Brilliance — even genius — is no guarantee that consequential factors have not been left out or misconceived. Karl Marx’s Capital was a classic example of an intellectually masterful elaboration of a fundamental misconception — in this case, the notion that “labor,” the physical handling of the material and instruments of production, is the real source of wealth. Obviously, if this were true, countries with much labor and little technology or entrepreneurship would be more prosperous than countries with the reverse, when in fact it is blatantly obvious that the direct opposite is the case.
If socialists understood economics they wouldn’t be socialists.
With the exception only of the period of the gold standard, practically all governments of history have used their exclusive power to issue money to defraud and plunder the people.
Always remember the difference between economic power and political power: You can refuse to hire someone’s services or buy his products in the private sector and go somewhere else instead. In the public sector, though, if you refuse to accept a politician’s or bureaucrat’s product or services you go to jail. Ultimately, after all, all regulations are observed and all taxes are paid at gunpoint.
Many of the cant words of politics are simply evasions of reality. A prime example is the notion of making housing, college, health insurance, or other things ‘affordable.’
Continue reading “The Rolls Royce fallacy”
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
The Great Depression was not caused by laissez faire but by the actions of well-intended politicians and bureaucrats. The Federal Reserve System, after all, was not created in response to the Great Depression, but in 1913. Soon thereafter it began experimenting with its awesome powers, expanding the money supply during the roaring ’20s, propping up the pound sterling in London, extending credit so Europeans could buy American agricultural products. All the while, Congress was becoming more and more protectionist. When the Fed reversed policies in 1929 and actually shrunk the money supply by a third over the next three years and Congress culminated its protectionist tendencies with the Smoot-Hawley tariff, the collapse was underway. The fact that Hoover then raised taxes and Roosevelt kept wages artificially high guaranteed the massive unemployment that marked the 1930s. Government caused and exacerbated the Great Depression.
The economic disasters of socialism and communism come from assuming a blanket superiority of those who want to run a whole economy.
Let us not forget that the cultivation of the earth is the most important labor of man. When tillage begins, other arts will follow. The farmers, therefore, are the founders of civilization.
Hamilton’s whole monetary policy is based on unconstitutional grounds and unsound reasoning, and fraudulent statements. His policies were fought through the whole public career of Franklin, Jefferson, Madison, Randolph, and many another truly great lovers of Republican Government.
Continue reading “Fighting the central bank”