One of the areas of interest for me as I weaved my way through my ten years of formal post-secondary education (yes, I spent the entire decade of the 1980s pursuing four degrees at several different universities; some of it part-time as I waffled between education and full-time work for relatively good pay in a grocery store) was that of epistemology (the nature and origins of ‘knowledge’). It was likely the result of some of my required readings: Stephen Jay Gould’s Ever Since Darwin, Thomas Kuhn’s The Structure of Scientific Revolutions, and Clifford Gertz’s The Interpretation of Cultures. Regardless, I ended up exploring (outside of my regular classes) such topics as deconstructive criticism, hermeneutics, and philology; interesting topics for someone who ended up teaching elementary school students (10 years) and as a school administrator (15 years).
Upon reflection, this exploration of how humans come to ‘know’ what they know (or at least what they believe) has led me to be rather skeptical of dominant narratives, especially of ‘authority figures’. My challenging of ‘authority’, as it were, may have come somewhat ‘naturally’ given I grew up in the household of a police officer. Not that I consider my dad to have been ‘authoritarian’, not at all, but the somewhat ‘natural’ pushback children can give to parents was slightly coloured in our household by the simple fact that my dad was a sociocultural authority figure on top of his role as a father.
Anyways, I believe I have always questioned to a certain extent the ‘popular’ stories we are exposed to. And as I’ve read more widely over the years, I’ve come to hold that these stories tend to always play to the pursuits of the people that dominate society’s economic and power structures. Reading Edward Bernays’ Propaganda, Murray Rothbard’s Anatomy of the State, and Noam Chomsky’s Hegemony or Survival: America’s Quest for Global Dominance has certainly solidified that feeling. In fact, I’ve come to believe that the primary motivation of our ruling elite is the control/expansion of the wealth-generating/extraction systems that provide their revenue streams. Everything they do serves this purpose in one way or another. Everything.
As Chomsky makes clear in Hegemony or Survival, one of the dominant concerns of the ruling elite is controlling the masses. Without such control, their power and privilege is at risk since the masses far, far outnumber the elite.
Rothbard argues in Anatomy of the State even just simple, passive resignation by the people that the status quo structures are inevitable is enough to sustain them. To ensure such acceptance, the State employs ‘opinion molders’ to justify/rationalise/persuade the population of the beneficence of the ruling elite and that some alternative is far worse.
In Propaganda, Bernays sets out arguing that democracies being so complex require an unseen group of people to guide their ideas and beliefs so as to ensure cooperation. It is this special cadre that directs what stories/narratives are to be believed that is the real ruling power in a society, not its politicians. And, of course, Bernays became an important part of the US Empire’s storytelling to market geopolitical ‘interventions’ as adventures in nation building and spreading democracy.
So, narrative control is essential to maintaining power and privilege. One of the growing ways of controlling the narrative in a world of social media and non-mainstream/corporate digital news is to ‘disprove’ alternative stories. One of the more recent forms of such control has been the phenomenon of ‘fact checking’. Fact checking has been marketed as a form of objective and investigative research into claims disseminated by others. If one can ‘check’ the ‘facts’ and show them to be biased, prejudiced, misinformed, misguided, purposely false, etc., then one’s own narrative can be shown to be ‘true’ and ‘factual’.
It would appear, however, that the ‘fact-checking’ narrative itself is beginning to fray quite openly, perhaps reinforcing the accusation by some that the process of ‘fact checking’ is far more about giving the appearance of objective support for dominant/mainstream storylines (virtually always in favour of the power and economic structures that favour the ruling elite) rather than actually providing ‘factual’ buttressing of well-documented and evidentiary arguments.
Although you will have some difficulty finding the following stories in most (all?) mainstream/corporate media outlets (this is one of the ways legacy media censures stories; they simply don’t report on them at all or very marginally— see the organisation Project Censored for ongoing examples), there is increasing exposure that ‘fact checking’ is nothing more than another tool in the toolbox of narrative control/propaganda used by the ruling elite.
In a lawsuit by journalist John Stossel, Facebook has defended its ‘fact checking’ by claiming that the third-party fact checkers it uses are merely the ‘opinion’ of the fact checkers it depends upon and thus protected under the U.S.’s First Amendment. It’s ‘opinion’ not actually ‘factual’ so the lawsuit is frivolous.
In another accusation of wrong-doing, the British Medical Journal (BMJ) has written an open letter to Mark Zuckerberg of Facebook/Meta calling the censorship and flagging of some of their work very problematic. In fact, the editors of the journal called Facebook’s fact checking: “inaccurate, incompetent, and irresponsible.” Facebook/Meta has yet to reply.
We have a long-time journalist standing up to the fact-checking process and Facebook defending itself by stating these ‘fact checks’ are really just the opinion of others. Followed by a well-respected medical journal challenging Facebook’s fact checking as completely off-base and unfounded. Two pretty strong strikes against a powerful media’s supposed objective ‘fact checking’ and increasing censorship of non-mainstream stories.
I could go one with example after example of such blatant manipulation of narratives by our ruling elite and their so-called ‘fact checkers’ but what else is there to say? Except, if the mainstream/corporate media and/or government/politicians are pushing repeatedly a narrative (or purposely censoring one), then it likely serves the purpose of manipulating what you believe so as to maintain/expand the status quo power and/or economic structures of our society. Their stories, no matter the rationalisation/justification for them, should always be viewed critically and questioned. Chances are they are serving their narrow purposes, not the wider society’s.
I see this all the time in many of the energy/resource stories I read and the domineering economic paradigm through which the ‘facts’ are viewed at the expense of an ecological lens. And while there has been a growing incorporation of environmental/ecological concerns in the energy/resource narratives, it seems to me it’s more about crafting storylines that serve to leverage concern about natural limits to further expand wealth and control, and certainly not to address the notion that we can’t continue to pursue growth in any form in perpetuity without doing irreparable damage to the natural systems we depend upon for our very survival.
No, we can chase growth, employ everyone, and forever raise our standards of living by constructing ‘Net Zero’ buildings and electric vehicles, all powered by ‘clean/green’ energy, and living happily ever after. Comforting stories to be sure, but also ones that feed the insatiable profit-seeking of the ruling elite at the expense of the natural systems that provide our ability to be alive.
Infinite growth. Finite planet. What could possibly go wrong?
Today’s contemplation is prompted by an online media article that argues for cancelling Canada Day, our national ‘celebration’ for the day the nation state of Canada was ‘born’ (July 1, 1867). I raise this topic for the growing sense of ‘disappointment’ with our national government and, more generally, of all government/politicians. A feeling that seems to be fairly widespread around the globe and, of course, waxes and wanes depending on media attention and events.
Orlov argues that “my five stages of collapse…serve as mental milestones…[and each breaches] a specific level of trust or faith in the status quo. Although each stage causes physical, observable changes in the environment, these can be gradual, while the mental flip is generally quite swift” (p. 14).
Here are his five stages:
a) Financial collapse where faith in risk assessment and financial guarantees is lost.
b) Commercial collapse that witnesses a breakdown in trade and widespread shortages of necessities.
c) Political collapse through a loss of political class relevance and legitimacy.
d) Social collapse in which social institutions that could provide resources fail.
e) Cultural collapse that is exhibited by the disbanding of families into individuals competing for scarce resources.
The concept of the ‘nation state’ and how the ‘patriotism’ one feels towards it is manipulated by the-powers-that-be/elite/ruling class are interesting sociological/psychological areas to explore and reflect upon. One of the more interesting books/essays I have read about the ‘State’ is Murray Rothbard’s Anatomy of the State. This particular section has stuck with me:
“The State is almost universally considered an institution of social service…[and that] we are the government…[But] the government is not ‘us.’ The government does not in any accurate sense ‘represent’ the majority of the people…Briefly, the State is that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area…Having used force and violence to obtain its revenue, the State generally goes on to regulate and dictate other actions of its individual subjects…[Moreover, the] State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively ‘peaceful’ the lifeline of the parasitic caste in society…The State has never been created by a ‘social contract’; it has always been born in conquest and exploitation…While force is their modus operandi, their basic and long-run problem is ideological. For in order to continue in office, any government (not simply a ‘democratic’ government) must have the support of the majority of its subjects…[Thus] the chief task of the rulers is always to secure the active or resigned acceptance of the majority of the citizens…For this essential acceptance, the majority must be persuaded by ideology that their government is good, wise and, at least, inevitable, and certainly better than other conceivable alternatives…Since most men tend to love their homeland, the identification of that land and its people with the State was a means of making natural patriotism work to the State’s advantage.”
The ‘State’ works hard to legitimise its position and power (their primary motivation being the control/expansion of the wealth-generating systems that provide their revenue streams). For the most part, it ‘controls’ (or, at least, heavily influences) all of those aspects of society that help to do this: legislative powers, military/security, education, money creation/distribution, taxing power, communications/media, etc..
They constantly ‘market’ themselves as representative, transparent, responsive, responsible, accountable, etc. when, in truth, the exact opposite tends to (is always?) the case. When one scratches at the surface, even gently, of the facade of what we are told is true about our governments and ‘representatives’ we find an upside down world of corruption, nepotism, self-serving interests, and manipulation. But question the status quo belief system and you are often characterised as traitorous or a conspiracy theorist because the curtain can never be drawn aside to show the emperor has no clothes. The group think and reduction of cognitive dissonance that maintains the illusion is strong.
Don’t like what the government is doing? Go vote them out of office. Problem is, citizens have zero agency via the ballot box. Nothing ever changes. The system remains. It continues to extract wealth (in terms of labour and resources) and expand ruinous policies (both environmental and social). The rich and powerful continue to pull the strings of, well, virtually everything.
And this is not some new historical phenomenon. The ‘evolution’ of complex societies and the hierarchical power structures/sociopolitical systems that develop in response to the growth of populations has often (always?) been dominated by a certain ‘caste’ of people who find themselves ‘above’ the others. This is particularly true as the society gets larger (both in numbers of citizens and geographic size) and ‘representatives’ lose touch with the ‘average’ person, socialising primarily within an echo chamber of sycophants and like-minded/educated people. As the saying goes: power corrupts; absolute power corrupts absolutely.
I’ve come to the conclusion that government, especially big government, is virtually the last place I am going look to for leadership, virtue, or even just common sense since their motivation is to subjugate the majority of us to serve their interests and that of their close supporters (primarily the rich and influential financiers), not mine, my family’s, or my community’s.
It is also important for the State to inculcate in its subjects an aversion to any “conspiracy theory of history;” for a search for “conspiracies” means a search for motives and an attribution of responsibility for historical misdeeds. If, however, any tyranny imposed by the State, or venality, or aggressive war, was caused not by the State rulers but by mysterious and arcane “social forces,” or by the imperfect state of the world or, if in some way, everyone was responsible (“We Are All Murderers,” proclaims one slogan), then there is no point to the people becoming indignant or rising up against such misdeeds. Furthermore, an attack on “conspiracy theories” means that the subjects will become more gullible in believing the “general welfare” reasons that are always put forth by the State for engaging in any of its despotic actions. A “conspiracy theory” can unsettle the system by causing the public to doubt the State’s ideological propaganda.
This essay represents a “conspiracy theory” (or better, a conspiracy hypothesis) about the uses of the term “conspiracy theory” itself. I acknowledge that the term is one of the most potent epithets that can be hurled at a writer or speaker, that it is mostly used to delegitimize and dismiss its target, and that it serves not only to discredit the claim that a writer or speaker makes but also the very investigation into purported conspiracies. The phrase represents a condensed, shorthand means of labeling a claim negatively and humiliating the claimant, disqualifying the claimant and the claim a priori. Likewise, in writing of the “conspiracy” behind the use of the phrase, I am hereby opening myself up to the charge of “conspiracy theory.”…
…click on the above link to read the rest of the article…
For most economists there is the need to keep the so-called economy along the path of a stable economic growth and a stable price inflation. One of the reasons for the possible deviation of the economy from the stable growth path is a change in the demand for money. If the authorities failing to make sure that an increase in the demand for money is accommodated by the corresponding increase in the supply of money this could result in the economy deviating from the path of stable economic growth and stable inflation. Hence, it is imperative for the central bank to make sure that the growth in the supply of money is in tandem with the growth rate of the demand for money in order to maintain economic stability.
Note that on this way of thinking, a growing economy requires a growing money stock, because economic growth gives rise to a greater demand for money. Failing to accommodate a strengthening in the demand for money could lead to a decline in the prices of goods and services, which in turn will destabilize the economy and lead to an economic recession.
Since growth in money supply is of such importance, it is not surprising that economists are continuously searching for the right, or the optimum, growth rate of the money supply.
Some economists who are the followers of Milton Friedman – also known as monetarists – want the central bank to target the money supply growth rate to a fixed percentage. They hold that if this percentage maintained over a prolonged period it will usher in an era of economic stability.
The idea that money must grow in order to sustain economic growth gives the impression that money somehow sustains economic activity.
…click on the above link to read the rest of the article…
Growing stock market volatility is increasingly reminding investors of downturns that twice crashed valuations by more than 50% since the turn of the century. Many Americans remain perplexed as to why the economy appears to teeter perennially on the brink.
A small group of radical economists, followers of the late Ludwig von Mises, think they know why.
“Conventional economists believe that free markets cause booms and busts,” said George Bragues, an adjunct professor at the University of Guelph-Humber, who will be speaking at the International Conference of Prices and Markets taking place in Toronto this weekend.
“That’s only partially true,” said Bragues . “There is a good argument that governments themselves, more specifically central-bank driven borrowing, are the biggest creators of economic euphoria and subsequent depression.”
Do governments cause depressions?
Von Mises’s free-market ideology— so radical it makes the American Republican party look communist—is almost completely ignored by governments, ivy league university economics departments and central banks.
However, that ignorance comes at a price.
Today, the ghost of Von Mises’s ideas haunts much of the planet, where governments have quietly, often secretly, fostered colossal debt bubbles that will almost be impossible to deflate without calamity.
Von Mises’s suggestion that credit bubbles are the key drivers of booms and depression, broadly known as the Austrian Business Cycle Theory, was first outlined in his 1912 book Theory of Money and Credit.
Murray Rothbard built on this theory in his own 1963 work America’s Great Depression, which provided a convincing case study on how the U.S. government fueled the 1920s stock market expansion, collapse and the ensuing spillover effects.
Mises’s out-of-the-box works are particularly important as the planet inches towards peak debt and what the IMF warns could be an impending depression, because populist socialist politicians such as Bernie Sanders will almost certainly blame the free markets.
…click on the above link to read the rest of the article…
According to modern economics, various ideas that we have established about the world of economics emanates from historical data. By inspecting the data, an economist forms a view regarding its behavior. As long as the theory seems to explain the data, it continues to be regarded as valid. Once it fails to adequately explain the data it is replaced by a new theory. Note that on this way of thinking a theory is derived from the data.
According to most experts, the sharp increase in the living standards in the western world in the past few hundred years could be attributed to the accumulation of technical knowledge.
This conclusion was reached by observing that for the thousands of years most people lived in great poverty, but since the 18th century there was a massive increase in prosperity, which economists attribute to the sharp increase in technical knowledge. (See McCloskey https://www.youtube.com/watch?v=1bmXI_pt9fQ)
Given this way of thinking it is not surprising that Paul Romer, this year’s Nobel Laureate in economics has concluded that the heart of economic growth is the result of an expansion in technical knowledge.
According to Mises,
Experience of economic history is always the experience of complex phenomena. It can never convey knowledge of the kind the experimenter abstracts from a laboratory experiment.[1]
To make sense of the data an economist must have a theory, which stands on its own feet, and did not originate from the data. By means of a theory, an economist could scrutinise the data and could try to make sense of it.
The key ingredient of such a theory is that it must originate from something real that cannot be refuted. A theory that rests on the foundation that human beings are acting consciously and purposefully fulfils this.
…click on the above link to read the rest of the article…
The week-long deification of the late John McCain was quite the deep-state performance: Three “state funerals”(in Phoenix, D.C., and Annapolis) accompanied by the constant clucking of the “mainstream” media about how the epitome of a deep-state insider — son and grandson of U.S. Navy admirals, mass murderer of Vietnamese peasants, “Keating Five” criminal conspirator, friend of “the right kind” of Middle East terrorists, lifelong government employee whose senate office was ground zero for defense industry lobbyists for the past several decades — is somehow an anti-establishment “maverick.” The televised sobbing of the very appropriately named Senator Jeff Flake was rich, as were proposals to name a government building after McCain and the seemingly endless feigned sorrow in the voices of television talking heads.
Deep state propagandists and their media apologists apparently believe that a dead politician can be worth his weight in gold if a big enough spectacle of lies and superstitions can be concocted after the “great man’s” demise and used in support of the current regime. As Murray Rothbard argued in an essay entitled “The Nature of the State,” “it is precisely the function of the State’s ideological minions and allies to explain to the public that the Emperor does indeed have a fine set of clothes . . . The age-old success of the ideologists of the State is perhaps the most gigantic hoax in the history of mankind.”
As with so many other statist stunts and superstitions, it all started with Lincoln. As Larry Tagg wrote in his book, The Unpopular Mr. Lincoln: The Story of America’s Most Reviled President, during his lifetime Lincoln was by far the most hated and despised of all U.S. presidents but became a “sudden saint” in death.
…click on the above link to read the rest of the article…
In the New York Times article on March 27, 2018 – Immaculate inflation strikes again – Paul Krugman argues that those economists who are of the opinion that the key factor that causes inflation is increases in money supply are very wrong. According to Krugman, the key factor that sets in motion inflation is unemployment. Whilst a decline in the unemployment rate is associated with a strengthening in the rate of inflation an increase in the unemployment rate is associated with a decline in the rate of inflation.
Note that for Krugman inflation is about general increases in the prices of goods and services, which we suggest is a flawed definition. To ascertain what inflation is all about we have to establish how this phenomenon emerged. We have to trace it back to its historical origin.
The essence of inflation
The subject matter of inflation is an act of embezzlement. Historically inflation originated when a country’s ruler such as king would force his citizens to give him all their gold coins under the pretext that a new gold coin was going to replace the old one. In the process, the king would falsify the content of the gold coins by mixing it with some other metal and return diluted gold coins to the citizens.
On this Rothbard wrote,
More characteristically, the mint melted and recoined all the coins of the realm, giving the subjects back the same number of “pounds” or “marks”, but of a lighter weight. The leftover ounces of gold or silver were pocketed by the King and used to pay his expenses.[1]
On account of the dilution of the gold coins, the ruler could now mint a greater amount of coins and pocket for his own use the extra coins minted. What was now passing as a pure gold coin was in fact a diluted gold coin.
…click on the above link to read the rest of the article…
Contrary to the popular way of thinking, we suggest that there is nothing wrong with declining prices. What signifies industrial market economy under a commodity money such as gold is that prices of goods follow a declining trend.
According to Joseph Salerno,
In fact, historically, the natural tendency in the industrial market economy under a commodity money such as gold has been for general prices to persistently decline as ongoing capital accumulation and advances in industrial techniques led to a continual expansion in the supplies of goods. Thus throughout the nineteenth century and up until the First World War, a mild deflationary trend prevailed in the industrialized nations as rapid growth in the supplies of goods outpaced the gradual growth in the money supply that occurred under the classical gold standard. For example, in the US from 1880 to 1896, the wholesale price level fell by about 30 percent, or by 1.75% per year, while real income rose by about 85 percent, or around 5 percent per year.[1]
In a free market the rising purchasing power of money i.e. declining prices, is the mechanism that makes the great variety of goods produced accessible to many people. Obviously, in a free market economy it does not make much sense to be concerned about falling prices.
On this Murray Rothbard wrote,
Improved standards of living come to the public from the fruits of capital investment. Increased productivity tends to lower prices (and costs) and thereby distribute the fruits of free enterprise to all the public, raising the standard of living of all consumers. Forcible propping up of the price level prevents this spread of higher living standards.[2]
For most economic commentators a general fall in prices is always “bad news” for it generates expectations for further declines in prices and slows down people’s propensity to spend, which in turn undermines investment in plant and machinery.
…click on the above link to read the rest of the article…
When Murray Rothbard’s America’s Great Depression first appeared in print in 1963, the economics profession was still completely dominated by the Keynesian Revolution that began in the 1930s. Rothbard, instead, employed the “Austrian” approach to money and the business cycle to explain the causes for the Great Depression, and to analyze the misguided and counterproductive policies that were followed in the early 1930s, which, in fact, only intensified and prolonged the economic downturn.
To many of the economists in the early 1960s, Rothbard’s “Austrian” approach seemed out-of-step with the then generally accepted textbook, macroeconomic approach that focused on a highly “aggregate” analysis of economic changes and fluctuations on general output and employment as a whole. There was also the widely held presumption that governments could easily maintain economy-wide growth and stability through the use of a variety of monetary and fiscal policy tools.
Mises, Hayek and the Austrian Theory of Money and the Business Cycle
However, in the early and middle years of the 1930s, the Austrian explanation of the Great Depression was at the forefront of the theoretical and policy debates of the time. Ludwig von Mises (1881-1973), first developed this “Austrian” theory of the causes of inflations and depressions in his book, The Theory of Money and Credit (1912; 2nd revised ed., 1924) and then in his monograph, Monetary Stabilization and Cyclical Policy (1928).
But its international recognition and role in the business cycle debates and controversies in the 1930s were particularly due to Friedrich A. Hayek’s (1899-1992) version of the theory as presented in his works, Prices and Production (1932) Monetary Theory and the Trade Cycle (1933), and Profits, Interest and Investment (1939). A professor of economics at the London School of Economics throughout the 1930s and 1940s, Hayek was, at the time, considered by many to be the main competitor against John Maynard Keynes’s “New Economics” that emerged out of Keynes’s 1936 book, The General Theory of Employment, Interest and Money.
…click on the above link to read the rest of the article…
The capitalist system is a great engine of human prosperity.
When Murray Rothbard’s America’s Great Depression first appeared in print in 1963, the economics profession was still completely dominated by the Keynesian Revolution that began in the 1930s. Rothbard, instead, employed the “Austrian” approach to money and the business cycle to explain the causes for the Great Depression, and to analyze the misguided and counterproductive policies that followed in the early 1930s, which, in fact, only intensified and prolonged the economic downturn.
To many of the economists in the early 1960s, Rothbard’s “Austrian” approach seemed out-of-step with the then generally accepted textbook, macroeconomic approach that focused on a highly “aggregate” analysis of economic changes and fluctuations on general output and employment as a whole. There was also the widely held presumption that governments could easily maintain economy-wide growth and stability through the use of a variety of monetary and fiscal policy tools.
We can now see that it represented the revival of the “Austrian” monetary tradition in the post-World War II period.
However, in the early to mid-1930s, the Austrian explanation of the Great Depression was at the forefront of the theoretical and policy debates of the time. Ludwig von Mises (1881-1973) first developed the “Austrian” theory on the causes of inflations and depressions in his book, The Theory of Money and Credit (1912; 2nd revised ed., 1924) and then in his monograph, Monetary Stabilization and Cyclical Policy (1928).But the Austrian theory’s international recognition and role in the business cycle debates and controversies in the 1930s were particularly due to Friedrich A. Hayek (1899-1992). His version of the theory was presented in his works, Prices and Production (1932), Monetary Theory and the Trade Cycle (1933), and Profits, Interest and Investment (1939).
…click on the above link to read the rest of the article…
The notion that we must ‘support our troops’, that we must be ‘patriotic’ towards our nation state and its military because they are fighting for our freedoms and democracy is at a minimum misguided and more egregiously a manipulated conditioning by the state.
The idea that military ‘interventions’ are necessary to maintain our freedom or expand democracy ignores the evidence that the invasion and occupation of foreign sovereign states is motivated by imperial expansion to control fundamental resources (e.g. fossil fuels) and sustain or improve financial/economic hegemony (i.e. maintain the US petrodollar as the world’s premier reserve currency).
War is racket as US Marine Corps Major General Smedley Butler argued[1]. It serves the financial interests of the State oligarchs. The State, however, must persuade the masses that this is not the case. It must have the support of the people for the political class to remain in their privileged positions and avoid blowback from the citizens over which they rule.
As Murray Rothbard argues in The Anatomy of the State[2]
“[t]he State is almost universally considered an institution of social service…[and that] we are the government…[But] the government is not ‘us.’ The government does not in any accurate sense ‘represent’ the majority of the people…Briefly, the State is that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area…Having used force and violence to obtain its revenue, the State generally goes on to regulate and dictate other actions of its individual subjects…[Moreover, the] State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively ‘peaceful’ the lifeline of the parasitic caste in society…The State has never been created by a ‘social contract’; it has always been born in conquest and exploitation…While force is their modus operandi, their basic and long-run problem is ideological. For in order to continue in office, any government (not simply a ‘democratic’ government) must have the support of the majority of its subjects…[Thus] the chief task of the rulers is always to secure the active or resigned acceptance of the majority of the citizens…For this essential acceptance, the majority must be persuaded by ideology that their government is good, wise and, at least, inevitable, and certainly better than other conceivable alternatives…Since most men tend to love their homeland, the identification of that land and its people with the State was a means of making natural patriotism work to the State’s advantage.”
The State uses this patriotic ‘feeling’ to convince its citizens that any ‘attack’ is upon them and not upon the ruling caste. Any war between rulers thus becomes a war between people, with the masses defending the rulers in the misguided belief that they are defending themselves and certain ideologies.
In Hegemony or Survival[3], Noam Chomsky argues that Empire (the American one in particular) attempts to maintain its hegemony through military, political and economic means, demonstrating a total disregard for democracy and human rights in the process. He goes on to provide evidence that ‘preventative’ wars by the current global superpower are often used to keep potential/imagined threats from ever reaching a stage where they become real threats to its hegemony.
There is also increasing evidence that, in fact, the State’s citizens have far more to fear from its own government with regard to a loss of freedoms and erosion of democracy than some concocted threat from outside its own borders. The mass surveillance programmes revealed by NSA insiders, undermining of elections, and constant devaluation of currency/purchasing power comes to mind.
To once again quote Murray Rothbard:
“The greatest danger to the State is independent intellectual criticism; there is no better way to stifle that criticism than to attack any isolated voice, any raiser of new doubts as a profane violator…[and] to depreciate the individual and exalt the collectivity of society…[In fact,] the State must nip the view in the bud by ridiculing any view that defies opinions of the mass…Thus, ideological support being vital to the State, it must unceasingly try to impress the public with its ‘legitimacy,’ to distinguish its activities from those of mere brigands.”
The State, therefore, relies upon and manipulates its citizens’ very emotional notion of ‘patriotism.’ It uses it to maintain and expand its control of resources (both physical and financial) both domestically and abroad. And those who question or challenge it are branded treasonous and attacked/ostracised in any number of ways. Questioning is not allowed.
Most economists believe that a growing economy requires a growing money stock, on grounds that growth gives rise to a greater demand for money, which must be accommodated.
Failing to do so, it is maintained, will lead to a decline in the prices of goods and services, which in turn will destabilize the economy and lead to an economic recession or, even worse, depression.
Since growth in money supply is of such importance, it is not surprising that economists are continuously searching for the right, or the optimum, growth rate of the money supply.
Some economists who are the followers of Milton Friedman – also known as monetarists – want the central bank to target the money supply growth rate to a fixed percentage. They hold that if this percentage is maintained over a prolonged period of time it will usher in an era of economic stability.
The idea that money must grow in order to sustain economic growth gives the impression that money somehow sustains economic activity.
According to Rothbard,
Money, per se, cannot be consumed and cannot be used directly as a producers’ good in the productive process. Money per se is therefore unproductive; it is dead stock and produces nothing[1].
Money’s main job is simply to fulfill the role of the medium of exchange. Money doesn’t sustain or fund real economic activity. The means of sustenance, or funding, is provided by saved real goods and services. By fulfilling its role as a medium of exchange, money just facilitates the flow of goods and services between producers and consumers.
Historically, many different goods have been used as the medium of exchange. On this, Mises observed that, over time,
…click on the above link to read the rest of the article…
In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard, the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote:
I therefore advocate as the soundest monetary system and the only one fully compatible with the free market and with the absence of force or fraud from any source a 100 percent gold standard. This is the only system compatible with the fullest preservation of the rights of property. It is the only system that assures the end of inflation and, with it, of the business cycle. (1)
Murray Rothbard was convinced that we should return to a sound monetary system based on the market-chosen money commodity gold. Note that the use of gold as money as such cannot keep banks from issuing fiduciary media (a.k.a. uncovered money substitutes). The important thing is therefore that the monetary and banking system are free. A free banking system will develop along sound lines of its own accord, not least because banks have to continually clear transactions between each other and will tend to shun overextended lenders. A free market monetary/ banking system would likely be different from today’s system in numerous aspects, but it would be just as sophisticated and efficient. Most importantly, it would be economically sound and the likelihood that severe business cycles emerge would be vastly lower. Photo via mises.org
Some economists such as George Selgin and Lawrence White have contested this view. In his article in The Independent Review George Selgin argued that it is not true that fractional-reserve banking must always set in motion the menace of the boom-bust cycle. According to Selgin:
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According to the Austrian Business Cycle Theory (ABCT) the artificial lowering of interest rates by the central bank leads to a misallocation of resources because businesses undertake various capital projects that prior to the lowering of interest rates weren’t considered as viable. This misallocation of resources is commonly described as an economic boom.
As a rule businessmen discover their error once the central bank—that was instrumental in the artificial lowering of interest rates—reverses its stance, which in turn brings to a halt capital expansion and an ensuing economic bust.
From the ABCT one can infer that the artificial lowering of interest rates sets a trap for businessmen by luring them into unsustainable business activities that are only exposed once the central bank tightens its interest rate stance.
Critics of the ABCT maintain that there is no reason why businessmen should fall prey again and again to an artificial lowering of interest rates.
Businessmen are likely to learn from experience, the critics argue, and not fall into the trap produced by an artificial lowering of interest rates.
Correct expectations will undo or neutralise the whole process of the boom-bust cycle that is set in motion by the artificial lowering of interest rates.
Hence, it is held, the ABCT is not a serious contender in the explanation of modern business cycle phenomena. According to a prominent critic of the ABCT, Gordon Tullock,
One would think that business people might be misled in the first couple of runs of the Rothbard cycle and not anticipate that the low interest rate will later be raised. That they would continue to be unable to figure this out, however, seems unlikely. Normally, Rothbard and other Austrians argue that entrepreneurs are well informed and make correct judgments. At the very least, one would assume that a well-informed businessperson interested in important matters concerned with the business would read Mises and Rothbard and, hence, anticipate the government action.[1]
…click on the above link to read the rest of the article…
Murray Rothbard was convinced that we should return to a sound monetary system based on the market-chosen money commodity gold. Note that the use of gold as money as such cannot keep banks from issuing fiduciary media (a.k.a. uncovered money substitutes). The important thing is therefore that the monetary and banking system are free. A free banking system will develop along sound lines of its own accord, not least because banks have to continually clear transactions between each other and will tend to shun overextended lenders. A free market monetary/ banking system would likely be different from today’s system in numerous aspects, but it would be just as sophisticated and efficient. Most importantly, it would be economically sound and the likelihood that severe business cycles emerge would be vastly lower. Photo via mises.org
