Posts

Lessons from the Richest Duck in the World by Robert Anthony Peters

Scrooge is an unlikely name for a hero. Since Dickens’s A Christmas Carol, it has elicited thoughts of disagreeable skinflints. That all changed with Scrooge McDuck.

At first, Donald Duck’s Uncle Scrooge was quite Dickensian in character, but creator Carl Barks knew that a churlish miser would not sustain an audience’s sympathy. To really give this character legs (or wings), he would have to give him the kind of morals that resonate with readers.

It worked. Disney’s Duck universe has been popular for over 60 years. My generation enjoyed Duck Tales on TV. An older generation avidly read Uncle Scrooge comics, the first issue of which has Scrooge explaining how he earned his fortune: “I made it by being tougher than the toughies, and smarter than the smarties! And I made it square!”

Barks created a wealth of economic lessons through fables that are still enjoyed around the globe today.

A Modern-Day Aesop

Barks was born in rural Oregon to a farming family at the turn of the 20th century. Growing up, he had a hardscrabble existence. Due to several moves, living far from schools, and poor hearing from childhood measles, he had minimal education. He worked as a farmer, cowboy, swamper, railroad worker, printer, and more. His first gig as an illustrator was for a men’s humor magazine. In late 1935, he discovered an ad in the newspaper for Disney. Though the job offered only half his current pay, he decided to join the animation department and eventually the comic book publisher. Barks was a man who was willing to work hard, work well, and take a chance on great possibilities. The storytelling in these comics featured Barks’s strongly individualist outlook, his belief in the entrepreneur, and his optimism in markets resulting in human benefit.

Trade, Trade Again

Before Barks created Uncle Scrooge, he was already exploring the beneficial nature of trade in 1947’s “Maharajah Donald,” an issue of the Donald Duck comic book series, which featured Donald and his nephews Huey, Dewey, and Louie. The story begins with the boys cleaning out the garage at Donald’s behest, with the understanding that they could keep whatever he did not want. Predictably, he wanted all the things and was only willing to part with one stub of a pencil that’s “not worth a thing.” Less than thrilled, the boys keep it to trade for something else. They run into Piggy, who offers them a ball of string. Figuring it is not worse, they trade. As luck would have it, they run into a kid whose kite flying is limited by his length of string. Eager to get it really soaring, he trades them his knife for their string. One of the nephews feels a pang of guilt, but in short order, the other two chime in, “Don’t let it bother you” because “he’s happy!”

Eventually, they trade up to a pearl and decide to cash in. There happens to be a man in the jewelry store who was about to sail to India to obtain a pearl much like what they have in their hands. They exchange it for the steamboat ticket, which Donald promptly steals from them. Donald boards, the nephews stow away, and they arrive in India, only for Donald to run afoul of the local magistrate to the point of being fed to the royal tigers. While wracking their brains to find ways to save him, his nephews run over their list of assets: “We don’t know a soul we could ask for help … and we haven’t a cent for bribing the guards … we just can’t do something that is impossible.” But lo and behold, what do they spy next but an old stub of a pencil! To which the nephews declare, “We’re rich!” They then commence trading goods until they have acquired a creative solution to free their uncle from his predicament.

The story presents a cornucopia of economics lessons: subjective value, mutual gains from trade, and entrepreneurship. What better display of subjectivity than to have your life saved by the application of market exchange to a good that you considered worthless? Mutual gains are clear by the voluntary nature and perceived benefit of each party to the trade. (Most poignant is the Kirznerian alertness to the pencil and its use in trade.)

A Land without Greed

“Tralla La” is the tale of an exasperated Uncle Scrooge. Tired of being hounded for his wealth and time by charities, businessmen, and tax collectors, he finally snaps, telling Donald, “I want to go someplace where there is no money and wealth means nothing!” From his physician, he hears of the land of Tralla La, a land without gold, jewels, or money, deep in the Himalayas. Scrooge, Donald, and nephews set forth, and as they fly overhead, they see a land of abundance. The leader explains, “We Tralla Lallians have never known greed! Friendship is the thing we value most!”

All is serene until a farmer discovers a bottle cap that Scrooge had carelessly tossed out of the plane window. The honest peasant attempts to return it to Scrooge, who declines it, considering it worthless. Subjective value makes its appearance here, when the farmer and his fellow villagers invest this item with great desirability, leading to a bidding war that goes from 10 sheep to 20 and finally to a year’s yield of rice. When it is discovered that Scrooge has a case of bottles, all with caps, the Tralla Lallians attempt to purchase it, to no avail. Finally, the mob declares him a “meanie” and wants his taxes raised. The only solution to this problem is to call in an air strike — not of bombs, but bottle caps.

Even a humble bottle cap can spark desire because of its scarcity. Its price will be high if it is the only one around and perceived to have value. The results of “Helicopter Ben’s” strategy are on display here as well. Though the Federal Reserve may believe that it can make people wealthier by increasing the money supply, Uncle Scrooge knows that increasing the number of bottle caps will diminish their worth.

From Riches to Rags to Riches

Finally, and probably the most famous Uncle Scrooge story in economics circles, we have “A Financial Fable.” Beginning as a bucolic idyll, the story opens with  the entire Duck clan working the fields and tending the livestock. The nephews sing the praises of hard work while Donald complains, wanting money for nothing.

Scrooge investigates his new bank, a corn crib, hiding his money in plain sight. This may not have been his brightest idea: a cyclone whips through and takes all of his money, scattering it over the countryside. The nephews are distraught, but Scrooge simply replies, “If I stay here and tend to my beans and pumpkins, I’ll get it all back.”

Donald and the rest of the country quit their jobs and set off to “see the world.” Meanwhile, Scrooge and the boys continue to labor on their farm. With no one else working and nothing being produced, Donald and the rest of the world come straggling back. Scrooge is happy to feed them — at new market prices. Eggs are a million dollars apiece, cabbage is two million, and ham is a bargain at a cool trillion. With each purchase, the money from Scrooge’s corn crib trickles back and he becomes, yet again, the richest duck in the world.

With another “helicopter” scenario, we see the inflationary effects of a massive injection of money. We also get a glimpse into many aspects of wealth — how it is created, how it is maintained, and what happens when we redistribute in ways that are not related to market performance. Barks knew he was creating a morality tale of capitalism, admitting, “I’m sure the lesson I preached in this story of easy riches will get me in a cell in a Siberian gulag someday.”

Economic Tales

Economics is all around us — even in our comic books.

Now cable channel Disney XD has announced plans to relaunch Duck Tales in 2017. As long as the show sticks to the characters and stories inspired by the great Carl Barks, it will offer us plenty to enjoy — and economics lessons that are sure to fit the bill.

Robert Anthony Peters

Robert Anthony Peters is an actor, director, producer, and member of the FEE alumni advisory board.

Amazon Liberates Readers: The Digital Era Creates Gardens without Gardeners by Stewart Dompe

Science fiction author Ursula K. Le Guin thinks Amazon represents everything that’s wrong with capitalism:

If you want to sell cheap and fast, as Amazon does, you have to sell big. Books written to be best sellers can be written fast, sold cheap, dumped fast: the perfect commodity for growth capitalism.

The readability of many best sellers is much like the edibility of junk food. Agribusiness and the food packagers sell us sweetened fat to live on, so we come to think that’s what food is. Amazon uses the BS Machine to sell us sweetened fat to live on, so we begin to think that’s what literature is.

She blames the online retailer for perpetuating a system that encourages authors to produce “sweetened fat” instead of the literature that nourishes the soul. She attacks the marketing of best seller lists (“BS lists”), and it would not be a mistake to infer that she believes these lists are comprised of an entirely different sort of “BS.” She writes:

Best Seller lists are generated by obscure processes, which I consider (perhaps wrongly) to consist largely of smoke, mirrors, hokum, and the profit motive. How truly the lists of Best Sellers reflect popularity is questionable.

If the literary world is a garden, then Amazon would be a gardener whose liberal use of fertilizer, Le Guin contends, has encouraged the growth of weeds. But her anger is misplaced. There is no gardener — and the garden is more beautiful than ever.

Spontaneous Order in the Book World

Amazon is a consequence, not the cause, of the digital revolution. More books are being published every year because it is now easier to become an author. Traditional publishers printed 316,480 new titles in 2010. That’s 100,000 more than they published in 2002, but this figure is dwarfed by the 2.7 million “nontraditional” titles that were published in 2010. The importance of publishing houses, bookstores, and critics has eroded because authors can now bypass these middlemen and sell ebooks directly to the public. All it takes is a website and some social-media savvy.

amazon quoteSome will argue that with this large increase in quantity, the weeds will start to outnumber the roses. The problem with this argument is that it misunderstands the market segmentation that is occurring. Simply put, what is a weed to one is a rose to another. Publishers need to sell a minimum number of books to recover the substantial fixed costs of printing. These financial pressures mean that even a well-written manuscript would be rejected if it were judged to appeal to too small an audience. As the cost of publishing has fallen, manuscripts that were previously rejected are now being published, and authors can now target smaller audiences. It is therefore unsurprising if readers find that most books conflict with their aesthetic preferences — they are not the intended audience.

Abraham Lincoln, Vampire Hunter will never sit on my parents’ nightstand. That is neither a tragedy nor unexpected, but to the people who love historical horror fiction, the world is a better place with that book in it. More writers can now pursue their dreams of becoming authors. The garden is growing larger and more diverse.

What Hath Marketing Wrought?

Le Guin is concerned about the influence of marketing in creating best seller lists. But even with a much larger budget than what book publishers have, Hollywood seems incapable of ensuring against $100 million bombs like Tomorrowland. Producers may broadly know what “the people” want, but that knowledge offers little guidance in ensuring a commercial success.

If you had told me a few years ago that one of the most popular book series in America, the Twilight saga, would be about a love triangle between a mopey teenage girl, a werewolf, and a centuries-old pedophile, I would have laughed in your face. Another best seller, Fifty Shades of Grey, started as Twilight fan fiction. In what smoke-filled room was it decided to sell erotica at Walmart?

Best sellers are an interesting phenomenon, because book consumption — once an intimate connection between reader and writer — has transformed into a widely shared social experience. These shared experiences create bonds between strangers. Art is a bridge that connects otherwise lonely islands of experience. When Mark Zuckerberg announced his book club, he was inviting countless strangers to join him in thinking and talking about the world.

Producing a best seller is harder than it looks. What sells or doesn’t sell — and what becomes the next breakout hit — is never the outcome of design. Writers and publishers experiment. Readers respond. Social media allows the cycle to accelerate, and sometimes the results can seem bewildering.

In this new era, more people are dedicating their lives to creating art. It is hard to find fault with either those pursuing their dreams or those paying them to do so. There are more books than we can read in a lifetime. If there is anything to regret, it is our pitifully short lives, not the literary bounty before us.

Le Guin is a brilliant novelist, but she fundamentally misunderstands the nature of the 21st-century market. The challenge now facing all readers is not to criticize the abundance of choices but to develop better filters for finding the literature that appeals to their interests. Luckily, Amazon has some recommendations you may be interested in viewing.

Stewart Dompe

Stewart Dompe is an instructor of economics at Johnson & Wales University. He has published articles in Econ Journal Watch and is a contributor to Homer Economicus: Using The Simpsons to Teach Economics.

AMC’s “Halt and Catch Fire” Is Capitalism’s Finest Hour by Keith Farrell

AMC’s Halt and Catch Fire is a brilliant achievement. The show is a vibrant look at the emerging personal computer industry in the early 1980s. But more than that, the show is about capitalism, creative destruction, and innovation.

While we all know the PC industry changed the world, the visionaries and creators who brought us into the information age faced uncertainty over what their efforts would yield. They risked everything to build new machines and to create shaky start-ups. Often they failed and lost all they had.

HCF has four main characters: Joe, a visionary and salesman; Cameron, an eccentric programming geek; Gordon, a misunderstood engineering genius; and Gordon’s wife, Donna, a brilliant but unappreciated housewife and engineer.

The show pits programmers, hardware engineers, investors, big businesses, corporate lawyers, venture capitalists, and competing start-ups against each other and, at times, shows them having to cooperate to overcome mutual problems. The result is innovation.

Lee Pace gives an award-worthy performance as Joe MacMillan. The son of a never-present IBM tycoon and a negligent, drug addicted mother, Joe struggles with a host of mental and emotional problems. He’s a man with a brilliant mind and an amazing vision — but he has no computer knowledge or capabilities.

The series begins with his leaving a sales job at IBM in the hope of hijacking Cardiff Electric, a small Texas-based computer company, and launching it into the personal computing game.

As part of his scheme, he gets a low-level job at Cardiff where he recruits Gordon Clark, played by the equally talented Scoot McNairy. Enamored with Gordon’s prior writings on the potential for widespread personal computer use, Joe pleads with Gordon to reverse engineer an IBM-PC with him. The plot delves into the ethical ambiguities of intellectual property law as the two spend days reverse engineering the IBM BIOS.

While the show is fiction, it is inspired in part by the real-life events of Rod Canion, co-founder of Compaq. His book, Open: How Compaq Ended IBM’s PC Domination and Helped Invent Modern Computing serves as a basis for many of the events in the show’s first season.

In 1981, when Canion and his cohorts set out to make a portable PC, the market was dominated by IBM. Because IBM had rushed their IBM-PC to market, the system was made up entirely of off-the-shelf components and other companies’ software.

As a result, it was possible to buy those same components and software and build what was known as an IBM “clone.” But these clones were only mostlycompatible with IBM. While they could run DOS, they may or may not have run other programs written for IBM-PCs.

Because IBM dominated the market, all the best software was being written for IBMs. Canion wanted to build a computer that was 100 percent IBM compatible but cheaper — and portable enough to move from desk to desk.

Canion said in an interview on the Internet History Podcast, “We didn’t want to copy their computer! We wanted to have access to the software that was written for their computer by other people.”

But in order to do that, he and his team had to reverse-engineer the IBM BIOS. They couldn’t just steal or copy the code because it was proprietary technology, but they could figure out what function the code executed and then write their own code to handle the same task.

Canion explains:

What our lawyers told us was that not only can you not use [the copyrighted code], anybody that’s even looked at it — glanced at it — could taint the whole project. … We had two software people. One guy read the code and generated the functional specifications.

So it was like reading hieroglyphics. Figuring out what it does, then writing the specification for what it does. Then once he’s got that specification completed, he sort of hands it through a doorway or a window to another person who’s never seen IBM’s code, and he takes that spec and starts from scratch and writes our own code to be able to do the exact same function.

In Halt and Catch Fire, Joe uses this idea to push Cardiff into making their own PC by intentionally leaking to IBM that he and Gordon had indeed reversed engineered the BIOS. They recruit a young punk-rock programmer named Cameron Howe to write their own BIOS.

While Gordon, Cameron, and Joe all believe that they are the central piece of the plan, the truth is that they all need each other. They also need to get the bosses and investors at Cardiff on their side in order to succeed, which is hard to do after infuriating them. The show demonstrates that for an enterprise to succeed you need to have cooperation between people of varying skill sets and knowledge bases — and between capital and labor.

The series is an exploration of the chaos and creative destruction that goes into the process of innovation. The beginning of the first episode explains the show’s title:

HALT AND CATCH FIRE (HCF): An early computer command that sent the machine into a race condition, forcing all instructions to compete for superiority at once. Control of the computer could be regained.

The show takes this theme of racing for superiority to several levels: the characters, the industry, and finally the economy and the world as a whole.

As Gordon himself declares of the cut-throat environment in which computer innovation occurs, “It’s capitalism at its finest!” HFC depicts Randian heroes: businessmen, entrepreneurs, and creators fight against all odds in a race to change the world.

Now into its second season, the show is exploring the beginnings of the internet, and Cameron is running her own start-up company, Mutiny. I could go on about the outstanding production quality, but the real novelty here is a show where capitalists, entrepreneurs, and titans of industry are regarded as heroic.

Halt and Catch Fire is a brilliant show, but it isn’t wildly popular. I fear it may soon be canceled, so be sure to check it out while it’s still around.


Keith Farrell

Keith Farrell is a freelance writer and political commentator.

A Shrine to a Socialist Demagogue by Lawrence W. Reed

MANAGUA, Nicaragua — It’s May 27, 2015. Driving south on First Avenue toward Masaya on a hot, late-spring day in the Nicaraguan capital, my eye caught an image in the distance. “That looks like Curly from The Three Stooges!” I thought. Nah, what would he be doing here? Nyuk. Nyuk.

As we approached, I suddenly realized it only resembled Curly. It was actually somebody considerably less funny. The statue was a garish, tasteless manifestation of the late Venezuelan socialist strongman Hugo Chavez, surrounded by ugly, orange curlicues. I repressed the urge to gag as I stopped to take this photo:

Hugo Chavez shrine

This tribute to a man whose ceaseless demagoguery ruined his nation’s economy is the doing, of course, of Nicaraguan president Daniel Ortega and his party. Ortega, like Chavez, engineered constitutional changes that may make him effectively president for life. He has worshiped state power since the 1970s. He was a Cuban-trained Marxist and cofounder of the Frente Sandinista de Liberación Nacional, the Sandinistas. I visited the country five times in the 1980s to interview key political figures, and whenever I was there, Ortega was pushing government literacy programs; meanwhile, his government was harassing and shutting down the opposition press.

Back in the 1980s, Ortega relied heavily on subsidies from his Soviet and Cuban sponsors. But now that the Soviets are ancient history and the Cuban economy is on life support, he’s had to moderate. Nicaragua is a very poor country. Its per capita GDP is about a third of the world average, better than Yemen’s but not as deluxe as Uzbekistan’s. According to the 2015 Index of Economic Freedom, however, it’s ranked better than you might expect at 108th in the world. Seventy countries are actually less free.

Who do you think is ranked at the very bottom, at 176, 177, and 178?

None other than the workers’ paradises of Venezuela, Cuba, and North Korea.

If you want a glimpse of the current state of the Chavez/Maduro experiment in Venezuelan socialism, look no further than the relative scarcities of toilet paper (you’d better bring your own if you visit) and paper money (more abundant than ever at 510 percent inflation).

I asked my old friend Deroy Murdock, senior fellow with the Atlas Network, Fox News contributor, and keen observer of affairs in the Americas: How would you assess the legacy of the Venezuelan caudillo memorialized by Ortega’s regime in Nicaragua?

“Hugo Chavez arrived in Venezuela, determined to make his country a gleaming showcase of socialism, and renovate Cuba in the process,” Murdock said. “Now, Chavez is dead, Castro still lives, and both countries remain in dire straits. Chavez’s legacy is the enduring lesson that big government is bad, and huge government is even worse.”

Indeed. Seems pretty self-evident whether you look at the numbers from afar or walk the streets in person. Venezuela’s economy has been in free-fall for almost all of the past 15 years.

But there I was, gazing at a giant Hugo in Managua, a monument intended to say, “Way to go, man!” One wonders where an impoverished country gets the money or even the idea to construct such a hideous gargoyle.

Then I realized the answer: Ortega’s Nicaragua is run by socialists. And by typical socialist reasoning, you can be an architect of disaster but reckoned to be a “man of the people” just by claiming to be one.

If you produced the same results while advocating capitalism, you’d be reckoned a monster.


Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

The Good Life and the Sanction of the Victim by Steven Horwitz

Few libertarian authors generate more heated disagreement than Ayn Rand. Whatever her flaws, she could often be a very sharp observer of human behavior and human culture, and there are ways to put those observations into use beyond politics and in interpersonal relationships instead.

The primary moral message of Atlas Shrugged, I would argue, is the idea that evil has, to a large degree, only the power that its victims grant to it.

Consider the image that provides the book’s title. Francisco D’Anconia asks a party guest,

If you saw Atlas, the giant who holds the world on his shoulders, if you saw that he stood, blood running down his chest, his knees buckling, his arms trembling but still trying to hold the world aloft with the last of his strength, and the greater his effort the heavier the world bore down upon his shoulders — what would you tell him to do?

Francisco answers his own question: “To shrug.”

The point here is that Atlas is only a victim because of his willingness to think he is morally obligated to suffer, to continue doing the thing that is crushing him.

This concept is refined further in the book and is best summarized as the importance of “the sanction of the victim.”

In the book’s political economy, this idea refers to the fact that the creators and producers continued to work hard at what they love, even as those around them made it increasingly more difficult to do so.

Like Atlas, the weight of the “looters” continued to bear down on the attempts of the producers to keep the railways and steel factories open. What John Galt does is to try to convince them all that it is time to shrug — to withdraw their sanction from the very code that made them victims.

For most of the main characters in the book, the key moment is when they realize they are complicit in their own unhappiness because they have accepted the moral code of their victimizers. This is why Rand insisted, both in her novels and nonfiction, on the importance of philosophy, and especially ethics.

Characters like Hank Rearden don’t think they need philosophy as they can just continue doing what that they love and ignore the people who try to bring them down. But without philosophy, Rand argues, Hank and the others who Galt tries to get to join him in his strike cannot understand their own victimization.

Choosing to ignore ethics simply allows others to dictate the terms of morality, and to the extent that the producers of the world tacitly or explicitly accept the looters’ morality, they have given them “the sanction of the victim.”

Whether it’s Atlas shrugging, Rearden leaving his unhappy marriage, or capital going on strike, all of them are connected by the refusal to bear a burden that has been self-imposed by accepting without question the (mistaken) moral code of others.

This basic idea also has relevance outside the context of political economy, and understanding it can make your life a better place.

Rearden’s relationship provides one example. If you are in a relationship where it seems impossible to please your partner, despite your best honest efforts to do so, it’s likely to make you miserable. Here is where it’s worth asking if you bear some responsibility by having bought into your partner’s problematic value scale that makes pleasing him or her impossible.

By agreeing to a set of rules that has rigged the game against you, you agree to lose and forgo your own happiness. You have given that person the sanction that turns you into a victim by agreeing to a code that ensures you can never win.

Recognizing this point can improve your life immensely if you simply shrug. Naming what’s happening and refusing to agree to the other person’s rules is the first step to happiness, either by changing the rules or ending the arrangement. But you first must recognize the role played by your passive acceptance of a rigged system.

You can see this idea at work in the office as well. Co-workers who make you miserable often do so because they are able to convince you to play office politics by their rules they created, and those rules are likely to make you the loser. Again, recognizing that you do not need to accept those rules, and sanction the implicit moral code they involve, is the first step in freeing yourself from your victimization.

What Atlas Shrugged ultimately asks us to consider is whether we have thought carefully about the moral rules and ethical principles that we explicitly or implicitly accept. If you are unhappy with your life, and especially with your various professional or interpersonal relationships, it is worth asking whether that unhappiness is of a kind with Atlas trying to carry a weight that he cannot possibly support.

If so, withdraw your sanction of the rules of a rigged game. Shrug off that weight. Find new rules or different players. As Rand emphasized, your happiness is within your grasp if only you recognize your role in making it possible:

Do not let your fire go out, spark by irreplaceable spark, in the hopeless swamps of the not-quite, the not-yet, and the not-at-all. Do not let the hero in your soul perish, in lonely frustration for the life you deserved and have never been able to reach. The world you desire can be won, it exists, it is real, it is possible, it’s yours.

Steven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Microfoundations and Macroeconomics: An Austrian Perspective, now in paperback.

Is Mad Max the End of Freedom? by Jeffrey A. Tucker

What a ride is the new Mad Max!

The desert scenes — filmed in Namibia and Australia — remind me of Lawrence of Arabia. So peaceful. At first. Then, in the first scene, Mad Max, who is forced to live off the land, eats a two-headed lizard whole and raw. Blech. But actually this sets up the whole atmosphere of extreme privation that dominates the film. The absence of material provision leads everyone to act in egregious ways.

Then the action starts. Huge and crazy looking cars, motorcycles, and trucks guzzling massive quantities of gas (who makes it all?), racing around the desert blowing each other up.

There are punks, zombied-eyed workers, disgustingly dirty workers and peasants, haggard women warriors, a gross-me-out dictator, a strange economy that seems to live off blood transfusions and mother’s milk, a tireless heavy-metal band with a flame-throwing guitar player riding around on a war truck, and many more wacky things.

The whole film is loud, eye-popping, jaw-dropping, crazy, insane, high-anxiety fun from first to last. It leaves you breathless. Then it turns out to be substantive in a philosophical sense, and even inspires with a message of triumph over despotism.

And yet, I was also reminded of my first experience watching the old Mad Maxin my youth. I had recently become convinced of the case for the free society. I had daringly embraced the conviction that it is not the state that holds society together and builds civilization.

Society itself — Bastiat and others convinced me — contains within it the capacity for its own ordering. Markets, property rights, and even law are emergent institutions that allow the creation of the good society. Accepting that meant departing from both right and left.

Somehow, and I’m not entirely sure why, the first viewing of the original film shook my convictions. Is this what freedom looks like? Yikes. I walked away from the film somehow fearing that I had embraced a political vision that would lead straight to the grim, chaotic — let’s use the word anarchic — world of Mad Max. There are no rules, only a vague semblance of morality, and social norms are made up on the spot.

Truly, is this what libertarianism is all about? It’s just an impulse, and one that actually makes no sense, though I can imagine many viewers would come away with that same fear. If this is the way the world looks without powerful central control, no thanks.

But think about it. The setting is usually described as “post-apocalyptic.”

Who destroyed the world (a question one character in the new version asks)? We don’t know for sure, but it’s a good bet that it is the same crew that, in the 20th century, blew up whole cities, dropped bombs on millions of innocents, slaughtered whole peoples in famines, gulags, work camps, death marches, and gas chambers.

I’m speaking of the state. That’s the only institution with means and the will to destroy civilization. So if I had to guess the answer to the question, I would guess: politicians and bureaucrats destroyed the world.

Plus, there is in fact a state, or at least a ruling class with power, in Mad Max.

His name is Immortan Joe. He wears a weird mask and has some strange breathing contraption on the back of his neck. He both controls all resources (including the most precious resource of all, water) and heads a religious cult in which all his followers think that perfect obedience will lead to eternal salvation. He commands them completely and totally.

He is also utterly lawless — any means to the end of keeping his power. That’s his one and only concern. He also happens to inhabit the only green spot in the whole region, monopolizing and devouring the earth’s most valuable resources.

Sounds like a state to me.

As for the rest of society, true, there is no law and nothing like stable property rights. Morality is pretty much out of the question. Even if you believe in right and wrong, the material privation is so intense that acting on moral postulates is out of the question. This is not society. This is society destroyed, a society reset, all norms and institutions for human cooperation erased.

The viewer can’t help asking the question: What would I do if I were in the situation?

Well, I would have to learn not to be squeamish about eating two-headed lizards raw. I would have to learn to be a good driver. I would have to learn how to stab and shoot to kill. I would have to get used to the sight of blood.

But most of all, if I wanted to play some part in improving this ghastly world, I would have to contribute my efforts to unseating the grotesque and loathsome Immortan Joe.

There are plenty of challenges in the Mad Max world. Extreme conditions of scarcity is just the most conspicuous. To solve that problem requires property rights, markets, capital accumulation, and long-term investment. These are great ideas. But they can’t be realized so long as there are thugs extant that will rob you of property the instant it starts to create wealth.

In other words, the problem in the Mad Max world is not too much freedom. It is that freedom is never given a chance to work due to the presence of tyranny. This is the source of the disorder, chaos, non-stop violence, and overall poverty and insecurity.

Until the tyranny is overthrown — until the head of the ruling class is dislodged from perch of power — there can be no hope whatever. In the end, the effort to unseat this jerk is led by women who escaped his clutches to live far outside the capital. They long for the freedom to put together something like a life.

To see that requires you look a bit below the surface.

The film does, in fact, reveal something important about sex/gender and politics: namely, that a consciousness of universal human rights and dignity is the product of civilization. A might-makes-right society of poverty and power will be highly exploitative of women. This much we know from history, and the film gets this right.

Finally, for an economist, there is a clever insight here concerning the ancient problem of the diamond/water paradox: Why is water, which is more necessary for life, cheaper than diamonds? Mad Max reveals the answer: It all comes down to marginal value and relative scarcities. In this society, people will do anything for a drop to drink. Or eat.

Thank you, thank you, freedom and trade, for rescuing us all from the world of Mad Max and Immortan Joe.

Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.