Capitalism v The Free Market

Economic Liberty Lecture Series: Sheldon Richman from The Future of Freedom Foundation on Vimeo.

Bryan Caplan responds:

If Sheldon were merely saying that libertarians' noun of choice should be "the free market," rather than "capitalism," he'd have a decent case. But for libertarians to reject "capitalism" as an alternate noun is overly defensive - and to announce that we "oppose capitalism" is completely confusing.

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Stephan Kinsella responds:

I have myself for years now preferred the term anarcho-libertarian instead of anarcho-capitalist, mostly because libertarianism is about more than just free markets. But to the extent capitalism means the private ownership of the means of production–and I think this is a defensible meaning still–it is of course libertarian. We can expect any advanced libertarian society to be “capitalist” in that it would have an industrial, productive economy where the means of production is privately owned, characterized by the division and specialization of labor.

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Caplan Book Club: For a New Liberty

Bryan Calpan is starting a book club.

Is there any interest in having an EconLog Book Club on Murray Rothbard's For a New Liberty? I've got a lot of history with this book, which is now available online. I read it about ten times between the years of 1989 and 1994, and it had a tremendous influence on my thinking. But I haven't read it for fifteen years. Now I'm curious to revisit it and see how well it holds up.

Even if you find the anarcho-capitalist substance of the book noxious, it's hard not to admire the style. For a New Liberty is ridiculously well-written, so whatever you conclude, you'll enjoy the book club experience.

Who's in?P.S. Glad to see there's so much interest. I suggest we start discussing Chapter 1, "The Libertarian Heritage: The American Revolution and Classical Liberalism" on January 20.

My thoughts: This could be interesting for those interesting in learning more about liberty and individual freedom.

More info here.

Herbert Hoover was an Interventionist

from Bryan Caplan

I'm going to dissect one of Hoover's last major speeches before the 1932 election - his November 5, 1932 address in St. Paul. In this speech, Hoover gives two long lists: The first about "our long-view policies to cement that recovery and to stimulate progress in our country for the future", the second about "the measures, lack of measures, or destructive measures proposed by our opponents."In this post, I'm going to review all 21 items on Hoover's list of what he did right; in the next, I'll turn to all 19 items on his list of what his opponents did wrong. Ready? OK, here are the 21 policies Hoover wanted the whole country to know about

read the list here

Bryan Caplan on the Gas Tax Holiday

Most economists oppose the Clinton-McCain gas tax holiday because they can’t see how consumers will benefit. In fact, “most” is an understatement; when challenged to name one economist willing to back her plan, Mrs. Clinton’s response was to disparage the whole profession.

Why are economists so opposed? In the short run, the supply of gasoline is basically fixed; it takes a while to build a new refinery. The demand for gasoline, in contrast, is more responsive to price; we’re already seeing greater use of public transportation and brisk sales of fuel-efficient cars. When you combine fixed supply with flexible demand, it’s suppliers, not demanders, who pocket the tax cut. That’s Econ 101.

So far, I pretty much agree with the consensus. Economists might overstate the rigidity of supply — it’s possible that eliminating the tax could spur producers to find a way to squeeze out a little more gas — but they’re probably right that the Clinton-McCain proposal will not shrink the price at the pump. Nevertheless, I think it’s an idea worth supporting. In fact, I’ve got two arguments in favor of it, though I doubt that either candidate will want to repeat them in public.

The first is that the tax holiday is a relatively cheap symbolic gesture that makes truly bad policies less likely. The main causes of high gas prices are probably factors beyond our control, like rapid growth in China and India and low real interest rates. But voters don’t want to hear this; they want politicians to “do something!”...

Second, even a “giveaway” to the oil industry sets a positive course for the future. During the last crisis, the industry was a scapegoat for scarcity. Politicians scrambled to stop oil companies from profiting from the crisis, even though temporarily high profits end shortages by giving businesses an incentive to figure out how to increase output...

read the entire essay