Many fools, eager to part with their money, have wasted their time on psychics. Any extremely useful talent or skill will be immediately identified by the market. If psychics really existed, we would not need to search far and wide for them. We could simply examine markets that would most likely attract psychic 'talents'.
Consider gambling in casinos. Any person who actually possessed psychic abilities could live the life of a gambler and read people's minds at the card table. There would be no educational degree required and no special skills necessary other than psychic ability.
However, do we actually see people with psychic abilities in casinos who never lose? No, of course not. And if psychics are not present in an area of the market where their 'talents' would produce the biggest payoffs, then they do not exist.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Some would argue that psychics would want to obfuscate their skills in order to keep gambling or to avoid persecution. However, it would be to the benefit of psychics in a free market to reveal their skills. People with such skills would be instantly hired by any company or government in the world as advisors. The bidding would be extremely high for psychic talents. Since psychic advisors for companies do not exist, the market has shown that they are in fact frauds.
Fortunetellers are also notorious cheats. The free market would place these people in politics predicting the fate of world leaders and nations. One could make a fortune in sports gambling as well with fortune telling ability. If you could truly see the future, your options would be endless. The stockbrokers of Wall Street would all be fortunetellers instead of educated speculators.
Fortunetellers read your palm for a few dollars. This shows that they are definitely not maximising their supposed potential. Why would the market give them such a job with their skills? Some would say scepticism. This cannot be true because the market eventually selects what works best. If something works every time, the market accepts it as legitimate. Even in the presence of many fraudulent fortunetellers, the real ones would emerge at the top of the market through competition. From that point, fortunetellers could enter whatever financially maximising field that they desire.
Faith healers fall into the same category as psychics and fortunetellers. The market chooses what works. If these healers worked better than modern medicine, the healers would be at the top of the market while modern medicine would become obsolete.
Scepticism as the reason for faith healers not having prominence does not hold up here either. The market chooses what works especially in life and death situations. When a person has cancer, there is no room for scepticism. A person must choose the option that works best. That option is modern medicine. Faith healing is rarely used because it does not work. If people were healed better by faith healing, anyone with any sense would go to these faith healers. But, the market has already proven the better choice is modern medicine.
Last is the myth of politicians. There can be no such profession in a free market. Politicians do not arise through free market competition. Politicians, inherently, must influence and coerce their way to the top.
Even heroic politicians like Ron Paul have not achieved their positions through free-market means. Ron Paul is one of the finest men ever to serve the US House of Representatives. But even Ron Paul explains that he does not view himself as a politician but rather an educator.
Among his colleagues, his performance is not evaluated in the same way the free market evaluates employees in a private company. Indeed, he is not considered 'successful' by the standards of conventional politics.
If Ron Paul were not to get re-elected, it would not be because he was a bad congressman. In politics, the one who is most successful in using deception and coercive wins. In a free market, the person who performs the best for others in the framework of voluntary exchange wins.
Thievery and chicanery are essential in this political process. The free market relies on voluntary agreements. A voluntary agreement is an agreement that mutually benefits both parties.
A politician cannot help one person without first stealing from someone else. This forced redistribution is anti-free market because the redistribution is not voluntary. People have already voted for their desires on redistribution and charity through their own bank accounts. The charitable offerings voluntarily approved show true desires.
This theft by the government is necessary to achieve the most power and influence. Theft is dishonest. Hence, being a 'good' politician must also always be dishonest and involve theft.
The free market rejects theft. Murray Rothbard excellently drew the connection between thieves and the government in 'Man, Economy, and State' by saying:
'If governments budget their revenues and expenditures, so must criminals; where a government levies taxes, criminals extract their own brand of coerced levies; where a government issues fraudulent or fiat money, criminals may counterfeit. It should be understood that, praxeologically, there is no difference between the nature and effects of taxation and inflation on the one hand, and of robberies and counterfeiting on the other.
'Both intervene coercively in the market, to benefit one set of people at the expense of another set. But the government imposes its jurisdiction over a wide area and usually operates unmolested. Criminals, on the contrary, usually impose their jurisdiction on a narrow area only and generally eke out a precarious existence. Even this distinction does not always hold true, however. In many parts of many countries, bandit groups win the passive consent of the majority in a particular area and establish what amounts to effective governments, or States, within the area. The difference between a government and a criminal band, then, is a matter of degree rather than kind, and the two often shade into each other.'
Government spreads further deceit through the predictions of the US Federal Reserve, for instance, or the Congressional Budgeting Office. If these groups are so accurate, why do they not work? Why do financial companies constantly search for further answers to trends in the economy when people such as Alan Greenspan are supposedly so prescient?
The market searches for further answers because the Federal Reserve are constantly wrong. They are amateurish fortunetellers. When they predict something generally correctly, they are hailed as geniuses to the Nth degree. However, we all know that more times than not their predictions are horribly incorrect.
When these economic forecasters claim that the war in Iraq or Hurricane Katrina relief will cost a certain amount, they are telling you no more truth than a palm reader. They looked into the face of the problem and then guessed the kind of future it holds just like a palm reader does with his customers.
How did President Bush determine that the Katrina relief would cost exactly $200 billion dollars? There is no actual proof of this cost. The cost can only be determined when private enterprises have negotiated all deals necessary for repairs. All of these deals cannot be simultaneously calculated.
The war in Iraq is similarly laced with numerous calculations which could only have been picked out of a crystal ball. Former Bush economic advisor, Larry Lindsey, claimed a cost of $200 billion. US Democrats put their two cents in by suggesting $93 billion. White House Office of Management and Budget Director, Mitch Daniels, guessed $50 to $60 billion based on the First Gulf War. But only if apples were oranges would the First Gulf War costs compare to the new Iraq Debacle.
In a CBO letter to the US Congress dated September 30th 2002, the CBO pretends to even calculate the amount of ammunition that will be used each month during different levels of the war. This is as bad as old Soviet style economic calculation. The CBO even admits, 'CBO has no basis for estimating the number of casualties from the conflict...'. If you can't estimate casualties, how can you possibly estimate the amount of ammunition to be used?!
Economic calculation in its many different forms ranging from $50 to $200 billion can never hit the mark. Only the market determines the true cost of anything.
Predictions on ammunition spent and durations of war are as good as the predictions of a fortuneteller. The future is unknowable by both fortunetellers and economic forecasters. The market determines all future and final costs.
The future is impossible to see or calculate. This has been proven through the market by not empowering fortunetellers and palm readers. Economic calculation of future events is similarly impossible. Error after error has shown the mistakes of economic calculation. Why does then it persist?
Because the free market is not involved in the process. No one is replaced in the government for making mistakes on budgets. There is no profit incentive. Without the incentive, any number is thrown out to satisfy particular groups or political motivations. The incentive of coercion is the only extant incentive in politics.
With coercion, the act of theft and misinformation about the future is proliferated to the masses.
By Vedran Vuk
Vedran Vuk is a major in economics and finance at Loyola University of New Orleans. The above essay first appeared on https://www.mises.org - the website of the Ludwig von Mises Institute.
