New philosophy articles are at Critical Fallibilism. Since 2021, Curiosity is my personal site for informal or off-topic articles. I don't endorse all old articles here.
> According to this [Exploitation] theory, capitalism is a system of virtual slavery, serving the narrow interests of a comparative handful of businessmen and capitalists, who, driven by insatiable greed and power lust, exist as parasites upon the labor of the masses.
> This view of capitalism has not been the least bit shaken by the steady rise in the average standard of living that has taken place in the capitalist countries since the beginning of the Industrial Revolution. The rise in the standard of living is not attributed to capitalism, but precisely to the *infringements* which have been made upon capitalism.
> How Slave Owners Pushed Marxist "Wage Slavery" and Exploitation Theories
> Indeed, the term "wage slavery" and its variants were popular among slavery's defenders, who sought to portray capitalism as a system more barbaric than the chattel-slavery system of the American slave states.
> Or as Robert Higgs put it, "True to his sociological theories, Fitzhugh wanted to extend slavery in the United States to working-class white people, for their own good!"
> House majority whip Rep. James Clyburn dismissed President Trump’s record low African-American unemployment numbers in an interview on Fox News. Anchor Neil Cavuto asked Clyburn whether he was pleased with the low unemployment rate of American minorities.
...
> “No, because it’s not true. I’m saying the African-American unemployment is not the lowest it’s ever been, unless you count slavery. We were fully employed during slavery, so it all depends on how you measure this up,” Clyburn responded.
As the harbingers of socialism tell us again and again, socialism will not only make all people rich, but will also bring perfect freedom to everybody. The transition to socialism, declares Frederick Engels, the friend and collaborator of Marx, is the leap of mankind from the realm of necessity into the realm of freedom. Under capitalism, say the Communists, there is bondage for the immense majority; in the Soviet Union alone there is genuine liberty for all.
The treatment of this problem of freedom and bondage has been muddled by confounding it with the issues of the nature-given conditions of man’s existence. In nature there is nothing that could be called freedom. Nature is inexorable necessity. It is the state of affairs into which all created beings are placed and with which they have to cope. Man has to adjust his conduct to the world as it is. He lacks the power to rise in rebellion against the “laws of nature.” If he wants to substitute more satisfactory conditions for less satisfactory, he has to comply with them.
Freedom in Society Means Freedom for Individuals to Choose
The concept of freedom and its antithesis make sense only in referring to the conditions of social cooperation among men. Social cooperation, the basis of any really human and civilized existence, can be achieved by two different methods. It can be cooperation by virtue of contract and voluntary coordination on the part of all individuals, or it can be cooperation by virtue of command on the part of a Führer and compulsory subordination of the many. The latter system is authoritarian.
In the libertarian system every individual is a moral person, that is, he is free to choose and to act and is responsible for his conduct. In the authoritarian system the supreme chief alone is a free agent while all the others are bondsmen subject to his discretion. Where the authoritarian system is fully established, as was for instance the case in the empire of the Inca in pre-Columbian America, the subjects are merely in a zoological sense human; virtually they are deprived of their specifically human faculty of choosing and acting and are not accountable for their conduct. It was in accordance with this degradation of man’s moral dignity that the Nazi criminals declined any responsibility for their deeds by pointing out that all they did was to obey the orders of their superiors.
Western civilization is based upon the libertarian principle, and all its achievements are the result of the actions of free men. Only in the frame of a free society is it meaningful to distinguish between what is good and ought to be done and what is bad and ought to be avoided. Only in such a free society has the individual the power to choose between morally commendable and morally reprehensible conduct.
Man is not a perfect being and there is no perfection in human affairs. Conditions in the free society are certainly in many regards unsatisfactory. There is still ample room for the endeavors of those who are intent upon fighting evil and raising the moral, intellectual and material level of mankind.
Socialism Leads to Total Control
But the designs of the Communists, Socialists, and all their allies aim at something else. They want to establish the authoritarian system. What they mean in extolling the benefits to be derived from what they call “planning” is a society in which all of the people should be prevented from planning their own conduct and from arranging their lives according to their own moral convictions. One plan alone should prevail, the plan of the great idol State (with a capital S), the plan of the supreme chief of the government, enforced by the police. Every individual should be forced to renounce his autonomy and to obey, without asking questions, the orders issued from the Politburo, the Führer’s secretariat. This is the kind of freedom that Engels had in mind. It is precisely the opposite of what the term freedom used to signify up to our age.
It was the great merit of Professor Friedrich von Hayek to have directed attention to the authoritarian character of the socialist schemes, whether they are advocated by international or by nationalist socialists, by atheists or by misguided believers, by white-skinned or by dark-skinned fanatics. Although there have always been authors who exposed the authoritarianism of the socialist designs, the main criticism of socialism centered around its economic inadequacy, and did not sufficiently deal with its effects upon the lives of the citizens. Because of this neglect of the human angle of the issue, the great majority of those supporting socialist policies vaguely assumed that the restriction of the individuals’ freedom by a socialist regime will apply “only” to economic matters and will not affect freedom in non-economic affairs.
But as Hayek in 1944 clearly pointed out in his book The Road To Serfdom, economic control is not merely control of a sector of human life that can be separated from the rest; it is the control of the means for all our ends. As the socialist state has sole control of the means, it has the power to determine which ends are to be served and what men are to strive for. It is not an accident that Marxian socialism in Russia and nationalist socialism in Germany resulted in the complete abolition of all civil liberties and the establishment of the most rigid despotism. Tyranny is the political corollary of socialism, as representative government is the political corollary of the market economy.
Now Professor Hayek has enlarged and substantiated his ideas in a comprehensive treatise, The Constitution of Liberty.* In the first two parts of this book the author provides a brilliant exposition of the meaning of liberty and the creative powers of a free civilization. Endorsing the famous definition that describes liberty as the rule of laws and not of men, he analyzes the constitutional and legal foundations of a commonwealth of free citizens. He contrasts the two schemes of society’s social and political organization, government by the people (representative government) based upon legality, and government by the discretionary power of an authoritarian ruler or a ruling clique, an Obrigkeit as the Germans used to call it. Fully appreciating the moral, practical and material superiority of the former, he shows in detail what the legal requirements of such a state of affairs are and what has to be done in order to make it work and to defend it against the machinations of its foes.
The Welfare State Leads to Socialism
*Unfortunately, the third part of Professor Hayek’s book is rather disappointing. Here the author tries to distinguish between socialism and the Welfare State. Socialism, he alleges, is on the decline; the Welfare State is supplanting it. And he thinks that the Welfare State is, under certain conditions, compatible with liberty.*
In fact, the Welfare State is merely a method for transforming the market economy step by step into socialism. The original plan of socialist action as developed by Karl Marx in 1848 in the Communist Manifesto aimed at a gradual realization of socialism by a series of governmental measures. The ten most powerful of such measures were enumerated in the Manifesto. They are well known to everybody because they are the very measures that form the essence of the activities of the Welfare State, of Bismarck’s and the kaiser’s German Sozialpolitik as well as of the American New Deal and British Fabian Socialism. The Communist Manifesto calls these measures which it suggests “economically insufficient and untenable,” but it stresses the fact that “in the course of the movement [they] outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.”
Later, Marx adopted a different method for the policies of his party. He abandoned the tactics of a gradual approach to the total state of socialism and instead advocated a violent revolutionary overthrow of the “bourgeois” system that at one stroke should “liquidate” the “exploiters” and establish “the dictatorship of the proletariat.” It was this that Lenin did in 1917 in Russia and what the Communist International plans to achieve everywhere. What separates the Communists from the advocates of the Welfare State is not the ultimate goal of their endeavors, but the methods by means of which they want to attain a goal that is common to both of them. The difference of opinions that divides them is the same that distinguishes the Marx of 1848 from the Marx of 1867, the year of the first publication of the first volume of Das Kapital.
The Failure of Economic Planning
However, the fact that *Professor Hayek has misjudged the character of the Welfare State* does not seriously detract from the value of his great book. For his searching analysis of the policies and concerns of the Welfare [115] State shows to every thoughtful reader why and how these much-praised welfare policies inevitably always fail. These policies never attain those—allegedly beneficial—ends which the government and the self-styled progressives who advocated them wanted to attain, but—on the contrary—bring about a state of affairs which—from the very point of view of the government and its supporters—is even more unsatisfactory than the previous state of affairs they wanted to “improve.” If the government does not repeal its first intervention, it is induced to supplement it by further acts of intervention. As these fail again, still more meddling with business is resorted to until all economic freedom has been virtually abolished. What emerges is the system of all-round planning, i.e., socialism of the type which the German Hindenburg Plan was aiming at in the First World War and which was later put into effect by Hitler after his seizure of power, and by the British Coalition Cabinet in the Second World War.
The main error that prevents many of our contemporaries from adequately comprehending the significance of various party programs and the trend of the welfare policies is their failure to recognize that there is apart from outright nationalization of all plants and farms (as effected in Russia and China) a second method for the full realization of socialism. Under this system that is commonly called “planning” (or, in war time, war socialism) the various plants and farms remain outwardly and seemingly units, but they become entirely and unconditionally subject to the orders of the supreme planning authority. Every citizen, whatever his nominal position in the economic system may be, is bound to toil in strict compliance with the orders of the planning board, and his income—the amount he is permitted to spend for his consumption—is exclusively determined by these orders. Some labels and terms of the capitalistic system may be preserved, but they signify under the altered conditions something entirely different from what they used to signify in the market economy. Other terms may be changed. Thus in Hitler Germany the head of an outfit who supplanted the entrepreneur or the corporation president of the market economy was styled “shop manager” (Betriebsführer) and the labor force “followers” (Gefolgschaft). As the theoretical pace-makers of this system, e.g., the late Professor Othmar Spann, has pointed out again and again, it retains only the name of private ownership, while in fact there is exclusively public—state—ownership.
Only by paying full attention to these fundamental issues can one [116] form a correct appreciation of the political controversies in the nations of Western civilization. For if socialism and communism should succeed in these countries, it will be the socialism of the planning scheme and not the socialism of the nationalization scheme. The latter is a method applicable to predominantly agricultural countries like those of Eastern Europe and Asia. In the industrial countries of the West the planning scheme is more popular because even the most fanatical statolatrists shrink from directly nationalizing the intricate apparatus of modern manufacturing.
Yet the “planning scheme” is just as destructive of freedom as the “nationalization scheme” and both lead on to the authoritarian state.
I came across these pages claiming that people have taken that famous Keynes quote about being dead in the long run out of context. I thought this claim would be of interest, especially because of the specific economists mentioned as making this error.
> There is one other big problem with Hazlitt--a problem that he shares with many of his successors on the Wall Street Journal op-ed page, on the Weekly Standard, and on the National Review. His quotes cannot be counted on to be in context. His summaries cannot be counted on to be honest.
> For example, Hazlitt on Keynes in Economics in One Lesson:
>> p. 4: There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.
> What Keynes actually wrote in his Tract on Monetary Reform:
> Now 'in the long run' this [way of summarizing the quantity theory of money] is probably true.... But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
> Misrepresentations like this do Hazlitt no credit at all.
> In this extended discussion of how to use the quantity theory of money, the sentence “In the long run we are all dead” performs an important rhetorical role. It wakes up the reader, and gets him or her to reset an attention that may well be flagging. But it has nothing to do with attitudes toward the future, or with rates of time discount, or with a heedless pursuit of present pleasure.
> So why do people think it does?
> Note that we are speaking not just of Ferguson here, but of Mankiw and Hayek and Schumpeter and Himmelfarb and Peter Drucker and McCraw and even Heilbronner–along with many others.
> I blame it on Hayek and Schumpeter. They appear to be the wellsprings.
> Hayek is simply a bad actor–knowingly dishonest. In what Nicholas Wapshott delicately calls “misappropriation”, Hayek does not just quote “In the long run we are all dead” out of context but gives it a false context he makes up:
>> Are we not even told that, since ‘in the long run we are all dead’, policy should be guided entirely by short run considerations? I fear that these believers in the principle of apres nous le déluge may get what they have bargained for sooner than they wish.
> > For example, Hazlitt on Keynes in Economics in One Lesson:
But then the Hazlitt paragraph *does not quote Keynes*.
> > Misrepresentations like this do Hazlitt no credit at all.
A comment on the general attitude of certain people is not a misrepresentation of a particular quote.
Plus the Keynes quote given actually does say that 1) in the long run we're dead 2) opposes judging policies by long run results. So where would be the misrepresentation even if Hazlitt had been specifically referring to that passage?
And if you seriously want to debate these matters, tell us an error in Hazlitt's main book on the matter where he was trying to be detailed, precise, thorough, etc. Criticize his most serious statements on the matter instead of a broad complaint from an intro book.
Do not buy individual stocks. Only buy broad index funds to hold for years. You aren't a professional trader[1]. You don't know what you're doing. You will not beat the market on average.
[1] Unless you are. But most professionals are destroying value too.
> If US officials wish to effectively handle the rising number of cases in big cities, they would do well to take lessons from South Korea and start freeing the market for healthcare rather than bungling a monopolized testing protocol that did not need to be monopolized, and thereby preventing people from getting tested. This would not immediately resolve the problems created by bad regulation in the past, but it would certainly reduce its negative consequences while improving the healthcare system's ability to deal with these sorts of crises going forward. It would also have the benefit of reducing the cost of healthcare generally.
I got some criticism and was doing some more thinking about it.
I was writing some notes on my thinking and got stuck at a certain point in my analysis.
I tried to come up with an argument that the guy in the article was actually creating value.
The argument is:
In the current situation where there is very high demand for things like hand sanitizer, if the guy hadn’t engaged in his speculative activities, woudn’t that be a windfall for whoever happened to grab a bottle of hand sanitizer at a dollar store in the backwoods of Kentucky? Like say the global market price for hand sanitizer is $50 a bottle at the moment, and it costs $1 at the dollar store in Kentucky. If NYT article guy can get the $1 hand sanitizer to the $50 market, isn't he adding value?
People willing to pay $50 for hand sanitizer may be more disproportionately at risk, living as they are in urban centers where they’re more likely to come into contact with the virus than someone frequenting a dollar store in rural Kentucky.
So basically the argument is that the guy is helping move goods to where they are more urgently needed, based on price signals.
**Counterargument**: there might be other means of getting people access to the stock of goods in a rural Kentucky dollar store in an urgent situation like the coronavirus disaster *other than* having some small time speculator shipping stuff around at great cost. For example, the store might be a national one that can move inventory around, or the stores might donate the supply of hand sanitizer, or the govt might ask for it.
**Counter-counter-argument**: Would that actually happen? Should we criticize someone who actually acted on the basis of the fact that *maybe* someone else could have acted to solve the problem? The govt and others aren't doing an amazing job responding to the situation.
**Counter-counter-counter-argument**: The guy isn't doing an amazing job responding to the situation either.
Some general comments: speculators can face issues like bad storage practices, or expensive storage, or expensive/inefficient shipping, or difficulty finding/connecting with customers. The difficulty finding/connecting with customers could be due to issues like regulation, or markets balking at “price gouging”, or an inability of certain major purchasers to purchase stuff from independent parties selling goods outside of the normal supply channels.
These are all risks and concerns that the successful speculator must think about and try to plan for *before* he engages in his speculation if he’s going to have much hope of successfully engaging in speculation and adding value to the marketplace by holding goods for later use.
This guy doesn't seem to have great storage practices, has expensive shipping, wound up facing trouble selling his goods and may get in trouble with the law. He ineffectively dealt with the objective state of the situation involved in getting his goods to market.
**Counter-counter-counter-counter-argument**: But should some of the things he's having to deal with even exist? Like anti-price-gouging laws and harsh consumer sentiment against price gougers? Blaming him for having to deal with that stuff seems like blaming the victim.
**Counter-counter-counter-counter-counter-argument**: He's not some productive genius dealing with a new anti-dog-eat-dog rule being sprung on him, though. He knew or should have known the facts of the situation he was dealing with, including stuff like price gouging laws. His actions wind up temporarily taking some time-sensitive and urgently needed goods off the market at the time when they could be of the most benefit.
Anyways I think I'm making progress but still don't think/feel like the initial argument re: moving around goods to where they're more urgently needed is fully addressed.
#16062 Do you want to focus on this advanced, complicated topic, indefinitely, including sub-topics, to try to successfully reach conclusions? If the plan is to do a haphazard amount on this and then stop for reasons that aren't communicated to me, I don't think it makes sense for me to engage.
Overall, I agree with the analysis presented in the article. I did have one quibble:
> For the hospitals are in a position to outbid virtually all other competitors for such things.
> For one thing, they could immediately obtain the supplies held by speculators, who, under present conditions, are prohibited from selling them, a situation that is insane.
> What is preventing these sales is an apparent preference for the suffering of hospital patients over the profit of the speculators, who have assembled the supplies the hospitals and their patients need.
I would guess that hospitals face various issues that would prevent them from obtaining supplies held by speculators such as the guy discussed in the NYT article (such as hospital policies, regulations, or liability concerns).
> #16062 Do you want to focus on this advanced, complicated topic, indefinitely, including sub-topics, to try to successfully reach conclusions? If the plan is to do a haphazard amount on this and then stop for reasons that aren't communicated to me, I don't think it makes sense for me to engage.
Hard no to "indefinitely."
I think I could reasonably commit to something like a moderate amount of discussion over the course of a couple of weeks. It may be longer depending on the length of time for which other stuff I want to do is disrupted due to the corona stuff. So the availability (or lack thereof) of other activities that I'd prefer to focus on right now is one major constraint.
Another major constraint is my own unpredictable interest level. I have some general interest in economics that I've pursued to some degree for many years, so in some respects I'm in better shape on that front for this discussion than I would be on many other topics. Despite that, I still don't want to commit to an indefinite time period discussion.
I understand if this is not a really tempting discussion offer to you -- no hard feelings if so!
I read through the two pages (in the PDF) in Reisman's *Capitalism* on "The Tendency Toward Uniform Prices Over Time: The Function of Commodity Speculation". Haven't read the related analysis on oil shortages yet.
Will you pick anything to focus on? I think ongoing topic changing is one of the common ways you and most people screw up progress/learning (and also are worse to interact with for me).
The issue isn't the time period (number of weeks) but what happens during that time. What, if anything, gets done and resolved. Topic changes should be for reasons, not because of emotions or the passage of time.
If you can't focus on a topic due to your interests (what you find "fun" and "interesting") being emotional whims (I think that's really common), that's a major problem and something needs to be done about it. One of the best things most people can do about it is a workaround: work on smaller, easier, simpler topics. Start with projects you can finish in 15 minutes. Succeed at some. Then scale up: half hour projects, hour projects, two hours, etc. (You may notice how this connects to the issue of overreaching.)
#16077 Indefinite means "lasting for an unknown or unstated length of time" (New Oxford dictionary). Maybe there's confusion about that. That's very different than forever. It means you don't automatically stop after a set amount of time or say "well it's been 3 weeks, that's a lot of time, so it's reasonable to be done now". The stopping or topic-changing conditions should not be based on time (or emotion).
Indefinite also doesn't mean you can't give up or fail so you'd be stuck working on it forever.
But giving up or failing should be a moderately big deal. A notable event, not a dime a dozen. It'd be a thing that goes on a list of projects and their outcomes and is considered important data about your life, capabilities, etc.
Tons of topics get dropped with no clear failure, no clear giving up, no clear outcome, and no data collection in order to identify patterns of failure and address them. This is an ongoing problem with ~everyone, year after year. I'm trying to deal with it better now.
> Will you pick anything to focus on? I think ongoing topic changing is one of the common ways you and most people screw up progress/learning (and also are worse to interact with for me).
If "pick anything to focus on" means "commit to discussing an intellectual/philosophy topic for an indefinite period of time, possibly years, including all relevant/related topics, until stuff gets throughly resolved, lest the failure to do so be considered a kind of failure/breach of trust/fraudulent misrepresentation of interest in the topic" then no.
> The issue isn't the time period (number of weeks) but what happens during that time. What, if anything, gets done and resolved. Topic changes should be for reasons, not because of emotions or the passage of time.
I don't have a criticism of your position regarding how conversations should ideally go in terms of topic changes etc. What I was trying to get across earlier is what I think I can actually reasonably commit to in good faith right now, given what I know about myself.
> If you can't focus on a topic due to your interests (what you find "fun" and "interesting") being emotional whims (I think that's really common), that's a major problem and something needs to be done about it.
I think that's true but don't think I'll make major progress on this issue anytime soon.
For now my current approach will be to not really engage intellectually with FI stuff much at all (that's not a new situation, just stating it for the record). I have some limited interest in discussion of some particular FI-adjacent topics some amount, but not enough to meet the discussion standards here, and I don't want to misrepresent my interest level in discussion to other people.
#16081 You're wrong about how it (thinking, reason, learning, not overreaching, etc) works, how you could make progress, what to do, etc. But you don't discuss that either.
Your pessimism, negativity, etc., are totally unnecessary and avoidable. They are due to your own misconceptions that you are shielding from critical discussion. It doesn't have to be this way.
> ... giving up or failing should be a moderately big deal. A notable event, not a dime a dozen. It'd be a thing that goes on a list of projects and their outcomes and is considered important data about your life, capabilities, etc.
Justin Mallone replied (emphasis mine):
> If "pick anything to focus on" means "commit to discussing an intellectual/philosophy topic for an indefinite period of time, possibly years, including all relevant/related topics, until stuff gets throughly resolved, lest the failure to do so be considered a kind of failure/**breach of trust/fraudulent misrepresentation of interest** in the topic" then no.
curi said nothing about fraud or breach of trust. Justin added that.
It looks to me like curi had in mind basically that **Justin himself** would consider it a big deal if Justin stopped discussing before a conclusion was reached.
#17608 On George Reisman's website on the left sidebar you can get (free):
Capitalism: A Treatise on Economics. I've read it and think it's exceptional. It's long and detailed; you can look up specific topics with the detailed table of contents, the detailed index, or electronic search. lots of sections are possible to read without reading all the prior text first.
> Fast-forward to February 2020. Since then, the quantity of money in the U.S. economy, measured by M2, has increased by an astonishing $4 trillion. That’s a one-year increase of 26%—the largest annual percentage increase since 1943.
has anyone researched M2? should we be super concerned? my my initial reaction was to think that "$4 trillion", "one-year increase of 26%" and "largest annual percentage increase since 1943" all sounded bad, but i don't actually know.
#20043 I've seen several things about this. I think it's bad but I don't know the degree of badness. Should I be making any changes to my life because of it? Major changes?
#20121 Reminds me of a popular stock market saying:
Why did the stock market go down? Because there were more sellers than buyers.
This is true but probably not at the level of abstraction the original question intended.
The questioner probably wanted to know why were there more sellers than buyers?
Likewise someone asking about diamonds and water probably wants to know why don't people want more water and why do they want more diamonds?
I think answering only the lower level of abstraction is typically a tactic for sounding profound while effectively saying "I don't know" to the original intent of the question.
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https://mises.org/library/classical-economics-vs-exploitation-theory
> Classical Economics vs. The Exploitation Theory
> According to this [Exploitation] theory, capitalism is a system of virtual slavery, serving the narrow interests of a comparative handful of businessmen and capitalists, who, driven by insatiable greed and power lust, exist as parasites upon the labor of the masses.
> This view of capitalism has not been the least bit shaken by the steady rise in the average standard of living that has taken place in the capitalist countries since the beginning of the Industrial Revolution. The rise in the standard of living is not attributed to capitalism, but precisely to the *infringements* which have been made upon capitalism.
https://mises.org/wire/how-slave-owners-pushed-marxist-wage-slavery-and-exploitation-theories
> How Slave Owners Pushed Marxist "Wage Slavery" and Exploitation Theories
> Indeed, the term "wage slavery" and its variants were popular among slavery's defenders, who sought to portray capitalism as a system more barbaric than the chattel-slavery system of the American slave states.
> Or as Robert Higgs put it, "True to his sociological theories, Fitzhugh wanted to extend slavery in the United States to working-class white people, for their own good!"
https://mises.org/library/anti-obamanomics-why-everyone-should-be-favor-reducing-taxes-rich
> Anti-Obamanomics: Why Everyone Should Be in Favor of Reducing Taxes on the "Rich"
by Reisman
#15509 Democrat Leader Dismisses Record African-American Jobs Rate: ‘We Were Fully Employed During Slavery’, *The Federalist* (2020-02-20):
> House majority whip Rep. James Clyburn dismissed President Trump’s record low African-American unemployment numbers in an interview on Fox News. Anchor Neil Cavuto asked Clyburn whether he was pleased with the low unemployment rate of American minorities.
...
> “No, because it’s not true. I’m saying the African-American unemployment is not the lowest it’s ever been, unless you count slavery. We were fully employed during slavery, so it all depends on how you measure this up,” Clyburn responded.
Mises Criticizes Hayek
https://oll.libertyfund.org/titles/mises-planning-for-freedom-let-the-market-system-work-a-collection-of-essays-and-addresses
(Formatting omitted, emphasis is mine.)
12: Liberty and Its Antithesis
As the harbingers of socialism tell us again and again, socialism will not only make all people rich, but will also bring perfect freedom to everybody. The transition to socialism, declares Frederick Engels, the friend and collaborator of Marx, is the leap of mankind from the realm of necessity into the realm of freedom. Under capitalism, say the Communists, there is bondage for the immense majority; in the Soviet Union alone there is genuine liberty for all.
The treatment of this problem of freedom and bondage has been muddled by confounding it with the issues of the nature-given conditions of man’s existence. In nature there is nothing that could be called freedom. Nature is inexorable necessity. It is the state of affairs into which all created beings are placed and with which they have to cope. Man has to adjust his conduct to the world as it is. He lacks the power to rise in rebellion against the “laws of nature.” If he wants to substitute more satisfactory conditions for less satisfactory, he has to comply with them.
Freedom in Society Means Freedom for Individuals to Choose
The concept of freedom and its antithesis make sense only in referring to the conditions of social cooperation among men. Social cooperation, the basis of any really human and civilized existence, can be achieved by two different methods. It can be cooperation by virtue of contract and voluntary coordination on the part of all individuals, or it can be cooperation by virtue of command on the part of a Führer and compulsory subordination of the many. The latter system is authoritarian.
In the libertarian system every individual is a moral person, that is, he is free to choose and to act and is responsible for his conduct. In the authoritarian system the supreme chief alone is a free agent while all the others are bondsmen subject to his discretion. Where the authoritarian system is fully established, as was for instance the case in the empire of the Inca in pre-Columbian America, the subjects are merely in a zoological sense human; virtually they are deprived of their specifically human faculty of choosing and acting and are not accountable for their conduct. It was in accordance with this degradation of man’s moral dignity that the Nazi criminals declined any responsibility for their deeds by pointing out that all they did was to obey the orders of their superiors.
Western civilization is based upon the libertarian principle, and all its achievements are the result of the actions of free men. Only in the frame of a free society is it meaningful to distinguish between what is good and ought to be done and what is bad and ought to be avoided. Only in such a free society has the individual the power to choose between morally commendable and morally reprehensible conduct.
Man is not a perfect being and there is no perfection in human affairs. Conditions in the free society are certainly in many regards unsatisfactory. There is still ample room for the endeavors of those who are intent upon fighting evil and raising the moral, intellectual and material level of mankind.
Socialism Leads to Total Control
But the designs of the Communists, Socialists, and all their allies aim at something else. They want to establish the authoritarian system. What they mean in extolling the benefits to be derived from what they call “planning” is a society in which all of the people should be prevented from planning their own conduct and from arranging their lives according to their own moral convictions. One plan alone should prevail, the plan of the great idol State (with a capital S), the plan of the supreme chief of the government, enforced by the police. Every individual should be forced to renounce his autonomy and to obey, without asking questions, the orders issued from the Politburo, the Führer’s secretariat. This is the kind of freedom that Engels had in mind. It is precisely the opposite of what the term freedom used to signify up to our age.
It was the great merit of Professor Friedrich von Hayek to have directed attention to the authoritarian character of the socialist schemes, whether they are advocated by international or by nationalist socialists, by atheists or by misguided believers, by white-skinned or by dark-skinned fanatics. Although there have always been authors who exposed the authoritarianism of the socialist designs, the main criticism of socialism centered around its economic inadequacy, and did not sufficiently deal with its effects upon the lives of the citizens. Because of this neglect of the human angle of the issue, the great majority of those supporting socialist policies vaguely assumed that the restriction of the individuals’ freedom by a socialist regime will apply “only” to economic matters and will not affect freedom in non-economic affairs.
But as Hayek in 1944 clearly pointed out in his book The Road To Serfdom, economic control is not merely control of a sector of human life that can be separated from the rest; it is the control of the means for all our ends. As the socialist state has sole control of the means, it has the power to determine which ends are to be served and what men are to strive for. It is not an accident that Marxian socialism in Russia and nationalist socialism in Germany resulted in the complete abolition of all civil liberties and the establishment of the most rigid despotism. Tyranny is the political corollary of socialism, as representative government is the political corollary of the market economy.
Now Professor Hayek has enlarged and substantiated his ideas in a comprehensive treatise, The Constitution of Liberty.* In the first two parts of this book the author provides a brilliant exposition of the meaning of liberty and the creative powers of a free civilization. Endorsing the famous definition that describes liberty as the rule of laws and not of men, he analyzes the constitutional and legal foundations of a commonwealth of free citizens. He contrasts the two schemes of society’s social and political organization, government by the people (representative government) based upon legality, and government by the discretionary power of an authoritarian ruler or a ruling clique, an Obrigkeit as the Germans used to call it. Fully appreciating the moral, practical and material superiority of the former, he shows in detail what the legal requirements of such a state of affairs are and what has to be done in order to make it work and to defend it against the machinations of its foes.
The Welfare State Leads to Socialism
*Unfortunately, the third part of Professor Hayek’s book is rather disappointing. Here the author tries to distinguish between socialism and the Welfare State. Socialism, he alleges, is on the decline; the Welfare State is supplanting it. And he thinks that the Welfare State is, under certain conditions, compatible with liberty.*
In fact, the Welfare State is merely a method for transforming the market economy step by step into socialism. The original plan of socialist action as developed by Karl Marx in 1848 in the Communist Manifesto aimed at a gradual realization of socialism by a series of governmental measures. The ten most powerful of such measures were enumerated in the Manifesto. They are well known to everybody because they are the very measures that form the essence of the activities of the Welfare State, of Bismarck’s and the kaiser’s German Sozialpolitik as well as of the American New Deal and British Fabian Socialism. The Communist Manifesto calls these measures which it suggests “economically insufficient and untenable,” but it stresses the fact that “in the course of the movement [they] outstrip themselves, necessitate further inroads upon the old social order, and are unavoidable as a means of entirely revolutionizing the mode of production.”
Later, Marx adopted a different method for the policies of his party. He abandoned the tactics of a gradual approach to the total state of socialism and instead advocated a violent revolutionary overthrow of the “bourgeois” system that at one stroke should “liquidate” the “exploiters” and establish “the dictatorship of the proletariat.” It was this that Lenin did in 1917 in Russia and what the Communist International plans to achieve everywhere. What separates the Communists from the advocates of the Welfare State is not the ultimate goal of their endeavors, but the methods by means of which they want to attain a goal that is common to both of them. The difference of opinions that divides them is the same that distinguishes the Marx of 1848 from the Marx of 1867, the year of the first publication of the first volume of Das Kapital.
The Failure of Economic Planning
However, the fact that *Professor Hayek has misjudged the character of the Welfare State* does not seriously detract from the value of his great book. For his searching analysis of the policies and concerns of the Welfare [115] State shows to every thoughtful reader why and how these much-praised welfare policies inevitably always fail. These policies never attain those—allegedly beneficial—ends which the government and the self-styled progressives who advocated them wanted to attain, but—on the contrary—bring about a state of affairs which—from the very point of view of the government and its supporters—is even more unsatisfactory than the previous state of affairs they wanted to “improve.” If the government does not repeal its first intervention, it is induced to supplement it by further acts of intervention. As these fail again, still more meddling with business is resorted to until all economic freedom has been virtually abolished. What emerges is the system of all-round planning, i.e., socialism of the type which the German Hindenburg Plan was aiming at in the First World War and which was later put into effect by Hitler after his seizure of power, and by the British Coalition Cabinet in the Second World War.
The main error that prevents many of our contemporaries from adequately comprehending the significance of various party programs and the trend of the welfare policies is their failure to recognize that there is apart from outright nationalization of all plants and farms (as effected in Russia and China) a second method for the full realization of socialism. Under this system that is commonly called “planning” (or, in war time, war socialism) the various plants and farms remain outwardly and seemingly units, but they become entirely and unconditionally subject to the orders of the supreme planning authority. Every citizen, whatever his nominal position in the economic system may be, is bound to toil in strict compliance with the orders of the planning board, and his income—the amount he is permitted to spend for his consumption—is exclusively determined by these orders. Some labels and terms of the capitalistic system may be preserved, but they signify under the altered conditions something entirely different from what they used to signify in the market economy. Other terms may be changed. Thus in Hitler Germany the head of an outfit who supplanted the entrepreneur or the corporation president of the market economy was styled “shop manager” (Betriebsführer) and the labor force “followers” (Gefolgschaft). As the theoretical pace-makers of this system, e.g., the late Professor Othmar Spann, has pointed out again and again, it retains only the name of private ownership, while in fact there is exclusively public—state—ownership.
Only by paying full attention to these fundamental issues can one [116] form a correct appreciation of the political controversies in the nations of Western civilization. For if socialism and communism should succeed in these countries, it will be the socialism of the planning scheme and not the socialism of the nationalization scheme. The latter is a method applicable to predominantly agricultural countries like those of Eastern Europe and Asia. In the industrial countries of the West the planning scheme is more popular because even the most fanatical statolatrists shrink from directly nationalizing the intricate apparatus of modern manufacturing.
Yet the “planning scheme” is just as destructive of freedom as the “nationalization scheme” and both lead on to the authoritarian state.
I came across these pages claiming that people have taken that famous Keynes quote about being dead in the long run out of context. I thought this claim would be of interest, especially because of the specific economists mentioned as making this error.
https://delong.typepad.com/sdj/2005/04/economics_in_on.html
> There is one other big problem with Hazlitt--a problem that he shares with many of his successors on the Wall Street Journal op-ed page, on the Weekly Standard, and on the National Review. His quotes cannot be counted on to be in context. His summaries cannot be counted on to be honest.
> For example, Hazlitt on Keynes in Economics in One Lesson:
>> p. 4: There are men regarded today as brilliant economists, who deprecate saving and recommend squandering on a national scale as the way of economic salvation; and when anyone points to what the consequences of these policies will be in the long run, they reply flippantly, as might the prodigal son of a warning father: "In the long run we are all dead." And such shallow wisecracks pass as devastating epigrams and the ripest wisdom.
> What Keynes actually wrote in his Tract on Monetary Reform:
> Now 'in the long run' this [way of summarizing the quantity theory of money] is probably true.... But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
> Misrepresentations like this do Hazlitt no credit at all.
this guy blames Hayek:
https://equitablegrowth.org/a-note-on-niall-ferguson-why-did-keynes-write-in-the-long-run-we-are-all-dead/
> In this extended discussion of how to use the quantity theory of money, the sentence “In the long run we are all dead” performs an important rhetorical role. It wakes up the reader, and gets him or her to reset an attention that may well be flagging. But it has nothing to do with attitudes toward the future, or with rates of time discount, or with a heedless pursuit of present pleasure.
> So why do people think it does?
> Note that we are speaking not just of Ferguson here, but of Mankiw and Hayek and Schumpeter and Himmelfarb and Peter Drucker and McCraw and even Heilbronner–along with many others.
> I blame it on Hayek and Schumpeter. They appear to be the wellsprings.
> Hayek is simply a bad actor–knowingly dishonest. In what Nicholas Wapshott delicately calls “misappropriation”, Hayek does not just quote “In the long run we are all dead” out of context but gives it a false context he makes up:
>> Are we not even told that, since ‘in the long run we are all dead’, policy should be guided entirely by short run considerations? I fear that these believers in the principle of apres nous le déluge may get what they have bargained for sooner than they wish.
in the previous message, the paragraph that starts "Now 'in the long run' this" should have been double-quoted
#15802
> > For example, Hazlitt on Keynes in Economics in One Lesson:
But then the Hazlitt paragraph *does not quote Keynes*.
> > Misrepresentations like this do Hazlitt no credit at all.
A comment on the general attitude of certain people is not a misrepresentation of a particular quote.
Plus the Keynes quote given actually does say that 1) in the long run we're dead 2) opposes judging policies by long run results. So where would be the misrepresentation even if Hazlitt had been specifically referring to that passage?
And if you seriously want to debate these matters, tell us an error in Hazlitt's main book on the matter where he was trying to be detailed, precise, thorough, etc. Criticize his most serious statements on the matter instead of a broad complaint from an intro book.
Do not buy individual stocks. Only buy broad index funds to hold for years. You aren't a professional trader[1]. You don't know what you're doing. You will not beat the market on average.
[1] Unless you are. But most professionals are destroying value too.
https://twitter.com/prof_rbw/status/1237772732114309120
They seem to be missing that *labor-saving* inventions do not increase the need for (slave) labor.
South Korea vs Italy - Markets vs socialism
https://mises.org/wire/markets-vs-socialism-why-south-korean-healthcare-outperforming-italy-covid-19?fbclid=IwAR38LEqQwdC4QP3EwPBtj1qU5r5xuHQL5ilEDjqkfWEb4nOJapN4dtZemv8
> If US officials wish to effectively handle the rising number of cases in big cities, they would do well to take lessons from South Korea and start freeing the market for healthcare rather than bungling a monopolized testing protocol that did not need to be monopolized, and thereby preventing people from getting tested. This would not immediately resolve the problems created by bad regulation in the past, but it would certainly reduce its negative consequences while improving the healthcare system's ability to deal with these sorts of crises going forward. It would also have the benefit of reducing the cost of healthcare generally.
I discussed this NYT article re: a "price-gouger" on the FI Discord a few days ago.
https://www.nytimes.com/2020/03/14/technology/coronavirus-purell-wipes-amazon-sellers.html
I got some criticism and was doing some more thinking about it.
I was writing some notes on my thinking and got stuck at a certain point in my analysis.
I tried to come up with an argument that the guy in the article was actually creating value.
The argument is:
In the current situation where there is very high demand for things like hand sanitizer, if the guy hadn’t engaged in his speculative activities, woudn’t that be a windfall for whoever happened to grab a bottle of hand sanitizer at a dollar store in the backwoods of Kentucky? Like say the global market price for hand sanitizer is $50 a bottle at the moment, and it costs $1 at the dollar store in Kentucky. If NYT article guy can get the $1 hand sanitizer to the $50 market, isn't he adding value?
People willing to pay $50 for hand sanitizer may be more disproportionately at risk, living as they are in urban centers where they’re more likely to come into contact with the virus than someone frequenting a dollar store in rural Kentucky.
So basically the argument is that the guy is helping move goods to where they are more urgently needed, based on price signals.
**Counterargument**: there might be other means of getting people access to the stock of goods in a rural Kentucky dollar store in an urgent situation like the coronavirus disaster *other than* having some small time speculator shipping stuff around at great cost. For example, the store might be a national one that can move inventory around, or the stores might donate the supply of hand sanitizer, or the govt might ask for it.
**Counter-counter-argument**: Would that actually happen? Should we criticize someone who actually acted on the basis of the fact that *maybe* someone else could have acted to solve the problem? The govt and others aren't doing an amazing job responding to the situation.
**Counter-counter-counter-argument**: The guy isn't doing an amazing job responding to the situation either.
Some general comments: speculators can face issues like bad storage practices, or expensive storage, or expensive/inefficient shipping, or difficulty finding/connecting with customers. The difficulty finding/connecting with customers could be due to issues like regulation, or markets balking at “price gouging”, or an inability of certain major purchasers to purchase stuff from independent parties selling goods outside of the normal supply channels.
These are all risks and concerns that the successful speculator must think about and try to plan for *before* he engages in his speculation if he’s going to have much hope of successfully engaging in speculation and adding value to the marketplace by holding goods for later use.
This guy doesn't seem to have great storage practices, has expensive shipping, wound up facing trouble selling his goods and may get in trouble with the law. He ineffectively dealt with the objective state of the situation involved in getting his goods to market.
**Counter-counter-counter-counter-argument**: But should some of the things he's having to deal with even exist? Like anti-price-gouging laws and harsh consumer sentiment against price gougers? Blaming him for having to deal with that stuff seems like blaming the victim.
**Counter-counter-counter-counter-counter-argument**: He's not some productive genius dealing with a new anti-dog-eat-dog rule being sprung on him, though. He knew or should have known the facts of the situation he was dealing with, including stuff like price gouging laws. His actions wind up temporarily taking some time-sensitive and urgently needed goods off the market at the time when they could be of the most benefit.
Anyways I think I'm making progress but still don't think/feel like the initial argument re: moving around goods to where they're more urgently needed is fully addressed.
#16062 This article is relevant. Can you come up with any criticism of it?
http://georgereismansblog.blogspot.com/2020/03/anti-price-gouging-and-preference-for.html
#16062 Do you want to focus on this advanced, complicated topic, indefinitely, including sub-topics, to try to successfully reach conclusions? If the plan is to do a haphazard amount on this and then stop for reasons that aren't communicated to me, I don't think it makes sense for me to engage.
> #16062 This article is relevant. Can you come up with any criticism of it?
> http://georgereismansblog.blogspot.com/2020/03/anti-price-gouging-and-preference-for.html
Overall, I agree with the analysis presented in the article. I did have one quibble:
> For the hospitals are in a position to outbid virtually all other competitors for such things.
> For one thing, they could immediately obtain the supplies held by speculators, who, under present conditions, are prohibited from selling them, a situation that is insane.
> What is preventing these sales is an apparent preference for the suffering of hospital patients over the profit of the speculators, who have assembled the supplies the hospitals and their patients need.
I would guess that hospitals face various issues that would prevent them from obtaining supplies held by speculators such as the guy discussed in the NYT article (such as hospital policies, regulations, or liability concerns).
> #16062 Do you want to focus on this advanced, complicated topic, indefinitely, including sub-topics, to try to successfully reach conclusions? If the plan is to do a haphazard amount on this and then stop for reasons that aren't communicated to me, I don't think it makes sense for me to engage.
Hard no to "indefinitely."
I think I could reasonably commit to something like a moderate amount of discussion over the course of a couple of weeks. It may be longer depending on the length of time for which other stuff I want to do is disrupted due to the corona stuff. So the availability (or lack thereof) of other activities that I'd prefer to focus on right now is one major constraint.
Another major constraint is my own unpredictable interest level. I have some general interest in economics that I've pursued to some degree for many years, so in some respects I'm in better shape on that front for this discussion than I would be on many other topics. Despite that, I still don't want to commit to an indefinite time period discussion.
I understand if this is not a really tempting discussion offer to you -- no hard feelings if so!
I read through the two pages (in the PDF) in Reisman's *Capitalism* on "The Tendency Toward Uniform Prices Over Time: The Function of Commodity Speculation". Haven't read the related analysis on oil shortages yet.
Will you pick anything to focus on? I think ongoing topic changing is one of the common ways you and most people screw up progress/learning (and also are worse to interact with for me).
The issue isn't the time period (number of weeks) but what happens during that time. What, if anything, gets done and resolved. Topic changes should be for reasons, not because of emotions or the passage of time.
If you can't focus on a topic due to your interests (what you find "fun" and "interesting") being emotional whims (I think that's really common), that's a major problem and something needs to be done about it. One of the best things most people can do about it is a workaround: work on smaller, easier, simpler topics. Start with projects you can finish in 15 minutes. Succeed at some. Then scale up: half hour projects, hour projects, two hours, etc. (You may notice how this connects to the issue of overreaching.)
#16077 Indefinite means "lasting for an unknown or unstated length of time" (New Oxford dictionary). Maybe there's confusion about that. That's very different than forever. It means you don't automatically stop after a set amount of time or say "well it's been 3 weeks, that's a lot of time, so it's reasonable to be done now". The stopping or topic-changing conditions should not be based on time (or emotion).
Indefinite also doesn't mean you can't give up or fail so you'd be stuck working on it forever.
But giving up or failing should be a moderately big deal. A notable event, not a dime a dozen. It'd be a thing that goes on a list of projects and their outcomes and is considered important data about your life, capabilities, etc.
Tons of topics get dropped with no clear failure, no clear giving up, no clear outcome, and no data collection in order to identify patterns of failure and address them. This is an ongoing problem with ~everyone, year after year. I'm trying to deal with it better now.
> Will you pick anything to focus on? I think ongoing topic changing is one of the common ways you and most people screw up progress/learning (and also are worse to interact with for me).
If "pick anything to focus on" means "commit to discussing an intellectual/philosophy topic for an indefinite period of time, possibly years, including all relevant/related topics, until stuff gets throughly resolved, lest the failure to do so be considered a kind of failure/breach of trust/fraudulent misrepresentation of interest in the topic" then no.
> The issue isn't the time period (number of weeks) but what happens during that time. What, if anything, gets done and resolved. Topic changes should be for reasons, not because of emotions or the passage of time.
I don't have a criticism of your position regarding how conversations should ideally go in terms of topic changes etc. What I was trying to get across earlier is what I think I can actually reasonably commit to in good faith right now, given what I know about myself.
> If you can't focus on a topic due to your interests (what you find "fun" and "interesting") being emotional whims (I think that's really common), that's a major problem and something needs to be done about it.
I think that's true but don't think I'll make major progress on this issue anytime soon.
For now my current approach will be to not really engage intellectually with FI stuff much at all (that's not a new situation, just stating it for the record). I have some limited interest in discussion of some particular FI-adjacent topics some amount, but not enough to meet the discussion standards here, and I don't want to misrepresent my interest level in discussion to other people.
#16081 You're wrong about how it (thinking, reason, learning, not overreaching, etc) works, how you could make progress, what to do, etc. But you don't discuss that either.
Your pessimism, negativity, etc., are totally unnecessary and avoidable. They are due to your own misconceptions that you are shielding from critical discussion. It doesn't have to be this way.
#16081
curi said:
> ... giving up or failing should be a moderately big deal. A notable event, not a dime a dozen. It'd be a thing that goes on a list of projects and their outcomes and is considered important data about your life, capabilities, etc.
Justin Mallone replied (emphasis mine):
> If "pick anything to focus on" means "commit to discussing an intellectual/philosophy topic for an indefinite period of time, possibly years, including all relevant/related topics, until stuff gets throughly resolved, lest the failure to do so be considered a kind of failure/**breach of trust/fraudulent misrepresentation of interest** in the topic" then no.
curi said nothing about fraud or breach of trust. Justin added that.
It looks to me like curi had in mind basically that **Justin himself** would consider it a big deal if Justin stopped discussing before a conclusion was reached.
Economist George Reisman shared audio recordings of the lectures he taught at university:
https://georgereismansblog.blogspot.com/2020/08/reismans-final-years-university.html
https://mises.org/wire/august-money-supply-growth-hit-record-high-fifth-month-row
What sort of investment actions should Americans take in response to USD inflation? How bad is it? What might happen on what timescale?
#17608 On George Reisman's website on the left sidebar you can get (free):
Capitalism: A Treatise on Economics. I've read it and think it's exceptional. It's long and detailed; you can look up specific topics with the detailed table of contents, the detailed index, or electronic search. lots of sections are possible to read without reading all the prior text first.
Capitalism Short Answer Q&A 2500 questions with answer keys, organized by chapter of Capitalism
Economics self education program guide contains 1500 essay/study/review questions about Capitalism, organized by chapter
> Fast-forward to February 2020. Since then, the quantity of money in the U.S. economy, measured by M2, has increased by an astonishing $4 trillion. That’s a one-year increase of 26%—the largest annual percentage increase since 1943.
from: https://www.wsj.com/articles/the-money-boom-is-already-here-11613944730
has anyone researched M2? should we be super concerned? my my initial reaction was to think that "$4 trillion", "one-year increase of 26%" and "largest annual percentage increase since 1943" all sounded bad, but i don't actually know.
#20043 I've seen several things about this. I think it's bad but I don't know the degree of badness. Should I be making any changes to my life because of it? Major changes?
https://jonathanstark.com/daily/20210307-0321-my-theory-of-value
> “Marginal utility” is silly academic handwaving.
> How come some people are willing to pay more money for diamonds than water?
> **Because they don’t want more water and they do want more diamonds.**
> Duh.
Sad, clueless take from Jonathan Stark.
> **Because they don’t want more water and they do want more diamonds.**
That's basically what marginal utility says. more = marginal. want = utility.
#20121 Reminds me of a popular stock market saying:
Why did the stock market go down? Because there were more sellers than buyers.
This is true but probably not at the level of abstraction the original question intended.
The questioner probably wanted to know why were there more sellers than buyers?
Likewise someone asking about diamonds and water probably wants to know why don't people want more water and why do they want more diamonds?
I think answering only the lower level of abstraction is typically a tactic for sounding profound while effectively saying "I don't know" to the original intent of the question.