Economics In the Long Run

Robert Luddy gave a lecture in sorely missed 2019 titled, “Henry Hazlitt’s Long-Term Economic Thinking: Foundation of Entrepreneurial Excellence.” Throughout his talk, it’s clear that Hazlitt has had a profound impact on Luddy—an entrepreneur who’s exhibited excellence for decades. How is it that Luddy personifies success? One possible explanation is that he ignores the temptation of short-term gains while focusing on attaining long-term goals. Hans-Hermann Hoppe would likely describe Luddy as one with low time preference. Writing about his talk, Luddy discusses how Hazlitt’s most famous workEconomics in One Lesson—sought to build upon Frederic Bastiat’s essay, “What Is Seen and What Is Not Seen.” “Hazlitt goes one step further,” Luddy says, “summing up economics not simply as a series of transactions with hidden implications, but in terms of long-term effects outliving the short-term effects of every economic principle or policy.”

In Luddy’s talk, he focuses not on Economics in One Lesson, but on a lesser-known work that greatly influenced him. “Hazlitt’s economic thinking was revolutionary, but his thoughts on morality were paramount.” It’s clear that Luddy strives to embody the wisdom in Hazlitt’s The Foundations of Morality. “As in his understanding of economics, [Hazlitt] realized that the long-term interests of the individual would serve the long-term interests of society.” Unlike left-libertarians, Luddy doesn’t dismiss morality: “The market requires moral leaders because the market cannot function without integrity,” and a moral individual cannot best “serve the long-term interests of society” if he is not free to cooperate with other individuals. It is one’s reputation—not legislation—that enables cooperation, as John Tamny reminds his readers of Muhammad Yunus’s insight: “credit is reputation.” From The Foundations of Morality:

Liberty is the essential basis, the sine qua non, of morality. Morality can exist only in a free society; it can exist to the extent that freedom exists. Only to the extent that men have the power of choice can they be said to choose the good.

For Luddy, freedom and morality are of utmost importance. “This freedom directly applies to entrepreneurs: in order to have the freedom to succeed, we must have the freedom to fail.” Freedom—always double-edged—does not apply only to the business world; it permeates all aspects of life. Voluntary exchange need not describe only “the free market;” the distinction from the social realm is an unnecessary distraction, as economics encompasses human action, not just “money.” During his talk, when Luddy speaks to Hazlitt’s understanding of morality, he says, “If it’s moral, it’s very likely to hold up for the long term; conversely, if it holds up long-term, it’s very likely moral.” Businesses do not “have the freedom to fail” when the negative effects of their short-term aspirations can be socialized or perversely encouraged by the regulations that allegedly protect individuals from immoral business practices (Are all businesses “free to fail”?). Stated differently: morality functions as a natural regulator in the same way that competition regulates businesses. Once enshrined in law, freedom is lost, so morality is lost as well, regardless of the intentions that spurred the law. Luddy’s “moral thinking is long-term thinking” is also applicable to vaccine mandates, as they sacrifice liberty for the sake of achieving cowards’ short-term comfort.

Michael Rectenwald wrote, “the onus is on those who fear infection to protect themselves from the virus and its variants, and not on others—whether they are vaccinated or not.” Banning everything that frightens people and mandating everything that comforts them will condition a once-free people to recoil in horror from thinking long-term, and if the short-term is the only timeframe in which the masses are comfortable pondering, then the once-primordial zeal exhibited when chasing instant gratification will return as the dominant state of mind. Perhaps that servile state has already materialized. But back to Luddy’s understanding of morality, for those who revel in the proliferation of vaccine mandates, what’s their end goal? If their authoritarian impulses were satisfied, meaning if 100% of the population were to be vaccinated by the time their coddled heads resume dreaming of everyone accommodating their fear, what’s their next shortsighted decree? The notion that people cannot act morally without edicts corralling them insults both history and humanity. If most people were immoral—if most were murderers, rapists, and thieves—how could any civilization have flourished? Those that thrived but then declined suffered not from a lack of laws but from an overabundance of them. “Get the shot or get on the dole” is a false choice, imposed by the force of law, not by voluntary association. If prosperity could be mandated into existence, America wouldn’t appear, as it currently does, like a mortally wounded empire begging to be put out of its misery.

Now that the predators, parasites, and their sycophants in the media (and in your neighborhood) have made it clear that they couldn’t care less about the right to choose, and after already having made it abundantly clear that they couldn’t care less about “the poor,” perhaps this vicious crowd—many of whom were once deemed “pro-choice”—would be wise to ditch their veil of compassion. Hypocrisy doesn’t lend itself well to persuasion. No matter one’s ideology, if it relies on laws—or on the spurious threat of them—it’s morally bankrupt. Laws shield immoral practices from their inevitable end—extinction. As in business, if an immoral practice is free to fail, then it will not last long; however, if it’s subsidized or prohibited, the state arrogantly proclaims what should or shouldn’t endure. If individuals are free to choose, the moral practices will rise to the top, just as the best products and services rise to the top when individuals are able to voluntarily choose among them. Only without laws restricting or promoting human action will humanity be able to align with “the long-term interests of society.” What is clearly immoral today and always, however, is the morality-dictating state—a vile mob that we’re forced to fund. If something is either mandated or prohibited, whether vaccines and masks or abortion and slavery, then the law that seeks to either mandate or prohibit it will only interfere with the self-evident, evolutionary process—a process that, when unimpeded, will cause less harm in the long term than any unnatural intervention.

(I discussed this article on David Forsyth’s podcast.)

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Casey Carlisle

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