Posts tagged Economics

Re: @Nick Ford

Really? That sounds like an oddly restrictive picture of “free market practices” to me. Let’s say that, in a non-communal, commercially-oriented market, I decide to go into business selling pizza with a partner. I’ll do the cooking (I like to cook); she’ll do the delivery (I hate delivery driving; she likes that kind of thing). We’ll split up the administrative and bookkeeping tasks. Under the heading of the partnership, we buy a store, an oven, a delivery van, and some other equipment. Using the equipment that we bought jointly with our pooled capital, I make pizzas; she delivers them to customers.

Now, if we have in fact formed a partnership, then I cannot just individually turn around and sell the store or the oven out from under her. I can’t set prices to be just anything I want, either, even though the pizzas I cook are the product of my individual labor. That’s a business decision which needs to be made jointly, unless we agreed to give me unilateral control over pricing, which we might well not do.

Does that make our pizza partnership something other than a “free market practices”? If so, it would seem like your conception of the free market allows for almost none of the commercial (let alone communal!) activity practiced in any modern market to be counted as “free market practice.” Which seems odd. If not, then what’s the relevant difference between the joint ownership and joint decision-making involved in my partnership, and the joint ownership and joint decision-making involved in a voluntary commune, where the members of the commune agree to joint ownership of land, shops or large-scale capital goods — with similar obligations of joint decision-making?

Re: Against Fiscal Conservatism: On Inpropriating the Expropriators


Yes, Ron Paul gives his money back to the Government, because he’s demonstrating he’s fiscally responsible.

How does returning money back to the thief who stole it demonstrate fiscal responsibility?

It seems to me that if you want to demonstrate fiscal responsibility with stolen money, the way to demonstrate it would be to return it to the owner it was stolen from. Not to spend a bit off the top and return the rest to the thief.

By returning money to the treasury that is superfluous in his budget, is he actively contributing towards the excesses of Government vis a via his actions

Sure: he’s providing them with more money to use in violating innocent people’s rights. So am I, through taxation. But I don’t have a choice in the matter; I get taxed whether I want to be taxed or not. Ron Paul does have a choice in the matter: he has a budget, and he could do everything he can to make sure that the money gets returned to the tax victims it was extracted from, or at least gets spent on things which, while wasteful, do not involve committing violence against innocent people. Or he could turn it back over to Treasury, which will use it to commit violence against innocent people. Doing the latter doesn’t make the violence his fault, exactly — it’s the fault of the people who commit it. But he would be doing more good for the world if he piled up all the surplus money on the National Mall and set it on fire than he does by returning it to the federal government for their future use.

Ron Paul believes the same thing, which is essentially why he does it? I get what you’re saying, I really do, but I just don’t think this is a valid reason to be opposed fiscal conservatism, because fiscal conservatism isn’t causing the problem, it’s actually the opposite–it’s antithetical to out of control government spending

If you think that “out of control government spending” is my primary concern here, then I don’t think you’ve really gotten what I’m saying. My point is that government spending is a secondary issue. The primary issue is government violence.

what’s the alternative?


I’m not really interested in figuring out a way for Dr. Paul to keep his government job. If there isn’t any way for him to honestly handle the loot that he’s been allocated, then he ought to resign. That said:

Give it away? Keep it?

I’d prefer he give it away to a randomized selection of the tax victims it was stolen from. (Returning the money is the only honest thing to do when you come into some money that you know to have been stolen from living victims who you could identify and return the money to.) But, failing that, keeping it and using the surplus to buy beer and pizza for his office staff would still be preferable to returning it to the Treasury.

Re: Sumner on the Neoliberal Revolution

Quoting Scott Sumner:

It doesn’t matter whether Chile grew faster or slower after 1973, what matters is that after 1973 Chile became the most successful economy in Latin America.

I’m sure that economy was successful for somebody. For example, there was tremendous growth in the electrical services sector.

John V:

You can’t possibly agree with part of what Pinochet did without the other parts!

Sumner wasn’t talking about “part of what Pinochet did.” He made a global statement about the Chilean economy as a whole.

I think that if it were prominent industrialists who were being left in ditches with their faces hacked off, instead of unionists, Sumner might be more hesitant to call that a “successful economy,” or to treat what happened as progress in the direction of economic liberalism. Comparative GDP figures notwithstanding.


That a wide variety of governments under a wide variety of political circumstances all implemented similar pro-market reforms in the last few decades of the 20th century is a point that is relentlessly ignored by those … who want to say these reforms were everywhere put in place in defiance of popular opinion.

That, or they believe in a theory of politics which holds that decision-makers in a wide variety of governments in a wide variety of political circumstances are operating within an incentive structure which isn’t always closely aligned with enacting policies that reflect “popular opinion.”

Which may be a good thing or a bad thing, in any particular case. Popular opinion is sometimes right and sometimes wrong. But I do think that public choice economics has something to say about arguments which make a naive inference from the behavior of governments to conclusions about the majority opinion of their alleged constituents.

Re: Against Fiscal Conservatism


This suggests it is a matter of principle,

No doubt. But what’s the principle?

If it’s something like “The U.S. government should be as efficient as possible in spending what it steals from innocent victims,” I can’t see why that principle is worth defending or acting on. The primary problem isn’t profligacy; it’s the stealing.

The money he sends back only delays the theft and destruction that has to occur for the government to continue

No, it doesn’t. It is not as if the IRS is going to collect $100,000 less in taxes or the Treasury is going to issue $100,000 less in government bonds thanks to the windfall. It’s not as if government returns surpluses back to taxpayers when they have surpluses; they just look around for new things to spend the extra money on.

Well I didn’t see this was just for his office budget, but if he inflated the value of staff labor just because he had extra money lying around he would be abandoning his market principles.

What market principles? In my view, there is no way whatsoever to live up to “market principles” when you are distributing stolen loot. All government spending is by definition a command economy, not a market economy, and no price that Paul chose to pay for labor or goods in his office budget, whether small or large, would be a “market” price, because (as Mises teaches us) there’s no way for a command economy to approximate market outcomes.

but you’re acting like what the Fed spends money on is worse than what Paul would spend money on locally

The money went to Treasury, not to the Federal Reserve. In any case, what the U.S. government spends money on is definitely worse than what Paul would have spent it on locally. Paul’s spending would merely be wasteful. The U.S. government’s spending is actively evil and destructive; it goes towards imprisoning, surveilling, hurting, maiming, and killing innocent people, both within the United States and abroad.

Paul spending money that is neither his nor should be spent is central planning as well.

Yes, I agree. There’s no way around central planning when government allocates money. All you can do is get the money away from government as quickly as possible — and, preferably, try to get it into the hands of some those net taxpayers it was originally stolen from. But that’s precisely why Paul shouldn’t give the money back to Treasury for more government allocation.

But I get what you’re saying and it’s not a bad thought, he could have paid himself the $100,000 and spent it at every business in town or something…

I think that would be better than giving it back to Treasury, but the best thing for him to do would be to just give it away directly to randomly selected net taxpayers without demanding any consideration in return.

@Sir Elliot:

He can’t keep the money. If he doesn’t use it, it must be returned to whatever general office staff budget is in place, since the books have to be balanced out.

I’m aware. What I’m suggesting is that it would be better for Ron Paul to use it on something wasteful but non-destructive, rather than giving it back to the U.S. government, which will use it for something both wasteful and destructive.

Maybe if the featherbedding gets too egregious, it would make it difficult for Ron Paul to keep his government job. But then, I’m not especially interested in figuring out ways to help Ron Paul keep his government job.

Maybe I’m not understanding OP’s point?

Maybe not. If it helps, my primary point is that it’s misleading (and indeed stupid, if not dishonest) to describe paying $100,000 back to the U.S. Treasury as “paying back the American people.” What it is, is paying back the American government, which is a different entity, and one which happens to be antagonistic towards, and parasitic on, the “people” it claims to rule.


That’s a pretty massive leap in logic to suggest that Ron Paul’s fiscal conservatism is aiding bankers.

I didn’t say it’s aiding bankers. I said it’s aiding the U.S. government. (The U.S. government, of course, does aid bankers — hence my mention of them — but it also does lots of other things. Like blowing up Afghan children.)

So in an essence, you’re faulting Ron Paul for sticking to his ‘guns’ (Being an honest politician).

No; I’m faulting those who claim that giving stolen money back to the pirate who originally stole it is a form of “honesty.” There is no “honest” way for any politician to spend tax monies; the only thing to do is to get them out of political hands.

Re: Mutualists – FR33 Agents – Comments Wall

Cal: The attempt does not, at all, in any way, presuppose anything about the fundamental nature of the formation of value.

I didn’t say that your attempted distinction presupposed something about “the fundamental nature of the formation of value.” I certainly realize that Mises didn’t say anything in the passage I quoted about value-formation, but then, neither have I. What I said was about Mises’s view on what it means to say that Jones economically values X. Not his view on how Jones forms that value for X.

Cal: Mises is not saying value is comparative, he is saying that it is revealed comparatively (ordinally) and subjectively.

You’re asserting this, but where’s your argument? I gave you specific passages of text in which Mises straightforwardly says that for the purposes of economics value does not exist independently of the revealing of comparative preferences in action. Not that it isn’t known by third parties; that it has no independent existence. For Mises, there just is nothing for economics to talk about separate from actual or hypothetical revealed values. (Which, necessarily, express a consistent ordinal ranking. Among other things.) Of course, you can agree or disagree with Mises’s views about the conceptual analysis of value — it certainly sounds like you are more interested in the sort of psychologistic perspective that Mises rejected — but then you should perhaps speak only for yourself, and not for “all modern economics,” or for all proponents of the subjective theory of value.

As for explaining marginalism 101 to me, you can save yourself the effort. I already understand how that works. My comments here have nothing to do with rejecting marginal utility theory.

Cal: No, Marja, labor-entailment does not necessarily affect subjective valuation.

  1. She didn’t say it “necessarily affects subjective valuation.” She said it does affect it. Note the difference in modality. One can correctly assert that a general tendency obtains without claiming that it is a necessary or conceptual truth.

  2. However, I will also note that, given the meaning of the term “cost,” basic requirements of rationality do require that costs have a certain bearing on value-ordering. (For something to count as a cost is for it to lower a state of affairs in an actor’s preference order, ceteris paribus. If it did not, then it must not really be a cost for that economic subject.) Hence there are at least some factors that necessarily affect subjective valuations — among them costs — because they are themselves already part of subjective valuations, and valuations, to count as valuations, must be part of a consistent ordering.

Re: Mutualists – FR33 Agents – Comment Wall

Marja: The first meaning [of ” to value”] being to admire, or to appreciate [sans the price-finding meaning of appreciate!]… The second meaning being to compare one good to another.

Kyle Bennett: Marja, values are not ordinal (nor are they cardinal), they are non-numerically defined. As Cal said, they are ranked ordinally only when comparisons become necessary. How one does that is purely subjective and not subject to external analysis…. There’s only one meaning relevant to subjective value economics. …. Your second meaning is not in any way, shape, or form part of valuation under the STV.


Could you tell me what version of subjective value theory you are reading that tells you that the concept of “value” in marginalist economics is not comparative? Looking briefly at a couple of sources, I find that Ludwig von Mises tells us (in Human Action I.IV.2 that “one must not forget that the scale of values or wants manifests itself only in the reality of action. These scales have no independent existence apart from the actual behavior of individuals. The only source from which our knowledge concerning these scales is derived is the observation of a man’s [sic] actions. Every action is always in perfect agreement with the scale of values or wants because these scales are nothing but an instrument for the interpretation of a man’s [sic] acting.” Earlier, we are told (in I.I, “Acting Man” [sic] that action is always an expression of preferences (hence necessarily comparative) — that “Acting man [sic] is eager to substitute a more satisfactory state of affairs for a less satisfactory. His mind imagines conditions which suit him better, and his action aims at bringing about this desired state. The incentive that impels a man to act is always some uneasiness ” Von Mises argues that only this sort of comparative valuing (as opposed to other things which you might call “valuing,” such as idle wishes or moral doctrines) is relevant to economics, since economics is the science of human action.

Similarly, at the beginning of “Toward a Reconstruction of Utility and Welfare Economics,” Rothbard tells us that “Individual valuation is the keystone of economic theory. For, fundamentally, economics does not deal with things or material objects. Economics analyzes the logical attributes and consequences of the existence of individual valuations. … But the essence and the driving force of human action, and therefore of the human market economy, are the valuations of individuals. Action is the result of choice among alternatives, and choice reflects values, that is, individual preferences among these alternatives.” [emphasis mine]

Whatever valuation in Marja’s first sense may be, it is not the sort of value that prominent subjectivists have thought to be relevant to economics. They have, as far as I can tell, generally or exclusively argued that Marja’s second meaning of “to value,” not the first, is what’s relevant to the economic study of human action.

Re: Zinnconsistent

vidyohs: I guess I have to spend more time with Lysander, as so far in my readings I haven’t got to the part about him being an anarchist, or least I have come to that interpretation yet. . . . Note I didn’t say you were wrong about Lysander, I just said that, in my quite likely more meager reading of Lysander, I had not made that interpretation. Now that you’ve suggested it, I’ll look closer.

Well, from the sounds of it you’ve already read No Treason. If you haven’t yet gotten the anarchistic implications of Spooner’s view, you might consult his later books, in which he most clearly argues that he views any form of government whatever as illegitimate, e.g. his “Letter to Thomas F. Bayard: Challenging his right — and that of all the other so-called senators and representatives in Congress — to exercise any legislative power whatever over the people of the United States” at or his short book “Natural Law; or The Science of Justice: A Treatise on Natural Law, Natural Justice, Natural Rights, Natural Liberty, and Natural Society; showing that all legislation whatsoever is an absurdity, a usurpation, and a crime” at . Spooner makes it pretty clear there.

I know that workers at various times have risen up and seized the farm from its owners, but my point was that in most cases they probably didn’t get a whole hell of a lot from it, hardly worth the effort unless life in general where the farm is located is also just a living hell for everyone. I guess I am saying that in my view, and in general, while a farm may produce a tidy wealth for one man, typically that wealth divided amongst many men isn’t going very far.

Well, um, in situations where peasants get together and seize control over farms, it has typically been the case that they were seizing control over farms that they were already working on as their primary means of subsistence. The difference is that before they had to work according to the requirements set by a government-privileged landlord, and to turn a hefty share of the fruits of their labor over to him, whereas afterwards they didn’t have to do that. They were already surviving on shares of the income generated from a single (typically very large) farm or plantation; the difference is that, after the expropriation, the shares they got were no longer reduced by the leeching of government-appointed tax farmers and landlords. (* Government-appointed because the landlord typically owed his control over the land to a grant from the Crown or the State based on nothing more than the naked exercise of government power and privilege (to conquest and feudalism in Russia or France; to conquest and colonialism in European-colonized territories in Latin America or Africa).

Re: Anarcho-Capitalism Is Not A Form of Libertarian Socialism


I’m late to this party, but I’ve been late to a lot of parties lately, and am trying to catch up, so….

  1. This is a really excellent and thoughtful post. Thanks for putting it out there.

  2. Of course you’re right that there are substantive, not merely rhetorical differences between the norms advocated by most libertarian socialists (as the term is conventionally understood) and anarcho-capitalists (Rothbardian or otherwise). And that these differences include difference over norms of just enforcement. (Not just what free associations would be best to make but also what even counts as free or unfree association.) If Spangler has leaned a lot on questions of rhetoric and semantic distinctions, I hardly think it’s because he wants to argue that there is no substantive difference. It’s because he wants to do a better job than the conventionally-drawn subcultural battle-lines have done so far in showing where those substantive differences really are. And (given Brad’s usual orientation towards activism in particular) I expect that a lot of the upshot is supposed to have to do with where the opportunities for alliance and cooperation in spite of real differences might be.

(In particular, if someone tends to believe, as many anarcho-capitalists do, that conventionally pro-capitalist Constitutionalists or minimal-statists are closer to the anarcho-capitalist position than conventional libertarian socialists are, then that’s probably one of the things that might need rethinking. Not because anarcho-capitalists and conventional Red-and-Blackers have the same conception of freedom or domination, but because anarcho-“capitalists” and limited-governmentalists don’t have the same conception either. And I expect that Brad thinks — anyway, I know that I think — that, purely verbal agreements and purely verbal conflicts to one side, when allowed free rein and carried through consistently, the syndicalist or anarcho-communist or anarcho-collectivist or mutualist conceptions of these terms, and the anarcho-“capitalist” conception, are plausibly closer to each other in theoretical structure, and definitely closer to each other in practical political effects, than either the libertarian socialist conception is to state socialism, or the anarcho-“capitalist” conception is to minarchism or Constitutionalism.)

  1. In response to Alex Peak’s comments on economic panarchy, you write “Spangler isn’t exactly talking about that either – he’s claiming that there’s no meaningful distinction between the groups, and I explained why I think that this is misleading.” I agree that Alex’s comments were off to one side of your concerns and of Brad’s original point. But I don’t know why you read Brad as “claiming that there’s no meaningful distinction between” libertarian socialists and anarcho-capitalists. As I read Brad’s posts, his point was that (consistent, agoristic, whatever) Rothbardian anarcho-capitalism is a species of the genus “libertarian socialism.” Certainly he explicitly says that there are lots of other kinds of socialists who are not left-Rothbardians; I think his argument also allows for there being lots of other kinds of libertarian socialists who are not left-Rothbardians. It’s a subset relationship, not an identity. The point as I understand it doesn’t have anything to do with claiming that Rothbard’s and Kropotkin’s versions of socialism are fully compatible, let alone identical; it has more to do with convincing people who are Rothbardians that they are one among many kinds of libertarian socialists — not really supporters of capitalism (as Brad thinks they should understand the term). Which presumably will have some impact on how they position themselves in debates about the political-economic status quo, and in their thinking about their political relationship to other anarchists, on the one hand, and “libertarian” state-capitalists, on the other.

  2. You write: “Part of why I think that Spangler’s claims are misleading is that he seems to think that if you think that the state intervenes to uphold an unjust allocation of property and that the consequences of abolishing the state naturally lead to a redistribution of property, this makes you a libertarian socialist, but that’s not what libertarian socialism is defined by. It involves fairly specific notions about property at a different conceptual level, and it doesn’t entail a reduction of the issue to the pre-existance of a state.”

That’s a strong definitional claim, but I’m not sure where you’re getting your definitions of “libertarian socialism” from. Apparently not from Benjamin Tucker, who called his ideas both libertarian and socialist, but was also very emphatic that he didn’t share the “fairly specific notions about property” advanced by, say, Kropotkin or Bakunin. (Whether or not he was on the same page as Proudhon depends on how you read Proudhon; which is of course a contested issue within libertarian socialist thought.) People who nowadays call themselves “libertarian socialists” do tend to agree with Kropotkin more than they do with Tucker, but that seems like variation and changes in majority opinion amongst socialists; not a change in the boundaries of who counts as a socialist and who doesn’t. If Tucker is not going to be counted as a libertarian socialist, then I’d need to know why not; certainly he considered himself one and was commonly accepted as one at the time. If he does get counted, then I’d like to know what definitional criterion having to do with “fairly specific notions about property” would consistently accept him but turn out consistent Rothbardians. If there isn’t one, then it seems like your definitional criterion is either too broad or too narrow to consistently line up with the paradigm cases. In which case you would need a different criterion.

Re: The Great Ideas Are Simple

Kevin Carson:

Similarly, the labor theory of value is based, not on an inductive generalization from the observed movement of prices, but on an a priori assumption about why price approximates cost, except to the extent to which some natural or artificial scarcity causes deviations from this relationship. (Kevin Carson, Studies in Mutualist Political Economy, pp. 70-73)

J. Neil:

Translation: Kevin Carson has some blue-sky theory out of his ass — without looking at what happens in the real world

Now we have J. Neil Schulman, who claims to be an admirer of Ludwig von Mises, objecting to the use of aprioristic economic theory as “blue sky-theory out of his ass without looking at what happens in the real world.” Awesome.

Ludwig von Mises:

Consequently, a proposition of an aprioristic theory can never be refuted by experience. Human action always confronts experience as a complex phenomenon that first must be analyzed and interpreted by a theory before it can even be set in the context of an hypothesis that could be proved or disproved; hence the vexatious impasse created when supporters of conflicting doctrines point to the same historical data as evidence of their correctness. … Disagreements concerning the probative power of concrete historical experience can be resolved only by reverting to the doctrines of the universally valid theory, which are independent of all experience. Every theoretical argument that is supposedly drawn from history necessarily becomes a logical argument about pure theory apart from all history.

(Ludwig von Mises, “Epistemologial Problems of Economics”, Ch. 1, s. II.2)

J. Neil:

If Kevin’s theory could accurately describe price fluctuations in a free market, Kevin wouldn’t be making his living emptying bedpans for a living. He’d be a filthy rich Wall-Street broker.

  1. Again. We don’t live in a free market.

  2. And, now we have J. Neil Schulman, who claims to be an admirer of Ludwig von Mises, apparently objecting not only to the use of aprioristic theory in economics, but also believing that an accurate economic theory ought to produce quantitative predictions. Really, dude?

Do you know anything in particular about Ludwig von Mises’s economics? You just angrily dismissed to two of the three central ideas that von Mises is known for. (At least you didn’t bring up Kevin’s work on calculation problems in big corporations, which would have given you an opportunity to angrily dismiss the third.) All of which indicates to me that you are either ranting in utter ignorance, or else you just don’t give much of a damn about what’s true and what’s false, as long as you get to slam Kevin Carson in the process.

In either case, you ought to be embarrassed.

Re: The Health Care Debate Has Been “Meaningful”? It Just Ain’t So!

John: If it was so that medical care and mutual aid was so easy to come by, then why was their a perception that the poor and elderly were dying sick in the streets?

It depends on what period this “perception” is supposed to apply to.

  1. If you’re referring to the heyday of the mutual aid societies in the late 19th century through the 1910s, the answer is simply that this “perception” exists because statists often promote bogus perceptions of crisis without much supporting data, in order to put over the need for their desired programs with the politicized public. Some actual data on the circumstances faced by the poor and elderly, rather than impressionistic and sensationalistic “perceptions” would be useful here. I have some actual data on how available these arrangements were to ordinary workers, which I present briefly in the article — typically between 20% and 50% of workers in major urban areas in English-speaking countries were covered, and these numbers were rapidly rising in the 1900s, prior to the political campaigns to eradicate the associations and raise medical prices. If you want a fuller presentation of the data, I recommend David Beito’s excellent book, From Mutual Aid to the Welfare State, especially Ch. 6, “The ‘Lodge Practice Evil’ Reconsidered.” If you have actual countervailing data that tends to cut against the conclusion I draw, feel free to present it, but if what you’ve got is just ill-specified “perceptions,” well, so what?

  2. If, on the other hand, you’re referring to the decades leading up to the passage of major government entitlement programs for the “poor and elderly” — programs like Social Security (1935) or Medicare (1965), then you need to keep in mind that these programs were introduced and rolled out decades after the non-corporate, grassroots, free-market alternatives that I discuss in the article had been deliberately dismantled by politically-driven campaigns — coordinated mainly by establishment medical guilds, using their power over government licensure of practitioners as their primary means of enforcement — to drive them out. (The blackballing campaigns against lodge-practice doctors in the U.S. ramped up in the mid-1910s and succeeded in forcing dramatic declines in lodge practice starting in the 1920s. See Beito, p. 124 et seq.) So, to the extent that government could point to a crisis of health care accessibility or affordability for the poor and elderly, just before the New Deal and Great Society transfer programs were created, it’s because government was pointing to a situation where the kind of grassroots, consensual social organizations that had made health care accessible to the poor and elderly had already been rubbed out by government in the decades prior. Once again, an example of government breaking your legs, then handing you crutches, and telling you, “See, without me you couldn’t even walk!”

Also, secondarily, because, insofar as there was a genuine crisis, it was, in no small part, the direct result of the non-corporate, grassroots, free-market alternatives that I discuss in the article having been deliberately dismantled in the decades prior. The grassroots voluntary mutual aid associations that I discuss in the article flourished in the late 19th century up until the 1910s; in the 1920s,

By the time that government programs such as Social Security (1935) and Medicare (1965) were being proposed and rolled out, the “lodge practice” arrangements and similar mutual aid associations had already

John: However I am not ready to drink the cool-aid …

I don’t want to be a dick about this, but can you not use that phrase when what you mean is “I don’t accept your delusional beliefs?” It’s an offhand jokey reference where the “punchline” is the murder of 276 children, and the senseless deaths of almost 1,000 people, just 30 years ago. Jokes like that suck.

John: … and say that we need to rid ourselves of the FDA or of medical accreditation. Kevin Trudeau is a salesmen of alternative cures for a variety of ailments [etc., etc.]

The existence of quacks and dangerous drugs today, in spite of already-existing heavy government regulation, seems like an odd argument for relying on government regulation as a means of getting rid of quacks and dangerous drugs.

In any case, the free-market position is not that we need to get rid of drug testing or medical accreditation. The free-market position is that the state should not force any particular scheme for drug safety or efficacy testing, or for medical licensure, on you or me without our consent.

The important thing, from the standpoint of individualist principle, is that, if you want to pay for snake oil without any consideration of demonstrated effects, you should be free to do so. And if I want to spend money only on drugs that scientific research has demonstrated to be safe and effective, or on doctors who have garnered the recognition of their peers as honorable and competent professionals, then I should be free to patronize only those that consensual consumer-protection outfits and professional medical institutions have approved.

In a freed market, there will certainly be both drug testing and medical accreditation; it will simply be drug testing and medical accreditation that relies on informed choice, or education and persuasion, rather than on the force of the law. How do I know that such institutions will exist? Well, of course, because they already exist, or have existed in the past. Before the modern prescriptions system was created in 1951, the role of objective watchdog for drug safety and efficacy in the U.S. was handled by the American Medical Association (which maintained a private drug-testing laboratory and published annual guidebooks of drugs that received their seal of approval). They provided a system of voluntary, independent oversight that worked — until government “fixed” it.

Similarly, nobody that I know of is proposing that existing methods of accrediting doctors or other medical practitioners be abolished. Where would you get such a ludicrous notion? There’s already plenty of non-governmental means of accrediting doctors — among them, well, the doctoral degree in medicine, which is issued by medical schools and still would be issued by medical schools in a freed market, based on standards of training and mastery. Similarly for nursing degrees, certification by professional associations like the AMA, etc. What radical individualists oppose is not accreditation, but state licensure laws, which add an unnecessary layer of politically-directed licensing restrictions on top of already-existing, voluntary professional standards and certifications within the medical profesion. The problem with this is, first, that they are coercive, and hence violate the rights of patients and practitioners; and, second, that the standards for governmental licensure are imposed through political decision-making and legislative fiat, rather than being determined through open debate and consensus over best practices within the health care market.

As a result, they often use the force of the state to shut down debate and impose requirements that have nothing to do with medical fact and everything to do with political pull — as when state licensure laws were used to attack feminist women’s health centers, midwives, or other alternative medicine providers, even without any evidence that any identifiable patients had been harmed or were even dissatisfied with the service. Or, to return to our original topic, when state licensure laws were used to blackball doctors who were providing perfectly adequate care, but who were seen as “underselling” (that is, providing competent care at costs that were affordable by ordinary working people) during the political campaign against lodge practice in th 1910s and 1920s.

John: The truth is that of all the industrialized countries, America is the only one with a private for profit system,

Didn’t you read the article? “America” doesn’t have a private health care system. It has a government-imposed health care system. The market is dominated first, by direct government control, and, second, by the operations of a handful of corporate privateers who depend entirely on a combination of government subsidy and government-imposed barriers to entry for their day-to-day operations and long-term strategy.

A freed market in health care would look completely different from the “system” that you and I face today.

John de Laubenfels: Would you give companies that research and produce new drugs NO protection from competition,

You are correct that I do not believe that protectionism for pharmaceutical corporations is an adequate argument for imposing government-granted monopolies.

If you want to “protect” pharmaceutical companies’ existing business models, do so on your own dime by boycotting competitors and directing your money to first movers. (Hey, it worked for Tolkien.) But I’m not nearly so invested in protecting current business practices in the pharmaceutical industry, and I’d rather that you don’t use government monopoly to force your protections on my pocketbook.

John de Laubenfels: starting the moment someone gets ahold of the new drug, analyzes it, and creates a knockoff? Nothing for all the money the original company has spent doing trials? I don’t think that such a system would be either fair or likely to motivate companies to produce new, life-saving drugs.

On the cost of doing drug trials, of course, in the same sentence where I advocated the abolition of patents I also specifically stated that I supported the abolition of the FDA, which would dramatically reduce the compliance costs involved in developing new drugs and bringing them to market. So I don’t know what you’re referring to here. (Of course, if companies want to do internal testing they can do so, but in voluntary independent oversight systems, the costs of running trials are typically assumed by the independent watchdog organizations themselves, as part of their institutional charter.)

However, if it turns out that it’s no longer profitable for big, for-profit corporations to do medical research, then — horrors! — it may just turn out to be the case that medical research has to be carried on by non-corporate or not-for-profit institutions. But I hear we have some of those. And I’m not typically impressed by broken-window arguments that fail to take any account of the value of the unseen alternative uses to which money might be put, if not for the coercive government intervention.