Apr
29
2015

What Should We Call “Austrian Economics?”

In their 2008 essay “Economic Singularism,” William Barnett, II and Walter Block wondered if there wasn’t a better label we could have for “Austrian Economics.” As evangelists of the Austrian School know all too well, when we mention Austrian economics to non-economists, they typically crinkle their face and ask if we are talking about economists who happen to live in Austria. The confusion is understandable; it could probably use a different name.

Here are some potential names Block and Barnett came up with (from my favorite to least favorite):

  • Property Rights School of Thought
  • The Praxeological School of Thought
  • The Methodological School of Thought
  • The Spontaneous Order School of Thought
  • The Information School of Thought
  • The Either Success or Error School of Thought
  • The Subjectivist School of Thought

I really like the Property Rights School of Thought because property rights are the basis for any other kind of rights for a libertarian. If you don’t own your property, including your person, what benefit is any other so-called right?

Praxeology is Mises’ term for the study of human action. I do prefer it when people ask me, “What the HELL is praxeology,” to when they ask, “Are Austrian economists all from Austria?” So calling it the Praxeological School would lead more people to understand the theoretical framework of praxeology and more people to ask about it.

Block and Barnett came up with their own top choice for a new name: The Singularism School of Thought.

The Singularism School of Thought

Austrian economics is all about deducing from the idea that people act purposefully. Each choice is some action A over alternative actions B,C and D to achieve goal X,Y or Z. Different people prefer using different means to achieve the same goals, and, quite often, prefer different goals.

Singularism is the idea that a person has only a “single” choice at any given time – he can either do A, or not A (B,C,D or F). His choice, A, was not necessarily the best choice by everybody’s standards, but it was his best choice in the moment, given what he knew and what he valued.

In Human Action, Ludwig von Mises talked about a principle called Methodological Singularism:

Praxeology asks: What happens in acting? What does it mean to say that an individual then and there, today and here, at any time and at any place, acts? What results if he chooses one thing and rejects another?

A man never chooses between “gold” and “iron” in general, but always only between a definite quantity of gold and a definite quantity of iron. Every single action is strictly limited in its immediate consequences. If we want to reach correct conclusions, we must first of all look at these limitations.

Block and Barnett define Singularism as the idea that “all of human action consists of choosing one option and setting aside all others” (22).

The Escalator Dilemma

To show how the singularity principle plays out, Block and Barnett applied it the example of walking on an escalator. They mocked their colleagues at the University of Rochester who couldn’t figure out the answer to this question: “If people stand still on escalators, then why don’t they stand still on stairs?”

The Singularism Analysis:

Let’s assume that the goal, X, is to get to the top of the stairs. The binary either/or choice is clear: either do X (get to the top) or do non-X (don’t get to the top). These are different situations with distinctive opportunity costs. Only in the stair situation does he really have this binary decision to make. If he doesn’t walk on the stairs, his opportunity cost is that he won’t get to the top. If he doesn’t walk on the escalator, he will still get to the top, just not as quickly.

Thus there are two separate choices: first, he must decide whether he will use the stairs, escalator or even the elevator, and then he must decide to walk or not to walk.

Conclusion

Block and Barnett might not actually want to rename the Austrian School of Thought with the Singularity School of Thought. Their purpose, rather, was to highlight this important aspect of choice so we don’t make bizarre errors that lead to unnecessary interventions into the economy.

 

 

Apr
10
2015

Who Owns the Future: China or India?

China and India are the two most populous countries in the world. Both have the potential to become the most important economy in the next generation or two. Both are highly bureaucratic, but, as economist Gary North pointed out, India is a Keynesian bureaucracy and China is a Communist bureaucracy. North argues that India has a brighter economic future than China because its Keynesian bureaucracy is more in line with Western bureaucracies. But what exactly does this mean?

Keynesian Bureaucracy vs. Communist Bureaucracy

Both kinds of bureaucracy gets funding by extracting money from the taxpayers. But only in a Communist bureaucracy do the bureaucrats actually have the power to imprison and torture citizens. In such a system, the state can do whatever it wants because it owns the courts. The state owns every individual person and all property. This is called totalitarianism. Both are systems of centrally planned economies, but only the Communists carry people off and execute them in the night.

Dr. Gary North said that the chief difference between these two systems is that Western Keynesian bureaucracies respect the right of self-ownership. An individual person is a separate legal entity and not just a small, insignificant part of the state, as under Communism. “Keynesianism rules indirectly, by positive incentives mostly, and by the threat of interference from time to time.” At least Keynesians are somewhat predictable in their actions and incentives.North continued, “In a Keynesian bureaucracy, the state is not the primary owner of the means of production. The government directs the economy primarily through indirect means, such as low-interest loans, certain kinds of subsidies, the regulatory system, control over the central bank, and various kinds of sanctions, both positive and negative. In the United States, the central bank is legally independent from the federal government. It usually cooperates with the federal government, but it does not have to. In a Communist society, the central bank has to cooperate.”

Legacy of Common Law

There are other reasons why North believes India has a brighter future than China. The reasons are related to the fact that India was ruled by the British for 250 years. Now, hundreds of millions of educated Indians speak fluent English and are well-acquainted with a common law system. The common law system is closer to a free and rational legal system than the tyrannical Communist system practiced by the Russians and Chinese. Common law, or customary law, is the part of law that comes from custom and judicial precedent rather than statutes written up by a legislature.

“If we’re talking about betting on the future,” North writes, “I would bet on India over China. That is because I believe in liberty. The Chinese have a degree of economic liberty, but they do not have the basics of what we in the West regard as a free society… India is bureaucratic, but it is a Western bureaucracy, not a Communist bureaucracy. That makes all the difference.”

Should We Be Impressed with China?

Perhaps Westerners are overly impressed by the economic growth numbers seen in China over the last several years. North wondered if people were impressed by the wrong things: “They are impressed with central banking, massive bureaucracy, hostility to common law, hostility to freedom of the press, rigged statistics, government-owned commercial banks, and in the case of China, the biggest real estate bubble in history. That bubble is going to pop, and there will be social turmoil in China when it happens.”

Conclusion

If we project out to the year 2050, when India has the world’s largest population and China’s population has stagnated, it seems likely that India will be the bigger economic powerhouse. China does have a big real estate bubble and rapidly aging population. And Dr. North’s argument about the significance of common law and the superiority of Western Bureaucracies certainly add fuel to the argument for preeminence of India.

Feb
12
2015

Question for Christians: Does God Want You to Obey the State?

Christian pastors typically tell their churches that it is important for them to obey the government because of the teachings in Romans 13. Some churches are led by absolute warmongers, but many others have leaders who are simply trying to stand up for law and order, perhaps naively in some cases.

It is important for Christians and all decent people to be respectful to others. This good cheer should even extend to people in authority- but only because they are people, not because of their power. The issue has nothing to do with one’s position; just be a decent person to everybody.

Christians typically agree that it is wrong to break criminal and contract law. But then there are “laws” that go way beyond criminal and contract laws. In these cases, where the legitimacy of the laws are open to debate, Christians should obey the state’s laws only as a practical matter. For example, the income tax protesters might have some rather convincing intellectual points, but who wants to spend their life in jail? Of course, there can sometimes be cause for resistance against unjust laws. This is up to the conscience of each individual. It is up to each person to navigate his way through this world of ideas, careers, relationships, money and horses. Just don’t hurt other people; serve other people. That will make you rich and happy. The liberal soul is made fat. By watering others we water ourselves (Proverbs 11:25).

Now it is true that the State has been the greatest enemy of Christians throughout history. The persecuted Christians in the Roman Empire were never asked to worship Jupiter. The axe-men worked ’round the clock chopping off Christian heads because they would not worship the State. The whole of the religious life in the pagan world was administered by the State. The Bible rejects this program in its entirety. The great Christian battle has been against those who would make man into God, and this has been done most successfully by giving people a new God in the State. This doctrine of “Statism” leads to totalitarianism because it is based on the belief that the State is the ultimate authority on earth. Statism is the great rival religion competing against Christianity in the West.

Christians are supposed to look to God as the ultimate authority in the world, not the State, which is simply a man-made replacement for God and His laws. The Bible portrays God as autonomous; the State portrays man as autonomous. Acts 5:29 commands Christians to obey God rather than man. Too many Christians today have found it easier to subvert the authority of God than to subvert the authority of powerful men. All Christians should oppose the logic of total State power as lethal to Christian values and the freedom required to live them out.

As a Christian, it is a matter of following God’s commandment to love other people. Whilst some people worship the State as a kind of earthly salvation for the problem-of-the-month, the Bible teaches people to look to God for values, peace and hope.

Jan
11
2015

Russians Dying of Hopelessness

Mother Russia’s Ugly Population Stats

The Russian population declined by 7 million (5%) from 1992 to 2009. This is an incredible depopulation bomb – unheard of in peacetime— that is being caused by rising mortality.

Russia has one of the lowest birthrates in the world: 1.61 (compared to 2.01 in the U.S.). UN data from 2010 showed that Russia had the highest abortion rate in the world. And how about a third factor: rising mortality rates. According to the mortality research of Nicholas Eberstadt, the life expectancy of 15-year-old males in Russia is worse than their peers in Somalia and Ethiopia (2006 figures). Truly unimpressive. No wonder Russia is losing population.

What is Killing Them? No Hope!?

Eberstadt found that Russian depopulation occurred three other times in the 20th century: after the Russian Civil War (1917-23), during the murder and starvation of two million in Russia and Ukraine (1933-34), and during WWII when 27 million Russians died.

After ruling out smoking, drinking, health care spending and other factors, Eberstadt wondered what could be the cause of rising mortality in Russia. Without a definitive explanation, he assumes there is a “relationship” between mortality and psychological well-being. A loss of hope and belief in the future.

Gary North agrees with Eberstadt’s assessment: the Russians are dying from a loss of hope. North tied rising mortality rates to a loss of faith in Communist post-millennial eschatology. Post-millennialism is basically a belief in the future, a belief in progress; that the best is yet to come. This eschatology was not a feature of the thousand-year-old Russian Orthodox Church. It was a feature of Communist utopianism. Russian life expectancy has dropped dramatically since the collapse of Communism. By seven years.

“The Soviet Union imposed a new eschatology onto the people of Russia. This new eschatology was intensely postmillennial. It substituted long-term evolutionary progress for the final judgment. It preached a doctrine of judicial theology, but it made the state God. If men believed in the state, meaning the state as run by the Communist Party of the Soviet Union, their lives would improve. If they obeyed the bureaucracy, their lives would improve. All of history was to be understood only by the principles of scientific socialism. The people were told that the principles of scientific socialism guaranteed the expansion of Communist society across the face of the earth. This, in turn, would create a new mankind. Adherence to Marxism, as applied to national politics, would lead to the regeneration of society. This was an article of faith.

This had to do with the religion of revolution. The belief was simple to state: proletarian revolution is inevitable throughout the world, and this revolution, which was inherently sacrificial and bloody, would transform mankind over time. This was taught systematically throughout the entire educational system of the Soviet Union for 70 years.”

The religion of revolution turned out to be a hallow religion for the Russian people. And they have been the special victims of totalitarianism.

Masha Gessen of the New York Review of Books, writes:

In (the book) ‘The Origins of Totalitarianism’ Hannah Arendt argues that totalitarian rule is truly possible only in countries that are large enough to be able to afford depopulation. The Soviet Union proved itself to be just such a country on at least three occasions in the twentieth century—teaching its citizens in the process that their lives are worthless. Is it possible that this knowledge has been passed from generation to generation enough times that most Russians are now born with it and this is why they are born with a Bangladesh-level life expectancy?

Dec
24
2014

Orwell’s “Complete Reversal” on Capitalism

George Orwell (1903-1950) was a socialist writer who had tried very hard to make a neat separation between economic freedom and political freedom. He thought you could control the production of the body without controlling production of the mind. But, ultimately, he changed his mind. He was an idealist, a communist. He came to see that Marxists were not believers in utopia, but merely power-seekers who did and said whatever needed to gain power – then use it!

Orwell’s far left publisher, Victor Gollancz, accused Orwell of being too pessimistic about the future of the totalitarian state in “Inside the Whale,” an essay in which he uses the story of Jonah inside the whale as an image of accepting the world without trying to change it. Orwell responded to Gollancz’s concern on January 4, 1940: “You are perhaps right in thinking I am over pessimistic. It is quite possible that freedom of thought etc. may survive in an economically totalitarian society. We can’t tell until a collectivized economy has been tried out in a western country (13).” orwell

Orwell saw capitalism as a system in which wealthier people exploit workers. So he didn’t have a high view of economic freedom and, thus, didn’t see why economic freedom would be necessary in a free society.

But Orwell changed his mind a year later. In his BBC radio talked “Literature and Totalitarianism,” Orwell argued that literature would be impossible in the future totalitarian world. In his talk he admitted the inescapable tie between economic and political freedom. “It was never It was never fully realised that the disappearance of economic liberty would have any effect on intellectual liberty. Socialism was usually thought of as a sort of moralised liberalism. The state would take charge of your economic life, and set you free from the fear of poverty . . . but it would have no need to interfere with your private intellectual life. . . . Now, on the existing evidence, one must admit that these ideas have been falsified (15).”

Writing in the conservative academic quarterly journal Modern Age, Arthur Eckstein called this an “astonishing passage” and a “complete reversal” from Orwell’s earlier denial of the necessity for economic liberty. Eckstein chastised Orwell for never being honest enough to return to this inescapable idea in his later writings. “The implications of this view of the social impact of capitalist economics made Orwell the socialist very uncomfortable, challenging his most cherished ideals about how a ‘just’ society should look.” (16)

Eckstein is right: Orwell should have developed the implications of this insight– regardless of the soft feelings of his socialist buddies or his own attachments to vague socialist utopianism. Nevertheless, Orwell recognized the dead-end of the totalitarian state and painted an unforgettable picture in his book Nineteen Eighty-Four, published shortly before his death. He was very much a liberal in his writing, rather than a socialist. He believed strongly in freedom of thoughts. Here is the way Orwell set up the fundamental conflict of civilization: “(1) Society cannot be arranged for the benefit of artists; (2) without artists civilization perishes” (p 18). Orwell offered no solution to this dilemma. He didn’t offer socialism as a solution.

Eckstein, Arthur. “1984 and George Orwell’s Other View of Capitalism.” Modern Age, March 1985. Pp. 11-19.

 

Jun
26
2014

Was YOUR father Just Like Ron Paul?

Warren Buffett, one of the wealthiest men in the world, enjoyed the benefit of having a very Ron Paul-esque father. In fact, Howard Buffett was probably more like Ron Paul in his sound economic and liberal political views than any American politician until… Ron Paul himself in 1976.

buffett

Howard Buffett was so sure he couldn’t get elected to Congress in 1943 that he hadn’t bothered writing an acceptance speech.

Howard Buffett (1903-1964) served four times as a Republican Congressman in Nebraska during the decade between 1943 and 1953. Unlike almost all of his political peers in Congress, Buffett was a consistent defender of liberty. The taxpayer was the “forgotten man,” in Buffett’s eyes; the government kept using his money He stood against interventionism both at home and overseas, opposing the Cold War, foreign aid and military conscription. Buffett tied together conscription and freedom in 1962 when he wrote “When the American government conscripts a boy to go 10,000 miles to the jungles of Asia without a declaration of war by Congress…. what freedom is safe at home? Surely, the profits of U.S. Steel or your private property are not more sacred than a young man’s right to life.”

Buffett was not completely alone in the fight for liberty in the 1940s and 50s. He was part of a group of Republicans known as “Taftites.” They were part of the “Taft” wing of the Republican Party led by the Republican Senator from Ohio Robert Taft. The Senator was primarily driven by a desire to stop the imperialist and expansionist internationalism sweeping the United States after the Second World War. Taft opposed new internationalist alliances such as NATO, favoring instead a return to international law in world affairs. Besides Buffett, other Taftites included Rep. Ralph Swinn of New York, H.R. Gross of Iowa and then Rep. George Bender and Frederick Smith – both from Taft’s state of Ohio (McMaken, 7).

Howard Buffett was a critic of the Office of Price Administration (OPA), which had the job of putting price controls on retail consumer goods to “stabilize” the economy. Lower prices are cute – for a short time, before they lead to shortages and you cannot buy the goods at any price. Buffett blamed the OPA for shortages in lumber, soybeans and corn. He thought price-fixing had a particularly pernicious effect on small businesses, claiming that price regulations had caused half-a-million businesses to fail in just three years from 1941 to 1943.

And the government price controls didn’t even do the only good thing it was supposed to do: end inflation. Buffett told the New York Times in 1952 that imposing price controls is a “fake remedy” for inflation. It “makes inflation worse by concealing and postponing its effects. It will ultimately destroy the free market that is the base on which American freedom rests,” he said.

The gold standard was both an economic and political issue for Buffett. It was so important for individual political rights, he thought, because gold-backed money was welcome all around the world and, thus, gave people the freedom of movement – they were not trapped into their own government. But, with the abandoning of the gold standard, the American citizen became “dependent upon the goodwill of the politicians for his daily bread.” This is probably not a safe position for American citizens.

 

McMaken , Ryan. A Brief History of the Old Right: Libertarian and Conservative Critics of Foreign Interventionism. Ryan McMaken: 2002.

May
28
2014

Skyscraper Effect in China?

Chinese Skyscrapers Mania

Skyscrapers are some of the most long-term building projects on the planet, and China seems to build a new one every day. Shanghai currently has three of the 16 tallest buildings in the world: the Jin Mao Tower (1999), the Shanghai World Financial Center (2008) and the Shanghai Tower (2014). And China is planning to finish the tallest skyscraper in the world with a project in Changsha, the capital city of central China’s Hunan province.

 

 Do Skyscrapers Cause Economic Depression?

The economist Andrew Lawrence created the “skyscraper index” in 1999 to point out the correlation between the building of the latest “world’s tallest skyscraper” with impending global financial disaster. Lawrence called his index an “unhealthy 100 years of correlation.” Bottom line: if you hear that some builder is constructing the “tallest skyscraper in the world,” watch out! It is not that the building of the skyscraper causes the economic depression, but is rather a prominent symptom of powerful economic forces. Specifically, these skyscrapers tend to get built when there is the largest disconnect between the actual interest rate and the natural interest rate. That is, when government intervention forces the actual interest rate lower than the natural rate of interest for a long period of time and to a great extent.

Boom-Bust Business Cycle

The builders announce and begin constructing the world’s tallest skyscraper in the late phase of the boom in the Austrian business cycle, while unemployment is still low. Next is a sharp economic downturn and increase in unemployment. The skyscraper is finally completed during the early phase of the inevitable economic correction. Had the builders known the future, they would not have continued their incredible building project in these cases, but, the relevant price information typically comes too late for them to make an informed decision on construction.

Capital-Intensive Boom

The most famous economic disaster in U.S. history, the Great Depression, took place at a time of what Austrian economist Mark Thornton called a “capital-intensive boom in the construction of ever-taller buildings.” What was he talking about? Everybody has heard about the massive gains and bubble in the stock market at the end of the 1920s, but fewer are aware of the massive construction bubble that occurred at the same time. At the time of the great stock market crash, U.S. builders were in the midst of constructing not just one of the “world’s tallest skyscrapers,” but three: 40 Wall Street (71 stories in 1929), the Chrysler Building (77 stories in 1930), and, of course, the Empire State building (102 stories in 1931).

What is the Austrian Explanation of the Skyscraper Effect?

skyscraper

Planned “world’s tallest skyscraper” in Changsha, China.

The skyscraper has become the symbol of the capitalist system in the modern era, much like railroads and factories were its symbols in earlier eras. Skyscrapers are very long-term investment projects – just the kind of projects that artificial booms encourage. Remember, during the Great Depression, the famous “cluster of errors” occurred first in capital-goods industries rather than consumer-goods industries.

Mark Thornton explained, “In the Austrian view, changes in the interest rate change the relative price between longer-term capital projects and shorter-term capital projects. A lowering of the interest rate raises the prices of longer-term capital goods relative to shorter-term capital goods.” The market responds to this change in relative prices by diverting resources to long-term capital goods, such as skyscrapers. There are only so many resources in the economy at any given time, and they do not always get diverted to the best long-term projects for the actual market. “These resources become formulated in a highly specific capital good that may not be well suited to the alternative production processes of the postadjustment economy,” said Thornton.

And then there is the earthy question of what happens when land prices go up and construction prices go down? Skyscrapers go up.

Thornton explained what happened in four major financial crises throughout the 20th century:

“First, a period of “easy money” leads to a rapid expansion of the economy and a boom in the stock market. In particular, the relatively easy availability of credit fuels a substantial increase in capital expenditures. Capital expenditures flow in the direction of new technologies that in turn creates new industries and transforms some existing industries in terms of their structure and technology. This is when the world’s tallest buildings are begun. At some point thereafter, negative information ignites panicky behavior in financial markets and there is a decline in the relative price of fixed capital goods. Finally, unemployment increases, particularly in capital- and technology-intensive industries. While this analysis concentrates on the US economy, the impact of these crises was often felt outside the domestic economy.”

Perhaps the Chinese government knows about the skyscraper effect and that is why last summer they called it off “until the project passes relevant safety examinations and gains building permits.”

 

Read Mark Thornton’s Skyscrapers and Business Cycles

Apr
25
2014

Sundown in America?

David Stockman, the former Director of the Office of Management and Budget (1981-85) during the Reagan Presidency and author of “The Great Deformation: The Corruption of Capitalism in America”, spoke at Harvard University in a speech he called “Sundown in America: The Keynesian State-Wreck Ahead.” Stockman spoke about the ill-effects of his party’s Republican Keynesianism and its responsibility for destroying the growth of wealth in American families over the past 25 years.

Golden Nuggets from the speech:

  • Stagnant Living Standards: The median U.S. household income in 2012 was $51,000- a figure reached in 1989. Living standards have not grown in 24 years.
  • Poorest Struggling More: Bottom quintile of households making $11,500, a 20 percent decrease from the $14,000 in constant dollar income in 1989.
  • Food Stamp Nation: The number of Americans on food stamps has risen from 18 million to 48 million since 1989.
  • Rich Getting Richer, Including Under Obama: The top 5 million U.S. households (top 5%) have enjoyed an income rise from an inflation-adjusted $240,000 in 1989 to $320,000 last year. The $40 trillion gain in the net worth of the top 5% is almost double the entire net worth of the other 95% of households.
    Writes Stockman, “So, no, Sean Hannity need not have fretted about the alleged left-wing disciple of Saul Alinsky and Bill Ayers who ascended to the oval office in early 2009. During Obama’s initial four years, in fact, 95 percent of the entire gain in household income in America was captured by the top 1 percent.
  • Pentagon Budget Grew $200 billion: From $450 billion per year in 89′ to $650 billion per year, a 40% increase despite the election of the Harvard peace candidate Barack Obama.
  • Income in DC Metro Has Climbed 40%: From $48,000 to $62,000 during the same time that wages have been stagnant for 25 years in America as a whole.
  • Debt as Percentage of GDP: The $3 trillion of national debt in 1989 was just 35% of GDP; today’s $17 trillion debt is 105% of GDP.
  • U.S. Credit Market is on Drugs: Has risen from $13 trillion (2.3X national income) in 1989 to $58 trillion (3.6X national income) today. This credit market debt figure includes the debt of households, financial institutions and businesses.
  • Fed Prints $4 Billion of Make-Believe Money Every Business Day: This is a solution?

Stockman’s picture of America over the last 25 years:

  1. The rich have done exceedingly well, doubling their fortunes. He blames this on the Central Bank’s policies which transfer wealth to the top 1%.
  2. The government has done very well, expanding its powers over people.
  3. Regular folk are paying more for the government and getting less in benefits.

The modern American State is failing to deliver on its promises: it is a “Savior State which can no longer save the economy and society because it has fallen victim to its own inherent short-comings and inefficacies.”stockmanreagan.banner.AP

Stockman got on a roll, calling out the State for totally failing to distinguish between public interest and private looting, “One week Washington proposes to bomb a nation that can’t possibly harm us and the next week its floods Wall Street speculators, who can’t possibly help us, with continued flows of maniacal monetary stimulus.”

Stockman predicted this depressing “Sundown in America” scenario because he believes the federal budget has become a “doomsday machine,” without any effective process of fiscal governance in sight. He concluded that the American State will destroy itself through its own economic debauchery.

Mar
20
2014

Monsters in America

Americans have always created monsters for their own consumption as a way to deal with changes in American society. Scott Poole’s book “Monsters in America: Our Historical Obsession with the Hideous and the Haunting” recounts the history of American horror culture. Poole shows how the monsters represented in American fiction reveal the psychology of the American mind as it responds to historical events and big social changes. Essentially any being outside of the American norm could become a monster.

Colonial Era

New World colonists have been creating monsters ever since Columbus discovered the wonderful world of cannibalism. Europeans then believed that all Native Americans must be cannibals. Cotton Mather saw the natives as children of the devil who were created to challenge the Puritan colonists in the New World. The witch was “the devil in the shape of a woman.” Poole sees the image of the witch in the 17th and 18th centuries as a depiction of woman commanding economic and sexual power in society. Other early monsters included the mysterious sea monster and the wholly mammoth.

Slavery

Distrust in slavery went both directions. First of all, the slaves wondered what the slave-owners did with the slaves that left the plantation. They must be eating them, of course. And then the slave-owners obsessed over the potential for slave rebellion. Poole writes, “The story of an inhuman creature that turns on its master provided slaveholders with a ready metaphor for the possibility of a slave rebellion.” They also had to dehumanize their black slaves to justify their enslavement; many American slave-owners did not have a history of slave-ownership back in Europe and so were not naturally comfortable with the institution. But owning monsters was more palatable.

Human Agency Horror

In “Human Agency Horror,” we see common people committing horrendous crimes, especially in the household. These horror comics, written in the 1940s and 1950s, dealt with domestic horrors such as the murder of spouses. These comics often had a socially and politically “subversive intent,” according to Poole. This might be a mental patient uprising against their unfair caretakers or a wife cruelly murdering her husband.

World War and Cold War

The post WWII era is characterized by radioactive lizards and alien invasions. The radioactive lizards served as a way to define the nuclear threat and attempt to deal with it. Americans were understandably paranoid about what nuclear power might do — rather than write some lame script about some anti-nuclear weapon activists attending conferences, Americans created a nuclear monster.

The alien invasions were based on fears of a Soviet invasion during the Cold War, and probably some residual fears of Nazi Germany that was so firmly planted in the American mind. There was also the fear of invasion from within: communists at home; perhaps even your neighbor. Invasion of the Body Snatchers would be an example of this inability to trust your neighbors’ intentions. Poole mentions the paranoia brought on by J. Edgar Hoover, who told Americans to be very suspicious of young people who play the guitar or women who are way too interested in education.

Serial Killers

The 1970s and 1980s and even 1990s witnessed a response to the cultural revolution of the 1960s. Americans began consuming what he calls “horror news” wherein  The “sexual counter-revolution” of the 1980s created the myth of the serial killer, who was represented as the inevitable result of the sexual revolution. The serial killer was often given deep sexual motives for his violent crimes. “We created this” was the idea. “True Crimes” authors noted things like Ted Bundy was born out of wedlock and raised by a single Mom, or Jeffrey Dahmer was a homosexual.

What does the Monster Look Like Today?

Where is the insatiable debt monster? or the overpriced health-care monster? Now, now, the monster of today is the evil businessman in the movie who tries to make a profit at any cost.

 

Poole, Scott. Monsters in America: Our Historical Obsession with the Hideous and the Haunting. Waco: Baylor University Press, 2011.

Mar
1
2014

Why the West Developed – Less Militarism?

Why did the West develop economically much more quickly than other civilizations?

Because the West demonstrated a lower time preference compared to these other people groups. This allowed the process of civilization to occur, a process marked by savings and capital accumulation. The higher a group’s time preference level, the more likely it was to stop being smart and developing its human capital, and instead just beat other groups over the head with a club and steal their stuff. A great short-term strategy, but you can see how it makes people very stupid after hundreds or even thousands of years.

Ludwig von Mises writes: “The eminence of the Western nations consisted in the fact that they succeeded better in checking the spirit of predatory militarism than the rest of mankind and that they thus brought forth the social institutions required for saving and investment on a broader scale.”

At some point, property rights need to be respected so that the division of labor can work its magic in peace. “What the East Indies, China, Japan, and the Mohammedan countries lacked were institutions of safeguarding the individual’s rights.”

And yet the success of the West has helped other people groups. The West’s foreign investment into areas with higher time preferences have supported the process of civilization the world over. Mises writes, “Thanks to foreign capital, the countries of Latin America and Asia are today equipped with facilities for production and transportation that they would have had to forego for a very long time if they had not received this aid. Real wage rates and farm yields are higher today in those areas than they would have been in the absence of foreign capital.”