Economics of David D. Friedman’s “The Machinery of Freedom”: Some similarities and dissimilarities to the Austrian school

I just recently finished reading the 3rd edition of David D. Friedman’s book The Machinery of Freedom: Guide to a Radical Capitalism, which was published in 2014. The 1st and 2nd editions were published in 1973 and 1989 respectively.

The book attempts to explain how an anarcho-capitalist society might work in the future and draws from historical examples to demonstrate how various societies have already provided even the most widely-accepted minimal functions of government (police, courts, military) either within the borders of nation states but without their help or entirely without their existence. Societies and legal systems I noted from the book include: Saga period (medieval) Iceland (ch. 44), Rominchal gypsies (ch. 49), Somalialand (ch. 49), traditional Jewish and Islamic law, some others based on feud law (ch. 49), and the Comanche Native American tribe (ch. 52). In the case of medieval Iceland, it lasted almost 400 years as semi-stateless (from the years 870-1263CE): privately enforced legal rules and without an executive branch of government. As if that’s not fascinating enough, an equally interesting topic covered was the economic analysis of law, which Friedman covers in further detail in another book: Law’s Order: What Economics Has to Do with Law and Why It Matters, which I also look forward to reading.

What I wish to provide in a little detail here is how Friedman’s Chicago school approach to economics (drawing only from this particular book) differs from approaches of the Austrian school of economics. I say “approaches” (plural) because there is no unanimous agreement on every point within the Austrian school of thought nor or any other – at least there shouldn’t be or people have stopped thinking for themselves.[1]

In college I took the required mainstream economics courses like any other student and did a few independent studies in economics in addition to that. But it wasn’t until after college that I began to study the Austrian school on my own. So while I read through The Machinery of Freedom, for my own reference, I recorded things I noted about how his approach to economics differed from what I’ve learned from the Austrian school. Since economist friends of mine have already asked me about Professor Friedman’s economics, I decided to publish it here in case it may be helpful to others. Back in 2010 I also read about half of his book Hidden Order: The Economics of Everyday Life, but I had not, at that time, read much Austrian economics, so I would be unqualified to use material from that book in this analysis without reading it again.

The occurrences in which Friedman’s approach shares similarities with the Austrian school is by no means intended to say that he is in full agreement with any particular Austrian economist. In fact, as I understand it, he is quite proud to be Chicago. 🙂
Similarly, regarding the occurrences in which Friedman’s approach seems to diverge from the Austrian school, I don’t point them out in order to critique them myself.

All page numbers below correspond to the 3rd edition (print) of the book. I should mention that since it was published using Amazon’s Print-on-Demand, as far as I know, the author can make changes to the book at any time without this 3rd edition becoming a 4th. Therefore the page numbers I have provided below may also change.

 

Occurrences in which David Friedman seems to share similarities with the Austrian approach to economics in The Machinery of Freedom:

  1. Pg. 44: Critique of Marx – I have not read Eugen von Böhm-Bawerk’s books myself as of yet, but from what I understand, Friedman’s critique of Marx is the same as (or very close to) the critique that Böhm-Bawerk gave. Quoting Friedman in The Machinery of Friedman: “…paying for tools today and waiting for years to get the money back is itself a productive activity and that the interest earned by capital is the corresponding payment.”
  2. Pg. 45: Time preference – Although this concept is understood well in neoclassical economics, as far as I understand, it originates with Böhm-Bawerk.[2] This concept is key in the Austrian school and is used to explain interest rates. Here I quote Friedman: “Thus ten dollars today is worth more than ten dollars tomorrow. This is why interest rates exist, why, if I borrow ten dollars from you today, I must give back a little more than ten dollars tomorrow.”
  3. Pg. 49: Subjective theory of value – This concept goes back to Carl Menger’s critiques of David Ricardo and the classical economists’ “invariable measure of value.” It has, however, made its way into neoclassical economics.[3]
  4. Pg. 102: Socialist economic calculation debate – Friedman refers to Mises’ contributions to the socialist economic calculation debate and Mises’ book Socialism: An Economic and Sociological Analysis.
  5. Pg. 143: Rothbard quote – Friedman quotes Rothbard on limited government. He obviously does not endorse Rothbard’s economics, but Austrians might be interested to know it.[4]
  6. Pgs. 215-6: Denationalization of money – Every Austrian I am aware of supports the denationalization of money (although many strongly disagree with some of Hayek’s suggestions on the subject). Given that we live in a world of central banking and fiat money, some Austrians argue that since money is controlled by nation states it should at least be backed by gold, silver or some other “sound money” as to limit government spending, etc.

 

Occurrences in which David Friedman seems to disagree with the Austrian (or at least Misesian) approach to economics in The Machinery of Freedom:

  1. Pgs. 166-7: A priori theory of property rights – Hans-Hermann Hoppe has produced such a theory.
  2. Pgs. 212 & 277: Gross national product (GNP) – Friedman uses gross national product (GNP). Austrians don’t tend to like these macroeconomic statistics.[5] However, I’ve noticed in the past that if you go to the Mises Wiki and lookup particular countries (Albania for example), you will find GDP statistics referencing the World Bank as a source. 🙂
  3. Pgs. 256 & 263: Perfect competition – Friedman uses the concept “perfect competition.” Israel Kirzner in particular argues that the concept of perfect competition is contrary to the real meaning of competition. See one of Kirzner’s lectures on this here.
  4. Pgs. 259-60: Rationality and prediction – The rationality subject would require me to go a little more in depth than I am willing to here, but for those interested in a more in-depth analysis, see my paper with Carmelo Ferlito On Human Rationality and Government Control. Regarding prediction, Friedman states “The central assumption of economics is rationality, that individual behavior can best be predicted by assuming that each individual takes those actions that best achieve his objectives.”[6] Austrians make predictions of their own all the time (predicting an economic bubble will burst, for example), but the emphasis, when predictions do occur, is on “qualitative, theoretical pattern predictions about the discoordinating consequences of interventionism.”[7]
  5. Pgs. 281-2: Mixing labor with land as a justification for property rights – Friedman disagrees with Locke’s mixing labor with land as a sufficient justification for property rights. He revises Locke’s justification and argues that by mixing labor with land one acquires ownership of what one’s labor produced because one owns their own labor, but this does not provide justification for ownership of the land itself. Friedman admits that his revised version of Lockean appropriation “has its problems.”[8] Stephan Kinsella’s book Against Intellectual Property is also critical of Locke’s “mixing land with labor.” But Kinsella seems to disagree with Friedman on the point of owning one’s labor: “[T]here is no need to maintain the strange view that one ‘owns’ labor in order to own things one first occupies. Labor is a type of action, and action is not ownable; rather, it is the way that some tangible things (e.g., bodies) act in the world.”[9] Kinsella quotes from an article by Tom G. Palmer: “occupancy, not labor, is the act by which external things become property.”[10]
  6. Bonus: Rothbard and banking (not in the book) – In order to be fair to Professor Friedman’s work, I sent him an email with a rough draft of this blog post before publishing so that he could correct any misunderstandings I might have had about his ideas. He replied with one particular disagreement he has with Rothbard that did not make it to The Machinery of Freedom. I quote his email response to me here: “One disagreement with Rothbard… is over how a private monetary system would work. I would expect it to be fractional reserve, which Rothbard argued, I think implausibly, was necessarily fraudulent and so should be illegal. But Rothbard’s position is not, I believe, shared by all Austrians, perhaps not by most.”
    For those interested in more detail (from an anti-fractional reserve perspective), see chapter 11 (“A critical note on fractional-reserve free banking”) of Jesús Huerta de Soto’s book The Theory of Dynamic Efficiency. Huerta do Soto points out in a footnote that, “the recent interest in free banking and the development of the Fractional-Reserve Free Banking School stems from the book published by Friedrich A. Hayek in 1976 entitled… Denationalization of Money: The Argument Refined” (pg. 311).

 

Points that did not fit neatly into the categories above:

  1. Pgs. 265-7 & 320: Intellectual property rights (IPR) – It seems to be the overwhelming consensus among Austrians to not view IP as legitimate property (due to its artificial scarcity) and therefore not support monopoly privilege by the state. I tend to agree. In the book Against Intellectual Property, author Stephan Kinsella writes that “David Friedman analyzes and appears to endorse IP on ‘law-and-economics’ grounds, a utilitarian institutional framework.” Friedman doesn’t come out in favor of or against IPR in The Machinery of Freedom. He does analyze some costs and benefits of IPR in chapter 54 and concludes that chapter by stating that the desirability of IP laws is outside the scope of the chapter. However, he refers readers to two books: Against Intellectual Monopoly by Michele Boldrin and David Levine and his own book Future Imperfect, which includes a discussion on how IP protection can be provided “in other ways, for instance by contract.” Also, in the final chapter of The Machinery of Freedom (ch. 66), Friedman gives an encryption-based market solution for identifying original authors of work.
  2. Pg. 13: Use of the term “consumer sovereignty” – This one actually has little to do with Austrian economics except for the fact that Mises used the term consumer sovereignty in Human Action,[11] so I know Austrians that have read Human Action might be interested to know that Friedman also used it in The Machinery of Freedom. Rothbard strongly disagreed with what the term implied.[12] William Harold Hutt (not an Austrian) coined it in the 1930s.

Footnotes:

[1] In his introduction to the 2nd edition, scholar’s edition of Murray Rothbard’s Man, Economy, and State, Joseph T. Salerno quotes Rothbard from the preface of the revised edition (pg. xlviii), published in 1993:

“It has indeed become evident in recent years that there are three clashing paradigms within Austrian economics: the original Misesian or praxeological paradigm, to which the present author adheres; the Hayekian paradigm, stressing ‘knowledge’ and ‘discovery’ rather than praxeological ‘action’ and ‘choice,’ and whose leading exponent now is Professor Israel Kirzner; and the nihilistic view of the late Ludwig Lachmann, an institutionalist anti-theory approach taken from the English ‘subjectivist’ Keynesian G.L.S Shackle.”

[2] See The Austrian School of Economics: A History of Its Ideas, Ambassadors, & Institutions by Eugen Maria Schulak & Herbert Unterköfler (pg. 34):

“Böhm-Bawerk… had already thoroughly considered the relationship between the present and the future by posing the question: why is a debtor prepared to pay the creditor interest for a loan on top of paying back the amount of the loan itself? He answered this by explaining that future goods have a lower value than present goods, and the result is a difference in value between the present and the future: between loan and repayment.”

[3] According to the 2nd edition of Mark Skousen’s book The Making of Modern Economics: The Lives and Ideas of the Great Thinkers (pgs.185-6), Menger refused to reprint or translate his original ideas on the law of imputation, marginal analysis and subjective theory of value. Eugen Böhm-Bawerk and Friedrich Wieser were responsible for disseminating them.

[4] Note: In Appendix II of The Machinery of Freedom Friedman lists the Ludwig von Mises Institute in the section “Organizations and Institutes.” He mentions that “They [the Mises Institute] tend to follow the views of Rothbard and, perhaps as a result, to be critical of mine” (pg. 352).

[5] See Man, Economy, and State pg. 491: “Many writers have fallen into the trap of assuming that they can, in a similar way, add up the entire capital value of the nation or world and arrive at a meaningful figure. Estimates of National Capital or World Capital, however, are completely meaningless. The world, or country, cannot sell all its capital on the market. Therefore, such statistical exercises are pointless. They are without possible reference to the very goal of capitalization: correct estimation of potential market price.”

Note: I’ve still used GDP & GNP in my own writings and know other Austrians that do too. However imperfect, it still gives us a quick number to look at and understand that the US economy is enormous when compared to North Korea.

[6] Emphasis is mine.

[7] See Jesús Huerta de Soto’s The Austrian School: Market Order and Entrepreneurial Creativity, pg. 3.

Also, I will point out that as a free market economist and anarchist, Friedman is obviously not arguing that economists should treat humans as perfectly rational so that their behavior can be predicted so that government-employed economist social engineers or legislators can intervene in the market. (To emphasize again: I am not critiquing Friedman here). But to many mainstream economists, rationality and prediction serve precisely this purpose. To quote Nassim Nicholas Taleb’s book The Black Swan (2nd ed., pg. 184):

“…if you believe in free will you can’t truly believe in social science and economic projection. You cannot predict how people will act. Except, of course, if there is a trick, and that trick is the cord on which neoclassical economics is suspended. You simply assume that individuals will be rational in the future and thus act predictably. There is a strong link between rationality, predictability, and mathematical tractability. A rational individual will perform a unique set of actions in specified circumstances… Rational actors must be coherent: they cannot prefer apples to oranges, oranges to pears, then pears to apples… In orthodox economics, rationality became a straightjacket. Platonified economists ignored the fact that people might prefer to do something other than maximize their economic interests… I would not be the first to say that this optimization set back social science by reducing it from the intellectual and reflective discipline that it was becoming to an attempt at an ‘exact science.’ By ‘exact science,’ I mean a second-rate engineering problem for those who want to pretend that they are in the physics department—so-called physics envy. In other words, an intellectual fraud.”

[8] Friedman admits “Speaking as an economist, I find the rules implied by this argument to be inefficient ones. But they at least provide a justification for enforcing a form of property rights in land that is consistent with the libertarian view of rights” (pg. 282).

[9] See Stephan Kinsella’s Against Intellectual Property, pg. 38.

[10] Palmer’s article “Are Patents and Copyrights Morally Justified?” cites Georg W.F. Hegel.

[11] See Human Action, pg. 270 (scholar’s edition):

“Neither the entrepreneurs nor the farmers nor the capitalists determine what has to be produced. The consumers do that. If a businessman does not strictly obey the orders of the public as they are conveyed to him by the structure of the market prices, he suffers losses, he goes bankrupt, and is thus removed from his eminent position at the helm. Other men who did better in satisfying the demand of the consumers replace him… They make poor people rich and rich people poor. They determine precisely what should be produced, in what quality, and in what quantities. They are merciless egoistic bosses, full-of whims and fancies, changeable and unpredictable. For them nothing counts other than their own satisfaction.”

[12] See Man, Economy, and State pg. 630 (2nd edition, scholar’s edition):

“‘Sovereignty’ is the quality of ultimate political power; it is the power resting on the use of violence. In a purely free society, each individual is sovereign over his own person and property, and it is therefore this self-sovereignty which obtains on the free market. No one is ‘sovereign’ over anyone else’s actions or exchanges. Since the consumers do not have the power to coerce producers into various occupations and work, the former are not ‘sovereign’ over the latter.”

 

See also:

North Korean won and economic calculation

North Korean wonA friend of mine recently sent me this Reuters article by Daniel Tudor and James Pearson about the illegal but tolerated market economy behind North Korea’s own “iron curtain.” Among a few of the topics covered in the article (and the book by the same authors) they reveal several of the North Korean government’s attempts to restrict voluntary trade in North Korea via manipulations of the won (KPW) currency. What I found interesting was the discrepancy between the official government-set exchange rate (only 96 KPW per 1 USD as of the time the article was published) and the market exchange rate (closer to 8,000 KPW per USD, again, as of the date the article was published).

Another case, according to the authors, involved the government canceling the last two zeros of every bank note. The government did this by requiring citizens to trade their 1,000 won notes, for example, for 10 won notes. North Koreans were allowed only one week to make the trade. One of the catches was that the government would only exchange a maximum of 100,000 won (about $30-40 at the time). The result? The savings of North Korean people were destroyed instantaneously. Remaining monetary notes stored away in savings became worthless because by law, no merchants would be allowed to accept them. For a North Korean to demand that the government trade in more than the 100,000 won maximum would likely result in that individual being subjected to intense questioning about any black market activities he or she may be involved in. “Where did you get this extra money?! You must be doing something illegal! Off to the labor camps for you!”

Obviously, making any rational economic calculation with these money prices is difficult to say the least. And in an oppressive regime that does everything it can to discourage market activity, that almost seems to be the government’s intention. Under these conditions, if there is any rational economic calculation at all it is only thanks to the black market! If people cannot rely on money to not lose its value drastically overnight, they will try to sell it as soon as possible for other currencies, consumer goods, etc. It is for this reason, that North Korean people (illegally) trade US dollars and Chinese yuan on the black market. Similarly, when people notice the discrepancy between government-set exchange rates (which are only government attempts to conceal just how bad inflation is) and market exchange rates, they will choose to buy and sell at market rates — not government-set rates.

Related note: Inflation also has a strong tendency to encourage spending and consumption over saving. During hyperinflation in Brazil in the 1980s and early 1990s, Brazilians frequently ran to the markets to sell their money (by buying goods and services) as soon as they received their paychecks. Holding onto their money for even an extra day often meant that their money’s buying power decreased dramatically. The increase in demand and seller expectations that demand would continue pushed prices up even further.

The Reuters article gives an example of a basketball for sale at a shop in Pyongyang for 46,000 won. At 96 KPW to 1 USD, the price of the basketball is US$479.17. Obviously, nobody pays this amount of money for basketballs under normal circumstances in any country. Now, by contrast, if the market rate is about 8,000 KPW for 1 USD, we are only talking about US$5.75. But even at this price, one would imagine that most poverty-stricken North Koreans without political connections would prefer instead to use their money to purchase goods and services that are more essential to maintaining human life. To switch from economics to psychology for a moment, I’m referring to goods and services that are able to serve functions further to the bottom of the triangle in Maslow’s hierarchy of needs (i.e. physiological needs such as water and food).

My curiosity led me to check XE.com to check the exchange rate between KPW and USD. Here below was the rate shown on 16 April, 2015. I updated the page 2 hours later, and the rate was still exactly the same. For any other currency (belonging to nation states with more formalized market economies), XE.com is able to provide updated rates as they fluctuate throughout the day. This is the relevant portion of the screenshot I took from the page on that date:

XE.com's exchange rate for North Korean wan (KPW) on 16 April, 2015

 

 

 

Today, two weeks after getting the above exchange rate, XE.com reports it to be 124.753 KPW for 1 USD. (That’s “one hundred twenty-four point seven five three” for my friends from countries that have the opposite usage for commas and periods than that of the United States — not “one hundred twenty-four thousand seven hundred fifty-three”). My guess is that XE.com is reporting North Korean government-announced exchange rates since 124 to 1 USD doesn’t seem too high relative to exchange rates with many other countries.

I also checked the rate using “Currency Converter HD” iPhone app, which is the app I rely on for all other currencies as I travel, and found this very different exchange rate. Today again, two weeks after I first checked and finally got around to writing this blog post, the app still says that 1 USD is valued at 900 KPW. I also find it difficult to believe that the going exchange rate is perfectly divisible by 100!

Currency Converter HD for iPhone's exchange rate for North Korean wan (KPW) on 16 April, 2015

 

 

 

 

 

 

 

As of 1 May, 2015, Google reports the same exchange rate as my iPhone app:

Google's exchange rate for North Korean wan (KPW) on 1 May, 2015

So what is the truth? Is the going market rate in North Korea for 1 USD closer to 96 KPW? 900 KPW? 8,000 KPW? It’s not easy to know.

 

More on economic calculation:

See also:

Hollywood versus Bastiat and the free enterprise system

Hollywood vs. Bastiat and the free enterprise system

A Dark Truth, a film starring Forest Whitaker and Andy Garcia, takes a swing at capitalism and misses by a longshot. It is also almost as ridiculous tactically as it is ideologically. Apparently the film’s budget did not include hiring a consultant with military or police experience to ensure that the actors playing roles with supposed years of tactical experience (soldiers, a former CIA operative, etc.) would handle guns in a way that would appear they’ve actually been trained to use them. But the film’s blatantly absurd gun handling is the least of its problems.

In the film, Jack Begosian, played by Garcia, is a radio talk show host and former CIA operative. He is hired to go to Ecuador to expose a massacre of innocent civilians. The massacre is supported and covered up by a North American water company and carried out by the Ecuadorian military.

What the film attempts to show is that evil corporations run by businessmen and inspired by greed, will stop at nothing to earn a profit for themselves and their shareholders, including massacring countless innocent women and children. But to anyone that understands the functions of free enterprise system, what the film actually shows is an entity of government (in this case, the Ecuadorian military) that fails to maintain its proper role of protecting life, liberty and property of the citizens it is empowered to protect. Instead the military itself becomes a profit-seeking entity and partners with the evil senior leadership of the water company. Important to note is that it is not the businessmen in the film that carries out the deed of massacring innocent civilians with guns; it is the Ecuadorian military. The film’s flaw in reasoning is that without the privileged and corrupt alliance with the Ecuadorian government, the water company, driven by men who seek a profit, would be forced to gain its profit only by peaceful and voluntary exchange in the free market. That is, it would only gain profit from customers that would willingly trade money for water because they consider themselves better off by purchasing the water in the first place. In the unlikely event that the water company was to try to sell its water to citizens at gunpoint or perhaps outright rob them without providing water in return, the only proper role of government in this case would be to defend innocent life!

As a direct attack on property rights, Begosian explains to one live caller on his radio show that 300 years ago in England the government privatized public land. “…It changed the way we think, the way we view time, and land, and water,” he says. “Is it wrong to sell water? What about air, would it be wrong to sell air? …Is it so far-fetched [that] you can sell water but you can’t sell air?” During another scene in the film, Francisco Francis, played by Forest Whitaker says “We are talking about a natural resource. Natural resources should be controlled by the government for the people. Not by the private entity whose major interests are to maximize profit.”

Let us think about this for a minute. Air is abundant all around us. The air you breathe comes at no expense to anyone else. But what if you wanted to breathe outside normal circumstances? What if, for example, you wanted to breathe underwater? Would you not have to buy an air tank or a snorkel? Since to breathe underwater, you would have to pay to acquire the means to breathe by purchasing a device that would make it possible, what is the difference? The difference is that when you buy an air tank or a snorkel you are compensating many other people for their labor, ideas and for their property – all of which have made the production and availability of your tank or snorkel possible. And the seller? He would not sell you an air tank or a snorkel unless he believes he is better off with the money you offered to him. So how then does all of this apply to water? I ask you. Does water not need purification? Does water not need transportation? Does water not need bottling or to be stored in a large tank? Why then is selling a natural resource different than selling any other?

Let us compare the role that the Ecuadorian government played in the film to the view of Frédéric Bastiat – a 19th Century French defender of free enterprise. In his book The Law he argues:

“…individuality, liberty, property — this is man. And in spite of the cunning of artful political leaders, these three gifts from God precede all human legislation, and are superior to it. Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.”

In Bastiat’s view, life is important; therefore the proper role of government is to protect women, children and anyone else – not massacre them. Liberty is important; therefore the proper role of government is to allow individuals to make choices for themselves. Citizens are free (not forced) to buy water from anyone they please, and sellers are free to sell to anyone they please. Property is important; therefore the proper role of government is to protect the private property of citizens and of the water company, which is, after all, comprised of individuals that aspire to earn a profit. And should one entity – whether that be the citizens or the water company – act by force against the other, the proper role of government is then to act by force against the aggressor in order that justice be upheld.

Minor Publications

I have very seldom submitted articles to newspapers, etc. for publication. Nonetheless, here are a few articles I have written, some with abstracts and some without:

On Human Rationality and Government Control – by Emile Phaneuf and Carmelo Ferlito
October, 2014, Vol. XI nº2 2014 – «Procesos de Mercado: Revista Europea de Economía Política»
In this paper we first address a long-standing criticism of human rationality and what that means for the role of government. We review and compare much of the literature on rationality and demonstrate that various authors within various fields often mean very different things by the word «rational.» While we make no claims as to whether or not humans always behave rationally, we point out the flawed logic for what is suggested for the role of government as a way of addressing the human irrationality problem. Building on the Mises-Rothbard-Huerta de Soto tradition, we argue that what is more important than perfect rationality is purposeful action. We explain the dynamic nature of the market in which time plays an important role, and humans act with expectations to accomplish goals, learn from past mistakes, discover new information and modify their plans accordingly. Using Hayek’s approach, we discuss the knowledge problem in which data is dispersed among millions of individuals (unknown in its entirety to any central authority) as well as the problems with applying the scientific method exactly as it is used in the natural sciences to the human behavioral sciences. These problems combined, we argue, make for a much more disastrous system than would be a system in which often irrational individuals would be free to make mistakes for themselves, discover new information and take actions for their own betterment.

International Relations Glossary in Portuguese and Spanish
July 2, 2013 – «MyPoliSciLab.com» (paid website) and «InternationalRelations.com»
For IR scholars and students who also happen to be “latinoamericanistas,” this list of translations of IR terms in all three languages (English, Portuguese and Spanish) serves as a great resource.

Sowell’s Visions
December 5, 2013 – «Foundation for Economic Education»
In this article I summarize Thomas Sowell’s book A Conflict of Visions and Steven Pinker’s The Blank Slate and explain the importance of understanding the concepts of opposing world visions when discussing often controversial topics such as economics and politics.

Developments in Brazil Energy Sector
January 25, 2011 – «The Rio Times»
This article discusses new developments in the Brazilian energy sector, including the buying of Brazilian utility company (Elektro) by Iberdrola – Spain’s largest electric company – and plans to revive construction of Angra 3, the country’s third nuclear power reactor.

Slow Start to PAC Development
January 18, 2011 – «The Rio Times»
Brazil’s Growth Acceleration Program (“the PAC”) began in 2007 with a budget of roughly US$300 billion with plans for public housing provisions, improvements in sanitation, transportation, infrastructure and more. But four years later, only about five percent of the projects have been completed, and the second PAC (PAC2) is already underway with even more ambitious goals than the first.

Rio Real Estate Shielded from Burst
January 4, 2011 – «The Rio Times»
Real estate prices have risen significantly in Rio de Janeiro since it was announced that Brazil would host the 2014 World Cup and 2016 Olympic Games. Prices are also driven by an emerging middle class in Brazil with access to credit for the very first time. Some spectators have rumored that a real estate boom and bust cycle is near. In this article, I explain why the boom and bust is unlikely.

UA Community Voices Opinion of Tibet-China conflict
March 31, 2008 – «The Arkansas Traveler»

Protests in the Streets of Sao Paulo (text only); Award-winning photography for this coverage (along with videos)
March 12, 2007 – «The Arkansas Traveler»

Resources for Brazilianists

Organizations Dedicated to Individual Liberties and Free Markets in Brazil:

International Trade & Business:

Economics and Development:

International Relations and Politics:

Head of State:

Educational Resources:

Other:

See also:

International Relations vocabulary in Portuguese and Spanish

Updates:

  1. This resource has also been published at MyPoliSciLab.com (a paid website for political science students) and at InternationalRelations.com by Professor Joshua S. Goldstein. (5 July, 2013).
  2. I have learned that somebody took this list and improved upon it using Google’s Fusion Tables. With these Fusion Tables, the data can be manipulated in various ways using filters to suit the convenience of the user. Nice tool, and thanks to whomever did that! Here is the link. (7 July, 2015).

If you study Portuguese or Spanish and international relations (or related fields) this list could be of great use – especially if you are studying abroad and the host language is not your own. My methodology consisted of taking the glossary of terms from a slightly older version of this textbook and translating the terms one-by-one from English to Portuguese and Spanish using online dictionaries and Wiki. A huge thanks to Dr. Sergio Villalobos (native speaker from Chile) for checking/correcting the Spanish translations and to Ana Lúcia da Silva Kfouri (native speaker from Brazil) for checking/correcting the Portuguese translations and for setting them to the “reforma ortográfica” standard. And lastly, thank you to Joshua S. Goldstein and Jon C. Pevehouse for writing the book that made this list possible.

# English Português Español
1 acid rain chuva ácida lluvia ácida
2 airspace espaço aéreo espacio aéreo
3 Al-Qaeda Al-Qaeda Al-Qaeda
4 Amnesty International Anistia Internacional Amnistía Internacional
5 anarchy anarquia anarquía
6 Antarctic Treaty (1959) Tratado da Antártida Tratado Antártico
7 arms race corrida armamentista carrera armamentista
8 autarky (self-reliance) autarquia autarquía
9 authoritarian(ism) (government) autoritarismo autoritarismo
10 balance of payments balanço de pagamentos balanza de pagos
11 balance of power equilíbrio de poder equilibrio de poder
12 balance of trade balança comercial balanza comercial
13 ballistic missiles míssil balístico misil balístico
14 bargaining negociação regateo
15 basic human needs necessidades básicas do ser humano necesidades básicas del ser humano
16 bilateral aid ajuda bilateral ayuda bilateral
17 biodiversity biodiversidade biodiversidad
18 Biological Weapons Convention (1972) Convenção sobre Armas Biológicas Convención sobre Armas Biológicas (BWC)
19 bipolar system, bipolar world, bipolarity sistema bipolar, mundo bipolar, bipolaridade sistema bipolar, mundo bipolar, bipolaridad
20 blue helmets (UN peacekeeping) Forças de manutenção da paz das Nações Unidas Fuerzas de paz de las Naciones Unidas, cascos azules
21 brain drain fuga de cérebros / fluxo de talentos fuga de cerebros
22 Bretton Woods system Acordos de Bretton Woods Acuerdos de Bretton Woods
23 burden sharing repartição de encargos reparto de la carga
24 capital accumulation acúmulo de capital acumulación del capital
25 capitalism capitalismo capitalismo
26 carrying capacity capacidade de transporte capacidad de carga
27 cartel cartel cartel/cártel
28 central bank banco central banco central
29 centrally planned (command) economy economia planificada economía centralizada, economía planificada
30 chain of command cadeia de comando cadena de mando
31 Chemical Weapons Convention (1992) Convenção sobre Armas Químicas Convención sobre Armas Químicas
32 Chernobyl Chernobyl Chernóbil
33 civil war guerra civil guerra civil
34 Cold War Guerra Fria Guerra Fría
35 Commission on Sustainable Development Comissão para o Desenvolvimento Sustentável Comisión para el Desarrollo Sustentable (CSD)
36 Common Agricultural Policy Política Agrícola Comum da União Europeia Política agrícola común de la Unión Europea
37 common market mercado comum mercado común
38 Commonwealth of Independent States Comunidade dos Estados Independentes Comunidad de Estados Independientes
39 comparative advantage vantagens comparativas ventaja comparativa
40 Comprehensive (Nuclear) Test Ban Treaty (1996) Tratado de Interdição Completa de Ensaios Nucleares Tratado de Prohibición Completa de los Ensayos Nucleares
41 conditionality condicionalidade condicionalidad
42 conflict conflito conflicto
43 conflict and cooperation conflito e cooperação conflicto y cooperación
44 conflict resolution resolução de conflitos resolución de conflictos (o conflictología)
45 constructivism construtivismo constructivismo
46 consumption goods bens de consumo bienes de consumo
47 containment contenção contención
48 Conventional Forces in Europe (CFE) Treaty (1990) Tratado das Forças Armadas Convencionais da Europa (FACE) Tratado de las Fuerzas Armadas Convencionales en Europa
49 convertible (currency) moeda convertível moneda convertible
50 cost-benefit analysis análise de custo-benefício análisis de costo-beneficio
51 Council of Ministers (or Council of the European Union) Conselho da União Europeia, Conselho Consejo de la Unión Europea (CUE)
52 counterinsurgency contrainsurgência contrainsurgencia
53 coup d’état golpe de estado golpe de estado
54 crimes against humanity crimes contra a humanidade crímenes contra la humanidad
55 cruise missile míssil de cruzeiro misil de cruzero
56 Cuban Missile Crisis (1962) Crise dos mísseis de Cuba Crisis de los misiles en Cuba
57 cultural imperialism imperialismo cultural imperialismo cultural
58 customs union união aduaneira unión aduanera
59 default inadimplência suspención de pagos
60 dehumanization desumanização deshumanización
61 democracy democracia democracia
62 democratic peace (theory) teoria da paz democrática teoría de la paz democrática
63 demographic transition transição demográfica transición demográfica
64 dependency theory teoria da dependência teoría de la dependencia
65 deterrence (theory) teoria da intimidação teoría de la disuasión
66 devaluation desvalorização devaluación
67 developing country País em desenvolvimento, país emergente país en desarrollo
68 Development Assistance Committee (DAC) Comitê de Ajuda ao Desenvolvimento Comité de Ayuda al Desarrollo
69 diplomatic immunity imunidade diplomática inmunidad diplomática
70 diplomatic recognition reconhecimento diplomático reconocimiento diplomático
71 direct foreign investment: See foreign direct investment investimento estrangeiro direto inversión extranjera directa
72 disaster relief auxílio em desastres administración de desastres
73 discount rate taxa de desconto tasa de descuento
74 Doha Development Round Rodada Doha Ronda de Doha
75 dumping dumping dumping
76 economic development desenvolvimento econômico desarrollo económico
77 economic surplus excedente econômico excedente económico
78 electronic warfare guerra electrônica guerra electrónica
79 empowerment (in development) empowerment, delegação de autoridade empoderamiento
80 enclosure (of the commons) encercamento cercamiento
81 ethnic cleansing limpeza étnica limpieza étnica
82 ethnic groups grupo étnicos grupo étnicos
83 ethnocentrism (in-group bias) etnocentrismo etnocentrismo
84 Euratom (European Atomic Energy Community, EAEC) Comunidade Europeia da Energia Atômica Comunidad Europea de la Energía Atómica
85 euro (currency) euro euro
86 European Commission Comissão Europeia Comisión Europea
87 European Court of Justice (ECJ) Tribunal de Justiça da União Europeia Tribunal de Justicia de las Comunidades Europeas, Tribunal de Justicia Europeo
88 European Parliament (or Europarl, EP) Parlamento Europeu Parlamento Europeo
89 European Union (EU) União Europeia Unión Europea
90 exchange rate taxa de câmbio tasa de cambio, tipo de cambio
91 (European) Exchange Rate Mechanism (ERM) Exchange Rate Mechanism (same as English) / Mecanismo de Taxa de Câmbio Mecanismo de tasa de cambio, Mecanismo de Tipos de Cambio (MTC)
92 export-led growth crescimento liderado pela exportação crecimiento impulsado por exportaciones
93 fiscal policy política fiscal política fiscal
94 fixed exchange rate taxa de câmbio fixa tipo de cambio fijo
95 floating exchange rate taxa de câmbio flutuante tipos de cambio flotantes
96 foreign assistance ajuda externa ayuda extranjera, ayuda exterior
97 foreign direct investment investimento estrangeiro direto (IED) inversión extranjera directa
98 foreign policy process processo de política externa proceso de política exterior
99 fossil fuel combustível fóssil combustible fósil
100 “four [Asian] tigers”/”four dragons” quatro tigres asiáticos cuatro tigres asiáticos
101 free economic zones zona franca zona franca
102 free rider problem problema free rider (taken from English) problema del polizón
103 free trade livre cambismo librecambismo
104 free trade area área de livre comércio, zona de livre comércio área de libre comercio, tratado de libre comercio (TLC)
105 game theory teoria dos jogos teoría de juegos
106 General Agreement on Tariffs and Trade (GATT) Acordo Geral de Tarifas e Comércio Acuerdo General sobre Aranceles Aduaneros y Comercio
107 Generalized System of Preferences (GSP) Sistema Geral de Preferências (SGP) Sistema Generalizado de Preferencias (SGP)
108 genocide genocídio genocidio
109 geopolitics geopolítica geopolítica
110 global culture cultura global cultura global
111 globalization globalização globalización
112 global warming aquecimento global calentamiento global
113 gold standard padrão-ouro patrón oro
114 great powers grande potências grandes potencias
115 greenhouse gases gases do efeito estufa (GEE), gases estufa gases de efecto invernadero (GEI), gases de invernadero
116 green revolution revolução verde revolución verde
117 Gross Domestic Product (GDP) produto interno bruto (PIB) producto interno bruto
118 groupthink pensamento de grupo pensamiento grupal, pensamiento de grupo
119 guerrilla war guerrilha guerra de guerrillas, guerrila, guevarismo
120 hard currency moeda forte moneda fuerte
121 hegemonic stability theory teoria da estabilidade hegemônica teoría de estabilidad hegemónica
122 hegemonic war guerra mundial/hegemônica guerra mundial
123 hegemony hegemonia hegemonía
124 high seas alto mar alta mar
125 home country país de origem país de origen
126 host country país hóspede país de acogida
127 human rights direitos humanos derechos humanos
128 humanitarian intervention intervenção humanitária injerencia humanitaria
129 hyperinflation hiperinflação hiperinflación
130 idealism idealismo idealismo
131 IMF conditionality condicionalidade do FMI condicionalidad del FMI
132 immigration law lei de imigração ley de inmigración
133 imperialism imperialismo imperialismo
134 import substitution substituição de importações sustitución de importaciones
135 industrialization industrialização industrialización
136 industrial policy política industrial política industrial
137 infant mortality rate taxa de mortalidade infantil tasa de mortalidad infantil
138 infantry infantaria infantería
139 intellectual property rights direitos de propriedade intelectual derechos de propiedad intelectual
140 Intercontinental Ballistic Missile (ICBM) míssil balístico intercontinental (ICBM) misil balístico intercontinental (ICBM)
141 interdependence interdependência interdependencia
142 interest groups grupos de interesse grupos de interés
143 intergovernmental organizations (IGOs) organização internacional, organização intergovernamental organismo internacional, organización intergubernamental (OIG)
144 International Committee of the Red Cross (ICRC) Comitê Internacional da Cruz Vermelha (CICV) Comité Internacional de la Cruz Roja (CICR)
145 International Court of Justice Corte Internacional de Justiça, Tribunal Internacional de Justiça Corte Internacional de Justicia, Tribunal Internacional de Justicia
146 international integration integração internacional integración internacional
147 International Monetary Fund (IMF) Fundo Monetário Internacional (FMI) Fondo Monetario Internacional (FMI)
148 international norms normas internacionais normas internacionales
149 international organizations (IOs) organizações internacionais organizaciones internacionales
150 international political economy (IPE) economia política internacional economía política internacional
151 international regime regime internacional régimen internacional
152 international relations (IR) relações internacionais (RI) relaciones internacionales
153 international security segurança internacional seguridad internacional
154 international system sistema internacional sistema internacional
155 International Whaling Commission Comissão Internacional da Baleia (Brasil), Comissão Baleeira Internacional (Portugal) Comisión Ballenera Internacional (CBI)
156 investment investimento inversión
157 Iran-Contra scandal/affair (escândalo/caso) Irã-Contras (escándalo) Irán-Contra(s), Irangate
158 irredentism irredentismo irredentismo
159 Islam Islã (Brasil), Islão (Portugal) Islam
160 Islamic fundamentalism fundamentalismo islâmico fundamentalismo islámico
161 just war doctrine teoria da guerra justa teoría de la guerra justa
162 Keynesian economics economia keynesiana, escola keynesiana economía keynesiana, Keynesianismo
163 land mines mina terrestre mina terrestre
164 land reform reforma agrária reforma agraria
165 lateral pressure (theory of) (Teoria da) pressão lateral (teoría de la) presión lateral
166 League of Nations Sociedade das Nações, Liga das Nações Sociedad de Naciones (SDN)
167 less-developed countries países menos desenvolvidos países menos desarrollados
168 liberal feminism feminismo liberal feminismo liberal
169 liberalism (economic liberalism) liberalismo econômico liberalismo económico
170 lobby lóbi, lobby, grupo de pressão lobby, grupo de presión
171 Maastricht Treaty Tratado de Maastricht Tratado de Maastricht, Tratado de la Unión Europea
172 malnutrition, undernourishment desnutrição malnutrición, desnutrición
173 Maoism, Marxism-Leninism-Maoism maoísmo, Pensamento de Mao Tse Tung, Marxismo-Leninismo-Maoísmo (MLM) maoísmo, Pensamiento Mao Tse Tung, Marxismo-Leninismo-Maoísmo (MLM)
174 Marxism Marxismo Marxismo
175 mediation mediação mediación
176 mercantilism mercantilismo mercantilismo
177 microcredit microcrédito microcrédito
178 middle powers média potência, potência média potencia intermedia, potencia mediana, potencia media
179 migration migração migración
180 militarism militarismo militarismo
181 military governments governos militares gobiernos militares
182 military-industrial complex complexo militar-industrial complejo industrial-militar
183 Missile Technology Control Regime (MTCR) Regime de Controle de Tecnologia de Mísseis Régimen de Control de la Tecnología de Misiles
184 mixed economy economia mista economía mixta
185 monetary policy política monetária política monetaria
186 Montreal Protocol (1987) Protoloco Montreal Protoloco de Montreal
187 most-favored nation (MFN) nação mais favorecida nación más favorecida
188 multinational corporation (MNC) multinacional, empresa multinacional multinacional, empresa multinacional
189 multipolar system, multipolar world, multipolarity sistema multipolar, mundo multipolar, multipolaridade sistema multipolar, mundo multipolar, multipolaridad
190 Munich Agreement (1938) Acordo de Munique Acuerdo de Múnich
191 mutually assured destruction (MAD) Destruição Mútua Assegurada Destrucción Mutua Asegurada
192 Nash equilibrium Equilíbrio de Nash equilibrio de Nash
193 national debt, government debt, public debt dívida governamental, dívida pública deuda nacional, deuda pública
194 national interest interesse nacional razón de Estado, interés nacional
195 nationalism nacionalismo nacionalismo
196 nation-states Estado-nação Estado-nación
197 NATO: See North Atlantic Treaty Organization Organização do Tratado do Atlântico Norte (OTAN, NATO) Organización del Tratado del Atlántico Norte (OTAN)
198 negotiation negociação negociación
199 neocolonialism neocolonialismo neocolonialismo
200 neofunctionalism neofuncionalismo neofuncionalismo
201 neoliberalism neoliberalismo neoliberalismo
202 neorealism neo-realismo, neorrealismo neorrealismo
203 New International Economic Order (NIEO) Nova Ordem Econômica Internacional Nuevo Orden Económico Internacional (NOEI)
204 new world order nova ordem mundial nuevo orden mundial
205 nongovernmental organizations (NGOs) organizações não governamentais (ONG), organizações não governamentais sem fins lucrativos organización no gubernamental (ONG)
206 Non-Proliferation Treaty (NPT), Nuclear Non-Proliferation Treaty (1968) Tratado de Não-Proliferação Nuclear Tratado de No Proliferación Nuclear
207 nonstate actors atores não-estatais actores no estatales
208 nontariff barriers barreiras não-tarifárias barreras no arancelarias
209 nonviolence/pacifism não-violência/pacifismo no violencia, no-violencia/pacifismo
210 norms (of behavior) normas de comportamento normas de comportamiento
211 North American Free Trade Agreement (NAFTA) Tratado Norte-Americano de Livre Comércio Tratado de Libre Comercio de América del Norte (TLCAN, TLC, NAFTA)
212 North Atlantic Treaty Organization (NATO) Organização do Tratado do Atlântico Norte (OTAN, NATO) Organización del Tratado del Atlántico Norte (OTAN)
213 oil shock, oil crisis crise do petróleo crisis del petróleo
214 Organization of the Petroleum Exporting Countries (OPEC) Organização dos Países Exportadores de Petróleo (OPEP, OPEC) Organización de Países Exportadores de Petróleo (OPEP)
215 ozone layer ozonosfera, camada de ozônio ozonosfera, capa de ozono
216 Paris Club Clube de Paris Club de París
217 Peace Corps Corpo da Paz Cuerpo de Paz
218 peace movements movimentos pacifistas movimientos pacifistas, movimientos de paz
219 political asylum, right of asylum asilo político, direito de asilo asilo político, derecho de asilo
220 postmodernism, postmodernity pós-modernismo, pós-modernidade postmodernismo, postmodernidad
221 power poder poder
222 prisoner of war (POW) prisioneiro de guerra prisionero de guerra (PDG)
223 prisoners’ dilemma dilema do prisioneiro dilema del prisionero
224 proliferation proliferação proliferación
225 pronatalist policy política pró-natalista, política pró-natalidade políticas pronatalistas, política pro-natalidad
226 prospect theory teoria do prospecto teoría de perspectivas
227 protectionism protecionismo proteccionismo
228 proxy wars guerra proxy guerra por proxy, guerra subsidiaria
229 Qur’an, Koran Alcorão, Corão Alcorán, Corán
230 rational actor theory, rational choice theory Teoria do ator racional, teoria a escolha racional teoría de la elección racional
231 realism, political realism realismo, realismo político realismo, realismo político
232 reciprocity reciprocidade reciprocidad
233 refugee refugiado refugiado
234 reserve currency moeda de reserva moneda de reserva
235 retaliation retaliação, talião retaliación, revancha
236 risk assessment avaliação de risco evaluación de riesgo
237 secular state estado laico, estado secular estado laico
238 service sector, service industry, tertiary sector setor terciário sector de servicios, sector terciario
239 Single European Act (SEA) (1957) Ato Único Europeu (AUE) Acta Única Europea (AUE)
240 Sino-Soviet split Ruptura Sino-Soviética Ruptura Sino-Soviética
241 socialism socialismo socialismo
242 sovereignty soberania soberanía
243 Special Drawing Right (SDR) Direito de Saque Especial (DSE) Derechos Especiales de Giros (DEG)
244 state Estado Estado
245 state-sponsored terrorism terrorismo patrocinado pelo Estado terrorismo patrocinado por el Estado
246 stealth technology tecnologia stealth, tecnologia furtiva tecnología furtiva, tecnología stealth
247 Strategic Defense Initiative (SDI) Iniciativa Estratégica de Defesa Iniciativa de Defensa Estratégica (IDE)
248 subsistence farming agricultura de subsistência agricultura de subsistencia
249 subtext subtexto subtexto
250 summit meeting cimeira / reunião de cúpula cumbre
251 supranationalism supranacionalidade supranacionalidad
252 Taliban Talibã Talibán
253 tariff tarifa arancel
254 technology transfer transferência de tecnologia transferencia de tecnología
255 territorial waters mar territorial mar territorial
256 third world terceiro mundo tercer mundo
257 tit for tat olho por olho, lei de talião ojo por ojo, ley del talión
258 total war guerra total guerra total
259 tragedy of the commons tragédia dos comuns tragedia de los comunes
260 Treaty/Treaties of Rome (1957) Tratado(s) de Roma Tratado(s) de Roma
261 United Nations (UN), United Nations Organization (UNO) Nações Unidas (NU), Organização das Nações Unidas (ONU) Naciones Unidas (NU), Organización de las Naciones Unidas (ONU)
262 UN Charter Carta das Nações Unidas Carta de las Naciones Unidas
263 UN Convention on the Law of the Sea (UNCLOS) Convenção das Nações Unidas sobre o Direito do Mar Convención de las Naciones Unidas sobre el Derecho del Mar (CNUDM), Convención sobre el Derecho del Mar, Convención del Mar
264 UN Conference on Trade and Development (UNCTAD) Conferência das Nações Unidas sobre Comércio e Desenvolvimento (UNCTAD) Conferencia de las Naciones Unidas sobre Comercio y Desarrollo (CNUCYD, UNCTAD)
265 UN Development Programme (UNDP) Programa das Nações Unidas para o Desenvolvimento (PNUD) Programa de las Naciones Unidas para el Desarrollo (PNUD)
266 UN Environment Program (UNEP) Programa das Nações Unidas para o Meio Ambiente (PNUMA) Programa de Naciones Unidas para el Medio Ambiente (PNUMA)
267 UN General Assembly (UNGA/GA) Assembleia Geral das Nações Unidas (AGNU) Asamblea General de las Naciones Unidas
268 UN Secretariat secretário geral/secretariado das Nações Unidas secretario general/secretaría general de Naciones Unidas
269 UN Security Council (UNSC) Conselho de Segurança das Nações Unidas Consejo de Seguridad de Naciones Unidas
270 undernourishment: See malnutrition
271 urbanization urbanização urbanización
272 Uruguay Round Rodada do Uruguai Ronda de Uruguay
273 war crime crime de guerra crimen de guerra
274 Warsaw Pact, Warsaw Treaty Pacto de Varsóvia, Tratado de Varsóvia Pacto de Varsovia
275 weapon of mass destruction (WMD) arma de destruição em massa (ADM) armas de destrucción masiva (ADM)
276 World Bank Banco Mundial Banco Mundial (BM)
277 World Court: See International Court of Justice
278 world government governo mundial gobierno mundial
279 World Health Organization (WHO) Organização Mundial da Saúde (OMS) Organización Mundial de la Salud (OMS)
280 world-system theory Teoria do Sistema-Mundo, teoria de sistemas mundiais sistemas mundiales, teoría del sistema mundial
281 World Trade Organization (WTO) Organização Mundial do Comércio (OMC) Organización Mundial del Comercio (OMC)
282 zero-sum games jogo de soma zero juego de suma cero

Resources:

1. The university Pontifícia Universidade Católica do Rio de Janeiro holds a blog in which they provide international relations terms and definitions. The site is entirely in Portuguese and no cross-language translations are given.

2. Thomson Wadsworth publishing offers a list of translations of political science terms from English to Spanish. Very few of these are specifically related to international relations (IR), but they are related nonetheless.

See also:

potencia mediana