The Arctic Ocean is warming up, icebergs are growing scarcer and in some places the seals are finding the water too hot, according to a report to the Commerce Department yesterday from Consulafft, at Bergen, Norway

Reports from fishermen, seal hunters, and explorers all point to a radical change in climate conditions and hitherto unheard-of temperatures in the Arctic zone. Exploration expeditions report that scarcely any ice has been met as far north as 81 degrees 29 minutes.

Soundings to a depth of 3,100 meters showed the gulf stream still very warm. Great masses of ice have been replaced by moraines of earth and stones, the report continued, while at many points well known glaciers have entirely disappeared.

Very few seals and no white fish are found in the eastern Arctic, while vast shoals of herring and smelts which have never before ventured so far north, are being encountered in the old seal fishing grounds. Within a few years it is predicted that due to the ice melt the sea will rise and make most coastal cities uninhabitable.

Sounds familiar, doesn’t it? There is only one problem with the story: It was published in The Washington Post in November 2, 1922.[1]

If this report was accurate when it was made, we have had Arctic melting for over 90 years, and most, if not all, coastal cities are still inhabitable. But the report may of course be inaccurate and based on selective data. But climate alarmism was not yet born in 1922, and the politicians of the time did not see the potential of using such reports to enhance their own powers. And neither was modern environmentalism born. It would be many years before Norwegian philosopher Arne Næss was to propose that the human population should be reduced to 100 million in order to prevent… well, such things as the Arctic melting and making coastal cities uninhabitable.

Let’s move on to 1974. At that time there was serious concern that we are entering a new ice age. See this link[2], from which I quote:

Weather satellites sweeping across the Northern Hemisphere have come up with a surprise: The permanent snow and ice cap has increased sharply.

The finding is cited as one more indication of what some climatologists believe to be a basic change in the world’s climate, a cooling trend.

The trend could affect weather and rainfall patterns, perhaps impairing the world’s ability to produce enough food for the expanding population, according to a number of authorities. […]

In the United States, the leading proponent of the changing climate theory is Reid A. Bryson, director of the Institute for Environmental Studies at the University of Wisconsin.

“The evidence is now abundantly clear”, Bryson has said, “that the climate of the Earth is changing, and is changing in a direction that is not promising in terms of our ability to feed the world.”

I have looked up Reid Bryson, and he seems to have been a serious scientist who was also honest enough to later admit that his prediction was wrong. Later on he maintained that the earth is indeed slowly warming but that the carbon dioxide emission had nothing to do with it; he thought that we are in a natural warming cycle and are still coming out of the “little ice age”.

Today, climatologists seem to agree that there a slight warming trend but are very much divided on the question of its extent and, above all, on what causes it.[3] But climatology has been politicized – this is why we hear all the time that there a broad consensus that global warming is anthropogenic and that the issue is settled and no further discussion necessary. Politicians simply love their own power and their ability to meddle with our lives, and the demise of industrial civilization is a price they are willing pay – or rather, make the rest of us pay.

Meanwhile, 100 million followers of Arne Næss want to see the rest of us – approximately 6.9 billion human beings – dead.

People who are in favor of gun control probably don’t read this blog. It is simply too obvious that criminals prefer disarmed victims to armed ones. It is equally obvious that dictators and would-be dictators prefer a disarmed population to an armed one. Not understanding this is stupid – and I wouldn’t insult my readers by assuming they are stupid, would I?

But there is a certain argument one hears once in a while: If one points to statistics that confirm that fewer crimes are committed when people are allowed to wear arms, one will hear that this is an invalid argument, because “correlation isn’t causation”.

Now, correlation isn’t necessarily causation. Some statistical correlations are mere coincidence. At best, correlation shows that there some causal connection to look for. To take a familiar example, smokers contract lung cancer more often than non-smokers. That means one should look at the possibility of a causal connection. On the other hand, not every smoker contracts lung cancer – and sometimes even non-smokers contract lung cancer. What this implies is that there is a causal connection to look for, but that there are also other factors involved.

On the other hand, causation always and necessarily implies correlation. For example, the law of gravity implies that the vast majority of things one drops will fall to the ground, and if some things do not fall to the ground, one will have to look for the factor that counteracts gravity. If a leaf or a feather does not hit the ground, or does it with a delay, this is explained by air resistance. If birds and airplanes manage to fly, it is because of a cause that counteracts gravity, and therefore birds fall to the ground only when they are shot, and an airplane (or a space ship) only when its motor for some reason stops working properly.

And in the case of gun control failing to avert crime and even causing crime, the cause is equally obvious. Criminals may be intelligent or stupid, but they are never so stupid as to choose armed victims when there are disarmed victims to attack. Neither would a dictator, or a would-be dictator, fail to realize that an armed citizenry would be a formidable obstacle. Not even a madman on a shooting spree would miss this.

It has been pointed out, time and time again, that mass shootings in the vast majority of cases have been perpetrated in “gun free zones”, and that they never occur at shooting ranges where every potential victim is already armed. It has also been pointed out that crime rates rise when guns for self-defense are outlawed. It is simply ridiculous to say that this is a mere statistical coincidence and that it is a correlation that does not prove causation. We know the causation and should not be surprised by the correlation.

Even proper ideas can be misused, and this is an example.

For Scandinavian speaking readers: Two of those essays, Freedom and The Toxicity of Environmentalism are also available in Swedish translations, and I am currently working on translating the title essay.

At least here in Sweden, gasoline and electricity are also heavily taxed; this is part of the effort to “save the planet” from the results of industrialization. The relatively poor – those who can at least afford a car – are made to pay extra for driving to and from their work; but it does not make a dent in the fortune of Al Gore, who is able to afford a well-lit mansion and to drive in a limousine or fly by private airplane while traveling the world to preach austerity to the rest of us.

But what about exclusively taxing the rich and hand the money out to the poor (after a handsome deduction for paying the politicians and their henchmen other public servants)? Here is a quote from Ayn Rand:

In view of what they hear from the experts, the people cannot be blamed for their ignorance and their helpless confusion. If an average housewife struggles with her incomprehensibly shrinking budget and sees a tycoon in a resplendent limousine, she might well think that just one of his diamond cuff links would solve all her problems. She has no way of knowing that if all the personal luxuries of all the tycoons were expropriated, it would not feed her family – and millions of other, similar families – for one week; and that the entire country would starve on the first morning of the week to follow. […] How would she know it if all the voices she hears are telling her that we must soak the rich?

No one tells her that higher taxes imposed on the rich (and the semi-rich) will not come out of their consumption expenditures, but out of their investment capital (i.e., their savings); that such taxes will mean less investment, i.e., less production, fewer jobs, higher prices for scarcer goods; and that by the time the rich have to lower their standard of living, hers will be gone, along with her savings and her husband’s job – and no power in the world (no economic power) will be able to revive the dead industries (there will be no such power left). (“The Inverted Moral Priorities” in The Voice of Reason, p.  274.)

This is what taxing the rich will inevitably accomplish: less investment, fewer jobs, higher prices, scarcer product, and in the end (if practiced consistently enough) starvation.

This point is also stressed by “Austrian” economists, especially by George Reisman. There is an essay by Reisman on the Ludwig von Mises Institute’s web site, called Anti-Obamanomics: Why Everyone Should Be in Favor of Reducing Taxes on the “Rich”, from which I quote:

The progressive personal income tax, the corporate income tax, the inheritance tax, and the capital-gains tax are all paid with funds that otherwise would have been saved and invested. All of them reduce the demand for labor by business firms in comparison with what it would otherwise have been, and thus either the wage rates or the volume of employment that business firms can offer. For they deprive business firms of the funds with which to pay wages.

By the same token, they deprive business firms of the funds with which to buy capital goods. This, together with the greater spending for consumers’ goods emanating from the government, as it spends the tax proceeds, causes the production of capital goods to drop relative to the production of consumers’ goods. This implies a reduction in the degree of capital intensiveness in the economic system and thus its ability to implement technological advances. The individual and corporate income taxes, and the capital-gains tax, of course, also powerfully reduce the incentive to introduce new products and improve methods of production. In all these ways, these taxes undermine capital accumulation and the rise in the productivity of labor and real wages, and thus the standard of living of everyone, not just of those on whom the taxes are levied.

And later on:

Starting with tax cuts for the so-called rich — based on equivalent reductions in government spending — is the only hope for the resumption of significant economic progress, indeed, for the avoidance of economic retrogression and growing impoverishment. Because of this, it is actually the quickest and surest road to any major reduction in the tax burden of the average wage earner. It holds out the prospect of the average wage earner being able to double his standard of living in a generation or less. The average standard of living would double in a single generation if economic progress at a rate of just 3 percent a year could be achieved. Such economic progress would also mean a halving of the average wage earner’s tax burden in the same period of time — if government spending per capita in real terms were held fixed, for then he would have double the real income out of which to pay his present level of taxes. And then, of course, once all the taxes that most stood in the way of capital accumulation and economic progress were eliminated, further reductions in government spending and taxation could and should take place that would be of corresponding direct benefit to wage earners, that is, show up in the reduction of the taxes paid by them.[1]

$ $ $

But if there should be no taxes on the poor and no taxes on the rich, what taxes should there be? Who, then, should pay the salaries of our politicians and their henchmen other public servants? Or should there be no politicians and no government at all? Should the proper functions of government (as some anarcho-capitalists suggest) be taken over by insurance companies? At least, they would not levy taxes but be paid voluntarily.

Well, as you probably know, Ayn Rand addresses this question in her essay “Government Financing in a Free Society” in The Virtue of Selfishness. I quote parts of it:

In a fully free society, taxation – or, to be exact, payment for governmental services – would be voluntary. Since the proper services of a government – the police, the armed forces, the law courts – are demonstrably needed by individual citizens and affect their interests directly, the citizens would (and should) be willing to pay for such services, as they pay for insurance.

And here is her proposal:

As an illustration (and only as an illustration), consider the following possibility. One of the most vitally needed services, which only a government can render, is the protection of contractual agreements among citizens. Suppose that the government were to protect – i.e., to recognize as legally valid and enforceable – only those contracts which had been insured by the payment, to the government, of a premium in the amount of a legally fixed percentage of the contractual transaction. Such an insurance would not be compulsory; there would be no legal penalty imposed on those who did not choose to take it – they would be free to make verbal agreements or to sign uninsured contracts, if they so wished. The only consequence would be that such agreements or contracts would not be legally enforceable; if they were broken, the injured party would not be able to seek redress in a court of law.

And later on:

When one considers the magnitude of the wealth involved in credit transactions, one can see that the percentage required to pay for such governmental insurance would be infinitesimal – much smaller than that paid for other types of insurance – yet it would be sufficient to finance all the other functions of a proper government.

And:

Men would pay voluntarily for insurance protecting their contracts. But they would not pay voluntarily for insurance against the danger of aggression by Cambodia. […] A program of voluntary government financing would be amply sufficient to pay for the legitimate functions of a proper government. It would not be sufficient to provide unearned support for the entire globe.

And I have to quote this paragraph:

It may be observed, in the example given above, that the cost of such voluntary government financing would be automatically proportionate to the scale of an individual’s economic activity; those on the lowest economic levels (who seldom, if ever, engage in credit transactions) would be virtually exempt – though they would still enjoy the benefits of legal protection […] These benefits may be regarded as a bonus to the men of lesser economic ability, made possible by the men of greater economic ability – without any sacrifice of the latter to the former.

So under this proposal, the taxes would, predominantly, maybe even exclusively, be paid by the rich. But it certainly wouldn’t have the effects that taxes on the rich have today.[2]

$ $ $

What, then, are the chances of such a tax reform ever being implemented? Pretty slim, I would say. In today’s world, non-existence. But maybe in some distant future. As Ayn Rand writes in her essay

…the principle will be practicable only in a fully free society, a society whose government has been constitutionally reduced to its proper, basic functions. […] Any program of voluntary government financing is the last, not the first, step on the road to a free society – the last, not the first reform to advocate.

If we were to argue for such a reform today, would the politicians even listen?

One obvious stumbling block[3] is that a fully free society would mean fewer politicians and government employees than we have today – fewer by a large extent. Would today’s politicians and government officials voluntarily step down, take their place in the market economy and leave the rest of us alone and only interfere in our lives when our rights have been violated?

A political career is quite lucrative today. Politicians grant themselves quite handsome salaries – and when they are voted out of office (which does happen, sometimes), they also grant themselves quite handsome pensions; they do not even have to begin looking for other jobs, if they don’t feel like it. And if they do feel like it, they take well-paid jobs as lobbyists, without having to relinquish their handsome pensions. (At least, this is the case here in Sweden, but I do not think it is much different in the rest of the Western world.) With a government “constitutionally reduced to its proper, basic functions”, this would not be possible.

So, judging by the situation today, I have to be pessimistic. And the distant future is – well, distant.

I got this picture from Wladimir Kraus on Facebook. I quote his comment:

This Soviet poster describes lives under capitalism and socialist USSR.

Under capitalism: the overworked worker is barely able to survive on his meager wage, while the fat capitalist sits on sacks of gold–wealth serving his greed and war lust.

Under socialism: a well-fed and well-dressed worker is happily carrying loads of merchandise; in the background are university, cinema, factories–wealth serving the masses.

Of course, by now everybody knows that nothing could be further from the truth. It is, to be precise, exactly the opposite! Still, it seems that little has changed in the public’s fundamental understanding of how capitalism operates and whom it benefits.

Under capitalism capitalist wealth is at the service of the buying public, i.e. the workers. Workers far from being exploited by that capital are directly benefited by the wealth of the richest capitalists precisely because they do not keep that wealth in the form of cash (or gold) but invest it in capital goods and use it to pay wages.

Why blog about this? Well, The Economist recently published a short piece called Who’s Shrugging now, dealing with Ayn Rand’s influence in Sweden. I quote:

Sweden might seem an odd place to foster a Randian movement. In 1976 she decried its welfare state as “the most evil national psychology ever described” […]

So how did Ayn Rand arrive at this conclusion? Did she travel extensively in Sweden and talked to many Swedes to discover what our national psychology is like? Well, no.

The quote is from Ayn Rand’s very last Ford Hall Forum lecture, “The Moral Factor” (April 11, 1976), also issued in pamphlet form. Among other things, the lecture discusses the case of Ingmar Bergman, who was arrested in 1976 on a charge of tax evasion. I quote from the pamphlet:

Harry Schein, chairman of the Swedish Film Institute, and a friend of Mr. Bergman, said: “’There is something very Swedish about this whole case. The idea of people saying “you can’t get away with anything.” We call it “the royal Swedish envy,” and it’s 400 years old.’ He added: ‘One of the reasons Swedish equality is so advanced is that the motive behind it is not just socialism, but an active dislike of people who are supposed to be better. You have to cut people down. Everyone must be equal. Make someone who’s exceptional feel unexceptional.’”

This, I submit, is the most evil national psychology ever described. This is the bottom of the moral abyss. Many of you have read my essay on “The Age of Envy,” which deals with what I regard as the lowest evil: hatred of the good for being the good. It is shocking to read of an entire nation committed to that kind of hatred. Yet such is the base of the Welfare State and the motive required to hold it together.

It is, indeed, “shocking to read of an entire nation committed to that kind of hatred”. It is even more shocking to hear this of the nation where I was born and have lived most of my life – and to learn that throughout my life, I have been surrounded by “haters of the good for being the good”, without even noticing it. What does this tell about my powers of observation, and of my ability to induce from my observations, even in a case where there is an abundance of concrete instances to induce from?

Enough sarcasm. – Certainly there are some bad people in Sweden, just like everywhere else. And certainly a majority of Swedes support the welfare state. But I believe in most cases, this is simply because they do not understand better. A few of them might be motivated by this “hatred of the good for being the good”; but those people are in a minority in any nation or culture.

What is the line of reasoning here? There is a slightly jocular expression in the Swedish language; this is taken to be representative of the national character, or national “sense of life” of the Swedish people; and then the conclusion it that Sweden is the most envious country on earth.

I am not much of a patriot; but neither do I think the entire Swedish people should be condemned on such a flimsy basis.

First, this is what Ludwig von Mises has to say:

If the supply of caviar were as plentiful as the supply of potatoes, the price of caviar—that is, the exchange ratio between caviar and money or caviar and other commodities—would change considerably. In that case, one could obtain caviar at a much smaller sacrifice than is required today. Likewise, if the quantity of money is increased, the purchasing power of the monetary unit decreases, and the quantity of goods that can be obtained for one unit of this money decreases also.

When, in the sixteenth century, American resources of gold and silver were discovered and exploited, enormous quantities of the precious metals were transported to Europe. The result of this increase in the quantity of money was a general tendency toward an upward movement of prices in Europe. In the same way, today, when a government increases the quantity of paper money, the result is that the purchasing power of the monetary unit begins to drop, and so prices rise. This is called inflation. (Economic Policy: Thoughts for Today and Tomorrow, p. 55.)

So, yes: An increase in the amount of precious metals will have this inflationary effect; and it is also true that also in this case the money would reach some people first and others only later. But there are some important differences between this and paper money and/fractional reserve inflation.

First of all: Who will be the first ones to receive this new money? The persons who mine the metals and those who then mint it. But this is eminently just: It is simply their payment for the work they have done. This cannot be compared with the “work” of a counterfeiter, be he a private criminal or a central bank.

Second: Fiat paper money and fractional reserve money pretend to be real money, although they are not. But a new gold or silver coin does not pretend to be anything else than it really is.

Thus, there can be no moral objection to this kind of increase of the money supply. But there is a more practical point that needs to be stressed – if only to show, once again, that the moral is the practical.

Both fiat money and fractional reserve money (fiduciary media) will eventually disappear. They are created “out of thin air” and will eventually disappear into the same thin air. Fiat paper money will inevitably someday lead to hyperinflation, and the paper currency will collapse. As for fiduciary media, they will disappear the day the inflation bubble bursts and we get a depression.

By contrast, gold and silver once mined remains in existence, and so do gold and silver coins once coined. They cannot disappear. (Even the gold and silver occasionally lost in ship wrecks may one day be retrieved.) For this reason – and this one of the important things one can learn from George Reisman, in particular – it is not just inflation proof, it is also deflation proof.

Earlier on this subject:

Debating Fractional Reserve Banking
A Belated Open Letter to Ayn Rand on Fractional Reserve Banking
More on Fractional Reserve Banking
Fractional Reserve Banking Yesterday and Today
Should Pick-Pocketing Be Legalized?
Is “Fractional Reserve Banking” Compatible with Objectivism?

And, in Swedish:
Varför “fractional reserve banking” bör förbjudas
“Fraktionella reserver” än en gång

In retrospect I find it slightly mysterious that this theory was accepted for such a long time and by such intelligent persons. It is quite obvious to me that this theory puts the cart before the horse: the products are not valuable because a lot of labor has gone into making them; on the contrary, one expends a lot of labor because one expects the final product to be valuable and because one expects to get a good price for them. If people did not like eating bread at all, it would not get baked, the flour would not be grinded, the corn would not be grown (or at least not for this purpose), etc.

Let me elaborate, and let me begin with some non-economic values. – Economists deal exclusively with economic values, i.e. values that are bought and sold or exchanged in barter. But “value” is a broader concept than just “economic value”; the broadest definition is that given by Ayn Rand: “That which on acts to gain and/or keep.”

For example, if you value your spouse, this has nothing to do with his or her market value or value in exchange, since you do not intend to sell or exchange your spouse. So let me begin with a spouse:

If you have read your Dorothy Sayers, you know that Lord Peter proposed to Harriet Vane for years on end before she finally accepted his proposal and married him. Would anyone say that her value in Lord Peter’s eyes was determined by the number of proposals he made? On the contrary, the number of proposals was determined by the value Lord Peter put on her. (Simple enough?)

Or take a more mundane example: I make my bed once a day, and now and then I vacuum-clean my apartment. Again, would you say that the value of the made-up bed or the tidy apartment is determined by my work? Again, the contrary is true: I see a value in a made-up bed and a tidy apartment, and that is the sole reason I bother to make up my bed and vacuum-clean. (Again: Simple enough?)

Of course, it is not different with economic values.

The labor theory was overturned in 1871, with the publication of Carl Menger’s Principles of Economics (Grundsätze der Volkswirthschaftslehre). In this book Menger makes the fundamental distinction between “goods of first order” (or “consumption goods”) and “goods of higher order” (or “means of production”). In my loaf of bread example, the loaf is a “good of first order”, and the rest are “goods of higher order”. A short quote from Menger is in place:

Human beings experience directly and immediately only needs for goods of first order – that is, for goods that can be used directly fir the satisfaction of their needs. If no requirement for those goods existed, none for goods of higher order could arise. Requirements for goods of higher order are thus dependent upon requirements for goods of first order, and an investigation of the latter constitutes the necessary foundation for the investigation of human requirements in general. (P. 80f.)

Menger puts the horse before the cart! It is the value (or expected value) of the final product – the loaf of bread – that determines how much total labor is expended in all the steps leading up to the final product.

But one should be fair to the classical economists. In the first paragraph I presented the labor theory “in its simplest and crudest form”. But the classical economists recognized several exceptions and modifications of the theory. Take the example of some famous painting, which can be sold at auction for several millions: it would be absurd to say that this price is determined by the painter’s labor, much less then the labor expended on the paint and the canvas. This and similar exceptions were recognized by Ricardo:

There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Some rare statues and pictures, scarce books and coins, wines of a peculiar quality, which can be made only from grapes grown on a particular soil, of which there is a very limited quantity, are all of this description. Their value is wholly independent of the quantity of labour originally necessary to produce them, and varies with the varying wealth and inclinations of those who are desirous to possess them. (Principles of Political Economy and Taxation, chapter 1, section 1.)

And the modifications? One thing that struck me about the “simple and crude” version was this: In a primitive society much less labor was expended on the loaf of bread than today. The miller might grind the flour by hand, and the farmer would use a simple wooden plough; there would be no mills or tractors. Then, according to the labor theory, the loaf would be that much cheaper, and the loaf in today’s advanced civilization would be, by comparison, extremely expensive. But this sounds absurd; and the answer to this absurdity is that capital accumulation and labor-saving machinery make it possible to produce many more loaves, and this makes them cheaper. And this, too, is recognized by Ricardo:

The principle that the quantity of labour bestowed on the production of commodities regulates their relative value, [is] considerably modified by the employment of machinery and other fixed and durable capital. (Chapter 1, section 4.)

And there are other modifications having to do with the time factor and the rate of profit. For example, Ricardo writes in the same section:

All commodities which are produced by very valuable machinery, or in very valuable buildings, or which require a great length of time before they can be brought to market, would fall in relative value, while all those which were chiefly produced by labour, or which would be speedily brought to market, would rise in relative value.

And:

… commodities which have the same quantity of labour bestowed on their production will differ in exchangeable value if they cannot be brought to market in the same time.

And in the next section:

Every rise of wages, therefore, or, which is the same thing, every fall of profits, would lower the relative value of those commodities which were produced with a capital of a durable nature, and would proportionally elevate those which were produced with capital more perishable. A fall of wages would have precisely the contrary effect.

But those exceptions and modifications do not save the labor theory of value. I would say that the actual truth lies precisely in those exceptions and modifications.

Simple enough? I hope so; and I hope I have not made it more complex than it really is.

(You can read Ricardo on line here. And I can also recommend chapter 11, part C (p. 473–498) of Capitalism: A Treatise on Economics, where George Reisman sifts the wheat from the chaff in the theories of Smith and Ricardo. And if you understand Swedish, there is also a Swedish blog post on this subject.)

I wrote my first blog post in October 2010 and got 33 visits. The next month I wrote nothing and got 4 visits. There was a peak in April 2011 with 162 visits, and another in August 2011 with 311 visits. The next peak was in October 2011 with 588 visits, and in May 2012 I had 605 visits. And last month I had 636 visits. This month, it is slightly lower, but there are a couple of days left. – Anyway, from hardly any visits to around 600 per month, that is progress.

I also took a look at what posts are most popular, and here is a “top ten” list:

Paul Krugman’s Dishonesty (251)

Whose Premises Should One Check? (195)

A Belated Open Letter to Ayn Rand on Fractional Reserve Banking (172)

Aristotle on Friendship (171)

Aristotle on Egoism (167)

A Short Word on Hans-Hermann Hoppe (147)

Fractional Reserve Banking Yesterday and Today (134)

What if the One Percent Shrugs? (107)

George Reisman 75 Years (107)

A Weird Confusion About Concept Formation (106)

My visitors come from 76 different countries. The United States tops this list, followed by Sweden, the United Kingdom, Canada, New Zealand, Australia and India.

The statistics on my Swedish blog vary from about 500 to about 1000 visits per month. And it also has visitors from all over the world: 53 different countries. (There are of course Swedes who live abroad; but it is more likely that some people take a peek at my Swedish blog and then leave it when they realize they don’t understand the language.)

Maybe I’m on my way to becoming world famous?

Science does not value, but it provides acting man with all the information he may need with regard to his valuations. It keeps silence only when the question is raised whether life itself is worth living.

This is eminently true. If you were to ask this question of yourself, no science could tell you the answer; the only one who can answer it is you. – But if you even read this, this is proof enough that you do find life worth living; if not, you would already be dead: you would have committed suicide in any manner available, including stopping eating.[1]

Not even the science of ethics could tell you the answer. This science (and I refer here, of course, to the Objectivist ethics) can tell you that there is an inextricable link between “life” and “value” – that it is only to living beings that values are possible and necessary – and it can tell you that life is the ultimate standard of value. And then it can offer you advice about how to go about living successfully to make it even more worth living: use your reason, use your own mind, be productive, honest, just – all the things enumerated in the catalog of virtues in Galt’s speech. And you have to apply this as best you can to all the concrete situations in your life (which is not always easy). But if you really think that “life is not worth living”, all this is of no avail. If life itself loses its value, what else could be of value?

Mises repeats his point a little later in the text:

It is true, praxeology and economics do not tell a man whether he should preserve or abandon life. Life itself and the unknown forces that originate it and keep it burning are an ultimate given, and as such beyond the pale of human science. The subject matter of praxeology is merely the essential manifestation of human life, viz., action.

Praxeology and economics can tell you many things – for example, it can tell you why capitalism is the proper social system and why socialism is doomed to fail. But this, too, is based on the idea that life is worth living: if it were not, what would it matter if you live in a free society or under tyranny and slavery? If your life were truly not worth living, neither would it matter whether you are free or a slave.[2]

This far, I agree with Mises. (The point is virtually self-evident, so I have merely elaborated on a self-evidence above.) Now to a “bone of contention”: Mises’ insistence that science is – and should be – wertfrei or value-free. In other words, science does not, and should not, pass judgments of value. Such judgments are outside the scope of science. Wherever they belong, they do not belong in science; neither in the natural sciences, nor in the humanities.

Well, the natural sciences do not make value judgments – for example, physics does not tell us whether gravity is good or bad; it just tells us that there is such a phenomenon as gravity. But even so, it tells us that it is a bad thing to jump from an airplane without the aid of a parachute. But this concerns the implications of scientific knowledge, not the content of the science. – And the very pursuit of science is based on the idea that knowledge is a value. But that concerns the scientist’s motivation in pursuing science, not the content of the science.

But is this true about economics as well? (Or about the humanities in general, but I want to focus on economics.) Well, the economist as well as the natural scientist must be motivated by the idea that knowledge is a value; and the knowledge, once acquired, implies “oughts” and value judgments. For example, once an economist has arrived at the insight that capitalism leads to prosperity and socialism to misery, it would be ludicrous to abstain from saying that we ought to have capitalism, and that socialism is bad.

But what about the content of economics, apart from the motivation to study it and the implications of it? This is what Mises has to say:

While many people blame economics for its neutrality with regard to value judgments, other people blame it for its alleged indulgence in them. Some contend that economics must necessarily express judgments of value and is therefore not really scientific, as the criterion of science is its valuational indifference. Others maintain that good economics should be and could be impartial, and that only bad economists sin against this postulate.

The semantic confusion in the discussion of the problems concerned is due to an inaccurate use of terms on the part of many economists. An economist investigates whether a measure a can bring about the result p for the attainment of which it is recommended, and finds that a does not result in p but in g, an effect which even the supporters of the measure a consider undesirable. If this economist states the outcome of his investigation by saying that a is a bad measure, he does not pronounce a judgment of value. He merely says that from the point of view of those aiming at the goal p, the measure a is inappropriate.

Observe that the word “bad” here expresses a value judgment. But the economist should not have used this word? He should have used words like “undesirable” or “inappropriate” instead? This may be semantic hair-splitting, but certainly those words, too, express value judgments.

There is no escape from value judgments. As Ayn Rand explains:

In answer to those philosophers who claim that no relation can be established between ultimate ends or values and the facts of reality, let me stress that the fact that living entities exist and function necessitates the existence of values and of an ultimate value which for any given entity is its own life. Thus the validation of value judgments is to be achieved by reference to the facts of reality. The fact that a living entity is, determines what it ought to do. So much for the issue of the relation between “is” and “ought”. (The Virtue of Selfishness, p. 17.)

And later in the same book:

Moral evaluations are implicit in most intellectual issues; it is not merely permissible, but mandatory to pass moral judgments when and where appropriate; to suppress such judgment is an act of moral cowardice. But a moral judgment must always follow, not precede (or supersede), the reasons on which it is based. (P. 143.)

In my own words: Value judgments, or moral judgments, must never be divorced from the facts of reality.

But saying this in a modern philosophy class is like swearing in church. Modern philosophy takes it for granted, even axiomatic, that values are divorced from reality. No “ought”, it teaches to young, defenseless minds, can ever be derived from an “is”; no value can ever be derived from facts.[3]

I think this idea is the most stupid idea ever uttered in the whole history of philosophy. Anyone who has not yet passed through a modern philosophy class (and punished with a lower grade for disagreeing with this idea) knows that an “ought” is derived from an “is”. To take an example I have used before: what clothes you should wear is determined by the weather; when it is 30^o cold outside, you don’t go out in shorts; when it is 30^o warm, you don’t put on your fur coat. But modern philosophy teaches you this does not matter; not even the fact that you might freeze to death matters.

Every time anyone makes an analysis of the facts and then makes a recommendation based on this analysis, he is deriving an “ought” from an “is”. He may study gravity and then recommend a parachute, to repeat the example above. Or he may be an economist and be asked to analyze the pros and cons of taxation; if he is a good, “Austrian”, economist, he will find that taxes are harmful and that taxes on “the rich” will eventually harm “the poor” as well. So he will recommend lower taxes, or even the abolishment of taxes.[4] But on the premise that an “ought” must not be derived from an “is”, he cannot allow himself to make that recommendation!

I will not insult Mises by calling him a “modern philosopher”; but in this case I believe he has bought the Humean idea of the is/ought or fact/value dichotomy.

In case someone should think I am unfair to Mises, that I have refrained from quoting some good stuff, and that my criticisms are mere nit-picking, I would like to end by quoting George Reisman:

Even on the occasions when I found it necessary to disagree with him […] I always found what he had to say to be extremely valuable and a powerful stimulus to my own thinking. I do not believe that anyone can claim to be really educated who has not absorbed a substantial measure of the immense wisdom present in his works. (Ludwig von Mises: Defender of Capitalism.)

He is a powerful stimulus to my thinking, too. And you are not educated until you have read him.

This blog post is getting long; an “is” that implies an “ought”: that I should stop here.