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Economic Freedom and the Montgomery Bus Boycott

Posted by blindspotpolitics on November 8, 2012

Economic Freedom and the Montgomery Bus Boycott

In his aptly named “Stride toward Freedom,” Martin Luther King describes the means by which he and other Montgomery, Alabama African Americans achieved social justice on the bus system through nonviolence. The focus of the book is clearly these elements: a) nonviolence and b) justice. King writes of the former as the method and of the latter as the sickness. But the goals? Well, none other than freedom.

While reading King’s account I could not help but analyze the means by which social injustice occurred in Montgomery. At almost every flip of the page, another element of injustice stared me and Dr. King in the face. Interestingly, however, this “social injustice” was anything but social—meaning merely relegated to the social sphere of life. The social injustices that prevented the boycott and kept alive the gross inequalities of segregation were political, expressed through economic action.

The Negro taxi companies were unable to help the boycott because there was a mandated minimum charge for their services. The boycott was put under legal strain because of an old law that prevented, essentially, a conspiracy in the marketplace (forcing consumer to buy without their consent). The city played it tough by demanding compensation for the lost funds during the strike (a 15% fee from the busses, which, for some reason, they were legally entitled too). These protectionist policies continually hindered the progress of freedom.

Such a realization not only links the social, political, and economic spheres of life (and the disciplines) but also highlights the danger of positive liberty expressed against economic freedom. For, from where did the social justice derive? In short, from the government’s positive economic laws. Without such sanctions on the economic rights of African Americans (although never explicitly expressed of course, except for segregation itself), the boycott would have been far easier; the protestors, as consumers, would have had more options to attempt the overthrow of social injustice.

The marketplace could have provided them leverage against the evil forces that be. But instead, the government held them down through its attempts to equalize the market—equality and liberty struggled to keep in balance, the former preventing the latter. This conclusion suggests the need to limit the government’s ability to infringe on economic freedom, and more generally to limit its ability to effect positive laws—especially at a local level where factional and subjective values dominate.

There are many uses for the government, but manufacturing economic equality is only necessary if economic inequality has already been manufactured. The one precipitously leads to the other, with the power of government the benefactor of factional interests that aim to undermine one another. When power and money collide the effect is structural inequality that cannot be bypassed except by battling within the system. When money and power are kept distinct, the consumer is free to act as she pleases.

King’s “stride toward freedom” was unnecessarily a battle against government power instead of solely against the social inequalities constructed by the two race’s history. It was a stride toward economic freedom, toward negative liberty, as much as a nonviolent movement against the discriminations of the social status quo.


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Can Praxeology Tweet?

Posted by blindspotpolitics on July 13, 2012

What if Twitter could accurately predict the stock market?

Well, apparently it can.

Derwent Capital Markets, a London based hedge fund, recently used data from Twitter to anticipate the rise and fall of stocks. The project ended up with a 1.86% return, beating out the overall market. According to the study “Twitter mood predicts the stock market,” the social media service can be utilized for an 87% accuracy in stock predictions.

Shit. That’s pretty cool. Now, stop thinking about how you’ll now become rich by reading all your friends’ tweets (could be me, but I don’t think it’s that easy); perhaps more importantly, this study and its implications offer insight into the greatest struggle of Austrian Economists like Ludwig Von Mises or Fredrich Hayek: empirical data.

Austrian Economics, unlike most modern economic theories, rejects the principles of empirical induction, preferring, instead, to logically deduce the “laws” of economics from human action. All of this rests on praxeology, nicely defined by a recent article from the Ludwig von Mises institute:

Praxeology rests on the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals. This concept of action contrasts to purely reflexive, or knee-jerk, behavior, which is not directed toward goals. The praxeological method spins out by verbal deduction the logical implications of that primordial fact. In short, praxeological economics is the structure of logical implications of the fact that individuals act. This structure is built on the fundamental axiom of action, and has a few subsidiary axioms, such as that individuals vary and that human beings regard leisure as a valuable good.

Essentially, man is a rational actor, his actions matter, but such actions are too subjective to quantify with any supposed insight.

Here’s where Twitter comes in–

Twitter is a platform that allows individuals to express themselves succinctly and, hopefully, accurately. That’s why it can predict the stock market–a twitter update is fundamentally an expression of an individual’s will-what he or she wants to do, will do, or thinks others should. When that data is compiled and properly analyzed it should give a picture of real trends (more than just a hash-tag) that reveal how people are acting en mass.

If we can predict how individuals will most likely act then we might be able to predict fluctuations in the overall economy based on those rational decisions at the individual level. Each individual matters, but when we look at an aggregate of mankind’s thoughts, motivations, and actions we can begin to see how data can serve many purposes. If we earnestly believe that the greatest predictor of economic trends is the actions of one individual then we have affirmed praxeology and Austrian Economics more generally.

The realities of predicting the stock market with Twitter show that markets are directed by the actions of rational individuals throughout society (expressing their will via social media) , not the planned or directed actions produced by governments. From here it’s fairly simple to conclude that centrally planned economies will never work. If the individual is the vital cornerstone of an economy then by allowing economic liberties that promote free market capitalism you are allowing individuals to have true agency in rationalizing their economic choices, a freedom every individual should enjoy.

Thanks Twitter.


The Free Market

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#Healthcare: the triumph of subjectivity

Posted by blindspotpolitics on June 28, 2012

A few months ago I almost shit myself from laughing so hard. During one of the Republican Presidential debates, New Gingrich proposed that we start getting rid of activist judges who support liberal things like gay marriage or gun control or health care reform. Most of the men who shared the stage with him shared his sentiments. “These activist judges have got to go!” Newt demanded, with much applause and many a rebel yell from the audience.

Well, the big no-no happened. Health care, sorry, *Obamacare, is now here and firmly constitutional. And although I haven’t checked my RSS feed to see the responses of the day, mainly out of fear for how many updates I have from the Cato Institute, I bet there is a lot of jabbering about activist judges, and liberal judges, and how judges are destroying this country.

But wait.

Activist judges?

Well, the deciding vote today was John Roberts. JOHN ROBERTS: the guy who voted from unlimited corporate money in politics. John, freaking, Roberts: the George W. Bush Court appointee.

Is he an activist?


Whether you agree with today’s decision or not, it revealed why placing the Supreme Court above partisanship or political loyalty is essential to our Democracy.

Many people, including those who oppose activist judges, bemoan the lack of objectivity in the current Supreme Court. They see the Justices as the judicial arms of our political parties.

Today’s decision shows that this is not always the case. Chief Justice Roberts, the supposed constitutional muscle of the Republicans, took a step towards left field.

His decision surprised a lot of people and proved that the Supreme court is not rigid nor objective. The court is necessarily dynamic and organic, fueled by the experiences of the men and women under the black robes. Their respective subjectivity makes things difficult and uncertain, the antithesis of partisan politics and party line voting to be sure, but also evolutionary, revolutionary, and contemplative.

The Court evolves as we evolve and as America evolves. Yes, sometimes too quickly, but almost always in our direction. The decision today is not the creeping of socialism or the tip toeing of Stalin or Castro, but the hurrah of independent thought.

Today, subjectivity allowed one man to rise above the political muck and finally make a thought-out judgment regarding our Constitution.

Today was a victory against the naysayers of American Democracy; those zealots, on either side of the aisle, who claim that bipartisanship is dead and that we’ll soon have to fish the constitution out of a garbage dump along with all the other crap.

History might judge Roberts for his independent choice, but at least he made one.

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