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Wilhelm Ropke: The Economist Who Stood Up To Hitler

Sometimes there are men of principle who live their values and not merely speak or write about them. People who stand up to political evil at their own risk, and then go on to say and do things that help to remake their country in the aftermath of war and destruction. One such individual was the German, free-market economist, Wilhelm Röpke.

Born on October 10, 1899, Wilhelm Röpke died half a century ago on February 12, 1966. It seems appropriate to mark the fifty-year passing of one of the great European economists and advocates of freedom during the last one hundreds years.

In the dark days immediately following the rise to power of Adolf Hitler and his Nazi movement in Germany in January 1933, Röpke refused to remain silent. He proceeded to deliver a public address in which warned his audience that Germany was in the grip of a “revolt against reason, freedom and humanity.”

Nazism as the Destruction of Decent Society

Nazism was the culmination of Germany’s sinking into ”illiberal barbarism, Röpke said, the elements of which were based on: (l) “servilism,” a “longing for state slavery,” with the state becoming the “subject of unparalleled idolatry”; (2) “irrationalism,” in which ”voices” in the air called for the German people to be guided by “blood,” “soil,” and a “storm of destructive and unruly emotions”; and (3) “brutalism,” in which “The beast of prey in man is extolled with unexampled cynicism, and with equal cynicism every immoral and brutal act is justified by the sanctity of the political end.” Röpke warned that, “a nation that yields to brutalism thereby excludes itself from the community of Western civilization.” He hoped Germany would step back from this abyss before its people had to learn their mistake in the fire of war.

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Do As You’re Told! – The Case For Social Engineering

Do As You’re Told! – The Case For Social Engineering

Wherever we turn we are confronted with politicians, political pundits, television talking heads, and editorial page commentators, all of whom offer an array of plans, programs, and projects that will solve the problems of the world – if only government is given the power and authority to remake society in the design proposed.

Even many of those who claim to be suspicious of “big government” and the Washington beltway powers-that-be, invariably offer their own versions of plans, programs, and projects they assert are compatible with or complementary to a free society.

The differences too often boil down simply to matters of how the proposer wants to use government to remake or modify people and society. The idea that people should or could be left alone to design, undertake and manage their own plans and interactions with others is sometimes given lip service, but never entirely advocated or proposed in practice.

In this sense, all those participating in contemporary politics are advocates of social engineering, that is, the modifying or remaking of part or all of society according to an imposed plan or set of plans.

The idea that such an approach to social matters is inconsistent with both individual liberty and any proper functioning of a free society is beyond the pale of political and policy discourse. We live in a time of piecemeal planning and incremental interventionism.

The Reasonableness of Individual Planning

It is worthwhile, perhaps, to question this “spirit of the times,” and to do so in the context of marking an anniversary. Slightly over 70 years ago, on December 17, 1945, the Austrian economist (and much later economics Nobel Prize winner), Friedrich A. Hayek, delivered a lecture at University College in Dublin, Ireland on, “Individualism: True and False.”

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‘Democratic Socialism’ Means the Loss of Liberty

“DEMOCRATIC SOCIALISM” MEANS THE LOSS OF LIBERTY

Democratic Party hopeful, Bernie Sanders, recently outlined what it means for him to be a “democratic socialist.” The problem is that the same label might be applied to most of the other candidates running in both the Democratic and Republican parties running to be the nominee for presidency of the United States.

One November 19, 2015, Bernie Sanders delivered a speech in which he outlined what he means when he calls himself a “democratic socialist.” He assured his listeners that he did not advocate government ownership of the means of production.

He said that he supported “private companies that thrive and invest and grow in America instead of shipping and jobs overseas.” And that “innovation, entrepreneurship, and success should be rewarded. But greed for the sake of greed is not something that public policy should support.”

He insisted that he “merely” wanted the wealthy billionaires, the “one-percenters,” to pay their “fair share,” with the belief that if they were taxed sufficiently high then it would be able to finance all the other good things that he would like to see every American have.

FDR and His Economic “Bill of Rights”

So besides a clear desire for a form of regulatory socialism that would see to it that private businesses did not “ship” jobs and profits overseas, and a fiscal socialism that would use the tax code to redistribute wealth from that supposed “one-percent,” what does Bernie Sanders mean by “democratic socialism”?

His playbook, it turns out, is Franklin D. Roosevelt’s New Deal of the 1930s and FDR’s 1944 call for an “economic Bill of Rights.” In the 1930s, Franklin Roosevelt pushed through Social Security legislation, introduced the first federal minimum wage law and tax-funded unemployment insurance, and implemented federal job programs.

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History Doesn’t Go In a Straight Line

History Doesn’t Go In a Straight Line

Noam Chomsky on Bernie Sanders, Jeremy Corbyn, and the potential for ordinary people to make radical change.

Noam Chomsky in 2011. Andrew Rusk / Flickr

Noam Chomsky in 2011. Andrew Rusk / Flickr

Throughout his illustrious career, one of Noam Chomsky’s chief preoccupations has been questioning — and urging us to question — the assumptions and norms that govern our society.

Following a talk on power, ideology, and US foreign policy last weekend at the New School in New York City, freelance Italian journalist Tommaso Segantini sat down with the eighty-six-year-old to discuss some of the same themes, including how they relate to processes of social change.

For radicals, progress requires puncturing the bubble of inevitability: austerity, for instance, “is a policy decision undertaken by the designers for their own purposes.” It is not implemented, Chomsky says, “because of any economic laws.” American capitalism also benefits from ideological obfuscation: despite its association with free markets, capitalism is shot through with subsidies for some of the most powerful private actors. This bubble needs popping too.

In addition to discussing the prospects for radical change, Chomsky comments on the eurozone crisis, whether Syriza could’ve avoided submitting to Greece’s creditors, and the significance of Jeremy Corbyn and Bernie Sanders.

And he remains soberly optimistic. “Over time there’s a kind of a general trajectory towards a more just society, with regressions and reversals of course.”


In an interview a couple of years ago, you said that the Occupy Wall Street movement had created a rare sentiment of solidarity in the US. September 17 was the fourth anniversary of the OWS movement. What is your evaluation of social movements such as OWS over the last twenty years? Have they been effective in bringing about change? How could they improve?

They’ve had an impact; they have not coalesced into persistent and ongoing movements. It’s a very atomized society. There are very few continuing organizations which have institutional memory, that know how to move to the next step and so on.

 

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Fraud, Fools, and Financial Markets

Fraud, Fools, and Financial Markets

Adam Smith famously wrote of the “invisible hand,” by which individuals’ pursuit of self-interest in free, competitive markets advances the interest of society as a whole. And Smith was right: Free markets have generated unprecedented prosperity for individuals and societies alike. But, because we can be manipulated or deceived or even just passively tempted, free markets also persuade us to buy things that are good neither for us nor for society.

This observation represents an important codicil to Smith’s vision. And it is one that George Akerlof and I explore in our new book, Phishing for Phools: The Economics of Manipulation and Deception.

Most of us have suffered “phishing”: unwanted emails and phone calls designed to defraud us. A “phool” is anyone who does not fully comprehend the ubiquity of phishing. A phool sees isolated examples of phishing, but does not appreciate the extent of professionalism devoted to it, nor how deeply this professionalism affects lives. Sadly, a lot of us have been phools – including Akerlof and me, which is why we wrote this book.

Routine phishing can affect any market, but our most important observations concern financial markets – timely enough, given the massive boom in the equity and real-estate markets since 2009, and the turmoil in global asset markets since last month.

As too many optimists have learned to their detriment, asset prices are highly volatile, and a whole ocean of phishes is involved. Borrowers are lured into unsuitable mortgages; firms are stripped of their assets; accountants mislead investors; financial advisers spin narratives of riches from nowhere; and the media promote extravagant claims.


Read more at https://www.project-syndicate.org/commentary/government-intervention-financial-crises-by-robert-j–shiller-2015-09#1pbaxOEsUVWLuRvm.99

 

Why Is Market Fundamentalism So Tenacious?

Why Is Market Fundamentalism So Tenacious?

One of the great economists of the twentieth century had the misfortune of publishing his magnum opus, The Great Transformation, in 1944, months before the inauguration of a new era of postwar economic growth and consumer culture. Few people in the 1940s or 1950s wanted to hear piercing criticisms of “free markets,” let alone consider the devastating impacts that markets tend to have on social solidarity and the foundational institutions of civil society. And so for decades Polanyi remained something of a curiosity, not least because he was an unconventional academic with a keen interest in the historical and anthropological dimensions of economics.

As the neoliberal revolution instigated by Reagan and Thatcher in the 1980 has spread, however, Polanyi has been rediscovered.  His great book – now republished with a foreword by Joseph Stiglitz – has attracted a new generation of readers.

But how to make sense of Polanyi’s work with all that has happened in the past 70 years?  Why does he still speak so eloquently to our contemporary problems? For answers, we can be grateful that we have The Power of Market Fundamentalism:  Karl Polanyi’s Critique,written by Fred Block and Margaret R. Somers, and published last year. The book is a first-rate reinterpretation of Polanyi’s work, giving it a rich context and commentary.  Polanyi focused on the deep fallacies of economistic thinking and its failures to understand society and people as they really are. What could be more timely?

The cult of free market fundamentalism has become so normative in our times, and economics as a discipline so hidebound and insular, that reading Polanyi today is akin to walking into a stiff gust of fresh air.  We can suddenly see clear, sweeping vistas of social reality.  Instead of the mandarin, quantitative and faux-scientific presumptions of standard economics – an orthodoxy of complex illusions about “autonomous” markets – Polanyi explains how markets are in fact embedded in a complex web of social, cultural and historical realities.

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#ResistFinance

#ResistFinance

It may just be fitting that today is May Day, the old remembrance of the once “great” destructive force of international communism. Of course, it still resonates largely because its proponents view it from the standpoint of actual purity. Stalin, you see, never really practiced it; as such it has supposedly never really been tried. Repeating that lie long enough has left generations susceptible to the same cowing interpretations.

Normally, these fascinations with Marx and Marxism are left to the ivory towers of academia, who have apparently taken heart to the KGB’s “liberation ideology” and brought it to America’s college youth. I don’t mean for this to be such a political discussion, but it is somewhat unavoidable. After all, one of the most trending topics on Twitter earlier this week, just in time for May Day itself, was #ResistCapitalism.

The open spaces for this backlash are provided neatly by the recovery that doesn’t exist outside of various DSGE and GARCH models central banks employ to tell us how well they have done. Today’s youth are being inundated with Marxism that once appeared ridiculous in obviousness, but now contains, seemingly, some righteous prescription. This is not just “inequality” but it isn’t apart from it either, as stock bubbles and the very real lack of wage opportunity sharpen this great sense of divide.

 

From the perspective of anyone who appreciates actual freedom and free markets, there is an easy answer to the problem – that all these neo-socialists that don’t appreciated the irony of being “afforded” the opportunity to resist and renounce capitalism by all its very successful fruits. They are confused over the nature of capitalism itself, as maybe should not be so unappreciated or unexpected since it has been buried for some decades now. 

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The Fog – Comprehending the Invisible Hand | Armstrong Economics

The Fog – Comprehending the Invisible Hand | Armstrong Economics.

Fog

COMMENT: I just wanted to thank you for all your charts and explanations of what was taking place on the DOW this week.  I have been reading your work for the past five years and I appreciate that you make this available for everyone.  I am trying to understand what is coming our way and what I need to do to help my family.  Sometimes I feel overwhelmed and in a thick fog.

The other day I was at the beach engulfed in this  surreal fog.  It captures what I feel so often.  I know you like to use visuals in your blog so I am sending this picture to you
if it can be of any help.  Thanks again for all your hard work.
Sincerely,
ID
REPLY: The free markets are truly infallible for they tell you what the future will be. The key is to listen and to grasp the body language of the market movements. I have stated history repeats because the passions of man never change. This also applies to market movements. We are setting the stage for the bond bubble. We are going to see a major crisis in government that will make your head spin. This is where the risk truly lies. Each 8.6 year wave produces a major high bit in a different sector or region. This wave is the high in bonds and it is precisely on time.

 

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Olduvai IV: Courage
In progress...

Olduvai II: Exodus
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