Interventionism Turns Crisis into Depression

Mark Thornton

(Originally posted on Mises.org)

Austrian economists have a well-developed theory that explains the boom, bubble, bust, and recovery. A good introduction to the Austrian theory of the business cycle can be found in Larry Sechrest’s article “Explaining Malinvestment and Overinvestment.” Larry wrote the article to provide a pedagogical device for economics students, but academic economists will probably be able to understand it as well.

Privatize the Police

Murray N. Rothbard

(Originally posted on Mises.org)

Abolition of the public sector means, of course, that all pieces of land, all land areas, including streets and roads, would be owned privately, by individuals, corporations, cooperatives, or any other voluntary groupings of individuals and capital. The fact that all streets and land areas would be private would by itself solve many of the seemingly insoluble problems of private operation. What we need to do is to reorient our thinking to consider a world in which all land areas are privately owned.

The Feds Collect Most of the Taxes in America—So They Have Most of the Power

Ryan McMaken

(Originally posted on Mises.org)

In 2021, it’s clear Americans now have thrown off any notions of subsidiarity and instead embraced the idea that the federal government should be called upon to fund pretty much anything and everything. From “stimulus checks” to “paycheck protection,” it’s assumed an entire national workforce can be propped up by federal spending. Moreover, in the wake of 2020’s Covid Recession, every pressure group from local governments to weapons manufacturers looks to the federal government to offer ever larger amounts of federal spending ladled out from the federal pot of more than six trillion dollars of annual spending. Need some “infrastructure”? The federal government will pay for it. Need a bailout? You know where to go. 

The Drive for Regulatory Harmonization

Robert Higgs

(Originally posted on Mises.org)

Contemporary social and economic affairs take place within a bewildering complex of regulatory restrictions and requirements. Already profuse beyond comprehension, the labyrinth grows ever more extensive. In the United States, at the federal level alone, the 4,000 to 5,000 new final rules put in place each year require some 20,000 pages of the Federal Register for their official promulgation (Clyde Wayne Crews, Jr., Ten Thousand Commandments: An Annual Policymaker’s Snapshot of the Federal Regulatory State [Washington, D.C.: Competitive Enterprise Institute, March 1999], 14–15). Simultaneously, the 50 states, 3,043 counties, 19,279 municipalities, and 16,656 townships crank out countless new regulations of their own (see Statistical Abstract of the United States 1997, 297, for the number of government units in 1992).

How Fiat Money Changes Culture

Stephan Livera

(Originally posted on Mises.org)

Can the type of money used change the culture of a society? This might seem like an absurd proposition, but it is supported by the arguments of proponents of the Austrian school of economics. 

The Covid Lockdowns Showed Us How Dangerous Social Engineers Have Become

Birsen Filip

(Originally posted on Mises.org)

Since the onset of the covid-19 pandemic, governments around the world, along with a handful of unelected medical experts, have been behaving as though they are the social engineers of totalitarian regimes (e.g., fascism, Nazism, and communism). To be more precise, this select group of political leaders and medical experts have upended economies, as well as the lives of billions of ordinary people, by implementing extremely coercive and restrictive lockdowns and physical distancing measures for the stated purpose of bringing the pandemic under control and preventing future outbreaks. Specific measures have included curfews; police patrols on the streets; the compulsory closure of businesses deemed nonessential, as well as workplaces, schools, and institutions of higher education; the banning of social gatherings; the cancelation of sporting and cultural events; the suspension of religious services; and restrictions on personal movement and interactions at the local, national, and international levels. In many parts of the world, people have been subjected to mandatory stay-at-home orders, requiring them to spend most of the day confined and isolated in their homes. Lockdown measures have also been used to prohibit people from engaging in public protests and freely expressing their opinions, as failure to comply with limits on social gatherings has led to people being arrested, detained, and fined. It has also not been uncommon to see excessive police force being used to enforce lockdowns and curfews, and to disperse protests against unreasonable restrictions. Some governments have also set up detention centers for international travelers entering into their countries, where they are forced to quarantine at their own expense while they wait for the results of their covid-19 tests. Shockingly, in early June 2021, the provincial government in Ontario, Canada, went so far as to announce that residents in long-term care homes would soon be permitted to engage in “close physical contact, including handholding” and “brief hugs” with visitors when both parties are fully immunized.

Central Banks See No Way out of the Low Interest Rate Trap

Thomas Mayer

Gunther Schnabl

(Originally posted on Mises.org)

Since the 1980s, slower economic growth in the industrial countries has been accompanied by declining interest rates. They have even turned negative in more recent years. At the same time, investment, productivity, and real GDP growth all have slowed. Recession caused by lockdowns of the economy to fight the corona pandemic in 2020/21 has accelerated the demise of interest. Even as the world economy recovers, central bankers around the world have signaled that interest rates will be kept low for a long time to come. What is going on here? Various economists have provided different theoretical and empirical explanations for the global decline of interest rates.

Why the Regime’s Regulatory Power Is a Standing Threat to America

Jacob G. Hornberger

(Originally posted on Mises.org)

Whenever some foreign regime that is independent of the U.S. Empire goes after dissenters, U.S. officials trot out the First Amendment to show how different the United States is. Here, people are free to criticize government officials without fear of being put in jail or otherwise punished for exercising their free speech rights, they proudly point out. 

The Ratification Debate: A Standing Army vs. the Militias

Murray N. Rothbard

(Originally posted on Mises.org)

[This passage is excerpted from Murray N. Rothbard’s Conceived in Liberty, vol. 5, The New Republic: 1784–1791.] 

One of the most important aspects of the proposed Constitution was its authorization for a permanent national standing army, a striking contrast to the simple reserve constituting the state militia. The standing army was a particular objection of the Antifederalists, who, in the liberal antimilitary tradition, believed such an army to be inimical to the liberty of the American people. In contrast, the ex-Continental Army officers, particularly the higher officers, yearned for the power, the pelf, and the prestige that would come to them once again, and this time permanently, should there be a standing army. The leading and most aristocratic ex-army officers were cohesively organized in the ultra-reactionary and militaristic Society of the Cincinnati, which looked for a European-type army established, preferably led by a hereditary officer caste. The ex-Continental Army officers and particularly their upper strata in the convention, eagerly welcomed and fought for the proposed Constitution as their long-awaited conduit to a caste status in a standing army. Elbridge Gerry, indeed, feared the power of the Cincinnati, and this was one of the reasons why Gerry (and George Mason) opposed the popular election of the president at the convention:

The Fed Plans to Raise Interest Rates—Years from Now

Ryan McMaken

(Originally posted on Mises.org)

On Wednesday, the Federal Reserve’s Federal Open Market Committee voted to continue with a target federal funds rate of 0.25 percent, and to continue with large-scale asset purchases. According to the committee’s press release:

Capitalism Isn’t a Modern Invention. It’s Medieval.

David Gordon

(Originally posted on Mises.org)

During the eighteenth century, capitalism in Europe “took off” in a way it had not done before, and as a result the West surpassed all other areas of the world in economic growth. What led to this transformation? Max Weber offers the most famous answer. In The Protestant Ethic and the Spirit of Capitalism (1905), he traces the new system to the Puritans. Before them, though there were rich merchants, substantial savings and investment by private individuals was unusual. The Puritans changed matters. They viewed the self-disciplined pursuit of wealth without indulgence in luxury consumption as a sign that God had predestined them to salvation. 

Consent of the Governed?

Robert Higgs

(Originally posted on Mises.org)

What gives some people the right to rule others? At least since John Locke’s time, the most common and seemingly compelling answer has been “the consent of the governed.” When the North American revolutionaries set out to justify their secession from the British Empire, they declared, among other things: “Governments are instituted among Men, deriving their just Powers from the Consent of the Governed.” This sounds good, especially if one doesn’t think about it very hard or very long, but the harder and longer one thinks about it, the more problematic it becomes.

Biden Is Trying to Seize Control of Local Land-Use Regulations

Matt Ray

(Originally posted on Mises.org)

In recent years, there’s been a push to move zoning decisions further from the local level. In 2019, Oregon passed House Bill 2001, making it the first statewide law to abolish single-family zoning in many areas. By expanding the state government’s jurisdiction to include zoning decisions previously handled by local agencies, the law entails an alarming centralization of state power. This was quickly followed by the introduction of similar bills in Virginia, Washington, Minnesota, and North Carolina. Now President Biden is attempting to increase federal influence over local zoning.

Governments Are Failing at Their Most Basic Duties—While Promising Free Stuff

Gary Galles

(Originally posted on Mises.org)

Three city blocks were systematically burned to the ground as hundreds of the local police stood by and viewed the violence. They were obeying orders not to harm the arsonists. The National Guard was called, adding more armed watchers. A passive gendarmerie consorting with open rebellion has rarely been seen in American history, until recently.

Except for variation in detail and numbers, this sort of thing is happening today.

Why Big Business Ends up Supporting the Regime

Ryan McMaken

(Originally posted on Mises.org)

Policymakers know they hold immense power to regulate and punish firms that don’t play ball. Industry leaders know this too. So it’s likely both sides will indeed end up “playing ball.” 

In Defense of Debt Collection

Llewellyn H. Rockwell Jr.

(Originally posted on Mises.org)

You know hypocrisy, as when the pot calls the kettle black? Well, this news report gives new meaning to the idea:

The rise in American consumer debt has been accompanied by a sharp increase in complaints about aggressive and sometimes unscrupulous tactics by debt collection agencies, a phenomenon that has government regulators increasingly concerned.

Thanks to Federal Megaspending, the Trade Deficit Has Only Gotten Worse

Mihai Macovei

(Originally posted on Mises.org)

President Trump’s protectionist trade measures against China and other external partners have not caused a reduction of the total US trade deficit. The latter actually grew further as China’s exports found indirect ways into the US and massive domestic spending schemes were expanded during the pandemic.

This Is What Could Trigger Big Growth in CPI Inflation

Brendan Brown

(Originally posted on Mises.org)

Many episodes of monetary inflation, some even long and virulent, do not feature a denouement in a sustained high CPI inflation over many years. Instead, these episodes have the common characteristics of asset inflation and the monetary authority levying tax in various forms – principally inflation tax or monetary repression tax. For the monetary inflation to undergo combustion into sustained high CPI inflation it must generate necessary one or two necessary conditions. First, currency collapse; or second, a credit boom which spawns a persistent tendency of demand to exceed supply at present prices across a broad range of markets in goods and services.

Why Stimulus Does Not Stimulate

Robert Blumen

(Originally posted on Mises.org)

Congress is hard at work on a stimulus bill. Doubtless their efforts will pay off. Does anyone stop to ask what it is about stimulus that stimulates? And what, exactly, does it stimulate? Start by spending a lot of money that the government does not have, borrow the difference, and the central bank prints the difference and buys up the debt. But does that increase the production of useful things? To answer this, we look at an unlikely friend, Keynes and his General Theory.

Is Guaranteed Basic Income the Solution to Robots Taking Our Jobs?

Robert Blumen

(Originally posted on Mises.org)

The idea of universal basic income (UBI) is near the peak of the hype cycle. Democrat Andrew Yang made it the flagship issue of his presidential campaign. A small industry of advocates tirelessly push arguments in its favor. I will address two in this piece. The first: the claim of permanent elimination of jobs. The second: the resulting need for income to compensate for the fall in purchasing power from the lack of work. Both rely on long-discarded economic fallacies.