On Attacking Austrian Economics

Tyler Durden's picture

Submitted by James Miller of the Ludwig von Mises Institute of Canada

Josh Barro’s and David Frum’s Pathetic Attack on Austrian Economics

Josh Barro of Bloomberg has an interesting theory.  According to him, conservatives in modern day America have become so infatuated with the school of Austrian economics that they no longer listen to reason.  It is because of this diehard obsession that they reject all empirical evidence and refuse to change their favorable views of laissez faire capitalism following the financial crisis.  Basically, because the conservative movement is so smitten with the works of Ludwig von Mises and F.A. Hayek, they see no need to pose any intellectual challenge to the idea that the economy desperately needs to be guided along by an “always knows best” government; much like a parent to a child.  CNN and Newsweek contributor David Frum has jumped on board with Barro and levels the same critique of conservatives while complaining that not enough of them follow Milton Friedman anymore.

To put this as nicely as possible, Barro and Frum aren’t just incorrect; they have put their embarrassingly ignorant understandings of Austrian economics on full display for all to see.

First off, no conservative, besides perhaps Michele Bachman, has shown any interest in the Austrian school as of late.  In most aspects, Ron Paul can hardly be considered a conservative.  If Frum, with all his political credentials, can show me another true blooded conservative that has read through Human Action or Man, Economy, and State, I am all ears.  The fact remains that traditional conservatives aren’t brushing up on their Mises when they aren’t attending Tea Party rallies or asking their Congressman to nuke Iran into smithereens.

On the subject of Austrian economics itself; the school isn’t against empirical evidence per say.  What it opposes is methodological positivism which is using empirical data by itself to formulate theories about how an economy functions.

Austrians don’t see the social sciences as one in the same with the physical sciences like chemistry.  Closed experiments can’t be conducted on humans that will always yield the exact same results.  Because humans posses the ability to make choices, there are no constants in human behavior.  As economist Robert Wenzel puts it

In the science of physics, we know that water freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed.

There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time.

Austrian economics relies on deductive reasoning and one a priori law that Ludwig von Mises worded as “human action is purposeful behavior.”  That is, man acts to achieve ends or otherwise he would not act.  This statement is what Murray Rothbard, considerably the most known Austrian economist next to Mises and Hayek, called “radically empirical” since it is absolutely self evident to any observer.  A few subsidiary axioms can then be derived from the human action axiom such as “individuals vary” and that people “regard leisure as a valuable good.”

Austrians don’t reject empirical evidence but look at it with the theory of human action in mind.  They don’t see an increase in ice cream sales coinciding with an increase in kidnappings and automatically assume that as people eat more ice cream, they become more prone to abducting people.  They may consider that because warmer weather tends to result in more people going outside for leisurely activity, the opportunities for kidnappings to occur increases as does the appetite for ice cream.  This isn’t a rejection of empirical evidence but merely viewing the world with a theory to help explain the complex happenings of society.

As for the financial crisis which should have changed the minds of the true believers, if Barro or Frum were paying even the slightest amount of attention to the Austrian school during the run up to the housing bubble burst, they would have seen a number of warnings from those versed in Misean economics.  This includes Gary North, Robert Wenzel, Doug FrenchJim Rogers, Hans Sennholz, Frank Shostak, Ron Paul, and Peter Schiff.  Austrian economist Mark Thorton even wrote this back in 2004:

It has now been three years since the U.S. stock market crash. Greenspan has indicated that interest rates could soon reverse their course, while longer-term interest rates have already moved higher. Higher interest rates should trigger a reversal in the housing market and expose the fallacies of the new paradigm, including how the housing boom has helped cover up increases in price inflation. Unfortunately, this exposure will hurt homeowners and the larger problem could hit the American taxpayer, who could be forced to bailout the banks and government-sponsored mortgage guarantors who have encouraged irresponsible lending practices.

So how did so many observers that understood Austrian economics see a crisis on the horizon?  Unbeknownst to Barro and Frum, the school has a theory that explains why economic booms and busts are a product of money supply manipulation by a central bank and fractional reserve banking.  The Austrian Business Cycle theory stipulates that as credit expansion occurs unbacked by real savings, an inflationary boom takes hold where many are deceived into believing themselves richer than they truly are.  As the money supply is increased by a central bank, so too are banks enticed to expand credit.  As Rothbard explains:

Businesses, in short, happily borrow the newly expanded bank money that is coming to them at cheaper rates; they use the money to invest in capital goods, and eventually this money gets paid out in higher rents to land, and higher wages to workers in the capital goods industries. The increased business demand bids up labor costs, but businesses think they can pay these higher costs because they have been fooled by the government-and-bank intervention in the loan market and its decisively important tampering with the interest-rate signal of the marketplace.

This credit expansion is fully sanctioned by the government that not only provides a public backstop to banks that may find themselves insolvent but also join the bandwagon of taking advantage of cheap borrowing costs.  As the inflationary boom wears on, capital is consumed as more and more of the public get caught up in the exuberance.  When the money supply expansion inevitably ends (as it must less the complete destruction of the currency takes hold), the market and prices must readjust accordingly as malinvestments finally come to light.  During the boom the production structure of the economy is distorted to the point where both increased investment in capital goods and increased consumer spending tend to take place.  Put simply, credit expansion throws off what would otherwise be a natural rate of consumption and saving.  Once it is realized that producer goods have been bid up far too high to be purchased with existing savings, prices must fall and losses are felt.  This is precisely how the recent housing bubble played out as the price of homes, which are generally considered good investments, reached a point too high to be mass marketable.  As economist Joseph Salerno documents:

The events of 9/11 led the Fed to ratchet up its expansionary monetary policy. From the beginning of 2001 to the end of 2005, the Fed’s MZM monetary aggregate increased by about $1 billon per week and the M2 aggregate by about $750 million per week. During the same period the monetary base, which is completely controlled by the Fed, increased by about $200 billion, a cumulative increase of 33.3 percent.

The Federal Funds rate was driven down below 2 percent and held there for almost three years, pegged at 1 percent for a year (Figure 5). The result was that the real interest rate, as measured by the difference between the Federal Funds rate and headline CPI, was negative from roughly 2003 to 2005. Rates on 30-year conventional mortgages fell sharply from over 7 percent in 2002 to a low of 5.25 percent in 2003 and, aside from brief upticks in 2003 and again in 2004, fluctuated between 5.5 percent and 6.0 percent until late 2005 (Figure 6). Perhaps, more significantly, 1-year ARM rates plummeted from a high of 7.17 percent in 2000 to a low of 3.74 percent in 2003, rising to 4.1 percent in 2004 and to slightly over 5 percent in 2005. In addition, credit standards were loosened and unconventional mortgages, including interest-only, negative equity, and no-down-payment mortgages, proliferated.

When housing prices began to fall, so did the perception of wealth by homeowners, mortgage lenders, and house flippers.  Because the global economy is so interconnected, the unemployment that occurs in just one industry has a devastating ripple effect.  When the housing bubble finally popped, recession set in as the economy contracted.

Barro and Frum have given no indication that they are familiar with the Austrian theory of the trade cycle.  Where they come off as critical of the school is its preferred solution to economic recession.

Austrians stress the importance of prices as signals to all economic actors.  Because prices are so vital to market coordination, they must be allowed to adjust to a new normal defined by the new spending and investment patterns.  Anything the government does to prevent the painful but necessary readjustment from occurring (such as bailing out politically favored industries, enacting price and wage controls, subsidizing the unemployed, or providing loans in the form of taxpayer dollars to businesses that would otherwise be unable to afford their borrowing costs) puts the brakes on the recovery.  This is why Austrians are against all government interference in the marketplace to prevent a much needed correction following a bust caused predominantly by the government’s own inflationist agenda.

None of this is a blind allegiance to an ideology.  The laissez faire attitude among Austrians is rooted in an understanding of the complexities of the marketplace and the vital importance of capital and production.  Perhaps more importantly, many followers of the school see modern day banking for what it really is: a racket based on fractional reserve lending that is held together by both the government and its central bank’s promise to guarantee its solvency.  Barro claims that his own opinions on monetary policy and banking regulation have changed since the financial crisis.  Unlike many Austrians, he never saw the crisis coming.  He has no systematic theory to explain why the bubble occurred and what steps are needed to prevent it from happening again.  Hilariously, Barro has admitted to attempting to read Mises’ grand treatise Human Action but that he couldn’t understand it and therefore claims “it actually makes no sense.”  Upon reading select chapters from Human Action, even the most casual reader would see that Mises doesn’t completely reject the use of empirical data as Barro claims.  What the economist needs, according to Mises, is “the power to think clearly and to discern in the wilderness of events what is essential from what is merely accidental.”  That means looking at historical data with a correct understanding on market functions to be able to interpret it so it makes sense and provides a possible explanation for outliers.

When it comes to conservatives “dumping” Milton Friedman as David Frum laments, all this writer can say is good riddance.  Friedman was as statist as they come.  From his advocacy for the dreaded “withholding tax” while employed by the U.S. Treasury to his comfortableness with the Federal Reserve, Friedman was hardly the liberty fighter he is often made out to be.  Yes, he has provided some eloquent defenses of capitalism and the morality of free choice.  But as Rothbard made sure to point out way back in 1971:

And so, as we examine Milton Friedman’s credentials to be the leader of free-market economics, we arrive at the chilling conclusion that it is difficult to consider him a free-market economist at all.

At the same time, we find Friedman calling for absolute control by the State over the supply of money – a crucial part of the market economy. Whenever the government has, fitfully and almost by accident, stopped increasing the money supply (as Nixon did for several months in the latter half of 1969), Milton Friedman has been there to raise the banner of inflation once again. And wherever we turn, we find Milton Friedman, proposing not measures on behalf of liberty, not programs to whittle away the Leviathan State, but measures to make the power of that State more efficient, and hence, at bottom, more terrible.

And while Friedman famously argued, along with Anna Schwartz, that blame for the Great Depression should be laid on the Federal Reserve’s reluctance to offset the declining money supply, Rothbard (alone at the time) argued that it was because of the Fed’s previous inflationary policy in the latter half of the 1920s that a stock market bubble and real estate really took off.  Because the inflation was hidden in the rise of certain asset prices and overall increases in productivity, many economists missed the Fed’s role in the boom.  Additionally, Rothbard concluded in his much overlooked book America’s Great Depression that the Depression really became great because of Herbert Hoover’s unprecedented interventionist policy of massive increases in government expenditures, the propping up of wages, price supports, and the enactment of protectionist tariffs.  Though Friedman’s view is still held as the conventional explanation for the Depression, especially by Federal Reserve chairman Ben Bernanke, Rothbard’s explanation is attracting more followers by the day.  Back in 2009, eminent UCLA economist Lee E. Ohanian even published a working paper for the Journal of Economic Theory that supported much of Rothbard’s explanation for the Depression.

In the end, all Josh Barro’s attack on Austrian economics shows is his utter lack of knowledge on the subject.  To claim that conservatives are devout followers of the school is incredibly misleading.  Mitt Romney isn’t brushing up on his Mises or Hayek during campaign stops.  Rush Limbaugh isn’t reciting essays by Rothbard on his radio show.  And Sean Hannity isn’t lecturing his viewers on the nuances of the Austrian Business Cycle theory.  The Federal Reserve only became a topic of discussion during the past Republican primary race because of Ron Paul’s ability to make it a relevant issue.

Barro claims to have a bookshelf of Austrian literature.  He would do well to crack open a book sometime as he desperately needs a refresher course.  David Frum would be just as wise to check out the Austrian school for himself rather than learn it second hand from someone who clearly doesn’t have a firm grasp on the subject.

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Payne's picture

just for once I would like to see something that a politician has done right that qualifies them to judge even a dog show.

markmotive's picture

Politics is destroying this world. Politicians don't know shit.

Russia just sent warships to Syria. Someone send Hilary Clinton a memo.

http://www.planbeconomics.com/2012/07/10/russia-sends-warships-to-syria/

ghenny's picture

So what would you substitute for politics? War, a Mormon or Muslim or Southern Baptist Theocracy, a Kingdom, a dictatorship, a police state, no state with the associated anarchy?  Politics aint perfect but its better than the alternatives.  We get enough checks and balances in our system to pretty much neutralize the government so the market can work without too much interference.  What goes wrong is crony capitalism, crony socialism and as you here say, sometimes the quasi independent Federal Reserve.  Try to be a little more sophisticated in your thinking and commenting.

AUD's picture

Something whose quality remains unaltered despite the 'human action' of passing dud cheques to obfuscate bankruptcy.

Gold.

knukles's picture

Let's get a grip
It's all gonna be OK

Ben and Timmah are gonnna (Oppps!  Almost typed "Gonad") testicleify before something of other in Congress, probably the Joint Committee on Smokescreens and Horseshit.
We all know that the reassuring prognostication shall essentially be summarized as folows;

Ben:  "I don't know anything."

Timmah:  "LIBOR Rat?  Isn't that Minnie Mouse's sister?"

God, it just don't get any better than this.

AldousHuxley's picture

austrian school is like catholic school for catholic school girls.....it is just going to make them more eager for easing.

 

if you want to teach the people about hyperinflation, let them have hyperinflation. bring about 20% annual inflation and then see what even the most dumbest hick thinks about money printing.

 

behaviors won't change unless pendulum swings to one extreme

CrazyCooter's picture

if you want to teach the people about hyperinflation, let them have hyperinflation. bring about 20% annual inflation and then see what even the most dumbest hick thinks about money printing.

Sir, that has to be one of the most concise and brilliant comments I have read on ZH in quite some time.

Regards,

Cooter

Bendromeda Strain's picture

I concur - expect for the fact that "dumb hicks" will grok the true nature of the situation long before academics and other elite cheerleaders.

Nothing To See Here's picture

Money printers will always say that what didnt work happened because they didnt print enough or borrow enough or spend enough. Look at what hyperinflation brought about in Weimar. It never came close of becoming a libertarian place, whereas you'd think they would have had enough of central planning...  The vulnerable masses are even more easily manipulated. They will turn to MORE government, not less, because there will always be some big-mouthed douchebag who will promise to save them.

GFKjunior's picture

I see that you're new here. Most of us are Austrians and truly believe the answer is close to non-existent government. A few more weeks of reading ZH and you too will see the truth.

knukles's picture

And the truth shall set you on edge for a very long while whilst you attempt to disentangle your prior processing lessons.  Clarity will come.  And when it does, a great relief, serenity and peace, accompanied by healthy cynicism shall be its very own reward.
It is your own perception which changes.
For the better.
Welcome to reality, unvarnished.

forrestdweller's picture

if you believe in a 'close to non existent government', please go live in somalia en come back in half a year. i will ask you the same question again then.

Hobbleknee's picture

The government shut down several times in the 80s.  Everyone went about their business as usual. 

Do you think there would be total chaos just because we didn't have Janet Napolitano telling us to spy on each other?  On the contrary, there would be more prosperity for everyone without the government consuming 40% of our wealth.

TWSceptic's picture

We were basically without government in Belgium for a whole year. No problems whatsoever even though the media and politicians were panicking.

 

Necessity for government is an illusion my friend. America used to have one of the smallest governments in the world, Americans prospered at that time. Now it has the biggest government in the world, things have never been as bad as they are now...

DOT's picture

Belgium leads the way !

 

 

Mitzibitzi's picture

I am getting so fucking sick of people using the Somalia argument. The place was a war zone when it DID have a functioning government. Has in fact been a war zone, on and off, for most of the last 150 years - a coincidence that this is when Britain and Italy stuck their bankster-guided, Imperialist noses into the region? And there'd been low level conflict in the area for a good 1500 years before that! There are literally hundreds of running feuds between different groups, divided along religious, ethnic, economic and philosophical lines. Have been almost forever.

What Somalia is suffering from is not a lack of government, it's the aftermath of shoving 5 or 6 independent 'states' (4 fairly large ones and a couple of smaller ones, if memory serves) together, originally into one British and one Italian colony - later into just one aggregation, in the interests of making the area cheaper to govern (read, steal the resources of). And a result of deliberate policy by the UN to keep much of Africa in poverty and conflict; again for reasons of exploitation by the First World (and these days, the Second World as well!).

There are places where settlement / annexation by Imperial powers, primarily the British, did a lot of good in the long run - But Somalia wasn't one of them. It's largely in the state it is now because WE, the West, fucked it up quite spectacularly in the name of profit. So yeah, government WAS the problem; the thoughtless imposition of it, not the lack of it!

 

Calculated_Risk's picture

So people can't be civil unless they have the government there to make them civil?! BAHAHAHAHA

rwe2late's picture

GFKjunior

Humans organize. There are benefits to organization. And pitfalls. Those who head organizations tend to use the organizations they head to accrue privileges and power to the detriment of the rest of the population. As heads, they become isolated, even paranoid, further compounding and self-justifying the tendency to wreak havoc on others and on the environment.

The "anarchist" solution is to have no organizations with power. Impossible to realize, and impossible to enforce.

All this is required to happen, one must suppose, in daily ‘new years‘, when everyone begins with equal wealth, property, and control of government.

The “anarchist” spin-off of “capitalism” imagines that by allowing the accrual of great wealth and property, and by restricting the government to protecting that wealth and property, abuses and oppression will end, presumably because those with wealth and property will refrain from using their wealth to influence establish, entrench, and enhance their “rights” and privilege.

CrockettAlmanac.com's picture

 

So what would you substitute for politics?

 

A respect for individual liberty.

 

 We get enough checks and balances in our system to pretty much neutralize the government so the market can work without too much interference.

 

Did you sleep through 2008?

 

Try to be a little more sophisticated in your thinking and commenting.

 

Don't assume that that which you fail to understand is unsophisticated.

caconhma's picture

Milton Friedman was a fraud but a very skillful one. He was selling the same lies as Krugman under a cover of the free market disguise.

It was Milton Friedman who claimed that the Great Depression would be avoided if only FED has printed more money.

 

TWSceptic's picture

Or he just made that one mistake and you are unfairly labeling him as a fraud for that.

Bendromeda Strain's picture

That wasn't a mistake, that was a fatal error and a disqualification.

Stoploss's picture

Burrrp..

Shit, forgot. The full moon retards all come out at the same time.

Kinda like a mini retard tsunami every thirty days.

We need retard tampons or something..

NumNutt's picture

Looks like a couple of people didn't think your comment was very funny.  I, Sir, on the other hand thought it was so funny I almost blew beer out my nostrils.

Inthemix96's picture

ghenny,

I have been a follower of ZH for years.  That one post by you is the best fucking piece of parody I have ever personally seen on these pages.  Fucking first class mate, you seriously dont know what the fuck you are talking about.

Hahahahahahahaha, (golf clapping)

Lebensphilosoph's picture

War is politics, or at least a method of politics. It is politicians who create wars between states. Theocracies, dictatorships, police states, are all of them political entities. If you are going to accuse others of having a lack of sophistication in their thinking, you had better show some in your own if you don't want to look like an utter prat.

TWSceptic's picture

There are so many errors in that one post. You describe anarchy as chaos, but they are two entirely different things. Then you mention "crony capitalism" capitalism is not crony, cronyism is crony. Cronyism is always present, it will never go away, but when cronyism becomes official policy, that's when you got fascism. That's our world today.

sansnobel's picture

How about Rule of Law?  Maybe Justice?  Would that be suitable for you there ghenny?

Bagbalm's picture

Why is it always 'sophisticated' to put up with inexcusable shit?

Mr. Magniloquent's picture

Name a war not started by politicians. Name a criminal organization that has oppressed, murdered, and plundered to any degree that governments have. Governments are the worst perpetrators of the very ills and evils they are supposed to bullwark against. The difference is that their victims are captive, sometimes willingly born of their own ignorance to reality. Perhaps you ought to heed your own advice.

monoloco's picture

At least with a Monarchy there is a chance to get an enlightened leader once every few centuries.

JimBowie1958's picture

So what would you substitute for politics?

There was a time we were trying to not elect mere politicians but STATESMEN who knew better than to work for the crooks because if we all did that then we all lose.

I dont think we have seen statesmen run things in DC for several generations.

All we get now are the photogenic dregs the corporate masters can dig up from the bottom feeding whores who then tell them what to say, think and do to get elected.

Romney and Obama are two excellent examples of what I am talking about. Tweedle Dee and Tweedle Dum with not a shred of any virtue working for them.

flacon's picture

Tom Woods responds:

 

Neoconservative David Frum Hearts the Fed

http://www.youtube.com/watch?v=1d1rcaX-lzU

TruthInSunshine's picture

If John Maynard Keynes were alive today, he would sue Krugman et al. for libel & slander, and file a motion requesting a permanent injunction barring The Krugman Circle Jerk Chorus from ever invoking his name or from engaging in any future butchering and torturing of what Keynes believed and endorsed.

 

By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”


"There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

 

--John Maynard Keynes

from The Economic Consequences of the Peace (p. 235-6)

Michael's picture

If Austrian economics and the Gold standard were implemented, a loaf of bread could cost 10 cents and not inflate in price for decades.

It also puts the virtual hand cuffs on the money changers and pillagers.

El Tuco's picture

But couldn't the same fuckers that manipulate the dollar/interest rates/information, etc, etc manipulate and control gold?

Just asking......

CrockettAlmanac.com's picture

As long as any gold backed paper is redeemable in gold then manipulation becomes much more difficult. Remember that even though the US stopped using gold money domestically in 1933 the Breton-Woods agreement made US dollars redeemable in gold by foreign nations until 1971. This did not stop excess printing entirely but it kept a lid on it. It was not until Nixon closed the gold window that inflation really got going. To the best of my recollection the dollar has lost about 95% of its value since 1913 but a full 70% of that value was lost after 1971.

granolageek's picture

Until there's a gold refining breakthrough that changes the relative values of glod and bread.

 

When Spain looted the new world in the 1500s, the resulting strictly gold based inflation ruined thousands of nobles who had converted their labor based prerogatives to gold rents.

 

Gold is not magic. It is a commodity. It has always been a valuable commodity. But that value has changed by factors of 2 abd 4 at different times. Claiming it  has not simply shows ignorance.

JR's picture

On the other hand, Hunter Lewis in his book, Where Keynes Went Wrong, presents Keynes’ arguments that "look to the State for economic leadership."

Among them, each here with a brief extrapolation from Lewis’ comments, are:

1.      The state should decide on the “volume of investment.”  Lewis: “This means that if investment is too low to absorb all savings, and if lower interest rates do not bring up investment sufficiently, the state should make investments itself.”

2.      The level of government investment should be carefully calibrated in order to foster a perpetual “quasi-boom."  Lewis: “[T]his follows from Keynes’s view that, most of the time, investment lags savings, so that money remains idle, and the economy falters. A boom should therefore be nursed and kept going as long as possible…  One might ask…might not the combination of consumer demand and investment run so strong that the boom finally goes get out of control…even cause inflation? ...  Keynes acknowledged that this could conceivably happen… however, he did not want to increase interest rates. As he said: ‘We must find other means of [cooling the economy] than a higher rate of interest. For if we allow the rate of interest to [rise], we cannot easily reverse the trend.’”

3.      The state’s usual job is to fill up the investment tank, not to drain it. Keeping it full is what matters most. But there are other reasons to welcome a larger role for the state in investment.  Lewis: “On the whole, Keynes appeared to sympathize with the idea that government would do a better of investing than private markets.”

4.      The state’s control of the economy should not stop with interest rates, investment, taxation, and exchange rates. Lewis: “Moreover, over time, the very distinction between private and public economic activity will gradually fade. Private companies will become semi-socialized and eventually ‘Public Boards’ and ‘Private Companies’ will only differ with respect to how the directors are appointed.” …

Et cetera! And this is just a smidgen of “where Keynes went wrong” along with all his followers, especially the ever faithful Ben S. Bernanke, on their pathway to the current worldwide economic disaster.

El Tuco's picture

Zionism is destroying the world.....

and don't count on the Russians for anything. They can barely stay sober.

Vic Vinegar's picture

What does Zionism mean to you?  I think that many people have a clearly-defined understanding of the term but for others like myself it's a bit nebulous.

So if it's really destroying the world, it would really help to know: a) what it means and b) what I should do about it.  Thank you

And on a related-note - and on-topic - I've never read Human Action or Man, Economy, and State.  If reading these books means something more than reading the guidebook to 'Magic: The Gathering' then I will.  I would also appreciate an explanation as to why these books are important.

This comment ain't trolling but rather a genuine lack of understanding.

Questan1913's picture

Vic Vinegar,

If you are serious about educating yourself, I would suggest you not tackle one of the treatises you mention before some preparation.  I would suggest the following reading list in the following order to get the biggest gain in knowledge per time spent.

"The Law"  F. Bastiat    Approximately 75 pages in large type written in simple yet precise prose.  If your initial reaction is highly negative and you find yourself thinking "this guy is nuts". you need go no further.  You are too brain damaged by pernicious propaganda to benefit from reading anything that is counter to your brainwashed state; just return to the TV, and live happily ever after.

If you find "The Law revelatory and uplifting here is the rest of the list.

"The State"  Franz Oppenheimer.  One of the most important books one can read and another foundation builder.

"A Letter to Grover Cleveland"  Lysander Spooner.  A simple 130 page paperback that nicely restates and sums up his voluminous previous works.  If you can get through it and understand it, you have received the equivalent of 3 or 4 college educations in the US today, and then some. It is extremely dense with ideas and information.  If you want to sharpen your mind, this book works like magic!

"The Road to Serfdom" F.A. Hayek.  Will explain the mechanism that has transformed the US from a vibrant first world powerhouse nation to a seedy, stagnant, corrupt and twisted funhouse mirror carricature of a third world helll hole.  This one book is equal to another college education.

Good luck.

 

Vic Vinegar's picture

No offense Q-dog, and I will give you a greenie for trying.

But my goal was not to: explain the mechanism that has transformed the US from a vibrant first world powerhouse nation to a seedy, stagnant, corrupt and twisted funhouse mirror carricature of a third world helll hole. 

I wanted actionable items.

In the meantime, I'm gonna rock out to my favorite Katy Perry video, OK?

http://www.youtube.com/watch?v=98WtmW-lfeE

i-dog's picture

I don't know why people keep junking you for entirely reasonable questions?! :/ (Maybe it's because they, like I, have often considered you to be a collaborator in the past...and you may still be, though I now doubt it).

There is no "actionable item" that an individual can pursue to bring a screeching halt to what has been unfolding, in very decisive steps, over the past few centuries -- with the planning and execution carried out by thousands of ideologues working together in the seats of financial, political and social power. Those at the very top have periodically reviewed progress, and changed their master plan along the way, to ensure success and we are now at the dénouement.

There are countermeasures we could still take ... for example, through initiating a mass defection of state governments from the globalist central planning 'unions' ... but I, for one, fear that time is now too short for that to take hold. In any event, the people of the USA and EU would prefer to listen to the platitudes and continue receiving the bennies printed by their respective central governments -- and would therefore fight dissolution even more vigourously than TPTB themselves!!!

So...be prepared to defend yourself from your neighbours...long before you will see a drone taking aim on your redoubt!

NidStyles's picture

Being a long time player of Magic, I can tell you that you should read all of those books. You'll be better at Magic too. Don't worry about the down arrows there's a lot of cranky and frustrated investors here these days. 

Fort's picture

These books are important because they are glossed over in most University curriculums, that may not always be the best recommendation, but with these books it actually is. They are also considered controversial in main stream which is much more Keynesian oriented. Main stream argue that the relative peace of the last 6 or so decades has proven the success of Keynesian theory. I would counter that argument with the argument that the destruction reaped by the black plaque in medieval times also was followed by long terms of relative peace and economic prosperity. The last decades of peace followed the destructive WWII. I guess when a lot has to be rebuild there simply are many opportunities for prosperity. Rebuilding things gives a distraction from recent suffering. Personally I think the road to serfdom from Hayek was one of the most comprehensible books on economics’ I ever read. In my view reading Human action and Man, Economy and State offer an education; Magic The Gathering offers a distraction from reality you chose which you require most at this point in time. Distraction may be far more tempting, so are drugs, alcohol and other escapes. This brings me to your first question:

Zionism can best be learned about by reading the Protocols of Zion. (Google, wiki, Amazon etc.) Read them and make up your own mind.

A few comments on the protocols; the protocols in my humble opinion were not written by Jews, but were used aggressively in propaganda to condemn Jews which ultimately lead to the massacres of WWII. The protocols to this day are used in this manner; I think this offers a distraction from the real culprits and authors of the protocols. Surrounding the protocols is another controversy namely whether they are false or real. They are extremely prophetic and not in the Nostradamus type of way. They quite literally describe the world we are living in today. Much more can be said about this subject, but I would recommend reading them first and then read into all controversies, keep an open and very critical mind. Don't come to conclusion to fast and don't ever start believing you hold the ultimate prove that all conspiracy is actually true. Let your own mind be your guiding sovereign, reality is after all in the eye of the beholder.

What you can do about it? People always hold all the power; once people say it is enough a tidal wave of revolution comes in motion, which cannot be stopped. I personally think we have to rebel as taxpayers and ultimate financiers of governments and banks but not by killing each other but by destroying the banking system. Voting has proven to change nothing and as you will read will not do anything but put the most desired puppet in power. Simply stop depositing money in banks collectively is way more effective. This is a form of voting as well, with your feet. Events have built up too far and pain and suffering can no longer be prevented, but if people start resisting now, it might change fast enough to make it a nice world for our children again with not too much bloodshed, preferably none. The internet offers an opportunity that this time; our children might actually safe the knowledge required to truly prevent this from ever happening again. After all our modern times have the most complete records ever. This time there is a group not represented very often in historic files and archives. The common people have voiced their opinion and real situation on the internet. This time history may not be written at all, but it will just exist, because there are simply too many versions of what happened. I find that an interesting consideration.

You can also replace the chicken and egg in the famous question which came first with chaos (Austrian school) and order (Keynesian school). That discussion is at the heart of the matter and it saves you a hell of a lot of time reading This simple summary does not do justice to the theories, but it does boil down to it. If you do decide to educate yourself, I think it is worth it. 

Inthemix96's picture

And another thing mark,

Why is there a media block-out over in Mexico, I would post a link but I'm a fucking clown on a computer, I can only type I'm afraid.  The website I looked on is 'Newordernews', and by all accounts, and pictures, and one video they have up, there is fucking millions of mexicans demonstrating.

I'm in England and youtube has it blocked cos' the gubbermint asked it to.  Any ideas fellas???

Mitzibitzi's picture

It would appear they're protesting election results.

Seems that a significant proportion of the population have worked out that the 'official' results are totally bogus. Apparently, some sneaky pro-democracy group was quietly monitoring the voting and conducting 'Exit' polls. Which point to the official results being a total fabrication, cos they ain't even close to what was observed on the ground.

There isn't much info online, though, and I had to sidestep Google to get what little I did.