Switzerland: Far from Flawless, but still a Unique Country – An Interview with Claudio Grass
Our friend Claudio Grass has discussed Switzerland in these pages before, and on one of these occasions we added some background information on country’s truly unique political system (see “The People Against the Establishment” for the details). People are generally aware that direct democracy in the form of frequent referendums is a major characteristic of the Swiss system, but how many people know that the country’s executive is essentially modeled after the system established in the city states of ancient Greece?
The Sphinx observatory on Mt. Jungfraujoch in the awe-inspiring Swiss alps. Photo credit: Jungfraubahnen
Claudio was recently interviewed by Jeff Deist of the Mises Institute on what we can learn from Switzerland, which despite its undeniable flaws, continues to stand out among European nations states as a beacon of liberty. As the introduction at the Mises Institute notes, political life in Switzerland differentiates itself by its strongly pronounced degree of subsidiarity and the major limitations it places on central political power structures at the federal level:
Switzerland is no libertarian paradise. It has bureaucrats and a wayward central bank. But it remains an astonishing modern example of the principles of federalism and subsidiarity in action. In fact, it exemplifies Lew Rockwell’s daydream: nobody much knows or cares who is president. Its federal administrative state demonstrates humility instead of hubris. And virtually all political decisions, from taxes to welfare to immigration, are decided locally. Claudio Grass joins Jeff Deist to discuss what libertarians can learn from Switzerland, and how neutrality in two disastrous European wars shapes Swiss DNA today.
…click on the above link to read the rest of the article…
Sliding down the steep slope of the cursed year. [PT]
DJIA, typical pattern in the course of a decade since 1897. Years ending in 7 did tend to be marked by large setbacks on average.
Minneapolis Fed president Neel Kashkari attacking a block of wood with great zeal. [PT] Photo credit: Linda Davidson / The Washington Post
Economist and philosopher Hans-Hermann Hoppe dissects democracy in his book Democracy, the God that Failed, which shines a light on the system’s grave deficiencies with respect to guarding liberty. As Hoppe puts it: “Democracy has nothing to do with freedom. Democracy is a soft variant of communism, and rarely in the history of ideas has it been taken for anything else.” At first glance this may strike many people as an exaggeration, but considering the trends that have emerged over the past several decades, it seems difficult to refute this assertion. Particularly since the beginning of the so-called “war on terrorism”, individual liberty has suffered numerous setbacks in Western democracies, while the power of the State has grown to almost unheard of proportions. In a democracy everybody is in theory free to join the psychopathic competition for power (in contrast to the largely rigid power structures prevailing in feudal societies), but all things considered, that is a highly questionable advantage. In fact, in many ways it isn’t an advantage at all. [PT]
Instantaneous relief! No matter what your affliction is, snake oil cures them all. [PT]
Now here is something all those “Great Depression experts” always neglect to mention: the Fed’s holdings of government securities expanded my more than 400% between late 1929 and early 1933. Friedman’s often repeated assertion that the Fed “didn’t pump enough” in the early 1930s – which is held up as the gospel truth by nearly everyone – is simply untrue. It is true that the money supply collapsed anyway – but not because the Fed didn’t try to pump it up.
Rahm Emanuel looks happy. He should be – he is the mayor of Chicago, which is best described as crisis incarnate. Or maybe the proper term is perma-crisis? Anyway, it undoubtedly looks like a giant opportunity from his perspective, a gift that keeps on giving, so to speak. [PT] Photo credit: Ashlee Rezin / Sun-Times
If you are destined to stay on the Afghan plantation forever, might as well plant something. [PT]
Hello, darkness.
The gold-silver ratio from 1800 to 1915. In the 1870s, numerous nations around the world dropped bimetallism in favor of a gold standard (France was a noteworthy exception). Thereafter it quickly became obvious that silver had been vastly overvalued at the official exchange ratio. It was essentially a subsidy for silver miners. Once a pure gold standard was adopted, mild consumer price deflation became the norm, as economic productivity grew faster than the supply of gold. Contrary to what virtually all central bankers nowadays assert, this had no negative effects on the economy whatsoever. On the contrary, the four decades following the adoption of the gold standard produced the biggest and most equitable real per capita growth the US has ever seen – such growth rates were never again recaptured. Of course, at the time government spending represented between 3% to 4% of total economic output, i.e., government was but a footnote in most people’s lives. The reason why governments subsequently sabotaged the gold standard was precisely that they wanted to grow without limit. [PT]
Eight Spanish silver reales, or “pieces of eight” which consisted of 387 grains of pure silver (the coin on the upper right is a Mexican piece of eight, with Chinese chop marks). These coins were minted by the Spanish Empire since 1598 and were of the same size and weight as the German Thaler, which in turn was standardized across all German territories since the 15th century. These coins were legal tender in the US until 1857 and for a long time were the by far most widely used coin. The Coinage Act of 1792 established that the new US dollar was to be equal in value to Spain’s pieces of eight, but people soon found out that the US Mint used a slightly different standard of fineness (0.9 instead of 0.8924), which meant that about 1% more silver was needed to mint a dollar. This made them reluctant to bring silver to the mint, hence the Spanish coins continued to dominate in daily life. Spanish reales were actually the first world currency, and it worked splendidly for almost 300 years (incidentally, over the time of its existence, this was the least debased coin in the Western world, which explains its popularity). People would cut the coin into 8 pieces (“bits”) of equal size for smaller transactions and to make change – prices on US stock exchanges were quoted in fractions based on these 8 bits for a very long time. The United States Assay Commission which kept an eye on the quality of the production of the US Mint was one of the few bureaucracies to ever be disbanded – in 1980. This is actually testament to the stickiness of bureaucracies – gold coins had been out of circulation since 1933 and silver coins since 1965 (a rudely debased half dollar existed until 1970). [PT]
They’re not the best map readers, that much is known for certain. [PT]
Pick a rabbit to follow…
In short, investors were simultaneously anticipating inflation and deflation. Naturally, this is a gross oversimplification. But it does make the point that something peculiar is going on with these markets.
