the NAP. It also, very importantly, separates us from the Antifa and Black Lives Matter anarchists who are currently trying to take over streets, highways, and large swaths of Seattle, Portland and other US cities. They, too, oppose free enterprise.
Is anarcho capitalism utopian? Well, yes, I think it is in some sense. That is, due to my understanding of sociobiology, I don’t think a majority of people are now capable of living up to the NAP which underlies this system. On the other hand, the nations of the world are now in an anarchistic (not anarcho-capitalist) relationship with one another. A state of anarchy now prevails between Argentina and Austria, between Brazil and Burundi, between Canada and China, etc. That is, there is no world government controlling their interactions. The only way to solve this anarchism would be to install a world government. So anarchism is not utopian in the sense that very few people would want to go down that path.
WB: I don’t reconcile it at all. I am a big fan of all the scholars you mention. On a personal matter, it was Ayn Rand who converted me to a position of limited government libertarianism, or minarchism. I met her while I was an undergraduate at Brooklyn College, and, then, a blissfully ignorant enthusiast of socialism. I have learned from all of the authors you mention. However, they are all statists, of a limited variety to be sure, but statists, nonetheless. Instead, I would say that the thinker now most crucial to libertarianism in general, and to anarcho capitalism in particular, is Murray N. Rothbard. I am a Rothbardian, and I follow him in rejecting the criticisms of anarcho capitalism offered by the half dozen scholars listed above.
ND: In your important analysis of the pay-gap between men and women, you have come under fire from feminists who say that you do not take into account that as supposed patriarchy disappears, the pay-gap decreases. What do you say to such critics?
WB: Thanks for your characterization of my analysis. Actually, I have done only just a little bit of actual research on this matter. Rather, I am a follower of Gary Becker, Thomas Sowell, and Walter E. Williams on this issue who have done far more than I on this matter. I will take credit, however, for popularizing this analysis.
What’s going on here? Roughly, there is a sexual pay gap of some 30%. This means, again on average, that for every $10 a man earns, a woman’s pay is $7. What determines wages in the first place? Productivity. This divergence should not raise hackles when it occurred two centuries ago. Why not? Because male productivity then way higher than female. Most jobs required physical strength, and men, again only typically, are stronger than women.
But nowadays, very few employment slots require brute strength. So why does the gap still occur? It is simple; wives do the lion’s share of housekeeping, cooking, cleaning, child care, shopping, etc. But everything we do comes at the expense of not being able to do other things as well, if at all. Ussain Bolt is the fastest sprinter on the planet, but he is not a good cellist; Yo Yo Ma plays that instrument exquisitely, but his time in the 100 meters is nothing to brag about. This marital asymmetry specialization, alone, explains virtually all of this 30% pay gap.
There are two bits of evidence that support this contention.
Yes, the pay gap between all men and women is some 30%. But that between ever married males and females, people who are now married, widowed, separated, or divorced, is much higher. It varies, but is something like 60%. What is the pay gap between men and women who have never been touched by the institution of marriage? They are not married, widowed, separated or divorced. It is zero. Let me repeat that. There is no pay gap here. Now, in actual research, you never find 100% equality. A more accurate way of putting this is that the ratio between male and female earnings ranges from something like 90% to 110%, depending upon country, age, occupation, schooling, etc. But, for all intents and purposes the gap simply does not exist for the never marrieds.
Here is a second bit of evidence countering the claim that free enterprise is inherently sexist. Suppose this gap really were due to discrimination against women. Then, we would have a situation where the productivity of both genders was $10, but the fairer sex was paid only $7. But this would mean that industries where women predominate would be more profitable than others. There is no evidence supporting this. It would also imply that extra profits could be garnered ($3 per hour) from hiring a woman. As entrepreneurs added women to their payrolls, their wages would inevitably rise. To what level? To equality, since pay scales tend to reflect productivity, which we now assume are equal. But we see no indication that firms are beating the bushes to employ more women, except, recently, when the virus of virtue signalling began to predominate.
If patriarchy, defined as unequal household and child care tasks were to end, then, yes, the pay gap would also decrease, presumably almost to zero, since the marital asymmetry hypothesis would no longer be operational. But not quite. Pregnancy and breast feeding will always separate the genders. Then, too, men tend to take more dangerous jobs, and this too, will separate sexual remuneration. However, if the end of patriarchy is defined more broadly, so as to obviate these differences too, then I would expect the gap to disappear. But this is not the world we live in. Biology, once again, intrudes the best laid plans of the feminists. There are still strong differences between males and females. Many would say, thank God for the difference!
ND: In your view, is capitalism weakening, especially given how easily Communist China has exploited it for its own gain?
WB: Weakening? I would say the very opposite. The Chinese economy has catapulted thanks in large part to their adoption of at least some aspects of capitalism. The Russians, too. This is evidence, I think of a strengthening of this system.
ND: How do you think capitalism will manage tech monopolies
WB: Capitalism is incompatible with monopoly. If there is monopoly in existence then, to that extent, there is no capitalism. But to make sense of this claim we must have the Austrian view of monopoly in mind, not the mainstream or neoclassical one. What is the difference between the two?
In the (correct!) Austrian perspective, monopoly is a government grant of exclusive privilege to conduct a certain kind of business; anyone who competes with this monopoly is a criminal. Examples include the US post office and the system of taxi cab medallions which operates in major cities such as New York. Those who engage in such activities without permission from the monopolist are subject to fines and imprisonment. A very dramatic example of this phenomenon was depicted in the movie Ghandi when people went to the sea to obtain to water so as to access the salt therein. They were savagely beaten by the police. Why? There was a monopoly of salt granted by the British government, and these people were violating it. That is crony capitalism, not laissez faire capitalism.
Given this, there is a serious question as to whether or not there are at present any tech monopolies. Some are given special legal privileges by government, and, to that extent are monopolisitic, and thus, entirely incompatible with laissez faire capitalism.
The (incorrect!) view prevalent amongst most modern economists is very different. They would include the foregoing as monopolies but also, quite fallaciously, add on density or concentration. For example, when IBM was the only producer of computers, it was deemed a monopoly, based on the fact that it was the only one in this industry. This company never came within a million miles of trying to forbid competition (the Austrian perspective); it was deemed a monopoly solely because at the time it was thought to have no competitors. It had 100% “control” of the industry.
This concept is intellectually dead from the neck up. It is arbitrary. It depends upon how the “industry” is defined. If narrowly enough, pretty much anyone can become a monopoly; if widely, then no one is or can be. For example, I am the sole producer of Walter Block services, narrowly defined. There are other libertarian economists, to be sure, but none are exactly like me. On the other hand, if we define this “industry” broadly, I am only one of several hundreds of thousands of practitioners.
Let us take a less unique example. If the industry is defined as providing dry breakfast cereals, the concentration ratio will be high. If we include wet breakfast cereals too, this ratio will be lower. If we add all breakfast ingredients, ham and eggs, not just cereals, it will decrease even more. Adding all food, not just for breakfast, will further reduce it. Well, which is correct? Plaintiffs want to define the industry narrowly, so as to render a high concentration ratio, or monopolization, whereas the defense sees the matter in the opposite way. The point is, there is no rhyme or reason to this entire matter.
Bill Gates and Microsoft started way out in the boonies in Seattle. He didn’t grease the palms of either party in Washington DC. How to bring him into line? Why, declare him a monopolist! All of anti-trust legislation is a disgraceful sham.
ND: What about encroaching robotization? If human labor is largely side-lined, what will capitalism become?
WB: I am not a Luddite. I do not think that machinery, computers, robots, etc., are a threat to human kind. Indeed, I maintain that the very opposite is the case. The more non human help we can access from such sources, the less will our lives be “nasty, brutish and short.”
Either we will run out of jobs that need doing, or we will not. In neither case will artificial help emanating from this source prove to be a difficulty. Suppose we become aesthetes, and are satisfied with our present standards of living, a few decades from now. Then, we will have a achieved a “post scarcity” state of the economy. Thanks to machines, and everyone will have a sufficient number of them, we can all sit back, relax, and “play” all the livelong day. No problem here. More realistically, we will never run out of thing we want. We will always seek more than we have. We will want to eradicate all diseases, live forever, comfortably, explore the core of the earth, the bottom of the oceans, other planets in this and additional solar systems. With the help of robots, we can accomplish more of these goals than other wise, but we humans will still be called upon to labor so as to attain, these ambitious goals.
Ned Ludd was faced with knitting machines which would allow one worker to do the jobs previously needing 20 people. He “reasoned” that 19 people would then be rendered unemployable, and proceeded to burn this new machinery. His heart may have been in the right place (if we abstract from the fact that he destroyed the property owned by others), but the same cannot be said for his head. He reckoned in the absence of the fact that these 19 people would now be freed up to create new goods and services, impossible to attain previously, but now within our reach.
But the same exact situation presents itself right now. Instead of looking at the secretaries and typewriter workers unemployed by computers, those. who labored for Kodak and are no longer needed, ditto for zoom reducing the need and the employment needed for travel to attend meetings, focus on the fact that all these “unemployed” people are now free to produce goods and services otherwise unobtainable. At one time, about 85% of the US labor force was needed to be on the farms, in order to feed ourselves. Nowadays, the figure is something like 2%. Is this a tragedy for our economy? To think so is to revert to simple Ludditism. It is a failure to understand basic economics. The more help we get from inanimate matter, the better off we shall be
ND: As an economist, are you hopeful about the future of the West?
WB: Milton Friedman was once asked, What is the future course of stock market prices? His response was, They will fluctuate. I say the same thing as the future of the West. It, too, will fluctuate, I expect. If Biden wins the next election, political correctness will threaten Western civilization. If Donald, less so. My hope is that Rand Paul will be the president in 2024. Then, our civilization will take a turn for the better.
ND: Thank you so much for your time. It was wonderful speaking with you.
WB: My pleasure. Thanks for putting these questions to me. They were challenging, and made me think.
The image shows, “New York,” by George Bellows, painted in 1911.
Recently, I have been reflecting on my journey as a self-professed Libertarian and the shifts in my thinking that have occurred over the past twelveyears as a Libertarian party member. I have noticed more frequently that some colleagues with whom I have shared common views in the past on policy topics are no longer in alignment with my views.
I acknowledge that I have changed. I have slid in and out of various “camps” of Libertarian conviction over the years. My experience within the Libertarian movement, which has been responsible for my evolving views, has included:
I was elected Chairman of the Ontario Libertarian Party (OLP) in 2017 with the mandate to recruit and prepare 124 OLP candidates for the June 2018 Ontario Provincial election (the Conservatives won a majority under Doug Ford and handed a humiliating defeat to the incumbent Liberals under the highly unpopular Kathleen Wynne);
As the Libertarian candidate for my home riding, I learned much from being a political ‘insider’ as I had in fiveprevious occasions as a Libertarian candidate;
Proclaimed by the former OLP Leader as the party’s “most prolific writer” (mostly on Facebook), I witnessed and learned from thousands of responses to the Libertarian content about which I wrote. [Note: social media has proved to be the best way to reach the public with our message since all mainstream media outlets consider every other party except for the three top contenders to be irrelevant and non-newsworthy.]
This personal reflection has been partially inspired by Canadian author William D. Gairdner’s book THE GREAT DIVIDE, Why Liberals and Conservatives Will Never, Ever Agree. It addresses a phenomenon that seems to exist at every point along the left-right continuum of political engagement, and even within political parties. The theme of his book is: “The populations of the democratic world, from Boston to Berlin, Vancouver to Venice, are becoming increasingly divided from within, due to a growing ideological incompatibility between modern liberalism and conservatism. This is partly due to a complex mutation in the concept of liberal democracy itself, and the resulting divide is now so wide that those holding to either philosophy on a whole range of topics: on democracy, on reason, on abortion, on human nature, on homosexuality and gay marriage, on freedom, on the role of courts … and much more, can barely speak with each other without outrage (the favourite emotional response from all sides). Clearly, civil conversation at the surface has been failing – and that could mean democracy is failing.”
Mr. Gairdner’s observations hit home to me personally because of my experience with the mini-divides that exist within the Libertarian parties with whom I have been associated. The perspective of time will help to explain my point.
When I first joined the Ontario Libertarian Party in 2007, the atmosphere within the leadership team and the party’s most enthusiastic supporters was one of rigorous adherence to the body of Libertarian ideas that tended to the extreme: Anarcho-Capitalism. Often abbreviated as “Ancap,” it is considered a faction of libertarian political philosophy that promotes individual freedoms, private property, and free markets through the removal of government. “Removal” implies wholesale privatization of all government institutions so that they must compete with non-government service providers for business without relying on the immense benefit of guaranteed tax funding to support them.
In those early days, the OLP comprised a small group on members who were mainly greying white men who shared the dream of attaining a virtually (if not entirely) government-less society. After being elected to the Executive Committee as Member at Large (MaL) around 2010, I concluded that the OLP was operating primarily as a men’s club that liked to talk about attaining political success and influencing opinion across broad communities of voters, but their goals were out of reach so long as the organization stumbled along making next to no progress.
During those early years, I also began reading extensively to deepen my understanding of Libertarianism and the Austrian School of Economics which was an essential pillar undergirding any possibility of achieving and sustaining a Libertarian society if it was to ever be realized. Authors like Murray Rothbard, Ludwig von Mises, Frederick Hayek, Hans Herman Hoppe, Tom Woods and others with predominately Ancap leanings all had a profound impact on my outlook as a Libertarian. Their ideas were inspiring to say the least, but eventually I came to the conclusion that they will never be widely accepted in our western democracies.
In 2012, a new leader of the OLP was elected–Allen Small. I came to know and respect Allen when he had also been a MaL on the Executive Committee. As a former high school teacher, Allen had the attributes and talents that I felt would help the OLP to make progress as a political entity.
Over the next six years, Allen lead us through two elections. Both of these elections marked record-breaking results unseen since the OLP had been founded in 1975. Allen worked closely with Rob Brooks, an experienced political campaign manager from another party, to shape a new election platform designed to make it appear less extreme and more attractive to a broader community of supporters. Allen was also the driving force behind building a larger social media following which was crucial to our growth. His legacy as the most successful Leader of the Ontario Libertarian Party in modern times is one that has set a high bar for future leaders to surpass.
During Allen’s tenure, I continued to read and gradually took a renewed interest in the OLP. As I held a very demanding job, my time was limited and I was unable to offer much assistance in support of Allen’s efforts. My views on Libertarianism had also begun to shift again, and they can be best described as politically-pragmatic because I came to accept the notion that proven methods of political messaging were essential to improve electability. However, I was still privately sympathetic to Ancap ideas. In retrospect, I was gradually becoming more “minarchist” as I continued to emerge from my earlier Ancap cocoon.
Minarchism is generally viewed as a libertarian political philosophy which advocates for the state to exist in forms that function solely to protect citizens from harm, aggression, theft, breach of contract, and fraud. During the OLP buildup to the June 2018 election, I felt compelled to condense and simplify my personal understanding of what it means to be a Libertarian. Ultimately, I settled on the following statement and I printed it on my business card as OLP Chairman: “Libertarians defend and protect individual persons (their mind, body and efforts) and their property from intentional and unwanted harm and aggression imposed by others including those employed by the state.”
Another shift in my thinking was also taking place as I actively campaigned on our 2018 election platform which featured a new Non-Government Options emphasis in our Libertarian vision. Integral to this vision was the necessity to introduce competition into the “public services” markets. For it to work, it is essential to eliminate all regulations that empower public institutions to operate on a monopoly basis. This will put the power of choice back into the hands of our citizens so that they can be free to patronize their choice of available service providers who best serve their unique needs and preferences. Furthermore, for citizens who prefer that services in health care or education (for example) be provided by the government, they are free to opt in as a “government customer” and pay their share of the taxes needed to sustain government operations. Conversely, for citizens who decide that they are best served by “non-government” service providers who will surely emerge to meet market demand after existing anti-competition regulations are repealed, these people will not be required to remit taxes; they can apply these tax savings to buy private insurance policies or make direct payments to providers. I refer to this form of Libertarianism as “free choice minarchy.”
The reasons why I remain a “free choice minarchist” today is because of the obvious advantages it brings to all voters. First, for citizens who choose “non-government” service providers, payments will not be managed by an inefficient, impersonal, expensive and often inflexible “middle man”–the government bureaucracy that collects our hard-earned money through non-optional taxation.
Second, free markets have a proven history of spawning business model innovations and prudent capital investments in order to control costs and improve the pricing and quality of their products as well as their customer service reputations. All of this is derived in direct response to the ever-present forces of competition. It’s no mystery that “the customer is king” in competitive businesses, but the same cannot be said within government operations.
Third, everyone gets what they want by being free to choose from viable alternatives. The thinking goes that it is none of my business what my neighbour wants to buy and it’s none of my neighbour’s business concerning what I prefer, so why should any drama exist between us as to how we meet our needs and preferences.
Fourth, government expenses are directly proportional to the number of regulations that are “on the books” and must be enforced with expensive resources. By eliminating all pro-monopoly regulations, the government will have lower enforcement costs and thereby require less money from taxation and/or public debt.
Fifth, this approach eliminates the element of “autocratic rule by one-size-fits-all” policy implementations which have always been the result of every election in our history. People differ in every conceivable way, which is why businesses adapt and adjust constantly to find new ways to serve customers profitably. It stands to reason that when government monopolies eliminate all consumer choices, they take on the same problems for which anti-trust laws were created to break up private sector monopolies. This double standard is hypocrisy at its most obvious. Governments must no longer operate under the protection of biased legislation if we are ever to expect service levels to improve in quality and decrease in cost.
After running in six elections as a Libertarian candidate, I am asked often why I continue to do it given our history of attaining less than 1% of the popular vote. Recently, I have been asking myself the same question. Here’s why.
Maxime Bernier and his People’s Party of Canada (PPC) has achieved impressive success in 5 short months since last September 2018 to build a nation-wide party complete with EDAs (Electoral District Associations) in every riding across Canada. Neither the OLP nor the Libertarian Party of Canada (LPoC) has accomplished anything even close in spite of being in existence for over 4 decades. Bernier’s fund-raising ability is extraordinary. His ability to attract followers and media attention dwarfs ours. He has shown me what can be done under the right leader and the level of highly motivated talent that such a leader can attract. It is a demoralizing comparison to me as a long time OLP and LPoC member.
I consider the PPC platform shown on its web site as “Libertarian lite” insomuch as it seeks “Less Government” just as a Libertarian minarchist does. In other words, our directions are the same but only the degree of change is different.
After reading Right Here, Right Nowby former Prime Minister Stephen Harper (for whom I have great respect), I am convinced that Harper’s incremental approach to public policy change is wise. Policy results can be tested from small first steps and evaluated/adjusted before further steps are taken. This is the right approach for any elected Leader who wants Less Government and one that I would hope for if a Libertarian, PPC, or Conservative Party is elected in the upcoming federal election.
For my final, and maybe most significant consideration, I fall back on the reasons why I entered politics in the first place–my daughters. I had come to the conclusion years ago that I could not consider myself a responsible parent if I was not prepared to act to defend and protect my children from threats. To me, the greatest threat to their future has been and continues to be the unopposed and relentless growth of government power, scope, size, and cost at every level of government. The threat is manifest in an enormous set of fiscal, social, and cultural risks that will surely eat away at the quality of Liberty in their lives through no fault of their own.
Years ago, I reasoned that we do not live in a true democracy unless at least one genuine Less Government option appears on every election ballot at every level of government. Since the only true Less Government option has been the Libertarian ballot choice, I have chosen to be that candidate in my riding when no one else was prepared to do so. I knew that I had no chance to be elected, but I felt that at least there would be one voice in each election to argue the reasons why continued government expansion was dangerous to everyone and why Less Government is the only viable antidote to these risks.
Sadly, there has never been an election in Canada that featured a Libertarian candidate on every ballot in every election riding. The best effort so far was achieved last June when the OLP ran an Ontario-wide election campaign with 116 candidates for 124 ridings even though we operated on a shoe-string budget of about $40,000. (Note: the campaign budgets for the largest four Ontario parties was subsidized with tax dollars under the Per Vote Subsidy resulting in campaign cash windfalls of $5.1 million (Liberals), $4.1 million (Conservatives), $3.2 million (NDP) and $640,000 (Green Party). The other 22 so-called “fringe” parties that had registered with Elections Ontario for the June election and had complied with all of its campaign rules, required paper filings and fee payments, did not qualify for funding. If you are asking yourself why you were not aware of the 22 parties, you now know part of the story: running elections and reaching the public with campaign messaging is very expensive and “fringe” parties are put at a significant disadvantage to the major parties by tax subsidies.
As you can see from the above, my political path has been meandering even though I have remained a card-carrying Libertarian. As Mr. Gairdner pointed out, politicians and their most ardent supporters generally dig in for the long haul in support of their partisan convictions and are frequently loathe to budge even a smidgeon from their ideological perch.
There are likely as many Libertarians who hold stubbornly to their views, proportionately speaking, as there are ardent Liberals and Conservatives. Politics is certainly a messy business and it is easy to see why so many people avoid the topic in “polite company.”
The photo shows, “Unveiling the Statue of Liberty,” by Edward Moran, painted in 1886.
