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The Jordan B. Peterson Podcast
189. Is Property Theft? | Dr. Robert Murphy
Aug 30, 2021
02:34:44
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Quick takeaways
- Understanding economic principles can help challenge misguided assumptions about exploitation and power dynamics in society.
- Raising the minimum wage can lead to unintended consequences such as increased unemployment rates, particularly among young people.
- Ideas and individual action are primary drivers of economic progress, challenging the notion of exploitation and emphasizing cooperation and productivity.
- Cooperation and productivity drive economic growth and challenge the idea of economic systems being based on the exploitation of workers.
- Ownership facilitates efficient resource allocation, incentivizes specialization, and prevents the concentration of power in a centralized authority.
- Private property ownership fosters innovation, specialization, and a meritocratic society where individuals are rewarded for their contributions and expertise.
Deep dives
Importance of Austrian Economics
Austrian economics, as discussed by Jordan Peterson and Dr. Robert Murphy, emphasizes the significance of understanding economic principles. It highlights the dangers of government policies imposed in the name of helping disadvantaged groups or avoiding bad things, which often have unintended consequences. The Austrian school of economics, in contrast to the labor theory of value, focuses on the theory of marginal utility, which explains the role of subjective value in determining market prices. This theory recognizes that labor is not the only form of valuable contribution, emphasizing the importance of entrepreneurship, managerial ability, and abstraction. It also highlights the role of ideas and individual action as the driving forces of economic progress. Understanding these economic principles can help individuals make more informed decisions and challenge misguided assumptions about exploitation and power dynamics in society.
The Flaws of Minimum Wage Hikes
The discussion between Peterson and Murphy delves into the consequences of minimum wage hikes, specifically focusing on the potential negative impacts for workers. They explain that while raising the minimum wage may seem beneficial in theory, it can lead to unintended consequences. They argue that higher labor costs incentivize employers to hire fewer workers or introduce technological advancements that replace human labor, leading to increased unemployment rates, particularly among young people. Additionally, they highlight the importance of understanding the market dynamics and productivity factors when assessing the impacts of minimum wage policies. While acknowledging that some individuals may benefit from higher minimum wages, they caution against the potential adverse effects of such policies.
The Role of Ideas in Economic Progress
Peterson and Murphy explore the contrasting views of Marx and Mises regarding the role of ideas in economic development. While Marx believed material forces of production primarily drove historical change, Mises argued that ideas, specifically individual action and reasoning, were the primary drivers of human progress. Mises emphasized that human action starts with thought and reasoning, with individuals pursuing goals and utilizing reason to achieve them. He highlighted the importance of the intellectual ideas behind economic systems, such as individual sovereignty and property rights, in driving economic progress. This perspective challenges the notion of exploitation and emphasizes the positive aspects of cooperation and productivity in economic development.
Cooperation and Productivity in Economic Systems
The discussion between Peterson and Murphy highlights the importance of cooperation and productivity in economic systems. They emphasize that people come together and cooperate to maximize productivity and effort, which leads to economic growth and societal progress. This perspective contrasts with the view that economic systems are fundamentally based on the exploitation of workers by capitalists. They argue that economic progress is driven by individuals' ability to think, innovate, and create structures that enhance productivity. They emphasize the role of entrepreneurship, managerial abilities, and the multiplier effect of cooperative labor in facilitating economic prosperity. This perspective acknowledges the complexity and importance of various roles in an economy and challenges the notion of oppressive power dynamics.
Ownership as a Foundation: Incentivization, Specialization, and Pricing
Ownership plays a crucial role in incentivization, specialization, and pricing within a market economy. It allows individuals to take ownership of their labor, giving them the freedom to specialize in their areas of expertise and maximize productivity. By owning property, individuals can make decisions about how it is used and can monetize it, allowing for efficient resource allocation. Ownership also provides individuals with authority and power, distributing power sources and preventing the concentration of power in a centralized authority. Furthermore, ownership facilitates the calculation of comparative value, ensuring efficient allocation of resources in a market economy.
The Benefits of Wealth and Inequality: Meritocracy and Innovation
Private property and the accumulation of vast fortunes are vital for fostering innovation and progress. Wealth and inequality, rather than being a result of exploitation, often emerge as a product of superior foresight, expertise, and specialization. Wealthy individuals often make investment decisions based on their track record and expertise within specific domains. Their accumulated fortunes provide the resources and freedom to introduce new products and advancements in their respective fields. Furthermore, private property and accumulated wealth help maintain a meritocratic society where individuals are rewarded for their contributions and expertise.
Private Property as a Stabilizing Force: Responsibility and Balancing Power
Private property ownership not only brings benefits but also entails responsibilities. Owners have a vested interest in taking care of their property, be it a car, a factory, or any other asset. Responsible ownership leads to maintenance, protection, and enhancement of the value of the property. Moreover, ownership acts as a counterbalance to the concentration of power in a centralized authority. Rather than an unchecked authority determining the course of societal decisions, private ownership disperses power and authority among individuals, fostering competition, innovation, and diversity of opinion.
Ownership and Market Economics: Role in Combating Prejudice and Exploitation
Ownership within a market economy plays a critical role in combating prejudice, such as racism and sexism. Through ownership, individuals are incentivized to make rational decisions based on productivity, efficiency, and value. Prejudiced decision-making would be contrary to the central tendency of a market economy, which values specialization, expertise, and comparative advantage. Consequently, organizations seeking to optimize productivity are more likely to prioritize merit over irrational prejudices. Private property ownership enables the calculation of value, incentivizes responsible stewardship, and counters the use of arbitrary power, providing a framework that discourages and corrects prejudiced and exploitative behavior.
The Austrian school argues that social cooperation is driven by a motivation to stave off catastrophe
The Austrian school of economics emphasizes that individuals engage in social cooperation not to exploit others, but to avoid catastrophe. They highlight the importance of social interaction and willingness to sacrifice specialization in order to participate in the process. Ownership and other benefits emerge as a consequence of this process, which has evolved over time through distributed computation.
The Austrian school criticizes centrally planned interest rates and advocates for market-based determination
The podcast discusses the Austrian school's critique of centrally planned interest rates. They argue that artificially low interest rates, set by central banks, send false signals to entrepreneurs who engage in long-term projects, even when the public has not saved enough to justify those investments. This results in a boom period followed by a bust or recession. The podcast argues that market-based determination of interest rates would avoid the distortions caused by centrally planned rates.
Cryptocurrency, such as Bitcoin, aligns with the principles of the Austrian school
The podcast briefly explores the concept of cryptocurrency, particularly Bitcoin, in relation to the Austrian school of economics. While there is some division among Austrians, with some favoring commodity money like gold, cryptocurrency enthusiasts argue that Bitcoin's decentralized nature and mathematical limit on supply make it a viable alternative to traditional fiat currencies. They see it as a demonstration that money does not necessarily require centralized control.
25.
Mises Points Out That It's Not Just Peasants Who Left the Farms and Goes to the Cities
3min
Dr. Robert P. Murphy is an Austrian School economist, Research Fellow at the Independent Institute, and Senior Fellow at the Mises Institute.
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This episode of The Jordan Peterson Podcast covers topics such as value, free trade, private property, and minimum wage laws. They also dedicate time to discuss the specialization of individual tasks, interest rates, the Business Cycle, and more engrossing matters.
Being the author of multiple books, from Lessons for the Young Economist, to The Politically Incorrect Guide to Capitalism, Dr. Murphy does not hold back with his economic and political discussions. He continues to highlight his views in his other book, Choice: Cooperation, Enterprise, and Human Interaction, which is a modern distillation on the school of Austrian economics.
Dr. Murphy’s website: https://consultingbyrpm.com/
Dr. Murphy's bio: https://bit.ly/38qiNyk
Dr. Murphy's Book: "Choice: Cooperation, Enterprise, and Human Action" https://www.independent.org/store/book.asp?id=116
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