F.A. Hayek On "The Great Utopia"

Tyler Durden's picture

While it is hardly necessary to provide commentary to one of F.A. Hayek's timeless observations from his book, The Road To Serfdom, rereading the chapter titled The Great Utopia, in this year of what could possibly be the most important election in the history of the United States, in which the US public will be promised nothing short of utopia by virtually every candidate except the one who really knows that fixing America would require pain and sacrifice, is everyone's duty. Courtesy of the Center for Economic Liberty we recreate it below in its entirety, and urge all readers, regardless of political persuasion of economic beliefs to consider what F.A.Hayek was saying some 70 years earlier, and how very applicable it is to our current situation.

The Great Utopia

There can be no doubt that most of those in the democracies who demand a central direction of all economic activity still believe that socialism and individual freedom can be combined. Yet socialism was early recognized by many thinkers as the gravest threat to freedom.

It is rarely remembered now that socialism in its beginnings was frankly authoritarian. It began quite openly as a reaction against the liberalism of the French Revolution. The French writers who laid its foundation had no doubt that their ideas could be put into practice only by a strong dictatorial government. The first of modern planners, Saint-Simon, predicted that those who did not obey his proposed planning boards would be "treated as cattle."

Nobody saw more clearly than the great political thinker de Tocqueville that democracy stands in an irreconcilable conflict with socialism: "Democracy extends the sphere of individual freedom," he said. "Democracy attaches all possible value to each man," he said in 1848, "while socialism makes each man a mere agent, a mere number. Democracy and socialism have nothing in common but one word: equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude."

To allay these suspicions and to harness to its cart the strongest of all political motives—the craving for freedom — socialists began increasingly to make use of the promise of a "new freedom." Socialism was to bring "economic freedom," without which political freedom was "not worth having."

To make this argument sound plausible, the word "freedom" was subjected to a subtle change in meaning. The word had formerly meant freedom from coercion, from the arbitrary power of other men. Now it was made to mean freedom from necessity, release from the compulsion of the circumstances which inevitably limit the range of choice of all of us. Freedom in this sense is, of course, merely another name for power or wealth. The demand for the new freedom was thus only another name for the old demand for a redistribution of wealth.

The claim that a planned economy would produce a substantially larger output than the competitive system is being progressively abandoned by most students of the problem. Yet it is this false hope as much as anything which drives us along the road to planning.

Although our modern socialists' promise of greater freedom is genuine and sincere, in recent years observer after observer has been impressed by the unforeseen consequences of socialism, the extraordinary similarity in many respects of the conditions under "communism" and "fascism." As the writer Peter Drucker expressed it in 1939, "the complete collapse of the belief in the attainability of freedom and equality through Marxism has forced Russia to travel the same road toward a totalitarian society of un-freedom and inequality which Germany has been following. Not that communism and fascism are essentially the same. Fascism is the stage reached after communism has proved an illusion, and it has proved as much an illusion in Russia as in pre-Hitler Germany."

No less significant is the intellectual outlook of the rank and file in the communist and fascist movements in Germany before 1933. The relative ease with which a young communist could be converted into a Nazi or vice versa was well known, best of all to the propagandists of the two parties. The communists and Nazis clashed more frequently with each other than with other parties simply because they competed for the same type of mind and reserved for each other the hatred of the heretic. Their practice showed how closely they are related. To both, the real enemy, the man with whom they had nothing in common, was the liberal of the old type. While to the Nazi the communist and to the communist the Nazi, and to both the socialist, are potential recruits made of the right timber, they both know that there can be no compromise between them and those who really believe in individual freedom.

What is promised to us as the Road to Freedom is in fact the Highroad to Servitude. For it is not difficult to see what must be the consequences when democracy embarks upon a course of planning. The goal of the planning will be described by some such vague term as "the general welfare." There will be no real agreement as to the ends to be attained, and the effect of the people's agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go: with the result that they may all have to make a journey which most of them do not want at all.

Democratic assemblies cannot function as planning agencies. They cannot produce agreement on everything — the whole direction of the resources of the nation-for the number of possible courses of action will be legion. Even if a congress could, by proceeding step by step and compromising at each point, agree on some scheme, it would certainly in the end satisfy nobody.

To draw up an economic plan in this fashion is even less possible than, for instance, successfully to plan a military campaign by democratic procedure. As in strategy it would become inevitable to delegate the task to experts. And even if, by this expedient, a democracy should succeed in planning every sector of economic activity, it would still have to face the problem of integrating these separate plans into a unitary whole. There will be a stronger and stronger demand that some board or some single individual should be given power to act on their own responsibility. The cry for an economic dictator is a characteristic stage in the movement toward planning. Thus the legislative body will be reduced to choosing the persons who are to have practically absolute power. The whole system will tend toward that kind of dictatorship in which the head of the government is position by popular vote, but where he has all the powers at his command to make certain that the vote will go in the direction he desires.

Planning leads to dictatorship because dictatorship is the most effective instrument of coercion and, as such, essential if central planning on a large scale is to be possible. There is no justification for the widespread belief that, so long as power is conferred by democratic procedure, it cannot be arbitrary; it is not the source of power which prevents it from being arbitrary; to be free from dictatorial qualities, the power must also be limited. A true "dictatorship of the proletariat," even if democratic in form, if it undertook centrally to direct the economic system, would probably destroy personal freedom as completely as any autocracy has ever done.

Individual freedom cannot be reconciled with the supremacy of one single purpose to which the whole of society is permanently subordinated. To a limited extent we ourselves experience this fact in wartime, when subordination of almost everything to the immediate and pressing need is the price at which we preserve our freedom in the long run. The fashionable phrases about doing for the purposes of peace what we have learned.to do for the purposes of war are completely misleading, for it is sensible temporarily to sacrifice freedom in order to make it more secure in the future, but it is quite a different thing to sacrifice liberty permanently in the interests of a planned economy.

To those who have watched the transition from socialism to fascism at close quarters, the connection between the two systems is obvious. The realization of the socialist program means the destruction of freedom. Democratic socialism, the great utopia of the last few generations, is simply not achievable.

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UgglyBetty's picture

Hey! Thanks for the feedback. I agree with you that many people are awakening the hard way, but are those that now suffer the inconsistences of this economic model, willing to ask for more liberty or more State to satisfy their needs? I'm from Argentina, and I can tell you that the situation here is about to explode but I dont thing anyone is willing to make any sacrifices to go on with life, many people are accustomed to receiving State assistance that do not even think about working for a living, they just think they are entitled to a certain level of income and thats it, it's not about being productive to earn your living or to overcome financial difficulties...
I hope you are right, and people finally view things as they are, a great Ponzi to empoverish us all against the elites, but after soooooooo many decades of populism here I bet people will want their share of the pie instead of thinking how they can go by themselves contrary the populist speech.
Wish all of you the best though, not a great thing to be a third world country.

The Limerick King's picture



Someone please pass the blue pill

The system is breaking my will

I need to return

And try to unlearn

The things that keep giving me chills!

SillySalesmanQuestion's picture


 I could'nt agree more with those words HD

Conor's picture

The people have unwittingly, insidiously, succumbed to Hobbes's Leviathan.

WaterWings's picture

We can expect this. They ("we") are prone to herd behavior. We must be fearless evangelists of Freedom.

Mr. Magniloquent's picture

I believe this obliviousness is due to the magnitude of the metastasis of the State. I, a mere human, do not trifle with concerns over our Sun dying and englufing our world. It lays outside the scope of my humble existence. For most, the governments of the world--particularly the U.S. Federal Government, are beyond the scope of their being. Washington D.C. might as well be a force of nature for what most can do about it. It effects you regardless of what actions you take, and any attempt to mitagate it is left wanting.

I believe the only reasonable solution left is sessesion. We shall see if that day ever comes.

Conor's picture


So much of the government has now attained autonomy that the Presidential election will have little impact on our current socioeconomic trajectory. 

Conor's picture


So much of the government has now attained autonomy that the Presidential election will have little impact on our current socioeconomic trajectory. 

KCMLO's picture

It's certainly a compelling thought.  I would be concerned how to extract a non-geographically contiguous population with our views on liberty from a willfully ignorant mass of consumers.  I don't even mean the condescension implied by that statement, I've just run out of ways to describe those around me who either refuse to see, or refuse to care what is being done to them.

Contrary to belief, revolutions are typically incited by a vocal minority and fought against another vocal minority while the bulk of the country sits idly by and tries not to participate in any way.  Our own revolution was no exception.  This is particuarly frustrating because the "muddle-in-the-middle" viewpoint is never exposed to be inadequate or unproductive.  Say tomorrow we somehow are able to enact instant reforms that provide complete and total liberty, so long as one's personal liberty does not interfere with another's.  Not utopia by any means but the "most free" society, by definition, to ever exist in the history of the world.  We would still have a sizable (maybe even a majority?) portion of the population either aggitated by the disruption to their routine or simply not give a shit.

Always Positive's picture

'......I want to grab them by the shoulders and shake the shit out of them while screaming in their miserable, sheeplike faces "WHAT THE FUCK IS WRONG WITH YOU?!"....'

So, akak, after you screamed in their miserable, sheeplike faces, WHAT DID YOU DO? Seriously, what did you do to rectify the problem. What have you ever done?

I'm assuming you're a more senior individual, so if you go back to Nixon taking America off the gold standard in 1971...and you, being an intelligent person, KNEW this was bad..what did you do? Organise rallies, protests, contact politicians? Anything?

Too far back? OK. When under Clinton Glass-Stegal was repealed and you KNEW that was a bad move, what did you do? Organise rallies, protests, contact politicians? Anything?. I could go on.

See akak, the problem is that on ZH (and everywhere) there are many KEYBOARD WARRIORS like you who KNOW what the problems are and KNOW who is responsible (the Banksters, Wall Street, Zionists, Gubermint, Elites, TPTB etc etc)


You never did anything personally  about it. You never took responsibility for your own lives, your kids' futures. YOU NEVER DID ANYTHING!

And now, old mate(s), it's too late.

THEY have won because of YOUR inaction/stupidity/cowardice.

America is about to go down the drain, taking the whole world with it, because YOU DIDN'T TAKE RESPONSIBILITY FOR YOUR OWN LIVES, YOUR OWN FUTURE BY TAKING APPROPRIATE ACTION.

So please, stop whining & crying like infants. You are about to get exactly what you deserve, due entirely to what you did/didn't do in the past. Suck it up.

The intro says: '....except the one who really knows that fixing America would require pain and sacrifice, is everyone's duty...'

It's was also 'everyone's duty' to act n the past. You failed in 'your duty' and now you - and the rest of us - will suffer the consequences.

What goes around...



clymer's picture

You don't know what he has done. He could have been volunteering for Ron Paul's campaign at the local level, running for selectman, etc. At least he is awake. At least his heart is in the right place and that is enough to start. Why don't you be part of the solution and prescribe exactly what we all should do in three easy steps to begin to reform the system? Or would you rather paint yourself as the generational victim of boomer laziness so you can spout off with "whoa is me" "we got fucked by the generation before us" crap which is 1.) counterproductive and 2.) an over simplification of a complex issue


Always Positive's picture

Exactly Clymer, I don't know what he's done that's why I was asking. And you'll notice akak doesn't want to engage and has 'moved on'. He realises he'll get his backside kicked. Again. Akak, like all cowards will slink away at the first sign of someone who will give as good as he gets.

See, what annoys me about Keyboard Warriors like akak is that he's here, every day, spouting his, views, pontificating, being the know it all loud mouth...but actually does zilch (you can bettya if he HAD done something he'd let us know quicktime...)

As a non American, all I can do is protect myself as best I can from the upheavals about to hit us all because, largely, of what America has done to screw up the entire world. "THEY" may be doing it; YOU have allowed it - by doing nothing.

Clymer, you asked me to prescribe 3 steps  - well I'll give you just one that's entirely appropriate for the circumstances & all that is needed:

Put on your best suit, silk tie, nice shoes and go to the next OWS demo near you. Take your wife & kids & friends. Join in peaceful protest. Show the World that it isn't just a pretty scruffy bunch of gutsy kids who are angry, but main-stream America.

Move the OWS  protest to the political centre and the middle classes. In large numbers. Dignified. Maybe silent protest. Just banners. If Black America could raise a million men to march a few years ago, is it too much to ask ALL Americans to do something similar to save the Nation?

That action would get their attention. Maybe then Ron Paul would have a chance.

Will you march? Will akak? Not a chance. Much easier to be a loud mouth Keyboard Warrior, blaming everyone else, than actually doing something concrete.





akak's picture

AP, I did not "slink away", I merely stood back and allowed you the opportunity to blather on and discredit yourself in your unprovoked and unsubstantiated attack on me and many others.

The fact of the matter is, you know NOTHING about me, nor about what I might have or have not done to further the cause of liberty.  You have set up the classic strawman argument here, wildly assuming that merely because I participate in an online forum, that that somehow precludes me from having done ANYTHING else to fight for or advance a cause for which I also argue here.  It is quite obvious to even the dullest of thinkers what a complete logical fallacy that is, as well as an ignorant assumption and gross insult.'

How dare you ASSUME you know anything about me based solely on my participation in this forum?  Or are you trying to goad me into divulging personal information that has no relevance to the discussion at hand?

I owe you absolutely no explanation of or elaboration on my life outside this forum, and if you even try to raise that red herring once again, it will only further demonstrate the total lack of critical and logical thinking skills on your part.

Always Positive's picture

Nice blast akak, some worthy rhetoric & verbal flourishes.

But  just tell me, anonymously, quietly, just between you & I, whisper in my ear, what have YOU ACTUALLY DONE? EVER?

Sorry? I didn't quite catch that...

You're like a well-hooked fish akak and though you may make a run & dodge & twist & turn..there's no-where to go.

Anyway, I've finished. I only fish for sport and I'll cut the line and let you sink to the bottom, to rest a while. But next time your Keyboard Warrior persona takes hold and you're about to flame importantly away...pause for a moment and re-consider. I might be out there, waiting for you. Of course, you may choose not to respond but on this board everyone will know the real reason why.

All the best & take care.

akak's picture

It is quite amusing to see somebody rhetorically get their head handed to them, only to then willingly come back to have the bloody stump of their neck severed as well.

It's astounding to read you blathering on and on, accusing me (and others) of something when you know NOTHING about me, or of what I have done in the cause of liberty.  Really, are you that much of an idiot, to run around accusing TOTAL STRANGERS of things when you have ZERO FACTS about them?  Does the concept of logic even exist in your addled mind?  Tell me, do you call the cops on your neighbors because you suspect, with NO EVIDENCE, merely based on your perverse psychological projection, that they are shooting heroin or abusing their baby?  That would be consistent with what you are doing here.

I do not owe you or any other anonymous asshole in some internet forum any personal information or history, nor would it be relevant to the discussion even if I did divulge such information.  For all you know, I am Ron Paul's campaign manager, or Ron Paul himself --- and even if I were, I have little doubt that an irrational idiot and antagonistic troll such as yourself would still find some excuse to find fault.

Among your other fallacies in logic, you inherently assume the false dichotomy that one can either act in the "real world" to further the cause of liberty, OR argue and debate about liberty in an online forum.  Has it ever crossed your hopelessly muddled mind that one may be engaged in BOTH?

Aside from the complete illogic of your "argument" (such as it is), I cannot fail to notice that despite you jumping into the fray here with guns blazing at random targets, YOU did not tell US what YOU have done to further the cause of liberty.  Since you seem to feel that posters here need to divulge private and personal information in order to justify their presence in this forum, it would logically be incumbent upon you to start out with the listing of your pro-liberty credentials before demanding them of anybody else.

Anyway, thanks for the laughs, and do come again --- while it is not very sporting, it can on occasion be fun to shoot fish in a barrel.  Now, having disposed of that unsightly bloody stump, I think I'll go fry up these fine fillets.

Max Fischer's picture



So, in other words.... you've done nothing. 


He NAILED you. 

You thought you could quietly exit the conversation until, 13 hours later, he called you out for being a coward.  Then, not 20 minutes later, you had produced a neurotic response which probably took 19 minutes to write.  You frantically clicked the refresh button like a lab rat on cocaine for 10 straight hours, didn't you?  Watching from afar, knowing you got nailed..... 




akak's picture

I should have expected a troll tag-team with you as the junior member.

Actually, I am happy beyond measure to see you show up and add your insane two cents to the non-debate, as it only further discredits you and points out your similarly hopeless weakness at honest and logical debate.

This AlwaysPositivelyanAsshole mindlessly jumps into the middle of a discussion blatantly accusing me of something while knowing NOTHING about me or my history.  Tell me, Max, you vile bastard, just what principle of logic is reflected by such an action?   That's right --- none.  Obviously, neither you nor he understand the elementary difference between an ASSUMPTION --- all he, and you, have --- and a fact.  It is all bluster, bullying and lies with dishonest, disingenuous, malignant trolls like you --- and clearly the standard modus operandi of both of you. 

Oh, by the way Max, I am accusing you of child molestation with your nephew.  Clearly you are guilty, as you have never even argued against child molestation here, nor fought against child molestation in the "real world".  And you can NOT defend yourself in any way, because I am merely using the exact same tactic as AlwaysPositive did above against me, and since you endorsed his method, you must endorse mine against you as well.

Thanks again, it was fun --- two fish out of that same barrel in one night; I'm on a roll!

dhengineer's picture

Hayek's whole point was that we are not responsible for everyone else.  We are responsible for ourselves, and, by so doing, we strenghten society in general, without resorting to some "utopian" bullshit system.  Doing something positive can also mean going John Galt, protecting oneself and one's loved ones from the coming storm, providing for our own lives, and staying as far beneath the radar as possible.  When the storm clears, we will be in a position to restart our little corner of the economy.

My wife and I bought a couple of acres of tillable land in a relatively remote location, we have a very small house, a large garden, PM's, food, tools, seeds, private well, septic, generator, solar, like-minded neighbors, and very little income.  We are prepared to ride out the coming storm, which we have been watching develop for about ten years.  We have taken responsibility for ourselves and have not taken anything from anyone.  We believe in individual freedom, not collectivism.


constitutionalist's picture


I can't believe it but I can't agree with you more, people do want to be told what to do. I can not wrap my mind around this concept. People will openly admit it when questioned. I have nightmares about this, our grandparents weren't pussies, how did this happen?

Oh regional Indian's picture

Consti, two great wars, since 50's almost continuous wars, Gandhi (emasculated 3 generations of Men by telling them not to fight).... over-reaching political correctness....

It's been done, so no one fights back.


akak's picture

Interesting perspective on Gandhi, who is essentially universally held up in the West as a great figure of impeccable moral integrity and political accomplishment.

Al Gorerhythm's picture

There's more than one way to skin a cat. Depending upon the size of the cat, fighting that fucker is ideally the last option.

mjcOH1's picture


During a prayer speech on June 16, 1947: “If we had the atom bomb, we would have used it against the British.” ~ Gandhi’s “The Last Phase,” Vol. II, p. 326

“Among the many misdeeds of the British rule in India, history will look upon the act of depriving a whole nation of arms, as the blackest.” ~ Gandhi’s “Autobiography,” Part V, Chapter XXVII

“I do believe that where there is a choice between cowardice and non-violence I would advise violence. Thus when my eldest son asked me what he should have done, had he been present when I was almost fatally assaulted in 1908, whether he should have run away and seen me killed or whether he should have used his physical force which he could and wanted to use, and defended me, I told him that it was his duty to defend me even by using violence.” ~ CWMG, Vol. XXI, p. 132.

“It is indeed necessary to be physically strong. If the Indians want to learn the use of fire-arms and swords, by all means let them do so. ?” ~ The Indian Opinion, June 18, 1908

Irish66's picture

The herders are getting tired of watching the sheep.  The hard workers are tiring of carrying the load.

The corporations are lossing their smartest people and they don't care.

We are broken.

dolly madison's picture

I've also discovered, to my dismay, that a majority of people actually like to be told what to do. To be ruled.

As dismaying as this may be, it is the natural order of things.  Social animals only need so many leaders.  If you look a the Meyers Briggs test, you will see that only 2 categories are listed as natural leaders, INTJ and ENTJ.  Which makes between 3% and 9% natural leaders.  The rest are natural followers.

akak's picture

False dichotomy.

One can be neither a follower NOR a leader.

What is wrong with being independent?

dolly madison's picture

What is wrong with being independent?

Nothing wrong with being independent, and actually the INTJ tends to just like to be independent, but is fully capable of leading when necessary.  Independent is leading self, so still not a follower.  Still, I think the majority are followers, and again that is the natural state for social animals.

mkkby's picture

Wrong, Akak.  An independant is a leader.  He's decided leading sheep is too much of a bother and is only leading himself.

jeff montanye's picture

well put.  might also note that we currently get neither democratic freedom (new rules for extralegal imprisonment and execution) nor socialistic economic gain (unless we are too big to fail).

palmereldritch's picture

Libertarian = you have the freedom to be the author of your own utopia and make the mistakes necessary to understand that all the other programmed opportunities have a greater price tag.

Woodyg's picture

Which Hayek are we talking about? The free markets one or this one:

Hayek also wrote that the state has a role to play in the economy, and specifically, in creating a "safety net". He wrote, "There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision."[68]

The problem is socialism leads to centralized planning but so does a corporate world with a few huge predators at the top........ Aka 'free markets'

Free markets are an Impossibility......

Personally I like the India model where only 3 branches of any business are allowed(at least it used to be that way) That would do a hell of a lot better job of creating a 'free market' than an 'anything goes - no regulation model many profess to want......

zhandax's picture

Americans are suffering because central planning of money is destroying productivity.

Americans are suffering because FDR confiscated our money and forced us to transact business with debt exclusively.  How can you pimp a silver blog and fail see this?

cranky-old-geezer's picture



Americans are suffering because central planning of money is destroying productivity. Mis-pricing money causes resources to flow into unproductive areas.

No, mis-pricing money isn't destroying productivity, laziness is.

And no, money isn't mis-priced on Main Street America, just on Wall Street where they get it from the Fed without paying any interest, plus the Fed will buy their worthless bonds at full face value ...plus commission.

Americans are suffering from currency debasement more than anything else.

The Alarmist's picture

Americans are suffering from a massive redistribution of their wealth in a giant ponzi scheme where the only winners are and will be the ruling elite who take their vig at every step of the scheme. Everybody is entitled to a piece of everybody's wealth, and as time goes by there is less and less to take.

I take it back ... It stopped being a ponzi scheme when the rest of the world started to cut back on bond purchases; now it is more like musical chairs.

boooyaaaah's picture

The maximum weight that a truck can carry is 20,000 lbs.

There is a movement afoot to make it 10,000 lbs.

Tho will increase teamster employment, require more
Truck, tire. And fuel production, therby increasing employment.

The cost will be spread over the entire economy.
prices and tax collection will increase.

A great socialist planner solution.

When solutions sound simple it is because the problem is over simplified

Matt's picture

In order for there to be a decentral solution, you would need all roads to be privately owned so owners can charge higher rates to heavier trucks which cause more wear on their roads, to cover the increased maintenance heavier trucks cause.

Would you prefer it if the elites directly owned all the roads?

CrockettAlmanac.com's picture

Not all private ownership is ownership by elites. In a free market ownership is more evenly distributed because wealth can only be accrued through earnings and not through redistribution by force.

Matt's picture

This is the big problem I have with advocates of libertarianism, they talk about how things would be if the world had always been run by free markets, rather than dealing with the reality of what it would be like if the world switched over to libertarianism.

The people who are really rich now would be the ones who own most of everything, since their current wealth and property ownership doesn't suddenly cease to exist.

Unless you propose we redistribute everything equally one time, then have free markets going forward, with everything privately owned.

Marco's picture

Earnings and rent ... rent means that in the absence of economic growth wealth is guaranteed to accumulate, feudalism is the steady state of capitalism.

bonderøven-farm ass's picture

Wars on 'perceived' social ills.....

~Poverty (Fuck off LBJ)

~Drugs (Fuck off Nixon/Reagan)

~Terrorism (Fuck off Bushy W.)

.....and I say fuck off to every 'leader' on the 'hill' who supports these perpetual wars on it's on citizens.  

"We are strictly confined to our men to whom we give liberty." ~ H.D.T 

Marco's picture

There is massive misallocation of resources yes, but there is artificially cheap oil as well ... and they are both a result of the fiat ponzi.

This what makes stopping the Ponzi so dangerous, will better allocation of capital be able to offset America having to pay even money (ie. trade balance) for oil?

CrockettAlmanac.com's picture

There's a huge downside to petrodollar hegemony. Lots of grief I can do without.

steve from virginia's picture

This is completely wrong, there is no sacred 'production' with evil 'debt' as different entities. There is nothing to rescue production nor is the state production's obstacle.

Production is a dog-and-pony show,  the means by which credit is created, there is no other purpose for so-called 'production' other than to be the instrument of credit. Facilitating credit -- technically seigniorage -- is the primary job of the state.

Credit is the essential condition for the creation of modern, creditable enterprises which are those which drive out all others. Without credit there are no 'productive' enterprises, be they businesses or sovereigns.

The purpose of the sovereign is to service private debts in perpetuity and to defend the interests of the borrowers/lenders against 'disruptions'. There is no other form within the credit enterprise itself that is able to borrow-to-lend perpetually (without going broke as is the case with firms or individuals). The state is integral to credit which is the sole product of enterprises.

There is no such thing as a boom in productivity, only a boom in the creation of credit. There is no 'efficient' allocation of anything, only a scam played upon the gullible who believe in fairies.


Marco's picture

So lets say the Solyndra plant is just as good an allocation of resources as a factory which actually produces saleable consumer goods?

JR's picture

America once had a utopia. It had created the greatest economy in the history of the world. But the utopia was destroyed when Congress, in 1913, gave prerogative over the nation’s money and credit, and thus control of all her industry and commerce and policies, to a supra-national power of private international bankers by enactment of the Federal Reserve Act.

As Carl Parton writes in an incredible article, Debt Slavery, “There is one candidate running for President of the United States that will stand for these principles, Ron Paul,” that made our country that utopia. Here are excerpts from his January 12, 2012, article:

I believe that our Nation needs to start to recognize a new immoral and destructive atrocity being committed. I call it debt slavery…

 The most egregious example of debt based slavery comes from our National Government. Our current banking system began in 1913 when Congress passed the Federal Reserve Act. This law granted a group of corporate banks called the Federal Reserve “the Fed” the power to control our Nation’s money supply and monetary policy. This was the starting point of our perpetual debt based economy. The Federal Reserve was granted the right to print money and loan it to the US government at 6% interest guaranteed by law. The more money the Federal Reserve prints, the deeper the Federal Government goes into debt to the Fed. Coincidentally, the 16th amendment of the Constitution which allowed the Federal Government to collect tax on income was ratified in the same year. The income tax collected from the American taxpayers was designed to pay off the debt to the unaccountable, private, corporate, banking system, known as the Fed, which operates under the force of compounding interest. It is only a matter of time until the servicing of our debt will account for more of our Nation’s budget than the sum total of all other government spending. Perhaps that is why, Mayer Amschel Bauer Rothschild, the grandfather of the Rothschild British banking family that owns major interest in the Fed, spoke these words, “Give me control of a nation's money and I care not who makes it's laws.”

You might ask how debt to the Federal Reserve Banks enslaves the American people. The answer is that it affects policies. Subsidies to corporations and industries by the Federal Government are controlled. Foreign policy, such as how much and to whom we give aid, is controlled. War and World policing is encouraged. Entitlement spending designed to create dependency by the people is constantly increased. All of these policy decisions are made in the best interests of the banking system rather than the American people. All of these policies also increase the spending by government and contribute to more debt.

The bonus insult by the Fed is that they do not have any loyalty or allegiance to the United States. When we hear about the World economy and our interdependence on the stability of other nations to have a good economy it is only the Fed and its ties to the international banking system that bind us to the “World’s Economy.” We would still trade with other nations even if their economies failed, we would still produce goods and services, we would still have a vibrant domestic ability to prosper. It is the banking system that suffers in the event of Europe’s debt crises and woes. We are a free Democratic Republic ruled by law and bound to a Constitution. Why do the bad spending and debt decisions of Socialist nations in Europe control our destiny and fortunes? The answer is the World banking system which is directly connected to the Fed.

I believe that the people in this country need to awaken to the new slavery. We need to come together to fight against the injustice of debt slavery. We need to audit the Federal Reserve and return to the Constitutional principle of sound money. We need to end the practices of World policing and preventative warfare which add to our National debt. We need to curtail unsustainable growth in spending on non-essential Federal government. We need to stand for the abolition movement of this millennium. End debt slavery!

jm's picture

America once had a utopia.

Tell that to the Indians and slaves. 

There are no utopias in this world.  Literally one of the stupidest posts ever.