Tag Archives: frustrating arguments

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Answers To: “Free markets don’t work because people are irrational”

It’s government planning that depends on rational actors.  Irrational actors will result in a flawed plan, which is then imposed on the entire society.  One irrational bureaucrat at the top could spell disaster for everyone else.

A free market implies nothing about the rationality of its actors.  Those who end up making the best investment decisions get a return on capital, while those who make bad decisions lose.  Over time, this produces a natural selection pressure in the economy, towards more efficient habits, procedures, and technologies; but, this tendency has nothing to do with the rationality of individual actors in the system.  They could be rational or irrational, taking planned or random actions.

This process is analogous to natural selection in biology.  As long as expressions of fitness can be retained over time, selection pressures will produce life forms optimized to their environment.  Those who claim a functioning economy requires an all-knowing, “rational” central planning committee to make order out of the irrational chaos of society, are proposing the necessity of economic “intelligent design”.

That assumes there is and should be an objective and particular purpose for the economy.  But, there is no such thing, because people’s preferences and goals are subjective.  There is no such thing as “market failure”.  It is impossible to objectively evaluate economic outcomes without an a priori ethical framework, but this is what economists pretend to do.  The result is nonsensical arguments like this one.

If we boil it down, this is not an economic argument at all, but an ethical one.  The person making the title argument is saying “People engaged in free, voluntary trade are doing things I don’t like.  Therefore they are irrational and this represents a market failure.”  My response is “live and let live”!

Hear no evil, see no evil, speak no evil

Answers To: “Taxes/regulations aren’t backed by violence”

So I’m going to start this “Answers To” series where I respond to some of the more common and inane arguments I hear in support of government.  This isn’t so much to uncover new theoretical arguments, because most of this stuff has been dealt with by libertarian thinkers.  It’s more about rhetoric – how an argument is presented and what an effective response might be.  I encourage you, dear reader, to submit arguments you’ve heard (and answers!) to apollo at apolloslater dot com.

A common one I’ve heard is one probably encountered by most libertarians.  You’ll be arguing with your friend about some tax or regulation and you’ll say something like, I don’t think people should be “forced at gunpoint” or that “violence” should be used to accomplish something.  At which point your friend gives you a blank stare and thinks you’re bananas.

After all, you don’t see mass executions of people who aren’t paying taxes!  Maybe if someone screws up, they pay a fine and that’s the end of it.  So there’s a lack of perspective here – not seeing the end of a chain of events that resisting taxes would bring about (I’m charged a fine; if I don’t pay, I’m thrown in jail; if I resist, I’ll be beaten or shot).  And not seeing the threat of violence that underpins government mandates, precisely because the threat causes most people to comply, making the execution of the threat a rare, unobserved event.

Explaining this chain of events and the effect of the underlying threat may help your friend understand your position.  You can also say, I’ll agree to your new tax or regulation, as long as the government cannot use physical force to enforce it.  Put the onus on him to describe how his program would work without the threat of physical violence.  If it does, then he is describing a voluntary program.  If it requires a threat, then you’ve proven your point.