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Roy A. Childs, Jr. on the Writings of Ludwig von Mises (1990)


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#1 Roger Bissell

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Posted 23 September 2011 - 02:12 PM

A Guide to the Writings of Ludwig von Mises
by Roy A. Childs, Jr., December 1990


The great social theorist Ludwig von Mises was born one hundred and ten years ago, published the majority of his important works before midcentury, and died nearly twenty years ago, at the end of a staggeringly productive life. I have paid tribute to Mises' role in the defense of capitalism and rebirth of classical liberalism several times in these pages, and we have highlighted several of his major works. Still, some people profess to be intimidated by the sheer volume and complexity of his work. Where do we begin, and were do we go from there, they ask?

For those readers I offer, with a little bit of envy--because it is a trilling and unrepeatable experience to be discovering Mises whole for the first time--a guide to reading Mises and becoming acquainted with his body of work.

A few disclaimers. First, I willfully skip over Mises's more difficult and complex writings in monetary theory and methodology. You can tackle his Theory of Money and Credit any time you feel up to it, and the same can be said for his most advanced works in the theory of knowledge, which are mostly out of print in any case. Second, I know there are innumerable ways to guide someone through Mises's writings; this is mine. Don't be afraid to skip around: to pass by something for a time and return to it later, or to skip ahead and read sections of another essay or book. Finally, if you are a novice, it will help to keep a copy of Mises Made Easier, compiled by Mises's student Percy Greaves, at your side; this is a glossary to the meaning of some terms and historical references, and while it centers on Human Action, it also cross-references other Mises' works. You'll find it invaluable sooner or later!

Rather than beginning with any systematic work, start with two collections, one basic, and the other intermediate: Planning for Freedom, a standard collection, and Money, Method, and the Market Process, a new volume edited by Margit von Mises and Richard Ebeling. Both offer excellent introductions to the Misesian approach, mainly on economics and comparative systems. Planning contains a bonus: Murray N. Rothbard's essay "The Essential von Mises" as an appendix, without a doubt the best single essay ever written on Mises. Other than that, there are sixteen other essays by Mises, including several classics: "Inflation and Price Control," "Profit and Loss," a superb treatment, "Wages, Unemployment, and Inflation," and "The Political Chances of Genuine Liberalism."

Money, Method, and the Market Process, on the other hand, is somewhat more specialized in its twenty-one chapters. Ebeling's intro is outstanding, and the sections on "Trade," "Ideas," and "Comparative Economic Systems" and are all richly rewarding.

If these whet your appetite for more Mises, then let's get serious. It was Ludwig von Mises, more than anyone else--even Hayek!--who laid the groundwork for the intellectual demolition of socialism in the twentieth century. The fuse here was his 1920 essay "Economic Calculation in the Socialist Commonweath" proving that pure socialism was impossible, that without private ownership in the means of production, there could be no rational economic calculation under socialism, and that any attempt to achieve it would inevitably collapse: it was only a matter of time. Read the booklet of that name first, which offers an English translation of Mises's original essay plus commentaries by top Soviet and Polish economists, and a postscript by the outstanding American Misesian Joseph Salerno.

Then turn to Mises's full-length treatment Socialism: An Economic and Sociological Analysis, which has been justifiably labelled one of the great works in the social sciences of the century. This magnificent volume has mesmerized one generation of thinkers after another since its original 1922 publication; in its deft handling of the socialist delusion, there is nothing like it. Play special attention to Part V, on "Destructionism," and to the scintillating Part IV, "Socialism as a Moral Imperative."

For a final assault on the specifically Marxist aspects of socialism, leap ahead to the 1957 tome Theory and History, a neglected masterpiece. This book can be consulted on many levels for different things, but here read through Parts Two and Three, on "Determinism and Materialism"--complete with a crushing blow against "dialectical materialism"--and "Epistemological Problems of History," with its attacks on historicism and scientism. (Read the rest of this broad interpretive work after Human Action.)

I know it will shock some people that I wait until now to bring in the incomparable work, Liberalism, which many regard as Mises's finest presentation of his overall point of view. I second that view, but that doesn't mean to me that it is the best introduction to his work.

Mises had several interrelated missions in life: to rebuild economics from the ground up, placing the entire science on the new foundations established by the "Austrians," particularly Menger and Böhm-Bawerk; to use this reconstructed economics to intellectually demolish statism of all varieties, particularly fascism, socialism, and communism; to provide a newly integrated and scientifically-based defense of laissez faire capitalism and reconstruction of classical liberalism.

His point of view, in short, was always comparative: which social system and ideology were best for human beings? Liberalism appeared in his forties, after the main task of demolishing the intellectual foundations had been accomplished; it was his own personal manifesto for the resurgent Liberalism he struggled for all his life. It is an amazingly comprehensive and concise work, bristling with the energy of Ralph Raico's superb translation, spanning history, philosophy, ideologies, economics, and all the other social sciences to provide the broadest possible celebration of Liberalism as a whole. It ties everything else together, and gives us an honest vision of the possibilities for mankind's future, and without any utopian nonsense, to boot.

Last but not least, two works at the opposite ends of the Misesian corpus: Human Action and The Anticapitalist Mentality. All his life Mises wanted to write a full-fledged treatise on economics. and he achieved this in the crowning achievement of his incredible career, Human Action, a work that goes far, far beyond economics. It is a work of genius and will be the intellectual companion of a lifetime. The Anticapitalist Mentality, on the other hand, is Mises's sole attempt to come to grips with the fashionable hostility to capitalism, the most productive social system ever witnessed. It is probably Mises's most popularly-written work; take it as desert after the rest. The end result? Reading through these will give you one of the great experiences of a lifetime, an understanding of the world that you will treasure forever, and a commitment to liberty that will be as precious to you as life itself.
Objectivism, properly used, is a tool for living, not a weapon with which to bash those one disagrees with.

#2 George H. Smith

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Posted 24 September 2011 - 07:56 AM

Where did this originally appear? It looks like something that Roy would have written for the Laissez-Faire Books catalogue.

Roy had a remarkable ability to write sweeping overviews of this sort while making them interesting to read. It is a shame that so much of his writing is buried in LFB catalogues and periodicals that are nearly impossible to find any longer.

Ghs

#3 Philip Coates

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Posted 24 September 2011 - 02:56 PM

1. What I am most struck by is how well, how effectively this dude can write. And how few people on our side today can do it as well.

Most of the 'Objectivist intellectuals' could take lessons from him. He's not needlessly abstract and he gives brief summaries and examples. He's concise and yet packs in an extraordinary amount of information. I don't know much about him, but reading between the lines my guess would be that he has spent a lifetime reading. And reading *widely*, i.e., across disciplines. The essay is -authoritative- in the sense not necessarily that one would agree with all of his preferences or the ordering of his reading list but that a fair-minded reader on any side of the political divide would believe he knows what he's talking about. That he's done the reading.

That's not always something that shines through with, say, op ed writers for the Ayn Rand Institute who want to pontificate about specifics of our policy toward Iran for example, or the pontentialities of alternate energy sources such as geothermal or solar, or mortgage loans.

Also, Childs is a pleasure to read.

It doesn't feel like you're doing penance or slogging through molasses. Perhaps the primary reason is he isn't trying to impress and avoids "pedantry". Here and in the other piece Roger posted on a general libertarian reading list...and if I recall in other essays and reviews I've seen by Mr. Childs over the years -- he avoids something sometimes seen in highly knowledgeable libertarian authors: being long-winded or pedantic, making too big a deal of a minor point or going off on a 'pet' tangent, showing off of their knowledge at too great a length or in greater detail than the topic requires. (I think I saw this a number of times in the more 'academic libertarian' venues such as the Mises Institute people, as opposed to the 'popular libertarian' venues like Reason or Liberty, whose readership wouldn't stand for it.)

Sprawling, tiring long-windedness is less of a primary problem with many of the Objectivist essayists. Perhaps because they don't always know enough to be pedantic. They haven't read widely enough in a range of fields or as background for their topic and too often tend to just try to "deduce" all aspects of a detailed or complex matter from general philosophical principles.

You sometimes get a dismaying feeling their reading experience has been in philosophy, philosophy, and philosophy. I'm talking less about the older generation, Kelley and Peikoff** and before them the Brandens. It seems to be more some of the younger ones.

**I haven't analyzed it yet, but I personally find Childs a more appealing, engaging writer than DK or LP. At least more effective, coming down off the abstract level as much as is needed to be persuasive and understood. You get the feeling that these Objectivist intellectuals not only have not but will not reach out to a wider audience or persuade a skeptical moderate or liberal compared to these two 'reading list' essays by Childs. Clearly, neither DK or LP wrote these two review essays.

Roy Childs gets to the point in fairly direct, non-roundabout, non-egghead fashion. When he discusses each of the books by Mises (or in his general list), he explains what's in it with brevity. Then he moves smartly on to his next point. And the overall flow or structure of his essay is clear. He stated right up front that he was going to provide a progression from simple or basic or introductory to more complex. And he delivers on his promise in a refreshingly no-nonsense - and 'common sense' fashion.

If I had a minor criticism about that and about his writing, I would suggest using some telling excerpts or quotes. It's more effective to show than merely to assert. (I realize, though, he wrote book summaries for a catalog and one appealing to those largely sympathetic, so space is at a premium so the quotes would have to be short and occasional.)

2. The other thing that shines through in Childs' writing -- and therefore by implication about the quality of his mind -- is the *sheer industriousness*, the all-too-rare thoroughness. He doesn't satisfy himself with just making one point about Mises' work or two or three about the classical liberal literature. He is trying to survey -every- book that is important. He puts them in order. He contrasts them. He doesn't write in the lazy, half-assed style characteristic of people posting on discussion boards.

In order to be a successful intellectual, to be a persuader in the humanities especially, it is best to spend a lot of time, years in fact, in reading a wide range of material. And digesting it. And learning how to puit yourself in the shoes of, to 'translate' it for those outside your context.

If you don't *love* that kind of reading, that level of research or self-education -- and if, instead, you are only doing it impatiently or as a duty in spreading your ideology, you won't do it well.

3. So, Objectivists and those who want to change the culture, to be great writers, to be listened to outside the 'choir': Study someone who is trying to do many of the things you are trying to do. Take apart his essays line by line and see what he does well. And see if you could accomplish the same purpose as well: getting people to read the corpus, read the major but difficult works, giving them a practical road map and some tips . Don't be arrogant just because you've read Rand or because he's not an Objectivist, may have been an anarcho-capitalist . . . or for other equally silly reasons to dismiss someone you can learn something from.

Learn and improve . . . Or get the hell out of the way. Don't screw it up and turn off potentially interested or well-read, thoughtful newbies.

Find some other line of work and leave this one to those better suited to it.

Edited by Philip Coates, 24 September 2011 - 04:01 PM.


#4 Roger Bissell

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Posted 24 September 2011 - 09:16 PM

Yes, Childs writes well, he does his homework, and we (who want to be good, persuasive writers) should emulate him. Thank you, Phil, for so thoughtfully and eloquently saying this.

REB
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#5 George H. Smith

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Posted 24 September 2011 - 10:15 PM

Phil,

I appreciate your comments about Roy, but keep in mind that the pieces Roger posted were written for the LFB catalogue. Roy wrote with brevity because he had no choice, given the strict space limitations.

But you are correct, given this context. Roy was probably the most experienced book reviewer of the modern libertarian movement, and he was a master of that art. He could make even boring books seem interesting.

If you want to read what is unquestionably Roy's greatest theoretical work, see the extensive article on "Anarchism and Justice" that he published in The Individualist during the early 1970s. This was published in four parts; and, so far as I can tell, only the first part has been posted online as yet. Go here:

http://www.thornwalk...ilds_aj_toc.htm

Roy and I were living in the same apartment building (on Selma Ave. in the heart of Hollywood) while he was writing most of his series, and I was working on ATCAG. We would often take breaks by going to a movie or a bookstore or a meeting of some kind. Roy and I actually debated on the same team at USC once. We defended free will, and two USC grad students in philosophy defended determinism. I wish I had a tape of that debate. It would be historic.

Shortly after Roy died in May 1992, I published an emotional tribute to him in Liberty Magazine. I no longer have a copy of the piece, however, and I have not been able to find it online. I was not in good shape when I wrote it (within days of his untimely death), so I remember virtually nothing about it, but I think it was pretty good. I don't recall the exact issue of Liberty (it would probably be June or July, 1992), but if someone has a copy and would be willing to send me a xerox of my article, or scan it and post it on OL, please do so. I haven't read the piece since shortly after it was published, and I'm curious about what I said.

Ghs

#6 Brant Gaede

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Posted 24 September 2011 - 10:22 PM

Phil,

I appreciate your comments about Roy, but keep in mind that the pieces Roger posted were written for the LFB catalogue. Roy wrote with brevity because he had no choice, given the strict space limitations.

But you are correct, given this context. Roy was probably the most experienced book reviewer of the modern libertarian movement, and he was a master of that art. He could make even boring books seem interesting.

If you want to read what is unquestionably Roy's greatest theoretical work, see the extensive article on "Anarchism and Justice" that he published in The Individualist during the early 1970s. This was published in four parts; and, so far as I can tell, only the first part has been posted online as yet. Go here:

http://www.thornwalk...ilds_aj_toc.htm

Roy and I were living in the same apartment building (on Selma Ave. in the heart of Hollywood) while he was writing most of his series, and I was working on ATCAG. We would often take breaks by going to a movie or a bookstore or a meeting of some kind. Roy and actually debated on the same team at USC once. We defended free will, and two USC grad students in philosophy defended determinism. I wish I had a tape of that debate. It would be historic.

Shortly after Roy died in May 1992, I published an emotional tribute to him in Liberty Magazine. I no longer have a copy of the piece, however, and I have not been able to find it online. I was not in good shape when I wrote it (within days of his untimely death), so I remember virtually nothing about it, but I think it was pretty good. I don't recall the exact issue of Liberty (it would probably be June or July, 1992), but if someone has a copy and would be willing to send me a xerox of my article, or scan it and post it on OL, please do so. I haven't read the piece since shortly after it was published, and I'm curious about what I said.

Ghs

I have it George, I just don't know exactly where. Eventually I'll get it to you. But can't you get it at Liberty online?

I din't know whether I have all the l f book reviews or not. I may have them in storage. If I find them they are yours, but I can't check this out right now.

--Brant

Rational Individualist, Rational self-interest, Individual Rights--limited government libertarian heavily influenced by Objectivism


#7 George H. Smith

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Posted 24 September 2011 - 10:27 PM

Phil, I appreciate your comments about Roy, but keep in mind that the pieces Roger posted were written for the LFB catalogue. Roy wrote with brevity because he had no choice, given the strict space limitations. But you are correct, given this context. Roy was probably the most experienced book reviewer of the modern libertarian movement, and he was a master of that art. He could make even boring books seem interesting. If you want to read what is unquestionably Roy's greatest theoretical work, see the extensive article on "Anarchism and Justice" that he published in The Individualist during the early 1970s. This was published in four parts; and, so far as I can tell, only the first part has been posted online as yet. Go here: http://www.thornwalk...ilds_aj_toc.htm Roy and I were living in the same apartment building (on Selma Ave. in the heart of Hollywood) while he was writing most of his series, and I was working on ATCAG. We would often take breaks by going to a movie or a bookstore or a meeting of some kind. Roy and actually debated on the same team at USC once. We defended free will, and two USC grad students in philosophy defended determinism. I wish I had a tape of that debate. It would be historic. Shortly after Roy died in May 1992, I published an emotional tribute to him in Liberty Magazine. I no longer have a copy of the piece, however, and I have not been able to find it online. I was not in good shape when I wrote it (within days of his untimely death), so I remember virtually nothing about it, but I think it was pretty good. I don't recall the exact issue of Liberty (it would probably be June or July, 1992), but if someone has a copy and would be willing to send me a xerox of my article, or scan it and post it on OL, please do so. I haven't read the piece since shortly after it was published, and I'm curious about what I said. Ghs

I have it George, I just don't know exactly where. Eventually I'll get it to you. But can't you get it at Liberty online? I din't know whether I have all the l f book reviews or not. I may have them in storage. If I find them they are yours, but I can't check this out right now. --Brant


I checked several times in the Liberty archives, but they were very spotty and didn't have that issue. But I haven't checked for well over a year, so I will take another look now.

Thanks,

Ghs

#8 Brant Gaede

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Posted 24 September 2011 - 11:01 PM

George, go to Libertyunbound, click on the archives, search May 1992 to July 1992 then go to page 28 in the July issue.

--Brant

Rational Individualist, Rational self-interest, Individual Rights--limited government libertarian heavily influenced by Objectivism


#9 George H. Smith

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Posted 24 September 2011 - 11:07 PM

Later edit: Please post any comments on my article here.

I found my article. It wasn't indexed, so it didn't show up on a search, so I went through a couple issues.

I will post my tribute to Roy here. It's not very long, but I will divide it into two parts. Here is the first, from Liberty Magazine (July 1992).


Remembering Roy Childs
George H. Smith
Part 1

It has been nearly thirty hours since Andrea Rich called me with the terrible news: Roy Childs had just died in a Florida hospital, apparently from respiratory failure. I am pleased to write this tribute, a welcome relief from my tears.

Roy and I were close friends for twenty-one years; over the past six years, we talked on the phone virtually every day. He used to say that I knew him better than anyone else. That was a great compliment, for I loved the man dearly.

How does one explain Roy Childs? I am tempted to answer: For friends no explanation is necessary, for strangers no explanation is possible. Roy was a presence - physical, intellectual, and emotional. To meet him once was to remember him forever. Roy was an army of raw emotions which, as they careened and collided in his immense frame, were refined by a powerful intellect, expressed with a rich voice and tempered with a wry sense of humor. It is difficult even to imagine a skinny Roy Childs; everything about him was bigger than life.

It is also difficult to imagine the libertarian movement without Roy Childs. He was a colossus who profoundly influenced the early movement. Those who know of Roy only through his book reviews should read some of his early work on anarchism and political theory. Those articles reveal a mind of astonishing brilliance and depth, a mind fueled by a passion for ideas and a love of liberty.

Aside from his original contributions, Roy played a crucial role in the early movement. He disseminated and popularized the anarchistic ideas of Murray Rothbard, thereby giving libertarians a much-needed radical alternative to the more conservative views of Ayn Rand. The conflict and competition between those two paradigms, the Randian and the Rothbardian, excited many young libertarians and inspired them to explore new frontiers in libertarian theory.

There was yet another area where Roy played a crucial role, one he was especially proud of. Through his articles and reviews, Roy introduced a predominantly Objectivist audience to a broader philosophical framework, most notably to works by Aristotelian philosophers on epistemology and ethics. Those books provided valuable intellectual ammunition, and they helped to wean many young Objectivists from their cliquish, defensive attitudes.

J.S. Mill once said of Jeremy Bentham that he was a teacher of teachers. This was equally true of Roy, especially with me. During the early seventies, Roy told me repeatedly that I should branch out into fields other than philosophy. He complained (with characteristic tact) that I was "tabula rasa" when it came to history, and that philosophers who know nothing except philosophy are a social menace. (He believed the same was true of economists and other specialists.) Libertarianism would never progress without interdisciplinary scholars. Therefore, Roy asked rhetorically, why didn't I become one? Did I want to remain a boy Objectivist for the rest of my life?

I took Roy's advice to heart, and for the next eight years I devoted myself almost exclusively to history. Roy didn't always give good advice, but when it was good, it was very good.

(To be continued...)



Ghs

#10 George H. Smith

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Posted 24 September 2011 - 11:50 PM

Later edit: Please post any comments on my article here.

Here is the last part of my Liberty tribute to Roy.



Remembering Roy Childs
George H. Smith
Part 2

Those were exciting times, the early seventies, when Roy and I lived in the same Hollywood apartments. I was writing my book on atheism, and Roy was writing a remarkable series of articles on "Anarchism and Justice" (published in The Individualist). Here we were - two budding intellectuals with a diet of discussion consisting of epistemology, psychology, politics, theories of sex, and much more.

Inflamed with the innocence and enthusiasm of youth, Roy and I haunted libraries and bookstores, attended lectures, gave lectures of our own, participated in debates on anarchism, religion, and free will, and bugged Nathaniel Branden. Roy seemed delighted when I called him "the fountainhead of libertarian gossip." He quizzed everyone on the Rand-Branden split and had figured out the details of that scandal long before they became public knowledge.

We were flat broke during those years, but we didn't seem to mind.Pleasures of the mind substituted for creature comforts. Roy was happy if he had enough money to go to the movies and buy an occasional classical record.We brought in some money by writing book reviews at twenty-five dollars a pop, which kept us in frozen dinners and soft drinks for a week. Roy's biggest score came when he located a bookseller who had drastically underpriced a first edition presentation copy of We the Living, which Roy could resell for a handsome profit. But there was a problem: the dealer was thirty miles away, and Roy lacked transportation. Roy offered me twenty dollars if I would drive him on my motorcycle. So we piled aboard a 250cc "two banger" Yamaha and embarked on a sixty-mile journey along treacherous California freeways.

With Roy as my constant companion, I had a perpetual source of free entertainment. I often urged Roy to repeat his best routines for young fans, who would double-up with laughter as he acted out the role of a disturbed Donald Duck (complete with an authentic voice) who was doing "sentence completion" in group therapy. ("Mother was always...sitting on me. Mother was always...dunking me in water.") Or Roy might deliver his famous speech explaining how Dracula was the ideal Randian hero. (Dracula pursued his rational self-interest according to the standard of "vampire qua vampire"; he despised mysticism as manifested in holy water and the cross; most significantly, it was he who penetrated and the woman who was penetrated.)

Roy and I often reminisced about those halcyon days; we wondered what had changed, and why. The libertarian movement seemed to have lost much of its vitality, and the viciousness of politics had turned many former friends into bitter enemies. Or maybe it was just us - older, wiser, and somewhat more cynical.

Roy's later years were not easy for him. Plagued with physical problems, and faced with the need to earn a living, Roy was unable to muster the time and resources to undertake major projects. He often spoke of his desire to write a book on the history and ideas of the modern movement. And he desperately wanted to have his own newsletter, so he could write the kind of incisive commentaries and articles he had become famous for as editor of Libertarian Review.

Unfortunately, these dreams were never realized. Roy had been stigmatized in some circles as "difficult," so he found it nearly impossible to obtain funding. Much of the movement he had helped create turned its back on him, and I shudder when I recall the pain this caused him.

Yes, Roy could be difficult at times, but he gave far more than he got. His ideas and his vision, the fruit of many years of intense intellectual labor, were free for the asking. He sparked enthusiasm in others when he felt none himself. He set up projects for others when he had no hope of getting one himself. He was a generous and kind man.

Some libertarians stuck by Roy to the end. I wish to thank those people on Roy's behalf. He spoke of you often, and with great affection.

Barely a day has passed since Roy ceased to exist, and I already feel pangs of terror and dread. So much of what I am l owe to him. I would probably have given up long ago, if not for his counsel and encouragement.

Farewell, my fine friend! Farewell!



Ghs

#11 George H. Smith

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Posted 25 September 2011 - 01:19 AM

Thanks, Brant. I've been wanting to read that article for years. I had forgotten that I wrote it only 30 hours after learning of Roy's death; at that point I had not slept for over two days. I recall crying while writing most of the article, but that's about all I remember.

Ghs

#12 Philip Coates

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Posted 25 September 2011 - 11:01 AM

> The other thing that shines through in Childs' writing -- and therefore by implication about the quality of his mind -- is the *sheer industriousness* [me, post #3]

Since I read the non-technical parts of Reisman's "Capitalism" quite a few years ago, I've been hungry for someone, someone who has read widely enough in the literature, someone who knows economics on an advanced level and who can also deal with the non-economic points to do a thorough summary and companion and guide to this masterpiece.

It seems if I'm waiting for it to come out of the Objectivism movement, I may be waiting in vain.

> op ed writers for the Ayn Rand Institute who want to pontificate about specifics of our policy toward Iran for example, or the pontentialities of alternate energy sources such as geothermal or solar, or mortgage loans.

I'm not really talking about Yaron Brook. Specifically, as I recall, he has been pretty sharp, being professional and knowledgeable when talking about finance and mortgage loans. He was a professor of finance and is knowledgeable in these areas. On the other hand, that doesn't mean that the only way you can write on any topic is if you've been a professor in that field or have an advanced degree or have read ten or twenty specialized books on that topic.

#13 George H. Smith

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Posted 25 September 2011 - 06:00 PM

> The other thing that shines through in Childs' writing -- and therefore by implication about the quality of his mind -- is the *sheer industriousness* [me, post #3]

Since I read the non-technical parts of Reisman's "Capitalism" quite a few years ago, I've been hungry for someone, someone who has read widely enough in the literature, someone who knows economics on an advanced level and who can also deal with the non-economic points to do a thorough summary and companion and guide to this masterpiece.


Someone with that much knowledge is not likey to write summaries. He or she will do original work. Moreover, Capitalism is not an especially difficult book; the background needed in economics could be acquired in a few months, perhaps less. If you are not willing to invest that much time in a huge book, then summaries won't help.

There are some problems with Reisman's book. For example, he is far more sympathetic to classical economics than most Austrians would be. I have not looked at Capitalism in some time, but I got the impression that Reisman is a neo-classical economist, not an Austrian.

Human Action is a masterpiece. Capital and Interest is a masterpiece. Man, Economy and State is a masterpiece (especially if we include Power and Market as the third volume). Capitalism is not a masterpiece. It is just a very good book.

Ghs

#14 Philip Coates

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Posted 25 September 2011 - 06:38 PM

> Capitalism is not a masterpiece. .

You are completely wrong. "Capitalism" -is- a masterpiece.

Moreover, I'm amazed you say it is not especially difficult: "the background needed in economics could be acquired in a few months, perhaps less."

Did you read it in its entirety? Even Ph.D.'s in economics point out that the last third of the book requires a great deal of knowledge of economics to understand some of the issues he's discussing, including technical issues normally dealt with well beyond the econ 101 level. (Probably why two free-market Nobel laureates in economics - which you are not - gave it such high praise.)

And, much earlier in the book, his devastating rebuttal of environmentalism root and branch alone is worth the price of purchase.

Plus, his writing can be amazingly vivid, dramatic, and eloquent in many places with brilliantly chosen examples. Here is (part of) what he says about the rapid economic development of the United States ==>

"In 1776 the present territory of the United States was an almost empty continent, whose cities either did not exist or were little more than coastal villages. Its population consisted of approximately half a million Indians, who lived on the edge of starvation, and three million settlers, most of whom were semi-self-sufficient farmers living in extreme poverty. In less than two centuries, it was transformed into a continent containing the two hundred million richest people in the history of the world; a continent crisscrossed with highways, railways, telephone and telegraph lines; a continent filled with prosperous farms and dotted with innumerable towns and cities that were the sites of factories using methods of production and producing all manner of goods that probably could not even have been imagined in 1776.

One should ask how the United States' economy got from where it was then to where it is even now. One should ask how Pittsburgh, Cleveland, Detroit, Chicago, St. Louis, San Francisco, Los Angeles, Houston, and Dallas came to be the great cities they all were, not very long ago, and, for the most part, still are. One should ask how New York City grew from a population of twenty thousand to eight million, and how Boston and Philadelphia could increase in size thiry-five and one hundred times over. One should ask where all the means of transportation and communication, all the farms and factories, houses and stores, and all the incredible goods that fill them came from.

The answer, as I say, is astoundingly simple. What was achieved in the United States was the cumulative, aggregate result of tens of millions of people, generation after generation, each pursuing his individual self-interest---in the process, necessarily helping others to achieve their self-interests. And what made this possible was individual freedom. "

--George Reisman, "Capitalism: A Treatise on Economics"

(Few people have said this more forcefully and eloquently. And convincingly.)

Edited by Philip Coates, 25 September 2011 - 06:43 PM.


#15 George H. Smith

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Posted 25 September 2011 - 06:55 PM

> Capitalism is not a masterpiece. .

You are completely wrong. "Capitalism" -is- a masterpiece.


You indicated previously that you read only the nontechnical parts of the book, which comprise but a small part of it. You also implied that you couldn't understand the technical stuff.

So how the hell would you know whether the book is a "masterpiece" or not. Because it is a very big book?

By my standards, a masterpiece must break new ground in a significant way. Name one respect in which Reisman does this. As I said, this is a very good book (in most respects), but it is not a masterpiece.

Ghs

#16 George H. Smith

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Posted 25 September 2011 - 07:18 PM


Did you read it in its entirety? Even Ph.D.'s in economics point out that the last third of the book requires a great deal of knowledge of economics to understand some of the issues he's discussing, including technical issues normally dealt with well beyond the econ 101 level. (Probably why two free-market Nobel laureates in economics - which you are not - gave it such high praise.)

And, much earlier in the book, his devastating rebuttal of environmentalism root and branch alone is worth the price of purchase.


I read every single page, which is a lot more than you did.

If you are so impressed with the judgments of free-market Nobel laureates, then name one who called Capitalism a "masterpiece," or anything like this.

Look at the endorsements on the back of the dust jacket. Hayek is the only Nobel Laureate quoted, and he praised only an earlier version of chapters 6-8, which presents the standard Misesian line on some issues. Hayek also recommends these chapters to "Every commentator on current affairs who is not a fully trained economist," so he didn't seem to think that advanced training in economics is necessary to understand Reisman. Were you thinking of some other free-market Nobel Laureate, perhaps?

I agree with your assessment of Reisman's critique of environmentalism. It is excellent. Capitalism is actually an anthology of sorts, i.e., a collection of writings that Reisman bundled together in one volume. If you had said that his critique of environmentalism is a "masterpiece," I might have agreed with you. But the book, considered as a contribution to economic theory, is not.

If in several months of intensive reading you cannot get past the Econ 101 stage, then I recommend that you stay away from economics altogether. You don't need to know all the technical bells and whistles of neo-classical economics to understand Reisman's presentation. He is a good, clear writer.

As for "high praise," the book deserves high praise, such as "this is a very good book." I believe this is what I said earlier.

Ghs

#17 George H. Smith

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Posted 25 September 2011 - 07:45 PM

Phil,

If you want to read some introductory texts on (conventional) economics, I recommend:

The Economic Way of Thinking, by Paul Heyne. (I have the seventh edition, 1994.) This covers standard microeconomics.

Basic Macroeconomics, by Edwin G. Dolan. (I have the second edition, 1980). A lot of macroeconomics is crap, but Dolan (a free-market economist) does a good job explaining it.

I doubt if it would take you more than a week to get through each of these textbooks.

Ghs

#18 George H. Smith

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Posted 25 September 2011 - 08:36 PM

Over the past decade I have had several occasions to debate the labor theory of value (LTV) with Marxists and, in this case, with the Tuckerite anarchist Kevin Carson. The post reprinted below appeared on Sam Konkin's Left Libertarian List in 2003. I believe I wrote at least one more post -- a reply to Kevin's critique of this post -- but this appears to be the only one I had the foresight to save.

I am reposting this with no alterations whatsover. What you see here is exactly as it appears in my files.

(Reply to Kevin Carson, LLL, June 21, 2003)

Kevin Carson wrote:

"The problem with most critiques of the LTV (or hypothesis, if you prefer) is that they don't fully grasp what it is. It is not primarily an ethical principle, as it was used by classical economists of the Smith/Ricardo tradition (or by Marx, for that matter), but an empirical statement about the performance of the market."

I have no idea what Kevin means by "most critiques." No serious critiques of the labor theory of value (LTV) of which I am aware (such as the devastating criticisms of Böhm Bawerk) commit the crude error that Kevin describes.

Kevin wrote:

"For starters, the LTV would be much more comprehensible is you substitute "supply price" for value."

I don't know what Kevin means by "supply price." If he simply means the market price, then this is indeed another way of signifying the so-called "objective exchange value" of goods. But, judging by his subsequent remarks, this doesn't seem to be what Kevin means. Rather, by "supply price" he appears to mean something akin to the "cost of production" -- and, if so, this is by no means a synonym for "value" in the economic sense. In any case, whatever Kevin means, it doesn't make the LTV any more comprehensible.

Kevin wrote:

"The classical LTV simply states that *equilibrium* market prices will approximate the supply price, and that supply price is determined mainly by labor. And all the "disproofs" that have been brought up by subjectivists had already been addressed by Ricardo."

I don't recall that Ricardo ever seriously addressed the criticisms of the LTV that were put forward by his critics. (For one thing, the most effective contemporary criticism of the LTV -- the *Critical Dissertation* of Samuel Bailey -- was not published until 1825, after Ricardo had been dead for two years.) Nothing like this appears in Ricardo's *Principles,* and I don't recall seeing anything in his other works or correspondence either.

Indeed, in his *Principles,* Ricardo offers virtually nothing in the way of a theoretical justification for the LTV. He mainly quotes Adam Smith, who made little effort to justify it either, but contented himself with making oracular pronouncements as if they were self-evident, but which were clearly wrong in some instances. (See, for example, Smith's statement about the relative values of beavers and deer in a "rude" state of society. Whenever I read this passage -- and I have read it many times – I think to myself, "What on earth was going through Smith's mind? How could he have possibly framed a hypothetical that is so obviously wrong?" And keep in mind that I am a*very* big fan of Adam Smith.)

It should be noted that Ricardo became increasingly dissatisfied with the LTV in later years. As Karl Pribram (*A History of Economic Reasoning,* Johns Hopkins, 1983, p. 150) put it:

"Embarrassed by the strength of the arguments raised against his value theory, [Ricardo] occasionally resorted to a vague cost of production theory, and eventually observed in a conversation with John R. McCulloch (1789-1864) that the quantity of labor which provided the standard for measuring exchange values was 'not the quantity of labor actually worked up in the commodity, but only a measure of this value which convention has chosen for the convenience of the science.' This statement is probably the most explicit allusion to the methods of hypothetical reasoning that can be found in Ricardo's writings."

Ricardo's dissatisfaction with the LTV is also expressed in these remarks, written to McCulloch in 1820:

I sometimes think that if I were to write the chapter on value [in the *Principles*] again..I should acknowledge that the relative value of commodities was regulated by two causes instead of by one, namely, by the relative quantity of labour necessary to produce the commodities in question, and by the rate of profit for the time that the capital remained dormant, and until the commodities were brought to market." (Quoted in Eric Roll, *A History of Economic Thought,* 3rd ed., Prentice Hall, 1963, p. 182.)

Kevin wrote:

"Ricardo argued only that the equilibrium price of goods whose supply could be increased in response to demand, would approximate production cost."

This of course is part of the problem with the LTV. Ricardo, in specifying that the LTV applies only to goods that are freely reproducible, excluded rarities, natural agents, and other economic goods whose value also requires an explanation.

It should be noted that Ricardo never claimed that labor is the sole source or measure of exchange value. In Chapter 1 ("On Value") of the *Principles of Political Economy and Taxation* (Penguin, ed. Hartwell, 1971, p. 56), he stated:

"Possessing utility, commodities derive their exchangeable value from TWO sources: from their scarcity, and from the quantity of labour required to obtain them." (My caps.)

Moreover, in Section IV of this chapter, Ricardo introduces "another cause, besides the greater or less quantity of labour necessary to produce commodities, for the variations in their relative value" (p. 72). This other cause, which "introduces a considerable modification" to the LTV (p. 79), pertains to the relative proportions of fixed and circulating capital used in production and to the time it takes to bring a commodity to market.

The point here is that Ricardo showed far more flexibility in his LTV than those socialists, such as Marx, who claimed to be building on Ricardo's work. Ricardo was quite willing to admit that the LTV has exceptions, limited application, and should be viewed only as a useful hypothesis that partially explains the relative exchange values of a certain class of economic phenomena.

Kevin wrote:

"He explicitly recognized that disequilibrium would produce temporary quasi-rents, or prices in excess of those necessary to bring goods to market, when quantity demanded outstripped quantity supplied. And he recognized that goods which were naturally or artificially in short supply (rare works of art, limited natural resources, champagne, as well of goods produced under state-enforced monopoly) would be priced above production-cost."

Aside from the obvious point that ALL economic goods are "in short supply" (i.e., scarce) to some degree, this last statement is a bit misleading. Regarding so-called rarities, Ricardo stated that "their value is WHOLLY INDEPENDENT of the quantity of labour originally necessary to produce them..." (p. 56, my caps.). In other words, according to Ricardo, the LTV has no relevance whatsoever to these goods.

This glaring exception, which means that we need one theory to explain the exchange value of some goods and an altogether different theory to explain the exchange value of other goods, is one of the chief weaknesses of the LTV. A major achievement of marginal utility theory was to unify *all* such explanations under a *single* (and far more coherent) theory of value.

Kevin wrote:

"And neoclassical economics has not disproved Ricardo's general rule of cost-of-production."

A labor theory of value -- especially the "embodied" version of the LTV that Ricardo defends -- is manifestly NOT the same thing as a "cost of production" theory of value, even though both Smith and Ricardo sometimes switched insensibly from one to the other.

Kevin continued:

"They have simply stressed the exceptions (which Ricardo recognized) at the expense of the rule."

I don't know about neoclassical critiques of the LTV, but this remark most certainly doesn't apply to critiques of the LTV written by Austrians, such as Bohn-Bawerk and Wieser. Austrians did *far* more than simply point to exceptions that Ricardo himself acknowledged.

Kevin wrote:

"If anything, I think Jevons and Menger obscured this tendency toward cost of production that was described by Ricardo."

The classical Austrians, while emphatically rejecting the LTV, by no means denied the role of the cost of production in determining equilibrium prices. Time and again they insisted that this is an important factor, but they also insisted that it is an "intermediate" rather than an "ultimate" cause of exchange values. They argued that costs of production are themselves explainable in terms of subjective valuations of marginal utility.

Kevin wrote:

"The subjectivists/marginalists have created a very useful paradigm for describing the mechanism by which price is determined in cases of disequilibrium or rarity--the exceptions Ricardo recognized to cost-of-production—and relating it to buyer psychology. But these are second order deviations from a first-order phenomenon (cost of production) described by Ricardo...."

There is nothing fundamental about either the LTV or various cost of production theories of exchange value. If Smith's cost of production theory (one among three or four different theories of value he defended, depending on how you count them) had considerable plausibility, this is largely because Smith included the average rate of profit as one of three factors in the cost of production, along with wages and rent. In other words, according to Smith, a producer will not enter a market (or stay there for very long) unless he figures that he can not only recoup the costs of labor (wages) and land (rent), but also earn at least the average rate of profit (the income accruing to capital) for a given good in a given economic neighborhood.

This inclusion of anticipated profits -- which really amounts to a theory of subjective expectations -- in the cost of production (which was also accepted by Ricardo -- see the footnote on pp. 86-7 of *Principles*) generated strenuous objections from some other classical economists, who maintained that it effectively amounts to an abandonment of the LTV. And they were exactly right about this.

One could drive a truck through the theoretical holes in the LTV. I have long believed that some libertarians -- and I am thinking specifically of those who describe themselves as "libertarian socialists" -- continue to espouse this antiquated theory largely because of its role in defending an "exploitation" theory of capital.

This is nonsense, and it is a shame. Among those who describe themselves as "Left Libertarians," SEKIII is to be commended for not falling into this trap.

Ghs



#19 Tim Hopkins

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Posted 25 September 2011 - 09:44 PM

George, what is your overall assessment of Kevin Carsons perspective? I understand your rejection of the LTV and your skepticism about his free market "anti-capitalism", but his fundamental position is that the role of the state is to subsidize the operating costs of the political class through the big monopolies (credit, banking, land control and "intellectual property") and seems to turn Marxian class analysis on it's head. He also supports wildcat labour action, which seems to have many libertarians worried about his credentials as an advocate of free markets. Have you ever engaged him outside of LL2?

#20 George H. Smith

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Posted 26 September 2011 - 06:01 AM

George, what is your overall assessment of Kevin Carsons perspective? I understand your rejection of the LTV and your skepticism about his free market "anti-capitalism", but his fundamental position is that the role of the state is to subsidize the operating costs of the political class through the big monopolies (credit, banking, land control and "intellectual property") and seems to turn Marxian class analysis on it's head. He also supports wildcat labour action, which seems to have many libertarians worried about his credentials as an advocate of free markets. Have you ever engaged him outside of LL2?


Kevin is an individualist anarchist of the Proudhon/ Tucker school, so obviously I agree with some of his positions. But he defends a number of their absurd theories -- not only the LTV, but also their occupancy theory of ownership, according which you can own a house only so long as you live in it, which makes rent a form of exploitation; and their view that interest is also is form of exploitation.

I can sort of understand why a 19th century libertarian might have bought into this economic hokum, but to believe it in this day and age is akin to believing in biblical creationism.

I have never discussed anything with Kevin outside LLL. I believe I posted a critical review of his book on that list (one that pointed out how much he borrowed from Marx), but I don't think I have a copy of that.

As for turning Marxian class analysis on its head, that's the sort of thing Bakunin tried to do. It can be clever, but nowadays no one cares about it except people with an interest in Marx.

Ghs




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