Musings from an Economics Student

An Austro-Libertarian Review of Glenn Beck's "Common Sense"

2009-08-11T11:40:00Z

In recent months I have become involved in the local Tea Party group. It’s a rather odd experience - I’m approximately 30-50 years younger than everyone else in the group. I tend to lean towards anarcho-capitalism/agorism while everyone else tends to be diehard conservative (mind you, I try to keep quiet about that since as Bob Lefevre put it, mentioning the word “anarchism” brings up images of mustached men in black capes carrying bombs with most people). Anyways, this group is closely tied with the local 9/12 group and as a result, I’ve heard people rave about how great Glenn Beck is and how his book “Glenn Beck’s Common Sense” is “must read.” I decided to check it out from my local library and apparently, there was quite a queue to check out the book - 6 different libraries had the book, but they were all checked out and 30 people had placed holds by time I got there.

Well, fortunately I managed to get my copy today and even read all of it. I was not aware that Mr. Beck’s book was packaged with Thomas Paine’s original “Common Sense”, which beefs it up from what would otherwise be a skinny pamphlet. Nonetheless, I did read Beck’s portion of the book in hopes of learning something about the people in my group and where they are coming from.

The overall theme of the book is “unity.” Beck’s argument is essentially this - after 9/11, we all felt good and “united” as a nation (I’ll say more on that later). But then we started bickering and divided and that’s how the politicians made government grow and take away our liberties. What we need to do, then, is to go back to what united us as a nation to begin with, limited government and so forth, and we’ll all be just fine.

It’s very tempting to say there’s nothing good with this book. A more hardcore Austrian or agorist is tempted to attack the book because Beck does not come from an Austrian perspective (it’s a pity that based on the bibliography of sources in the book, not a single Austrian is mentioned - no Mises, no Rothbard, no Hayek, etc. Not even familiar names for those truly interested in liberty, like Milton Friedman, Ayn Rand, John Stuart Mill, etc. The only good economist he quotes is Thomas Sowell, which is really limiting himself when there’s so many good economists that can support his cause). Likewise, a Randroid would be tempted to dismiss the book because it lacks “a proper epistemology.” But there are a few good things.

For instance, on page 9, he describes the all too common story of the State using crises in order to gain power. Later, he makes a brief mention of both corporate and personal welfare which is good as not too many conservatives are willing to admit that corporate welfare is just as bad as personal welfare. He attacks both Republicans and Democrats as being one and the same. He does what very few conservative pundits are willing to admit is that there are “Progressives” (personally, I prefer the term “Statist” in what he is referring to those favoring increased state powers and intervention, not necessarily restricted to the Progressive movement of the early 20th century) on the right who favor intervention in the form of a military welfare state as much as Progressives on the left have the image of favoring the personal welfare state. Yet despite these astute observations on the nature of the State that might lead one to a more anarchist position, Beck doesn’t seem to think there’s anything inherently wrong with the system, per say, only the people who are in it at the moment. That brings us to some of the things wrong with the book.

Now, it’s very tempting to attack some of the things Beck seems to think are crucial to the cause of liberty - a border fence, climate change denial, etc. I’ll avoid those only because I can write entire articles just dealing with those subjects alone. Instead, I’ll focus on more broader issues. On page 14, Beck says:
Compassion and capitalism go hand in hand, but compassion does not go with what these people [those selling the idea of “debt isn’t bad”, particularly with the housing market] are really promoting: greed. Of course, not everyone fell for their lies — some banks and mortgage companies refused to play the “home giveaway” game. To them, things like debt, income, and character stille mattered and they prudently denied unqualified borrowers. And what was their reward? They were labeled racist, greedy, and out of touch with the new reality.

Mr. Beck seems woefully ignorant of Austrian Business Cycle Theory. Yes, I should be kinder on the fact he is a pundit and not an economist, but ABCT can easily explain the housing market scenario without resorting to claiming banks were “greedy.” Banks that sold mortages to people who were offering sub-prime mortgages were merely responding to incentives that were helped put into place by the central banker, the Federal Reserve. It wasn’t so much people being “greedy” as it was people acting in their own self interest and having resources misallocated because of how the central banker acted. A minor quibble, but still.

Another thing is about salaries of members of Congress. Beck seems to think they get paid too much, and frankly, I’m not particularly fond of the fact they get paid to so much and yet they tend to do an awful job. But let’s be a bit reasonable. The salary that Beck cites is $174,000 a year. Why is that? Well, consider the fact that Congressmen and Senators tend to need money to pay for a home near DC and a home in their home district so they have somewhere to be when the house isn’t in session. Furthermore, I’d rather the taxpayer pay these people as opposed to having to be bought off by special interests just so they can get by. Yes, they are bought out by special interests now but a morally sound politician (if one can exist) could manage to live without selling themselves out.

The biggest thing for me, though was how he had to bring religion into it. The rest of the book was alright - pretty much stuff any libertarian or Old Right conservative should be able to agree upon, like about out of control spending, the rise of the political elite, and increasing powers of the state. But then he has to invoke God and it’s a rather poor attempt at it. He quotes Ben Franklin and how he believes in God (Ben Franklin was in fact a Deist who once remarked that “Lighthouses are more useful than churches”) and he even quotes Thomas Jefferson, while also a Deist, was very skeptical of religion including Christianity (one of his great contributions was the Jefferson Bible, a version of the Gospels with all supernatural phenomena pertaining to Jesus removed and strictly the philosophy of Christ remaining). Point is, it’s misleading to say the Founding Fathers were religious. Yes, they believed in God. But they were far from being devout evangelical Christians some like to portray them as. Yes, some of them were rather devout (George Washington comes to mind). But for most of the Founding Fathers, they would accept the idea that God created the world and that’s about it. To them, religion is just a human invention, and Holy Books were just individual interpretations. Furthermore, Beck seems to suggest that one needs religion to be moral and I do not believe that is the case. One can think of many men who did not believe in religion or God and still managed to lead virtuous lives. While a virtuous citizenry is an admirable thing, this does not necessarily translate to a religious citizenry.

To be fair, Beck does not do a lot of plugging for this 9/12 project, tending to refer to how America felt “after 9/11.” At the end, he drops the 9 principles and 12 values. Most of them I can agree with - I tend to agree with the general spirit conveyed, but I agree with a few of the principles, notably one and two and the second value of “reverence” (the 12 values are based off Ben Franklin’s personal values that he strived to maintain, but as mentioned, Ben Franklin’s idea of reverence is probably one differing from what Mr. Beck is suggesting). As I’ve already discussed principle 2 (“I believe in God and He is the Center of my Life”), I’ll discuss number 1 - “America is good.” But WHY is America good? I cannot imagine a situation where one can axiomatically derive “America is good.” What makes us good? Is it our system of government? Our economic system? Our military? The fact we’re #1 in some statistics? A poll perhaps of Americans who answered in the affirmative to “America is good”? True, it’s not catchy to elaborate but it comes off as mindless patriotism. However, there is one principle I am particularly fond of - “It is not un-American for me to disagree with authority or to share my personal opinion.” This, in a way, seems to undermine it’s message of unity and that is not necessarily a bad thing.

Perhaps Beck thinks America is good for its unity, the entire theme of both the book and the 9/12 project which I have a problem about. In the discussion about religion, Beck feels that religion is important because religion “unites” us. Just the other evening, at the local Tea Party group meeting, I disagreed with another member’s comment that we should be about “English first” because I do not believe that people should be forced to speak a particular language. I was scolded and told how English “unites” “us.” Beck’s goal of the 9/12 movement is to “unite” us as we were on 9/12, the day after 9/11. But is unity what it’s cracked up to be? True, a house divided cannot stand. The 9/12 Movement uses the likeness of the “Join or Die” cartoon by Ben Franklin, from when the image was used to unite the colonists against the British. Yet unity, I think, isn’t always what it’s cracked up to be. The talk of “unity” hearkens in my mind the Nazi slogan of “Ein Volk, Ein Reich, Ein Führer” (“One People, One Country, One Leader”). I think, contrary to Beck, that bickering is productive - I’d be scared if everyone in government was in total agreement with each other and in public discourse there was a unity of thought. There’s a few places I can think where this happening - the Soviet Union, Nazi Germany, Fascist Italy, etc. Personally, I think our differences are good. I think one of the things of what makes America good is that we have a rich diversity of colors, creeds, ethnic backgrounds, etc. I have nothing against unity at all - you need some form of consensus - but to get some sort of total assimilation, to totally unite us and have us all feel as one is a bit much. I would feel a bit scared if everyone thought like me, or at least fought similar. I dislike socialists but I think they’re handy to be around just to provide a dialectic force. I think that argument can be constructive. I think with diversity comes a wide range of choices and a rich flavor.

Overall, I think Beck means well. But I don’t think that “unity” should be a goal but rather liberty, a society that protects private property, a society where people are free to act in accordance to natural law which Thomas Paine, author of the original “Common Sense,” had in mind.

March on Albany

2009-06-20T11:26:00Z

I was going to write a longer diatrabe where I describe in detail the March on Albany (NY) protest I went to this past week put on by the Tea Party people. I was kinda reluctant, as most of the people in the local group are all retirees and I'm fresh out of college, but at least it's nice to be around people who don't think I'm totally crazy.

Anyways, decided to go to represent the more anarcho-capitalist viewpoint, since everyone else was pretty much conservative and well, I sorta stood alone. I wore my Hayek t-shirt (the one available from the Mises.org store :3), hoping I'd get interviewed on TV or something and get the Mises Institute some free publicity (well, I did get on TV but only for a second in a wide shot of the crowd).

Since it was a protest, I figure I might as well make a sign. It was suppose to address state issues, at least that's what the protest was about, but I couldn't think of any specific state issue that particularly was infuriating me so instead I decided to just make a sign with stuff people should read since I'm that type of guy. It wasn't flashy but I think it served it's purpose. Anyways, here's a pic:

In case you can't tell, I'm the one on the left (I was one of the few people there under 50 D:). Yeah, I threw in Rand but apparently that's like the only person people have heard of on that list from those who asked me about it and it's unfortunate that most people have no idea who Mises or Rothbard are. I know people who were raving about The 5000 Leap, which looks alright, but seriously, these people need to get some good exposure to Mises and the rest of the Austrian school so they can have a rock solid foundation for their rhetoric and argument against the increasing statism.

Brief summary, there was a wide range of the spectrum presented. Most of the crowd were right conservative, they want a purely Constitutional government, that sort of thing. Seems like most of the speakers werre plugging pet projects - one guy wanted a Liberty flag (a red flag with the words "LIBERTY" in white) he made on every flagpole, one group wanted to abolish the NYS government (sadly, they just want to vote out the existing state government and replace it with a new one - false advertisement if you ask me), one guy wants a NYS referendum, and all sorts of little pet projects. Campaign for LIberty were there, and as you can guess that I tended to agree with them the most, as they were pushing to End the Fed and for sound monetary policy and all that. Biggest peeve was the John Birch Society, who said we need to enforce immigration laws because "Mexicans are stealing our jobs" (it's sad that he's probably never read Bastiat, considering it was a John Birch film that introduced me to Bastiat). I have no idea how you can claim to support the free market and then ramble on with very basic economic fallacies. There were a few various sorts of people who handed out stuff - some marijuana legalization folks, some guy who handed out some short prose about supporting the troops, some guy handed out something about an alternative currency (not Liberty Dollar, but still a silver and gold private currency), 9/11 truthers, and there was one lone libertarian anarchist.

I suppose overall, I except the premise (that the state government is getting far too big), I just don't except the various conclusions or in some cases, the rhetoric to reach that conclusion.

You know you've been reading too much Mises.org when...

2009-05-01T14:52:00Z

...you dream of Jeff Tucker and have Mises Institute books in your dreams as product placement.

Honest to God, I had a dream last night where I was in Wal Mart and for some reason, Jeff Tucker was there, sitting in a little Red Rider wagon in a store aisle, wearing his trademark khaki pants, shirt, blue jacket, and little bow tie, reading the Mises Institute's new edition of Rothbard's For a New Liberty. We exchange some words and he wants me to pick up books for him at Wal Mart that I think he'd be interested in.

Obviously not too many Wal Mart stores carry Austrian economic texts, so for some reason, I went to look in the toy department and they had some Nacy Drew type of book (I just know it was a kinda girly kind of book), and I put in some sort of walkie talkie sort of thing in the bag, and some other really bizzare toys.I bring these back to Jeff and said "Well, it's not like you're going to find Rothbard's Logic of Action at Wal Mart." He says these are going to be terrific and thanks me.

The dream goes off in a weird tangent after that, but yeah, Jeff Tucker is in my dreams, as is product placement for Mises Instiute books.

I suspect this is my mind's way of saying I should get on the ball in writing that live blog of For a New Liberty. The good folks at the Mises Institute were kind enough to send me a review copy and they've been stiffed out a review thus far. Well, I think I better get around to it today, before I'm like MacBeth and start seeing the book before me.

This summer is gonna be awesome

2008-05-10T02:04:00Z

I got accepted into the Foundation of Economic Education's Austrian Economics seminar. You know who is going to be there? <b>Israel Kirzner</b>. That's right, a guy who has studied under MIses himself is going to be there. I have his textbook on price theory that I totally want him to autograph. I'll probably have to pick up a copy of "The Economic Point of View" before I go too.

I also hope to get into Mises University. I'd love to meet all my favorite Austrian economists and meet some other people who don't think I'm crazy for wanting a privatized military force.

Happy Earth Day

2008-04-22T04:40:00Z

While I am the last one to draw any harsh comparisons, here's a fun fact: Earth Day happens to be the same day as Vladimir Lenin's birthday.

Coincidence?

Review of two economic museums

2008-03-08T14:45:00Z

For spring break, I decided to go to Mexico again (and mind you, not to Cancun or any beach place like that), but since it was cheaper, I had to go through NYC. Anyways, I visited the Museum of American Finance in NYC (as recommended by Dr. Tucker) and the Museo Interactico de Economica in Mexico City. Here's my review:

Museum of American Financial History: Mostly financial, banking and the like, but really neat nonetheless. They've got some really neat specimens of old private currency, old silver certificates, a five million deutchmark note from the Weimar hyperinflation, and some really great stuff on the history of banking in the US. There's also a really great thing on entrepreneurship, talking about things like risk and having an idea, that sort of thing, which I thought was really great. The other half of the museum is dedicated to stocks, bonds, etc. but still very informative. They have a copy of the first issue of The Wall Street Journal, a ticker tape from the Stock Market Crash of 1929, a computer terminal just like the ones traders use as the NYSE, and there's three really great videos that explain what people at the NYSE, New York Mercantile Exchange, and the bond exchange actually do. I was able to score a pretty NYSE money clip too.

MIDE: Tyler Cowen of Marginal Revolution recommended this place. I was somewhat disappointed. It was, as the reply to my comment in Dr. Tucker's post, was mostly about teaching kids about economics. In fact, the only other people I saw there were school groups. Also for some reason, some of the interactive things where in English yet they'd still have Spanish audio. I did understand most of the signs and whatnot, and it was a nice look at basic economics, like you need land, labor, capital, etc. They had a nice little video talking about the pinmaker's story from "The Wealth of Nations."

My biggest complaint was when I got to the section on government. They had a cute little Sim City type game where you're the local mayor and you have to fix local problems. You'd get proposed a situation and you'd have to choose an option to handle it. Here's one example that I can remember which was along the lines of:

The local schools are falling apart and scores are extremely low. What do you do?

1) Ignore the problem
2) Repair existing schools

3) Repair existing schools and build new schools

Personally, I would just give parents either cash or vouchers for education and say "Send them to any school you want." The only one I felt was closest to mine was "Ignore the problem" but apprently, the correct answer was either 2 or 3. Sigh.

There were some neat things, like a huge LED board that shows inflation indexes for pretty much every common good in Mexico. The last room (they force you to see exhibits in a certain way and it's not just a recommendation - they yell at you if you don't) talks a bit about GDP and has comparisons about countries' standard of livings comparing GDP, literacy rate, health care, etc. In the middle of this room was a neat little model that was like a 3D bar graph that you could choose some statistic like health care and it would physically change the bar so you can see how it changes. As the only American in the room of some schoolgroup playing around with it, I got a kick how the US constantly topped everything.

The MIDE did have a decent giftshop though. I got a nice bookmark for my economic books for about $2, and I got a nice pen with old shredded 50 peso notes.

Personally, out of the two, I like the Museum of American Financial History, and not just because everything was in English. At least they promote the power of the free market, whereas MIDE devoted a good section to why we "need" central banks and government to provide services.

A minor wish of mine

2008-02-22T04:00:00Z

I have but one wish - reprint "The Common Sense of Political Economy" by Philip Wicksteed.

Really, that book is recommended by Austrians and non-Austrians alike and I can't find it in print anywhere. I'd pay good money for a copy.

Of course I'll let the market decide if that should be the case. Personally, I think the market would agree with me on this one.

Tip for the avid economics student

2008-01-11T00:29:00Z

This site that lets you buy physical copy of online public domain books is a God sent.

While I doubt the moderators here will not be pleased to tell you that I'm able to get "Recent Literature on Interest" by Boehm-Bawerk for half the price that the Mises Institute is charging.

Of course, from what I've read elsewhere, you get what you pay for. It'll be a generic cover and the text will be a scan of the book as opposed to actual text, so it might be a bit hard on the eyes. There's also a 700 page limit, so unfortunately, I was not able to get a copy of Philip Wicksteed's "The Common Sense of Political Economy" which I've seen recommended elsewhere but has been out of print for some time. Same goes with Alfred Marshall's "Principles of Economics" which, sadly, is only avaliable in abridged form. Also, it's limited only to books avaliable on Google Books or the Internet Archive at Archive.org. Finally, in some cases, it's just cheaper to buy a new copy of the book (for example, a copy from this site charged about $12 for a copy of Malthus' "Essay on Human Population" whereas you can get a new copy off Amazon for $10).

>I'm sure that the moderators will not be pleased for me advocating buying Austrian books from another site, but I think they can withstand a little market competition. Of course, as I said, if you were to buy from the Institute, you'll be getting a far superior product in terms of quality and probably supprting the Mises Institute as well. But if you're cheap, you can get readable economic classics at a low cost.

In defense of job "stealing" and outsourcing

2007-12-09T02:05:00Z

I work at the college library.

So I was at work and my supervisor along with myself were talking about banks and apparently, he tried to stat an HSBC account but was told to call this number only to find out that the woman on the other hand was in Bombay, India. He then decided not to get an account with them because they're letting Indian people "steal American jobs." I kept insisting that it's impossible to "steal" jobs, as that would suggest there is some fixed number of jobs in an economy, but he kept firmly insisting that they are making American people starve because Indian people are getting rich. Pretty much the conversation ended when I said "Well, I'll be sure to find an article on comparative advantage that shows that even though we might be losing jobs to India, we can still gain from that."

The sad thing is, he's definitely not the only person who believes that you can "steal" jobs away from an economy - one doesn't have to try hard to find prominent politicans who claim how Mexicans are "stealing" American jobs (though I don't see too many Americans fighting for the chance to water gardens or harvest crops). Frankly, as many of you readers know, that isn't the case. You can't "steal" a job - in fact, in the case of outsourcing for HSBC, everyone wins. An Indian person, instead of starving, now has a good paying job at a call center. The bank, being able to save on calling center costs, can now offer things like a higher interest rate which encourages people to invest through them or perhaps pay higher wages to other employees or perhaps in the form of higher dividends to stockholders which increases confidence. Even if it goes to "greedy" CEOs, then that should serve as a profit for finding a way to economicly cut their costs.

As for compartative advantage, it's probably one of economic's greatest ideas. In case you're not familar, it's the idea that even if you're a nation that is utterly devoid of resources or skills, you can still benefit from trade as you might be able to do something more cheaply than another more resourced nation. One of the nice things about using mathematics in economics is that you can show that mathematically, in addition to logic, that both nations get more of what they want from trading.

This idea of trade and "stealing" jobs really goes back to Bastiat's idea of What is Seen and Not Seen. Sure, you might see someone losing a "stolen" job at an American call center, but what people need to see is the creation of a job in India, more money that can go to other more useful endevours, and an increase of goods and services to everyone.

Introduction

2007-11-09T05:49:00Z

First post!

Really, here's an introduction - I'm a fourth year economics student. I'll concede that I really can't call myself a pure Austrian - while I think praxeology is great, I think that the use of math and statistics in economics is fine. What I agree with Austrians though is that sometimes economists do get "physicist envy" in wanting economics to be a science like physics, but I think that math is a useful tool in economics. Also, I think Austrian economics explains the time-value of money the best and in the most clear way, and I think that more mainstream schools of thought could learn a lot from the Austrian school.

Believe it or not, an English professor actually introduced me to Austrian economics. I had this English professor who had a Mises Institute coffee mug and a Mises totebag, so whenever she was writing down notes or while I was waiting for everyone else to be done during a test, I'd be staring at her totebag with the address "MISES.ORG" on it. I went to it, but I really didn't get what exactly it was all about, but eventually, after I got into libertarianism through Michael Badnarik's lectures on the Constitution did it all make sense. "Economics in One Lesson" is essentially what made me change my major from software engineering to economics. I'm glad I did.

If I don't blog regularly, it's because I'm a student and I need to up my grades, especially since I want to go to grad school. I want to go somewhere that will share my leaning, so my choice is George Mason to get a Master's and I want to go into the University of Chicago for a PhD. Yes, I know that Friedman said some pretty nutty things but nonetheless, I'd rather go somewhere that is respectable and the faculty has a similar leaning. So anyways, this blog will mostly of book reviews of economic books, maybe some book summaries for the classics (ala Robert Murphy's study guide for "Man, Economy, and State), but I'd count in the very least on some of my thoughts on economics.

So enjoy.