1. Raising the minimum wage is an effective way of helping
poor people.
Actually, doing so causes increased unemployment amongst unskilled workers, chases away capital investment from the region, and tends to lead to higher prices for consumer goods, something which poor people are the most sensitive to. Giving poor people a direct cash subsidy would be much less disruptive.
2. Moderate inflation is much better than moderate deflation.
Actually, moderate deflation caused by more goods being put on the market, so-called ‘growth deflation’, is an entirely benign, and actually a welcome, phenomenon. On the other hand, any inflation, moderate or otherwise, caused by monetary expansion always results in arbitrary, stealthy wealth transfers and economic distortions.
3. The familiar ‘business cycle’ phenomenon is an inherent offshoot of the capitalistic free-market.
Actually, the business cycle is caused by monetary expansion via credit expansion, something which the government enables and encourages through its interventions in the monetary and banking system.
4. Government intervention is necessary to get an economy out of a depression or recession.
Actually, even when we reach the ‘bust’ of the government-sponsored ‘boom-bust cycle’, the free-market is perfectly capable, if it is allowed to, of making the adjustments necessary to get out of a depression or recession. The ‘anti-depression’ government interventions usually just involve trying to spark yet another ‘boom-bust cycle’.
5. There is a certain class of economic goods called ‘public goods’ that only the government can provide effectively.
Actually, the government has no rational way of determining whether ‘positive externalities’, the defining feature of so-called ‘public goods’, exist or what their magnitudes are. As such, it does not know whether its interventions in the provision of ‘public goods’, interventions which always involve the creation of ‘negative externalities’, will be beneficial or harmful on net. There are numerous voluntary, free-market ways of ‘internalizing’ the positive externalities involved with certain economic goods (such as bundling, contingent contracts, social pressure), thus enabling the effective provision of these so-called ‘public goods’ by free-market mechanisms.
6. Government regulations are necessary to solve the ‘tragedy of the commons’ problem.
Actually, more often than not, the government, by refusing to recognize private property rights in these so-called ‘commons’, is responsible for creating the problem in the first place. Usually, a more complete and sophisticated structure of private property rights would allow the free-market to solve these kinds of problems in its usual manner.
7. Businessmen and capitalists are too concerned with the short-term, thus the government, which takes the ‘long view’, must intervene accordingly.
Actually, private parties whose ownership of both the income and the capital value of a resource, parcel of land, or productive organization is recognized usually have an incentive to take a ‘longer view’ concerning their property than the government does. If they neglect the future too much, the capital value of their property will suffer accordingly. By contrast, democratic politicians do not own the capital value of the properties they are ‘regulating’. If they want to be re-elected, they are almost forced to narrow their horizons to the shorter-term in order to appeal to voters in the present.
8. Government protects us from exploitation by private-sector monopolists.
Actually, empirically, governments have created and encouraged monopolies far more than they have destroyed and discouraged them. It is very difficult for a free-market business to monopolize its entire industry, whereas it is quite easy for the government to create a monopoly. It just needs to pass a piece of legislation outlawing competition in that industry, something which governments around the world frequently do.
9. Government protects small businesses against big businesses.
Actually, empirically, governments have tended to privilege big businesses at the expense of small businesses, not the other way around. The bigger a government becomes, the more resources businesses must devote to complying with complex regulations and to lobbying for special privileges or against specially harmful legislation. Due to their economies of scale, bigger businesses are generally better able to expend these resources in these areas than smaller businesses.
10. Governments socialize industries in order to help poor people get access to the fruits of those industries.
Actually, if this were really the government’s main objective, they could just give poor people the money necessary to purchase the fruits of the industry on the free-market; there is absolutely no need to socialize the entire industry. In reality, industries are socialized in order to pursue egalitarian objectives and in order to give the government more control over the economy, even if this means the industry being made much more inefficient and much less consumer-friendly.
11. Without the efforts of the labour movement, working conditions and hours would be the same as they were in the 19th century.
Actually, increased productivity-raising average capital investment per worker leads to higher real wages, and many would opt to take these higher real wages in the form of better working conditions and shorter working hours, rather than purely in the form of higher weekly take-home pay. This phenomenon, even without the help of the labour movement, would be sufficient to ensure that working conditions and hours would not, in the modern day, be those of the 19th century.
12. Government regulation is the only thing that can protect us from unsafe products.
Actually, third party private safety certification agencies, combined with basic anti-fraud laws, would be sufficient to protect us from unsafe products, and would probably do so in a more effective and less heavy-handed way than the government.
13. Selflessness is better than selfishness.
Actually, everything that is pleasant in life can be pursued and attained effectively in a selfish manner (including the pleasure derived from helping other people). True selflessness is an absurd self-sacrificial attitude, suitable only for fanatics.
14. There is scientific consensus on the fact that human-caused greenhouse gas emissions, if maintained at their current levels, will cause catastrophic global warming within the next 100 years.
Actually, there is only scientific consensus on the fact that the earth has been slowly warming for the past 30 years and that human-caused greenhouse gas emissions probably had something to do with it. There is still a lot of debate about whether natural causes may have been responsible for a lot of that warming and about the magnitude of the temperature-change that would result if humans continued emitting greenhouse gases at their current rate.
15. Gold or any other limited commodity could not possibly serve as the basis for an effective modern monetary system.
Actually, this belief is tied to the belief that moderate inflation caused by monetary expansion is much better than the moderate ‘growth deflation’ we would probably get under a fixed commodity standard such as gold (see falsehood #2). This belief is fallacious, so a gold or any other fixed commodity standard would work just fine. In fact, with the increased importance that international trade is playing in our world, having a commodity-based, international monetary system is even more important to have now than it was before.
16. Fascism and communism are at opposite ends of the political spectrum.
Actually, fascism and communism both involve authoritarian governments who strive to attain total control over the economy. Given these important similarities, they should be considered to be very close to one another on the political spectrum, whereas radical libertarianism would be at the opposite end.
17. There exists a universal standard of morality that every human being ought to adhere to.
Actually, there is no good reason, besides broadly conceived self-interest, to do anything at all. Since following a universal standard of morality cannot, by definition, always be in every individual’s self-interest, there is no good reason why every human being ought always to adhere to one.
18. The interests of your ‘countrymen’ are necessarily more important than the interests of ‘foreigners’.
Actually, you should feel free to put the interests of whoever you want before those of anyone else if doing so suits you, whether they are your ‘countrymen’ or not. No one has the godlike power to decree who you should or should not care more about.
19. Karl Marx was a great thinker.
Actually, Karl Marx was a great botcher. His economic theories were fallacious and his theory of a necessary antagonism between workers and capitalists was thus fallacious as well. His prediction that ‘capitalism’ would impoverish the working classes more and more until the advent of socialism, proved to be spectacularly wrong. His ‘philosophy of history’ was overly simplistic and not very helpful, and his technological determinism ignored all of the complexities of humanity and human history. His theories led to rivers of blood being spilt in the name of absurd ideals and social systems. He truly turned out to be a plague on humanity’s collective house.
20. What we have now is free-market capitalism.
Actually, what we have now is a mixture of interventionist crony capitalism, socialism, and some free-market capitalism. Many of the ‘evils’ that free-market capitalism currently gets the blame for can more correctly be attributed to government interventionism or socialism.
21. Democracy is inseparable from personal freedom.
Actually, some more authoritarian governments, such as Singapore’s, restrict their citizens’ economic freedom less than the governments of the western democracies do. Democracy and authoritarianism are political systems, while the amount the government restricts their citizens’ freedom is a policy decision that both of those political systems could potentially make the same way.
22. There are certain things, such as raw nature, that have intrinsic value.
Actually, there is no such thing as intrinsic value. The value of something is always assigned by an individual, valuing mind. Without this mind, the concept of value does not make sense.
23. Taxation is not coercive.
Actually, taxation is coercive by definition. People pay their taxes to the government with the knowledge that if they refuse, their assets could be confiscated or they could be thrown in jail by that government. If these credible threats did not exist, than the government would get its funding through voluntary contributions, not by taxation, and the government would be indistinguishable from a private charity, which is simply not true.
24. Voting in a democratic political election means that you consent to being governed by the resulting democratically-elected government.
Actually, voting can best be seen as a form of self-defense. People know that they will be governed regardless, so given that unpleasant fact, it is better to try to pick the party that will prove, in government, to be the lesser of the two or three potential evils. Also, if voting is consent, than non-voting should mean non-consent. However, most people say that if you don’t vote, you are not even entitled to complain about any political outcome at all; the very opposite of non-consent!
25. Consuming your resources is better for the economy as a whole than saving and investment your resources.
Actually, the very opposite is closer to the truth. Resources that are saved and invested contribute to raising the real wages of workers in the region where the resources are invested and to making the structure of production as a whole more productive in the eyes of people when they do eventually consume their resources. Consuming resources has no such general effect; it just benefits, in the short-run, the industries closest to the final consumer, at the expense of the industries more remote from the final consumer.
26. If the economy grows, than governments can ‘grow their way’ out of deficits and debt.
Actually, government debt is denominated in monetary, not real, terms, so even if the real economy did grow, if the money supply remained constant, it would be no easier for the government to balance its budget or pay off its debt. It would be more correct to say that the government could ‘inflate their way’ out of deficits and debt by causing (in the case of national governments) or waiting for (in the case of sub-national governments) more fiat money units to come into existence, with a more or less devastating impact on the purchasing power of its citizens, depending on how the real economy is doing.
27. John D. Rockefeller and Andrew Carnegie were good examples of ‘robber barons’.
Actually, Rockefeller and Carnegie revolutionized the oil and steel industries respectively, and contributed greatly to making life significantly better for millions of present and future people who now had easier access to these products. They didn’t ‘rob’ anyone, nor did they even succeed in ‘monopolizing’ their industries, contrary to popular belief. They are examples of great benefactors of humanity; it is sheer unwarranted impudence to call them and those like them ‘robbers’.
28. If the wealth and incomes of ultra-rich people were confiscated and distributed amongst poor and middle class people, the lot of these latter groups would improve considerably.
Actually, if the saved and invested wealth of the ‘ultra-rich’ were distributed amongst the masses, most likely a significant fraction of it would be used for purposes of present consumption, and as a result the economy would soon become a lot less productive overall, thus soon impairing these same masses’ standard of living significantly. The fraction that remained invested after being transferred would probably be invested less skillfully in its new hands, also impairing the productivity of the economy. If only the income that the ‘ultra-rich’ used for luxurious consumption was confiscated, than when distributed amongst the masses, it would probably have an almost negligible effect on the masses’ average standard of living. But this action would significantly undermine the incentives of the ‘ultra-rich’ to invest and manage their businesses skillfully, which would have disastrous consequences.
29. Modern liberalism is a logical continuation of classical liberalism.
Actually, classical liberals believed primarily in the free-market, limiting government, and laissez-faire. Their ideology was closest to that of modern libertarianism. Modern liberalism was created around the turn of the 20th century when the Liberal political parties started putting more and more aspects of interventionist and socialist policy into their platforms. Presently, ‘liberalism’ stands more for government interference, whereas ‘conservatism’ leans a bit more towards laissez-faire (in the economic sphere at least), a complete reversal of the situation in the mid-19th century when classical liberalism was at its peak.
30. Free-market economics relies on the unrealistic assumption that humans are motivated solely by material, especially monetary, objectives.
Actually, sound free-market economics (ie. Austrian economics) relies on no such assumption. It is not a problem at all to include purely psychic motivations alongside material and monetary motivations in free-market economic theory; it is essential in fact, and the best economic thinkers (including Mises and Rothbard) have done so explicitly. Some unhelpful mathematical models of fanciful static economies constructed by neoclassical economists rely on the artificial assumption in question, but these models can be rejected entirely without doing any damage whatsoever to the main body of free-market economic theory.
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