MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘Mises’

The World’s Least-Free Countries Reveal Just How Much “Socialism Sucks” | Mises Wire

Posted by M. C. on October 15, 2019

https://mises.org/wire/worlds-least-free-countries-reveal-just-how-much-socialism-sucks?utm_source=Mises+Institute+Subscriptions&utm_campaign=b832e6eb69-EMAIL_CAMPAIGN_9_21_2018_9_59_COPY_01&utm_medium=email&utm_term=0_8b52b2e1c0-b832e6eb69-228343965

[Socialism Sucks: Two Economists Drink Their Way Through the Unfree World. By Robert Lawson and Benjamin Powell.  Regnery Publishing, 2019. 192 pages.]

Robert Lawson and Benjamin Powell are well-known free market economists, and they do not look with favor on a disturbing trend among American young people. “In the spring of 2016,” they tell us, “a Harvard survey found that a third of eighteen-to twenty-nine year olds supported socialism. Another survey, from the Victims of Communism Memorial Foundation, reported that millennials supported socialism over any other economic system.” (p.8)

Unfortunately, the young people in question have little idea of the nature of socialism. Lawson and Powell would like to remedy this situation, but they confront a problem. Ordinarily, one would urge students to read Hazlitt’s Economics in One Lesson, Mises’s “Economic Calculation in the Socialist Commonwealth,” and similar classic works, in order to understand the basic facts about the free market and socialism, but the millennials are unlikely to do so. One must attract their attention. What can be done?

Lawson and Powell have had the happy idea of presenting elementary economics in a humorous way that will appeal to those “turned off” by serious and sober scholarship. In the latter adjective lies the key to their approach. Both of the authors enjoy drinking beer, and they travel around the world to various socialist countries in pursuit of their beloved beverage, making incisive comments about the economy of each country as they do so. They write in a salty style that will make millennials laugh, though some readers will find it jarring.

For the young, “socialism” means no more than vague ideas about “fairness”, but, the authors note, the term has a precise meaning: “To separate the state from socialism in any large society is like trying to separate private property from capitalism. It can’t be done. I’ll say it once more for the people in the back: socialism, in practice, means that the state owns and controls the means of production.” (p.128) No country is completely socialist, but some are more socialist than others. How can the degree of socialism be evaluated? Lawson has, along with James Gwartney, produced an annual economic freedom index for the Fraser Institute, which the authors use to answer this question, sometimes with surprising results.

Many professed socialists look to Sweden for inspiration, but according to the freedom index, “Sweden gets a 7.54 rating, which is good enough for twenty-seventh place out of the 159 countries in the study. . .Bottom line: Sweden is a prosperous, mostly capitalist country.” (pp.10-11)…

If some people admire Sweden, few except fanatics have good words for the economy of Cuba. Nevertheless, must we not recognize the wonders accomplished by the Cuban socialized medicine? We must give the devil his due. Lawson and Powell are not convinced. “Official Cuban health statistics are impressive. . .Yet, we also know that the hospitals most Cubans use are so poorly equipped that people often have to bring their own sheets. What gives? The silence [on the streets} is part of the answer. The lack of automobiles means a lack of traffic fatalities. Since automobile accidents are a leading cause of death among younger people, the lack of automobiles has a disproportionate impact on life expectancy statistics for reasons that have nothing to do with health care. The low rate of infant mortality is a product of data manipulation.” (p.53)

Why has Cuban socialism, like all other centralized socialist economies, failed? The authors present with great clarity the essential point: “’[A]lmost a hundred years ago, the Austrian economist Ludwig von Mises explained that socialism, even if run by benevolent despots and populated with workers willing to work for the common good, could still not match capitalism’s performance. Socialism requires abolishing private property in the means of production. But private property is necessary to have the free exchange of labor, capital, and goods that establish proper prices. Without proper prices, socialist planners could not know which consumer goods were needed or how best to produce them. . .Socialism also gives tremendous power to government officials and bureaucrats who are the system’s planners—and with that power comes corruption, abuse, and tyranny.” (p.37)

Socialist tyrants were the greatest mass murderers in history, and the young must be apprised of this melancholy fact. “Stalin ranks just behind Mao as history’s second greatest mass murderer, with Hitler coming in third—and all three dictators were, of course, committed socialists of one sort or another.” (p.115)…

It is not only the drug war, but the war on terror as well, that ought to be condemned, and here once more, the many millennials who protested against the war are in the right. “We feel the same about the war on terror. The wars and violence associated with it in the Middle East are a major reason for Europe’s immigration wave. . .advocates for capitalism can be against war precisely because war undermine capitalist institutions and freedoms.. . .Chris Coyne wrote a book entitled After War: The Political Economy of Exporting Democracy, in which he shows that when the U.S. engages in foreign intervention, it rarely creates the kind of lasting institutional change that supports what some might call a ‘neoliberal’ society. Economist Robert Higgs’s classic book, Crisis and Leviathan, shows how crises in the United States, especially wars, have led to expanded government at the expense of markets. Chris’s latest book, Tyranny Come Hone: The Domestic Fate of U.S. Militarism, co-authored with another friend of ours, Abby Hall, has shown how U.S. military interventions abroad ‘boomerang’ back to the United States in ways that decrease our freedoms at home. See, anti-war isn’t a uniquely leftist position. Capitalists should be anti-war too.” (pp.136-137. I regret the use of “neoliberal” as a term of praise and the solecism “advocates for.”)

I confess that I approached the authors’ project of a drinking tour of the socialist countries with skepticism. Would it be more than ajeu d’esprit? Reading the book has laid my skepticism to rest. Socialism Sucks has the potential to do great good, if it gets into the right hands, and its impressive sales suggest that it will do so.

Be seeing you

Sean Penn

The Dumb and Dumber of economics

 

 

 

Posted in Uncategorized | Tagged: , , , , , , , , , | Leave a Comment »

Mises’s Proposals for a 100-Percent Reserve Requirement | Mises Wire

Posted by M. C. on February 2, 2019

Long article. Mises is a tough read.

Bottom line = banks are allowed to keep only a few per cent of savings. The rest is lent out.

In a bank panic you will be out of luck. Get your cash out.

https://mises.org/wire/misess-proposals-100-percent-reserve-requirement

Ludwig von Mises was the first twentieth-century economist to propose the establishment of a banking system with a 100-percent reserve requirement on demand deposits. Mises made his recommendation in the first edition of his book, The Theory of Money and Credit, published in 1912. At the end of this first edition, in a section literally reproduced in the second, which was printed in 1924, Mises draws the following conclusion:

Fiduciary media are scarcely different in nature from money; a supply of them affects the market in the same wayas a supply of money proper; variations in their quantity influence the objective exchange value of money in just thesame way as do variations in the quantity of money proper. Hence, they should logically be subjected to the same principles that have been established with regard to money proper; the same attempts should be made in their case as well to eliminate as far as possible human influence on the exchange ratio between money and other economic goods.

The possibility of causing temporary fluctuations in the exchange ratios between goods of higher and of lower orders by the issue of fiduciary media, and the pernicious consequences connected with a divergence between the naturaland money rates of interest, are circumstances leading to the same conclusion. Now it is obvious that the only way of eliminating human influence on the credit system is to suppress all further issue of fiduciary media. The basic conception of Peel’s Act ought to be restated and more completely implemented than it was in the England of his time by including the issue of credit in the form of bank balances within the legislative prohibition.

Mises adds:

It would be a mistake to assume that the modern organization of exchange is bound to continue to exist. It carries within itself the germ of its own destruction; the development of the fiduciary medium must necessarily lead to its breakdown…

Be seeing you

Bankster

Bankster

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

An Escalating War on Cash

Posted by M. C. on February 26, 2016

https://www.lewrockwell.com/2016/02/no_author/escalating-war-cash/

An Escalating War on Cash

On February 16th, The Washington Post printed the article, “It’s time to kill the $100 bill.” This came on the heels of a CNNMoney item, the day before, entitled “Death of the 500 euro bill getting closer.” The former cited a recent Harvard Kennedy School working paper, No. 52 by Senior Fellow Peter Sands, concluding that the abolition of high denomination notes would help deter “tax evasion, financial crime, terrorist finance, and corruption.” In recent days, former Treasury Secretary Larry Summers, ECB President Mario Draghi, and even the editorial board of the New York Times came out in support of the elimination of large currency notes. Apart from the question as to why these calls are being raised now with such frequency, the larger issue is whether these moves are actually needed or if they merely a subterfuge for more complex economic manipulations by central banks to extend control over private wealth. Read the rest of this entry »

Posted in Uncategorized | Tagged: , , , , , , , | Leave a Comment »