Extreme Inequality Helped Cause Both the Great Depression and the Current Economic Crisis

George Washington's picture

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Catullus's picture

For the much revered Wealth of Nations is a huge, sprawling, inchoate, confused tome, rife with vagueness, ambiguity and deep inner contradictions. There is of course an advantage, in the history of social thought, to a work being huge, sprawling, ambivalent and confused. There is sociological advantage to vagueness and obscurity. The bemused German Smithian, Christian J. Kraus, once referred to the Wealth of Nations as the 'Bible' of political economy. In a sense, Professor Kraus spoke wiser than he knew. For, in one way, the Wealth of Nations is like the Bible; it is possible to derive varying and contradictory interpretations from various - or even the same - parts of the book. Furthermore, the very vagueness and obscurity of a work can provide a happy hunting ground for intellectuals, students and followers. To make one's way through an obscure and difficult tract, to weave dimly perceived threads of a book into a coherent pattern - these are rewarding tasks in themselves for intellectuals. And such a book also provides a welcome built-in exclusion process, so that only a relatively small number of adepts can bask in their expertise about a work or a system of thought. In that way they increase their relative income and prestige, and leave other admirers  behind to form a cheering section for the leading disciples of the Master.

 

-- Murray N. Rothbard

Economic Thought Before Adam Smith Vol. 1

Chapter 16.1 The Celebrated Adam Smith

Future Jim's picture

No. Dude. He said Adam Smith would agree with him. That's settles it. He must be right.

gwar5's picture

"...because free markets themselves are necessarily beautiful choas, a dyamic living thing, with rightful claim to their own mystery and uncertainty. Only through supreme vigilant efffort does an English garden remain a  subservient English garden, manicured into obedience, before it once again reverts to the wild forest that it once was and always wishes to be. Describing such a phenomenon pretends not to control it, but to give the wanderer a guide to where sustenance may be found and briars may lay hidden."

Oxford student, 1891

 

chet's picture

Yep.  And only about 1% of people who cite Adam Smith have actually ever read the thing.

greenewave's picture

The horror of war and MASSIVE political and civil unrest is COMING TO THE UNITED STATES.

Please watch the video “Hero of War” at (http://youtu.be/z0XPqiQM92Q) and see what the MAINSTREAM MEDIA doesn’t want you to see.

-Anonymous

Wow this look like a movie but the truth is that it’s not.

Malcolm Tucker's picture

Coming? It's already here. If you want to see tyranny and brutality watch this:

http://fedupmontrealer.blogspot.com/2010/12/canada-beware-of-coming-police-state.html

This is in Canada no less. 

Terminus C's picture

Yea, Herr Harper kindly spent $1 billion of our tax money to show us, the tax payer, just how much power the state holds over our heads.  He kindly used our money to demonstrate that our charter of rights and freedoms, enshrined in our constitution, is nothing but toilet paper.

Unfortunately if it was not Herr Harper doing this then it would have been Herr Iggy or... Herr Layton? (Hairy Layton maybe... not sure he would have done this but... the NDP... UHG... Triple the size of governmnet and they'd be happy)

Anyway, am doin my part to undermine fascism in my country.

Future Jim's picture

I wonder if those police were even Canadian. You never know. They look just like the rest of us - those Canadians.

In all seriousness, that was a very good video. I downloaded it before it disappears. It appears that the camera was hidden, like a pen camera, or else I'll bet it would have been confiscated and we would never have seen this. In addition to as many pen cameras as possible, I recommend as many cameras as possible mounted in cars or nearby windows and aimed at any protest, tea party, etc.

This reminds me of the collateral murder video, which I wrote about here: http://www.endofinnocence.com/2010/04/evil-exposed.html

 

Dr. Sandi's picture

Deja vu. Seems like I've seen this before somewhere!

You make the erroneous assumption that the MSM gives a rat's ass about what I see.

More Critical Thinking Wanted's picture

 

One small historic detail worth pointing out is that both the roaring 20s and the period leading up to the big 2008 crash were ruled by Republican presidents, with "free market", "hands off", deregulatory policies - a corrupt policy financed and cheered on by Wall Street.

That created/accelerated both the excesses, the inequality and laid the foundations for an inevitably big crash. Those eras had the mindset and intellectual limitations of Ron Paul, just on a grander scale.

Cleaning up the mess was left to democratic presidents.

Something to think about.

 

Rogerwilco's picture

Well that explains it! When Bill Clinton signed the legislation granting investment banks unlimited leverage, he became a Republican. Who knew?

Thanks so much for extending our knowledge.

More Critical Thinking Wanted's picture

 

Hey, why stop at Clinton, the president who (after a long string of republican presidents producing bigger and bigger debt) posted the first surplus quarter in decades and actually started reducing the debt?

So it's the fault of Kennedy ... or rather Roosevelt! It's true that he led the US into its biggest period of sustained growth, but he ... abolished the gold standard! Sure he must be at fault for 2008 too ;-)

 

Terminus C's picture

While your call on Republican presidencies rings true, the difference between Ron Paul and George Bush is that Paul would have let the banks fail... if he stuck to his beliefs and he would not have run up such a monstrous debt.

The main difference between 1929 and 2007 is the debt levels of America (public and private).  The mass borrowing of the thirties and forties was able to pull the U.S. out of the depression... this time it will not because we are heaping massive new debt onto massive old debt.

Also, the main common element to both of these major economic down turns was the manipulation of money supply by the U.S. Fed.

More Critical Thinking Wanted's picture

I'm not so sure about Ron Paul at all. Lets quote the man himself, from 2005, and see his actions at the height of the housing bubble:

   https://www.nytimes.com/2005/04/17/business/yourmoney/17sox.html

The quiet campaign against provisions of the Sarbanes-Oxley Act may have had something to do with the proposal by Representative Ron Paul, a Republican from Texas, on Thursday to eliminate Section 404 entirely. In a statement, the congressman said the provision "has raised the costs of doing business, thus causing foreign companies to withdraw from American markets and retarding economic growth."

And what was "Section 404" that Ron Paul opposed? Anti-fraud provisions:

Section 404 requires companies and their auditors to assess the companies’ internal controls, which are the practices or systems for keeping records and preventing abuse or fraud.

....

Holy crap ...