Michael McKay, New Publication from the Libertarian Alliance
- Dear All,
Here is a new publication from the Libertarian Alliance:
Austrian Economics and Anarcho-Capitalism: Peace, Prosperity and Freedom
Personal Perspectives No. 27
ISSN 0267-7156 (print)
ISSN 2042-275X (online)
© 2011: Libertarian Alliance; Michael McKay
Austrian Economics is Reality Economics
I am a businessman which is to say I am a professional calculator of risk and risk taker. I also am the guy who faces the unknown and the unknowable; this is something extra special which economists Frank H. Knight and Ludwig von Mises called ‘Uncertainty’.
Risk and uncertainty are always there and they both are something everyone wishes would go away. At least with Risk you can calculate probabilities; but there are also things that are totally unknown and unknowable – these are those pesky uncertainties about the future. Understanding risk and uncertainty and our willingness – or not – to take on risk and uncertainty tells us a lot about ourselves and how we approach the world.
For example, in The Concise Guide to Economics (Ludwig von Mises Institute; 3rd edition, 2007) author Jim Cox says that the entrepreneur risks and waits and you should note these are two things that the employee cannot do – the employee must be pretty darn sure that they are going to get paid at the end of the week or they just won’t show up! The entrepreneur can’t just quit like that. He doesn’t know if there will be money left over so that he too can get paid; he must risk and wait to see.
Now risks are something that you can pretty much figure out; you can calculate the probabilities of whether the Sun is going to come up tomorrow or whether people will sprout wings and start flying tomorrow.
An entrepreneur looks into the future and looks for these probabilities and makes an educated guess. If he guesses wrong he suffers. If a sudden game changing event occurs that he could not possibly have seen coming he suffers. Back in New Orleans in 2005, all the best planning for that new store, restaurant or tourist business wouldn’t have helped a bit when Hurricane Katrina suddenly blew in and put you out of business. Here in Iowa City in 2009 when a flood, the likes of which had never been seen before by any living person, destroyed many businesses that went, literally, under.
More at http://www2.libertarian.co.uk/?q=node/367 <http://www2.libertarian.co.uk/?q=node/367>
Director, The Libertarian Alliance (Carbon Positive since 1979)
sean@... <mailto:sean@...> Tel: 07956 472 199
Skype Username: seangabb
Postal Address: Suite 35, 2 Lansdowne Row, London W1J 6HL, England
Wikipedia Entry: http://tinyurl.com/23jvoz <http://tinyurl.com/23jvoz>
What would England and the world have been like in 1959 if there had been no Second World War? For one possible answer, read Sean Gabb's new novel "The Churchill Memorandum". If you like Bulldog Drummond and Biggles and the early James Bond, this will be right up your street: http://tinyurl.com/39lpade <http://tinyurl.com/39lpade>. Don't be frightened of the TinyURL - the original is just too long for a sig file.
[Non-text portions of this message have been removed]