Over six decades ago, free market, Austrian economist and Nobel Laureate, Friedrich A. Hayek, warned about the kinds of misguided economic policies that can lead a country down a road to serfdom of government control and domination over the citizenry.
With the rapidly expanding power of government under the cover of the current economic crisis, I discuss in a new piece, “America’s Return to a Road to Serfdom?” the particular dangers our country faces in heading down a road the end of which leads to the loss of indiviudal liberty and the diversity of human choice that is a hallmark of a free society, and the strangling of free enterprise and the competitive pricing system through a growing spider’s web of government controls, regulations and restrictions.
The expanding control of government over more and more areas of the economy means, as Hayek pointed out, means that each and everyone of us most increasingly conform to the hierarchy of values imposed by those in political authority. The State reduces us to a homogeneous mass to be easily manipulated and molded to fit the design the social engineers wish to make us in to.
And matching this, the growing network of economic controls means that the market pricing system is undermined through the edicts of “pay czars” and production regulations resulting in what Ludwig von Mises long ago called the socialist reality of “planned chaos.”
Each of us who cares about liberty must do all in our power to persuade our fellow Americans that this is a road down which there is nothing but a new brand of serfdom and economic decay.
{ 43 comments }
“Anyone with a proper education knows that the economy can only be interfered with by these ego-driven interventionists and that their interference drives the economy further towards socialism and towards totalitarianism politically.”
Bruce, you’re starting to sound like a socialist yourself, with your cliched polemics. When are we going to start hearing about the “running dog lackeys of the ego-driven interventionists”? It’s not ego that drives interventionism. It’s ideology.
I second that. I like Bruce, but jeez louise! can’t we get away from the rhetoric Bruce?
cliched polemics – That’s a good one.
In Bruce’s defence, I would agree that ego does play a role. The ideology of an egoist will usually benefit himself and not necessarily anyone else.
Ego may not drive the interventionism, but it sure as hell is holding the map on the ride!
Russ is right though. Re-using rhetorical (cliched polemic) over and over gets us nowhere. It’s basically a finger pointing exercise and has no substance.
And constantly painting the individuals in power as evil doers and miscreants accomplishes nothing either. Think about it. If all the people in “the State”, the people who are the bureaucrats and cops, clerks and politicos are actually evil, then most of us have at least one of them in our family or among our friends. I think the rough number of State (government) employed persons in the US today is something like 20%. That’s one in five.
Most people are mostly good most of the time. It’s an assumption one must make if one is to believe in the free-market. These people aren’t evil. They’re just dependent on their jobs, and, if they support the ideology that provides those jobs, then they are sorely, though perhaps necessarily, mistaken. There are exceptions I’m sure. I wouldn’t characterise Dick Cheney or Donald Rumsfeld as anything but evil. I would probably include BRAD DELONG in that assessment.
But they are the exceptions that prove the rule. How many people do you know personally that are that bad?
Then there are the wilfully blind. Most of the evil is done by these people. They are the ones who know what they are doing is wrong, but do it anyway, because it’s their job, and they try to forget about it when they leave it behind and go home to the wife and kids.
If one of these people is in your family or among your friends, smack ‘em! Tell them you love them, but smack ‘em hard! (verbally, NOT physically!) At least if they open their eyes they might VOTE differently, or get a new job.
Sure, deefburger, ego plays a role in everything. Ego plays a role in being an entrpreneur and building up a major corporation that provides jobs to 1000′s, also.
deefburger:
i don’t know where such generalizations of public employees have been made here. only the state is characterized as evil, the vehicle through which greater evil can be wrought by specific individuals.
Russ,
Granted: cliched polemics.
Tell me where: Sound like a socialist.
As far as ego-driven interventionism is concerned I do not see ideology as coming first. Whenever it started – and then later became an ideology – it started because someone was overcome by their ego and convinced themselves that they had the knowledge and the ability to ‘do’ the economy better than its own divine nature.
This perverse ideology, no doubt, encourages people along those lines (if you check again what I wrote). I identified them not as evil but as without a ‘proper education.’
I am glad to finally get someone to talk about ego-driven interventionism. Although implied in the classical liberalism literature (although maybe some do not think that it is – what about you Russ?) as far as I can tell I think that I am the first one to label it as such and thereby pinpoint the precise cause of the attempt to destroy the spirit of laissez-faire economics (which I have further refined and intricately described as the divine economy).
Anyone read Eric Hoffer’s “The True Believer”? A nice little treatise on misguided ego and actions of the self loathing common man.
Our current situation conforms nicely to Hoffer’s characterization of the “messiah”, his inner circle and the minions of “true believers” slithering toward the abyss. An ego alone will not culminate in socio-political phenomena – aka a movement. The true believer, coached to the mantra of the “chosen one” by a handfull of skillful miscreants (think Rove, Emmanuel, House, etc.) will transform a civilization.
Taken separately, each is necessary but insufficient to a sustained movement. Together, properly fulfilling their roles (ego driven), a movement is born and moves through childhood, adolescence, young adulthood, etc., etc., etc. The pattern is unmistakeable and rarely seen as a repetition of the past, but rather a new beginning.
This is not a new beginning or anything unique to our species. Look around folks..read a little history. It is full of repetition and knows no disciplinary boundaries. It is good to be king!!
@Robert
You know, in my philosophy, I see Ego as the Consciousness of the Body. As distinguished from the overall spiritual or metaphysical consciousness.
Fear, as a body function does a lot of thinking in the system of the body, and the actions/reactions to that fear, both in further thought (engaged by higher/spiritual experience) and in the biochemical responses to the fear signal.
It would make sense, considering the history of our species, that a great deal of human action, even complex systems such as the messianic one you describe, are not only possible, but probable.
I read recently, somewhere here at Mises I think, OH yes Hutt! The difference between Economics as a mechanism of Human Interaction, and the Social and Political controls and outcomes. The Economics is certain because of the Physical manifestation of the natural laws of economics.
Perhaps, Ego is governed by similar natural laws. It is a physical manifestation of Interaction and Reaction. There are measurable changes in the body in response to body centric awareness. We fear and our bodies react. We love and our bodies react. We have any number of experiences in this reality and our bodies react.
If my thinking is true, then Ego may show trends over time and across Individuals and Societies of Individuals, as you suggest in the messianic scenario.
Surely we are witnessing a repeat of the mistakes of fear made due to individual circumstance. We always have a President, in that house, in that chair. We have had a Fed Chairman who was someone with an Ego and a Body in that house, in that chair, since 1913.
We have seen “animal spirits”. Perhaps Keynes saw Ego and couldn’t face it without facing himself. A horrible fate for any man.
I believe the reason people fear NOT having government, is that they fear the responsibility of self preservation. Ego, that is the Body, might have, over the millennia, learned to group with others, rather than stand alone.
Capitalism, if it can be truly achieved by our race, must be accepted with unanimous bravery.
I’ll stand.
clichés have served socialism well as a promotional tool. i don’t see any harm in taking a leaf out of their book. regardless of the substance, form sells.
Ummm…
You all do realize that you are all absolutely completely stark raving loonies, don’t you?
I mean, taking all in all and averaging over the population, Americans have never in our history been freer than they are at this moment, after 76 years of the New Deal et sequelae…
Bruce Koerber wrote:
“Granted: cliched polemics.
Tell me where: Sound like a socialist.”
The phrase “ego-driven interventionism” sounds similar to me to phrases like “capitalist imperialism” that the lefties have used for years.
“Whenever it started – and then later became an ideology – it started because someone was overcome by their ego and convinced themselves that they had the knowledge and the ability to ‘do’ the economy better than its own divine nature.”
I don’t much care for the phrase “the divine economy”, either. It sounds kinda nutty to me, to be perfectly honest. You’ve gone from cliched polemics to theology. Also, calling all socialists “ego-driven” and calling a free market a “divine economy” makes it sound like you are name-calling.
Anyhoo… Where do you get the idea that it all started with somebody being overcome by their ego? Do you have any evidence to back up this assertion? Or is it just an assertion? And if it’s just a baseless assertion, then who exactly is ego-driven here?
I think that the idea of a free market economy is actually a rather hard idea to wrap one’s head around. After all, corporations don’t just run themselves; they need to be managed. Armies don’t just run themselves; the ones that have better leadership and fight as a cohesive whole tend to do better than the ones that don’t. Etc., etc. So it’s natual for most people to think that larger units like economies won’t just run themselves, and need management and leadership too. It’s “common sense”, only in this case it happens to be wrong. It’s similar in this sense to creationism. Evolution is also a hard idea to wrap one’s head around. After all, watches and automobiles don’t just naturally come into being without a designer. So how could more complex things such as living beings do so? It’s a natural human instinct to believe that some agent is needed for anything complicated to exist, whether it’s a living being or a functioning economy. Instead of using catch-phrases like “ego-driven interventionism”, which implies that all socialists are egomaniacs (many, maybe even most, are well-intentioned but misguided people), or “the divine economy”, which implies that people who don’t believe in the free market are against the divine and thus diabolical, let’s focus on educating people on how free markets in fact work better than socialism, even though that is not an intuitively obvious conclusion.
Brad DeLong wrote:
“You all do realize that you are all absolutely completely stark raving loonies, don’t you?
I mean, taking all in all and averaging over the population, Americans have never in our history been freer than they are at this moment, after 76 years of the New Deal et sequelae…”
Yeah, right. Does that figure in the fact that we pay a much greater percentage of our incomes in taxes than we did 100 years ago? Does that figure in the fact that we have to ask the government’s permission to buy a firearm, when we could have ordered one from the Sears, Roebucks catalog and received it in the mail 100 years ago? Does that figure in the fact that people go to jail for very long times for selling drugs that people want to buy and use, when you could enjoy a Coca-Cola with real coca and cola in it 100 years ago? Does that figure in the fact that a dollar has less than 5% of the purchasing power it had 100 years ago?
“Where the sole employer is the State, opposition means death by slow starvation.”
lucky brad de long, that he can post at the loonies website without fear of deletion. were he only to reciprocate.
Brad DeLong’s definition of “freedom” must be one of those twisted, self-serving versions, where it means something along the lines of “income equivalence.”
The Left and Center-left seem to have this weird obsession with rich people. I don’t get it. I’m as much opposed to the way that most of the super-rich made their money — i.e., through statism and statist cronyism, like the Rockefellers and the Rothchilds — but free-market wealth is a great boon to humanity.
Likewise, having a certain measure of material wealth is not the same thing as freedom. You’d think that anyone with an IQ over 80 would understand that.
Academics like DeLong don’t understand the basic idea of entrepreneurial freedom because they’ve typically never started, run or expanded a business. Statism is hunky-dory to these people, because they are its cheerleaders and (for that reason) its lesser beneficiaries.
ROFLOL!
loonies? I like that. Stark raving no less! If you knew me, you’d know I would be the last person on earth to deny that particular epithet! I’m proud of my lunacy.
Brad doesn’t know freedom from a gilded cage. 76 years of what? Fed interference in politics? Fed control of currency and markets? Fed funding of wars and socialistic wealth re-distribution?
Thank You Brad. You are a real saint.
Some of my clients are having to pay me in trade because of the great work your precious Fed has done. They can’t get their hands on the dollars they need. Nice work Professor.
Now, back to the Lunacy!
@Russ
I never meant to suggest that divinity enters into the equation, simply that natural laws, as the founders saw it, are god-given and inalienable for that reason. Bruce is, I’m sure from his posts, a deeply religious man, and may find it necessary in his interpretation of things find it necessary to invoke deity and divinity. Ok. But I personally don’t think it is necessary.
So, what of the problem of stewardship of the economy?
Let’s take a look at the system of decision making that the economy is. All of the participants within the system are intelligent and aware of their own place and circumstance. Independently, they are making decisions for their own gain. Overall, the decisions, taken together, constitute a parallel processing of data that was received in a similar, parallel manor. The Economic system is massively parallel as a computing(decision making) system, and requires no Leadership to accomplish it’s goals. The goals themselves are decentralized, just as the individuals have their own goals, circumstance, and abilities.
Now, let’s add a central authority to this process. Let’s put Brad in charge! His brain must be bigger, more efficient, and more capable than all the other brains put together in order to achieve processing power that is greater than the sum of the massively parallel system the economy already represents.
Ummm.
You all do realize that Brad’s head would have to be bigger than all outdoors to do this, don’t you?
Of course, we know it’s very small. How could centralization of economic decision making, benefit the independent nature of the system? Brad’s brain, no matter how big he thinks it is, is incapable of thinking thoughts that big. And judging by the evidence of his previous post, he is completely out of touch with the reality of circumstance enjoyed(or not) by the individuals within the economic system. With no direct access to the current actual states of being of each of the participants, he has no basis for any decisions that could benefit those participants. He can only know what he can be aware of himself.
Apparently he thinks we are freer becuase we are coerced and controlled.
Ummm
I smell a stark-raving Keynesian!
DeLong: “Americans have never in our history been freer than they are at this moment…”
That’s what happens when you learn history in the public school system. I guess DeLong thinks the New Deal legislation did not restrict freedom in any way. What about freedom to use gold or silver as money instead of paper? Maybe DeLong is operating under the socialist idea of freedom, as some have suggested, in which greater state control over our lives equals greater freedom.
Delong,
Is it easier to start your own business today than in the past? Can it even be done without hiring a lawyer to wade through the minefields of regulations? Is it easier today to sell one’s product without interference from states/regulatory bodies, etc.? Does the state take less of my earnings today than before?
And, even if it were true that Americans are freer now than ever before, that does not mean that we should just shut up and settle for what we have. Of course, if one is a member of the political elite, I’m sure nothing could be better than the status quo.
Is it easier to start your own business today than in the past? Can it even be done without hiring a lawyer to wade through the minefields of regulations? Is it easier today to sell one’s product without interference from states/regulatory bodies, etc.? Does the state take less of my earnings today than before?
It’s not just the overt regulations that interfere with entrepreneurship. It’s also the taxes, the constant devaluation of the currency we’re required to use, the distortion of the economy via easy credit (tried buying a house lately, Brad?), and the fact that government-sponsored enterprises CROWD OUT legitimate, private enterprises.
It is far more difficult to compete or innovate in government-heavy industries like telecommunications, transportation, delivery services, security, schooling, etc., because the government’s way of doing business establishes the rules, and all must live by them. What you end up with typically are gigantic mega-corporations with crony-insider pull.
Just look at how Hoover’s radio spectrum licensing scheme locked us into 1920s technology, and thus set back the development of RF telecommunications technology by 50-60 years, and led to the creation of megalithic “network” corporations that still dominate the media today.
Re: “That’s what happens when you learn history in the public school system. I guess DeLong thinks the New Deal legislation did not restrict freedom in any way. What about freedom to use gold or silver as money instead of paper? Maybe DeLong is operating under the socialist idea of freedom, as some have suggested, in which greater state control over our lives equals greater freedom…”
Actually no–Pacific Heights Nursery School, CalTech Kindergarten, then Sidwell Friends School and then Harvard: non-public schools all the way (but note that they are not private-enterprise schools with shareholders: instead they are non-profits, a different kind of animal).
I am puzzled by your comment: it seems to me that I am (and you are) perfectly free to make contracts locking in gold (or silver) values as prices for the future. And you are perfectly free to demand that people buying things from you pay you in specie as well. I don’t see any restriction on your freedom here. Perhaps you want the government to mandate that its unit of account be fixed in terms of some precious metals? But it seems to me that that would be not an enhancement but a restriction of freedom–a restriction of our freedom as a people to hold a larger share of our wealth in what we regard as the safe form of U.S. government obligations when we become fearful and wish to do so.
More broadly, let’s look down the table at this meeting I am typing in: I see two homosexuals who fifty years ago were forbidden by law to marry the loves of their respective lives, but who now are free to do so if they move to Massachusetts and will, I think, soon be free to do so in California. I see an African-American who fifty years ago would have been forbidden by covenant to buy his house. I see two women who fifty years ago would have had a hell of a time getting the jobs they now hold and are eminently qualified for. I see us four straight white men who fifty years ago would not have had the freedom *not* to breathe the benzene emitted from the Richmond, Martinez, and Benicia refineries.
And I suspect that all of us nine are legally free to buy lots of weapons, because I don’t think any of us are restricted felons. (And yes, I am annoyed at losing an average of one swiss army knife a year to the kabuki theater of Homeland Security.)
Seems to me that all nine of us are a lot freer than our predecessors of fifty years ago.
In fact, I cannot see how anyone in good faith could possibly argue otherwise…
Delong,
It’s obvious that in some ways people are more free. There is less discriminatory government intervention against racial and other minorities. That goes without saying and no one is criticizing that.
However, government intervention in other areas keeps growing and I cannot see how anyone in good faith could possibly argue otherwise…
Brad,
The most hard core statists around have disproportionately attended private schools. Who runs the public schools anyway?
Re: freedom yesterday and today.
True, many freedoms exist today that did not even one generation ago, as you say. But these freedoms are positive freedoms that come at the price of individual conscience. The government has assumed authority and displaced personal choice in increasingly more areas. You could say these new freedoms are mostly Rousseau-esque: the government is ‘forcing to be free’.
An analogy can be found in the Austrian definition of inflation, where it is held that an increase in money supply represents inflation and the rise in price is seen as the consequence. The current situation sees banks sitting on vast reserves. This accumulation is not merely a massive forced transfer of wealth. Implied is the potential for accelerating prices and destruction.
Let’s cap the analogy. Put simply, the government we live under now is sitting on massive totalitarian reserves. This is the real loss of freedom. Repression and killing are only consequences of this incredible increase in the government power supply.
In this sense, Americans are definitely a lot less free.
Doesn’t one Mises.org historian have a book called “Emancipating Slaves, Enslaving Free Men”?
Billy writes: “here is less discriminatory government intervention against racial and other minorities. That goes without saying and no one is criticizing that…”
Oh no, a lot of people are. Ron Paul is–or was until he concluded that it was a vote loser. Barry Goldwater used to: the principal freedom that he feared people were losing in 1964 was people’s freedom to tell people to get the f— out of his store should he wish to.
Every time Bill Niskanen says that America was better governed and more free back in the days of Calvin Coolidge a shiver runs up my spine.
to billy:
affirmative action is discrimination. despite reams of black-letter law, racial hatred has not disappeared or abated. i cannot see how anyone in good faith could possibly argue otherwise…
hey, here’s a thought: maybe all the rules and regulations about race, gender, religion etc. actually heighten and entrench the divisions.
see w.h. hutt “the economics of the colour bar”
Newson,
The Economics of the Colour Bar is an amazing book. Here is a quotation (thanks Rafe Champion):
“Those who have observed, as I have, the natural friendliness of children of vastly different colours and racial characteristics playing happily together unless reprimanded by their parents and teachers, are unable to regard colour antipathies as inherent human characteristics. After 36 years of observation, I have been led to believe that colour prejudice has persisted through economic factors – through the perpetuation of the economic inferiority of the non-while peoples. In the pages which follow, I shall try to explain why I regard the economic colour discriminations in the Republic as an independent cause rather than a symptom of colour injustices.”
What a true classic liberal Hutt was.
And you are perfectly free to demand that people buying things from you pay you in specie as well. I don’t see any restriction on your freedom here.
Then you don’t understand legal tender laws. See 18 U.S.C. s. 486.
http://www.law.cornell.edu/uscode/18/usc_sec_18_00000486—-000-.html
http://www.johnlocke.org/site-docs/meckdeck/pdfs/USAVLibdoll.pdf
Let’s see — the U.S. government takes over the production of the only official currency, and then mandates that income taxes be paid in that currency.
How convenient. It’s almost as though the imposition of the income taxes was done to create a demand for the ever-devalued currency!
So, Brad DeLong is glaringly WRONG to suggest that free we are free to use any old metal for money as we deem fit. I guess they didn’t teach research in any of those fancy schools. Just smugness.
But, even if we disregard this crude error of his, I find it odd that Brad DeLong would, in one breath, claim that it’s perfectly acceptable for people to order their financial transactions in a non-governmental form of currency, then in the next breath, wring his hands about how terribly unjust it was that homosexuals couldn’t be deemed married by the State.
If it were so EASY to live your life outside governmental supervision with regard to money, then why couldn’t homosexuals take a similar free-spirit attitude? Why can’t homosexuals simply be satisfied with being married privately? Get the State out of their marriages altogether? Just disregard the State’s approval or official sanction?
Why is it with regard to money, Brad DeLong expects us all to be satisfied with ordering our affairs privately, in gold if we want, regardless of what the State wants, but DEMANDS that government give its official stamp of approval on the private ordering of a homosexual relationship?
Aren’t homosexuals free to enter into a private relationship, outside the purview of the State, that is the functional equivalent of marriage? Why are people who want economic freedom expected to blithely disregard the State’s dictates with regard to what is considered valid money, but homosexuals are not expected to be so free-minded and independent of concern over the State’s approval or disapproval?
brad de long has no problem discriminating amongst commenters on his blog, and ejecting (deleting) personae non gratae. essentially, get the f*** off my blog.
sends a shiver down the spine.
marriage is within the state’s bailiwick, because the state is god.
dissenters will be be punished with holy fire and brimstone.
marriage is within the state’s bailiwick, because the state is god.
Sure.
But I don’t see how someone who went to such august institutions of learning can (a) hide so easily behind the idea of do-it-yourself money but (b) considers do-it-yourself marriage to be the epitome of injustice.
(Well, technically, I can see how he can do it, but I don’t see how he can do it without expecting to be laughed at.)
marriage is within the state’s bailiwick, because the state is god.
Sure.
But I don’t see how someone who went to such august institutions of learning can (a) hide so easily behind the idea of do-it-yourself money but (b) considers do-it-yourself marriage to be the epitome of injustice.
(Well, technically, I can see how he can do it, but I don’t see how he can do it without expecting to be laughed at.)
Newson,
“affirmative action is discrimination… i cannot see how anyone in good faith could possibly argue otherwise…”
I agree; I was thinking more along the lines of Jim Crow laws, anti-sodomy laws and the like.
Delong,
Ron Paul is against discriminatory laws (either against blacks, whites, reds, whatever) and thinks that we should all be EQUAL before the law.
@Brad Delong (He who’s name shall not be used at Mises, remember?)
It would appear that our friend Brad has illustrated nicely Bruce’s original supposition about Ego and the elite.
One mention of his name ,(my post) and WHAM! The fish hit the line. Welcome to the good ship Mises. Prepare to be filleted.
You took time out of your busy day, during what can only be assumed to be an important business meeting of some kind, to secretly Blog here at Mises while appearing to pay attention to the meeting at hand and just “taking notes”.
I grew up in South San Francisco, not far from Pacific Heights. I attended public schools there, with all of the races and nationalities of the San Francisco working class. I grew up watching my rights as an individual become recognized by the society at large and the law.
I doubt very seriously that the individuals at your meeting table were aware of your use of their individual struggles to be where they are today, are known to them. If I were one of them I would be appalled. First by your miss use of my time in the meeting, and second by your assumption that I have rights now that I did not have before.
The rights you claim have been gained by your gay, black, and female colleagues, are in fact natural rights they were in possession of at the time of their birth, like mine. These are inalienable rights. Their inability to express themselves through the exercise of these rights were limitations placed on them by society and secular law. The lifting of those restrictions did not create freedom that did not exist a priori.
Brad Delong: “I am puzzled by your comment: it seems to me that I am (and you are) perfectly free to make contracts locking in gold (or silver) values as prices for the future. And you are perfectly free to demand that people buying things from you pay you in specie as well. I don’t see any restriction on your freedom here. Perhaps you want the government to mandate that its unit of account be fixed in terms of some precious metals? But it seems to me that that would be not an enhancement but a restriction of freedom–a restriction of our freedom as a people to hold a larger share of our wealth in what we regard as the safe form of U.S. government obligations when we become fearful and wish to do so.”
Where to begin? This paragraph should be held up as the single most blatant illustration of why the Federal Reserve should be abolished. Every pertinent concept is completely backwards in your thinking.
1. Precious metals are commodities with intrinsic value and stable physical properties that preserve their value over time, without any help from anyone. They are directly comparable by anyone at any time and can be measured today and tomorrow with no change in the measurement, and therefore a one to one value comparison can be made across centuries with little deviation from the value they hold and represent.
2. The “unit of account” you refer to is the fiat currency of your organization, the one we are forced to use according to the legal tender laws. Their “fix” to the stable value of precious metals was removed in 1972. The currency was then no longer tied to a stable unit, and can no longer be relied upon for stability of value over time.
3. The Debt instruments you refer to are not intrinsicly valuable either. Debt is a note on FUTURE production, not Present Capital. As such, it is a promise, not an actuality. As an instrument of savings, it has LESS value as an unactualized wealth, than gold or silver which are real, right now, and will continue to be real in the future when they are needed.
These are the facts Professor. How do you justify your conclusions? What you claim as a Safe haven for saving is in fact the purchase of indentured servitude! Someone has to create the real wealth that the Bond paper represents. It has to be extracted via taxes from those very same people that the debt obliges. Government is not a producer of wealth, as you imply, but is instead a remover of wealth. In the case of Bonds, they are empty of wealth until someone creates, and is then taxed.
How, in the name of god, did you become a professor of Economics, when your understanding of the facts of economic life is so utterly unreal?
Bruce is right in a way. Only an Ego-Driven Interventionist, could justify the kind of thinking that lead you to write such drivel!
Your Ego certainly got you here, didn’t it?
Nothing has intrinsic value.
Subjectivism Powerfully Illuminates New Territories!
‘Ego-driven interventionism’ is not a catch phrase. If someone is just beginning to encounter the classical liberalism literature and comes upon ‘time preference’ and because they do not quite grasp its meaning calls it a catch phrase, that is a misunderstanding. Likewise to some – and I grant this much – the term ‘ego-driven interventionism’ may sound like a catch phrase but it is not. There are two destroyers of civilization that have been identified in the divine economy theory and they are: ego-driven intervention and ego-driven interpretation.
I do not think that it is necessary for a person to know anything about the divine economy theory to recognize the meaning behind these two (new) terms.
And a second point of clarification: It is easy to misunderstand the meaning of the divine economy theory if you don’t know what it is. If a person recognized that humans have a physical body like an animal but did not want to acknowledge the intellectual distinction then there would be a significant limitation to any scientific pursuit by that individual. It follows then that denying that the human spirit is a part of the human reality also puts limits on scientific discovery.
The divine economy theory is purely scientific even if such a thing does not seem possible to those who have preconceived thoughts about what ‘divine’ means. Unless the subjectivist methodology is incorrect, it is not correct to think that the divine economy theory is not scientific.
Ok Bruce, I think I get some of what you are saying, but can you say it without “new words”?
Can you give me a definition of what you call divine economy?
In my mind, these words might be translated to mean an economic system based exclusively on natural law. The “divine” element being the natural law.
That would be Capitalism.
So why not just call it Capitalism?
Deefburger,
Why Not Just Call It “Capitalism?”
Words, new or not, have limitations which is the whole reason why models are used to supplement our descriptive power and our understanding.
The first subjectivist model that I developed, which is the foundation for “MORE THAN LAISSEZ-FAIRE”, is first introduced visually as a four-petaled flower with a center. Or you could imagine the four cardinal directions but with a center. Here are the four elements: Imagine south as the Human Spirit, north as Transformation, east as Order, and west as Law. The center is what in the economic literature has been called equilibrium, which is what acts on all of these, and which I label as ‘divine economy.’
Like I said, words have limitations so I suggest that you refer to the model(s) to get a better sense of what I mean by ‘divine economy.’
One reason I don’t simply call it ‘capitalism’ is because it is more encompassing. When talking about capitalism no one suggests that we just call it ‘savings.’ They are not incompatible but they are not the same thing either.
Although in a way this model may sound simplistic but the model is developed further. For example, the model I mentioned to you above is two dimensional – even though identifying the elements is profound in and of itself – but in a handful of pages in Chapter Two it goes from a two dimensional model to a five dimensional model.
Do not be alarmed because every aspect of these models is subjective. That is one of the most revolutionary and remarkable things about the divine economy theory.
Brad Delong,
“I am puzzled by your comment: it seems to me that I am (and you are) perfectly free to make contracts locking in gold (or silver) values as prices for the future. And you are perfectly free to demand that people buying things from you pay you in specie as well. I don’t see any restriction on your freedom here.”
So: 1) you never heard of the legal tender laws your ilk got passed which nullifies any such contracts to be paid in gold? 2) You don’t realize that Uncle Sam doesn’t allow you to just pay with gold and silver without treating it as investment that needs to be separately tracked via additional paper work. 3) You are completely unaware that the federal government stole ALL private US gold and gold claims and still holds vast quantities of that gold off the market. Thus there is a hanging treat to do it again. 4) You are totally unaware that the government has prevented the use of precious metal coins, and free contract related to them. For example recently confiscating all the silver at Liberty Coin.
Some freedom. You are free to try to use it but the minute you do we will fail to protect you from criminals, add extra tax, throw you in jail for coining, and confiscate any metals used in this way.
Are you really that ….?
This is actually quite heartening: it’s very nice to see that everybody appears to agree that Americans are on average “freer” than our predecessors were fifty years ago.
I do wish that people would go further and *think* that there might be something badly wrong with Hayek’s argument, but the longest journey does begin with a single step.
“Who is so deafe, or so blynde, as is hee, That wilfully will nother here nor see?”
hayek erred in believing that the state would be motivated to constrain its own growth. the original premise, that the state is legitimate per sé, was flawed, but the longest journey begins with a single step…
Brad Delong,
Typical Keynesian think. Boil it all down to one number as if that tells you what is actually going on. We are in fact actually much less free on many metrics.
More on gold:
For example, I am not allowed to fully control my retirement investments. I asked my company to include precious metals in the mix of options on the 401k and they wouldn’t add it. Corporations in collusion with the government came up with 401K as a way to control the workers savings and drive it into their own stock. So I am less free in that regard. BTW, I went 100% silver on my old IRA at the time and am up around 400%.
So that is yet another example where I am restricted in being able to use gold as money where money serves as a store of value.
One other example of how the government punishes gold. The gold commodity markets allow people who are short gold to settle in cash, and the government has also set up the rules so that they can close those markets if they feel the price is running up too fast.
Brad Delong,
Did it ever occur to you that all these measurements of freedom were incommensurate and subjective, and therefore can move in opposite directions. So claiming we are less free depends on the person and what they value.
Of course, a black is more free now than when slavery existed, not that the Democrats had anything to do with that given they were the party of slavery and the Republicans the party of abolition. Using your methods anyone can easily argue that the Soviet Union was more free after the Iron Curtain closed if we look at how some subgroup was treated.
I humbly submit a book I wrote last year: http://www.billfoxsoapbox.com
America’s Road to Serfdom: A Journey From Self Reliance to Socialism
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