Conspiracy-Theory Socialism
If there's central planning for ill, why not for good?
A particularly unfortunate element on the fringes of the freedom movement is belief in a variety of conspiracy theories about government and the economy. Some theories are less damaging than others, but some are much nastier, suggesting, for example, that international Jewish bankers created and have sustained the Fed’s attempts to manipulate the money and credit system for their own enrichment.
Conspiracy theories are as old as human thinking; they satisfy a deep desire to believe that some person or group is in control of everything and that the apparently chaotic way that social life evolves actually has an underlying unity. In this way, observers have argued, conspiracy theories substitute for religion, providing meaning to what would otherwise be a meaningless social world.
And like religion, conspiracy theories ultimately rely on faith. The “best” theories are those that are impenetrable by contradictory evidence. They are, in the language of philosophy, “unfalsifiable.” Supporters of such theories will resort to the argument that any counter-evidence is really evidence for the theory, since it shows how clever the conspirators are in distracting our attention from their real power.
This is not what classical liberals should want to engage in. Our case for freedom must ultimately rest on reason and logic, and we must be open to evidence that genuinely contradicts our understanding of the world. Conspiracy theories are closed systems of thought that are the precise opposite of the open, evolving, dynamic worldview that informs our classical liberalism.
But there is a more fundamental problem with a classical liberal’s embracing most conspiracy theories. Ultimately, believing that a small group of evil people are manipulating economic and social processes for their own ends concedes to defenders of government economic planning that controlling and manipulating the economy is in fact possible! In other words, conspiracy theories are a form of socialism. If international bankers really are using the Fed to manipulate the economy to enrich themselves, or if politicians and bureaucrats are using the welfare system to undermine the family or to impoverish African-Americans, then using government to achieve fairly specific ends is apparently possible.
Notice that I’m not denying that government can cause all kinds of problems, or that institutions such as the Fed are in fact undermining economic well-being. (I’ve been a career-long critic of the Fed, especially about its role in causing the current recession.) What I am arguing is that the source of the problems they cause is not the evil intentions of those who occupy the seats of power, but the structural problems faced by all governments when they attempt to perform the tasks assigned them. It is not the Fed’s evil or the incompetence that leads to trouble but rather its ignorance.
Why Not Noble Conspiracies?
If we resort to conspiracy theorizing, we also leave ourselves open to an obvious response from our critics: If a small group really can manipulate the economy for evil ends, why can’t a small, or even a large, group manipulate the economy for more noble goals, say, some form of social justice? When we fall into conspiracy thinking we are actually accepting the fundamental premise at the heart of every form of socialism: that it is possible for human beings to consciously control the economy or society more generally. In doing so we fail, as I argued last week, to make the strongest case against those who think government can improve on the market.
At the most fundamental level, conspiracy theories cut against the concept of spontaneous order, which has been at the center of classical-liberal thinking since the late eighteenth century, if not earlier. From Smith to Menger to Hayek, the market, and social evolution more generally, have been understood as a discovery process that no one designed or controls. The very miracle of the market that we celebrate all of the time demonstrates that human action under the right institutions produces coordination, cooperation, prosperity, and peace without the need for conscious direction.
This perspective illustrates how complex the social world is. One implication is that almost every choice people make, whether market actors or political actors, is likely to have unintended consequences as it interacts with institutions and the choices of others. Conspiracy theories suggest that the conspirators can somehow avoid unintended consequences. They are strangely able to fashion the world according to their own image, effortlessly cutting through the complex patterns of society.
The ability to construct the world just as we like — without unintended consequences — was at the heart of Marx and Engels’s idealized socialist future. When classical liberals resort to conspiracy theorizing, they concede the possibility of such control and make it much too easy for their critics to ask why better people couldn’t do it right. Conspiracy theories are among the weakest ways to defend freedom. Freedom’s defenders should shun such beliefs and reaffirm our commitment to reason, logic, and the power of spontaneous-order explanations.
Comment by James on 20 May 2010:
Are you saying “a small group of evil people [never] manipulat[ed] economic and social processes for their own ends?”
Because if you are, you are ignorant of history for thousands of years.
Comment by Jacob Steelman on 20 May 2010:
To suggest that the causal impacts of government policies are “unintended consequences” resulting from the ignorance of politicians and bureaucrats ignores the very essence of government -the brokering of power on behalf of special interest groups(especially various ruling elites)within a country who have as their objective thwarting of the functioning of the free market and free society. They are intelligent adults who know exactly what they are doing – counterfeiting, murder (war), theft (through taxation and inflation)etc.
For example the prior administration clearly fabricated the story of weapons of mass destruction to justify their war on Iraq. What were the consequences of that war – a tenfold increase in the price of oil and USA oil companies being allowed to participate in the production of Iraq oil, a country who had previously been the domain of French and Russian oil companies. Who benefited from that price increase – the international oil industry with whom the Bush family has been associated for many years. Cheney’s former company Haliburton was a major beneficiary of the war as well. Did not Hank Paulson (and his successor) and Ben Bernanke direct billions of dollars to bailing out companies such as AIG which provided their friends on Wall Street with a 100% repayment of the monies they had at risk with AIG? Was not the bailout of GM in part intended to protect union jobs? Are not protective tariffs designed to protect business interests against the rigors of the free market?
Special interests and various ruling elites have staffs of lobbyists, lawyers and other professionals whose full time employment is to insure that there are as few unintended consequences as possible arising from the laws and regulations they help to pass and have implemented.
Comment by Beefcake the Mighty on 20 May 2010:
Even by Steve’s standards this article is utterly bad, totally
silly arguments being put forth here. It is a perfect example
of Rothbard’s observation that the Hayekian case for the market
rests on a belief that we are all ignorant and can do no better
than blindly following rules (some of which, like those orginating
in market transactions, just happen to be better than others).
Comment by Skyler Collins on 20 May 2010:
Jacob Steelman seems to be making Steve’s point. To show that these elite can successfully accomplish even their nefarious plans is to show that they could successfully accomplish benevolent ones, and supports the central planner’s argument.
Comment by Skyler Collins on 20 May 2010:
I’d also direct people to an article by Jerry Salcido on philosophy vs. conspiracy: http://www.campaignforliberty.com/article.php?view=459
Comment by fundamentalist on 20 May 2010:
“And like religion, conspiracy theories ultimately rely on faith. The “best” theories are those that are impenetrable by contradictory evidence.”
Is it really necessary to always use religion as the best example of the worst irrationality? The best in religion, such as Thomas Aquinas, is extremely rational. In the same way, there is a great deal of irrationality in economics, such as Marx. In fact, I see no more irrationality in religion than I do in economic thinking. But some economists make religion the synonym for irrationality in the same way the NAZI is for evil.
Comment by Bob Duplantier on 20 May 2010:
A careful review of history should convince any objective student that there has never been an age that was not dominated by conspiracies. But we need not be scholars to reach this same conclusion. We need only open our eyes to see conspiracies all about us.
Comment by Jim Turney on 20 May 2010:
I think Steven is on the right track. I’ve made similar points for many years. Even if I thought a conspiracy were real, I would prefer to understand the situation without depending on it.
I figure that if a situation can be understood by applying libertarian principles then that’s a more likely explanation than an elaborate conspiracy theory. I haven’t been at a loss very often….and I’ve never heard a conspiracy theory that doesn’t require elaborate planning and coordination.
I think some readers who have commented negatively have misunderstood the term ‘conspiracy theory’. Look it up in Wikipedia or your handy dictionary for a better understanding of the sort of thing I think Steven is referring to here.
For example, if the WMD charge against Saddam was a conspiracy then how do you explain that none was ‘found’ despite control over the area for months or years by the conspirators whose reputations have suffered so much over that false accusation? If they had planted a WMD to cover their mistake that would still not have constituted a ‘conspiracy theory’, altho it would be a ‘conspiracy’ in the modern legal sense which covers just about any kind of deceit or manipulation or fraud that involves more than one person.
Advocating a conspiracy theory will usually end up in embarrassment and ruin your credibility.
Comment by mb on 20 May 2010:
“At the most fundamental level, conspiracy theories cut against the concept of spontaneous order”
How so? Did Hayek or any other theorists of spontaneous order ever deny that human beings attempt to consciously design orders, often with terrible consequences?
The author seems to be conflating a number of distinct assertions. Is every event in the world the result of a grand conspiracy? Of course not. It’s silly to think so. Are conspiracies, “noble” or otherwise, likely to achieve all of their ultimate aims without producing unintended consequences? Again, no. But this doesn’t mean that there are no conspiracies, or that conspiracies cannot accomplish some of their objectives. For instance, al-Qaeda’s 9/11 conspiracy has, thus far, not achieved its ultimate goal, which, depending on whom you read, was either to create a global caliphate, or to expel the U.S. government from the Middle East, or to turn America into a completely closed society. Yet that conspiracy did succeed in killing 3,000 people, toppling two skyscrapers, and making America much less open than it was before. Similarly, the neoconservative project to remake the Middle East for the better has failed spectacularly in achieving that end, but it did succeed in its intermediate goal of selling the invasion of Iraq.
Comment by Burrhus on 20 May 2010:
Steven Horwitz: “Some theories are less damaging than others, but some are much nastier, suggesting, for example, that international Jewish bankers created and have sustained the Fed’s attempts to manipulate the money and credit system for their own enrichment.”
Really?
1) The president of the European Central Bank (ECB) is a Jew — Jean-Claude Trichet.
2) The Chairman of US Federal Reserve is a Jew — Benjamin Shalom Bernanke.
3) The previous Chairman of the US Fed is a Jew — Alan Greenspan. Greenspan is currently an adviser for Paulson and Co.(Jewish), the hedge fund involved in the current Goldman Sachs (a Jewish firm) fraud case. He is also an adviser for the British Treasury.
4) The current Managing Director of the International Monetary Fund (IMF) is a Jew — Dominique Strauss-Kahn.
5) The current president of the World Bank (WB) is…not a Jew — Robert Zoellick. But he was previously a managing director of.. yes, you guessed it…Goldman Sachs.
The two previous presidents of the World Bank were Jews — Paul Wolfowitz and James Wolfensohn.
6) The US Treasury Secretary who pushed trough the $700 billion 2008 bank bailout bill was not a Jew — Henry Paulson (no relation to the Paulson hedge fund). But, once again, he WAS previously Chairman and Chief Executive Officer of…Goldman Sachs.
7) The treasury Secretary during Clinton’s administration was a Jew — Robert Rubin. He had previously worked for 26 years at…it gets a bit repetitive…Goldman Sachs. He is currently one of Obama’s top economic advisers along with Lawrence Summers who is oddly enough…a Jew.
The ECB, the US Fed, the IMF and the World Bank are the four most powerful economic institutions in the world. Three currently have Jewish heads and the other, the WB, is headed by a former Goldman Sachs big-shot who was preceded at the WB two Jews.
Conspiracy or long-term, in-group evolutionary strategy? Call it what you will but there it still is, right in front of you.
Comment by Gene Callahan on 20 May 2010:
“A careful review of history should convince any objective student that there has never been an age that was not dominated by conspiracies.”
Funny how that’s not what actual historians claim. They must not be “objective students.”
“But we need not be scholars to reach this same conclusion.”
I guess that’s a relief for you.
“We need only open our eyes to see conspiracies all about us.”
I just spotted one in my closet a minute ago. And I think that’s one creeping up behind me now!
Comment by Jesse on 20 May 2010:
It seems to me that the point isn’t to deny ‘conspiracy theories’ per se – but merely to acknowledge the problem with claiming that such a theory is the primary cause. It is easy to disproportionately frame an alleged conspiracy for the same reason that central planners can’t achieve their goals: the amount of information needed to make the equation true is very difficult to come by. And initiatives to frame debates on such terms, or to centrally plan, in order “to make the equation true” can easily be driven by assumptions and speculation in spite of the lack of actual resources needed to accomplish the goal.
Comment by Gene Callahan on 20 May 2010:
Even by Beefcake’s standards his comment above was extraordinarily bad. It is a perfect example
of Callahan’s observation that Rothbardians are happy just to make up whatever they want about anyone who isn’t part of “the cadre,” as in the nonsense Rothbard made up about Hayek offered above. Rothbardian “intellectual history” has a single aim: to reinforce the cult mindset of his followers (not students!) by assuring them that [Hayek / Polanyi / Kirk / Lavoie / whoever] is such total rubbish that there is just no reason to even be bothered reading them — just keep reading Rothbard, comrades!
Pingback by A Problem With Conspiracy Theories « Kicking Over My Traces on 20 May 2010:
[...] the entire article by Steve Horwitz at The [...]
Comment by Ryan on 20 May 2010:
The libertarian states that central ECONOMIC planning never achieves the intended ends.
If conspiracies — that is, agreements by two or more people to pursue shared “centrally planned” goals — don’t work, then why do people go to church, run corporations, or play team sports?
Who could disagree that carrying out any of those shared goals is easier when that group has obtained the power to tax everyone else, print money that others are forced to use, imprison at will, or kill anyone standing in the way of the agenda? Who could disagree that obtaining these powers is therefore part of any agenda whose adherents are generally sociopathic enough?
Comment by Flattus Maximus on 20 May 2010:
This idea that we should reject conspiricy theories because
otherwise we are compelled to grant some legitimacy to socialism is utterly stupid.
Apart from the overrepresentation of Jews in the (statist) banking
system, Burrhus could have also mentioned the almost complete
domination by Jews of the mainstream media, which is really little
more than a government propaganda arm. He could have also
mentioned the role of neoconservatives as architects of the war
against Iraq and the role of other Jewish movements/organizations
in pushing for war against Iran, which is threatening Israel’s
nuclear monopoly in the Middle East. He could finally have noted
that the nomination of Elena Kagan will likely mean that Jews
will constitute one third of the justices on the Supreme Court,
far out of proportion to their numbers in the U.S population.
Yet, Jews are commonly portrayed as a small, relatively powerless
minority (they certainly portray themselves this way).
Obviously none of this is to say that Jews constitute a monolithic,
secret society working in unison (and anyone who claims that this
is what is being said is engaging in strawman-bashing). It’s
simply to note that, a small group with a common/shared identity
that is committed to furthering the interests of other members of
the in-group, can be VERY effective in attaining their ends while
successfully portraying themselves in a very different light.
Comment by Beefcake the Mighty on 20 May 2010:
Gene, go finish your PhD. I’m sure you have a lot of bills
to pay at this stage; time you finally got off your ass and
got a real job.
Comment by Sheldon Richman on 20 May 2010:
Yes, I removed a comment that in my judgment went over the line.
I hope we can get back to the subject, friends.
Comment by Steve Horwitz on 20 May 2010:
I don’t have the time at the moment to answer everything here, but let me make two points:
1. Saying that conspiracy theories are nonsense is NOT to say that there aren’t political actors who are out to do harm and who pass laws to make that harm happen. That’s not the same as a “conspiracy theory” for a number of reasons, the biggest being that *politicians do it out in the open where we can see it*. It’s not a “conspiracy;” it’s politics as usual. The other difference is that most conspiracy theories are “totalistic.” They believe LOTS of things are under the control of a small group, or at least that their control influences other things. That’s not the same as passing *a* bad law that does harm. And it’s also not the same as your local house of worship.
2. As classical liberals, our arguments are at their strongest when we assume that political actors are both smart and well-intentioned and then we show that they STILL cannot do what they think they can do. That isn’t to say that IN FACT political actors are always smart and well-intentioned, just that as an argumentative strategy, it neutralizes arguments the other side can use.
Next week’s column will talk more about why even the smart, well-intentioned folks can’t get the job done. More later.
Comment by claudio on 20 May 2010:
Hello from the south.
I really couldn´t understand why so many angry comments. The point of this short paper is very clear. Nobody is denying that people could try to conspire. The point is a simple hayekian one: the bigger the conspiracy the bigger the amount of information the conspirators must have and process.
Isn´t that obvious that it´s a difficult task? And adding the Arrow paradox only make things more difficult.
At the limit, the only way to believe in conspiracies (large scales one, maybe) is to deny its property to be falseable by the facts. I liked the insight.
Comment by Sean Ambroise on 20 May 2010:
Yes, it is necessary to assume that the state has impossible competency and ability in order to make most types of nefarious conspiracy theories plausible.
However, the major flaw I see in the conversation up to now is the failure to distinguish between various types of conspiracies. If we get around that obstacle, then we can get somewhere, and get a little bit closer to the truth perhaps.
There is the special interest on the one hand (the legal plunderer you could say), and the secret commanding elite on the other. The Iraq invasion (done supposedly to further special interests) was brought. I’d like to point out that it was accomplished by elected officials, and it was a publicly known event. You need no Illuminati for a man to get elected, and try to make himself and his friends rich.
The same goes for policies that protect the Unions. Motives may be lied about (for lying to the population is a very simple matter indeed), but ultimately it is superficial and plain.
What I believe the author is attempting to discredit (and what I likewise argue against) is the overarching Illuminatist theories, whether they be run by the Pope, the Jews, the Anti-Christ, the Lizard People, the Aliens, the “Elites” or whoever else is supposed to control the world.
To posit such a theory is to go beyond the plain, simple “special interest” conspiracies (such as wars or policies created for profit). It is to assume that nothing is as it seems and nothing can be certain. It is to assume that real businesses (such as the news media) are actually actors in the conspiracy. It is to assume that real political processes are phony, and that real officials are merely puppets for imaginary rulers.
Such a theory debases reason itself, for two reasons. Number one, everything from a credible source is “propaganda and lies”, whereas information from shady sources is “information that escaped censorship”. Secondly, a complicated truth (which requires more unwarranted assumptions) is substituted for a plainer one (which requires less of the same). The simpler one states that political processes, officials, and businesses are what they appear. To assume otherwise complicated reality unnecessarily, with an excess of assumptions that are not warranted (and thus, the scientific pursuit of truth is obstructed).
There are brilliant minds on either side of this argument, and I respect your arguments and your research. All in all, I think the discussion could be greatly improved if we were to agree on a distinction between “plain” conspiracies such as GM and Iraq, versus “overarching” ones that posit an authority that secretly controls… everything.
Comment by mb on 20 May 2010:
“Saying that conspiracy theories are nonsense is NOT to say that there aren’t political actors who are out to do harm and who pass laws to make that harm happen. That’s not the same as a ‘conspiracy theory’ for a number of reasons, the biggest being that *politicians do it out in the open where we can see it*. It’s not a ‘conspiracy;’ it’s politics as usual.”
But many coordinated political actions do NOT take place in the open. Do you really believe that we were privy to all or even most of the maneuvers that culminated in the invasion of Iraq? That a relatively small group of people in Washington, D.C., did not conspire, for reasons they may have seen as good, to make that war happen?
“The other difference is that most conspiracy theories are ‘totalistic.’ They believe LOTS of things are under the control of a small group, or at least that their control influences other things.”
I don’t know about “most conspiracy theories”; I’m not a connoisseur. I’m merely arguing that some of what you call conspiracy theories are not nonsense. I suspect that Dick Cheney and Donald Rumsfeld didn’t just sit around discussing the sports page behind closed doors. That doesn’t mean that their conspiracy was entirely secret, or that it wasn’t beset by chance and other difficulties, like any other human endeavor, or that it worked out exactly the way they had hoped, or that “Cheney and Rumsfeld conspired” is a *sufficient* explanation for why the Iraq war happened. It just means that there was a conspiracy.
Comment by Jonathan Finegold Catalan on 20 May 2010:
Steven Horwitz writes,
This is completely untrue. The argument against central economic planning is not about whether the politicians are ignorant, or in fact have specific ends they are trying to meet. The argument against central economic planning is completely economic in nature; i.e. the act of redistributing wealth as having a net loss, profit and loss, et cetera. Conspiracy theorists do not make the economic case against government any weaker.
Comment by Gene Callahan on 20 May 2010:
“Gene, go finish your PhD. I’m sure you have a lot of bills to pay at this stage; time you finally got off your ass and got a real job.”
Another fine Rothbardian tactic: Can’t answer the argument? Then it’s smear the person time!
Comment by Steve Horwitz on 20 May 2010:
Jonathan,
You are wrong. You have swallowed the Rothbardian Kool-Aid. The Austrian argument against centralized economic planning is precisely that no individual or group of humans could amass the knowledge necessary to plan the economy as planners would have them.
I would suggest you read some serious literature on the calculation debate not written by Rothbardians (or by sympathetic non-Austrians who actually get what the Austrians are saying) and then decide for yourself.
I’ll happily provide citations.
Comment by Gene Callahan on 20 May 2010:
“The argument against central economic planning is completely economic in nature; i.e. the act of redistributing wealth as having a net loss, profit and loss, et cetera. ”
Jonathan, you just have not grasped Mises’ and Hayek’s arguments against socialism! Steve’s point is accurate.
Comment by Sean Ambroise on 20 May 2010:
Is it possible to carry on an intellectual discussion without Sophistry and mud flinging?
“Gene, go finish your PhD. I’m sure you have a lot of bills to pay at this stage; time you finally got off your ass and got a real job.”
“You are wrong. You have swallowed the Rothbardian Kool-Aid. ”
“Even by Steve’s standards this article is utterly bad, totally
silly arguments being put forth here.”
“you are ignorant of history for thousands of years.”
I would expect more from freedom loving philosophers.
Pingback by Conspiração e algumas observações aleatórias sobre a internet « De Gustibus Non Est Disputandum on 20 May 2010:
[...] claudio under Uncategorized Leave a Comment Horwitz tem um ponto bem interessante sobre as teorias da conspiração. Os comentários beiram à falta de educação (confiram lá, parecem até os analfabetos que, de [...]
Comment by Kenneth Allen Hopf on 20 May 2010:
Sean .. yea, Steve has violated their religion.
Comment by mb on 20 May 2010:
The promiscuous use of the “conspiracy theory” accusation is at least as harmful as wacky conspiracy theories themselves. It creates an atmosphere in which anyone who brings up institutional secrecy, the disproportionate power of special interests, media complicity in government propaganda campaigns, and the like is automatically dismissed as a conspiracy theorist, and thus unworthy of being heard. Oddly, “conspiracy theory” is almost never used to describe far-fetched narratives such as this: http://97.74.65.51/readArticle.aspx?ARTID=13077
Comment by Steve Horwitz on 20 May 2010:
Sean,
Normally, I try to avoid that sort of stuff in this sort of forum, but perhaps reading the earlier comments, and I mean the ones attempt to make substantive arguments, you can understand my frustration. I’ve also had a really long week of arguing with the economically ignorant on another topic and my patience is very thin.
I probably should not have left that line in. (I still think the point it was making is true, but it wasn’t the best way to get it across.) My apologies on that point to Jonathan. I still think he needs to read some serious history of economic though though.
Comment by Kenneth Allen Hopf on 20 May 2010:
The extent to which we find a theory compelling is not a test of that theory, i.e., psychological commitment is not an arbiter of truth.
Comment by FletchforFreedom on 20 May 2010:
Sadly, much of the debate here has drifted from confusion to hair-splitting. That conspiracies exist, that people often conceal their motives, that politicians engage in patronage, and that individuals often coordinate activity for mutual benefit are all givens. Nor is it necessary that the politicians are “ignorant” of the results of their actions and that the consequences of those actions are “unintended”. As clarified in author’s response, it was never intended to argue otherwise. Those items included under the label “conspiracy theory” are invariably considered to be “vast” either in size (the number of those involved) or scope (the degree of control attained). The Truther position tends to follow the former tack; the author pursues those on the latter. And, in both cases, the concepts of vast and conspiracy – which, as already mentioned, involves secrecy (al Qaeda is quite open about its goals) – are mutually exclusive.
I would have argued that it is still appropriate to refer to Fed policy as “incompetence” – perhaps avoiding the confusion regarding the use of the term “ignorance” – as, due to incurable ignorance as to the means of exercising such control, those ostensibly charged with such action are incapable either acquiring or applying any such competence. Still, it doesn’t undermine the author’s point: falling for the thesis that conspirators are exercising such control at the macro level – which is the key point – concedes the possibility that someone is capable of exercising control at that level and that is a central tenet of socialism and socialists (who, despite the failure of their policies, concentrate on intentions and thus clothe themselves in the pretense that they are “on the side of the angels”).
So, the answer is, “a small group of evil people [has never] manipulat[ed] economic and social processes for their own ends”, albeit there are innumerable examples of such individuals manipulating small aspects of the system for personal benefit. Again, the difference is in scale.
“At the most fundamental level, conspiracy theories cut against the concept of spontaneous order” as they inherently embrace the premise that a viable order can be imposed by those carrying out the conspiracy. Here, again, there is no dispute that some have made such attempts – the point is that they cannot succeed (and have those “terrible consequences”).
Comment by Jonathan Finegold Catalan on 20 May 2010:
Steve Horwitz,
I don’t think I have ever read anything on the calculation debate or knowledge problem by a Rothbardian (not denying that there is Rothbardian literature on the subject, just saying that I’ve never read it). Furthermore, the idea of the redistribution of wealth being a net loss is not Rothbardian. I’m pretty sure the argument existed before Rothbard was even born, and in modern-day literature we are talking about Hazlitt.
It looks to me that you’re being kind of trigger happy in characterizing those who disagree with you.
In any case, you highlight my precise point. I’m not sure why assuming that government can plan to do evil means conceding the idea that government can also plan to do good. There is a difference between abusing a monopoly on force to do evil (which does not require the efficient distribution of resources, since all government evil is inefficient from an economic perspective — just because it benefits an individual bureaucrat doesn’t meant that it’s economically efficient; subsidies benefit individuals, after all), and efficiently planning an economy.
I’ll be more exact. You write,
Well, isn’t it possible? Since any of us can remember, I am sure that government has in some shape or form controlled the economy. Of course, Mises suggested that the market will always win (readjust), and I think that empirically it has shown that Mises was right.
What I think you implied was that by believing in conspiracy theories one concedes efficient economic planning. I believe this because right after, you write,
Socialists believe in the efficiency of socialism. Progressives believe that public-private markets are viable and more efficient than purely free markets.
In fact, reading into your post it seems that you’re largely confused, or too obsessed with disproving this ‘Rothbardian conspiracy theory cult’. You write,
Those two specific examples aside (although there is a lot of evidence which suggests that the Federal Reserve is indeed controlled by its largest member banks, and private businesses using the government to regulate in its favor is not unheard of — there is evidence that this is how the Federal Reserve came into existence in the first place, and it’s not just Rothbardian evidence), I think it’s rather clear that individuals can use government to achieve specific ends.
Did not emperors use government to wage wars? Do not farmers use government to be subsidized at the expense of others? I know that my family does, and because of that we are wealthier then we otherwise would be (but, we do it at the expense of others).
I think you are conflating economic planning in general with efficient economic planning — the latter has to do with the knowledge problem, not the former.
Comment by Tim on 20 May 2010:
Sometimes, people DO have bad intentions and they DO attempt to do harm to the country and the people for their own benefit. Our current President is one of those.
Comment by Jonathan Finegold Catalan on 20 May 2010:
I should also note that I am not necessarily agreeing with the ideas of defending conspiracy theories with no evidence or logic behind them. But, not all conspiracy theories fall into this category.
Comment by Sheldon Richman on 20 May 2010:
Tim writes: “Sometimes, people DO have bad intentions and they DO attempt to do harm to the country and the people for their own benefit. Our current President is one of those.”
How do you know this about Obama? What is your evidence for saying that Obama knows he is harming the country and intends to do so? I want to learn.
Pingback by Economic Malice and the Knowledge Problem | Economic Thought on 20 May 2010:
[...] Horwitz, over at The Freeman (“Conspiracy-Theory Socialism“), writes on libertarian conspiracy theorists. I think that Horwitz commits two major [...]
Comment by Jonathan Finegold Catalan on 20 May 2010:
My response is going through moderation, so until then I’d like to point some other commentary on this post (as a response to Horwitz): Economic Malice and the Knowledge Problem (http://www.economicthought.net/2010/05/economic-malice-and-the-knowledge-problem/).
Comment by Jim on 20 May 2010:
What’s missing here is the idea that scale matters. The impossibility of economic calculation in a purely socialist society does not mean that no organization larger than a single individual can ever achieve any of its ends. In a market economy, firms exist and do in fact achieve at least some of the ends that the managers and owners intend them to achieve. In a mixed economy, some firms specialize in achieving their ends through force or fraud and it is entirely plausible, even likely, that in order to do so they would keep their plans secret from other people.
The impossibility of socialist calculation places an upward limit on the size of such firms, but does not preclude their existence on any scale. Theories that posit a single, monolithic conspiracy that controls all of society can be discounted. Conspiracies that are limited in size, scope, and number of players can and do occur as surely as productive firms functioning openly in the market do.
Comment by Jacob Steelman on 20 May 2010:
Politicians and bureaucrats are puppets. They are power brokers pure and simple nothing more or nothing less. They make their money by using their position (supported by the point of a gun)to provide government favors to their clients. As an associate of mine who use to deal with politicians said of former Sentator Herman Talmadge “There is nothing more worthless than an ex-politician” – unless of course he transition into a lobbyist. The ruling elites are comprised of numerous special interests who come together for special projects and then re-assemble with other interests for other projects. It takes place in all countries – I have seen it up close and personal.
The free and unfettered market is an obstacle because it is harsh and can be unforgiving of inefficiency and mistakes. Thus businessmen frequently use government to provide them an advantage that the market will not otherwise provide them. Why else do businesses form cartels? Investors also like special advantages (from private positioning in the marketplace or government provided) – they refer to it as “the franchise” that a particular business has. Businessmen are not philosophers – their role in a market economy (whether regulated or unregulated)is to provide goods and services to their customers. They are agents of the customers. They also must provide a return on equity or debt capital which has been advanced to them. These are the primary constituencies to whom they are responsible. Politicians and bureaucrats are merely inputs to be utilized in the fulfillment of the businessman’s responsibilities. He or she takes the world as they find it and in that context carry out their role in society. When customers and investors send businessmen a different signal and voters send their political leaders a different message then government intervention will be reversed and free markets and free minds will be rule of the day.
Comment by Larry Ruane on 20 May 2010:
From the article: “Ultimately, believing that a small group of evil people are manipulating economic and social processes for their own ends concedes to defenders of government economic planning that controlling and manipulating the economy is in fact possible!”
I don’t think anyone is saying that they are controlling and manipulating the economy *successfully*; yes, they are damaging the economy and impoverishing the rest of us, but they still benefit from their efforts (at least in the short run).
Just think about common criminals (as opposed to those who constitute the governing class). They also affect the economy — they damage it (not as much as government but to some extent). Yet they benefit.
Pingback by Conspiracy Theory Socialism | Austrian Economics Blog on 20 May 2010:
[...] my Freeman Online column this week. A [...]
Comment by Sean Ambroise on 20 May 2010:
Jacob,
“Politicians and bureaucrats are puppets.”
“The free and unfettered market is an obstacle because it is harsh and can be unforgiving of inefficiency and mistakes. ”
I think every single person who has read this article is more than familiar with those two concepts. You make a reasonable case for libertarianism… but there is no contribution to the discussion at hand.
Are we to assume that because coercion breeds corruption, the fact of government’s existence proves “conspiracy”? And, in reference to my first comment, are we still unable to define what that “conspiracy” is?
Corrupt things happen in government (who knew!). Is that conspiracy? If so, then conspiracies exist. But please don’t use those arguments to oppose the theories that are actually discussed in this article.
I see a very disappointing logical fallacy reoccurring here with some consistency. The author mentions a particular genre of consipracy theory, that of the overarching control, and total public deception. Zionist bankers, for instance. In rebuttal, people argue that government is corrupt. Strawman, anyone?
Comment by damon scott hynes on 20 May 2010:
Supposing that govt can not only work for ill but for good presupposes that govt should work for one or the other, in other words, to choose sides and play favorites. Slippery slopes and all.
Some dead white guy said something about ‘governs best, governs least.’ IMO, govt’s responsibility should be limited to fostering an environment/playing field intended for the populace to develop and eventually patronize the marketplace of ideas. (To put it another way, defend us from enemies without while allowing the populace to define just what composes an enemy within.)
Bicameral legislative representation was desirable when 1. Messages were delivered on horseback and 2. When the public was less educated in general.
It is an undesirable entrenched concentration of power today.
Comment by Beefcake the Mighty on 21 May 2010:
Obviously the issue can’t be about conspiracy theories as such, since eg the US govt’s official account of 9-11 is itself a conspiracy theory, yet the latter does not raise Steve’s ire.
So, if believing in conspiracy theories commits one to believing in the viability of socialism (according to Steve), what does believing that a bunch of guys with box cutters were able to defeat the security apparatus of the US govt commit one to? That primitivism is superior to advanced capitalism?
Comment by aware on 21 May 2010:
” It is not the Fed’s evil or the incompetence that leads to trouble but rather its ignorance.”…If that is so it is a willful ignorance since the decline in the purchasing power of the dollar has been steady for 100 years.
Even now as the despised “Rothbardians” continue to point this out, as they have consistently, you find yourself clinging to the unintended consequences argument. Are we to believe that after a century of experience nothing has been learned? Are the “unintended consequences” which steadily lead to the destruction of the monetary unit they are allegedly “making sound” the result of coincidence? If that were true surely there wouldn’t be the straight line decline.
Maybe it hasn’t worked in every detail as planned because of unforeseen factors, but it is not necessary for something to work perfectly for it to work at all. The scheme may not have all the wealth yet but it sure ain’t doing too bad so far. Are conspirators forbidden from making adjustments and modifications in reaction to current events when needed? This doesn’t pertain just to the Central Banking element of the overall mass of corruption that is the modern State.
The State is a criminal enterprise and it doesn’t have to be a “conspiracy” (even when it is). It is such as a result of its very nature. It does what it does for the simple reason it can. It is by nature coercive, authoritarian, monopolistic, and ultimately prepared to use violence to achieve its goals. It isn’t about secret cabals and shadowy conspiracies, it is about the existence of a powerful entity that then is used by various people for their own reasons. And like it or not some of these people and reasons are evil. You seem to me to be nitpicking and I have to wonder why since your point(as understood by some here) denigrates Rothbard obsessively while conferring a benign, even good intentioned, ignorance to the State. One would think from a couple of comments it is the Rothbardians that are destroying our wealth and liberties, not the State! The strangest defense of the State I have ever seen put forth by a “libertarian”. I don’t think that is your intention but that’s how it strikes me.
That said, I do not see the current decline into bankruptcy and possible chaos as primarily conspiracy either. It has more the character of mass looting, where the intent of the original thieves is no longer even relevant. Too many passersby have discovered the doors are wide open and are grabbing all they can, while they can. That’s what elections are for, to decide who grabs the most and who its grabbed from.
As we approach the final and terminal stage of this it would seem now is not the time to engage in trying to subdivide the only real opposition to this based on what is plainly an animosity to Murry Rothbard and a lame attempt to label his adherents(don’t know if I’m one but I do admit a lot of affinity) conspiracy theorists and “Kool-aid drinkers”. Huh? Kool-Aid drinkers? Then you and those here who agree bemoan name calling? More productive effort should be spent warning individuals how to mitigate the effects of collective collapse in their personal lives. That those here are reading The Freeman is proof enough of the effort to know what is happening.
Your thrust is to me like someone who insists on studying a leaf in the midst of a forest fire. Your point may have merit as an intellectual exercise, but we have much bigger problems now. It is too late for nice diner conversations and subtle constructs in a vain attempt to win rhetorical points and converts among the passengers on the Titanic.
Comment by Steve Horwitz on 21 May 2010:
Once again, I am not denying that there are those in the political world who want to do harm. That’s not the same as a “conspiracy theory.” But even those who wish to do harm are in a “competitive” process with the other harm-doers and do-gooders in politics and rarely does politics produce exactly what everyone intended. Politicians can’t control outcomes either, although they can sure influence them.
Rent-seeking and self-interest are NOT the same as a conspiracy.
And let me remind folks, I *am* pretty much an anarcho-capitalist, so this is not about me being “soft” on the state.
Next week’s column will take up some of the issues raised here I suspect.
Comment by Bill Woosley on 21 May 2010:
I think there are few politicians that are trying to do harm.
I think that many of them are trying to provide benefits to particular people or groups.
And they must be aware that that this causes “harms” to other individuals and groups. But really think they avoid thinking about these harms. Rationalize them away. Just don’t pay attention to them.
People have limited mental capacity, if the smartest. WE can’t think about everything always. There is a selection bias for politicians whose attention focuses on the benefits provided to their supporters and pays less attention to the even greater harms. If they are widely spread so that no one bears much harm, slightly difficult to connect with the action providing the benefits, and if no one in particular complains much, then it is easy to ignore them.
But I won’t deny that there may be some politicians that are out to get “the rich” or “the corporations.” It isn’t just that they have resources that can provide benefits. Punishing them is part of the point. But, I think most who hate the rich and the corporations actually see their activities as preventing them from causing harm. Or really, just fairly distributing the benefits created by society.
I know all of my remarks are far afield form conspiracy theory. I agree with Steve. The interactions of rent seeking politicians generates patterns that none of them intend.
Comment by Chuck George on 22 May 2010:
You can’t help but wonder sometime if there isn’t some truth to the conspiracy theories. You certainly can’t say that, as a matter of fact, there is(are) no conspirac(y)(ies). You certainly are entitled to your opinion on either side of the question. hcg
Comment by Chuck George on 22 May 2010:
MOST politicians think only of themselves. Concern for constituents is only to further their own self-aggandizement. Cynical? You bet it is. If supporting a conspiracy is their most profitable course, so be it. That’s one of the reasons I don’t think you can say flat out that there are no conspiracies. It’s all about money and/or POWER. Do I repeat myself?
One tad of evidence: have you ever noticed any representative or senator retiring after 2, 4 or 6 years with a lower net worth than when they started their “public service”?
Comment by Tim Starr on 23 May 2010:
1) There’s a distinction that needs to be made between a “grand conspiracy theory” and an ordinary conspiracy theory. A theory which has it that the entire world, or entire countries, are totally controlled by a secret group, is a grand conspiracy theory, and such theories are false.
2) For conventional conspiracies, we must have evidence. E.g., we know the Nazis planned to exterminate the Jews, because we have ample factual evidence for this. We have no equivalent to the records of the Wannsee conference for the alleged conspiracy to lie about Saddam’s WMDs.
3) When it comes to evaluating evidence for conspiracy theories, we must avoid the mistake of adopting the rule of evidence by which all evidence for the theory is accepted simply because it supports the theory, and all evidence against the theory is rejected simply because it conflicts with the theory. And dismissal of sources simply because of their political affiliation must also be avoided – especially when people of the same political affiliation often have conflicting opinions on many subjects.
Comment by James Peron on 24 May 2010:
I am 100% with Steve on this one. And Sheldon is right. Most people don’t have bad intentions, just bad policies. As bad as some Left policies are the intentions of most supporters are quite honorable, even laudable. As for the Right, most of their support for vicious policies like the War on Drugs is based on their good intentions. That is actually the problem.
If intentions were evil it would be easier to counter them. But with good intentions may people assume your opposition to the bad policy is actually opposition to the good intentions. CS Lewis warned:
“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
Pingback by Weekly Articles (holiday shortened) « Interned In Northfield on 30 May 2010:
[...] A great little article on conspiracy theories and socialism. I personally am a conspiracy theory skeptic. Firstly, I try to resist the cognitive dissidence caused by self delusion, which makes people search for such theories as an explanation (brutal self-examination of ones belief system is healthier). The second is I’ve worked with a number of government agencies around the world and my experience is that they are made-up of patriotic, well-meaning, above average intelligence, Americans (the same is true for similar foreign agencies) who try to do their best with-in a cumbersome bureaucracy with counter-productive rules and norms; which by definition means they are incapable of grand conspiracies. http://www.thefreemanonline.org/headline/conspiracy-theory-socialism/ [...]
Comment by Rick Fisk on 12 August 2010:
This article is wrong on many levels and extremely illogical.
Horwitz uses the Jewish banker conspiracy theory as evidence itself that conspiracy theories are “unfortunate”. In this particular case, the theory is deemed false merely because the bankers are accused of being Jewish (which in fact they are and were for the most part).
Horwitz implies that one can totally refuse to even consider the actual facts of the matter since there are some who place emphasis on the cultural/religious/ethnic make-up of the conspirators. Yet later he offers this laugher:
“Our case for freedom must ultimately rest on reason and logic”
How absurd. There is a mountain of evidence that Rothchilds, Rockefellers and other notable international bankers were at the core of those who created the Federal Reserve System (and who 100 years later still hold controlling shares in it).
To allege that this wasn’t for their own financial gain is utterly preposterous. The facts are detailed in a plethora of credible sources, the most notable being “The Creature from Jekyl Island” and perhaps Woodrow Wilson himself who after leaving office remarked of the Federal Reserve, “I may have ruined the country”.
The problem with conspiracy theory bashers is their reliance on faulty premise to argue their case. For instance:
“the bigger the conspiracy the bigger the amount of information the conspirators must have and process.”
This is false. For instance, let’s take this out of the realm of government for a moment.
Let’s say that an employee of a local bank conspires with a few of his friends to drain the bank’s vault of all cash and valuables. Does that then mean that the Bank itself is involved in the conspiracy? Of course not.
The fact that a few in government might carry out a “massive” conspiracy without any of their downstream officers knowing they are involved in a crime and cover up is totally within the realm of possibility and only gets more likely the more power the conspirators possess.
Hayek may have been correct if you hold his statement to the proper context, that the more people actually know about a conspiracy, the less likely it will remain a secret. But merely to claim a blanket impossibility because the crime was enormous in its scope is just illogical and wrong.
Furthermore this is based on a false premise as well:
“Ultimately, believing that a small group of evil people are manipulating economic and social processes for their own ends concedes to defenders of government economic planning that controlling and manipulating the economy is in fact possible!”
Horwitz, while attempting to rebut all conspiracy theory, is still stuck arguing against a small group of bankers having the power to manipulate social and economic processes for their own benefit.
Because it is not possible to centrally plan the economy, therefore it is not possible to create ANY benefit for one’s self by using the tools economic and social planners use to control economies.
Again, this is totally false because the “conspiracy” has nothing to do with central planning per se. It has to do with a group of individuals who have injected themselves as a monopoly operator of monetary policy in this country. The fact that they can’t actually control the outcome of all economic activity is irrelevant. They’re not really interested in that. They dangled out their entity (The Federal Reserve) to politicians as a carrot in THEIR belief that the outcomes could be controlled.
Federal Reserve board members do not care whether the economy can be planned or not, they care about making a profit. And to that end, they have created a marvelous engine. In 100 years they’ve been able to reduce the dollar’s value to 4% of its original value (when it was tied to Gold) and all of that “loss” in value has ended up in the pockets of their member banks.
They don’t have to be able to achieve central planning nirvana.
Horwitz has not thought this argument through at all but is holding it out as an example of “logic”. Sadly, it looks as though some other bloggers are buying it as well.
Comment by Ed Farris on 9 September 2010:
33 Conspiracy Theories That Turned Out To Be True, What Every Person Should Know…
http://www.newworldorderreport.com/News/tabid/266/ID/980/33-Conspiracy-Theories-That-Turned-Out-To-Be-True-What-Every-Person-Should-Know.aspx
Comment by Ed Farris on 9 September 2010:
Looniest Of All 911 Conspiracy Theories
http://rense.com/general69/statee.htm
Comment by skinner's box on 18 March 2011:
the creature of jekyll island
http://thepiratebay.org/torrent/5318883
completely safe to read in a faraday cage.
Comment by BF Skinner's hamster on 18 March 2011:
Drop the red pill, folks.
http://is.gd/czCX81
Comment by Todd in Sacramento on 12 July 2011:
Interesting feedback on this. It appears that someone is trying to cover up the Jewish – banking connection. Although I can see where some claims have proven to hinder and not help the freedom movement. There is the chemtrail group that seems a little fringe by claiming every streak in the sky is a poisonous vapor intended to eradicate 2/3 of the population. I am not saying that the idea that the government would spray chemicals into the air is impossible, it just seems that there needs to be a little more hard evidence to make that claim. But to use the banking / FED / Jewish example as being fringe is an obvious attempt to discredit facts as some sort of fringe idea. Come on Horwitz, you are not convincing anyone that the bankers (central banks) aren’t the ones setting foreign and monetary policy. Many here have posted the title to Griffin’s book, “The Creature from Jekyll Island”. I suggest you read it, or maybe you have read it and it’s accuracy scares the crap out of you. Your article is futile in it’s attempt to neutralize exposing the agenda of the globalists. Nice try though.
Pingback by Mowat's Party Time on 20 November 2011:
[...] rise of underground media competing across the internet. The wave of conspiracy theories must have doubled since the JFK assassination [...]
Comment by Jody on 3 January 2012:
I have been enlightened by this article, but I see a circular argument – if there are evil groups then there are good [socialist] groups who could put down the evil groups. Well, it’s never pretty to oust a corrupt king. There are evil groups, but they are dwarfed by the greed of the world, the ignorance, and the disintegration of the family, disbelief in a higher power of good, etc.
I try to not be angry at the way things are, I do try to serve my god and neighbors.
Trackback by stop spam plugin on 7 February 2012:
You should check this wordpress plugin…
[...] Wonderful results against spam links using this plugin [...]……
Comment by wordpress seo on 8 February 2012:
Hello Web Admin, I noticed that your On-Page SEO is is missing a few factors, for one you do not use all three H tags in your post, also I notice that you are not using bold or italics properly in your SEO optimization. On-Page SEO means more now than ever since the new Google update: Panda. No longer are backlinks and simply pinging or sending out a RSS feed the key to getting Google PageRank or Alexa Rankings, You now NEED On-Page SEO. So what is good On-Page SEO?First your keyword must appear in the title.Then it must appear in the URL.You have to optimize your keyword and make sure that it has a nice keyword density of 3-5% in your article with relevant LSI (Latent Semantic Indexing). Then you should spread all H1,H2,H3 tags in your article.Your Keyword should appear in your first paragraph and in the last sentence of the page. You should have relevant usage of Bold and italics of your keyword.There should be one internal link to a page on your blog and you should have one image with an alt tag that has your keyword….wait there’s even more Now what if i told you there was a simple WordPress plugin that does all the On-Page SEO, and automatically for you? That’s right AUTOMATICALLY, just watch this 4minute video for more information at. WordPress Seo Plugin