Potpourri
==> Richard Ebeling talks about the great Austrian inflation.
==> The Tennessee chapter of NORML put out this publication on quick facts about marijuana legalization. Let me know if you guys spot anything that should be tweaked, because I know these people.
==> A blog post from Mises.org about “the time Murray Rothbard schooled James Buchanan.” The title isn’t misleading; Rothbard wrote to Buchanan, who agreed that Rothbard’s critique was technically correct.
==> Scott Sumner tries to big-tent me. I agree he and I both belong to the category, “Blogging economists who have a very high opinion of themselves.”
==> I obviously disavow the concluding remarks, but in this post Matt Yglesias does a decent job summarizing the Cambridge Capital Controversy. I bring this up mostly to say that I’m not being partisan when I claim that Thomas Piketty literally doesn’t know the first thing about it.
==> I was never jealous that Tom Woods’ Politically Incorrect Guide book outsold mine, but boy that’s neat he gets to interview Pat Buchanan. (I used to watch Crossfire back when my friends were going on dates in high school.) There’s an amazing part where Buchanan says something like (and I’m paraphrasing), “Churchill deliberately misled his own people about Stalin. I mean, there are certain things you have to do diplomatically. For example, I had to write toasts for Richard Nixon to give to communist leaders that would turn your stomach…”
“it should try to provide a stable path for some sort of nominal aggregate that is a proxy for the value of money itself, such as the overall price level or NGDP.”
I thought this was Friedman’s policy not Hayek’s or Murphy’s, as Sumner suggests. As far as i remember Hayek explicitly rejects the price-level doctrine as fundamentally misguided.
“Hayek himself eventually came to support a zero-inflation ideal. During the last decades of his career, and after having said little on the matter of price-level policy for several decades, Hayek began to distance himself from the productivity-norm: in The Constitution of Liberty (1960, 337) he recommended stabilization of an index number combining prices of both factors of production and final goods–a measure half-way between a productivity norm and zero inflation. Still later, in Denationalisation of Money (1978, 66-70) Hayek joined advocates of zero inflation, quietly abandoning his earlier arguments against such a policy together with the business-cycle theory connected to those arguments: attempts to stabilize the price level in face of productivity changes may lead to forced savings, but the problem is, after all, “of minor practical significance” (ibid., 83; see also White 1998, 17-20). In summary, Hayek came at last to accept a view of optimal price-level behavior that was practically the same as the one he had found wanting in Keynes almost half a century before.”
George Selgin
‘Hayek versus Keynes on How the Price Level Ought to Behave’
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.202.1035&rep=rep1&type=pdf
also:
http://macromarketmusings.blogspot.co.uk/2008/05/debunking-liquidationist-myth.html
” There’s an amazing part where Buchanan says something like (and I’m paraphrasing), “Churchill deliberately misled his own people about Stalin. I mean, there are certain things you have to do diplomatically. For example, I had to write toasts for Richard Nixon to give to communist leaders that would turn your stomach…””
Yeah, that part was amazing. I listen to Tom every day during my lunch break and I almost spat out a mouthful of half-chewed pizza at that moment.
The McLaughlin group was pretty much the only “politics” show my dad ever watched. I used to watch it with him as a kid. Dad would usually side with McLaughlin himself, but even in grade school, I could tell that I most agreed with Buchanan. Good times.
That is some actual progress from Sumner…on a few margins.
“Richard Ebeling talks about the great Austrian inflation.”
But his section at the end of that article on Mises and the Great Depression in Austria conveniently leaves out some interesting facts:
http://socialdemocracy21stcentury.blogspot.com/2014/05/mises-and-great-depression-in-austria.html
LK why do you always assume sinister intentions underlie every Austrian argument?
Nobody said anything about “sinister” arguments.
I said his argument is deficient and leaves out important facts. Different thing. [Edited by RPM.]
Since Keynesians do not (and don’t want to) understand human action, the NAP, prices as information, economic calculation and/or miscalculation (the undeniable ubiquitous phenomena that precede and make up economic activity), they have no theory of what actually caused the Great Depression. It certainly was not caused by the free market. As David Stockman said:
The Great Depression thus did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression—absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions. Instead, the Great Depression was a unique historical occurrence—the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking.
But ironically, the “failure of capitalism” explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens—-Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier—-that is, the old-time religion of balanced budgets— that had kept America a relatively peaceful Republic until 1914.
To be sure, under Mellon’s tutelage, Harding, Coolidge and Hoover strove mightily, and on paper successfully, to restore the pre-1914 status quo ante on the fiscal front. But it was a pyrrhic victory—since Mellon’s surpluses rested on an artificially booming, bubbling economy that was destined to hit the wall.
This is why it is so absurd and misleading to employ terms like “sticky” prices and wages when what one is actually dealing with is an oblivious population and an oblivious political class.
In tackling the economic crisis the Dollfuss-Schuschnigg dictatorship pursued harsh deflationary policies designed to balance the budget and stabilize the currency. The government’s program featured severe spending cuts, high interest rates, and frozen wages.
Why would we expect a fascist economic regime to be successful? How can one associate a fascist regime with Austrian economics? How can a government program of setting interest rates and “frozen wages” be attributed to Austrians? LK’s goal is simply to associate Mises and the Austrians with the Fascists employing his usually “historical” method when even he admits that he cannot locate a free market that failed in history because one never existed.
your schtick gets a bit repetitive after a while.
That’s because you can’t refute it. Or even engage it.
lK,
I don’t consider what you do, refutation.
We have the entire horde of interventionist economists, bureaucrats and SWAT teams trying to solve the problem of “market failure” and employing a bizarre theory of historical analysis. Then they cannot locate that spot in time where the market actually failed.
If what I’m saying is false, refute it. If it’s true, why else isn’t anyone else saying it?
so your theory is that there is this thing called the market which is incapable of failing in any way whatsoever, because you have defined it as being incapable of failure – whatever it happens to do.
It’s pretty clear that the defamatory attacks on Walter Block prove that our opponents do not even understand the NAP. I don’t think libertarians and/or Austrians take into account the level of ignorance and total unfamiliarity (purposeful or otherwise) of our basic concepts, that exists in their opponents. If I’m wrong, refute me with evidence and facts. I thought “progressives” were especially brilliant in the employment of evidence and facts.
I’ve pointed out to you before that you don’t really understand the NAP.
“Even if the NAP is correct, it cannot serve as a fundamental principle of libertarian ethics, because its meaning and normative force are entirely parasitic on an underlying theory of property”
http://www.libertarianism.org/blog/six-reasons-libertarians-should-reject-non-aggression-principle
My analysis is generally directed to other libertarians and Austrians and are intended as proposals on how to approach our opponents. I’m certainly not going to debate your obfuscations about the NAP. All non-criminals in the USA already know, understand and live pursuant to the NAP in their everyday lives until they float off into the alternative universe of politics. We should build on that existing understanding because we are not trying to re-create the wheel here.
“All non-criminals in the USA already know, understand and live pursuant to the NAP in their everyday lives”
Yes, they live in a society called the United States of America.
Yes, they live in a society called the United States of America.
Since that’s the point I’m making, I fail to see how that statement refutes my argument or helps yours.
is The United States of America a Rothbardian community?
is The United States of America a Rothbardian community?
Can you read?
until they float off into the alternative universe of politics. We should build on that existing understanding because we are not trying to re-create the wheel here.
http://consultingbyrpm.com/blog/2014/05/potpourri-203.html#comment-529140
yes I can read.
So you’re saying that people currently live in a society called The United States of America, but we need to change the rules so that everyone in the future will live in some other sort of society, defined by you, Bob Roddis.
Phillippe, are you really trying to have an honest conversation with Bob here? (As it doesn’t look like it at all.)
Yes, I’m so rude and repetitious. Prof. Eberling never pointed out that the prosperous Austrian regime was destroyed by war and central banking. Prof. Eberling never pointed out that the Austrian hyper-inflation was caused by the Social Democrats and not the free market.
By 1921 over half the Austrian government’s budget deficit was attributable to food subsidies for city residents and the salaries of a bloated bureaucracy to manage an expanding welfare state. The Social Democrats also regulated industry and commerce, and imposed higher and higher taxes on the business sector and the shrinking middle class. One newspaper in the early 1920s called Social Democratic fiscal policy in Vienna the “success of the tax vampires.”
The Austrian government paid for its welfare state subsidies and expenditures through the monetary printing press. Between March and December 1919 the supply of new Austrian crowns increased from 831.6 million to 12.1 billion. By December 1920 it increased to 30.6 billion; by December 1921, 174.1 billion; by December 1922, it was 4 trillion; and by the end of 1923, it had increased to 7.1 trillion crowns. Between 1919 and 1923, Austria’s money supply had increased by 14,250 percent.
And it’s rude (although completely true) to point out that if the free market does not fail, Keynesianism as a cure for a non-existent market failure makes no sense at all.
And, of course, it’s not a rude changing-of-the-subject for LK to again smear Mises and the Austrian School as being in league with the Austrian fascists.
Further, I based my statements upon Hayek’s explanation of “The General Theory” as a program meant to deal with a one-time unique crisis in the 1930s. I first heard this argument when I recorded it in 1977 and I’ve heard nothing to refute it. One cannot forget that the problems of the 1930s were caused by central banking and WWI and not the free market and we cannot allow the “progressives” and Keynesians to get away with claiming “the market failed”.
http://consultingbyrpm.com/blog/2008/12/hayek-tells-bill-buckley-that-even-keynes-was-afraid-of-the-keynesians.html
By “free market” you mean a fantasy world Rothbardian utopia that has never existed.
Of course, showing why such a system would not work in the way you think it would is an interesting exercise, involving abstract theorising, counterfactuals and inductive argument, but actual economists are concerned with real world markets and real world laissez faire, particularity the failure of real world markets to create market clearing via flexible wage and price adjustment — as happened in the Great Depression.
Recall your discussion of the alleged varieties of “laissez faire”? Actually, there is some validity to such an analysis in the sense of examining from history on a case-by-case basis the extent of protections for private property and contracts as opposed to the extent of violent interventions and interference with those principles. It is simple to differentiate crony capitalism from laissez faire. It is simple to determine that the “Robber Barons” employed “progressive” regulation and not laissez faire. It is not hard to determine from history that the Austrian and German hyper-inflations were not caused by the free market. Similarly, it is not hard to determine that the distortions leading up to the “depression” of 1920 were caused by central banking, the war and the interventions employed to finance the war.
Again, you are trying to obfuscate the fact that you employ an historical method to justify your policies and then claim that simple (and well understood) matters cannot be gleaned from history. The entire “progressive” meme is based upon lying about and distorting the essential differences between laissez faire and crony capitalism.
Further, these historical events do not substitute for economic theory, the most important element of which is how voluntary exchange gives objective expression to subjective valuations. Finally, the level of physical safety of the actors is also important because people are protected by private property and they are vulnerable when they are not. People cannot become affluent if they and their property are not safe from criminals, private and public.
Saying that a “free market” is a fantasy world Rothbardian utopia that has never existed is just another dodge.
So has such a Rothbardian system ever existed or not?
The 1977 Hayek interview is now on DVD.
http://consultingbyrpm.com/blog/2012/11/the-system-is-rigged-the-futility-of-politics.html#comment-48700
I will big tent Murphy too. I watched. Crossfire while high school friends went on dates too. Or maybe I was in grad school…still watching….
I’m pretty sure Crossfire wasn’t on 24/7. Granted, I was busy playing sports and partying back then, so maybe CNN had a much better programming schedule in those days, but I’m betting you could’ve worked in a date or two to go with your Crossfire marathons. Chicks dig big brains.
LK and Roddis, if you want to argue the specific points brought up by Ebeling, OK fair enough, but please don’t launch into a general discussion of economic calculation / flexprice etc. You guys have had that same argument 68 times before.
Right. So why let roddis throw up this ridiculous straw man right as his first response to my comment:
“that “Since Keynesians do not (and don’t want to) understand human action, the NAP, prices as information, economic calculation and/or miscalculation (the undeniable ubiquitous phenomena that precede and make up economic activity), they have no theory of what actually caused the Great Depression”
LK, I don’t open up each blog post and read all the comments every hour, on the hour. I mostly check in every few hours to see if anybody’s comment is being held up in moderation. If I see from the most recent ones that you and Roddis are having the same argument you’ve had 68 times before, I issue a warning.
If this is unacceptable to you, feel free not to come here.
I will cease because it’s your blog. But my intent is not to argue or debate with LK. It is to refine the best arguments to be used against our opponents and seek constructive criticism from other libertarians and Austrians regarding the correctness of those arguments and whether they should be used even if true.
Further, my critiques of LK have undergone significant refinement.
I’m out.
Throwing money at pubic education does not help.
http://finance.yahoo.com/news/mark-zuckerberg-gave-jersey-100-130400933.html