An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
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Saturday, July 7, 2012
On August 15, 1971: Great Day in U.S. History
Youtube video below of Dick Nixon opening up a can on the gold lovers, August 15, 1971. By executive order, directing the U.S. Treasury department to make it so that the USD was no longer convertible into gold [Ed: Yaaaaaay!]. Also included is a nice 10% tariff on imported goods in support of employment for U.S. workers for good measure.
In light of the policy advocated by the moron Steve Forbes that Tom has posted a link to below.
What has happened to the GOP since then? If Forbes represents the current GOP leadership (FD: I do not wholly accept that premise) then they will continue to be successfully challenged by Democrats for the middle-class or "labor"vote, which they once enjoyed and/or were at least competitive.
This video shows how there once was a time when they had decisive leadership that stood up for an independent, solely U.S. centric monetary and trade authority that put the U.S. worker first, and were not afraid to step on some mercantilist and gold-loving toes in the process.
Nixon was our last progressive president. Not so much due to his non-existent inner convictions as to pragmatic politics, but nonetheless he was a flaming liberal compared to the current crop of politicians.
ReplyDeleteYes, Nixon was a progressive. He needed to cut the link to gold in order to swipe more purchasing power in order to continue funding the slaughter of Vietnamese and Cambodians via carpet-bombing. A great hero of "unconstrained" government.
ReplyDeletehttp://www.flickr.com/photos/bob_roddis/3520131008/in/set-72157600951970959
Bob,
ReplyDeleteLooks like indeed that (war) was one of the uses that the then admin used fiscal policy to provision the govt towards ... cant argue with you.
But again, just speaking for myself, I'm not ready to just give up on the human and turn it all over to "precious" metals (which the point has been made that war existed under that regime too)...
Bob, we cant "punt" these issues over to gold or anything else... we have to deal with them head on as the intelligent creative beings that we are...
rsp,
The purpose of central banking is to allow the theft of purchasing power by the elite. The idea that fiat funny money and deficit spending can solve "problems of living" is absurd. They are the cause of those problems. You are creating an unconstrained governing class to solve problems that do not exist while your "solution" causes the problems in the first place.
ReplyDeleteBut remember that at the time the US fighting a cold war with Russia and China and it regarded the Viet Cong as their proxy. A bit simplistic, but that's how it was viewed. The Pentagon was concerned about losing access to resources in SE Asia and seeing those resources exploited by the "Red Menace."
ReplyDeleteSame with Iraq and Afghanistan. Geo-strategically its about control of ME and Central Asian energy resources deemed vital to US national security. So cost is no object. The US still sees Russia and China as its strongest potential enemy.
"to solve problems that do not exist"
ReplyDeleteIf there were no problems to solve why would anyone have proposed trying to find solutions to them?
Oh, of course, it's all a conspiracy.
Bob, I agree that this is one side of the story. The other side is restraining private oligarchies. The only viable solution as far as I can see is checks and balance on both governments and private elites through actually democratic institutions. That's an institutional problem that potentially can be solved politically through better institutional design.
ReplyDeleteI don't an available solution now based on political decentralization and economic liberalism that is capable of working the context of the present world and the direction in which the world is heading.
I see decentralization and liberalism as long term goals and believe that this will occur naturally when collective consciousness is ripe for it. Until then, we have to deal with the world as it is, and it is much more complex than most Libertarians assume, and the issues are much more complicated than they admit.
But history has a liberal bias, so I think that the trend over coming centuries will be toward greater decentralization of power and increasing liberalism in socially, politically, and economically. But there are going to be many challenges and conflicts on the way forward. Humanity is either going to make the transition to new forms of energy that will "fund" the greater complexity arising from "progress," or it is not. If it does, then we will enter a new era. If not, we will face pruning and even risk collapse.
Is it a "conspiracy" that no Keynesian bothers to understand Austrian School concepts or the original intent of the Constitution? You all have your naive vision of reality where you are the savior of the helpless rabble via unconstrained government (in your mind, you, not Stalin) and you can't bring yourself to examine your vision.
ReplyDelete"Conspiracy" suggests insightful and purposeful malice aforethought but such is clearly lacking in the ubiquitous Keynesian naivete.
You “restrain private oligarchies” by reducing the power of the state. “Private oligarchies” only have power if they control an active state. Without an active state to control, they are left in the position of begging you “pretty please” to buy their products or they go out of business. Gabriel Kolko showed that monopolies were not arising in the Robber Baron era and that the “Robber Barons” required “progressive” legislation to accomplish their mission of monopolization.
ReplyDeletehttp://tinyurl.com/cf7sudo
It is the granting of economic power to the government that is the source of the problems about which you complain. As a bonus, the granting of such power brings wars and the elite’s looting of the masses via fiat funny money dilution.
Bob I think you and those advocating this are being naive about the complexity, since there are complicated institutional factors operative that you seem to ignore. As long as the world is configured the way it is, it will not be possible to change one country alone, especially when it is a major player.
ReplyDeleteThe US can successfully oppose its competitors due to arrangements that have evolved to do so. As long as this situation exists, governments will be centralized and "big."
Governments are constrained by both external and internal factors. They have to prepare to oppose foreign enemies, which requires a strong economy as a sine qua non and they also have to keep control on the domestic front either through repression or "bread and circuses." Rome used both in combination, and so does the US. The US now being increasingly militarized in preparation for possible social break down, which becomes more like as "bread and circuses" are curtailed.
So I see no viable path to institute the ideas Libertarians propose without weakening the US, and the vast majority American happen to like their empire.
"Is it a "conspiracy" that no Keynesian bothers to understand Austrian School concepts"
ReplyDeleteThat's just something you've made up and have convinced yourself is true.
What you actually mean is that Keynesians don't agree with Austrian School ideas.
There's a difference between "understand" and "agree" which you don't seem to get.
(And by the way MMT is essentially a branch of 'Post Keynesian' thought).
"...or the original intent of the Constitution?"
You've demonstrated on occasion that you don't actually understand the constitution.
"You all have your naive vision of reality where you are the savior of the helpless rabble via unconstrained government (in your mind, you, not Stalin) and you can't bring yourself to examine your vision."
You naively believe that there would be no economic or social problems if eveyone just followed your beliefs (and your beliefs alone).
You are unwilling to accept that any aspect of your beliefs might be wrong in any way whatsoever.
You simply hold that everything you believe is absolutely, unquestionably true.
That is the mindset of a dictator.
And of course you hate democracy too, because you hate the fact that society doesn't operate according to your beliefs alone.
"a dictatorship may be a necessary system for a transitional period"
(von Hayek)
MMT isn't trying to be the "saviour of the helpless rabble". It's proposing policies which could lead to sustainable economic growth, full employment, price stability, and improving living standards for all. Not what we have now.
You guys are always talking about "consensus" and democracy. But if 51% or 61% of the populace wants to do something, they can all do it together voluntarily. That's a consensus. It is because you guys believe a priori that such a consensus is impossible that you impose the much inferior program of majority (of those casting votes) rule in lieu of an actual consensus.
ReplyDeleteBTW, Rothbardians have MANY disputes with Hayek. There is never an excuse for dictatorship. However, unlike Mises and Hayek, I have never lived through a period where my country was taken over by the real Nazis, so I cut them a little slack in the "practical politics" department.
ReplyDeleteIt is just that by winning the quasi Nobel Prize in Economics (such as it is) for his work demonstrating that it is Keynesian policy that causes the boom/bust cycle, there is no excuse for an educated person to not at least understand basic Austrian concepts. Winning the prize does not necessarily make Hayek right.
You naively believe that there would be no economic or social problems if eveyone just followed your beliefs (and your beliefs alone).
ReplyDeleteWhat I believe is that English common law principles of private property and contract including common law concepts of criminal and tortious behavior, are sufficient to solve inter-personal disputes. "Progressives" want to jettison those principles without any showing whatsoever that they have failed and without thinking through why their "solutions" will cause more problems.
Also, instead of just saying that "progressives" understand Austrian concepts, why not demonstrate such a claim?
Bob, Also, instead of just saying that "progressives" understand Austrian concepts, why not demonstrate such a claim?
ReplyDeleteThere are different schools in AE, as you know. Keynesians agree with some things and not with others. Basically the disagreement is over methodological individualism v. institutionalism. Keynesian economics is a systems approach in which relations among elements, actual and potential, are as critical to proper understanding of system dynamics as the elements are. Methodological individualism denies this. So an impasse results.
Moreover, even Hayek went with Popper rather than Mises over claims of irrefutable self-evidence.
Was Mises a Fallibilist?
Bob Roddis@July 8, 2012 11:24 AM
ReplyDelete"Is it a "conspiracy" that no Keynesian bothers to understand Austrian School concepts"...
Bob Roddis@July 8, 2012 12:24 PM
Also, instead of just saying that "progressives" understand Austrian concepts, why not demonstrate such a claim?
Easy:
http://socialdemocracy21stcentury.blogspot.com/2012/06/debunking-austrian-economics-101.html
Austrian concepts are
(1) trivially true,
(2) wrong, or
(3) not significantly different from neoclassical concepts.
This troll has no credibility whatsoever, for if he was himself fully familiar with the broad range of views within the Austrian school, he'd know that the Austrian Ludwig Lachmann held that markets have no tendency to equilibrium and that government intervention was justifiable for stability:
http://socialdemocracy21stcentury.blogspot.com/2012/02/lachmann-endorsed-keynesian-stimulus-in.html
http://socialdemocracy21stcentury.blogspot.com/2011/07/ludwig-lachmann-on-government.html
There is no essential dispute between Hayek, Mises, Rothbard, Lew Rockwell or me regarding the following which states the basic Austrian understanding of the economic galaxy. In a 1975 speech, Hayek stated:
ReplyDelete“The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept. The point I want to make is that this equilibrium structure of prices is something which we cannot know beforehand because the only way to discover it is to give the market free play; by definition, therefore, the divergence of actual prices from the equilibrium structure is something that can never be statistically measured.
****
In contrast, the modern fashion demands that a theoretical assertion which cannot be statistically tested must not be taken seriously and has to be discarded. As a result of this belief, a theory which, in my opinion, is the true explanation has been discarded as not adequately confirmed, and a false theory has been generally accepted merely because it happens to be the only one for which statistical evidence, even though very inadequate evidence, is available.”
Bob Roddis said...
ReplyDeleteBTW, Rothbardians have MANY disputes with Hayek.
Right: that's why you should replace the words "Austrian economics" with the "cult of Rothbard" in all your posts above.
It is you who show contemptible ignorance of the broad range of views within the Austrian school, in your attempt to present it as some monolithic entity when it's not.
Even the differences between the classical liberal system of Mises and the lunatic anarcho-capitalist system of Rothbard are considerable.
"“The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure"
ReplyDeleteThe belief that market systems tend to equilibrium or that general equilibrium states even exist in the real world is a deluded fantasy. The Austrian Ludwig Lachmann knew it. Even the Austrian Mario Rizzo in the Economics of Time and Ignorance rejects equilibrium theory.
Moreover, Hayek in the passage you cite contradicts himself, because by the end of his life Hayek actually gave up altogether on equilibrium theory:
“HIGH: To what extent do you think that general-equilibrium analysis has contributed to the belief that national economic planning is possible?
HAYEK: It certainly has. To what extent is very difficult to say. Of the direct significance of equilibrium analysis to the explanation of the events we observe, I never had any doubt, I thought it was a very useful concept to explain a type of order towards which the process of economics tends without ever reaching it. I’m now trying to formulate some concept of economics as a stream instead of an equilibrating force, as we ought, quite literally, to think in terms of the factors that determine the movement of the flow of water in a very irregular bed.”
Nobel Prize-Winning Economist: Friedrich A. von Hayek, 1983, pp. 187–188.
That is, Hayek abandoned the notion of the market as an "equilibrating force" - which renders what he says in your quote a cartload of garbage.
But not that we'd expect any serious understanding of the more complex issues in Austrian economics from a troll like you:
Bob Roddis - ignorant of basic Austrian concepts!
Hayek used the term "equilibrium". I didn't use it and even at the time of that 1975 quote, Hayek was not really pleased with the idea of using that term. It means nothing more and nothing less than those prices and outcomes that would have obtained in absence of injections of fiat funny money and/or other "stimulus". Suppose a nice Canadian film was made with a subsidy or fiat money loan. What would it have looked like or how much would it have made without the loan or the subsidy? We do not know and cannot know. Hayek's use of the term "equilibrium" merely means the outcome that would have happened absent the intervention.
ReplyDeleteThat's why your concern about "a natural rate" vs "many natural rates" of interest is so pathetic. All that Hayek meant by those terms was the rate or rates that would obtain absent the intervention into the rate setting process. That's the essential point which you insist upon not comprehending and/or intentionally mistating. Whether there might be a single such rate or multiple rates is really beside the point.
Again, LK insists upon refusing to understand the basic Austrian concept of economic calculation. And there is nothing non-Rothbardian about the content of the Hayek quote.
Bob, we know now through SFC modeling of sectoral balances that unemployment is the result of unspent income aka saving. Saving by one sector that is not offset results in demand leakage that results in not all goods produceable at full employment being sold, the build-up of unplanned inventory, the opening of an output gap and rising unemployment.
ReplyDeleteSector balances don't matter if the government sector has few assets thus has no "balances", right?
ReplyDeleteYou guys can go to the public with your "sector balances" analysis. The public can't even follow the idea that fiat money causes inflation. And, of course, the government shouldn't run a surplus or a deficit.
Mish explains how fractional reserve lending is the cause of all evil. He insists that everyone must read Rothbard and Mises and understand Austrian Economics (@ 7:00):
http://www.lewrockwell.com/lewrockwell-show/2008/12/10/81-the-answer-to-the-economic-crisis/
Regarding Hayek’s use of the word “equilibrium”, a few paragraphs before the above quote he states:
ReplyDeleteThese discrepancies of demand and supply in different industries, discrepancies between the distribution of demand and the allocation of the factors of production, are in the last analysis due to some distortion in the price system that has directed resources to false uses. It can be corrected only by making sure, first, that prices achieve what, somewhat misleadingly, we call an equilibrium structure, and second, that labor is reallocated according to these new prices.
This is consistent with my explanation above. As always, LK finds it necessary to take things out of context because he finds it necessary to ignore and avoid the central concepts of the Austrian School.
"Sector balances don't matter if the government sector has few assets thus has no "balances", right?"
ReplyDeleteUnder a fiat system, financial assets are no problem since the government issues the currency. The only constraint is real resources and a full employment budget maximizes economic performance by utilizing available resources instead of letting resources lie idle.
The issue is optimizing production, employment and price stability without presupposing equilibrium through the operation of market forces in that market forces do no result in such an equilibrium in a monetary economy in which saving and dissaving are possible and one that is also open, where the public sector and external sector can save and dissave, too.
A sector is in balance when all aggregate income is spent, saving denote a surplus, and dissaving denote a deficit. The sectoral balances sum to zero as an accounting identity.
The market for food can be in perfect equilibrium, and yet people can still be starving simply because they can't afford the equilibrium price.
ReplyDeleteIn this case you would have an insufficient supply of food to meet the total demand for food at a price that everyone can afford to pay.
A solution for the government in this case could be to increase the supply of food, thereby bringing down the price to a new equilibrium at which everyone can actually afford to eat.
But for Bob, of course, this would represent a terrible 'distortion'.
So, to stop such a 'distortion', Bob might advocate simply allowing people to starve, so that the market can clear by its own accord.
Because the market is always right.
And gold is more important than people.
People don't starve in the market. People starve when the New Dealers burn all the citrus fruit like in "The Grapes of Wrath" and kill all the pigs to "raise prices".
ReplyDeletePeople die when New Dealers fire bomb every last Japanese city except for two, and then nuke those last two.
"It can be corrected only by making sure, first, that prices achieve what, somewhat misleadingly, we call an equilibrium structure, and second, that labor is reallocated according to these new prices."
ReplyDeleteThat's precisely the point where Hayek's intellectual schizophrenia is revealed: for if there if no real general equilibrium state ever in the real world, the whole quote becomes so much nonsense.
It is actually you who have failed to understand the laughable inconsistency in Hayek's thought here.
Bob Roddis@July 8, 2012 5:22 PM
"People don't starve in the market."
Tell us another joke.
"These discrepancies of demand and supply in different industries, discrepancies between the distribution of demand and the allocation of the factors of production, are in the last analysis due to some distortion in the price system that has directed resources to false uses. It can be corrected only by making sure, first, that prices achieve what, somewhat misleadingly, we call an equilibrium structure, and second, that labor is reallocated according to these new prices."
ReplyDeleteFurthermore, what is your source for this?
In what book/article and when did Hayek say this?
It is obvious that his views in 1975 may have been different from his views in 1979 and later.
If you'd bothered to read any good biography of Hayek, say Caldwell's Hayek's Challenge: An Intellectual Biography of F.A. Hayek, Chicago, 2004, pp. 226-227, you'd know by around 1981 Hayek rejected even this own earlier definition of equilibrium.
That makes it clear his belief in an equilibrium structure of prices/wages is just another inconsistency in his thought.
The source is this pamphlet:
ReplyDeletehttp://www.flickr.com/photos/bob_roddis/7534880718/in/set-72157630494776170/
The use of the term “equilibrium” to refer to catallactic exchange is bizarre in the first place. It’s just another failed attempt to apply the language of physics to human relationships. If there is an exchange, each party got what the other person did not want. Apparently, the attempt was to create a word to reflect the fact that free exchange does not result in societal breakdown or economic collapse but instead leads to sustainable prosperity as opposed to the poverty-inducing unsustainable artificial expansions induced by Keynesian policy. They should stick with just saying that.
The terms 'free exchange' and 'free market' gloss over the reality of imbalances of power and hierarchical power structures within society.
ReplyDeleteAnonymous: "The terms 'free exchange' and 'free market' gloss over the reality of imbalances of power and hierarchical power structures within society."
ReplyDelete"Free exchange" and "free markets" are slogans, not descriptions. And prescriptively, they are impractical in today's complex world. We are not going to a bazaar economy anytime soon, unless civilization as we know it collapses and then anything is possible. Maybe even a barter economy.
Human action, catallactics and the non-aggression principle have very specific definitions and are easily understood descriptions of reality. They can be easily understood by anyone who would spend 30-90 seconds thinking about them. You guys just don't want to know what they mean because your totalitarian dreams would evaporate in a nanosecond.
ReplyDeletehttp://tinyurl.com/898dp78
"[H]ierarchical power structures within society" are the result of the breaching the non-aggression principle. I've already cited Kolko above. "Power structures" require government POWER and the goal of MMTers is take all contraints off of the exercise of POWER.
"unsustainable artificial expansions induced by Keynesian policy"
ReplyDeleteWhat's unsustainable is large asset price bubbles, financial ponzi schemes, and private debt binges. These occured for over two hundred years before Keynes came along.
A large part of MMT is about addressing these problems.
"the goal of MMTers is take all contraints off of the exercise of POWER."
ReplyDeleteNo it isn't. MMT is specifically about understanding the monetary system and proposing policies which could lead to sustainable economic growth, full employment, price stability and rising living standards.
It's not about firebombing Japan or sending people to the gulag in Siberia.
"your totalitarian dreams would evaporate in a nanosecond."
ReplyDeleteMMT isn't totalitarian. It is a school of economic thought which analyses the monetary system (present and past) and proposes policies based on that analysis aimed at achieveing generally desired economic and social goals: growth, employment, prosperity, better living standards, etc. It's not about installing a totalitarian regime.
"Hierarchical power structures within society" are the result of the breaching the non-aggression principle."
ReplyDeleteYou don't see hierarchical economic structures as hierarchical structures of power?
Bob R: "Human action, catallactics and the non-aggression principle have very specific definitions and are easily understood descriptions of reality. They can be easily understood by anyone who would spend 30-90 seconds thinking about them. You guys just don't want to know what they mean because your totalitarian dreams would evaporate in a nanosecond."
ReplyDeleteBob I have a actually read Mises rather closely on the philosophical points, and as a philosopher I like him, although I don't agree with him. He has a nice integration of Aristotle and Kant, and handles traditional issues in an interesting way. It is obvious Where he is borrowing ideas, and I can identity his renditions of Aristotle and Kant based on the source.
Mises presents a philosophical account similar to the way other philosophers have presented their accounts and Mises is more doctrinaire than most in his presentation. The assertion is that this an accurate description of the way things are and if you don't get it you are stupid because it is self-evident Well, that is what all philosophers say.
You happen to agree with MIses. I see the issues with his approach. I am not going to launch into an explanation because it would be time wasted. It seems self-evident to you and you are not going to change you mind.
I sympathize with where you are at, since I was in a similar position when I entered grad school — that is, until I encountered some very sharp professors who showed my that I was making claims I could not defend other than by saying to them, "Well, you are just stupid not to see the obvious" I was not stupid enough to do that, and so I ended up learning something about rigorous critical thinking.
Now this is not to say that Mises is "wrong." Let's just say that Mises narrative is just one way of many of looking at human action, and there are significant problems with his approach and presumptions. Human beings construct different narratives to justify their worldviews. The so-called self-evident propositions that appear to be descriptive function logically as norms establishing the boundaries and serving as criteria for assessing truth value of other propositions.
Everyone does this unconsciously and unintentionally. Philosophers do it consciously and intentionally. People gravitate to philosophies with worldview they deem closest to theirs.
So this is not to say that Mises is "wrong" in the sense that the foundations of praxeology are false. That is the problem with philosophical argumentation from the vantage of logical analysis.
It's a logical construction offered as an explanation that is actually the articulation of a worldview. In tightly knit cultures only one such worldview is permitted and all other are taboo, e.g., "heretical." Since liberalization started unfolding in the West at the Renaissance, different world views have been freely proposed and there are many competing worldviews now.
How we construct worldviews and why people choose the ones they do are the subject of logical analysis and cognitive research. Since there are not overarching absolute criteria publicly available, the choice among worldviews is normative and preferential. At the same time, worldviews can be critiqued rationally based on logical analysis and scientific findings. But in the end choice among worldviews is extra-rational. Vide credo quia absurdum — "I believe because it is absurd."
Y, it's black or white, either/or thinking and "my way or the highway." If not my version of Mises, then it is socialism, which Mises proved proved necessarily leads to totalitarianism.
ReplyDeleteThere is no counter-argument to this, nor is it fallible because it is not descriptive of the world. It's throwing one worldview against every other one. That's how all philosophical argumentation ends.
When I was a grad student, I remember asking one of my profs why the profs of different schools of thought never talked about anything with each other except the weather. He said, "Oh, we all argued each other back to fundamentals some time ago and amicably agreed to disagree. So there's nothing more to say." Took me awhile to understand that, and now it is perfectly clear to me.
You don't see hierarchical economic structures as hierarchical structures of power?
ReplyDeleteThe entirety of the phony “progressive” narrative is based upon a misuse of the word “power” as applied to two completely different situations. The first and correct use refers either to the threat of the initiation of force or the actual initiation of force. A SWAT team show up at your door and they say they will knock down your door and drag you to jail unless you pay your parking fine. It is proper to apply the term “power” to that situation as it applies to situations where the non-aggression principle is breached.
The other use is someone having more money than someone else. All that such a person can do is ask nicely if the purported “victim” wants to engage in an economic exchange or relationship. As Warren “Hut Tax”Mosler has noted, the “victims” can and do say no to proposed econonomic relationships. MMT is based upon colonial enslavement according to Warren “Hut Tax” Mosler:
The following is not merely a theoretical concept. It’s exactly what happened in Africa in the 1800’s, when the British established colonies there to grow crops. The British offered jobs to the local population, but none of them were interested in earning British coins. So the British placed a “hut tax” on all of their dwellings, payable only in British coins. Suddenly, the area was “monetized,” as everyone now needed British coins, and the local population started offering things for sale, as well as their labor, to get the needed coins. The British could then hire them and pay them in British coins to work the fields and grow their crops.
Asking the locals to pick crops and being turned down is an example of economic relationships. When the locals said no, the British got out their guns and threatened force. That is a “power” relationship.
Pursuant to the libertarian non-aggression principle, the power relationship is ALWAYS forbidden.
See also the film “Avatar”. The earthlings asked the aliens nicely if they could economically exploit their lands. The aliens said no. That’s an economic relationship. When the aliens said no, the earthlings invaded. That’s a forbidden exercise of “power”. As Kolko noted, the elite could not monopolize by just asking “pretty please”. They required the power of the state to monopolize. That’s why Rothbard wrote the book “POWER AND MARKET”.
These concepts are not that complex or controversial. You guys just find it necessary to obfuscate simple everyday concepts in your attempt to bamboozle the intended victims of your MMT scam.
"MMT is based upon colonial enslavement according to Warren “Hut Tax” Mosler:"
ReplyDeleteNo, it's not. Only a fool would think that Mosler's one historical example of how money was accepted in a British colony is what MMTers advocate today.
"The first and correct use refers either to the threat of the initiation of force or the actual initiation of force. ... It is proper to apply the term “power” to that situation as it applies to situations where the non-aggression principle is breached. "
You've chosen the wrong day to lecture people about force and power, for there is an interesting post here showing how Hayek preferred dictatorship to social democracy, in comments to an interview to a Chilean newspaper in the context of his praise of Pinochet:
“[A]s long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally, I prefer a liberal dictator to democratic government lacking in liberalism. My personal impression. . . is that in Chile . . . we will witness a transition from a dictatorial government to a liberal government . . . during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement.”
http://socialdemocracy21stcentury.blogspot.com/2012/07/hayek-and-pinochet-endless-love.html
When you consider that statement with Mises's praise of Mussolini's fascism the Austrains cultists are the last ones who should be lecturing on freedom:
“It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.”
Mises, 1978 [1927]. Liberalism: A Socio-Economic Exposition (2nd edn; trans. R. Raico), Sheed Andrews and McMeel, Mission, Kansas. p. 51.
Gosh, LK. Has it already been a week since your last pathetic smear of Mises regarding Mussolini which I answered in full? (BTW, I don’t know of any Rothbardian who supported the CIA coup in Chile. And Hayek’s view on that topic has nothing to do with his monetary theories).
ReplyDeleteThe influential economist John Maynard Keynes was a prominent supporter of Eugenics, serving as Director of the British Eugenics Society, and writing that eugenics is "the most important, significant and, I would add, genuine branch of sociology which exists".
http://en.wikipedia.org/wiki/Eugenics
Keynes’ position on eugenics goes straight to the heart of his economic theory. However, your Mises’ quote is taken completely out of context. Mises was clearly (and merely) pointing out that (in his opinion in 1927) the pre-Hitler form of fascism had halted the spread of Stalinist Pol Pot-like mass murdering Communism in Italy (Mussolini was indeed quite popular with hip leftists and even FDR until he joined up with Hitler in the late 1930s). But Mises also makes clear that fascism is a brutal and ignorant movement because fascists cannot even argue or engage in debate (just like socialists) and that fascism will lead to a civilization-ending war:
“Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles. But when the fresh impression of the crimes of the Bolsheviks has paled, the socialist program will once again exercise its power of attraction on the masses. For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism. ****
So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one's own nation can secure its place in the community of nations by force alone.
It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.” Pages 50-51
http://mises.org/books/liberalism.pdf
Yes, Keynes supported eugenics and should be condemned for that - but this has absolutely nothing to do with his economic theories.
ReplyDelete"Keynes’ position on eugenics goes straight to the heart of his economic theory.
LOL... more idiocy on display.
Note Mises's words:
"It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history."
Note that Mises did more than praise Mussolini, and supported the
Austro-fascist Dollfuss as a "quick fix":
“Dollfuss’s authoritarian policies were in his [sc. Mises's] view only a quick fix to safeguard Austria’s independence—unsuitable in the long run, especially if the general political mentality did not change” (Hülsmann, J. G. 2007. Mises: The Last Knight of Liberalism, Ludwig von Mises Institute, Auburn, Ala.
pp. 683–684).
Anyone who thinks that fascism is a "quick fix" is got serious issues.
Living under Dollfuss vs a North Korea type regime? I have never been in a situation where it was likely that my own country might be taken over by real murdering commies or Nazis. I'm going to cut Mises and Hayek some slack here.
ReplyDeleteFurther, these statements have nothing to do with the general idea of the non-aggression principle or the failures of Keynesian fiat funny money and deficits. You've lost the argument so you are changing the subject.
What the f@ck are you guys on about?
ReplyDeleteMMT is quite simple in my view, as I stated above.
As a body of theoretical research, MMT analyses the monetary system (both present and past) within a particular country, and then proposes policies based on that research which could lead to the attainment of goals such as economic growth, full employment, price stability, rising living standards for all, etc.
This is a separate area of discussion to that regarding supposedly perfect imaginary libertarian utopias.
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Oh and by the way Bob, if you can come up with an ideal economic model which doesn't involve constantly falling wages then I'm all ears.
Y,
ReplyDelete"economic growth, full employment, price stability,"
Good point. those goals are actually stated in US laws like the Federal Reserve Act itself, Humphrey-Hawkins, probably some others...
Kind or ironic when you have to watch a Richard Nixon video to be reminded about what is actually lawful...
rsp,
"economic growth, full employment, price stability"
ReplyDeleteThese are not only policy goals that macro theory uses to assess effectiveness and in terms of which to evaluate efficiency of means, they are also politically crucial since these the matters that voters are interested in and hold incumbents accountable for. If the economy misses any of them excessively in the eyes of the public, incumbents have some explaining to in the next campaign. There is a very close connect among macro, economic policy, and politics in democracies.
Bob Roddis isn't interested in "voters".
ReplyDeleteIn his ideal world all "voters" simply believe everything that Bob Roddis believes.
Because taxation is theft, and that's all there is to it, remember.
Then again, let's not pretend for a moment that democracy is anything other than imperfect.
But at least it's better than Bob Roddis' world in which the law according to Bob Roddis is absolute, and persistently falling wages are the norm.
In that world "price distortion" is fine so long as it's price distortion downwards.
Hoarders rejoice.
y:
ReplyDeleteYou're not interested in individual choice. In your ideal world, everyone obeys the mob majority. Minorities, be weary! If you don't engage in group think, you're breaking the law!