Timberlake (1963) Claims That Political Corruption by the Alcohol Industry Was the Major Reason for Establishing Prohibition

The control of corruption is of vital interest in any free and democratic society. An important goal of prohibition is the reduction of corruption. Timberlake (1963) claims that political corruption by the alcohol industry was the major reason for establishing Prohibition: "Like many other businesses, the liquor industry sought to influence or control all levels of government in order to promote its interests and to protect itself against unfavorable legislation. But unlike most businesses, it had a special reason to engage in politics: no other enterprise paid such high taxes or contributed such large sums to government" (106). Prohibition seeks to reduce corruption in both the specific sense of the bribery of public officials and in the general sense of maintaining individual integrity, virtue, and moral principles. Experience, however, shows that, on the contrary, the corruption of public officials increases. As Mises notes, "Unfortunately the office-holders and their staffs are not angelic. They learn very soon that their decisions mean for the businessmen either considerable losses or—sometimes—considerable gains. Certainly there are also bureaucrats who do not take bribes; but there are others who are anxious to take advantage of any 'safe' opportunity of'sharing with those whom their decisions favor' " (1949, 734). This corruption, in the case of prohibition, represents a failure to achieve the goals of prohibition and a major impediment to the enforcement of prohibition.

--Mark Thornton, The Economics of Prohibition (Salt Lake City: University of Utah Press, 1991), 126-127.

F. A. Hayek Sees a Causal Connection between Copyright Laws and Socialism; Abolishing Copyright May Liquidate the Defenders of the Welfare-Warfare State

One of the most important points that would have to be examined in such a discussion would be how far the growth of this [intellectual] class has been artificially stimulated by the law of copyright.

It would be interesting to discover how far a seriously critical view of the benefits to society of the law of copyright or the expression of doubts about the public interest in the existence of a class which makes its living from the writing of books would have a chance of being publicly stated in a society in which the channels of expression are so largely controlled by people who have a vested interest in the existing situation.

--F. A. Hayek, "The Intellectuals and Socialism," University of Chicago Law Review 16, no. 3 (Spring 1949): 420, 420n.

The Not-Real-Socialism Defence Is Only Invoked Retrospectively, When a Socialist Experiment Has Already Been Widely Discredited

Socialism is popular in the UK – not just among students, but also among people in their 30s and 40s. This is confirmed by survey after survey. Surveys also show that support for socialism in general terms is matched by support for a broad range of individual policies that could reasonably be described as socialist.

Curiously, support for socialism in the abstract is not matched by positive perceptions of any actual example, contemporary or historical, of a socialist system in action. People with a rose-tinted view of, for example, the former Warsaw Pact countries, of Maoist China, of North Vietnam or North Korea are a small minority in Britain today. Socialists have successfully distanced themselves from the over two dozen failed attempts to build a socialist society. Their claim that these systems were never ‘really’ socialist, but represented a distortion of the socialist ideal, has become conventional wisdom. Today, holding the failures of, for example, the former Soviet Union against a contemporary socialist is considered crass and boorish.

Yet while socialists distance themselves from contemporary and historical examples of socialism, they usually struggle to explain what exactly they would do differently. Socialists tend to escape into abstraction, and talk about lofty aspirations rather than tangible institutional characteristics. Those aspirations (for example, ‘democratising the economy’), however, are nothing new. They are the same aspirations that motivated earlier socialist projects. Socialism has never fulfilled those aspirations, but this is not for a lack of trying.

The not-real-socialism defence is only ever invoked retrospectively, namely, when a socialist experiment has already been widely discredited. As long as a socialist experiment is in its prime, almost nobody disputes its socialist credentials. On the contrary: practically all socialist regimes have gone through honeymoon periods, during which they were enthusiastically praised and held up as role models by plenty of prominent Western intellectuals. It is only after the event (i.e. once they have become an embarrassment for the socialist cause) that their version of socialism is retroactively redefined as ‘unreal’.

--Kristian Niemietz, summary of Socialism: The Failed Idea That Never Dies (London: Institute of Economic Affairs, 2019), xi-xii.

For Carl Menger, Economics Is the Study of Purposeful Human Choice, the Relationship between Means and Ends; Menger Used Cause and Effect Unlike Jevons and Walras Who Used Simultaneous Determination

“There never lived at the same time,” wrote Ludwig von Mises, “more than a score of men whose work contributed anything essential to economics.” One of those men was Carl Menger (1840–1921), professor of political economy at the University of Vienna and founder of the Austrian School of economics. Menger’s pathbreaking Grundsätze der Volkswirtschaftslehre (Principles of economics), published in 1871, not only introduced the concept of marginal analysis, it presented a radically new approach to economic analysis, an approach that still forms the core of the Austrian theory of value and price.

Unlike his contemporaries William Stanley Jevons and Léon Walras, who independently developed their own concepts of marginal utility during the 1870s, Menger favored an approach that was deductive, teleological, and, in a primary sense, humanistic. While Menger shared his contemporaries’ preference for abstract reasoning, he was primarily interested in explaining the real-world actions of real people, not in creating artificial, stylized representations of reality. Economics, for Menger, is the study of purposeful human choice, the relationship between means and ends. “All things are subject to the law of cause and effect,” he begins his treatise. “This great principle knows no exception.” Jevons and Walras rejected cause and effect in favor of simultaneous determination, the technique of modeling complex relations as systems of simultaneous equations in which no variable “causes” another. Theirs has become the standard approach in contemporary economics, accepted by nearly all economists but the followers of Carl Menger.

--Peter G. Klein, foreword to Principles of Economics, by Carl Menger (1976; repr., Auburn, AL: Ludwig von Mises Institute, 2007), 7.

The Public's Understanding of What Money Is and Its Origins Has Greatly Devolved and the Average Person Now "Trusts" the Wise Men and Women Working Secretly in Central Banks

The public’s understanding of what money is and its origins has devolved to the point where the government monetary authorities can now inflate with impunity, with the ultimate result to be the destruction of the division of labor undoing all of mankind’s progress to date. The average Joe and Jane must trust the wise men and women working secretly in central banks around the world with what passes for money—paper and digits on a computer screen. These banks are the largest employers of academically-trained economists. But under the guidance of the Keynesian-schooled, the central banks engage in monetary operations that fulfill the funding needs demanded by politicians for political ends.

The hopes, dreams, and living standards of millions are affected daily by these faceless bureaucrats that supposedly know exactly which monetary buttons to push and levers to pull to insure our prosperity. However, history shows that central bankers have but one strategy to cure all things, especially their past mistakes: print more money, with their plans for stabilization resulting in just the opposite. . . .

Written in the same year that he testified before the Currency Commission in Austria-Hungary, Carl Menger explains that it is not government edicts that create money but instead the marketplace. Individuals decide what the most marketable good is for use as a medium of exchange. “Man himself is the beginning and the end of every economy,” Menger wrote, and so it is with deciding what is to be traded as money.

It was Menger who developed a complete theory of social institutions which arise as humans interact, each with his own subjective knowledge and experiences. It is the spontaneous evolution of these human actions that create institutions whereby individuals discover certain patterns of behavior that aid each person in attaining their goals more efficiently. Nothing is more central to this evolution than the development of money,  making the division of labor possible, and satisfaction of wants attainable.

--Douglas E. French, foreword to On the Origins of Money, by Carl Menger (Auburn, AL: Ludwig von Mises Institute, 2009), 7-9.

In the Sphere of Economics There Exist Certain Laws Against Which the Will of Man, and Even the Powerful Will of the State, Remain Impotent

Economic theory, from its very beginnings, has endeavored to discover and formulate the laws governing economic behavior. In the early period, which was under the influence of Rousseau and his doctrines of the laws of nature, it was customary to apply to these economic laws the name and character of physical laws. In a literal sense, this characterization was, of course, open to objection, but possibly the term “physical” or “natural” laws was intended merely to give expression to the fact that, just as natural phenomena are governed by immutable eternal laws, quite independent of human will and human laws, so in the sphere of economics there exist certain laws against which the will of man, and even the powerful will of the state, remain impotent; and that the flow of economic forces cannot, by artificial interference of societal control, be driven out of certain channels into which it is inevitably pressed by the force of economic laws.

--Eugen von Böhm-Bawerk, Control or Economic Law (Auburn, AL: Ludwig von Mises Institute, 2010), 7.

MP John Lewis Ricardo Saw Patents as Monopolistic Obstacles to Laissez-Faire and Denied Outright that Patents Accelerated Invention; Patents Were Equivalent to the Corn Laws

As remarkable as the creation of a real patent system, however, was the simultaneous advent of real and sustained calls for patents to be abolished altogether. Among the first of those prepared to voice this possibility was the MP John Lewis Ricardo, nephew of David Ricardo, the great political economist, and himself a convinced opponent of the Corn Laws. The younger Ricardo was the chairman of one of the early telegraph companies—telegraphy being by far the most advanced and exciting commercial science of the day. He had found himself forced to buy up patents to forestall litigation, and was therefore inclined by his own experience to see them as monopolistic obstacles to laissez-faire. He pointed out—as many would repeat in the next generation—that patents had not been required to stimulate the invention of printing, gunpowder, or paper. Only “trivial” improvements tended to be patented, he claimed. In the end, Ricardo denied outright that patents accelerated invention. He maintained instead that they were an unnecessary impediment—the equivalent, in effect, to the navigation acts or the Corn Laws themselves.

--Adrian Johns, Piracy: The Intellectual Property Wars from Gutenberg to Gates (Chicago: University of Chicago Press, 2009), 262.

Advocates of Laissez-Faire Began to argue that Literary Property Was Just Another Restraint Imposed on a Market that Ought to be Free; therefore, Pirates Were Exemplars of Free Trade

For the reprinters themselves, the problem was that there was not just one case to be made for their practice, but two—and they were mutually exclusive. On the one hand, mercantilist principles emphasized the virtue of replacing imported manufactures with home production. On this score, pirates were vanguards of national economic prowess. But on the other, advocates of laissez-faire began to argue that literary property—that mysterious and novel concept—was just another restraint imposed on a market that ought to be as free as possible. It was, they declared, at once absolutist, monopolistic, iniquitous to the public good, and philosophically absurd. On this account, pirates were exemplars of free trade—indeed, of freedom in general. Needless to say, while the first kind of argument tended to hold good in metropolitan centers like Vienna, the second sprang from upstart founts of enlightenment like Edinburgh, Dublin, and Philadelphia. Both stood opposed to metropolitan assertions of authorial property.

--Adrian Johns, Piracy: The Intellectual Property Wars from Gutenberg to Gates (Chicago: University of Chicago Press, 2009), 51-52.

One Consequence of Price Discrimination by Intellectual Monopolists Is that They Artificially Degrade Their Products in Certain Markets As Not to Compete with Other More Lucrative Markets

Effective price discrimination is costly to implement and this cost represents pure waste. For example, music producers love digital rights management (DRM) because it enables them to price discriminate. The reason that DVDs have country codes, for example, is to prevent cheap DVDs sold in one country from being resold in another country where they have a higher price. Yet the effect of DRM is to reduce the usefulness of the product. One of the reasons that the black market in MP3s is not threatened by legal electronic sales is that the unprotected MP3 is a superior product to the DRM-protected legal product. Similarly, producers of computer software sell crippled products to consumers in an effort to price discriminate and preserve their more lucrative corporate market. One consequence of price discrimination by monopolists, especially intellectual monopolists, is that they artificially degrade their products in certain markets so as not to compete with other more lucrative markets.

--Michele Boldrin and David K. Levine, Against Intellectual Monopoly (New York: Cambridge University Press, 2008), 71.