Category Archives: Economics

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.

The Role of Intellectuals in Society

The concluding words in Murray N. Rothbard‘s book “The Case For a One Hundred Percent Gold Dollar” (pp. 71f):

There is no gainsaying the fact that this suggested program will strike most people as impossibly “radical” and “unrealistic”; any suggestion for changing the status quo, no matter how slight, can always be considered by someone as too radical, so that the only thoroughgoing escape from the charge of impracticality is never to advocate any change whatever in existing conditions.
But to take this approach is to abandon human reason, and to drift in animal- or plant-like manner with the tide of events. As Professor Philbrook pointed out in a brilliant article some years ago, we must frame our policy convictions on what we believe the best course to be and then try to convince others of this goal, and not include within our policy conclusions estimates of what other people may find acceptable. For someone must propagate the truth in society, as opposed to what is politically expedient. If scholars and intellectuals fail to do so, if they fail to expound their convictions of what they believe the correct course to be, they are abandoning truth, and therefore abandoning their very raison d’etre. All hope of social progress would then be gone, for no new ideas would ever be advanced nor effort expended to
convince others of their validity.

What Has Government Done to Our Money?

Book by Murray Rothbard, preface by Guido Hülsmann

I can name maybe half a dozen books (including the Bible) which have been pivotal to my intellectual development. What Has Government Done to Our Money, by Murray N. Rothbard, is one of them. Here‘s the Wikipedia page on the book.

I cite in the following excerpts from the preface by Professor Jörg Guido Hülsmann.

What Has Government Done to Our Money? is an outstanding example of Rothbard’s creative mind at work. Since it was first published in 1964 .[sic! Wikipedia and other sources say 1963], it has appeared in four editions in English, and has been translated into many foreign languages. It has served as a primer on monetary theory for all its readers. In fact, it is probably the most brilliant introduction to monetary theory ever written, presenting both the foundation of monetary theory and exploring the role of the state in the degeneration of monetary systems. The book is suitable not only for economists, but also for non-academics and all people interested in the subject. It is, like all of Rothbard’s works, a timeless and powerful statement. It leaves the reader with a completely new way to think about the relationship between money and state.

Here the elements and the functions of a free monetary system are presented with brevity and clarity. Rothbard shows how and why gold and silver are used as money on the unhampered market. Money originates neither from social compact nor government edict, but as a market solution of the problems and costs associated with barter. All other tasks usually considered monetary duties of the state — from minting to the definition of the monetary units to the precise form money will take — are left to private entrepreneurs on the unhampered market.

Where is the place of the state in this picture? Doesn’t the state have to guard our money? Doesn’t it have to adjust the money supply and supervise the banks? Rothbard’s answer to these questions is a clear no. Government intervention does not protect money at all but rather threatens its integrity. Government interference leads to more abuse and more instability than the free market would otherwise have tolerated. Instead of solving problems, intervention creates them. Instead of order they bring chaos and economic upheaval.

For Rothbard, the central issue is not whether monetary policy should stabilize the price level or the money supply; it is whether there is a role for the state in the monetary system at all. On this question, Rothbard answers decisively in the negative. Entrusting the money to the state is a grave error. It opens door and gate for totalitarian control of the society by interest groups closely connected to the state apparatus. The consequences are economic and monetary crises, and a relentless decline in the purchasing power of money. Rothbard illustrates this impressively with a short history of the monetary collapse of the West.

Rothbard’s chronicle of decline ends with the breakdown of Bretton Woods and a prediction that the future portends continued exchange-rate volatility, debt accumulation, inflation, crises, bailouts, and a political drive to further centralize control of money and credit. This prediction turned out to be a good summary of the monetary events of the last quarter century. The world economy adopted a de facto dollar standard, a managed monetary integration came to Europe, and crisis has followed crisis in Asia, Russia, Mexico, and Central and South America, along with exploding deficits and debts in the United States. Undoubtedly many more will come our way.

This new edition includes a detailed reform proposal for a 100% gold dollar [see online here], an essay first published in 1962, the same year that Man, Economy, and State appeared and two years before What Has Government Done to Our Money. That it was written a decade before the last vestiges of the gold standard were abolished does not diminish its power as a proposal for reform.

Would Rothbard’s plan work? Certainly. The limits are due not to its economic viability but rather to the same forces that keep all radical proposals for freedom at bay: political barriers and ideological opposition. Should the conditions ever become ripe for pure liberty again — and Rothbard was ever the optimist — this essay will serve as an outstanding blueprint.

Today all nations face a choice between sound money and continuing monetary depreciation and/or monetary crisis. Sound money, Rothbard shows, means the enforcement of strict separation between the state and money. Rothbard has shown that the world’s party of liberty can embrace what is usually said to be an impossible ideal: an international money protected against the arbitrariness of the state. His analysis and prescriptions deserve even more attention today than when they were first written.

Jörg Guido Hülsmann

Angers, France

April 2005

The Glue Binding Democracy and a Free Economy Has Melted

Writes Charles Hugh Smith in an article with that title on the blog “Of Two Minds”.

Quote:

The single-minded pursuit of greed does not magically organize the economy or society to serve everyone’s interests equally. As Adam Smith explained, capitalism and the social order both require a moral foundation, which in a free society takes the form of civic virtue: it is the responsibility of every citizen who is able to contribute to the social capital that serves us all to do so not in response to an oppressive state but of their own free will.

Here’s the problem though: What if the citizen opts to use his free will to not contribute to the social capital? What if, instead, he opts to use his free will to exploit the social capital without giving anything back, ever? Who’s to stop him, and how and why?

This is where the force of religion comes in. Wherever we use the word “responsibility” we need to examine this: “To whom are we responsible”? In a society where we can assume the vast majority of members believe in a God to whom they feel “responsible”, we can assume that they will behave largely along the lines of the commandments handed down from on high.

This can no longer be taken for granted in erstwhile Christian societies. This general presupposition began to be eroded to a large extent during the (pre-French Revolution) Enlightenment (with precursors of this trend beginning in the Renaissance). The French Revolution massively strengthened and accelerated this trend. The logical end points of this trend were the concentration and death camps of the 20th century.

We have since taken one (!) step back from that abyss. But we haven’t “turned around” yet and walked away from it.

“Climate Change” is a $100 Trillion Wealth Transfer from the Poor to the Rich

Are you predator or prey?, asks Elizabeth Nickson.

Excerpts:

Ever asked yourself why 20 million have poured through the Southern border in the last three and a half years?

[. . .]

Mostly they are coming because Black Rock, the UN, the WEF are grabbing their lands, the more fertile the better, driving them from those lands and sticking them into tenement cities where they have to scratch like chickens for a living.  Agenda 2030 is ravening under the radar in the US and Canada, where “civil society” in the pay of the government and environmental NGOs funded by oligarchs, is taking as much land and as many resources as possible out of the productive economy and shoving it into the land banks of BlackRock.

In the south, it’s not surreptitious. It is state policy to destroy their lives, to take their ancestral lands, whether it’s 40 acres or a half acre and leave them begging by the side of the road.

[. . .]

At the same time, in our vast swaths of upland forests, the UN organization Transitions is slowly accreting that land. For who? We don’t really know. Transitions is everywhere, in the US, in Canada, in every country in Europe.  It is where you live. It is one of the many prongs of Agenda 2030. Everywhere, it invades local governments and acts to suppress economic activity.

Transitions also trades carbon credits. For who? Who do you think?

Therefore Transitions, which has a rainbow-colored smiley PR face, is in that business. Buying land to transfer it to international organizations and mega-rich families so they can make money on our forests. But not us. We can’t.  We can’t even thin them to prevent catastrophic forest fire.

Those contracts must be interesting, not that anyone can see them. The first thing they do is act as whacking big first-time tax deductions. The second thing they do is act as an annual tax deduction because those trees are eating CO2. Very clever. International interests buy our land (and yours) and use it to not pay taxes. While banking some of the most valuable assets on the planet.

Multiply this 100,000 times, and you will see just a very tiny piece of the vast tapestry, the puzzle, of the Climate Change/Agenda 2030 plan that will shut down economic activity everywhere.

Socialism’s Very Quiet Revolution is Already Causing Chaos in the West

From Howard Kunstler’s recent article: “If Wishes Were Fishes“:

The failures of each giant system will only amplify and ramify the failures in all the other systems. Take that as axiomatic. For instance, the fantastic failures in higher education now on display, largely due to the Marxian defeat of excellence, will implant a generation of incompetents in all hierarchies of management. That will result in an insidious matrix of bad decision-making. The Pareto 80-20 principle will ensure that 80-percent of all institutional energy will focus on propping up failing institutions with bad decisions that add up to broken business models (while 20-percent goes into actually carrying-out the bad decisions as policy). That explains how Pete Buttigieg’s Department of Transportation spent $7.5-billion to build seven electric car charging stations.

From Wanjiru Njoya’s recent article “Socialism’s Very Quiet Revolution“:

The quiet nature of this revolution means that great optimism surrounds the banning of schemes and programs such as DEI, and many fail to notice that such bans do not capture the relentless “great tides of thought and appetite that run unseen deeply below the surface” to which Flynn referred. Thus, we see DEI offices being shut down and DEI staff reassigned to other offices to continue their work albeit without referring to it as DEI.

[. . .]

The lesson to derive from Flynn is that citizens unaware of an unfolding revolution are easily “sneaked into socialism.” Conservatives are now rejoicing at “winning” their battle to quash DEI programs, while the DEI enforcers simply slap a new label on their schemes and carry on. Being unaware of the scale of the threat, citizens fail to take effective action and are eventually “trapped in a socialist system.” A good example of how a country can become trapped is when decades of case law and legal precedent become difficult to reverse. Constitutional concepts over time acquire the meaning assigned to them by the courts, which are then entrenched in law schools and courts as the “correct” meaning. In this situation, the people’s optimism becomes their weakness.