Category Archives: Economics

How 1936 Consolidated the Progressives’ Triumph in 1913

Article by Gary North.

Excerpts:

Until the myth of Keynes and the myth of Franklin Roosevelt, which are closely entwined, are refuted in a series of comprehensive, scholarly materials, and then translated into materials accessible to the general public, and rhetorically effective among bright high school students who are in homeschool programs, we will remain on the receiving end of the Establishment’s overwhelming control of the media and academia. The World Wide Web offers a way to get around both of these Establishment operations, but in these two fundamental areas of American history — the New Deal and Keynes’s original introduction to Keynesianism — we have not yet begun to fight.

The intellectual battles over the New Deal and Keynes were part of a continuing war. Conservatives and libertarians lost both in 1936, but not because of their lack of theory. Mises had provided the basis of the answer in 1912 with The Theory of Money and Credit. Hayek also had the foundation: Monetary Theory and the Trade Cycle (1933). But neither of them sat down in 1936 to write definitive answers to Keynes. Neither of them ever did. Mises wrote a major book in 1957: Theory and History. By then, Keynes was triumphant in Western academia. Hayek’s final book was in 1988: The Fatal Conceit.

You have to fight when the battle comes to you. It is not good enough to be well armed. You have to stand your ground and fight.

John Maynard Keynes

Writes Robert Katz:

John Maynard Keynes, 1883 – 1946, was an infamous British mountebank and soothsayer who overpoweringly advanced the idea that an effective way for the State to defray the extravagant expenses met on route to its worldwide barbarous pillaging would be for it to engage in mass counterfeiting. He based his prognostication of the scheme’s efficacy on the premises that the multitude was either ignorant enough to believe that the debasement of their money was beneficial or wicked enough to energetically participate as the State’s privileged partner in the sham of taking in sound money and passing out fake. He was alarmingly accurate on both behavioral suppositions. Some of the biggest and most dishonorable swindlers of this morally offensive confidence game are Alan Greenspan, Ben Bernanke, Janet Yellen, and Jerome Powell.

The Birth of “Irrational Exuberance”

It’s still with us. Article by George F. Smith.

Excerpt:

John Law, the early eighteenth-century Scottish gambler and financier, thought the best way to revive an ailing economy was to remove the “great scarcity of money,” as he wrote in a 1705 monetary tract. A decade after its publication he took his ideas to the Continent and sold them to Philippe d’Orleans, the regent in charge of France’s finances, who needed a scheme more sophisticated than his failed program of coin clipping and confiscation to save the nation from bankruptcy.

In 1716 Philippe set Law up as head of the Banque Générale, the country’s central bank, giving it and him monopoly control of the note issue. Having won the nation’s trust with declarations of allegiance to sound money principles – he had promised his banknotes would be “payable on sight” in unadulterated gold coin – Law proceeded to apply another element of his theory. Because a scarcity of money, he believed, was the root of France’s economic problems, and since banknotes backed purely by precious metals would be in short supply, he began issuing notes “backed” by the nation’s vast landholdings. Exactly how one would redeem banknotes for acreage he neglected to explain.

Is John Law regarded as a charlatan today? Not whatsoever. The most influential economists of modern times regard Law with sympathy and respect. One eminent economic historian places Law in the “front ranks of monetary theorists of all time.” Others view him jealously for being the first economist to run an entire country, even if it meant running it into the ground.

Saint-Simon concluded,

[T]he chimera of the Mississippi, with its shares, its special jargon, its science (a continual juggle for drawing money from one person to give it to another), was to almost guarantee that these shares should at last end in smoke (since we had neither mines, nor quarries of the philosopher’s stone), and that the few would be enriched at the expense of the many, as in fact happened.

The allure of easy money drives irrational behavior, then and now.  End the Fed.

Net Zero means zero growth

Interview (podcast) on spiked-online.com with Jon Moynihan. Interviewer is Brendan O’Neill.

Introduction of the written excerpts:

Britain, the nation that birthed the Industrial Revolution, is now a world leader in deindustrialisation. The power stations, oil refineries and steelworks that helped make the UK wealthy are now closing down and moving abroad. High energy prices are crippling industry and hurting households. Yet politicians are doubling down on precisely the policies that have brought us here. Reducing carbon emissions, they say, must be the nation’s priority. Apparently, we need to embrace a Net Zero future, no matter what it costs our economy.

Playing with Fire: Money, Banking, and the Federal Reserve

Video by the Mises Institute.

The Fed has been the source of booms, busts, and the ongoing impoverishment of Americans since the Fed’s founding.

This is why a new, critical look at the Federal Reserve is needed, and why the Mises Institute is now happy to bring you this new documentary on the Fed.

Playing with Fire provides a look at how the Fed uses its expanding power to damage our economy, increase inequality, and to impoverish ordinary Americans. The film also looks at how much the Fed has expanded its own power since the Financial Crisis of 2008.

Featuring interviews with Ron Paul, Tom DiLorenzo, Joseph Salerno, Mark Thornton, Jim Grant, Alex Pollock, and Jonathan Newman, Playing with Fire explains what the Fed is, where it came from, and why it is so dangerous. Perhaps most importantly of all, Playing with Fire shows why we need to end the Fed altogether.

The UK gov’t wants to legalise “assisted dying”. Here’s what happens next.

Article by Kit Knightly

[Gotta get those pension and welfare liabilities down somehow. PwG]

The Parliament of the United Kingdom is moving forward with a vote on a new bill that will legalise assisted dying for those diagnosed with terminal illness.

The bill, proposed by Labour MP Kim Leadbeater, has yet to be published in full. According to the BBC:

The details have not been finalised but the bill is likely to be similar to a proposal in the House of Lords, which would allow terminally ill adults with six months or fewer to live to get medical help to end their own lives.

This is the culmination of a years-long political, media and entertainment industry wide campaign to normalise euthanasia in the UK’s public mind.

In that time we have been told that assisted dying is good for people, good for the NHS and good for the environment.

The bill is expected to be formally introduced on 16 October, with the first debate to take place later this year, meaning the vote will likely be held in early 2025.

I would be stunned if it doesn’t pass.

Here is my prediction for what happens next…

– For the first year or so it will just be an option, you won’t hear much about it except in articles with headlines like “Assisted dying saved my parent/partner/child from years of pain”.

– After a year or two a report will come out claiming success via some tortured invented statistical measure like “assisted dying boosts patient well being scores in surveyed NHS hospitals”.

– Another will follow claiming waiting lists have improved due to decreased overcrowding in palliative care wards. They might even claim it’s decreased the NHS’s carbon footprint.

– Opinion pieces will appear with titles like “Assisted dying success story shuts down conspiracy theorists”.

– The minimum age to be considered for assisted dying will gradually be lowered. And the list of diseases and conditions for which assisted dying is a “recommended treatment alternative” will expand.

– Eventually non-lethal diseases will be included, then psychological illnesses too. Then physical and mental disabilities.

– Then will come an “emergency” – a fake one, obviously – and the NHS will come out of it shining thanks to resources “freed up” by euthanasia programs.

– Next will come the editorials. “Assisted dying is good for patients and saved the NHS during [fake pandemic], it’s time to make it mandatory”.

– A backbench MP will introduce a bill forcing anyone diagnosed with a fatal illness to be put on an assisted dying list.

– The bill will fail, and most of the press will oppose it, but the government will issue “common sense” compromise regulations where assisted dying is the default, but patients can opt out of if they want.

– It will never actually BE mandatory. But it WILL be harder and harder to get out of. If you choose to opt-in and later try to change your mind, you will be said to be mentally incompetent.

– Patients who don’t want to sign DNRs or opt for end of life care will be branded “selfish” and “irresponsible”. Studies will claim they are a strain on the NHS’s resources.

– Down the line, opting out will incur penalties to your pension payments and mean you are charged for healthcare, making it impossible for many older people to afford to stay alive.

– Then they’ll start panels where patients who are “mentally incompetent” have assisted dying recommended by “mercy tribunals”.

…and the whole time the establishment will claim there is freedom of choice, and no slippery slope at all.

What Ludwig von Mises Meant by “Democracy”

Article by Ryan McMaken.

Excerpt:

“Democracy” is one of those terms that is essentially useless unless the one using the word first defines his terms. After all, the term “democratic” can mean anything from small-scale direct democracy to the mega-elections we see in today’s huge constitutional states. Among the modern social-democratic Left, the term often just means “something I like.”

The meaning of the term can also vary significantly from time to time and from place to place. During the Jacksonian period, the Democratic party—which at the time was the decentralist, free-market, Jeffersonian party—was called “the Democracy.” By the mid twentieth century, the term meant something else entirely. In Europe, the term came to take on a variety of different meanings from place to place.

For our purposes here, I want to focus on how one particular European—Ludwig von Mises—used the term.

Although many modern students of Mises are often highly skeptical of democracy of various types, it is clear that Mises himself used the term with approval. But, Mises used the word in a way that was quite different from how most use it today. The Misesian view contrasts with modern conceptions of a “democracy” in which majority rule is forcibly imposed upon the whole population. Because modern democratic states exercise monopolistic power over their populations, there is then no escape from this “will of the majority.”

Misesian democracy is something else altogether.

Mises’s vision of democracy must be understood in light of his support for unlimited secession as a tool against majoritarian rule. For Mises, “democracy” means the free exercise of a right of exit, by which the alleged “will of the majority” is rendered unenforceable against those who seek to leave.

Continue reading here.

The Fatal Conceit

That’s the title of Friedrich Hayek’s final book (published 1988).

According to the Wikipedia page of the book, the title drives “from a passage in Adam Smith’s The Theory of Moral Sentiments (1759), though the exact phrase does not occur in Smith’s book.”

Here is that Adam-Smith quote, according to Wikipedia:

‘The man of system … is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. … He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces on a chess-board. He does not consider that the pieces on the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse [choose] to impress upon it.’ Adam Smith, The Theory of Moral Sentiments, ed. D.D. Raphael and A.L. Macfie, Indianapolis: Liberty Fund 1984, VI.ii.2.17: 233-4.