Here is the current state of it, just for fun (hopefully I didn't write anything insane in here):
# Outline
- praxeology - study of the logical implications of human action.
- knowledge acquired from observational data is theoretically falsifiable or disprovable. a posteriori truth claims
- the natural sciences employ induction. "causal inference". general laws inferred from tests and observation
- a priori truths: more like tautologies.
- when X and Y engage in voluntary exchange, they both must expect to profit from it and they must have reverse preference orders for the exchanged.
- analytic/synthetic propositions
- analytics claims refer purely to definitions. "all bachelors are unmarried".
- synthetic truths reveal something beyond inference from definitions. "children prefer candy to vegetables". (non-tautologous)
- **knowledge can be synthetic and a priori**. This is the major unlock.
- "Man acts" is synthetic a priori knowledge. True by logical necessity, yet beyond mere definitions. The **action axiom**.
- An attempt to deny this claim affirms it in the course of denying it, because a man speaks the denial and denial is a kind of action.
- denying the truths of praxeology would require:
- a goal
- requires means
- excluding other courses of action (opportunity cost)
- incurring costs (time taken to deny)
- risk of achieving or not achieving goal - thus, profit or loss
- It is impossible to deny the above because doing so affirms this package of concepts.
- denying that language has meaning places you in a performative contradiction
- Truth Validity ("saying something is true") is an equally impossible concept to deny (to do so would require possession of knowledge of truth and validity). So implied in the meaning of truth-validity are
- The logical law of existence ("something exists")
- Identity ("things have properties that distinguish them from other things")
- Contradiction ("because things have particular identities, a thing cannot exhibit mutually exclusive properties". "cannot be X and Not X simultaneously")
- action-categories of Means and Ends contain Kant's Time, Space, and Causality
- an end is accomplished only after a means is employed => time elapses
- action must take place _somewhere_ (if even just standing room) = space
- ends are only met as the effect of some deliberate means => causality
- Positivist's objection to praxeology
- says: the only two possible kinds of truth are analytic definitions (a priori/tautologies) and tentative empirical hypotheses (a posteriori). This perspective essentially states that certainty cannot be claimed about anything unless it is definitional, which can only involve linguistic conventions. a priori truths are free of content in regard to the reality of the world. nothing from the a prior realm can give new meaningful information in the a posteriori realm.
- Response: the claim that "A priori knowledge can only be tautologous" either is tautological and tells us nothing new, or only a hypothesis, which may be falsified in an experiment. The only salvage is to concede that their claim is a synthetic a prior one, which is what they are denying.
- Action-based, purposeful-behavior epistemological framework grounds economic theory
- the desire for many resources exceed their availability, so potential for interpersonal conflict arises. What is needed is an objective basis for reconciliation if we want to avoid "might makes right".
# Private Property
- "This is not to say the adoption of property norms would immediately eradicate all conflict. Rather, it would serve as the logically justified foundation from which to arbitrate inevitable disputes over the control of scarce goods."
- one's body
- only the individual has exclusive right to employ his body as he sees fit
- as a norm for conflict avoidance
- ownership
- meaning: have final say over the employment or use of owned thing
- so long as employment doesn't entail initiation of uninvited physical interference with property of another
- secured by:
- original appropriation (mixing one's [[labor]] with an unowned [[economic good|good]])
- "homesteading"
- the laws of physics preclude there being two "first users" in the same space at the same time. thus it is a useful foundational norm to avoid conflict.
- a mere verbal declaration doesn't suffice (or else everyone could do this in an infinitely unresolveably way)
- voluntary exchange
- property rights are the framework for justification of force. if you have a right against coercion or murder, it implies the right is defensible by one's own use of force.
- "if my use of something X precludes any other use of that same something X, then X is rivalrous. Conversely, if my use of something X does not preclude any other use of X, and if my use of X does not subtract from any future use of X, then X is not rivalrous, and could therefore never achieve the status of “property.”"
- "non-scarce status might apply to many things but it always applies to non-finite things, that is, goods that can be copied without limit, with no additional copy having displaced the previous copy and with no degradation in the quality of the copied good from the original good."
- Intellectual Property
- the enforcement of IP rights results in delimiting of someone's rights over his own legitimate and scarce property.
- IP covers non-rivalrous goods and therefore not valid property
- "If someone profits from my idea without my permission, then the money he made is essentially money he has stolen from me! This addition to supply thus renders him unable to sell his music or invention for as much as he would have otherwise been able. His belief that this unauthorized reproduction and sale is tantamount to theft would suggest that he owns the buyers’ money before they hand it over to him. This is, of course, fallacious reasoning"
- and Labor:
- "one does not “own” his labor, for labor is just something you do and not a thing to be owned. It is true you do own your body, and you can use your body for labor if you wish, but it is the body that is owned, not the labor. Thus, what grants one the right to sell his services is the ownership he has over his body not his labor"
- creation itself is not sufficient in establishing property rights. For example, if I go to your house and use your ingredients to create a cake, I do not thereby own the resulting cake
# Norms, Ethics, Rights
- purpose: to avoid otherwise unavoidable conflict. thus, a good ethic or norm educes conflict and a poor one increases it.
- and [[#Private Property]] rights must be specified in time and to individuals:
- a person must be able to act, use, produce and consume goods straight away in order to survive (which is prerequisite to arguing for anything). if he had to wait for agreement with unspecified others, he won't be able to survive.
- in universal co-ownership, everyone everywhere would have to agree on the use of all property before anyone can use anything. this would result in everyone dying out and is therefore not a human ethic or norm.
- "Now that the alternatives have been shown to fail the justification schema, let us see if the acts of acquiring property via original appropriation and voluntary exchange suffer the same or a different fate: 1. Are they universalizable? Yes, the requirement for one to use either original appropriation or voluntary exchange to justly acquire property applies to all moral agents. 2. Are they practically achievable? Yes, everyone has the capacity to acquire property over scarce goods through original appropriation or voluntary exchange. 3. Are they compatible with the necessary presuppositions of argumentation? Yes, in fact they are corollaries of such presuppositions"
- rights vs morals
- the Libertarian Ethic applies to beings capable of argumentation or discourse
- "One of the shocking implications of the Libertarian/Private Property ethic is that it is not logically compatible with the State"
- the State’s status as “ultimate arbiter,” and the means by which it is enforced, are illegitimate and unjustified
- because taxation amounts to taking one's property against his will via aggressive means, it must be considered theft.
- ![[states make land synonymous with state participation]]
- for rights to exist between beings, there must be reciprocity
- requirements for a valid or justified ethic:
- it must apply to all _moral agents_ at all times and all places
- it must be practically achievable
- it cannot come into conflict with other norms which must be presupposed in the act of discourse
- Rights, cont'd
- Positive right: for a positive right to be fulfilled, someone is required to take action in order to fulfill it. "if I had a right to healthcare, this would oblige someone else to provide this service to me or to at least provide me with the funds necessary to purchase it".
- necessarily conflict with private property rights
- Negative right: preclude others from taking certain actions. requires no action taken on the part of anyone else
- does not conflict with private property rights
- conflict avoidance
- allows for production of wealth
- less conflict, lower time preference
- contracts. "to do" and "to give".
- legitimately enforceable contracts:
- if breached would entail a NAP violation
- involve transfer of title to property (which must be in possession of the promisor)
- the buyer of future goods bears the risk of default
- if a debtor doesn't have money to pay back the loan, cannot be violently punished. debtor is not causing a rights violation - the creditor volunteered to the risky promise of future goods
- contract fraud is theft. if we agree to trade apples for money, and you give me wooden apples for my $5, you've stolen from me. if you give me real apples you stole from X, now X is going to come after me to get his apples back. since you didn't have the apples when the contract was signed, it was illegitimate.
- the State's "social contract" is similarly illegitimate. it must acquire funds before providing services, and the funds are stolen
- "aggression": the initiation of uninvited physical interference with the persons or property of others, or threats made thereof
- Action: if one acts he necessarily must thing it's going to bring him to a more preferable state of affairs. if he felt a given action would take him further from preferred state, he would abstain or act differently.
- Value
- all value is necessarily subjective. the fact that voluntary trade occurs proves this. if we have two different things and we both want to trade them, we each must value the other's thing more than the other does.
- value subjectivity includes a single person - opportunity cost varying from time to time in the same person.
- NAP validity
- Argumentation is fundamentally non-coercive, and implies the belief that some things are true and argumentation _alone_ can reveal it / convince.
- you cannot assert something to be true with making an argument. the very assertion is an argument
- the purpose of an argument is to establish a proposition as true or justified (or to find out its not), which makes it non-coercive.
- if you threatened physical force in an argument, it would undermine the truth-discovery process.
- thus, for someone to engage in argumentation with another would require an implicit acceptance that the other party has the right to exclusive control over his own body
- "By establishing as a precondition of argumentation the mutual recognition and acceptance of each party's agency, the principle of self-ownership has been justified a priori. Thus, it may be concluded that any proposition(s) which conflict(s) with the principle of self-ownership cannot be coherently justified" - Hoppe
- practical precondition for argumentation is that both actors need to be alive. this requires the right to exclusively control and consume external resources (and to occupy some standing space).
- Economics
- Money
- savings
- holding cash is mitigation of future uncertainty
- if you carry cash, you must _not_ have exhausted all possible consumptive options. the withheld amount is an investment contra aversion to subjectively felt uncertainty
- purpose of liquidity is to provide immediately salable goods tradeable for nearly anything someone might want.
- users tend toward salable goods as money: allows maximum control over future uncertainties
- properties:
- ease of transport among monetary units
- divisibility
- durability
- verification
- scarcity (infinite supply would yield incomprehensible prices)
- liquidity - a state of acceptance.
- Money Prices: the exchange ratio between monetary units and all other goods and services
- prior to this single exchange ratios, you'd have to keep track of ratios between all goods in the economy (a gallon of milk priced in terms of horseshoes, sheep, strawberries, etc.)
- allows for making rational decisions: able to quantify opportunity costs in monetary units (it may not be that the best materials should be used for current Task X because they may be more productive for later Task Z)
- inflation is wealth redistribution from later users to earlier users (The Cantillon effect). the first users get to enjoy prices that haven't yet adjusted to the new money supply. last users may have the same number of dollars, but prices have gone up, thus less welath.
- Economic Goods - any scarce means that one sees as capacity to achieve certain ends.
- undiscovered or ubiquitous resources are thus not economic goods
- **only through private ownership of economic goods can the market produce prices which reflect relative demand and supply of scarce resources**
- economizing goods - the act of treating goods as scarce
- consumer goods - those which directly satisfy desires
- producer goods (the means of production) - indirectly satisfy desires
- land/natural resources
- labor
- efforts toward the indirect satisfaction of desire
- activity from a person's body that contributes to production of goods and services
- as opposed to "Leisure", which is directly satisfying own desires.
- "disutility of labor" - people prefer leisure to labor; will only work if believe it will produce more satisfaction in the future than the foregone leisure now.
- capital good - man-made means created by the use of the above two
- tend to compound. capital goods produced by other capital goods. (factories producing screwdrivers)
- Supply and demand.
- Supply is a relationship between the number of goods held and the price sellers are willing to trade for them.
- "law of supply" - as market price of a good rises, producers offer the same or greater number of units
- Demand is a relationship between how many goods consumers desire and what price they are willing to trade for them
- "law of demand" - all else held the same, a lower price will lead consumers to buy more units of a good, while a higher price will lead them to buy fewer.
- surplus: when producers attempt to sell more than consumers are willing to purchase at a given price
- shortage: when consumers want to buy more than producers are willing to sell at a given price
- market clearing price (equilibrium price): price at which producers want to sell exactly the number of units that consumers want to purchase. intersection of supply and demand curves.
- profits in a freed market represent adding of value to society
- requires one to transform goods such that result is more valued by consumer than raw materials + labor + time to produce.
- profits are necessarily win-win. each must expect to be better off than without the trade otherwise the trade wouldn't have occurred.
- psychic pleasure (as profit) exists as well - like giving money to a homeless person3.
- Division of labor
- focus on smaller set of tasks, increasing proficiency and becoming more productive
- central banking
- purpose: finance government operations and cartelize the banking system
- inflation: Cantillon effect wins financial elite support
- Main obscurantist means to counterfeit money:
- Purchase government securities - buy gov't debt with newly-printed money. holders of fiat see reduction in purchase price as they finance the principle of this loan.
- Setting reserve requirements [[fractional-reserve-banking-is-how-money-is-printed#Reserve ratio]]
- Setting the discount rate
- in comparison: free banking only has available savings from customers, so reflects consumer time preference
- higher savings means more actual resources to employ for investment
- lower savings means fewer unemployed resources present. so higher interest rates -> selects for entrepreneurs whose project their are likely to outstrip their rate payments (more likely to succeed) [[free-market-interest-is-time-preference-variance-commodified]]
- competition, monopoly and cartel
- a new ice cream vendor not only competes with carvel, but also with movie theaters - one chooses ice cream instead of movies
- the common definition of monopoly is flawed: "a firm that is the single provider of a particular good or service". as the smallest differentiation in product would give the newly-differentiated vendor "monopoly" over its "new thing"
- what monopoly really is is a special privilege granted by the State which allows exploiting consumers. this takes many forms:
- price ceilings
- price floors
- regulations
- occupational licensure
- minimum wages
- taxes
- explicit monopoly grants over certain industries
- free market water company example. it triples its rate. what happens:
- future potential customers will be deterred from moving here
- current residents are incentivized to move elsewhere
- consumers are incentivized to conserve their water
- competing water companies nearby will come in and start operations
- if there truly was only one water company with a "monopoly" in the first place, they must have gained customer trust and provided a better service than competitors and are unlikely to change business practices in such a drastic and hostile way
- cartel - group of firms in like-industries who coordinate to maximize profits.
- can take the form of setting production quotas or fixing prices
- complications
- determining unanimously among members
- most efficient members likely to resist restrictions on production
- even agreed, outside competition still a problem
- only through State-mandate can cartels exploit consumers
- a large firm with access to economy of scale can lower prices until competitors cannot maintain. once they're out of business, they raise prices to exorbitant levels.
- but without State support of monopoly, the threat of competition always looms
- Free market Banking
- Two varieties:
- deposit banking. just "hold my money safely"
- loan banking. lend my money to people for interest.
- saver delegates "successful forecasting" to the bank (division of labor). alternative is to become an expert at entrepreneurial forecasting.
- interest payments are primary a fee for accessing capital sooner rather than later (time preference)
- Scenario:
- Bob invests $100 at the bank, expecting a 5% return
- Joe takes a loan for $100 with 10% monthly interest
- After one month, Joe pays his principle + $10 interest. Bob returns to collect his $100 principle + $5 interest, the bank keeps $5 for the service of finding good entrepreneurial investments. And for Joe, it was worth $10 to start his business _last month_ rather than waiting (for some reason particular to him).
- in this free market system above, money represents claims on real resources. for Joe to borrow claims for _now_, Bob had to refrain from claims until _later_. no monetary supply change (unlike [[fractional-reserve-banking-is-how-money-is-printed]])
- Defaults would be constrained to single banks and not ripple throughout a central-bank-entangled industry
- Socialism and the Economic Calculation Problem
- in socialism, employers of the means of production are not incentivized to experiment to make a profit.
- no counterpart to provide competitive disruption
- without competition: waste or undesirable enterprises. shielded from market pressures
- there are no prices among the means of production, economizing is impossible. opportunity cost is impossible to deduce
- values are not imputed deus ex - the appear indirectly though money prices on the market (via privately owned property)
- Free Market: the social arrangements that develop absent coerced exchanges
- Profit/Loss test
- "If one is profitable, this means he is generally satisfying consumer preferences; if he is, on the other hand, making losses, this means he is transforming the goods at his disposal in such a way that their resulting configuration is worth less to the consumer than the sum value of the individual goods used in the process. Thus, profits equate to a production of wealth, and losses equate to a destruction of wealth" - Hoppe
- such a regulating mechanism does not exist for the state. revenue comes from confiscation. so any resulting profit/loss doesn't necessarily correspond with creation or destruction of wealth
- insurance
- some receive more than they paid, some pay more than they get back. necessarily
- but it _must_ be that no one knows in advance who wins and who loses
- if a risk isn't like this, it is **not insurable**.
- those firms with most accurate risk data will do best as they can ascertain the "lower limit" they can charge
- "risk" is chance in a knowable long-run probability distribution. "Uncertainty" is a chance occurrence with no probability information known.
- insurance applies to events with known approximate likelihood with repeated testing, like a coin flip.
- it is only possible to determine risk for classes of people, not individuals
- uninsurable:
- highly predictable occurrences: competition would render coverage unprofitable. cheaper to save one's own money
- high degree of certainty in prediction of occurrences: insurance would be unnecessary
- today's environment not good for consumer (State problems):
- minimum coverage requirements / mandated coverage
- forces many to buy more than they need. those resources could better serve if they were tailored to personal situation
- drives up the cost
- includes risks which shouldn't be insurable, like alcoholism. self-inflicted or clearly foreseeable (preexisting conditions)
- lesser capacity for customization and more is mandated
- prohibition against discrimination
- including pre-existing conditions
- causes insurers to pool higher-risk clients with lower-risk ones, which causes lower-risk clients to subsidize higher-risk ones. this perverts the function of premiums
- regulations, licenses
- barriers to entry, decreased competition, higher prices, less availability
- preventing covered medical risks is the most profitable for an insurance agency.
- "health care is so important it must be supported by the State".
- but food, water and shelter are more fundamental and provided by the market.
- pollution / "shared" resources / nature
- if land is not owned by anybody (nominally/legally "public") it is utilized without regard to disadvantages of the use
- private owners have incentive to maintain and improve their capital value
- if your neighbor is polluting _before_ you get there, you're acquiring "dirty property". if you want it clean, you must pay your neighbor for it.
- if land is valuable due to lumber, the owner has a natural incentive to harvest less than the replenishment amount in order to maintain future cash flow
- take a private lumber lot with 100 trees worth $1 each. the current owner will have multiple buyers: some who want to harvest all the wood right away, so want to pay not more than $99. others who recognize that they can harvest $50 worth of logs every few years and will therefore pay more than $99.
- Because many aqueous resources are not privately owned, the tragedy of the commons plagues their use and integrity. Over-fishing, dumping, oil spills, and other forms of pollution abound as no one has a direct and exclusive means to privatize the benefits of taking measures to maintain the integrity of the water. This contrasts with the incentives private owners have to prevent others from unjustly dumping trash or otherwise polluting their water
- the cow prospered due to it becoming private property, the bison nearly went extinct.
- waste disposal "negative externalities" may be internalized - free people setting up dump sites.
- may charge more for disposing of styrofoam or plastic (because it is harder/less cost-effective to dump, ruins the land value, etc.). so users of this dump are incentivized to purchase less destructive packaging and reduce waste.
- since the government "disposes of plastic", once a citizen pays taxes, he has no incentive to choose environmentally-safe packaging because the disposal costs are "free" now.
**Basically left off around here: [[ref_a-spontaneous-order_christopher-chase-rachels_book#TODO]], but the pollution section above seems to be out of order**. Also, I don't seem to have a single highlight on "education" - is that because it was all weird parochial stuff? [[2025-02-16]]
## Grab bag
- profits earned without aggression or State favoritism represent value added to society. the entrepreneur must combine inputs in a way that they are worth more than separately
- these businessmen work in pursuit of providing value to society, as this provides the greatest personal gain to them
- the market aligns the personal gain/social gain. only assumption: man acts toward his own interest
- "There is in the market economy no other means of acquiring and preserving wealth than by supplying the masses in the best and cheapest way with all the goods they ask for (provision for the common man - the agent who's actions decide the fate of the entrepreneur.)"
