Posted tagged ‘Ludwig von Mises’

Observations From The Margin

August 1, 2018

Observation Tower

-Could a transgender girl (a male who feels he is female) winning a girls high school sporting event be considered “gender appropriation”?

-If the progressive left is against “cultural appropriation”. Should they support “gender appropriation?

-Does the fact that environmentalists are trying to get rid of plastic straws tell us that there are no real environmental problems left for them to fight?

-Anyone who acts surprised that Russia attempted to meddle in the 2016 election is either ignorant about what went on between the U.S. and the USSR during the cold war era, or is faking their bewilderment. Trying to influence the politics of the other side was standard operating procedure for the CIA and the KGB.

-Steve Kerr colluded with his players and coaches to beat the Cavs in the NBA finals. Jessie James colluded with his gang to rob banks. So, is collusion a crime?

-Is the Russian collusion investigation actually a Russian Show Trial?

-I define the “Deep State” as bureaucrats in government agencies (CIA ,FBI, DOJ, NSA, IRS, State Department, DOE, etc) who do not answer to the electorate or elected officials. Deep State bureaucrats are always trying to grow their power. They also defend their power from those who wish to decrease it. Deep State bureaucrats are capable and willing to either destroy their enemies or protect their allies. So, should Trump revoke the security clearances of these former members of the Deep State; John Brennan, James Clapper, James Comey, Andrew McCabe, Michael Hayden and Susan Rice? Would you if you were President? Just as there is no such thing as a former Marine, is there such a thing as a former member of the Deep State? Remember what Sandy Berger did for Bill Clinton after he was out of office?

-The size and power of government has increased under the control of the “big government” D’s or the “small government” R’s. It only varies in degree. The reason government grows is because insiders in both parties accumulate wealth and power as the size of government increases. The establishment of each party has tried to convince us that their D and R game is real. This is similar to promoters of a game between the Harlem Globe Trotters and the Washington Generals trying to convince us that it is a real competition and not a show. The difference is, it is difficult to see that the D and R game is not a real competition between bigger and smaller government.

-We are seeing the establishment D’s and R’s being challenged for control of their parties. True socialist central planners like Bernie Sanders and Alexandria Ocasio-Cortez are challenging the establishment D’s in an attempt to move them toward total government control over economic activity (free healthcare, free education and free housing). While President Trump and the House freedom caucus are challenging the establishment R’s to move them toward less control over economic activity (shrinking bureaucracies, deregulation and lowering taxes). This movement will give citizens a real choice between government centrally planning and a free market economy, instead of having to choose between varying degrees of government central planning.

-In a real competition between socialist central planning and free market capitalism, free market capitalism wins. The problem starts after it wins. It produces such a high standard of living, that individuals forget how the standard of living was produced in the first place. Individuals begin to think that there is a better system of distributing the wealth that has been produced. Socialism is the ideology that economically ignorant individuals gravitate toward. As socialist policies are implemented they begin to upset the economic process that produced the original high standard of living. A downward spiral starts.

-Ludwig von Mises and F. A. Hayek can put more insight into fewer words than I can. So I will let them take center stage.

Ludwig von Mises“Men must choose between the market economy and socialism….some agency must determine what should be produced. If it is not the consumer by means of demand and supply on the market, it must be the Government by compulsion.”

F. A. Hayek – “It has already been suggested that it is not necessary, for the working of this free market capitalist system, that anybody should understand it. But people are not likely to let it work if they do not understand it.”

Ludwig von Mises“Anti capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled “progressives” interpret as evidence of the failure off capitalism are the outcome of their allegedly beneficial interference with the market.”

F. A. Hayek“While it may not be difficult to destroy the spontaneous formations which are the indispensable bases of a free civilization. It may be beyond our power deliberately to reconstruct such a civilization once these foundations are destroyed.”

Ludwig von Mises“Modern civilization is a product of the philosophy of laissez faire, it cannot be preserved under the ideology of Government omnipotence.

 

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Prager University: Democratic Socialism Is Still Socialism

December 14, 2016

Capitalism or Socialism - Traffic sign with two options - socialist centralized economic planning or capitalist liberated free market

Socialism is defined as Government owning the means of production. In a Capitalist economic system, the means of production are owned by individuals. Many systems today try to have a delicate balance between these two systems. They are similar to the economic Fascism that existed under Mussolini in Italy where the means of production are still owned by individuals, but Government politicians and bureaucrats make rules and regulations on how these means are to be used, as well as taxing away a high percentage of profits.

If a country is in the middle between Socialism and Capitalism the important question is; which direction is it headed? Is a country moving toward more economic freedom or toward more government central planning. The U.S. has been traveling, at varying speeds, down the road toward more central planning since the 60’s, with the accelerator pressed to the floor in the last 8 years.

This past election was a response to what has happened in the last 8 years. Lets hope Trump and Congress want to turn around and head in the direction of more economic freedom. But I wouldn’t count on it. I just hope they take their foot off the accelerator.

DEMOCRATIC SOCIALISM IS STILL SOCIALISM

Steven Crowder looks for the differences between Democratic Socialism and Socialism in this video from Prager University. Even though a majority of people vote for (sanction) this system, it doesn’t change the reality that it doesn’t work.

In 1848 Alexis de Tocqueville wrote this about Democracy and Socialism:

Democracy extends the sphere of individual freedom, Socialism restricts it. Democracy attaches all possible value to each man, Socialism makes each man a mere agent, a mere number. Democracy and Socialism have nothing in common but one word: Equality. But notice the difference. While Democracy seeks equality in liberty, Socialism seeks equality in restraint and servitude.”

 

Here are some statements about Socialism.

Paul Craig Roberts: “We should all be thankful to the Soviets, because they have proved conclusively that Socialism doesn’t work. No one can say they didn’t have enough power or enough bureaucracy or enough planners or they didn’t go far enough.”

F. A. Hayek:There can be no doubt that the promise of greater freedom as become one of the most effective weapons of socialist propaganda and that the belief that socialism would bring freedom is genuine and sincere. But this would only heighten the tragedy if it should prove that what was promised to us as the road to freedom was in fact the high road to servitude.

Ludwig von Mises: “Men must choose between the market economy and socialism……Some agency must determine what should be produced. If it is not the consumer by means of demand and supply on the market. It must be the government by compulsion.”

F. A. Hayek: “Planning, or central direction of economic activity, presupposes the existence of common ideals and common values; and the degree to which planning can be carried is limited to the extent of which agreement on such a common scale of values can be obtained or enforced.”

 

Related ArticleWhy Socialism Won’t Work, at austrianaddict.com.

Related ArticleMilton Friedman – “Socialism is Force”, at austrianaddict.com.

Related ArticleDrifting Toward Fascism, at austrianaddict.com.

Related ArticleDoes Socialism Make People Selfish? at austrianaddict.com.

Related ArticleSocialism Sounds Great, at austrianaddict.com.

 

Drifting Towards Fascism

September 20, 2016

man drifting in a boat

First let’s define Fascism so we can begin at the same starting point. Fascism is an economic system where the state doesn’t own the means of production, but the state makes the rules that producers and consumers have to follow. There is a bureaucratic layer between businesses and politicians which plans the economy. It is crony capitalism on steroids.

Fascism places politicians and bureaucrats as the ultimate rulers aka decision makers. The individual has no rights or liberty except what the rulers say they have. Order comes from the state, (top down) not from the individual, (spontaneous order).

I saw a great chart (below) showing America’s drift toward Fascism, in an article titled, The Road To Fascism In Just Two Charts, at bawerk.net. I have always thought economic systems fit on a line where at one end no government exists, and at the opposite end there is total government control. Where an economic system is placed on this line depends on how much government intervention exists, or put another way, how little governmental intervention exists.

WHAT IS AN ECONOMY? WHAT IS SOCIAL FREEDOM?

An economy is what results when each individual is free to decide what to produce, consume, exchange and save in a world of scarce resources which have alternative uses. Simply put, you own what you’ve produced or what you’ve received in exchange for your production. It is your property and you have a right to do with it what you wish.

Production is the creation of wealth. Consumption is the destruction of wealth. Exchange is the increase of wealth as both parties place a higher value on what they received than what they’ve given up. Saving is the preference of consumption at some point in the future to consumption in the present. Savings is the basis for capital formation. Capital formation is what increases productivity. Increased productivity is the creation of larger amounts of wealth.

Each individuals decision on what and how much he will produce, consume, exchange and save according to what he  subjectively values in a world of scarcity is the essence of freedom.

In order to have economic freedom you have to have social freedom and in order to have social freedom you have to have economic freedom. In other words, economic freedom and social freedom are different sides of the same coin. Individuals are free to act. Each individual is responsible for the consequences of his actions if they bring harm to others or himself.

I have a quote by F. A. Hayek at the top of my web site. It is my favorite quote because it sums up the choice individuals have faced since the beginning of time:

F. A. HAYEK: “THE COORDINATION OF MENS ACTIVITIES THROUGH CENTRAL PLANNING OR THROUGH VOLUNTARY COOPERATION ARE ROADS GOING IN VERY DIFFERENT DIRECTIONS, THE FIRST TO SERFDOM AND POVERTY THE SECOND TO FREEDOM AND PLENTY.

Let’s take a look at the chart and see what it reveals.

true-political-axis

Zero Government intervention into the economy starts at the bottom left of the chart and moves upward and to the right as Government intervention starts to increase. Zero Social Freedom starts at the top right of the chart and moves downward and to the left as the level of Social Freedom starts to increase.

Communism, socialism, fascism and democratic socialism are on the top right of this chart. They are economic and political systems that strangle individual liberty. Their very nature means intervention into, or control of, what is produced, consumed, exchanged and saved.

Anarcho capitalism, free market capitalism, classical liberalism and our America constitutional founding are on  the lower left of the chart. They are economic and political systems that strangle Government and allow individuals the freedom to produce, consume, exchange, and save as they see fit.

What exists today is the middle ground of crony capitalism, crony socialism and other forms of government interventionism. This is the utopian middle ground that elites think mixes the best parts of both ends of the chart. They know that free market capitalism produces great amounts of wealth as seen by our standard of living. But the elites don’t like the way the wealth is “distributed” and want to use the force of government to make this distribution  “fairer” according to their idea of “fair”.

The elites attempt to redistribute wealth differently than it would exist in the free market, creates incentives that ultimately decreases the wealth that is being produced. It divides us into groups that can be pitted against each other by political opportunists.

These statements by Ludwig von Mises tell us all we need to know about the above chart:

The issue is always the same: the government or the market. There is no third solution.”

The middle-of-the-road policy is not an economic system that can last. It is a method for the realization of socialism by installments.”

Anti capitalistic policies sabotage the operation of the capitalist system of the market economy. The failure of interventionism does not demonstrate the necessity of adopting socialism. It merely exposes the futility of interventionism. All those evils which the self-styled “progressives” interpret as evidence of the failure off capitalism are the outcome of their allegedly beneficial interference with the market.”

CONCLUSION

We are in the chaotic middle. Our choice is to move towards freedom and free markets. It is going to take a lot of time and effort to educate enough people in order to tip the scales toward freedom. Is the cost too high? It’s your decision.

 

Related ArticleCapitalism vs. Crony Capitalism, at austrianaddict.com.

Related ArticleSocialism Sounds Great, at austrianaddict.com.

Related ArticleWhat Creates Wealth? Freedom, at austrtianaddict.com.

Related ArticleWe Can’t Recreate The Garden Of Eden, at austrianaddict.com.

 

Must Reads For The Week 8/13/16

August 13, 2016

HILLARY + TRUMP = ECONOMIC IGNORANCE

Donald Trump Turns To Herbert Hoover Economics, at economicpolicyjournal.com. Mr. Trump wants to “prime the pump with more spending and debt.” Spending financed by debt, both public and private, is what got us here in the first place. In the last 10 years the Fed printed over $4 trillion, and the Government took on $10 trillion in new debt. That’s enough pump priming don’t you think? The Keynsian Economic well has dry up. The simple answer is to allow free markets to work unencumbered by Government spending and Fed monetary expansion. Unfortunately nothing is simple when politicians and bureaucrats are involved in the decision making.

Hillary Clinton’s 5 Ideas To Fix The US Economy, at money.cnn.com. How does this sound. 1) Government spending on infrastructure, 2) debt free college, 3) “encourage” (force) companies to share profits with employees, 4) make the rich pay more in taxes, 5) raise the minimum wage. This is simply more spending and debt wrapped up in Christmas paper with a bow on top.

ECONOMIC REALITY

Bankster Flips Out: Says Japan’s Government Isn’t Doing Enough Keynsian Spending, at economicpolicyjournal.com. Decades of Keynsian stimulus by the Japanese Government isn’t enough? It is always the same answer to every economic problem more spending.

What Should The US Do If Other Countries Use Tariffs And Use Other Methods To Distort Trade, at economicpolicyjournal.com. Government intervention with free trade through tariffs, subsidies, and regulations harms the economy of the country that implements these policies. If other countries want to harm their economies with these policies; Why would we respond to such stupidity by implementing the same policies?

The Minimum Wage: Taking Away The Right To Work, by Roy Cordato, at mises.org. How many times does it have to be said: when a wage is set above what a particular job produces, that job will go away. Why do you think the number of private sector union workers has declined from 35% of the private sector work force, to just over 6% of the private sector work force since the 50’s. Unions priced themselves out of the market and the jobs went away. When it comes to raising the minimum wage, it is our benevolent politicians who are pricing low skill workers out of the work place. Political rhetoric is seen, workers losing their jobs are unseen.

Latest Jobs Data: The Worst expansion In 30 Years Continues, by Ryan McMaken, at mises.org.  All the stimulus spending by government and the money printing by the Fed hasn’t worked as the planners planned. Until these two activities are stopped. This is the new normal.

Will The Bubble Pop Even If The Fed Never Raises Interest Rates, by Brendan Brown, at mises.org. We are in new territory. Does anyone know how this will end? No. But it will end with a lot of pain. All we know is, at some point the activities brought about by low interest rates and printed money will have to be liquidated.

Consumer Optimism Is Not The Key To Economic Growth, by Frank Shostak, at mises.org. As we have asked before; What Comes First, Production or Consumption? You can’t consume what isn’t produced. Stimulating spending puts the cart before the horse. As Mr. Schostak says, “Demand is limited by prior production. To put it differently, his demand if fully covered (i.e., funded by the bread that he has produced). demand therefore, cannot stand by itself and be independent: it is limited by prior production….”. Interest rates coordinate production across time. Interest rates set artificially by government send false information through process of production. As a result production and consumption are mismatched. This is where we are after a decade of the Fed’s monetary manipulation.

Venezuela Has But One Choice: Capitalism or Chaos, by Carmen Elena Dorobat, at mises.org. Here is a quote by Ludwig von Mises which sums up what every article in this post: “THE ISSUE IS ALWAYS THE SAME: THE GOVERNMENT OR THE MARKET. THERE IS NO THIRD SOLUTION.”

What Are Your Options When Both Political Parties Are Based On Socialist Ideals

April 19, 2016

This video, by LibertyPen, is an appearance Margaret Thatcher made on Firing Line in 1977, which was two years before she became Prime Minister of Great Britain. She was talking about ‘Capitalism and a Free Society’. The whole video is great but the part that really jumped out at me starts at 4:27. Mrs. Thatcher talks about the difference between American politics and British politics. Below is the money quote from the video. Oh how times have changed.

“I think in many ways American politics are very different because you have two parties based on a free society, or free enterprise society and economic freedom. We have one party based on that, one main party, and another one based on socialism.

Mrs. Thatcher’s statement about American politics couldn’t be uttered in 2016. Today we can safely say the Democratic parties ideals are in harmony, if not goose step, with socialistic ideals. And since around 2000, the Republican party has and is basing its actions on socialistic ideals, even though its platform doesn’t reflect its new direction. The inside the Washington beltway Republican establishment talks a good game when it comes to smaller government but its actions don’t back up its rhetoric. If what a person values is revealed by his actions, then we can safely say that both parties value ideals that are based on socialistic thinking.

Over the last seven years President Obama has increased the size and scope of Government with no opposition, and in some cases help, from the “small Government” Republican party. When both parties increase the power of Government, what are the options for people who understand individual liberty, the rule of law and free markets?

Since it is hopeless to change the Democrat party, your options are, either start a third-party, or take over the Republican party and purge it of the big government established leaders like Boehner, McConnell, McCain, Graham, Cantor et al. Since election cycles are every two years, this will take a long time. I think the third-party option has a higher cost in terms of time and credibility. Incrementally taking over the Republican party is the best option, and the seeds of this take over have already taken root around the country. How important is this job? This quote from F.A. Hayek spells it out.

F. A. Hayek: “The battle for freedom must be won over and over again. The socialists of all parties must be persuaded or defeated if they and we are to remain free men.

Where would we be today if the insurgency against big government hadn’t started in 2009 with the tea party and liberty groups? The gains by Republicans at the State and local levels (click here Republican Stranglehold On State Government) is a direct result of the grass-roots insurgency. The insurgency is led by people who believe in such radical ideas as individual liberty, free markets, and constitutional limits on government. It will take time for this limited government insurgency to trickle up to the Federal level. Senators Cruz, Lee, and Paul, along with the forty or so members of the freedom caucus that forced Boehner out of the House speakers position were born out of this bottom up change.

Bottom up change has a better foundation than top down change. Most peoples world view is based on the shifting sands of emotion not logic. Changing a persons vision of the world is difficult, which is why it happens at the individual level. It is personal. It starts and ends one conversation at a time, one person at a time, and it isn’t easy.

Just remember, as you start to walk through a tunnel, it gets darker and darker with every step. Just keep in mind that when it’s darkest, you are half way to your destination. Don’t give up. Keep moving forward, because you don’t realize how far you’ve traveled when you’re in the dark middle of the journey. Take some motivation from this quote by Ludwig vonMises.

Ludwig von Mises: “The history of mankind is the history of ideas. For it is ideas, theories and doctrines that guide human action, determine the ultimate ends men aim at, and the choice of the means employed for the attainment of these ends. The sensational events which stir the emotions and catch the interest of superficial observers are merely the consummation of ideological changes. There are no such things in rather misleading terms, a “turning point in history” is the coming on the scene of forces which were already for a long time at work behind the scene. New ideologies, which had already long since superseded the old ones, throw off their last veil and even the dullest people become aware of the changes which they did not notice before.

Menos Marx – Mias Mises (Less Marx – More Mises)

March 28, 2016

The global economic slowdown provides an opportunity to spread the ideas of Austrian economics and individual liberty. People know something is wrong but they don’t know the cause. Government intervention by politicians and bureaucrats, along with our central bankers policy of money printing and zero interest rates is what caused these economic distortions.

It is easy for political leaders to sell the belief that the solutions come from bureaucratic central planners. People can see concrete things built from the plans of engineers and architects, so it makes sense in our minds that plans can bring about the ends sought by the planners.

Getting people to understand that order can be created spontaneously when individuals pursue their own plans and cooperate voluntarily with each other in what we call a free market, is much more difficult because of its abstract nature. The concepts of money and interest rates aren’t easy to wrap your head around. When they are manipulated by central banks, it’s even harder to grasp.

Education about economic principles has to come from the bottom up (0ne on one), because we know the truth can’t come form politicians and bureaucrats.

In this article, Hope In Brazil As Millions March Against Rouseff, by Tho Bishop, at mises.org, we see growth of bottom up change. Here are some excerpts from the article: “Due to the work of Helio Beltrao and Mises Brasil, Ludwig von Mises and Austrian economics have made unprecedented gains within the country. As I noted last year, Mises is the most searched economist in all of Brazil. Meanwhile the media was forced to take notice as signs reading Menos Marx, Mais Mises (Less Marx, More Mises) were seen being waved during an earlier round of anti-Rousseff (President Dilma Rousseff) protests.”

“Ludwig von Mises: “In the long run even the most despotic governments with all their brutality and cruelty are no match for ideas. Eventually the ideology that has won the support of the majority will prevail and cut the ground from under the tyrant’s feet.

MORE HOPE FOR LATIN AMERICA?

Here is a video from libertypenblog.blogspot.com. John Stossel talks to Gloria Alvarez who is a free market activist in Latin America. Here are quotes from the video:

Gloria Alvarez: “..In Latin America we still don’t know how economics works. We have seen Cuba fail and it should be enough to see Cuba failing…….and since we don’t know history because Latin Americans are oblivious to what happened in the Soviet Union, in China…..”

Stossel asks, “How did you learn this”

Gloria Alvarez: “….I studied in a libertarian university…UFM….It has von Mises library…

 

Miss Alvarez, Latin Americans aren’t alone in their ignorance of history or how economics works. We Americans have become blissfully ignorant. And we have no excuses because we have a culture of liberty and free markets. How much farther down the Road to Serfdom do we have to travel before we wake up?

Click here to see video Gloria Alvarez speak at CPAC.

Related ArticlePeople Want A President Who Will “Get Something Done“, at austrianaddict.com.

Related ArticlePrivate Property vs. Collective Ownership: One Deals With Scarcity Better Than The Other, at austrianaddict.com.

 

 

Must Reads For The Week 1/23/16

January 23, 2016

ECONOMIC FORCES EVENTUALLY WIN

China Promises To Keep Intervening To “Look After” Stock Market “Investors”, Hurt “Speculators“, at zerohedge.com. So the cure for the Chinese stock market bust is Government intervention? Didn’t Government intervention cause the boom in the first place?  Government planners can’t stop reality. Economic forces are always in the process of correcting Government interventions.

The Rest Belt Goes Red – Glory Days Of China’s Steel Boom Leave Behind Abandoned Mills And Broken Lives, at davidstockmanscontracorner.com. Another example of a Government created bubble ending in a bust. Government centrally planning an economy doesn’t work. Ask the former Soviet Union.

The Three Musketeers Of Global Deflation – China, Russia, and Saudi Arabia, at davidstockmanscontracorner.com. We know about China’s problems, but over 65% of Russia’s and 45% of Saudi Arabia’s GDP comes from oil. Oil below $30 a barrel hurts these two countries. Economic forces can’t be stopped by Government central planners.

The Fragile Forty & How The Word Lost $17 Trillion In 6 Months, at zerohedge.com. Forty global stock indices are in bear markets, as over $17 trillion of equity has evaporated in the last six months. Central banks think the wealth effect created by their money printing will reignite the global economic engine. It hasn’t worked because economic forces eventually prevail.

This Is What The Death Of A Nation Looks Like; Venezuela Prepares for 720% Hyperinflation, at zerohedge.com. Bernie Sanders take note. This is what a socialist utopia looks like. Excerpt from the article: “..in reality the Venezuela economy no longer exists, with all transactions now taking place in grey or black markets, and the government apparatus effectively operating in a vacuum.” Economic forces creating a black markets was inevitable.

Schlumberger Fires 10,000 As It Announces $10 Billion Stock Buy Back, at zerohedge.com. To keep your slumping stock price up, all you have to do is buy back your stock. Simple supply and demand. How do you finance this buyback. Either borrow low interest printed money like many companies have and are doing, or get rid of your biggest expense, your workers. Economic reality forces businesses to make decisions.

A Post Boom World, Auto Prices Will Fall,, by Patrick Barron, at mises.org. Easy credit and sup-prime loans for cars will eventually end in a bust, like the housing bubble. Economic forces of supply and demand will bring the car market back in line.

And You Thought QE Was Over: The Fed Will Monetize Half Of This Years U.S. Treasury Issuance, at zerohedge.com. Over the next four years, the Federal Reserve is going to have to repurchase, with printed money, $1.1 trillion in maturing Government debt that it owns. The Federal Government can only grow to it’s present size if it is financed by it’s central bank, the Federal Reserve.

A RECESSION IS THE CORRECTION

Why We Need A Recession, by Ronald-Peter Stoferle, at mises.org. A recession is nothing more than economic forces correcting the misallocation of resources, labor, land and capital that was brought about by previous central bank money creation and easy credit.

As Ludwig von Mises said: “The return to monetary stability does not generate a crisis. It only brings to light the malinvestments and other mistakes that were made under the hallucination of the illusory prosperity created by the easy money.

And as F. A. Hayek said: “To combat a depression by a forced credit expansion, is akin to the attempt to fight an evil by its own causes; because we suffer from a misdirection of production, we want even more misdirection – an approach that necessarily leads to an even more serious crisis once the credit expansion comes to an end.

GOVERNMENT KNOWS BEST

How Government Poisoned The People Of Flint, by John Counts, at mlive.com. Government doesn’t know what’s best.

Texas Adopts New York Values On Fantasy Football, Tho Bishop, at mises.org. Government wants to protect you from illegal gambling. It’s better for you to buy legal state lottery tickets.