Tuesday, 22 August 2017

Q: Was the American Civil War really about slavery?


Q: Was the American Civil War really about slavery?
A: Yes. Yes, it really was. The “states right” the secessionists truly cared about was slavery.

Q: So why the continuing controversy over the American Civil War?
A: Because, says Colonel Ty Seidule, Professor of History at the United States Military Academy at West Point, “many people don’t want to believe that the citizens of the southern states were willing to fight and die to preserve a morally repugnant institution.”

 


For more information on the Civil War, check out :

  • The West Point History of the Civil War, an interactive e-book that brings the Civil War to life in a way that's never been done. Click here -> The West Point History of the Civil War
  • The Articles of Secession of the slave states, each of whom cited in seceding their motivating cause: i.e., their “peculiar institution” of slavery”
  • The Confederate Vice President’s ‘Cornerstone Speech,’ declaring the Confederacy’s causes of secession: “The prevailing ideas entertained by [Thomas Jefferson] and most of the leading statesmen at the time of the formation of the old constitution, were that the enslavement of the African was in violation of the laws of nature; that it was wrong in principle, socially, morally, and politically. …Our new government is founded upon exactly the opposite idea; its foundations are laid, its corner-stone rests upon the great truth, that the negro is not equal to the white man; that slavery -- subordination to the superior race -- is his natural and normal condition. [Applause.]”
  • The Lincoln-Douglas debates, wherein Lincoln sagely observed “a house divided against itself [by slavery] cannot stand.”

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Good question


_EpsteinMcKibben

[Hat tip Jim Rose]

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Quote of the Day: On the myth that economic freedom benefits the few while impoverishing the many


_JkoNlFu

“One of the biggest and most pernicious myths about economic development is that capitalism or, as I prefer to call it, economic freedom, benefits the few, while impoverishing the many…
    “’There can be no doubt [however] that in history unfree majorities have benefited from the existence of free minorities and that today unfree societies benefit from what they obtain and learn from free societies’ …
    “Africans, [for example], did not have to become rich in order to start experiencing longer and better lives. Indeed, it would be surprising if they did get wealthier, considering that since independence, many African countries have experimented with socialism and other forms of protectionism. Some, like Zimbabwe, still do.
    “Instead, all of Africa benefited from the technological advances that occurred in free, which is to say, capitalist countries.”

    ~ Marian Tupy, from his post ‘Don’t demonise capitalism – it’s making the world a better place

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Monday, 21 August 2017

Wasted life


In the end, it seems, nothing summarises the time in Parliament of Peter Dunne quite as much as his timing in choosing to leave.

After thirty years in office, around twenty of them as a lapdog to power, he had signalled that he might, for the first time, be able to see his way clear to effecting some sort of liberalisation of the War on Drugs -- his first move of any significance in all his time as the various politicians' poodle.

So the very moment he may have proved himself to be of some use to the wider world proved instead his complete and utter impotence.

And instead of a liberalisation that has been far too long in coming, an achievement for which he would have deservedly been remembered, he leaves the Parliament instead after thirty years without a single credible achievement to his name.

He will be able to look back back, in other words -- just like many another politician -- at a wholly and completely wasted life.
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From the Archives: Yes, Virginia, the Nazis really were socialists


Originally posted here in 2005, this post is looking long overdue for a re-post...

I've noticed some bloggers and commentators around the traps still upset at claims the Nazis were socialist.

What’s that? Nazis?? Nazis were socialists?!! Well, yes they were.

It's true that the National Socialists didn't nationalise their economy's commanding heights on coming to power as Lenin would have had them do; they didn't nationalise them because they didn’t need to -- as Hitler said, they simply nationalised people instead. Political correctness at the point of a gun. The result for Hitler's Germany and in the end for most of Europe was the same as it was for Lenin's Russia. Destruction.

George Reisman makes the case for Nazism = Socialism in an article here, (which he also delivered as a lecture on video.)

De facto government ownership of the means of production... was logically implied by such fundamental collectivist principles embraced by the Nazis as that the common good comes before the private good and the individual exists as a means to the ends of the State. If the individual is a means to the ends of the State, so too, of course, is his property. Just as he is owned by the State, his property is also owned by the State.

The Mises Economics Blog describes Reisman's thesis thus:

Contrary to myth, Germany was a socialist state, not a capitalist one. And socialism, understood as an economic system based on government ownership of the means of production, positively requires a totalitarian dictatorship. Indeed, the identification of Nazi Germany as a socialist state was one of the many great contributions of Ludwig von Mises.

And as if your eyebrows aren't already heading for the ceiling, here's another claim of Reisman's that might get them there that is arguably even more important than the title thesis: "In the United States at the present time, we do not have socialism in any form. And we do not have a dictatorship, let alone a totalitarian dictatorship." Read on to find out what Reisman says about the present system in the US, and by implication the rest of the west: that we do not have a dictatorship, nor do we (yet) have Fascism. "Among the essential elements that are still lacking are one-party rule and censorship. We still have freedom of speech and press and free elections," he says...

FULL ARTICLE HERE And a video of Reisman’s original talk ...

Bonus Quote of the Day: Thomas Sowell on the poverty of low expectations

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“If you want to see the poor remain poor, generation after generation, just keep the standards low in their schoold and make excuses for their academic shortcomings and personal misbehaviour. But please don’t congratulate yourself on your compassion.”
~ Thomas Sowell

Quote of the Day: On #Charlottesville conditioning people to accept totalitarianism


"The ominous implication of [last] weekend's riots is that we are letting our politics descend into a brutal, unprincipled, physical brawl between two illiberal caricatures--which serves to drown out real debates over opposing ideas and marginalise any unifying principles that we might draw on as reasons not to just kill each other...
"The two sides are mirror images of each other, and both have an interest in making our politics devolve into street fighting. Both sides have also been priming their people to be ready to kill for the cause, and it appears that Spencer's gang got there first, with one of his followers ramming his car into a crowd and killing a young woman…
"We are in a state of emergency, and it's because we're letting our political debate be defined on illiberal terms. We're supposed to either back the guys who try to re-enact Nuremberg, or we back the guys who whip themselves up into a frenzy to 'punch Nazis'--and define ‘Nazi' as anyone who disagrees with them. We either want technology companies to conduct ideological inquisitions, or we've got guys chanting 'Blood and Soil. We take a vicious murder by a racist and turn it into another opportunity to score partisan political points on social media--as if we want racism to be a partisan issue rather than a common cause that transcends party.

"I wrote recently about the steps required to condition people to accept totalitarianism. One of those steps--one of the last ones--is that we get used to political differences being settled by a contest of force in the streets. We've been closer to that point before, during the 1960s, when the violent protests and race riots were far bigger. But that was the brink of a very deep precipice, and we should be doing everything we can, on both sides of the political debate, to pull back from it.”

~ Robert Tracinski, from his post 'Notes from Our State of Emergency'

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Saturday, 19 August 2017

Quote of the Day: ‘ But let's not have bureaucrats and unaccountable Board members pursuing personal agendas with our money’


"I remain of the view that the [New Zealand Superannuation Fund (NZSF)] is serving no useful purpose and should be wound up…
    “One of the annoying aspects of the Fund is the way in which the Board and management get to take your tax money and mine, and invest (or not) in causes which they happen to find appealing … this has little to do with a careful evaluation of financial investment risk and a lot more about politics and 'good causes' – virtue signalling…
    "Perhaps the NZSF choice[s] will be widely popular. But that isn’t their job. In fact, it has always been one of the dangers of the Fund. It isn’t their job to be playing politics by tilting the portfolio towards trendy causes…
      "If the public wants to ban dairying, or oil and gas exploration, then elect the politicians to make those calls, and hold them to account. But let's not have bureaucrats and unaccountable Board members pursuing personal agendas ... with our money. If the economic and financial case is really there – and remember that active management calls of this sort don’t have a great track record globally – then lay it out for us to see. On what they’ve released to date, this look much more like a virtue-signalling call than one consistent with the NZSF’s statutory mandate, or with the sort of professional expertise we should hope for from well-remunerated investment managers.”

    ~ Michael Reddell, from his
       post ‘Virtue Signalling with Your Money'

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Friday, 18 August 2017

Monuments


Despite the ridiculously overblown claims of assorted idiots either quoting or  thoroughly misunderstanding George Orwell’s warning against the practice of historical airbrushing, there is nothing in the least “Orwellian” about removing monuments celebrating murderers or worse.

Germany boasts no public monuments to Hitler, Goering or Goebbels, and nor should it. It boasts no public monuments to Hitler, Goering or Goebbels, not because their memory has been Orwellianly erased, but because after the war fought to end Nazism the country was de-Nazified – as it should have been – rooting out the poisonous ideology to the most thorough extent possible.

Likewise in Japan, after a world  war fought to end its militant aggression, the country’s politics was thoroughly de-Shinto-ised and deodorised – Shinto being abolished as a state religion and its militant and ultra-nationalistic teachings, rites and monuments expunged.

So it was, or would have been, after the American Civil War too – a war fought, (as every rebel state’s declaration of their causes of secession made crystal clear at the time) to make the South safe for slavery just as long as their slave-owners desired. But too soon after that war against this inhumanity was won, the cause itself was lost and Jim Crow laws soon dragged in by the back door much that a war that killed 700,000 had thrown out the front.

So if it has taken one-hundred and fifty years to rouse the opprobrium necessary to remove statues erected to lionise peope who elected to go to war for the “right” to put other human beings in chains, then let’s raise a Halleh-fricking-lujah to that opprobrium, huh.

And stop mis-using Orwell to complain about it. Simply insist it be done within the law, instead of without.

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Quote of the Day: On trade’s greatest benefit: peace (China/North Korea edition)


"Regarding the Aug. 13 news article 'China to N. Korea: You’re on your own if you attack U.S.’:
      "Would Beijing have issued the same warning 50 years ago? While the answer is uncertain, it’s plausible to suppose that Beijing back then would have been less likely than today to warn a communist ally not to start a war with the United States. If the United States suffers severe damage from nuclear (or even conventional) weapons, China today has far more to lose than it did under Mao Zedong. Unlike China under Mao, the Chinese today have legions of commercial customers and suppliers in the United States. And a pretty good rule of business is 'Don’t kill your customers.' Don’t even be complicit in such killing.
      "Perhaps we are today reaping one of the unsung benefits of freer trade and the international economic integration that it promotes: a greater reluctance of trading partners to go to war with each other. Maybe, just maybe, the United States’ much-derided economic integration with China will not only continue to enrich the people of both countries materially, but also — and far more importantly — prevent senseless slaughter.”
   
~ Donald J. Boudreaux, on ‘Trade’s Greatest Benefit'

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Thursday, 17 August 2017

Bonus Quote of the Day: On monuments, and their purpose


“Monuments are not historical lessons. They portray something that is to be admired and appreciated—that is the purpose of art."
-~ Keith O'Neil

[Hat tip Stuart Hayashi]

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Quote of the Day: On overexposure to the ‘news cycle’


“Is anything fun, anymore? I reckon that exposure to perpetual outrage is a difficult thing for the human mind to navigate. When that outrage is mixed with scorn, horror and shame, it can be harmful to maintain.
    “As citizens in a republic we should be aware of the very issues eliciting such outrage, scorn, horror and shame.  Awareness helps us to make sense of our world; for each of us to make informed decisions.
    “News or events eliciting these feelings make up our news cycle every day. Exposure to the issues for a half hour each night, or perhaps over a morning newspaper, is probably sufficient for awareness purposes. Exposure to the issues on a 24/7 news cycle is too much. And prolonged exposure to uncensored opinion typically manifesting as bile, is worse.”

    ~ David Wilson, from his post ‘Enjoying the Ride’ at the Footy Almanac

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Wednesday, 16 August 2017

Quote of the Day: Australian politicians are losing it, says ‘Australian Financial Review’


“Talk about losing it. The Barnaby vortex opened and consumed [Australian] Foreign Minister Julie Bishop [and Prime Minister Malcolm Turnbull] in a whirlpool of hysteria and conspiracy theories that would do Donald Trump proud.
    “Bill Shorten, she said, had sought to use a foreign political party to raise serious allegations in a foreign parliament designed to undermine confidence in the Australian government…
    “The Prime Minister told his party room that ‘Bill Shorten wants to steal government by entering into a conspiracy with a foreign power.’
    “It continued in this vein in question time – an utterly hysterical bit of political overkill that tried to turn the government’s mortification over the fact that, on the face of it, the Deputy Prime Minister shouldn’t be sitting in the Parliament – into a Labor conspiracy, because someone in the ALP dared to ask someone in New Zealand to check up on citizenship requirements.
    “The overkill only added to the sense that the government really doesn’t have a clue about political strategy, and how, under pressure, it falls to pieces, rather than finds a path through one of those grin and bear it phases of politics which its own rhetoric suggests is underway.”

~ from the Australian Financial Review’s article ‘The day New Zealand conspired to overturn Prime Minister Malcolm Turnbull

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Quote of the Day: Mises on copying another man’s work

 

“Freedom of the press does not mean that you have the right to copy what another man has written and thus to acquire the success which this other man has duly merited on account of his achievements. It means that you have the right to write something different.”
~ Ludwig Von Mises, from his Economic Policy: Thoughts for Tomorrow and Today, Lecture 1, pp 1-15

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Tuesday, 15 August 2017

Quote of the Day: On Charlottesville and beyond


”The events in Charlottsville are the logical consequence of the politics of identity… The predictable, poisonous end result [of which] has been the return of racial thinking, the rebirth of racial imagination…”

Monday, 14 August 2017

Bonus Quote of the Day: On how yesterday’s postmodern philosophy delivered today’s identity politics


"By the 1950s … the failure of Marxism to develop according to the logic of its traditional theory was reaching a crisis. The merging of these two developments yielded the surging to prominence of non-rational and irrationalist Left socialisms. The symptoms were many. One was manifest in the splintering of the monolithic Marxist movement into many sub-movements emphasising the socialism of sex, race, and ethnic identity.
"The international proletariat is a highly abstract concept. The universality of all human interests is a very sweeping generalization. Both abstraction and generalization require a strong confidence in the power of reason, and by the 1950s that confidence in reason had evaporated.
"The loss of confidence in reason implied, as a matter of practical politics, that the intellectuals now had even less confidence in the average person’s capacity for abstract reasoning. It is hard enough for a trained intellectual to conceive, as classical Marxism requires, of all of humankind as ultimately members of a universal class sharing the same universal interests. But—the more epistemologically-modest theorists of the 1950s begin to ask—can we really expect the masses to abstract to the view that we are all brothers and sisters under the skin? Can the masses conceive of themselves as a harmonious international class? The intellectual capacity of the masses is much more limited, so appealing to and mobilising the masses requires speaking to them about what matters to them and on a level that they can grasp. What the masses can understand and what they do get fired up about are their sexual, racial, ethnic, and religious identities. Both epistemological modesty and effective communication strategy, then, dictated a move from universalism to [so-called] multiculturalism. In effect, by the late 1950s and early 1960s, significant portions of the Left came to agree with the collectivist Right on yet another issue: Forget internationalism, universalism, and cosmopolitanism; focus on smaller groups formed on the basis of ethnic, racial, or other identities...

“'Our sense of solidarity is strongest [explained philosopher Richard Rorty] when those with whom solidarity is expressed are ‘one of us,’ where ‘us’ means something small and more local than the human race.’"

~ Stephen Hicks, from pages 158-159 of his book Explaining Postmodernism

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Quote of the Day: On false science


"Climate scientists are desperate for their educated guesses to be accepted as science; so desperate that at least some climate scientists openly challenge the very keystone of science, the requirement that scientific theories must provide a means by which they can be falsified.”
~ Eric Worral, ‘Claim: Climate Science Does Not Have to Be Falsifiable'

RELATED:

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Saturday, 12 August 2017

Quote of the Day: On sports cars, subsidies and so-called sustainability [updated]


"The Tesla, in effect, is a beautifully engineered toy for the conspicuous-consumption market, accessible to millionaires but beyond the reach of the commercial market. Neither it nor most other electric vehicles have any place in a competitive, free-market environment. As an indication of how economically injurious these playthings are to society on the whole, the U.K.’s National Grid estimated that Britain would need to increase its peak generating capacity by 50 per cent to meet the government’s plans for electric vehicles, the equivalent of building 10 new nuclear plants.
      "The driver of the electric-vehicle industry — government fixation on global warming — has spurred even larger fake industries, led by wind turbines and solar photovoltaic cells. Neither they nor the many other anti-carbon inventions such as carbon sequestration plants are in any business sense ‘real.' The global renewable-energy industry, having squandered trillions of dollars building economically unjustifiable infrastructure, represents the greatest loss of wealth in the history of commerce….”
   
~ Lawrence Solomon, on ‘How Elon Musk Became the Master of Fake Business'


UPDATE: Commenter Mark T. tells me “the ‘10 new nuclear power stations was an extreme worst case scenario, and the mid-range estimate and most likely estimate was nowhere near that.”

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Wednesday, 9 August 2017

Quote of the Day: 'This point-scoring and deal-making is absurd'


"...even if we were 'the best people in the world,' or Nobel-Prize winning geniuses, we would not be allowed into Australia....
"In the four years we have been imprisoned on Manus Island we have experienced three Prime Ministers. But our usefulness as a political football has never changed. This point-scoring and deal-making is absurd ."
~ Behrouz Boochani, refugee on Manus Island, Sydney Morning Herald, August 9, 2017

Tuesday, 8 August 2017

Quote of the Day: On socialism's latest inevitable disaster


"When the Berlin Wall fell it was obvious to everyone with eyes to see and a brain to think with that socialism had been tried, and it had failed spectacularly. No one alive at the time could fail to get the lesson: Socialism Sucks.

"But it seems lessons that big have to be relearned every generation: the tragedy of Venezuela should be this generation’s object lesson that Socialism Sucks.
"Socialism [has now come] to Venezuela ... This issue of The Free Radical sends out A Challenge to Young Socialists to watch, and to learn – and to reject this ideological harbinger of misery."
~ PC in the introduction to the Free Radical magazine's Venezuela edition, 2007

Monday, 7 August 2017

Quote of the Day: “You are worse than I am…”


"'Why haven’t you let them [refugees] out [from govt detention centres on Nauru & Manus Island]?' Trump asked [Australian PM Turnbull]. 'Why have you not let them into your society?’
"‘OK,' said Turnbull, 'I will explain why. It is not because they are bad people. It is because in order to stop people smugglers, we had to deprive them of the product. So we said if you try to come to Australia by boat, even if we think you are the best person in the world, even if you are a Nobel Prize-winning genius, we will not let you in. Because the problem with the people … ‘

"Trump interjected, to say: 'That is a good idea. We should do that too. You are worse than I am.'”
~ from transcription of telephone conversation between Donald Trump & Malcolm Turnbull, as reported in the Guardian and

Sydney Morning Herald

Thursday, 3 August 2017

Quote of the Day: On happiness


"Man's happiness or well-being, which in Aristotle's system also is regarded as the supreme end of all endeavour, is, indeed, dependent in part upon external fortune; it is not complete until this has afforded its good things; but ethics has to do only that which stands in our power, only with the happiness which man gains by his own activity. Every being, however, becomes happy by the unfolding of his own nature and of his own peculiar activity -- man, therefore, through reason. The virtue of man is, accordingly, that habitude or permanent state of mind through which he is made capable of the practice of rational activity; it develops out of the endowments of his natural disposition, and has for its fruit, satisfaction, pleasure.”

~Wilhelm Windelband, A History of Philosophy 

[hat tip Andy Clarkson]

Frank Lloyd Wright | HOW TO SEE the "American Home"


More from Manhattan’s Metropolitan Museum of Art’s’s important ‘Unpacking the Archives’  exhibition, unpacking the 150 years of archives of architect Frank Lloyd – this video (part of a series) unpacking yet another delightful series of artefacts.

This snippet: a brief introduction to Wright’s presentations, over several decades, of systems for ‘The American Home.’



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Wednesday, 2 August 2017

“All property is, at root, intellectual.” Discuss.




"The extraordinary achievements in the modern pharmaceutical, biotech, telecommunications and computer industries,” expains law professor Adam Mossoff, "are dramatic evidence of the significance of intellectual property rights to human life and success.

"In this talk, Mossoff outlines Ayn Rand’s radical justification for intellectual property rights: that all property is — at root — intellectual."


[Hat tip Capitalism Magazine]
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Quote of the Day: “We don’t have capitalism…”


“I see much praise of Amazon as a feature of capitalism. But we don't have capitalism. We have central planning of credit managed by a central bank.
    “The Federal Reserve [the US central bank] has caused falling interest rates and rising asset prices, including especially rising Amazon stock prices. Amazon has financed itself in two incredible Fed-fueled bubbles. While it is somewhat open for debate, I don't believe that the company would have been able to do this in a free market. Certainly, to the extent that Amazon and its customers are consuming investor capital, that would not occur in a free market.
    “For much of its history, it made no money. Now it makes a scant five bucks a share. Which share is priced well over a grand.
    “‘The Fed’ has made stock market speculators heedless of the consumption of their capital. Which has made managers cavalier about consuming it.”

~ Keith Weiner on how government’s central banks feed capital consumption

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Tuesday, 1 August 2017

Recent project: House & kitchen etc.



The wonderful kitchen designer with whom I often work, Leonie Von Sturmer, is far better at self-promotion than I am — and here (above) on the front cover of the latest Trends magazine is the new house and kitchen we recently worked on at Greenwood’s Corner, Auckland.

With its new roof carefully located to manouvre through council’s height-in-relation-to-boundary controls, I love the way you can relax at the kitchen counter with a beer, enjoying the birdlife and foliage of the surrounding trees through the glassed gables and dormers.

(If I say so myself), it makes for a surprisingly open and informal setting in a relatively constrained site.
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Politicians–and everyone else—still don’t understand Say’s Law


[Editor's note: How do you do away with a “Law” that had been core to economists’ understanding of the market economy for 150 years? You misrepresent it.
    On Thursday US Energy Secretary Rick Perry on declared "you put the supply out there and the demand will follow." It appears that Perry was attempting to invoke Say's Law, and many professional economists and pundits quickly took to mocking both Perry and Say's Law for making assertions contrary to modern Keynesian orthodoxy.
    Below, economist Per Bylund explains in this Guest Post what Say's Law really says, how Keynes misrepsented it, and why understanding the Law is still a good thing.
]

179299134Few concepts are as misunderstood as the so-called Say’s Law. In part, this is the fault of John Maynard Keynes who, needing to do away with it to make room for interventionist policy, did much to make it mis-understandable. How do you do away with a “Law” that had been core to economists’ understanding of the market economy for 150 years? Simple: You misrepresent it. Strawmen are so much easier to knock over than the real thing.

Hence, the “Law” is presently known in the misbegotten terms Keynes gave it, that “supply creates its own demand,” something that is obviously untrue.

Originally, however, Say’s Law was different. It even had a different name. Economists prior to Keynes tended to refer to it simply as the Law of Markets, so-called because it describes in very simple terms the fundamentals of how a market functions. Jean Baptiste Say was simply the earliest to express the law, which may be why it has come to bear his name.

Say noted that

A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.

This means that

As each of us can only purchase the productions of others with his own productions — as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.

In other words (and this still shocks postmodern economists), production necessarily precedes consumption; and (in the way Keynes’s mis-statement should be re-ordered) anyone’s demand is constituted by their supply.

The Law of Markets thus summarises the nature of market actions where production is specialised under the division of labour. Specifically, that we produce to sell, with the intention to then use the proceeds to buy what we really want. Market production is in other words indirect and not undertaken to directly satisfy one’s own wants. We produce instead to satisfy other people’s wants, and can thereby satisfy our own by purchasing what others produce.

The benefit is that there is a separation between what I want to consume and what I produce, which means we can each specialise in producing something we are comparatively good at instead of producing only what we want to consume. It also means we can specialise in producing only one thing instead of a multitude, thereby cutting switching costs, develop skills and expertise, increase knowledge, and consequently increase output.

But while universal specialisation under the division of labour means that overall output is significantly increased, it also means we become dependent on each other in trade. Not only do we need to sell what we produce to others in order to get the means necessary, but we need to also trade with those who produce what we want to satisfy our wants. We become interdependent – and voluntarily so. This is why Ludwig Von Mises stated that

Society is division of labour and combination of labour. In his capacity as an acting animal man becomes a social animal.

This “social animal” benefits from, engages in, and in fact arises out of market (inter)action. As we can only benefit ourselves by properly aligning our own productive efforts with what other people want, we must understand other people. By doing so, we can better anticipate what needs and wants they have and then busy ourselves with attempting to meet those needs. And because production takes time, production must precede demand.

Because demand is unknown, production is necessarily speculative and entrepreneurial. Actual demand will be discovered when the goods are presented to potential buyers. Entrepreneurs are therefore forecasters, project appraisers, and risk-takers; in an advanced economy they advance funds to owners of labour and capital, and only recoup this investment if they succeed in selling the product.

At the same time, the consumers can only buy if they have themselves engaged in production that satisfies other people’s needs — because otherwise they will only have the willingness but not the ability to buy (and that is not demand). This is not a circular argument but an integration at the “macro” level – and also an explanation for economic growth. The ability to sell goods in the market and thus engage in specialised production requires prior investment [i.e., a ‘wages fund’ – Ed.]. So to specialise one needed to first produce demanded goods in excess of one’s own wants. The same is true today: development of a new good requires investment, and that investment is speculative because actual demand cannot be known until it is too late.

The implication is that there can never be a general glut in the economy and therefore no “deficiency” in what Keynes called “aggregate demand.” It is however certainly possible for there to exist a surplus or shortage of any particular commodity, which happens regularly as entrepreneurs fail to precisely anticipate and therefore meet market demand, but only in the short term.

As all production is undertaken to sell the goods produced to then purchase goods that better satisfy the producer’s want, the inability to sell becomes an inability to demand. We cannot demand unless we first produce the means to demand. It is thus not a “demand deficiency” that someone is unable to sell what he or she produce, and consequently cannot demand goods in the market. Rather, it is a production failure that causes a reduction in effective demand — specifically, an entrepreneurial failure.

If government stimulates demand, then this only subsidises those goods that have been produced at too high cost. Consequently, the entrepreneurial errors are propped up and production therefore remains misaligned with demand.

So it is easy to see why proponents of interventionism would want to do away with the Law of Markets. If demand is not constituted by supply, then markets may not clear and government must save us from ourselves. Something every government today feels compelled to promise.


PerBylundPer Bylund is assistant professor of entrepreneurship & Records-Johnston Professor of Free Enterprise in the School of Entrepreneurship at Oklahoma State University. Website: PerBylund.com.
This post previously appeared at the
Mises Wire. It has been lightly edited.

Bonus Quote of the Day: What Labour lacks


“Labour needs new ideas not new leaders.”
~ Finlay Macdonald

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Quote of the Day: On welcoming foreign capital


“The tribal distinction of ‘us’ and ‘them’ has little relevance in a market economy. We should actually be welcoming foreign capital that comes to our shores, we shouldn't consider it a form of ‘invasion’.”
~ Alberto Miingardi, from his article “Macron, Economic Nationalist

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