KOL158 | “The Social Theory of Hoppe: Lecture 6: Political Issues and Applications; Hoppe Q&A”

Kinsella on Liberty Podcast, Episode 158. This is the final  of 6 lectures of my 2011 Mises Academy course “The Social Theory of Hoppe.” The slides for this lecture are appended below; links for“suggested readings” for the course are included in the podcast post for the first lecture, episode 153. Transcript below. LECTURE 6: POLITICAL ISSUES AND APPLICATIONS; HOPPE Q&A Video Slides TRANSCRIPT The Social Theory of Hoppe, Lecture 6: Political Issues and Applications; Hoppe Q&A Stephan Kinsella Mises Academy, Aug. 15, 2011   00:00:01 STEPHAN KINSELLA: Final class.  We have a lot to cover.  Before I start, let me say don’t be intimidated by the length of the slides if you see them later.  There’s a lot of slides.  I put a lot of text in there for your reading pleasure later.  We’ll skim over some of that.  It’s there for – just for a full sort of, almost like a paper for you to study later and for resources.  I’m going to try to cover as much of it as I can, and I suspect we’re going to go the full 90 minutes on the lecture.  And I’ll be happy to stay as long as we need after that for Q&A, so that’s my plan. 00:00:39 So let’s get going.  Slide two.  So we talked about economic issues and applications last week.  We have a few more to finish tonight, and I will post the final quiz later this week.  I think only maybe 15-20% of the class took the midterm, which is fine.  You’re not – don’t feel under an obligation to take it.  But some of you might find it fun and a good refresher, and you’re not really graded on a per-class basis.  It’s just personal grading.  So today, we’re going to cover the – we’re going to finish the economic applications and issues from last time. 00:01:19 We’re going to go over the Hoppe Q&A.  He did provide me with answers to a bunch of questions that you guys submitted.  And then we’re going to talk about a variety of political issues and applications.  In addition to the ones we’ve already discussed, of course, argumentation ethics, which is a political-type issue, but some other applications tonight.  I didn’t give any suggested readings for this week.  There’s just so many little issues.  All the links are in these slides, and we’re going to go over them tonight. 00:01:48 So I thought that was sufficient rather than giving you – Karl is asking about the midterm.  I don’t – I think it’s probably close already, but Danny can let you know that.  If it’s not, I wouldn’t mind having it held open a little bit longer if people who haven’t taken it yet want to take it.  Okay, fine.  Stephen says it’s still open, so just – it’s only 16 or 18 questions, all multiple choice.  Some are funny.  Some are harder.  Some are easy, so feel free to take it as a refresher. 00:02:21 00:02:28 Karl says sounds went out.  Can anyone else hear me?  Okay, Karl, it’s your issue.  Maybe Danny can help you.  Okay, now – so I’m going to get to one of the remaining issues that we had here.  I’m only – I’m going to go over these, and a lot of them cover what I think are the highlights so that we can cover a lot.  Okay.  So a brief review.  There is, in the Austrian economics literature, an issue called the “Economic Calculation Debate,” 1920 or so. 00:03:10 Mises wrote a famous article where he argued that one problem with a centrally planned socialist economy, that is, an economy where the government, the state owns the means of production, is that there won’t be market prices for these things.  And therefore, you won’t know how to compare alternative projects.  When entrepreneurs think about the future, they compare possible uses of resources they have available.  And they compare them in terms of what kind of profit they can make in the future, that is, monetary profit. 00:03:42 So the only way to do that is to try to imagine, if I do project A, I might make a million dollars.  If I do project B, I might make $2 million, etc., and you compare the projects that way.  And then you choose the one with the highest profit, other things being equal, risk, etc., and you do that.  So that’s the standard Austrian idea of entrepreneurship, and Mises pointed out, well, without private property ownership of the means of production on a free market, you won’t have prices.  And then so the central planners won’t know how to compare these things.  They won’t know how to compare a bridge versus a tunnel.  You won’t know which one uses more resources.  You won’t know which one is more efficient. 00:04:24 So the action they – the decision they make will not be economic even if you just – even if you forget about all the other problems with it, which is self-interest and collusion and corruption etc.  So there’s a – for a long time – and then Hayek came along, and Hayek built on Mises’ theory with his knowledge ideas about how – Hayek said that, well – at first he was working within this idea of Mises, the criticism of socialism.  And he said, well, another aspect of this is that actors on the market know things, but they don’t know how to express them.  Like you know how to tie your shoe, but you might not be able to say that.  You know other things. 00:05:07 He called this tacit knowledge, but his point was even though knowledge in the economy is dispersed and widespread and held by different people and a lot of it’s tacit, it can be expressed in action when people make decisions on the market.  They affect prices, and so this knowledge that people have tacitly and in a dispersed form is spread throughout the economy by sort of a signaling mechanism of the price system.  And for a long time, Austrians said that Hayek had sort of illustrated Mises – or sorry, expanded on Mises or built on that or was sort of the flipside of the coin. 00:05:49 In 19, I want to say, 90-something Joe Salerno, in a postscript to the republication of Mises’ 1920 or ‘21 argument, points out that Hayek’s argument was really different than Mises’.  That’s called the de-homogenization debate.  He de-homogenized Hayek and Mises, and that started a series of articles in the review of Austrian economics, which are fascinating to read if anyone is interested in this.  Look in the later issues in the 1990s, articles by Leland Jager and Hoppe and Joe Salerno and Jeff Herbener and others about this calculation debate.  It’s a fascinating debate. 00:06:36 So I can’t go into it in detail, but Hoppe takes the side of the Salerno de-homogenizers here, and let’s go to slide five.  Just a few quotes here.  You’ll see the basically Misesian/Hoppian take on this is that Rothbard himself – this is before he died, 1995 – he concluded, the entire Hayekian emphasis on knowledge is misplaced and misconceived.  And Guido Hülsmann, a Hoppe student, also discusses how the knowledge problem is irrelevant.  And Salerno talks about how the price system cannot be what the Hayekians claim it is, and it I can’t go into that here.  But finally, let me just mention Hoppe comments that Hayek’s contribution to the socialism debate is false, confusing, and irrelevant. 00:07:28 So just be aware of that.  If you’re interested in going into that in more detail, I suggest some of these papers I have linked here.  But just be aware that there is a difference at least on the Misesian side.  They believe that the way the Hayekians and the Misesians view knowledge and calculation is fundamentally different.  Okay.  But you’ll hear Hayekians like, I don’t know, Steve Horowitz and Pete Boettke and these guys – Pete Boettke; I just typed his name there – who will say that the Hayekian knowledge stuff is a flipside of the coin.  Or it’s like another way of explaining the insight Mises had, or it’s complementary to it. 00:08:11 But some of the Hoppians and Misesians still believe that.  They believe that it was a misleading emphasis.  I tend to think they’re correct, although I do think there’s something about Hayek’s emphasis on knowledge that you could integrate into the way of looking at the role of knowledge in human action that I’ve been talking about lately with respect to intellectual property.  But that is neither here nor there, and I’ll leave it for now.  If anyone has any questions about this, we can maybe take it up at the end, but let’s move on now to what would have been, I think, the final topic I was going to talk about last time. 00:08:48 Some of you may have seen one of Hoppe’s graduate – advanced graduate seminar talks on Mises University from a few weeks ago where his topic was about Malthusianism.  He also gave a similar talk about this at the Property and Freedom Society earlier.  I think it was this year or last year.  I’ve got the link up here.  And he’s got a draft paper as well, which I think is not online.  I have a copy, but it’s not up yet. 00:09:17 And as Hoppe notes, Mises actually talks about, Thomas Malthus’ theories.  Now, some of you may have heard of Malthusianism, and you might have thought of it as an outmoded or crankish doctrine.  But in fact, Mises was extremely praiseworthy of it and said it was one of the most amazing achievements of human thought, etc.  The basic idea of Malthusianism, Thomas Malthus was a thinker, oh God, I don’t know, in the 1600s or something.  Maybe someone else knows when he had his ideas.  Modern-day Malthusians are people that are afraid of population increase.  They think that if we have too many people, it’s bad. 00:10:02 That grew out of Malthus’ ideas where he basically formulated some economic laws.  So he talked about, in capital accumulation in an economy, you have different factors that combine to produce your goods.  And so he said, well, you have to have an optimal combination like two parts of this and three parts of that to produce the optimal outcome.  So he said, well, if we if we focus on two of those factors, labor, human effort, or which depends upon the number of humans,