Author Archives: B.K. Marcus

About B.K. Marcus

Father of Benjamin, husband of Nathalie, BK Marcus works from Charlottesville, Virginia, as a publishing consultant. He is the founder of Invisible Order and former managing editor of Mises.org, where he selected and altered images for every Mises Daily article for eight years. He has also been responsible for developing the Mises Institute's ebook program (now selling more than 250 books at Amazon.com and iTunes) and the ebook program for the Laissez Faire Club at LFB.org. BK focuses on developing electronic books and beautiful imagery for libertarian publishers, such as FEE.org, Reason magazine, and others. His own blog is at bkmarcus.com.

Price Theory a la Rupert Murdoch

Rupert Murdoch was buying up online properties in the mid 1990s, trying to do with the newly commercial Internet what he had done with FOX television during the previous ten years or so. One of his new acquisitions was a gaming company here in Charlottesville. My friend and I became the two “web guys” for the company. It was my first full-time job in the private sector.

When I was discussing my yet-to-be-submitted laugh-track article with Paul Cantor and I mentioned that it was competition from HBO and FOX that pushed canned laughter into retreat, Professor Cantor recommended the book The Fourth Network: How FOX Broke the Rules and Reinvented Television by Daniel M. Kimmel.

He says it was his main source for this lecture:

“When Is a Network Not a Network?” (It’s a great talk!)

I said, “You know, I used to work for Rupert Murdoch.”

“Don’t you realize,” Cantor quipped, “at some point EVERYBODY has worked for Rupert Murdoch.”

Charlottesville, perhaps like most university towns, is famously left-wing. Rupert Murdoch was infamously right-wing long before FOX News became the unofficial media arm of the Republican Party. So I sensed a definite ambivalence, sometimes defensiveness, among my co-workers about the guy in charge. One thing I remember people saying with great respect, however, was that Rupert Murdoch had built his media empire by paying not what property was worth but rather what it was worth to him.

That struck me as profound at the time.

What they meant was this: Rupert Murdoch didn’t think of a newspaper as just a newspaper, a TV station as just a TV station. He thought about them as nodes in a network he was building. This meant he outbid his competitors who saw these organizations as single units of profit and loss, whereas Murdoch saw them as part of a bigger picture: what would they contribute to the larger plan?

FourthNetworkCoverFrom the The Fourth Network:

If there was a single turning point in the history of the FOX network, a moment when the Big Three became the Big Four, it occurred in December 1993 with the simple announcement that NFL football was coming to FOX the following season.

One of the NFL’s attorneys recalled,

“What FOX offered us, the league, was the potential of having a bidder who needed the games, wanted the games, and was willing — in a sense — to overpay for them.”

Why would a savvy entrepreneur overpay for anything?

As FOX exec Lucie Salhany later recalled,

“When Rupert took over, Rupert was his most phenomenal. ‘I want it, I have a vision, I’m willing to pay for it.’”

The author comments,

As he had with so many other properties, Murdoch had paid more than the market thought it was worth because he saw a greater opportunity there.

What was his vision? It turns out that 70 percent of the NFL’s viewing audience had never watched FOX.

Salhany again:

“So, in the end, it was actually a bargain to acquire the rights to the NFL to promote the rest of [FOX’s] schedule. It was cheaper. If you went out and spent the same amount of money to promote it, it wouldn’t have been as effective.”

What strikes me now is not how brilliant Murdoch was as an entrepreneur (although he was and is) but how my game-company colleagues worded their praise for the man — and what it revealed about the people giving the praise:

Rupert Murdoch didn’t pay what something was worth but rather what it was worth to him.

Notice the unstated assumption that there is such a thing as value independent of an individual evaluator, almost as if “worth” is objective, but Murdoch had the genius to see it as subjective.

Only when I started to read economics almost a decade later did I come to understand that all value is subjective. Consumers pay whatever they feel will benefit them more than the next best thing they could have done with that money, whatever seems better than the opportunity forgone. The difference between consumers and entrepreneurs is twofold:

  1. Consumers pay for things as direct ends in themselves, goods that will directly satisfy their subjective needs (consumers’ goods); whereas entrepreneurs pay for things as the means toward achieving other ends (capital or producers’ goods).

  2. Consumers can make direct price comparisons between, say, a cup of Starbucks coffee and a cup of diner coffee, or between a MacBook and a Windows laptop, but ultimately the comparison isn’t much of a calculation — it remains a subjective preference for the thing purchased over the forgone option; entrepreneurs, however, need to combine the objective data of recent prices for all their factors of production and compare the result to their personal predictions for what people will pay for the final product.

The successful entrepreneur is the better predictor, the more innovative producer, or both.

When my co-workers praised Rupert Murdoch for pricing factors more presciently or using them more innovatively, they were just saying, in essence, that he was a good entrepreneur. Maybe they understood that. Maybe what they meant by “what it’s worth” was what the current market consensus is for this factor’s future earnings, discounted for time, and assuming no innovation.

I certainly didn’t understand that they were merely describing what an entrepreneur does, and admiring Murdoch for doing it so much better than everyone else.

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Capitalism and Spirituality

DollarSunriseOne advantage a libertarian author has when working with Invisible Order is that we in the Order are well read in the relevant literature and have worked extensively with both scholarly and popular texts.

For example, one writer recently asked us what Ludwig von Mises would have to say about a passage he had found online:

Schelling recognized that genuine democracy is only possible given a citizenry aware of the cosmological, anthropological, and theological complexities of authentic freedom. Without a philosophical culture capable of sustaining inquiry into the cosmic and spiritual depths of human nature, the equality rightly demanded by democratic societies can only devolve into the leveling homogenization of consumer capitalism, where freedom is reduced to the ability to identify with the corporate brand of one’s choice. The trivialization and inversion of freedom inherent to “democratic” capitalism makes human beings forgetful of their divine-cosmic ground, functioning not only to alienate individuals from their communities, but humanity from earth.

Here is my reply:

I don’t know anything about Schelling beyond a quick perusal of his page at Wikipedia. I’ve searched Mises: The Last Knight of Liberalism for his name and found nothing, so I don’t know what Mises had to say about Schelling’s philosophy or whether or not the student you quote is accurately representing Schelling’s thinking. But he seems to be making a claim that Mises does address at some length — that capitalism promotes materialism and diverts our thinking from more important spiritual concerns:

It is assumed that there is little connection between the two aspects of civilization, that the spiritual is more sublime, deserving, and praiseworthy than the “merely” material, and that preoccupation with material improvement prevents a people from bestowing sufficient attention on spiritual matters. (Theory and History)

According to Mises, this assumption

serves the American socialists as a leading argument in their endeavor to depict American capitalism as a curse of mankind.… Reluctantly forced to admit that capitalism pours a horn of plenty upon people and that the Marxian prediction of the masses’ progressive impoverishment has been spectacularly disproved by the facts, they try to salvage their detraction of capitalism by describing contemporary civilization as merely materialistic and sham. (Theory and History)

Implicit in this position on capitalism and materialism (and, I believe, in the Schelling student’s claims about capitalism making people “forgetful of their divine-cosmic ground”) is a claim about history: “They bemoan the passing of a way of life in which, they would have us believe, people were not preoccupied with the pursuit of earthly ambitions” (Theory and History).

But this implicit historical claim is false: “It is hard to find a doctrine which distorts history more radically than this antisecularism” (Theory and History).

“Modern Western civilization is this-worldly,” Mises concedes. “But it was precisely its secularism, its religious indifference, that gave rein to the renascence of genuine religious feeling” (Theory and History).

“Wisdom and science and the arts thrive better in a world of affluence than among needy peoples” (Theory and History).

“[T]the drop in infant mortality, the prolongation of the average length of life, the successful fight against plagues and disease, the disappearance of famines, illiteracy, and superstition tell in favor of capitalism” (Theory and History).

And here are a couple of passages from Human Action on the classical-liberal belief that laissez-faire promotes the higher concerns:

They [the market liberals] do not share the naïve opinion that any system of social organization can directly succeed in encouraging philosophical or scientific thinking, in producing masterpieces of art and literature and in rendering the masses more enlightened. They realize that all that society can achieve in these fields is to provide an environment which does not put insurmountable obstacles in the way of the genius and makes the common man free enough from material concerns to become interested in things other than mere breadwinning. In their opinion the foremost social means of making man more human is to fight poverty. (Human Action)

The nineteenth century was not only a century of unprecedented improvement in technical methods of production and in the material well-being of the masses. It did much more than extend the average length of human life. Its scientific and artistic accomplishments are imperishable. It was an age of immortal musicians, writers, poets, painters, and sculptors; it revolutionized philosophy, economics, mathematics, physics, chemistry, and biology. And, for the first time in history, it made the great works and the great thoughts accessible to the common man. (Human Action)

I hope I correctly understood the PhD student’s claims and your question about their connection to Misesian thinking, and I hope these passages prove helpful in addressing that question.

Thanks,

BK

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The Power of Habeas Corpus

HabeasCorpusCoverMy friend and comrade Anthony Gregory, whom I blogged about here, has written a big, scholarly book: The Power of Habeas Corpus in America: From the King’s Prerogative to the War on Terror (New York: Cambridge University Press, 2013).

I’m sorry to say I have not read it yet. It lists for about a hundred bucks, but you can get a copy from the Independent Institute at a steep discount.

I knew that Anthony was writing it, and I knew the general topic, but it wasn’t until I read Allen Mendenhall’s review in the Freeman that I understood how radical, and how very Gregoryesque, the book turns out to be:

Sometimes it takes a non-lawyer like Gregory to remind lawyers of the philosophical implications of the practical and everyday functions of the law. Likewise, it takes a philosopher, again like Gregory, to show that a series of small legal victories is really one big loss in a larger scheme.

The foundational legal principle of habeas corpus is really one big loss? The principle that the state can’t hold you without cause, the one that Sir William Blackstone called “the most celebrated writ in the English law”? Does this mean that Thomas Jefferson was wrong to say, “Habeas Corpus secures every man here, alien or citizen, against everything which is not law, whatever shape it may assume.” How can libertarians oppose a legal doctrine that limits state power and secures individual rights?

Mendenhall writes,

Gregory’s scope is wide. He maps more than 400 years of legal history in roughly 400 pages and reminds us that the origin of the habeas remedy was not libertarian: “The king’s courts developed habeas corpus to centralize judicial authority and collect revenue.” His impressive sweep of history recognizes that “it took centuries before the writ was genuinely turned against the king’s oppression.” Ever since the Norman conquest, if not earlier, the writ of habeas corpus has been tied to royal or governmental prerogative. In the seventeenth century, in fact, the writ served as a procedural mechanism for ensuring that prisoners remained in prison rather than being released from prison.…

“For every vindication of a custodian’s power,” Gregory explains, “the authority to detain is upheld. For every undermining of a custodian’s power, there is the affirmation of another official’s power — a judge’s power, to say nothing of the state’s general power to decide whom to detain.”…

At once a tool of liberation and authority, the writ of habeas corpus undermines State authority even as it validates and solidifies that authority. In other words, it enables the very power that it subverts. Because it destabilizes institutionalized power ultimately to sustain that power, the writ is, in Gregory’s words, “mythical” and retains an “idealistic mystique” … a “tool of usurpation and centralization.”

Mendenhall lauds Gregory’s approach and recommends it to “libertarian jurists and jurisprudents who appear to be moving toward stodgy consensus on a number of pressing legal issues.”

It might be that other pet favorites of these legal libertarians — say, incorporation of the Bill of Rights against the states — are really short-term techniques serving as vehicles to long-term, centralized power.

The book review is well worth a thorough read, as is, I’m sure, the book it reviews.

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Which e-reader is right for you?

iPadMiniWhite4IOOnce you’ve read a few ebooks on the right handheld device, it’s very hard to go back to paper. But which is the right e-reader? The three most popular e-readers today are the iPad, Kindle, and Nook. And each has its uses.

iPad?

I know ebook enthusiasts who will only read on the iPad. Jeffrey Tucker was giving thumbs-down reviews to the most popular ebook readers back when I was already a complete convert to digital text. He said that turning the pages was too slow, that you couldn’t flip around in the book. “I can see how this might be valuable if this is the way we mostly read — the way people navigate the latest best-selling novel — but I have my doubts that this is the way most of us use books.”
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America’s first individualist anarchist featured on Wikipedia

AnneHutchinsonTrialWikipedia‘s featured article today is on Anne Hutchinson (1591–1643). Not only that, but their quote of the day is by Anne Hutchinson: “If you please to give me leave I shall give you the ground of what I know to be true.”

You have to read the full article to find buried, and in a single line, this about her: according to Murray Rothbard, Hutchinson was America’s first individualist anarchist.

Read his article about her, excerpted from Conceived in Liberty.

(This isn’t just Rothbard’s pet theory, by the way. Eunice Minette Schuster came to the same conclusion about Hutchinson and the antinomians in general in her 1932 book Native American Anarchism.)

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the vagaries of eggcorns

Yesterday’s word of the day at Wiktionary.org was vaguery:

vaguery

I’ve never seen this word before. My spell checkers all reject it. When I look it up in my dictionary app, it isn’t there; not only that, but the app tries to correct it to the word with which I’m much more familiar: vagary, for which it is apparently an "eggcorn."

eggcornI love the neologisms that language lovers come up with to categorize the creative mistakes people make. My personal favorite for a while has been mondegreen, but eggcorn may take its place.

The eggcorn, Wikipedia tells us, "is an idiosyncratic substitution of a word or phrase for a word or words that sound similar or identical in the speaker’s dialect." Unlike a malapropism, however, the eggcorn

introduces a meaning that is different from the original, but plausible in the same context, such as “old-timers’ disease” for “Alzheimer’s disease."

The term comes from the substitution of "egg corn" for the word acorn. (You can find a huge list of eggcorns here.) But back to yesterday’s word of the day.

The vagaries of fate (and the vagueness of the Delphic oracle) replaced Croesus's throne with a pyre.

The vagaries of fate (and the vagueness of the Delphic oracle) took Croesus from a royal throne to the pyre of a condemned prisoner of war.

Vagaries (I always encounter the word in the plural) are unpredictable changes, as in the vagaries of fate or the vagaries of the economy. They are not vague. The vagaries of the stock market are ups and downs, profits and losses that we can’t see coming. But while we may not know what those changes will be, we have a very clear understanding of what the possibilities are.

I have often seen writers misuse the word, either to mean "vaguenesses" (or vagueries, if Wiktionary is to be trusted) or in a way that is ambiguous enough that I can’t tell if they intend the word to carry its unpredictable-change meaning.

When King Croesus of Lydia asked the oracle at Delphi whether or not he should confront Cyrus the Great on the battlefield, he was trying to avoid the vagaries (unpredictability) of fate. But what he got back from Delphi were the vagueries (equivocal predictions) of the oracle: if the Lydian king made war on the Persian king, he would destroy a great empire. Croesus took the ambiguous answer one way, and the battle went the other way, destroying Croesus’s own empire. Tricky oracle: either way, she got to keep her job.

So if a writer makes reference to "the vagaries of oracular prophecy," you know he or she probably means vagueries, not vagaries, but it’s probably best to do more than just correct the spelling. A better word choice is needed. And if instead the text you’re editing says, for example, "the vagueries of fate," well, that may or may not be spelled correctly, depending on what the writer means, but it’s probably still best to avoid the vaguery of the word vagueries. Go for something more precise.

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The Power of the Comma

LetsEatGrandmaReuters editor, Tony Tharakan, sneaks a spurious comma into his post on how a comma allowed a Malaysian airline to sneak into the protectionist Indian market (h/t Grammar Girl).

He invites readers to identify his spurious punctuation mark.

Very clever.

I think I’ll follow his lead and invite you to find the (not one but) two (yes, 2!) false commas in this very post.

(Hint: they’re more than unnecessary; they change the meaning of what I’ve written to imply something that is false.)

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