Follow This Blog by Email

Search This Blog

Sunday, August 17, 2014

Lame Language: A Stately Affair

“For the state, the goal is to bind individuals to itself.” – Daniel Hieber, “Why Do Languages Die?”

“Political language is designed to make lies sound truthful and murder respectable, and to give an appearance of solidity to pure wind.” – George Orwell, “Politics and the English Language”


     From time immemorial predatory organizations calling themselves various names and waving various flags have lorded over societies, exploiting them and raping their cultures without remorse. What’s worse, these groups—called states today—never left their “hosts” of their own accord. They were always replaced or swallowed up by bigger, badder foes who continued to subjugate the same unlucky societies in their own turn.

     The states of yesteryear did not have the means—nor the ambitions—that are practically standard qualifications for statehood today. In the present, for example, the group calling itself “the United States government” not only extorts its subjects the old fashioned way through taxation and inflation, but regulates poor and new businesses across the economy into virtual oblivion, heavily subsidizes those firms whose company it can’t stand to live without, fattening its bureaucracies under the guise of “helping the poor”, purposefully engineering turmoil and ungodly destruction the world over, and—worst of all—this group convinces its subjects that all of this is legitimate, justified and even to their own benefit. Moreover, it teaches its citizens, who are presumed to be at once perfectly free, yet attached to their state like a conjoined twin, ought to take pride in being a part of all of this. In the ancien rĂ©gime, no ruler anywhere would have had the audacity to foist these efforts upon the public—let alone to the same degree—without the very real fear of waking up in chains within a week. In contrast, these actions are prominent endeavors, to say the least, of modern states. Only differences in name, location, and degree of their actions separate them from one another today.

     Seemingly without their weak points, modern states appear nearly untouchable. Its police are becoming more militarized by the hour and its militaries ever ready to fend off dissidents who become too raucous, while the press manufactures favorable public opinion to contribute public consent to the State’s causes and discourages heretical thought. However, when one considers what particular means the rulers of a state hold dear—as well as why these things are valued—and the logical implications of removing them from the State’s possession, the more plausible and desirable the true restoration of freedom and natural, uninhibited, unmolested peace seems to be. We thus must examine what those actors in charge of States value most and do all we can to take away those things as a matter of strategy.

     Evidently and in theory, rulers value those means which expedite the process of making them richer. Now, instead of speculating and imputing to individual rulers an arbitrary scale of values and proceeding from there, I suggest we turn toward a more inherent desire—one which is an absolute requirement for the State to attain any of its ends whatever. One of the most basic insights into human interaction is the use of language—a praxeological necessity for interpersonal communication in general, let alone for the State’s interaction with its subjects. As I will show, besides other things, the State distorts the language of the society over which it rules in order to cultivate favorable public opinion and demonize detractors. Thus, by “reclaiming” our own language in a broadly cultural sense, which is to say disallowing the State to pulverize words in our common tongue into oblivion, deconstruction of the compulsory State becomes a fundamentally easier goal. Putting an end to the State’s control of language renders the bulk of State propaganda hopelessly ineffective. In doing so, we will hopefully encourage those in comatose to smarten up and cast off the State’s imposition of ideas—showing people how to think rather than the all too ingrained habit of what to think. For if language manipulation is used to benefit rulers at their subjects’ expense, surely retaking our language will reverse this state of affairs.


“In the new jargon, certain intelligible ideas would become inexpressible. In a rather poor trade-off for this veto on complexity, many views that are expressible will, in turn, be entirely and indeed almost beautifully unintelligible.” – Christopher Hitchens, “Words Matter”

     To begin by way of analogy: Very similar to the State’s desire for one common currency—especially one it controls—rulers also desire for their subjects to speak one common language, and prefer it to be under their control. Expropriation becomes far easier and more fruitful by controlling language, for the State can communicate with its subjects more effectively.

     The first task of the State regarding money is to outlaw any alternative form of currency. It will usually pick the currency that is already most widely used in order to relieve itself of the time, means, and effort it would take to start from scratch. Once this task is accomplished, rulers must embark on the task of controlling and monopolizing the production of money. By controlling this, rulers enrich themselves at their subject’s expense much more efficiently than straightforward taxation by simply printing up their own money units (inflation) and using them at will, just as any counterfeiter does. Assuming they inflate—for they have little incentive to deflate—it leads, in the short term, to the rich getting richer at the expense of the poor who become poorer, and in the long run to a boom, which quietly wreaks havoc on the economy, then a bust as this havoc becomes manifest. In both the short and long run the level of wealth-loss and perceived diminished level of future gain create decivilizing effects such as short-term orientations, increased crime rates, and a general sense of hedonism. The degree to which the State expropriates in the traditional sense by taxation contributes to these decivilizing effects accordingly, but accomplished through inflation it accelerates such effects exponentially.

     Regarding language, the first task of the State is to acquire court intellectuals. Not a single task regarding the propagation of its ideas, manipulation of language and so forth, can be accomplished without them. They advance ideas for the State, spin “philosophical” defenses of its actions, and overall serve to convince a society to obey those ruling over it. Indeed, so needed is this role of artificial intelligentsia that wherever I speak of "the State" or "rulers" I am also speaking of their court intellectuals.

     Unlike gaining ultimate control of money, the State does not necessarily need to outlaw alternative languages (a task that would be hard to accomplish since language is merely a basic means to communicate and cannot be removed or dissolved by simple decree). It need only make one language standard within its borders, which very nearly amounts to the same thing. This choice will tend to be the one already spoken by its subjects, for it relieves the State of having to do work that would be terribly hard at best and impossible at worst. If this task is deemed too difficult it may diversify the languages its officials speak. But this case notwithstanding, the State can act in only three ways. It may have speakers of other languages merely learn the official one; otherwise, it must dispose of competition by either destroying every speaker of other languages or ostracize such speakers through propaganda—which may indeed lead individuals to learn the State’s chosen language. It may act in one or another of these ways, or all of them, either in conjunction or in succession.

     My reader may raise a few questions about why and how the State chooses one language over another. To answer these questions, in part, I must reemphasize the point made above regarding the preference to begin at a point in time closest to an actor’s end. It makes the goal of the State that much easier to choose and standardize that language which is most spoken in the society over which it rules. The fewer individuals it must force into speaking the language, the better. However, there is the rather obvious case of forcing a language onto a completely separate culture where this is not a possibility. The State may recruit speakers of the foreign language into its own ranks if this task is deemed too difficult. Yet if it does take the former route, it must persuade those foreign individuals in one way or another that it possesses enough force to influence their state of affairs. In short, those individuals must learn the standard language lest they be considered different in the pejorative sense of the term.

     Following the compulsory standardization of language, the state must monopolize the production of language, or what might be called the language market. The court intellectuals must have utter reign over what goes in and what comes out of the minds of the State’s subjects. This way, the State—and not those “decentralized” intellectuals who would otherwise spontaneously change and maintain ideas and language within a society—has control of what happens with them. Accordingly, rulers manipulate language in their own favor. This is necessarily to society’s detriment, for it uses society’s own language in a manner that would not have been used otherwise.

     Now to the ways in which language manipulation by government takes place. As words convey and communicate concepts, the State produces words anew to stand for concepts it has dreamt up and whose purposes are to make achievement of the State’s goals easier. The State also takes away or prevents those words which communicate ideas contrary to its goals from coming into being.

     There is a third and far more effective way to accomplish this task. That is adopting and adapting already existing words to fit the State’s aims. Thus, if rulers wish to make an idea palatable to the masses in a positive way they adapt one or more terms already in use and change their meaning. Essential to this undertaking is either choosing already vague words or choosing less ambiguous words and rendering them even more ambiguous than they were before. The State therefore has an incentive to pick more ambiguous terms rather than less ambiguous. It puts its own meaning behind these terms, and in due time, as more actors adopt this new definition, these terms come to mean what the State wants them to mean.

     If rulers wish to ostracize, belittle, or altogether remove an idea which threatens their aims, they may perform the same task in the opposite direction. They take words which mean very specific things to people in opposition to its goals and render them more ambiguous. Into this vacuum they place their own meaning, substituting the newer meaning for the former one. Again, as time proceeds, more and more actors will associate the word with the concept of the State’s choice; they end up thinking of that word and the concept it was originally meant to convey in a negative fashion.

     Changing the definitions of words inherently changes the concepts being communicated, for words are representations of concepts which actors desire to communicate to one another and are means as such. But by artificially changing a language, the State does not change these internal concepts. Every thought of ours is unique and unchangeable as such. (When an idea “changes” for an actor, it only means that more concepts were introduced or that the concepts building it up or complimenting it were forgotten, leading an actor to have a different opinion or viewpoint regarding the concept concerned. The term he attaches to that concept therefore represents the changed idea he puts behind it.)

      By modifying existing words, the State’s intervention into a language prevents the concepts from being communicated in an intended way by causing a term to convey concepts different from those intended by the users of the word. So properly speaking, the State severs the means from the end. The term itself takes on two different meanings, communicating different things to different people. They actually become two separate words, so to speak, though they have the same appearance, and the State then encourages one meaning to the detriment of the other.

     A phenomenal example of such language abuse is provided by Professor Noam Chomsky:

“In political discourse, every term has two meanings. [This is true] of the term ‘peace process’ . . . Its dictionary meaning is ‘some sort of process that’s trying to lead toward peace’. But it also has a technical meaning, one that’s actually used. In its technical meaning it means whatever diplomatic initiatives the United States happens to be advocating at a particular moment . . . that’s ‘the peace process’. Notice it follows that it’s a logical impossibility for the United States to be opposed to ‘the peace process’, that’s a nice consequence. To prove that the United States is for peace, you don’t have to do any laborious inquiry into the annoying facts because it’s true by definition. Since the peace process is whatever the United States is up to, the United States is always supporting peace. [Moreover,] the U.S. enemies are always opposed to peace, because they’re not supporting whatever the U.S. is up to, and so by definition they are opposed to peace.”

My reader may easily figure out other terms to apply this process to, such as “we”, “terrorism”, “progressive”, and so forth, virtually ad infinitum. To wit, this theft of language from the subjects of a state is virtually a process of purposefully rendering them speechless.

     To come back to and complete the original analogy to money: By having such control over language in society, rulers enrich themselves, at their subject’s expense, much more effectively than merely using basic propaganda to push an idea onto the populace. They “inflate” a language with meaningless words—for rulers have almost no reason to promote words with concrete definitions—which ultimately leads to the State gaining support for its actions at the expense of its victims, whose ideas become more opaque. In the short term, a “boom” of language is created with artificially injected concepts, which subtly transform society. In the long run, a “bust” occurs when society accepts the new definitions over their former ones. The level of language-loss devolves civilization as such; it leads, in part, to increased state power (which is to increase crime itself) and vague notions which lead virtually nowhere except to society’s own detriment. The degree to which the State manipulates ideas through mere propaganda contributes to such decivilizing effects accordingly, but done through language manipulation, it accelerates such effects exponentially.

     Accomplishing all of this on any kind of large scale has a few prerequisites. The State must control the education industry within its borders. (To some extent this means the press industry as well, for this is another form of education. By and large, this is how adults educate themselves about current affairs. One might say this is where they go to learn what to think based on the opinions of public intellectuals in society.) It is the most efficient way to accomplish every task above.

     Moreover, and this is really a prerequisite for any state action whatever regarding its subjects, rulers must have majority acceptance of their actions—whether active or passive—to do any of this. Too, the level of general acceptance affects the degree to which the State can change definitions of words. For instance, if a term is steadfastly defined by those in a society, rulers cannot change it; if it is somewhat less so, they can change its meaning slightly; if it is totally ambiguous they can use it as they please, either as is or they may easily place their own meaning behind it, of course making this their first choice for manipulation.

    A few words ought to be said here. Firstly, the term “prerequisite” might give the wrong connotation—it may not be that rulers manipulate language only after monopolization of education and possession of adequate public opinion, but that they do it all along as any propaganda program requires. Secondly, it is true that any of the State’s actions toward its subjects require propaganda to achieve, yet it is interesting to note that manipulating language itself has the intention of propaganda behind it. So propaganda begets propaganda. Thirdly, changing language and manipulating it out of self-interest in order to persuade others is not an action unique to the State, but because this power becomes centralized under the State, it can be far more disastrous than left to the free market where there is competition, freedom of education, and an overall incentive for words to genuinely mean something rather than stand for purposefully ambiguous concepts.


     The effects of the State’s language manipulation on society are simple, yet important. It involves looking at how compulsory conditions retard and detract from natural language development under conditions of freedom.

     The natural use of language to convey ideas is sharply diminished once the state monopolizes a language. More importantly, ideas are virtually prevented from being thought at all by outlawing the words to attach to them in the first place. This is not to say that individuals cannot form ideas on their own and create new words to identify them, but it prevents sharing ideas between one person and another because the words mean something different from one person to another. Creativity cannot be stamped out, ever, but it can be discouraged.

     Furthermore, once the State begins to manipulate a language, the language is distorted with otherwise unnecessary words and ideas that would not have existed otherwise. If they were necessary for individuals to communicate in society, the concepts and the words would already be in use. The State always acts in its own favor, so the subjects are made to think in an unnaturally, i.e., in a way they would not have thought if not for State interference. After all, the purpose of thought control is to make actions impossible which were possible before (and vice-versa). Thus, the State’s addition, subtraction, and manipulation of words can never be in a society’s favor, but always to society’s detriment.

     In addition, manipulation of words that already exist implicitly promotes feuding which would not have occurred otherwise. Those with more intelligent and creative minds, who possess a broader and better defined vocabulary find it hard to communicate with those using words with transformed meanings, which generates more antagonistic attitudes toward one another, making it that much harder for the former to break the mold.

     Lastly, and this might be the most important insight, whether transforming a term to promote an idea or to belittle it, the State attacks the most ambiguous terms first, and when it cannot do that, it turns words with specific meaning into vague words with hardly a trace of significant thought behind them. In either case, words become unclear so that the vague connotations take hold in a speaker’s mind, which implies the ghastly truth that the State uses human imagination—man’s most creative instinct—against itself and toward its own harm. Moreover, by routing out the concepts words convey, the actors who use them are not required to have much intelligence to “understand” them. The ultimate result of this entire process is a shrunken vocabulary within a language, and those words that do exist are vaguely defined, meaning a relatively dumber populace.

     All of these effects are decivilizing, because they cripple, retard, and destroy cultures which would otherwise grow and flower in their own way had the State not intervened in their language.


     “It is clear that the decline of a language must ultimately have political and economic causes . . . If one gets rid of these habits one can think more clearly, and to think clearly is a necessary first step toward political regeneration.” – George Orwell, “Politics and the English Language”

     In order to combat compulsory government those who desire to be free must at once encourage the rest of society to do most of what the government actively discourages as well as discourage whatever actions government promotes. Libertarians then position themselves to be squarely in conflict with the state which attempts to rule over them, and so begins the path to proper freedom.

     Anything one does in this vein is dangerous to different degrees, for those who run states are relentless in preserving their means. But this does not necessarily mean we ought to take the State to physical task. One needn’t be so utterly foolish as to take up arms against the state at the outset. History runs rife with rebellions that didn’t quite make it, and it makes little sense for live rebels in spirit to become dead rebels in the flesh. Instead, the oft recommended spread of ideas can make our job far easier. In order for this to be more effective we must insist on a more “conservative” use of language, which is to insist on using terms the way they were originally meant to be used. We must wrestle language back from the State's grasp and triumphantly reclaim it, as if to say, “You took this from us. You used our own creations against us and spoiled them in the process. We are taking back control of our minds and our tongues in order to restore our language to its proper place—in our hands.”

     If libertarians insist on educating others on what words actually mean in their strict sense and therefore how to properly use them, it encourages critical thinking in general—and, one hopes, thinking in a truly critical fashion concerning what the State is actually doing rather than what people are made to think it’s doing within and without its borders. As language is one of the most basic needs of a state to carry out its primal functions, reclaiming the real stuff of our language in order to subtly direct public sentiment back toward freedom and teeming culture ought to prove a great deal about peacefully tearing apart a monolithic government, piece by monolithic piece.

Saturday, July 12, 2014

My Experience with Beginning Intermittent Fasting

Usually, whenever I make some kind of change it's either I change a lot of things at once or I don't do it at all. What I've been doing lately wasn't exactly meant to be this way, but it's worked out nicely. Since I quit smoking, I figured I'd start working out. Since I started working out, I figured I'd give this intermittent fasting thing a shot. Since I started doing IF, I figured I'd make what I do eat within my day's eating window count and be relatively healthy because I won't have an opportunity to eat at all outside of that window. (All IF is is basically putting everything you eat into an 8 hour eating window every day and not consuming any calories outside of that time frame.)

Ever since I've been doing all this, I feel tremendous. My mind is far more alert and focused than I thought could happen without drugs (i.e. adderall and the like), and it's free. My body feels better overall, like I can control it instead of the other way about, and more energetic and efficient (if that makes sense). And both my mind and body easily "start up", so to speak, rather than more or less idling lazily without being able to get going whenever I'd like. I don't think any one of these changes would have worked to make me feel like I do at present on their own, but it took doing them all together for this to happen.

And because it's lifestyle change, it's really not as hard as it sounds precisely for that reason. This goes for any such change. It's almost comparable to imagining yourself as a different person; there wouldn't be a conflict with how you feel, what wants and needs you have, the certain views you hold, etc., right now. You would just be that other person, feel however they feel, want what they want, hold their views and so on, and that's that. Making a lifestyle change is basically doing exactly that, except you get to keep the same body and memories. So don't let it scare you if you've ever thought about doing anything like that. It's not as hard as it seems. Life's so much better when you try new things.

For a detailed overview of what IF is, how it works, and the science behind it, read The Beginner's Guide to Intermittent Fasting on

But if you need some guidance getting started, A.B. Dada, the owner of 7BuckTees, came up with his own two week self study for whoever wants to try out IF. It acts as a guide to what your body and mind should be going through for the first two weeks of sticking to IF; as such it is very encouraging.

Intermittent Fasting: Day 1
Intermittent Fasting: Day 2
Intermittent Fasting: Day 3
Intermittent Fasting: Day 4
Intermittent Fasting: Day 5
Intermittent Fasting: Day 6
Intermittent Fasting: Day 7
Intermittent Fasting: Day 8
Intermittent Fasting: Day 9
Intermittent Fasting: Day 10
Intermittent Fasting: Day 11
Intermittent Fasting: Day 12
Intermittent Fasting: Day 13
Intermittent Fasting: Day 14

Tuesday, July 1, 2014

Musings on the Supreme Court's Hobby Lobby decision

In reality, the decision preserves a right for one company which is being denied to every other onenamely the right of property (of which "religious" rights are but a form) and the right to do with one's property whatever one wishes to. Companies (i.e. the people who own them) have a natural right to give or not give anything they'd like to their employees, just as you and I have the same rightand I'm sure you will agree that someone coming into the picture and forcing us to do things with the things we own only because they say so and happen to have a gun is insane. The underlying principle to the left's outrage about the decision is that they need to demonize all excuses precisely so that companiesand people in generalwill obey them and not exercise their natural freedoms, because it would foil their political aims. In this particular situation, the left wants you to hate that companies get religious exemptions from a legislation they want to force on all companies everywhere, so they ridicule it when it's used. And that's good, because the left never had a right to force anything on anyone to begin with. That's why they dress it up and try to explain to you only the narrow picture, because only through that microscopic lens does anything they do resemble sense.

Furthermore, every other company is being forced to provide coverage they may or may not want to provide, a service that may or may not be in demand, that may or may not be in adequate supply to meet the unknown (and, because of this, unknowable) demand, or that may not even be economically feasible for the company with the now mandatory costs of providing the coverage. Not to mention the law forces the prices of contraceptives up, and since the companies are the ones that are forced to pay the costs, it ultimately results in either lower wages for employees, lower hours, or fewer employees altogether (or a mix of these things). That surely contradicts the left's rhetoric elsewhere. And these points only scratch the surface of the economic consequences.

And this is the way ownership and freedom of property works: If the employees (or would be employees) don't like that a company doesn't provide some benefit, they don't have to work there and can (and will very likely) find another job which will provide such coverage. Competition will eventually force companies not providing such coverage to provide it or else go out of business. People and people who own companies have rights, but that doesn't mean there won't be consequences for acting in a certain way. The free market takes care of itself. There is no need for the state's involvement. I just wish more people would realize that before taking absurd ideas like the ones being spread around about this decision to heart.

Friday, April 25, 2014

Ultimate Foundation of Private Property, Part II: Communication Ethics

In Part 1 I disputed the foundation on which Hans-Hermann Hoppe builds his argument ethics. Because his argument is based on the implications of argumentation itself, his argument leaves no room for recognition of ownership by actors who do not argue with one another. In Part 2, I will review these points, but focus mainly on reconstructing Hoppe’s argument using the basic act of communication, rather than the act of argumentation itself.

Read Part 2 here.

Tuesday, April 22, 2014

Ultimate Foundation of Private Property, Part I: Argumentation Ethics

I've finally finished my critique of Hoppe's argumentation ethics as well as Kinsella's estoppel approach. (It's not really a critique per se, but a subtle yet important reconstruction.) I got busy so I hadn't had time to finish editing it, but I've been wanting to show it to the world for the longest time. I think even Murphy and Callahan will like it.

That will be Part II and will be published in a few days. It follows this essay in which I discuss what I think is faulty about why Hoppe thinks his ethic (and more widely, praxeology itself) is true, as well as the problems his argument has with regard to actors mutually recognizing their respective property rights:

Read Ultimate Foundation of Private Property, Part I: Argumentation Ethics.

Tuesday, July 30, 2013

A Personal Note on Mises University

MisesEvery year, the Mises Institute holds an economics seminar called Mises University. It attracts many eager students of Austrian economics from both the United States and abroad. I happily attended this year’s seminar for the second year in a row. I originally wrote this as a letter to a friend while there and slightly amended it for publication on the Daily Anarchist.

Read my note about the experience:

Sunday, July 7, 2013

How to Think About Magic Tricks and Economics

If you have ever seen something that defied explanation, did you think it to be something you merely couldn’t explain, or that perhaps it was actually was pure magic? Perhaps you have seen David Blaine’s street magic specials and saw something like this. Magicians gain fame and reputation by performing illusions for eager spectators who wish to be fooled. In this case, a glimpse at the unknown is a tantalizing bit to savor. When someone sees such a trick, they are baffled, but because of this they usually try to figure out how it was done.

Regular people do this with economic phenomena every so often too. For instance, laymen sometimes wonder why the owner of a business raises his prices and remains highly successful. The laymen might attribute an arbitrary reason to the phenomenon at hand without thinking about it any further. The same is done with a baffling magic trick; it’s realized that a trick was done by some sleight of hand, though usually no further thought is given to what the magician actually did. So a vague notion is attributed to how each of these things happened, and I want to encourage the reader to pursue this initial spark of investigative work as far as he or she possible can.

What I want to suggest here is that we must embrace—and take as far as possible—this desire to understand. In order to come to a correct conclusion about we observe—whether with magic tricks, social phenomena, or anything else—we must stringently focus on the logic of the situation at hand, for only then can we actually make sense of what we see.

Ludwig von Mises stresses this point, telling us that a logically consistent theory is necessary in order to understand the human story (see the work suggested at end of this article). The reason why we find things such as magic tricks so confounding is precisely because they do not mesh with the way we think the world works. We correctly tend to place logic above what we observe. Thus, most of us realize that this is not actual sorcery, but some sort of illusion. And we are right.

Take for instance the magic trick called the Ambitious Card. The ‘effect’ of the Ambitious Card is that one selected card is plainly placed in the middle of the deck only to end up on the top again. But it does not do this by magic; it is accomplished by practiced sleight of hand. We came to this conclusion because logic tells us not to believe what we see right off the bat, but to match what we see with our intuitive logical insight. Here, then, is where we begin to figure it out. We must ask ourselves: What means (the magician’s ‘method’) can be used to achieve the end (the effect of the trick) sought? From this point we logically move forward until we have sufficiently explained it.

I’ll save you the trouble of figuring it out: the method for the trick (and I apologize for breaking the magician’s code) is usually that the selected card is actually the second card from the top. The magician picks up both cards and shows the face of the bottom card in what is called a double lift. He turns them back over, so that when he takes the top card—what we think is the selected card—, and places it in the middle of the deck, the selected card is still on top. Thus, when the magician snaps his fingers and says the magic words, the selected card “magically rises” to the top. However, this is only one way the magician might accomplish his goal. (I don’t want to spoil all the fun.) Should he choose this effect, many more methods could be used to achieve it. The magician’s choice of such methods depends on the time, the place, and the social environment in which the magician finds himself, just like any other person who decides to undertake a particular action. If you change the terms ‘method’ and ‘effect’ to the more general terms ‘means’ and ‘ends’, you will be at the starting point for understanding economics.
If we can figure out how such a feat as the Ambitious Card was accomplished, it no longer seems miraculous to us. The same goes for seemingly unexplainable economic events.  Now, while knowing the method of magic tricks might take the fun out of the whole thing, this is not the case with economic theory. Rather, theory puts the magic into what happens around us, because it enables us to give a true explanation of what occurs in reality. Indeed, figuring out the method to this trick—by applying logic to the situation—is similar to how the economist figures out what happens in society using economic “theory”. 

To go back to our earlier example, using consistent, logical theory, we can understand why we see a businessman raising the price a thing that he sells. I’ll save you the trouble of figuring that out, too. First, we must consider the person who is undertaking that action, namely the owner. Here we realize that, as an entrepreneur and as a human being, he prefers to have more than to have less. This fact is true for every person. (Note too that the want for things does not always mean money). Thus, it must also apply to the buyer of the good. The seller prefers to gain the most amount of money that he can per item sold, while the buyer wants to spend the least amount of money per item bought. The amount that the seller prefers to charge for each of his goods is shown on the ‘supply curve’ below. At the same time, the buyer will purchase a certain amount of the good at a given price, shown on the ‘demand curve’. Only at a price on which each person agrees will an exchange be made. The point at which the businessman can reach the maximum number of agreeable exchanges is called the ‘equilibrium point’. To give a visual example of this, each curve in the graph below shows the respective preference of the businessman and the consumer, as well as the equilibrium point.

Also consider what happens if the seller—who wishes to gain as much profit as possible—sets his price elsewhere. If he went above the equilibrium price, buyers prefer not to buy as much as they would have otherwise, thus the seller does not gain as much as he could have had his price been lower, so he lowers his price. And if he went below equilibrium, buyers prefer to buy more than they would have before; the seller realizes that he could make more money per item if he raises his price, so he does so. (This is precisely why the point at which the seller will make the most money is called the equilibrium point, for every deviation from it will eventually bring it back to this point.) This is the built-in mechanism in the economy called the ‘price system’.

(And it should be mentioned while we’re at it that the agreed upon price does not render each good’s “value” equal to one another, as you might be led to believe. In fact, in an exchange, each person must value what he is receiving more than what he is trading away, otherwise the exchange cannot take place. In this case, the buyer values the good he is receiving more than the amount of money that he is trading for it, while the seller values the money he is receiving more than the good he is trading away. Thus, each item’s value relative to each person is necessarily different and in no way can the two items be considered equal in value to one another.)

Now we are in a position to answer the question at hand: Why has the seller raised his prices and still remains successful? We have just seen that the seller will not raise his prices above the equilibrium point arbitrarily, else he will lose profit. Thus, we are left with the necessary conclusion that he has done so because his buyers are willing to pay more for his goods. So the seller’s raise in price is no longer a mystery to us. Using logic, it can be explained, just like a magic trick.

The proper method of economics is to form a consistent body of knowledge (theory) and then apply it to reality. Indeed, this is the only way to go about things. Some schools of thought wish to explain reality using history as a guide. But this will lead us astray and give us mistaken explanations. For example, if we tried to explain reality after seeing a magic trick, we might well come to the conclusion that some events in the world are simply miraculous and defy all explanation. This might be well and good if we want to settle there, but operating in this fashion would not get us anywhere in the pursuit of truth. So what we must do is use the tools of logic—which come prior to observation—to give an accurate account of why things happen the way they do. The entire edifice of economics is built with this purpose in mind.  Indeed, this way of reasoning is the only way that we could properly explain the Ambitious Card, and it is the only way that we can properly explain economic phenomena.

Try this as mental exercise: Whenever you see something that baffles you and you think that there must be a logical explanation for it, follow this thought process as far as you can. If you let logic assemble the pieces to reality—so that you come to one precise conclusion—you will not be led astray. Economic theory, far from being a “dismal science”, does explain a lot about human reality. It always helps to have a head start, so pick up the following works in order to get one:

Economics in One Lesson by Henry Hazlitt
Man, Economy, and State by Murray Rothbard

As a bonus, this work uses the method of economics to explain social phenomena outside of economics proper: Democracy: The God That Failed by Hans-Hermann Hoppe

This article originally appeared in The Libertarian.