In the Winter 2016 issue of The Quarterly Journal of Austrian Economics, Rahim Taghizadegan and Marc-Felix Otto discuss how a “violence cycle theory” can be built upon the study of how people obtain goods through coercion.
ABSTRACT: As the first application of the praxeological discipline of “Cratics” (Taghizadegan and Otto, 2015), a theory of the supply and demand of bads is developed. On this foundation, a violence cycle theory will be introduced in analogy to the praxeological business cycle theory (according to Ludwig von Mises). Central to this approach are the subjective perceptions of threats and possible bluffs regarding the backing of those threats. Such a violence cycle theory can explain the stability of structures of violence and reveal new interpretations of the “long peace” hypothesis.
Comparing violence cycle theory to business cycle theory
Taghizadegan and Otto make an interesting parallel Austrian business cycle theory and their violence cycle theory.
Austrian business cyle theory
According to Austrian economics, an economy is best coordinated when its participants are able to freely buy and sell goods to whomever they want. That way, the goods that are available, and the prices at which they’re offered, meet the most urgently-felt needs of consumers. That includes the availability of money, the price of which is the interest rate. When market participants are unencumbered, there is sound coordination not only between buyers and sellers, but also between present consumption and anticipated future consumption.
However, according to ABCT, when interest rates are brought down (through whatever means) to encourage lending, a tension arises between present consumption and anticipated future consumption. Capital projects that create the business cycle boom are built on the assumption that future consumption will support its financing, when that isn’t the case. When it becomes clear that those projects will not become profitable, the bust occurs, resulting in a recession, which is necessary to bring the economy back into proper alignment.
Violence cycle theory
In an earlier paper, Taghizadegan and Otto developed the praxeological discipline of “cratics”, which is a theory of the supply and demand of “bads”. A bad is a negative outcome that a person would experience if it occured. Person X would threaten person Y with bad outcome B unless Y provides X with good G instead. Rather than an economic exchange, through which both parties would benefit, it would be a “cratic” (or in Franz Oppenheimer’s framework, political) exchange, though which the negative utility of giving up good G is less than the negative utility of experiencing bad B.
One consequence of the political “transaction”, should Y believe that X is willing to carry out the threat, is that person Y feels aggreived because of the harm X inflicted upon him. However, if X continues to feel comfortable threatening Y to receive more goods from him, that sense of feeling persecuted will grow.
Absent such persecution, if people were able to interact with other on a voluntary basis, there wouldn’t be a developed sense of injustice among a certain group of people. While one person may have a claim against another person because of a particular wrong, freely developed dispute resolution procedures should allow those specific people to address that issue.
However, if a class of people were capable of extracting resources from the rest of the population by invoking a constant threat of punishment for noncompliance, this provides the conditions for developing a “violence cycle”. On the surface, there is very little overt violence in the community. However, as time passes, the population’s trust in its overlords diminishes. Once it evaporates, there is a significant risk of a violent backlash.
Today’s cratic “booms”
If we applied this line of reasoning to today’s political environment, one can see at least two cratic “booms”: the pervasive leftism in Western governments, and American foreign policy.
We can also see the beginnings of backlashes against both booms. With regard to Western leftism, Brexit, the election of Trump, and central Europe’s pushback against Europe receiving enormous waves of migrants are the early, crude reactions to an ideology that seeks that subsume people into an increasingly centralized, government-coordinated society. Similarly, Russia, China, and militant Islam are reacting against an American foreign policy that assumes that the planet is a mere object with which to manipulate.
A promising theoretical development
Taghizadegan’s and Otto’s development of a violence cycle theory is, indeed, a promising one. Among other things, it bolsters my thought that Rene Girard’s Mimetic Theory, which studies how people develop their desires through identifying the desires of their models, can both inform and reinforce praxeology. By further exploring praxeology in general, and cratics in particular, hopefully there can arise a scientific language that will reinforce the urgent need for people to interact peacefully with one another so that everyone may prosper and flourish.
Source: A Simple Fool