Bitcoin Schadenfreude

Those Bitcoin Masters Of The World have taken another drubbing today as Mt. Gox closed amid claims that almost a million bit coins have been stolen.

But I hardly think that will kill Bitcoin.

The Bitcoin jingoists are proclaiming the end of amateurism in Bitcoin exchanges, as if this will be the last theft and shutdown.  Anybody who believes that is an idiot.  Just think about it: billions in value in bitcoins just waiting to be stolen by anybody.  Russia and China (and other nations) have huge digital warfare operations that could target those bitcoins, either officially or extracurricularly.  No matter how cryptographically safe, systems can be penetrated through hardware or personnel.  And no government guarantees!  I wonder who will write them insurance knowing this?

But as I've pointed out before, Bitcoin will eventually be swamped with similar currencies and lose value until it is replaced by government-backed currencies.

What's new

NEW 2/21/2014: HearSay Economics [More...]

"[...] the fallacy Keynes called Say’s Law was and is a powerful force in economic discourse, seriously hampering our ability to respond rationally to economic troubles." [more...]

NEW 2/21/2014: Say's Law

The doctrine that shortfalls in overall demand aren’t possible, because money has to be spent on something. Debunked strongly by Keynes, yet still strongly held by manyChicago School economists and others. [more...]

NEW 2/20/2014: Defining Capitalism [More...]

A section of "Understanding Capitalism" by Geoff Price. Capitalism is a form of collectivist production, differing primarily in how the products of collective labor are distributed: between owners and workers. Well written and easy to follow. [more...]

NEW 2/20/2014: Economix web site and blog [More...]

"Economix is a graphic novel by Michael Goodwin, illustrated by Dan E. Burr, that explains the economy. More than a cartoon version of a textbook, Economix gives the whole story of the economy, from the rise of capitalism to Occupy Wall Street." [more...]

NEW 2/20/2014: Economix: How Our Economy Works (and Doesn't Work), in Words and Pictures

"Economix is a graphic novel by Michael Goodwin, illustrated by Dan E. Burr, that explains the economy. More than a cartoon version of a textbook, Economix gives the whole story of the economy, from the rise of capitalism to Occupy Wall Street." [more...]

NEW 2/20/2014: Books used as sources during the writing of Economix [More...]

An excellent reading list for understanding how politics and economics interact. From the graphic-novel style Economix. [more...]

NEW 2/20/2014: The TransPacific Partnership And "Free Trade" [More...]

A short, clear, graphic-novel introduction to the how the wealthy collect the benefits of Free Trade and the rest of us bear the costs. It includes the loss of national sovreignty through trade agreements that force deregulation. [more...]

NEW 2/20/2014: Speaking of speeches [More...]

The conservative movement eventually succeeded in destroying that label and making it something shameful for average Americans to wear openly. ("I'm not a liberal or anything, but ...") So we became progressives. [more...]

NEW 2/20/2014: Switzerland

An entrepot with easily defensible mountainous borders. Universal conscription and very strict immigration policies. [more...]

NEW 2/20/2014: The "No True Libertarianism" fallacy [More...]

Libertarians cannot explain why there has never been a libertarian society, and find excuses to explain that existing small governments are not "true libertarianism". The real reason is that libertarianism, like communism, is contrary to human nature. [more...]

NEW 2/20/2014: The Rise and Fall of Cap-and-Trade [More...]

"The problem is not that cap and trade is a theoretical proposal from ivory-tower economists that cannot survive application in the real world. To the contrary, its performance in action surpassed expectations..." [more...]

NEW 2/20/2014: Cap And Trade

A very successful "deregulation" strategy that replaces government regulation and Pigouvian taxes on harmful externalities with government-limited, salable rights to externalities. This brings market efficiency to regulation; thus businesses hate cap and trade. [more...]

NEW 2/19/2014: Mark-up Pricing in 11 Nations and the Eurozone: the Empirical Evidence [More...]

There is a mountain of empirical evidence available for many years now that shows that administered prices are the majority of prices in most modern market economies. [more...]

NEW 2/19/2014: Lee on the Three Types of Mark-up Prices [More...]

A price that is set by a firm on the basis of average unit costs of production plus a profit mark-up is an “administered price.” These prices are also sometimes called “mark-up prices,” “average cost prices,” “full cost prices,” “normal cost prices,” or “cost-plus prices.” [more...]

NEW 2/19/2014: Mark-up Prices

The widespread real-world use of mark-up prices, also known as administered prices, contradict the assumptions of marginalist theory of prices and many DSGE models based on marginal costs. [more...]

NEW 2/19/2014: Why I Am Not an Objectivist [More...]

Libertarian philosopher Michael Huemer accepts all but one of Ayn Rand's five major Objectivist claims: he does not agree that "Every person should always be selfish." [more...]

NEW 2/17/2014: Fighting the Last Macro War? (Slightly Wonkish) [More...]

Real Business Cycle Theory did well with the stagflation crisis, but didn't help with disinflation, the financial crisis or the persistently depressed economy. [more...]

NEW 2/17/2014: Real Business Cycle Theory

A freshwater, Chicago School theory that had one major success in the '70s predicting/explaining stagflation. No successes since then, left behind by the resurgence of various Keynesian schools. [more...]

NEW 2/16/2014: What's Wrong With a Free Lunch?

The straightforward arguments for and defenses of basic income. [more...]

NEW 2/16/2014: Inequality By Design: It Is Not Just Talent and Hard Work [More...]

"If the 1 percent are able to extract vast sums from the economy it is because we have structured the economy for this purpose. It could easily be structured differently, but the 1 percent and its defenders aren't interested in changing things." [more...]

NEW 2/15/2014: The Tom Perkins system [More...]

Libertarians often suggest one dollar = one vote schemes. Here's a satiric set of alternatives that illustrate the class interest in such proposals. [more...]

NEW 2/13/2014: Marxism of the Right [More...]

"The most fundamental problem with libertarianism is very simple: freedom, though a good thing, is simply not the only good thing in life." [more...]

NEW 2/13/2014: Descriptions Of Libertarianism

There are numerous varieties of libertarianism, so no one description will suffice. Here are some overviews and classifications that will give you a broader picture of libertarianism.[more...]

NEW 2/13/2014: Opposing Libertarianism

Opposing evangelical libertarianism is easy, but there's lots to learn to do it effectively. Here is an overview of some of what you would want to know. [more...]

NEW 2/13/2014: Men With Guns

Oh, horror! Laws are enforced by men with guns! But all rights in any social system (including anarchism) are enforced coercively. And isn't it funny that the same Constitution that libertarians claim supports private gun ownership clearly empowers the state to enforce laws. [more...]

NEW 2/13/2014: No, Plato Did Not Think Taxes Were Some Sort of Permitted Theft [More...]

Claims that "Statists think that theft is okay when the government does it" are wrong: they think all citizens of a polity have an obligation to contribute to public expenses. [more...]

NEW 2/13/2014: Taxation Is Theft

Libertarians call taxes bad names. But all voluntary residents have an obligation to contribute to public expenses. The obligation is voluntarily accepted as a condition of residence, unless emigration is prevented. Just like rent is voluntarily accepted by residence. [more...]

NEW 2/13/2014: Meet The Other Billionaire Brothers Funding Right-Wing Causes [More...]

"Fracking billionaires Farris and Dan Wilks are using their wealth to fund ultra-religious right wing anti-gay, anti-choice groups." [more...]

NEW 2/12/2014: Steve Keen, Debunking Economics, Chapter 6: Wages [More...]

Steve Keen lists 5 ways labor is different than the usual commodities. "The problem Keen identifies here is that labour supply curves need not be well behaved." [more...]

NEW 2/12/2014: Assuming Slopes of Curves

Standard neoclassical analysis assumes demand curves are necessarily downward-sloping and supply curves upwards-sloping. The real world doesn't necessarily agree. [more...]

NEW 2/12/2014: Enslave the robots and free the poor [More...]

Martin Wolf at the Financial Times says that because of technological unemployment "[...] we will need to redistribute income and wealth. Such redistribution could take the form of a basic income for every adult, together with funding of education and training at any stage in a person’s life." [more...]

NEW 2/11/2014: Economics for the Rest of Us: Debunking the Science That Makes Life Dismal

Shows how today’s dominant economic theories of economic efficiency and wages evolved, how they explicitly favor the rich over the poor, and why they’re not the only -- or best -- options. [more...]

NEW 2/11/2014: Markets in Everything

A propaganda theme at Marginal Revolution blog. Be amazed at the triumph of markets everywhere, but don't notice that they are often missing, noxious or poor substitutes for government. [more...]

NEW 2/11/2014: Capitalism

Capitalism (and entrepreneurship) are based upon the coercion that creates rights. Capitalism, like fire, is most valuable when it is used for desired purposes (regulated), not burning indiscriminately. For example, as part of Mixed Economy or Social Democracy. [more...]

NEW 2/11/2014: Markets

Existing markets are not spontaneous: they are social institutions that have been often created, heavily modified and regulated by governments throughout history. Because markets are amoral, they need regulation. [more...]

NEW 2/11/2014: Koch-backed political coalition, designed to shield donors, raised $400 million in 2012 [More...]

"The political network spearheaded by conservative billionaires Charles and David Koch has expanded into a far-reaching operation of unrivaled complexity, built around a maze of groups that cloaks its donors, according to an analysis of new tax returns and other documents." [more...]

NEW 2/11/2014: Inside the $400-million political network backed by the Kochs [More...]

A diagram of the organization and enormous flows of money in one section of the Kochtopus. [more...]

NEW 2/11/2014: How Crowdworkers Became the Ghosts in the Digital Machine [More...]

"Since 2005, Amazon has helped create one of the most exploited workforces no one has ever seen." "According to critics, Amazon’s Mechanical Turk may have created the most unregulated labor marketplace that has ever existed." [more...]

NEW 2/11/2014: Liberty, Rights, Property, Coercion, Government, Markets and Capitalism

The ideological universe of libertarians: how to view them with less distortion from propaganda. [more...]

NEW 2/09/2014: Shibboleths [More...]

An explanation of shibboleth (a phrase identifying one as a member of a community) and its context with examples from Republicans. [more...]

NEW 2/09/2014: The housing-market impacts of shale-gas development [More...]

"... fracking is controversial due to the local externalities it creates – particularly because of the potential for groundwater contamination. This column presents evidence on the size of these externalities from a recent study of house prices. The effect attributable to groundwater contamination risk varies from 10% to 22% of the value of the house, depending on its distance from the shale gas well. [more...]

NEW 2/09/2014: Environmental Regulation

Most economic activity has externalities for commons, a major market failure. Environmental regulation is a most cost-effective solution than torts, whether it is accomplished by permits, laws, or community governance. [more...]

NEW 2/09/2014: The Techtopus: How Silicon Valley’s most celebrated CEOs conspired to drive down 100,000 tech engineers’ wages [More...]

A conspiracy to fix wages by chief executives of Apple, Google, Lucasfilm, Pixar, Adobe, Intuit and Intel has been certified as a class-action lawsuit. "For all of the high-minded talk of post-industrial technotopia and Silicon Valley as worker’s paradise, what we see here in stark ugly detail is how the same old world scams and rules are still operative." [more...]

NEW 2/08/2014: Confessions of a Recovering Ideologue, Part I [More...]

Gene Callahan claims to be post-ideological, which frees him to recognize that property is just as coercive as government. [more...]

NEW 2/08/2014: Homesteadin' Is the Place for Me [More...]

How the homesteading idea was an excellent excuse for the theft of lands by the 17th-century English landowning class. [more...]

NEW 2/08/2014: Say What, Murray? [More...]

Murray Rothbard claims Say crushed opponents of Say's Law, but didn't mention that Say recanted later on. [more...]

NEW 2/08/2014: Look at the Violence Inherent in the System! [More...]

Libertarian Gene Callahan points out that private property is a social invention, which explains why some nations have "trespass" where others have "right to wander". [more...]

NEW 2/08/2014: Some Fundamental Legal Conceptions as Applied in Judicial Reasoning [More...]

The original 1913 legal article by Wesley Newcomb Hohfeld that helped clarify legal thought by distinguishing right, duty, privilege, no-right, power, liability, immunity and disability.[more...]

NEW 2/08/2014: A Hohfeldian Primer [More...]

A complete but difficult introduction that links to the original text of Some Fundamental Legal Conceptions as Applied in Judicial Reasoning to explain the ideas. [more...]

NEW 2/08/2014: Legal Theory Lexicon 034: Hohfeld Introduction [More...]

A brief introduction that uses the terms claim rights, liberty rights, authority rights, and immunity rights. While it identifies the correlates, it does not mention the jural opposites.[more...]

NEW 2/08/2014: Rights Theory handout: Hohfeld's Fundamental Legal Conceptions [More...]

One page of tables with jural opposites and correlates, and then their paraphrased definitions. The paraphrases change "right" into "claim". [more...]

NEW 2/08/2014: Hohfeld’s typology of rights

Wesley Newcomb Hohfeld created the standard legal classification of right, duty, privilege, no-right, power, liability, immunity and disability in his 1913 article Some Fundamental Legal Conceptions as Applied in Judicial Reasoning. (Privilege means liberty.) Libertarians (and lay people in general) are usually ignorant of these important definitions. [more...]

NEW 2/07/2014: Hayek the Evil Inflationist! [More...]

"So Hayek, after all his attacks on Keynes in the 1930s, essentially admitted Keynes was right, at least on these points at any rate." [more...]

NEW 2/07/2014: Milton Friedman, Unperson [More...]

Paul Krugman points out that Friedman's two major contributions to macroeconomics now seem unsupportable. "So Friedman has vanished from the policy scene -- so much so that I suspect that a few decades from now, historians of economic thought will regard him as little more than an extended footnote." [more...]

NEW 2/06/2014: Government

Libertarians demonize government and grossly misrepresent the nature of government, the effects of government and the differences between governments. [more...]

NEW 2/06/2014: Shibboleth

A shibboleth is a word or phrase that identifies you as belonging to the same tribe. It is a type of phatic expression. Synonyms include dog-whistle, password, watchword and catchword. [more...]

NEW 2/06/2014: The Lockean Fable of Initial Acquisition

John Locke tells a story (nothing more) that ignores the fact that current real-world ownership is based on past theft and conquest, not initial acquisition. "Mixing of labor" is merely expenditure of effort: it does nothing to create property because property is a socially constructed institution. [more...]

NEW 2/06/2014: Property

Property, like all rights, is a coercive social institution, not a mystical relationship of individuals with objects. Property redistributes liberty: it protects some specific liberty for owners, and coercively denies that liberty to all others. The pretense that property is not coercive is one of the great libertarian lies. [more...]

NEW 2/06/2014: Initial Appropriation: A Dialogue [More...]

Matt Bruenig explains the coercion involved in "initial appropriation". Much easier to read than Proudhon. He also ridicules the "mixing of labor" idea as being symbolic, rather than an actual description of a physical process. [more...]

NEW 2/06/2014: How the New Classicals drank the Austrians' milkshake [More...]

"It seems to me that the Austrian School's demise came not because its ideas were rejected and marginalized, but because most of them were co-opted by mainstream macroeconomics [...] I'm pretty confident in saying that the paradigm of von Mises and Hayek is dead." [more...]

NEW 2/05/2014: The conservative bias of economic models [More...]

The simple "benchmark" models that are used for first-level economic explanations tend to give conservative results, but often do not match the real world. Minimum wage and increasing the money supply in depressions, for example. [more...]

NEW 2/04/2014: Silicon Valley billionaires believe in the free market, as long as they benefit [More...]

"Google, Apple and other tech firms likely colluded to keep their workers' wages down. So much for that libertarian worldview." [more...]

NEW 2/03/2014: Squeezing the rich is good: even when it raises no money [More...]

Three examples of how unrestrained income for the wealthy is socially harmful and should be taxed, even if it doesn't raise more money. [more...]

NEW 2/03/2014: Bitcoin Exposed [More...]

Paultard silver promotion versus Bitcoin evangelism. 26 reasons why Bitcoin is not as good as silver, when neither is a particularly good investment. A pox on both their houses![more...]

NEW 2/03/2014: Mr. Anonymous and the Not-So-Spontaneous Birth of the Libertarian Movement [More...]

William Volker, alias "Mr. Anonymous", was one of the first major plutocratic funders of what has developed into libertarianism. Tens of billions of dollars have been spent on this centrally planned propaganda blitz over 60+ years. [more...]

NEW 2/03/2014: How Planet Money, This American Life and NPR Have Become Key Players in the Bankers’ Propaganda War on What's Left of Our Social Contract[More...]

The "Planet Money" show of NPR, surprise, surprise, is funded by Ally Bank (formerly GMAC), one of the world’s most toxic subprime lenders. Why else would NRP run a hit piece on Social Security? [more...]

NEW 2/03/2014: Subversion of the Opposition

The Koch Brothers (and others) probably know that it is much cheaper to subvert opponents (or defeat them in primaries) than to battle them. And they have vast amounts of money to finance the subversion. [more...]

NEW 2/03/2014: The True History of Libertarianism in America: A Phony Ideology to Promote a Corporate Agenda [More...]

"Before Milton Friedman was earning plaudits as an economic genius, he was a shill for the real estate industry and an early pioneer for big business propaganda known as libertarianism." [more...]

NEW 2/03/2014: United States

Libertarians frequently claim the United States was libertarian or laissez-faire between Reconstruction and the New Deal. Alternatively, they claim it is the closest state now. Both claims are ahistorical and ridiculous. [more...]

NEW 2/03/2014: What was the Greatest Mistake of Lionel Robbins’s Life? [More...]

Lionel Robbins (who brought Hayek to LSE) recanted his opposition to Keynes and support of Austrian business cycle theory, considering it the greatest error of his career.[more...]

NEW 2/03/2014: Confessions of a former Libertarian: My personal, psychological and intellectual epiphany [More...]

"The discomfort I felt with libertarianism was the discomfort of my ideas not aligning with my experiences. My thoughts and feelings were at odds. The feeling nagging me was that I couldn’t reconcile my humanity with my ideology any more than my friend could for me." [more...]

NEW 2/03/2014: Why I fled libertarianism -- and became a liberal [More...]

"I don’t think regular Americans have any idea just how crazy libertarians can be." [more...]

NEW 2/02/2014: The Three Great Errors of Most Libertarians

"Libertarians are mistaken to seek foundations, to take sides over moral approaches, and to have no proper theory of liberty." That's right: don't think, just believe in the ideology and interpret non-aggression his way.. [more...]

NEW 2/02/2014: The Non-Aggression Principle Can’t Be Salvaged -- and Isn’t Even a Principle [More...]

Julian Sanchez points out "the non-aggression principle is ultimately circular, and shouldn’t be the basis for a libertarian theory of politics." [more...]

NEW 2/02/2014: Epicycles and Non-Aggression [More...]

Brian Kogelmann points out "The non-aggression principle isn’t sufficient to help guide most of our political decisions, and so isn’t sufficient to be the core argument for libertarianism." [more...]

NEW 2/02/2014: Six Reasons Libertarians Should Reject the Non-Aggression Principle [More...]

Matt Zwolinski points out six major problems with the idea, all brought up by libertarians at one time or another. He suggests that libertarians need a paradigm shift to a more fundamental and less faulty idea. [more...]

NEW 2/01/2014: John Rawls's A THEORY OF JUSTICE: THE MUSICAL! [More...]

A delightful, musical burlesque of philosophy that pits John Rawls against his arch-nemeses Robert Nozick and Ayn Rand. Vimeo rental. Highly recommended. View the preview and read the Wikipedia page for a synopsis. [more...]

NEW 2/01/2014: The pseudoscience of libertarian morality. [More...]

An extended critical discussion of the pseudoscientific article "Understanding Libertarian Morality: The Psychological Roots of an Individualist Ideology" by Ravi Iyer et al. [more...]

Bitcoin predictions. [More...]

At some point in the not-so-distant future, a nation will issue its own crypto-currency that is exchangeable one-to-one with its ordinary currency... Even the rumor of these currencies will make Bitcoin plummet. [more...]

How a reductio ad absurdum works [More...]

Matt Bruenig points out "Libertarianism violates the NAP [non-aggression principle], as does every other theory that does not advocate the grab-what-you-can world." [more...]

What a World Following the Non-Aggression Principle Looks Like [More...]

Matt Bruenig points out that the "grab-what-you-can world" where people freely expropriate other people’s possessions is the only one where nobody initiates force directly against another person’s body. [more...]

Tyler Cowen: Statist, anti-Rothbardian agent of the Kochtopus [More...]

Tyler Cowen is a strong critic of Austrian and Rothbardian views, and he is hated for that. [more...]

Koch World 2014 [More...]

The Kochtopus raised more than $400 million for the 2012 elections, and has even more ambitious plans for 2014. Several new organizations were created to make the spending more effective. [more...]