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FDR beat Wilkie, and with the Fed's 1939 QE Alpha a distant memory, it was risk-off baby
Ahead of tomorrow's mid-terms and Wednesday's announcement of QE Ad Infinitum, we thought it would be worth reviewing a bit of history, including the Fed's first foray into quantitative easing in September, 1939, which set up one of the more interesting price analogs, namely: Dow 2010 vs. Dow 1940 (a year replete with its very own May France-crash). Frederic S. Mishkin and Eugene N. White write [emphasis ours]:
In May and June 1940, with the defeat of France by the Germans and the Dunkirkevacuation, the Dow Jones and the Cowles index lost 20 percent of their value, as seen in Figure 6. While real GDP declined in first quarter of 1940, there was no recession and expansion continued until February 1945 [listen to why this is not correct here]. Although small by comparison to jumps in the interest rate spread in 1937, there was a small but obvious increase during the collapse of the market. However, the spread still did not rise above levels reached in 1938 and 1939, and immediately fell to the pre-crash levels and then continued to decline. The economy and the financial system were in no immediate threat from the crash of the market. [Yet,] In September 1939 when war broke out in Europe, the Federal Reserve purchased $400 million of government securities to offset the big fall in the price of U.S. government bonds. This action was regarded by the Federal Reserve Board, and probably the markets as well, as a break from past practice. The professed aim was to protect member bank portfolios and to ensure an “orderly” capital market for economic recovery (Friedman and Schwartz, 1963). This action and the steady growth of the money stock from rising gold flows may have limited the reaction of the credit markets to the stock market crash. By 1940, the weaker financial institutions had been eliminated and the balance sheets of most banks and firms had been substantially strengthened. These improved initial conditions and the Fed’s early policy intervention meant that the credit markets reacted very little to the stock market crash. [Might, then, we credit the absence of TBTF rather than the ham-fisted actions of then-Chairman Eccles?]
Current Fed Chairman Bernanke, widely recognized as having once written a report for school on the Great Depression, is all to aware of what happened after that fateful November, 1940 election...
Of course, in the absence of QE Beta, the ruling class would need to jump start the economy with the preferred alternative to monetary debauchery: full scale world war. With the well-known stimulative effects of blowing things up accompanied by wage and price controls, it's a wonder we're not currently contemplating both.
Though some believe these matters to be settled, Austrian economist Robert "Babyface" Murphy has challenged Paul "Bring on the Housing Bubble" Krugman to a debate. Lew Rockwell writes:
Through a website called The Point, people can pledge an amount of money to make the debate happen. Not one cent is charged to them until it does happen. The money will go to a charity for the hungry in New York. So if it hits, say, $100,000, Krugman will have to explain why getting $100,000 to New York’s hungry isn’t worth one hour of his time. Brilliant. I’ve already pledged. Bob is up to around $5,000 already. (UPDATE: up to $10,000!) [EB: As of Nov 1: nearly $50k]
Murphy's no-holds-barred training video may be viewed at EconomicPolicyJournal.com.
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EB, barring all the endless debates on policy ad nauseum, your analogy & thesis has validity. Armstrong is predicting the debacle cycle low at 2011.44 or .45 during mid-June of next year. This will complete this particular cycle.
With the current gang of numbskulls at work, I view the probability as very high that will occur. As we can see in your analog, the low is around mid-year. It is obvious to all these central banker types are quite retarded. Personally, I avoid their arguments & won't waste my time reading their rubbish.
Monetaryred, on an article about Austrian economics...how novel.
I'm not sure you understand the above quote, because if you did, you see exactly what an Austrian would prescribe: No intervention. No taxes. Sound money. I hope you understand this this time.
I imagine you will rebut: what about the debt? Should we default? Yes. The government of the US is bankrupt. Therefore, the bond holders should make their claims to be administered in a court and accept their haircut. There can be a sale of the government's property and all employees will be dealt with as in other orderly bankruptcies.
No taxes. No tax increases.
Will this not be incredibly painful and dislocating to the American public? Yes, Yes and ...Yes. Who will we blame? I suggest three parties, although two are really the same. One, The Federal Reserve for creating debt for the sole purpose of profiting off the use of free credit and interest on credit they created. Two, bankers, whom failed to provide leadership or responsibility with themselves or other members in their criminal organization. Three, the citizens of the United States for failing to safeguard and protect their government through due diligence and economic education- essentially providing the room and bed for their own rape and transfer of wealth.
There is a cost to ignoring and repudiating the mechanism that is the free market. The more you abuse it, the worse it gets.
Finally, anyone that groups Austrians and Monetarists is a moron. Not kind of a moron, not a moron through ignorance, but a moron by choice. How's all that Keynsian math working out for you snowball?
A new government or no government can then be instituted.
Okay, Sean, there won't be any government.
I know better than to argue with an anarchist. I've done it plenty in the past.
What your anarchism has to do with Austrianism, I have no idea, but apparently you do, so that's good enough.
An anarcho capitalist would suggest that Murray Rothbard built upon the foundation of Mises and Hayek to explore and evolve Austrian economics to a place where government is shown to be unnecessary. Allowing the adoption of Austrian theory in an environment that allows for its' success. By the way- I did not junk you.
Anarchism - particularly Anarcho-Capitalism - would be a paradise for control fraud.
In this Rothbard essay:
http://www.lewrockwell.com/rothbard/rothbard133.html
Rothbard makes plain the Anarcho-Capitalists naivete. Here he deals at length with the single dispute, when that is really a question that cavemen were able to deal with. The difficult problems of jurisprudence are, in essence, rackets. This is when people use the claim of lawfulness to hide unlawfulness - control fraud.
So in Rothbard's example, the butcher who puts his thumb on the scale is caught, punished, and that's that. In reality, the crooked butcher, when caught, claims an innocent mistake and immediately offers redress - the ONE person who actually makes the claim - and then happily goes on cheating.
Market theo-nomics says that nobody will go to this butcher - the market will cure everything. Reality has shown this not to be the case time and time again. Why? Because, if for no other reason, all butchers will compete with this butcher - a Gresham's law dynamic of cheating will take over, where the market favors the cheaters.
Thus the unhappy need for the headache of regulation. Thus government. Thus the academic must meet reality.
Every argument with you is a cheat. Reality has shown this to be true? Really? I am assuming you have examples, because I will posit the opposite. That in reality, regulation has failed at ever intersection with commerce. Probably, because the regulations are written by the very people who will profit from escaping them. Actually, if a good regulation gets in the way, it will be removed (Glass-Steagal). The SEC has obviously fallen down on the job, The FDIC has failed to close up to 800 banks that should be closed and if you know Obama- you can get an extension.
That Police can brutalize and kill people and escape relatively unharmed. That while there are regulations against teacher molestation- it continues every year. That while being the most regulated country on the planet, with a dismal conviction rate, we still have more people in prison than any other country. Obviously, regulation is doing a great job.
This indicates the utter failure of government and regulation arguing for its' demise. Thus, another poorly thought out response meets reality.
Anarcho Capitalism: it isn't perfect, but it beats the hell out of what we have now.
"Snake oil" - what does that term come from? Government misbehavior?
Chinese fake baby formula, Chinese fake drywall, Fake cancer drugs, Enron and WorldComm, Fake RMBS, foods with fillers and additives - how many instances do you want of how dominant Gresham's Law can become in the real world and how terribly market theo-nomics fails?
And yet, all these places have governments with regulations. Regulations that cost money to create and enforce as well as places to put people whom violate them. If they are going to happen regardless, than I would just as soon not pay for it. Perhaps, without the false sense of security provided by these regulations, people would be better consumers and actually conduct due diligence. Effectively making fraud more difficult at every level.
No, they weren't regulated, Sean, but at least you're starting to be honest.
You don't want to pay for it. That's your narcissistic concern and that's your right, but why do I care? Your narcissism does not lend credibility to your ideas, it detracts from them.
If you want to live with lawlessness, then do. Go live in the paradise of Somalia and good luck to you.
I'd rather live where people have standards of decency. Are they all lived up to? No, Sean, welcome to the real world.
But what is assinine is clinging to the fantasy that capitalists will naturally behave well because someone told you that's how things work. They don't work that way.
Gresham's law, Sean. It's about Gresham's law. Absent enforced standards, cheaters prosper better than honest people and society has consistently found that to be too disruptive.
They are regulated,but there is always a loophole. Thus, the enrons of the world continue.
Why would I want to pay for something that doesn't work. That is just foolish. I only pay for things that have value if I can help it, you?
No where have I suggested lawlessness as you are presenting it. You fail to give people the credit for being able to construct an effective social model without government control. Your just pessimistic.
I'm pretty sure my standards for decency are as high as the next guy. Your real world encourages economic rape and the transfer of wealth, how is that decent?
I have never said capitalists will behave -, only that the market is a better enforcement tool (quicker, cheaper, with more liberty) than government intervention and regulation.
Lastly, Gresham's law states that bad money will run good money to ground. Are you sure your not quoting some other law?
Again, I know what Gresham's Law is, but I'm not sure you do.
Look at Wikipedia, specifically about the application of Gresham's Law in economics.
I prefer an economics text. That is the subject matter.
After you've read this -- http://mises.org/store/Anarchy-and-the-Law-P335.aspx -- and this -- http://mises.org/resources/2179 -- let's talk.
I'm serious.
Well, the first link is dead. As for the second, just from the description of this Hans-Hermann Hoppe and book; "Democracy: The God that Failed" with such gems as:
and
-I can say that you may be many things, but "serious" is not one of them.
I'm gonna give up hundreds of years of struggle for Democracy for the prospect of being "protected" by a combination of AIG and Blackwater because some crypt-Nazi tells me it's better than having a King (which is better than Democracy)?
You must be stoned.
Sean, I consider Mises' belief in the necessity of the state to be the fatal flaw in an otherwise flawless body of work. And I give Rothbard full credit for correcting it, lest the state's harshest critics nonetheless find themselves having to support its existence.
What good could come from all the criticism, then, no matter how reasonable or rational? If, when all is said and done, the state is necessary, then what could the state possibly care? What has to be shown instead is that the state is not necessary. And once the modern nation-state has sufficiently played itself out, the necessary experimentation can finally begin.
__________
The state can kiss my ass.
+++++
Bien dicho.
Look, I have no problem with Anarchists. I've known some Anarchists who are lovely people people, but here we see yet another parallel between Austrianism and Marxism.
When people think of "Anarchists" they generally think of the Collectivist or Social Anarchists
http://en.wikipedia.org/wiki/Social_anarchism
- of whom Bakhunin is usually thought of as a prototype.
A modern Social Anarchist is generally a person who is sympathetic to Marxism, but believes the state itself is too corrupt to be trusted.
The Anarcho-Capitalists clearly have the same relationship with Austrians.
The problem with all anarchisms is financial, in essence. Assuming people can live together without compulsion (and for the most part, they do), they need a common forum to adjudicated and arbitrate disputes. All such forums then meet with the problem of a measure of loss and a means of enforcing settlement so the dispute does not immediately resurface and get worse. Any systematizing or formalizing of this necessary system becomes government and that's that.
From Ludwig Von Mises:
So, again, what this "no government" anarchist eyewash has to do with Austrian economics, nobody knows but the Anarchists.In recognizing that there are trade-offs to all social systems and that some trade-offs are better than others. If power through government could be restrained- Mises is entirely correct. Unfortunately, governmental abuse of power has always existed.
This is the refinement I am referring to below. The uneveness of private police power versus the inevitable abuse of police power by the state. The Anarchist believes the former to present better opportunities and liberty than the latter.
However, there is no disagreement as to the application of Austrian economic principles within either structure. Further, Mises was not the originator of Austrian theory. Austrian theory has other proponents and even offshoots (Schumpeter, Hayek, Etc.). Attempting to create an argument from a paragraph without having taken the time to explore a subject in it's entirety is common, but I think your better than that.
If you can locate the arguments within a theory, you can identify its' unitary structure as well.
Anarcho-capitalism is not Austrianism and anarcho-capitalism is not an interesting discussion in my view (except as an academic exercise), because it reduces the market to an Ayn-Randian religion. It's not economics, it's just another iteration of Individualist Anarchism-http://en.wikipedia.org/wiki/Individualist_anarchism
-which is and has always been a Romantic/Religious movement.
Your points are valid in one respect: because the major works of Austrian economics were also written as anti-COMMUNIST polemic (when Mises and Hayek write "socialism" they mean Soviet-style centralism) at a time when the Soviet Union was causing crisis - and because of some very severe deficiencies in the ideas - they cause confusion.
When Mises writes something like this:
- (which he does often) it's easy to make a mistaken anarcho-capitalist interpretation of that kind of statement. But a reader then has to go further on: Even though Mises clearly has a poor understanding of both money and jurisprudence, he makes an unmistakably valid point about the necessary relationship between economic value and legal arbitration. That is that economic value is not meaningful without legal arbitration. To clear up Mises's quite obvious mistake: courts must have generally applicable standards of redress and settlement. Courts cannot and do not enforce contract specifics, since so often disputes resolve when contract specifics cannot be honored. Thus, money and media of exchange are NOT market phenomena, they are and always have been phenomona of arbitration.Repeating the same thing does not make it so, but very republican of you.
On to your next point: Mises, money and arbitration. Before I start, I can understand your confusion, because Mises, in his desire to get every concept word perfect, can cause confusion if you don't focus on every term. I fact, I reread him myself.
It is for this reason that taking paragraphs out of the whole can be problematic. This paragraphs refers to a number of items. One, it is not a support of government through being a final arbitrator. It merely reflects on what government does as an arbitrator. Two, He clearly states that government and courts do NOT determine what money is, but they are called upon to determine what is legal tender for the satisfaction of a debt in a contract where one party has reneged. They identify the terms of the contract and adjudicate whether each party has conformed to it's obligations.
Mises does NOT identify a NECESSARY relationship between jurisprudence and money. Just that the court may be called upon by both parties to settle a dispute in this regard. Of course, courts do not enforce contracts, but without their rulings, it is impossible for the merchant to do so.
Mises has an excellent understanding of money. If money was a phenomenon of arbitration, then there would be no money absent arbitration. Fortunately, we don't have to sue to complete every transaction. Money as a medium is established in market transactions, because both parties have to agree that the money is an acceptable substitute for the value of the exchange. If we agree a sheep is worth 100 dollars and a goat is worth 80 dollars, we have agreed on the value of those dollars as a money substitute.
Now, what all this has to do with the previous discussion, I have no idea. If I might make a suggestion: argument for the sake of argument can be fun, but it is always trumped by effective reasoning skills employed in defense of an argument worth defending.
The problem with your analysis is that you - and Mises - seem to be unable to get away from the narcissistic view of money. Money is a medium, therefore money is a pass-through good, not a commodity as such.
The value of a medium of exchange is not what it's worth to me (or you, or any individual) but what it's worth to the people we intend subsequently to buy things from. It is THEIR judgment of the value of money - not ours - that is decisive because it is THEY who must accept the money at par if we are to buy anything from them at par.
Beef jerky was once used as a medium of exchange. So suppose I value beef jerky very highly (more highly than other people) and decide that I want to use that system and for. Seemingly, I get a premium price everything. Because I value beef jerky so much more than other people I am, in effect, paid more for everything people buy from me.
But then I want to buy something - say, from India. Suddenly my premium trades at a severe discount.
Get the picture?
Because arbitration is an inevitable consequence of commerce, people want to know that they are being paid in a way that has the most-certain value in arbitration - presernts the smallest arbitration discount.
Thus, money is a phenomenon of arbitration.
Money is a medium of exchange. It's value is determined millions of times a day based on millions of transaction by people. What a third party thinks the value of money is is irrelevant when an exchange is made. People do not make an exchange based on what someone else thinks money is worth. The exchange is based on the value of the goods exchanged. Money merely allows trade to be more efficient than barter.
If China does not think my money is as valuable, does this keep me from making an exchange if I want a product at a particular price?
Perhaps you should define arbitration. Exchange is the inevitable consequence of commerce. Arbitration is the inevitable consequence of disagreement after the exchange.
While people would love to have high levels of confidence in a currency, this has little to do with whether an exchange is made. If the price is right, the exchange will be made.
Perhaps if you read Rothbard. He is easier to understand and does a better job at explaining concepts in my opinion. I highly recommend The combination textbook, "Man, Economy and State" with "Power and Markets". Very clear and detailed examples.
What a third party things is the value of money is the ONLY concern. The only value money has is to someone else because its value is as an efficient pass-through, not as a commodity in and of itself.
Yes, it happens every single day. It's called "FX risk". Wake up.
Again, for money to be an efficient medium of exchange through contract, a contractually-specified price must be subject to the lowest possible arbitration discount. Because courts need a single standard across all disputes (money damages) the most efficient money is the money standard used in arbitration.
You can't set a price until you know the value your money will have to the person you are trying to pay.
Perhaps if you re-read Rothbard, this time asking yourself about the implications of Gresham's Law on Rothbard's hyper-idealized notion of the market. For my own part, I have read Rothbard. I have quoted Rothbard to you. I have understood Rothbard. I have rejected Rothbard's arguments - long ago. Clearly you are the one who needs to re-read your Austrians, not me.
TMR, you obviously don't understand the quote and thus don't understand Austrian economics. The point is that unlike Supply-siders, who want tax cuts to spur consumer spending, and Keynesians, who want deficit spending to offset the lack of consumer spending, Austrians want deficit spending stopped and taxes cut in order to for the market to market to clear, period. If the tax cuts aren't spent to reduce consumer debt, then so be it, as those consumers will eventually have to pay the price themselves. But if they and everyone else do pay down debt, the market will clear that much sooner.
Yes, the process will be painful, but since there's no way around the pain, better sooner than later, as it will only be worse the longer it's delayed (the latter being what the government is attempting through its various "extend and pretend" policies.
Bottom line: Austrians want exactly zero government interference/intervention in the market -- which, being a subset of the spontaneous order that arises from social cooperationas a whole -- is simply the sum total of voluntary exchanges between and among individuals and groups.
__________
The state can kiss my ass.
DB,
CUTTING TAXES = DEFICIT SPENDING
It's simple arithmetic.
From the way you describe it, there is no difference between "Austrians" and Supply-Siders, except propaganda - Supply-Siders are more honest.
Also, if you think that Austrians want exactly zero government intervention in the market, you haven't read Hayek OR Mises, which is what I suspect about the vast majority of the new breed of "Austrians".
Utter strawman argument bull. What is poltical law versus natural law? What is intervention then, is it political law or natural law, you use vague terms to argue nonsense. Is government "intervening" when it puts a Wall St. fraudster in jail? What are you definitions of intervention, I guess they are kept vague so you can argue that the moon is made of cheese if you wanted to. Some supply siders believe in distorting markets by providing subsidies, others argue income taxes should be reduced. A subsidy is not and income tax reduction, but both could be argued "interventions" but they are not. Rightfully keeping the money you earned is not the same as government stealing from Jack to subsidize Joe. You cannot distinguish between what and what not the government should be doing, leaving it vague and undefined as if political law (the whims of the bureaucrats or dictator) are equivalent to natural law (law that protects freedoms and property) can be lumped together under the term "intervention". This is total strawman bullcrap.
TMR, I specifically said that deficit spending had to be stopped, in which case cutting taxes would not be deficit spending, that being the difference between "deficits don't matter" Supply-siders and "deficits do matter" Austrians.
Hell, just reduce government spending to what it was when Dubya came into office, and the income tax could be abolished.
And by the way, what's your solution? Or are you just a shoot-from-the-hip nay-sayer?
__________
The state can kiss my ass.
Your numbers are just so far off there's no real way of dealing with them.
As for what I would do? My solution would be debt repudiation in the least-destructive form possible, but in massive amounts. I would replace some taxation by using government capital to replace certain commodity functions of banking and insurance, breaking up the grossly inefficient financial monopolies before their outrageous self-dealing creates another massive crisis. I would be in favor of offering some credit on a per-citizen basis (an expansion of the Grameen Bank model), massive investment in paperless government and massive investment in private/public information systems that would make the "information super-highway" a truly superior public infrastructure.
I'm in favor of a vastly improved, public education system.
Rather than ignoring social problems and sweeping them under the rug so they cost more later, I would recommend we be honest about them and reduce their total cost as much as possible. To the greatest extent possible, every effort of government should be able to show that it is cash-flow positive for the whole economy.
After we overcame our horrendous level of under-investment, I would insist that the only acceptable debt level was that which we needed to overcome demographic peaks and valleys. If the government needs more money, rather than borrowing, the government should just print more money directly so it would immediately suffer the pain and unpopularity of the resultant inflation and high interest rates.
Semantics.
Without agreed upon definitions there can be no progress.
Things are too complicated now, and were in the GD, for any thousand events to be considered the "cause". Correlation, as they say, does not presuppose causation.
Brownian motion is more applicable.
good luck on your wish. obviously "zero government intervention" is not what the bankers want. if it was "they'd be buying equities" instead of the massive quantities of debt thus playing "follow the 'tard head." Talk about "no surprise there." I would think the "Austrians" would the original be around today would be amused by what our regime is trying to do. They understood royalty better than probably anyone and "trying to let the market take care of things, Emperor, is far cheaper" and only requires a funny hat that says "I'm Emperor---now let's invade somebody, but carefully." Now look what we have! We're "naked as a jaybird in January." Financially speaking of course.
Um, I didn't say anything about what the bankers want; I just spoke to the issue of what Austrian economics is and what it wants, there being no place for centralized, fraction-reserve banking in Austrian economics, much less for irredeemable currencies.
As for my wish, I'm quite sure it will be granted, the only question being when, as the monetary system we presently have is doomed to collapse under its own weight, as it has in fact already begun to.
__________
The state can kiss my ass.
another self-chosenite pres. who lied us into another
war for profit and slaughter, how surprising.
http://www.jewwatch.com/jew-leaders-roosevelt-interactive-family-tree.html
http://tracker.zaerc.com/torrents-details.php?id=15137
Yet more RepubliKeynesian nonsense masquerading as libertarian Austrianism from Lew Rockwell's site:
http://www.lewrockwell.com/manion/manion96.1.html
Here the author suggests 10% budget reductions and 40% tax reductions - Keynesianism so utterly ridiculous Paul Krugman would laugh at it as fiscally irresponsible.
And what is an Austrian economist anyway, but a monetarist with poor math skills.
And what is a non-Austrian economist but a physicist with poor math skills.
Math skills of a typical, Three Santa Claus Theory "New Austrian":
What it has to do with economics - or government - I have no idea.
There are no Austrian economists on this blog, just more RepubliKeynesian Super-Supply-Siders who embrace the Two Santa Claus Theory-
http://en.wikipedia.org/wiki/Jude_Wanniski#The_Two_Santa_Claus_Theory
-more fervently than ever. They don't want actual Austrian fiscal discipline, they just want bigger deficits and even bigger deficit tax cuts - that's why they're voting for the Tea Party..
Oh, plus some kind of chimerical "gold standard" that will magically fix everything.
Actually, let's call it a Three Santa Claus Theory.
Who are these supposed Austrians voting Tea Party and advocating bigger deficits? With regard to the Murphy article, focusing on outcome without regard to principles is how the equation jugglers missed the harpoon.
that would be me. great article by the way. i'm a little unclear what "ruling class" towards which you speak. i would say there was an "opportunist" class that have seen the advantages to the United States of America during its involvement in WWI saw an even greater won via this war. There were "programs" shall we say that were not being funded (as we have them today--although the obligations are of an order of magnitude "beyond belief" compared to 1940) and FDR and Co. saw this war as "the way to pay for the Salami." And indeed it was.
On the TP, EB, look at the comment streams.
With regard to the Murphy article, your defense is unresponsive and illogical.
Either tax cuts are bad from an Austrian point of view or they're not. How you think of them - or, more to the point, how you sell them - is a question of propaganda, not economics.
Specifically, RepubliKeynesian propaganda.
So, per this passage from Mises:
- which do you suggest: higher taxes (diversion of income from consumption to debt reduction) or debt repudiation, or both? If both, how much of each?TheMonetaryRed, I don't follow the comments here closely enough to know who you would be talking about. My prior point was a bit brief, and I'm glad you quoted Mises because Human Action was my reference point, its relevance being that it is a treatise developed through deductive reasoning. If you arrive at the conclusion that tax cuts are good because they stimulate consumer spending, which is a prerequisite to a robust economy, you will be committing other economic errors. To answer your question, personally, as a Rothbardian anarchocapitalist, I would suggest debt repudiation and no taxes, period. To rationalize that some other mix is permissible is to justify the state's authority to confiscate wealth, which will necessarily be done arbitrarily. I don't know that Mises went that far, but his protege certainly did. Realistically, the US can probably expect de facto or direct debt repudiation with continued high taxes.
Yeah, exactly what I thought.
You and Sean7k there are NOT AUSTRIANS. What you've got hold of there is just the newest iteration of Individualist Anarchism-
http://en.wikipedia.org/wiki/Individualist_anarchism
-which has a very long tradition in America, but is not an economic philosophy at all. Individualist Anarchism is at best a Romantic and at worst a religious philosophy which substitutes the Nietszchean concept of the ultra-supreme individual, or "Super-Man", for a god - as per Ayn Rand.
Anarcho-Capitalists may be honest people, but other than a basis for academic discussion, the main purpose anarcho-capitalism has served is as RepubliKeynesian propaganda.
As for the economics, I would be lying if I said I thought they were viable, as they are the supreme example of what William K. Black terms "Theoclassical economics" or as I like to call them "market theo-nomics". Because their underlying principle is a fantasy of the way a market works, they're destined in my judgment to be instantly undone by - to name just one example - Lemons market dynamics - fraud.
Austrian economics are a much more interesting discussion than anarcho-capitalism.
How disappointing. Just when I thought you were raising yourself to rational discourse, you toss in this turd. Without a reference to Murray Rothbard, the originator of Anarcho- Capitalism, how can you identify anything?
Anarchism has a long tradition, but it begins in Europe and centered around Classical Liberalism- the political economy of Bastiat. The same Classical Liberalism that inspired Austrian theory- as continued refinement.
Unfortunately, not all anarchism is associated with Austrian theory, in fact , there are so many schools of anarchism, it required quite a large volume just to detail the writing of each school. This rather juvenile attempt to play fast and loose with a term what many would call provocative at best, coupled with a sidebar into "market theo-nomics" smacks of desperation.
You obviously are incapable up addressing the debate with ideas to support your assumptions. As noted previously, you have no solutions either. So, is your presence on this post merely to act as a troll? Because if it is, you might want to try another topic.
Like Bakhunin the anarchist, Rothbard the anarchist makes some interesting points - but Anarcho-Capitalism is purely of academic interest. As an Anarchism, it has no real bearing as such on real-world policy.
Austrianism is much more interesting.
If Rothbard's ideas worked, then the Gaussian Cupola and Auction-Rate securities would have worked. They didn't. If Rothbard worked, then there'd be no problem with HFT trading. There is. If Rothbard worked, there would be no need ex ante for systems to fight fraud - which belief is the main contribution of Anarcho-Capitalist thought to modern economics and which belief was instrumental in allowing the destruction of the world financial system through massive mortgage fraud by private, unregulated parties.
Here's some of Robert Murphy's totally non-rigorous Two Santa Claus Crap:
http://mises.org/daily/3332
Deficit tax cuts are apparently bad if you think about them one way, but good if you think about them another way.
What utter nonsense.