Libertarians love to claim that their philosophy is backed by economics. While it is true that a number of famous economists have been libertarian, the more economics seems to back libertarianism, the less it resembles science and the more it resembles propaganda. The vast majority of libertarians who actually learn some economics learn either Austrian Economics or Chicago Economics. Those conflict so seriously that one side (or both) MUST be wrong. Both choices are seriously afflicted with the idea that economics is about capitalism, rather than actual human behavior. Claims that economics is a non-ideological science are transparently false.
- Austrian Economics (54 links)
- A pre-scientific, data-free, conservative and blinkered methodology for economics propaganda. Austrians tend to rely on handwaving, moral fairytales, and personal authority because they generally do not have mathematical models the way most other economics does. Pretty much every libertarian-leaning Nobel laureate in economics rejects Austrianism, starting with Milton Friedman.
- Business Cycle (8 links)
- Recession, depression, inflation and deflation are important aspects of business cycles that governments can and should manage with Keynesian policies. Libertarian economists in the Austrian and Chicago schools get it wrong.
- Chicago Economics (24 links)
- Milton Friedman's school. An example of Lysenkoism: "the manipulation or distortion of the scientific process as a way to reach a predetermined conclusion as dictated by an ideological bias."
- Common Fallacies Of Economics (67 links)
- Economics has its own styles of common fallacies. These are much loved by both pundits and highly qualified economists making partisan arguments.
- Currency (5 links)
- Libertarians generally complain about "fiat money" (paper money), and divide into gold or bitcoin camps. At this time, gold is simply a commodity: do gold standard libertarians want a government fiat to make it the currency?
- Deficit (3 links)
- Libertarians get all hot and bothered about government deficits. They are really just a form of borrowing, just like homeowners and businesses borrow. Rants about balanced budget amendments are simply ways they want to hamstring governments and cut taxes.
- Deregulation (39 links)
- Libertarians routinely propose deregulating almost everything; mostly because they want to increase private power by limiting government, not because it makes sense. Deregulation may not solve the serious problems that initially led to regulation or it may undo regulatory capture. Most deregulation activity is part of corporate attempts at Obstructing Regulation And Regulatory Capture.
- Development Economics (9 links)
- Some nations develop to become rich, while others stagnate and remain poor. There is a great deal of controversy about why, but libertarianism is not the solution (though it is often claimed to be.) Inevitably, success has government planning involved.
- Economic Power (5 links)
- Also known as Economic Coercion. Libertarians generally deny the concept of economic power, but there are many varieties. Purchasing power, monopoly power, bargaining power, managerial power, worker power, and class power at a minimum.
- Economic Reforms (8 links)
- Our current economic system concentrates wealth in very harmful ways. There are plenty of reforms that could help resolve this problem. Libertarian ideas generally would result in greater concentration of wealth.
- Economics 101 (69 links)
- Also known as neoclassical economics and economism. Libertarians are fond of applying standard Economics 101 microeconomics principles to bash the state. They forget the many concealed ideological biases of Economics 101, they forget that the real world doesn't often match simple models, they forget market failures, they forget the purposes of markets and they forget that microeconomics is not enough: you need macroeconomics too.
- Economics Alternatives (26 links)
- Mainstream economics has numerous problems. There are many different well-respected branches of economics that offer solutions but libertarians ignore because they conflict with libertarian ideology. These also provide much needed economic theory for opposing libertarian claims.
- Fiscal Stimulus (2 links)
- A Keynesian policy libertarians hate because it is government spending that is both an effective government policy and because it requires taxes eventually. They have invented many wild arguments against it (which have proven wrong) such as "crowding out".
- Free Market (25 links)
- "Free Market" (for libertarians) is a propaganda term, by which libertarians actually mean unregulated markets. Free markets cannot exist: they are an ideal model in economic theory. The vast majority of uses of "free market" are actually about real, regulated, imperfect markets, which are very little like free market models. Truly free markets would include markets for anything, including murder, and require perfect information and perfect competition. I recommend "unregulated market" instead of the propaganda term "free market".
- George Mason University Economics Department (11 links)
- A Koch-financed libertarian department of an otherwise publicly financed university. As of 2012, the Kochs had donated at least $33,000,000 to George Mason University. Essentially the entire department is also employed by the Mercatus Center, providing more Koch influence.
- Globalization, Free Trade and Economic Freedom (35 links)
- Code for "let business run the world and the heck with the populace." The anti-liberal dominance of plutocratic property and business over popular sovereignty. Historically, we could extend these concepts to include buying, owning, and selling slaves. The arguments made then were the same. Used by propagandists to trump other freedoms. Also known as economic liberty. These also result in large-scale redistribution, which capitalists prefer you not notice.
- Health Care (40 links)
- Despite superior results from socialized health care in every developed nation, libertarians insist on privatizing. Public health is the outstanding government success story. The sewers of Rome have saved far more lives than the legions of Rome ever killed. Killing by governments is tiny compared to the lives saved by government-eradicated smallpox alone. Libertarians frequently insist that Private Charity could replace socialized health care, but it has never done this anywhere in history.
- History of Economic Thought, 3rd Edition: A Critical Perspective (book, online)
- A readable textbook that will clarify your understanding of the pitfalls of different economic ideas, starting with the "invisible foot of the market".
- Ideology Underlies Economics (6 links)
- Claims that economics is a non-ideological science are transparently false. There's far more evidence than just the right-wing funding of Chicago Economics, Austrian Economics, and the George Mason University Economics Department. The ideology goes back at least to John Locke, who provided justifications for his class' policies of expropriation and enslavement. The wealthy have always created economic ideology to justify their wealth.
- Keynesian and Post-Keynesian Economics (13 links)
- Most libertarians oppose Keynesian arguments (such as insufficient demand causing recessions) because they conflict with their ideology (see Austerity.)
- Laissez Faire (23 links)
- Laissez faire is a hypocritical propaganda term: it is government that creates a capitalist environment, advantaging capitalists over others. Unregulated Market is a more honest term. History shows pretty clearly that unregulated, unfettered capitalism is a brutal environment where wealth accumulates in the hands of an elite leaving most people in poverty, deeply vulnerable to the inevitable economic shocks that follow.
- Law and Economics (13 links)
- A respectable school of legal and economic analysis which is often abused by libertarian academics for ideological propaganda purposes. It has been used extensively to train judges in corrupt economic conservatism. It's the obvious omissions of interests besides libertarian values that makes those books bogus.
- Libertarian Economic And Political Experiments (17 links)
- Chile and New Zealand are often cited by libertarians as sites of successful libertarian economic reform. They tend to cite a few "benefits", but there are many downsides....
- Libertarians understand economics better than people with other political positions. Especially liberals. (6 links)
- The vast majority of libertarians who actually learn some economics learn either Austrian Economics or Chicago Economics. Those conflict so seriously that one side (or both) MUST be wrong. Both choices are seriously afflicted with the idea that economics is about capitalism, rather than actual human behavior.
- Market Failure (36 links)
- Real world economies are rife with market failure. This means choosing between second-best options such as imperfect markets, NGO's and government solutions. Ideology and economic theory cannot say which is best: you must resort to experimentation and history.
- Mercantilism And Industrial Policy Works (16 links)
- Merchantilism, protectionism and industrial policy (AKA dirigisme) have a long history of being effective in the US, Great Britain, postwar France, etc. with free trade being adopted only after dominance is achieved. These policies are responsible for the huge reductions in poverty in India, China, Korea, and the rest of eastern Asia. Government support of export industry is key.
- Minimum Wage (23 links)
- Contrary to Economics 101 dogmas, minimum wage law has no harmful effects on employment according to many real-world studies. And definitely not the harmful effects long claimed by its opponents. Minimum wage does effectively reduce poverty.
- Monopoly, Oligopoly, Market Power and AntiTrust (44 links)
- Capitalists unendingly seek monopoly, oligopoly, monopsony and oligopsony as routes to the highest possible profits. All are inefficient according to ordinary microeconomics. This is a huge, measurable cost. Capitalists cannot self-regulate this problem away: government must.
- Positional Goods
- Positional goods are a zero sum game, and the more who participate in the game the more wasteful it gets. Luxury taxes can redistribute part of the wasted wealth to better purposes which are not zero sum.
- Privatization (37 links)
- There is an enormous history of privatization which shows that while it is sometimes beneficial, often it does not give the results its proponents claim. Privatization is often a form of crony capitalism, and often results in a different and less desirable product.
- Public Choice Theory (9 links)
- A school that starts with anti-government and pro-market ideology to find that government cannot work and markets do. Surprise! Economics for the plutocracy. See also Rational Choice Theory for the usual methodology.
- Public Goods And Club Goods (17 links)
- Libertarians often refuse to recognize public goods and club goods, or that governments have a role in their provision. The list of important goods with substantial public or club goods components is very long, and includes education, law, safety, health, transportation, research and much more. (Club goods are like public goods but excludable and only rivalrous with congestion.) Markets underproduce these because of the free rider problem.
- Rational Choice Theory (4 links)
- A field of economic theory that is notorious for many pathologies. See also Public Choice Theory, which uses rational choice methodologies.
- Rationality (Economics) (13 links)
- Rationality has a special meaning in economics, having to do with ideal models of human thinking that generally do not match what humans are actually capable of and are known to do. Humans use other methods instead: see Actual Human Rationality. In addition, Austrian economists redefine rationality to mean something entirely different.
- Refutation of Dogmas by Empirical Economics (17 links)
- Much of the economics recited by libertarians is Derp, but many older economics ideas have had a long evidence-free existence that is now being clearly refuted by modern empirical economics methods.
- Regulation (27 links)
- Regulation can protect important liberties, such as freedom from poisoning by pollution. Regulation can benefit by eliminating some bad choices or protecting from side effects. Complaints that regulation "destroys jobs" are laughable because ordinary productivity increases routinely destroy vast numbers of jobs. How many of us have farm jobs any more? Meeting regulatory requirements may even create new jobs.
- Social Security (13 links)
- Social security (and other social insurance such as Medicare) is one of the great enemies of libertarians and conservatives. They continually misrepresent it and claim alternatives are better. It is also the largest pot of money in the world: hence it's destruction would provide a huge windfall for the economically dominant.
- Spontaneous Order (9 links)
- Use of "spontaneous order" by libertarians is a propaganda term popularized by Friedrich von Hayek. It is meant to imply that no design is needed to create the order, while distracting from the fact that real human environments have major designs such as property and other institutions. Any environment will have a spontaneous order, whether or not any part of it is designed, coerced, or planned. Often these are (or result in) Unexpected Consequences. Nor are spontaneous orders likely to be maxima.
- Taxes (30 links)
- Libertarians hate 'em! But minarchist libertarians (the vast majority) have no coherent answer to how to pay for even a minimal government. Libertarian and Republican criticisms of taxes usually overlap.
- Unemployment (4 links)
- Libertarians have no solution to unemployment beyond discredited trickle-down theories.
- What is wrong (and right) in economics? [More...]
- "... anything that has turned into conventional wisdom is almost by definition wrong, or at least, overstated." Examples of dismissal of market failure, rejection of other social sciences, and benefits of globalization.
The worst enemies of enduring freedom for all may be certain folk who demand incessantly more liberty for themselves. This is true of a country's economy, as of other matters. America's economic success is based upon an old foundation of moral habits, social customs and convictions, much historical experience, and commonsensical political understanding. Our structure of free enterprise owes much to the conservative understanding of property and production expounded by Alexander Hamilton -- the adversary of the libertarians of his day. But our structure of free enterprise owes nothing at all to the destructive concept of liberty that devastated Europe during the era of the French Revolution -- that is, to the ruinous impossible freedom preached by Jean Jacques Rousseau.
Russell Kirk, "A Dispassionate Assessment of Libertarians"
But -- speaking of economics -- there’s basically an infinite market for glib pseudo-academic bullshit, if it protects and enhances the political and economic power of the already wealthy and powerful. That, more than anything else, is the base on which the intellectual Potemkin village that Epstein and his ilk have built continues to rest so securely.
Paul Campos, "A Plague Of Libertarians"
People who think "free markets" work in healthcare or the Internet are just as functionally stupid about economics as the most hardline Communist who thinks that the government should exercise full control of the toothpaste market. Most of the world understands by now that the second guy is a dangerous fool. But we're at a weird point in history where the first guy undeservedly has more credibility. He shouldn't--and he won't for long.
David Atkins, "Americans: we love paying more for less"
Economics is luxuriant with fallacies, because it is not a natural science like physics or chemistry. Propositions in economics are rarely absolutely true or false. What is true in some circumstances may be false in others. Above all, the truth of many propositions depends on people’s expectations.
Robert Skidelsky, "Four Fallacies of the Second Great Depression"
The majority of economic activity takes place without any direct connection to markets, undertaken in the household or government sector, or within large corporations that trade in the market sector, but use central planning to organize their own activities.
John Quiggin, "I Pencil: A product of the mixed economy"
We don't have to go into "Monkey's Paw" territory to realize that getting what you think you want can prove thoroughly unacceptable; it's a fact of life, which doesn't disappear in economics.
Cosma Shalizi, "In Soviet Union, Optimization Problem Solves You"
… Economic doctrines always come to us as propaganda. This is bound up with the very nature of the subject and to pretend that it is not so in the name of ‘pure science’ is a very unscientific refusal to accept the facts.
Joan Robinson, in Marx, Marshall And Keynes
I have always aimed to make my own prejudices sufficiently obvious to allow a reader, while studying the argument, to discount them as he thinks fit, though of course, this generally leads a reader of opposite prejudices to reject the argument in advance …
Joan Robinson, in Marx, Marshall And Keynes
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
Joan Robinson, in Marx, Marshall And Keynes
[L]ibertarianism has a naïve view of economics that seems to have stopped paying attention to the actual history of capitalism around 1880. There is not the space here to refute simplistic laissez faire, but note for now that the second-richest nation in the world, Japan, has one of the most regulated economies, while nations in which government has essentially lost control over economic life, like Russia, are hardly economic paradises. Legitimate criticism of over-regulation does not entail going to the opposite extreme.
Robert Locke, "Marxism of the Right"
You might say that neoliberalism borrows from economics only in the sense that astrology borrows from astronomy.
Simon Wren-Lewis, "Ordoliberalism, Neoliberalism and Economics"
A peculiar deformation of mainstream economics is the tendency to pooh-pooh the real-world relevance of all the theoretical reasons market fail and government intervention is desirable.
Dani Rodrik, "What is wrong (and right) in economics?"
There are powerful forces having to do with the sociology of the profession and the socialization process that tend to push economists to think alike. Most economists start graduate school not having spent much time thinking about social problems or having studied much else besides math and economics. The incentive and hierarchy systems tend to reward those with the technical skills rather than interesting questions or research agendas. An in-group versus out-group mentality develops rather early on that pits economists against other social scientists. [...] [E]conomists tend to look down on other social scientists, as those distant, less competent cousins who may ask interesting questions sometimes but never get the answers right. Or, if their answers are right, they are so not for the methodologically correct reasons. Even economists who come from different intellectual traditions are typically treated as “not real economists” or “not serious economists.”
Dani Rodrik, "What is wrong (and right) in economics?"