Monopoly: Defined

One of the many difficulties in debating the statist is clear communication.  Many economic terms have never been well defined and therefore the definition of such terms has been assumed.  To add to the confusion, in some cases, multiple definitions exist.  Additionally, definitions of words have evolved or have been outright co-opted with the intent of blurring their meaning.  So which definition holds?  To be prudent, one must point to the definition in use and must continually ask others to clarify the meaning of their words.

The use of the word monopoly is but one example.  In fact, in attempting his discussion of monopoly price in Man, Economy and State, Rothbard writes “Before investigating the theory of monopoly price, we must begin by defining monopoly.  Despite the fact that monopoly problems occupy an enormous quantity of economic writings, little or no clarity of definition exists.  There is, in fact, enormous vagueness and confusion on the subject.  Very few economists have formulated a coherent, meaningful definition.”[1]  In the very next paragraph he adds “A common example of a confused definition is: ‘Monopoly exists when a firm has control over its price.’  This definition is a mixture of confusion and absurdity.”[2]

For clarity, when I use the word monopoly, I use it in concert with the definition put forth by Murray Rothbard in Man, Economy and State.  His definition is “…monopoly is a grant of special privilege by the State, reserving a certain area of production to one particular individual or group.”[3]  Libertarians object to this grant as it is incompatible with market freedom.

I note the above for two purposes.  To document the use of the term monopoly in discussion and to respond in part to a comment posed by a listener to the Annoying Peasant Radio Show.  The comment stated in part “Monopoly is defined as having the means to control a market, but it is not illegal to compete with them.”  I would first point out that this is not a definition of monopoly to which I ascribe, and further, I recognize Rothbard as the authority on the subject.

Any writing of Murray Rothbard is worthwhile to read to discover the coherency of the libertarian philosophy (as well as to uncover the contradictions of the State).  For the beginner, Economics in One Lesson by Henry Hazlitt is highly recommended.  To find a plethora of recommendations I refer the reader to Tom Woods’ Liberty Classroom (

[1] Murray Rothbard, Man, Economy and State, page 661

[2] Murray Rothbard, Man, Economy and State, page 662

[3] Murray Rothbard, Man, Economy and State, page 669


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Nelson Mandela the Incoherent Ender of Apartheid

Nelson Mandela passed today, December 5th 2013 at the age of 95.  As a youth he opposed the use of force against himself and his supporters on seemingly principled grounds.  He opposed the oppression of the citizenry by the state.  As president, however, he supported the use of force against innocents to organize society according to his vision.  Like all statists, he did not recognize or choose to recognize, the incoherence of his position.

Most people remember that he had been incarcerated for 27 years.  Most are likely unaware, however, that according to Wikipedia and other news reports, Mandela was jailed resulting from a conviction on sabotage and conspiracy charges stemming from a bombing campaign targeting the government.  Mandela was accused of leading that campaign.  He denied the charges.  He was sentenced to a term of life imprisonment and was released in 1990 after an international campaign lobbied on his behalf.

Born into a royal family, Mandela attended the Fort Hare University and the University of Witwatersrand, where he studied law. While living in Johannesburg, he became involved in anti-colonial politics, joining the African National Congress (ANC) and becoming a founding member of its Youth League.  He studied the writings of Karl Marx aligning and associating himself with communists.

Upon his release from prison he worked to end apartheid which occurred in 1994.  His visits after his release included Cuba and Fidel Castro whom he long emulated.  His “ascent” to the presidency was as a democratic socialist.  He then, as a matter of policy, systematically used the force of government to reshape the South African society.  In 1994 he implemented “Obamacare”, “free” healthcare for pregnant women and children under six years of age and a slew of other social programs.  Mandela’s administration instituted collective bargaining and the Basic Conditions of Employment Act of 1997 which created enforcement mechanisms while extending a “floor” of rights to all workers, while the Employment Equity Act of 1998 was passed to put an end to discrimination and ensure the implementation of affirmative action in the workplace.

Mandela received criticism for failing to sufficiently combat crime, South Africa having one of the world’s highest crime rates.  750,000 whites who emigrated in the late 1990s cited the crime rate as the reason for leaving.  Much of that crime was black on black.  Mandela’s administration was mired in corruption scandals.

Upon Mandela’s death, most are unaware of the contradictions of his life.  They will fail to evaluate his life in full context.  They will hail him as a good man.  One who endured severe hardship and  ended apartheid.  I can support only his actions which were in concert with justice.

The only principled legacy is that of peace.  And peace is a result of the respect for the non-aggression axiom and property rights stemming from self ownership.  Nelson Mandela respected neither with consistency.

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The Claim “Obamacare Will Get Fixed”

Many of the supporters of Obamacare claim that it will get “fixed”.  The website issues will be addressed.  (The cost of which will not be seriously considered).  Enrollment in the plan will expand.

The plan that caused many existing health insurance policies to be cancelled will be modified to become politically more palatable.  The insurance companies will continue to be vilified for canceling existing customer’s policies regardless of the reasons for doing so.  The disrespect of economic realities (hard to cover the costs of insurance when a provider cannot deny those with preexisting conditions) will not be discussed in any meaningful way.  Unfortunately, it is likely that the government propaganda machine will, over time, win out over the people and with the people’s support or at least because of the peoples’ complacency.

Undoubtedly the website will become operable.  Complaints will become less frequent.  Supporters of Obamacare will claim the naysayers were wrong.  The statists will be vindicated (sarcasm warning).

Make no mistake.  Obamacare will not be “fixed”.  It may run temporarily (due to additional funding taken from other sources).  It may leave the headlines for a time.  The fervor will temper as the next battle comes to the fore.  But Obamacare will not be “fixed” only because it cannot be fixed.  The underlying reason for this is that the use of aggressive force and disrespect for property rights is not sustainable.  And this is what Obamacare is at its core.  It is the redistribution of wealth by threat of force.  It is theft.  It is the destruction of wealth.

It will be necessarily “fixed” again and again and again.  It will be an ongoing battle.  I have seen this before.  See campaign finance reform.  See social security.  See Medicare.  It is an inescapable truth that these programs, like the state itself are doomed to fail.  The battle of rhetoric may subside as politicians find it no longer politically expedient to continue the argument against Obamacare.  But the fate of all of these programs and the state are undeniable.

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The Incoherence of “Revolutionaries”

Recently we discussed a Russell Brand interview with Jeremy Paxman on Newsnight on the Annoying Peasant Radio Show.

Mr. Brand makes an impassioned plea for change; a paradigm shift, in his words.  He does so recognizing there is something wrong, that the system does not serve the many, that working within the confines of an apathetic, flawed system cannot improve our condition in a meaningful way; at least not to the extent that is radical enough to make a significant improvement.

To do as Mr. Brand suggests, we must fully understand the current circumstance, identify its contradictions, and propose an alternative that eliminates these errors and ensures that we do not add new inconsistencies.

So what is it about this paradigm that causes Mr. Brand to advocate change?  He claims that the current system underserves the disadvantaged; the poor.  I assume that Mr. Brand speaks of the permanent underclass, perpetual poverty, the disenfranchised.  (There is much more to our current circumstance, but I will limit the scope of the objection to the state to this argument.)

From the broader perspective we must understand, the current system, the state, has but one tool at its disposal.  Ludwig von Mises describes this tool and therefore the state itself as force.  Everything that the state contemplates or does must either be backed by the threat of force or is in fact the use of force.  And to be subjected to force is in direct contrast with man’s nature to be free.  It is this contrast that is the root cause of the problem of social order.  The use of aggressive force – the systematic disrespect for property rights (based on self ownership) creates the conflict in which society finds itself.  It creates a permanent underclass.  No meaningful improvement in man’s condition is possible until this reality is recognized and addressed.

As a result, the only paradigm shift is represented in support for property rights (in concert with self ownership).  All other proposals are the use of aggressive force wrapped in a different package – slavery in a different form.  They represent a reorganization of the chairs on the deck of the Titanic and do not address the impending doom of the ship.

Mr. Brand makes an effort to deflect the consistent questioning of the precise description of his proposed paradigm shift.  In the end he relents and exposes his ignorance of economic law.  He expresses his support for the use of aggressive force to create a new order.  He advocates the use of aggressive force to offer relief to those that have been especially victimized by the use of aggressive force.  He makes the classic error.

The only relief available to all (including those in perpetual poverty) is first to recognize the error of the present paradigm, to make the adjustment to eliminate the systematic imposition of aggressive force and to support the property right of self ownership.  The tool at the disposal of the citizenry to affect this change is the most powerful, knowledge.

With education, the citizenry are destined to enjoy the tranquility of peace and to unlock the full potential of the human creative spirit.

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Performance: Why a Free Society Beats the Statist Society, Everytime

The common objection to a free society is the contention that it simply will not work.  At best, the statist claims, “it is potentially a viable theory, but it just won’t work”.  The market failure theorist (a term Dr. Thomas Di Lorenzo has coined) insists that the liberty advocate fundamentally misunderstands the realities of man.  Nothing could be further from the truth.

The common argument has the statist endlessly questioning the liberty advocate placing the burden of describing every detail of human cooperation squarely on the shoulders of the natural order supporter.  The freedom advocate is caught in a never-ending game, a game in which he cannot “win”; a tactical error however, not an inherent weakness of liberty.  But the “how” is not where the primary support for a free society lies.  The case for liberty is rooted in its coherent argument.  No system of governance by a state (as is commonly understood) can make such a coherent case.

However, how a free society outperforms the society encumbered by a state is of course important and can and has been explained.  There is no doubt it outperforms the encumbered society.  Presented here is an abbreviated case for why this is so.  To gain a full understanding of the case for liberty, one must engage in a larger scale effort.

The problems presented by the statist regime are many, however, fundamentally this form of dominance does not properly recognize the nature of man, scarcity, property rights and the incompatibility of the use of aggressive force.  The private law society recognizes all of these fundamentals.  The natural order requires that society not be divided into two classes, the rulers and the ruled as does statism.

Reason dictates that the removal of encumbrances necessarily allow for an increase in the productive effort.  The theoretical and historical cases support the claim that societies acting in accordance with well-defined property rights (and those in concert with the nature of man) exceed the performance of a society encumbered by a state.  Support for this claim rests on the assertion that: 1) Defined property rights, when adhered to, reduce the potential for conflict.  2) The cost of production will be reduced.  3) Many items currently provided by the state will not be produced at all.  4) The cost of services currently offered by the state that have a market demand will be available at a lower price.  5) Possibly the greatest single gain will be made to the psyche of the populous, the only wealth creators.

Conflict avoidance, a concept emphasized by Hans-Hermann Hoppe will cause more resources to be dedicated to productive effort and reduce the destruction of wealth.   A system of justice, understood and practiced reduces the potential for conflict, creating stability and peace.  As the potential for conflict is reduced, society will divert resources from war and preparedness for conflict to peaceful cooperation – the creation of wealth.  Preparedness for conflict and war will be acknowledged as an inefficient use of resources.  The market will encourage the diversion of resources to more efficient use.  Further, the destruction of wealth that occurs in conflict will be limited, offering the preservation of existing wealth producing capital keeping them available for productive use.  There is a twofold gain resulting from stability and peace.  It will redirect resources currently used for preparation for conflict and also eliminate the destruction of resources as a result of war.

The cost of production will be reduced as a result of eliminating the burden the state currently places on production.  With the help of large-corporation honchos, regulations that discourage small businesses and start ups punish any attempt to enter the marketplace with red tape, burdensome regulations, minimum wage laws and healthcare laws.  Many readily recognize endless red tape requiring entire departments that produce nothing of value.  They exist solely to gain and maintain compliance and appease government inspectors, officials or bureaucrats.  Resources used currently for lobbying will be eliminated as the use of authority will not be for sale as it is now.  And the destructive mandates created as a result of lobbying will never come into existence.  Additionally, tax attorneys and tax accountants will be available for productive work.  All of this capacity will be realigned to create wealth, products and services demanded by the market.

Further reducing the burden on a free society, many services currently provided by the state will not be produced at all.  The “bads” produced by the state will be eliminated in short order.  Examples abound.  The US Postal Service will cease operation or be absorbed by those supplying delivery services.  Subsidized, poorly designed and maintained roads will be placed in the hands of businesses who will satisfy the needs of the marketplace or face elimination.  The FDA, responsible for the deaths of many annually will cease to exist.  The monopolization of money will be eliminated requiring no central bank.  The market will ensure the highest quality money at the lowest price just as it does for mail delivery, medical service delivery and any service.  Consistent with a free market, only goods and services demanded will be produced and those producers who cannot efficiently use resources will become more efficient or face elimination from the marketplace.

Upon elimination of the “bads” that the state currently supplies, the cost of the remaining services supplied by the state will be offered at a lower cost.  The state currently enjoys its status as a holder of a legal monopoly on the supply of its services which inevitably makes it an exploiter and expropriator.  No entity will enjoy a similar status.  The competitive marketplace will push suppliers to innovate to reduce costs further.  The result will be the reduction of the cost of producing these goods.

The affect on the psyche of the populous may in fact be the greatest impact.  The realization of the fruits of one’s labor will unlock the full potential of man’s creative spirit.  And unlocking the full potential of man’s productive capacity yields the greatest wealth.  In addition the psychological affect on the happiness is likely not quantifiable nor measurable, but is no less real because of a lack of a metric.

The journey to liberty requires context.  It takes effort to gain the proper prospective.  It has been said that to know truth you must risk everything.  Imagine the first ocean going explorers; the intense fear of the unknown, the possibility of falling off the edge of the earth.  The journey to liberty is similar in so many ways.  The enlightenment that comes from this effort is fulfilling and “liberating”.  So question the legitimacy and very existence of the state.  Use your ability to reason.

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