Home » Posts tagged 'Richard M. Ebeling'

Tag Archives: Richard M. Ebeling

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Central Banking Is Central Planning

Central Banking Is Central Planning

At a time when the appeal of and demands for a new “democratic” socialism seem to have caught the imagination of many among the young and are reflected in the promises of a good number of political candidates running for high office, there is one already-existing socialist institution in America with few opponents: the Federal Reserve System.

The fact is, central banking is a form of central planning. The Federal Reserve has a legal monopoly over the monetary system of the United States. It plans the quantity of money in circulation and its availability for lending purposes; and it sets a target for the annual rate of price inflation (currently around 2 percent), while also intentionally influencing interest rates, affecting investment spending, and supporting full employment. Almost all discussions and debates concerning the Federal Reserve revolve around how it should undertake its monetary central planning: which policy tools should be used, what target goals should be aimed for, and who should be in charge of directing America’s central bank.

Federal Reserve Independence in the Trump Era

A complementary issue that has received renewed attention concerns the question of how much “independence” the Federal Reserve and other central banks should have to determine and implement monetary and interest rate policy. This has recently come to the fore due to comments made by President Donald Trump concerning Federal Reserve interest rate policy and the individuals he has recently proposed for positions on the Federal Reserve Board of Governors.

Several times over the last year, President Trump has expressed irritation and frustration with increases in market rates of interest under the Federal Reserve Board leadership of Jerome Powell, who Trump nominated for Fed chairman and who has held that position since February 2018. 

 …click on the above link to read the rest of the article…

Debts and Deficits are Out of Control

Debts and Deficits are Out of Control


Understandably, the problems and politics of the moment dominate the news and attract the attention of most policy commentators and much of the public. Will there be another government shutdown, will House Democrats attempt to impeach the president, will interest rates remain low, and will there be a trade war with China? But there are longer-term problems as well, and one of them is the rising U.S. national debt due to annual government budget deficits as far into the future as the eye can see.

The Congressional Budget Office (CBO) recently issued its latest “Budget and Economic Outlook”projection, covering the next decade, 2019-29. And it is not a pretty picture. As of the beginning of February 2019, the cumulative federal government debt is approaching $22 trillion. This comes out to a per capita burden of nearly $67,000 for all those residing in the United States, and about $179,500 per U.S. taxpayer.

The CBO predicts that between 2019 and 2029, the government’s gross national debt will increase to almost $33.7 trillion because of annual budget deficits that beginning in the years immediately ahead will be over $1 trillion a year all the way to 2029 and will continue that way for every year after that to 2049 in the CBO’s much longer-term forecast. 

Not that the Congressional Budget Office’s projections will be right on target. The report admits that the agency has been wrong in its past forecasts. But virtually always its error has been to underestimate the growth in the federal government’s deficits and debt. So, if its track record follows form, when 2029 rolls around and the coming 10 years are looked back on, the national-debt problem may very well be noticeably worse than the CBO is currently anticipating.

 …click on the above link to read the rest of the article…

The Dangers of Totalitarian Planning, Past and Present

Liberty is a delicate idea and institution. While people say they want freedom, fight under the banner of freedom, and even sometimes die for its preservation and advancement, determining what it actually means to be free and to live in a free society seems often elusive and controversial.

What it means for a society to be free is, perhaps, easier to have a sense of when such a society is confronted with its clear opposite: tyranny. This is especially the case with the 1930s, when freedom seemed to be facing a mortal challenge with the rise of totalitarianism in the various forms of Soviet communism, Italian fascism, and German National Socialism (Nazism).

Totalitarianism Meant the Individual Got Lost in the Collective

Whether the totalitarian banners had written on them a call to class warfare (communism) or national conflicts (fascism) or racial wars (Nazism), all of them insisted on the end to individual liberty. The individual had neither rights nor areas of life outside of the control of the totalitarian state. The interests of the proletarian class, or the nation-state, or the “master race” came before the individual human being.

How and where you lived; what you worked at and the pay and benefits you might receive; the people with whom you could or had to associate; the books or newspapers you might read, or the music you could listen to, or the plays you could watch; the places to which you could go for any reason; and the quality and prospects of life — all these and many other aspects of everyday life were determined by the totalitarian state in which some people due to birth or circumstances found themselves living, and from which escape was often impossible without serious risk to one’s own life.

…click on the above link to read the rest of the article…

How Democracies Turn Tyrannical

How Democracies Turn Tyrannical

Both monarchs of the past and dictators more in the present have denied limits on their power to command and coerce those under their control.

For most of the last three centuries, the ideas of liberty and democracy have been intertwined in the minds of both friends and foes of a free society. The substitution of absolute monarchies with governments representative of the voting choices of a nation’s population has been considered part and parcel with the advancement of freedom of speech and the press, the right of voluntary and peaceful association for political and numerous social, economic and cultural reasons, and the guarding of the individual from arbitrary and unrestrained power. But what happens when an appeal to democracy becomes a smokescreen for majoritarian tyranny and coalition politicking by special interest groups pursuing privilege and plunder?

Friends of freedom, including many of those who strongly believed in and fought for representative and democratically elected government in the eighteenth and nineteenth centuries, often expressed fearful concerns that “democracy” could itself become a threat to the liberty of many of the very people that democratic government was supposed to protect.

The Tyrannies of Minorities and Majorities

In his famous essay “On Liberty” (1859), the British social philosopher John Stuart Mill warned that tyranny could take three forms: the tyranny of the minority, the tyranny of the majority, and the tyranny of custom and tradition. The tyranny of the minority was represented by absolute monarchy (a tyranny of the one) or an oligarchy (a tyranny of the few). The tyranny of custom and tradition could take the form of social and psychological pressures on individuals or small groups of individuals to conform to the prejudices and narrow-mindedness of wider communities who intimidate and stifle individual thought, creativity, or (peaceful) behavioral eccentricity.

…click on the above link to read the rest of the article…

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

Austrian Economics Is Essential to Understand Booms, Busts, and Money Itself

The boom-and-bust business cycle is a natural result of free-market capitalism, but rather of government intervention.

Looking to the next few years, will America and the world continue to ride a wave of economic growth, improved living standards, and technological changes that raise the quality of life? Or will this turn out to be, at least partly, an artificial economic boom that ends in another economic bust?

Reading the economic tea leaves is never an easy task. But the Austrian theory of the business cycle offers clues of what may be in store. In 1928, the famous Austrian economist Ludwig von Mises published a monograph called Monetary Stabilization and Cyclical Policy. It was an extension of his earlier work, The Theory of Money and Credit (1912).

Many things have happened, of course, over the last nine decades—the Great Depression, the Second World War, the Cold War, the end of the Soviet Union, roller coasters of inflations and recessions, replacement of gold with paper monies, the dramatic expansion of the welfare state, and an era of government debt fed by deficit spending to cover the costs of political largesse.

Then, as today, many governments were busy manipulating the supply of money and credit.

Yet, the laws of economics have not been overturned. As a result, like causes still bring about like effects. Minimum wage laws still price some workers out of the labor market whose value added to the employer is less than what the government dictates he must be paid. Rent controls and restrictive zoning laws create housing shortages when government interferes with market-based pricing.

Mises’ Monetary and Business Cycle Analysis Still Relevant Today

This is no less the case in the area of money and banking. When Mises published Monetary Stabilization and Cyclical Policy in 1928, most of the major countries of the world where still on some version of the gold standard.

…click on the above link to read the rest of the article…

America’s Great Depression and Austrian Business Cycle Theory

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…

America’s Great Depression and Austrian Business Cycle Theory

America’s Great Depression and Austrian Business Cycle Theory

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…

If Political Candidates Advocated Liberty

In modern democracies, political cycles never end. As soon as one election is over, those in government office or aspiring to such an office are already running for the next election. Having recently attended a public forum of state-level candidates looking to the 2018 election, I wondered what a real friend of freedom might say if he was offering himself for such a political office.

At a luncheon event several candidates running in the forthcoming Republican Party primary in South Carolina made their pitch as to why they should be their party’s nominees for state legislative offices in the next general election. They answered questions submitted by attendees at the lunch and made opening and closing statements about who they were and what they stood for.

Liberty Rhetoric, But Interventionist Policies

Not too surprisingly they all, in their respective ways, said they were “pro-business,” advocated lower taxes, a freer enterprise market environment, and greater transparent accountability by those in power in the state capital.

Why did each say they were running for elected office? They all had been in business but now wanted to “give back” and “serve” their communities.

What were major themes in many of the questions directed at them? South Carolina is a growing state with international corporations opening more manufacturing facilities, and matching this is an increasing population as more people move to the Palmetto State.

Those who submitted questions wanted to know what the candidates would do, if elected, about improving and widening road infrastructure to reduce increasing congestion, and how they would “manage” growth in the state? And what they might do in terms of taxes? There were other topics and issues, but these especially stood out.

…click on the above link to read the rest of the article…

This Is What a True Liberty-Loving Politician Would Look Like

This Is What a True Liberty-Loving Politician Would Look Like

What would a real friend of freedom say if he was offering himself for political office?

In modern democracies, political cycles never end. As soon as one election is over, those seeking office are already running for the next election. Having recently attended a public forum of state-level candidates looking to the 2018 election, I wondered what a real friend of freedom might say if he was offering himself for such a political office.

Liberty Rhetoric, But Interventionist Policies

At a luncheon event several candidates running in the forthcoming Republican Party primary in South Carolina made their pitch as to why they should be their party’s nominees for state legislative offices in the next general election. They answered questions submitted by attendees at the lunch and made opening and closing statements about who they were and what they stood for.

They all clearly believed that growth needed to be harnessed within “reasonable” rules and regulations.

Not too surprisingly they all, in their respective ways, said they were “pro-business,” advocated lower taxes, a freer enterprise market environment, greater transparency, and more accountability for those in power in the state capital.

Why did each say they were running for elected office? They all had been in business but now wanted to “give back” and “serve” their communities.

What were major themes in many of the questions directed at them? South Carolina is a growing state where international corporations are opening more manufacturing facilities, and, as more people move to the Palmetto State, it has an increasing population to match. Those who submitted questions wanted to know what the candidates would do, if elected, to improve and widen road infrastructure to reduce increasing congestion, and how they would “manage” growth in the state?

…click on the above link to read the rest of the article…

Even Advanced Technology Cannot Explain Human Action or Predict Markets

Even Advanced Technology Cannot Explain Human Action or Predict Markets

The logic of the human mind will prevail over paternalist dictates and the hubris of the social engineers.

For more than a century, the world has been caught in the grip of social engineers and political paternalists who are determined to either radically remake society along collectivist lines or to modify the existing society with regulatory and redistributionist policies that are in accordance with “social justice.” Both are based on false conceptions of man and society.

One of the leading voices who challenged twentieth-century social engineers and statists in the twentieth century was the Austrian economist, Ludwig von Mises. In such important works as Socialism (1922), Liberalism: The Classical Tradition (1927), Critique of Interventionism (1929), Planning for Freedom (1952), and in his monumental treatise, Human Action (1949; 1966), Mises demonstrated the economic unworkability and unintended negative consequences that result from attempts to impose central planning on society, as well as the social quagmire brought about by introducing piecemeal regulations and interventions into the market economy.

But it was in his often-neglected work, Theory and History: An Interpretation of Social and Economic Evolution, that Ludwig von Mises systematically challenged the underlying philosophical premises behind many of the socialist and interventionist presumptions of the last one hundred years. This year marks the sixtieth anniversary of the publication of Theory and History in 1957, so it seems worthwhile to appreciate Mises’s arguments and their continuing relevance for our own time.

The Elusive Search for Meaning and The Rise of Modern Science

The world is a confusing and uncertain place. We all live in communities with values, traditions, customs, and routines for daily life. We have grown up in them and tend to take certain aspects for granted. Our communities provide us with degrees of orienting certainty and predictability in our everyday affairs. Yet they still fail to answer a variety of “big questions.”

…click on the above link to read the rest of the article…

Neoliberalism Was Never about Free Markets

Neoliberalism Was Never about Free Markets

From the beginning, it was about watering down classical liberalism.

One of the most accusatory and negative words currently in use in various politically “progressive” circles is that of “neoliberalism.” To be called a “neoliberal” is to stand condemned of being against “the poor,” an apologist for the “the rich” and a proponent of economic policies leading to greater income inequality.

The term is also used to condemn all those who consider the market economy to be the central institution of human society as being against “community,” shared caring, and concern for anything beyond supply and demand. A neoliberal, say critics, is one who reduces everything to market-based dollars and cents and disregards the “humane” side of mankind.

The opponents of neoliberalism, so defined, claim that its proponents are rabid, “extremist” advocates of laissez-faire, that is, a market economy unrestrained by government regulations or redistributive fiscal policies. It calls for the return of the worst features of the “bad old days” before socialism and the interventionist-welfare state attempted to abolish or rein in unbridled “anti-social” capitalism.

The Birth of Neoliberalism: Walter Lippmann and a Paris Conference

He warned of the complementary danger from “creeping collectivism” in the form of the regulatory and interventionist policies.

The historical fact is that these descriptions have little or nothing to do with the origin of neoliberalism, or what it meant to those who formulated it and its policy agenda.  It all dates from about eighty years ago, with the publication in 1937 of a book by the American journalist and author, Walter Lippmann (1889-1974), entitled, An Inquiry into the Principles of the Good Society, and an international conference held in Paris, France in August of 1938 organized by the French philosopher and classical liberal economist, Louis Rougier, centered around the themes in Lippmann’s book. A transcript of the conference proceedings was published later in 1938 (in French) under the title, Colloquium Walter Lippmann.

…click on the above link to read the rest of the article…

“Liberal Socialism” — Another False Utopia

“Liberal Socialism” — Another False Utopiache2.PNG

Very often bad and failed ideas do not die, they simply reappear during periods of supposed social and political crisis in slightly different intellectual garb, and offer “solutions” that would merely help to bring about some of the very types of crises for which they once again claim to have the answers. Socialism in its various “progressive” mutations represents one of the leading ones in our time.

The latest manifestation of this appeared on August 24, 2017 in the New Republic online in an article by John B. Judis on, “The Socialism America Needs Now.” He is heartened by the wide appeal, especially among younger voters, that Bernie Sanders received during the 2016 presidential contest. He thinks that this may herald a rebirth and a renewed possibility for a socialist alternative to the current American political and economic system.

Having traveled over the decades from the 1970s to the present from being a radical, revolutionary socialist to a more “moderate” one today, Mr. Judis admits that the Marxian-style socialism of the nineteenth and the first half of the twentieth centuries is now long passé. The embarrassing experience of “socialism-in-practice” in the form Lenin and Stalin created in the Soviet Union or by Chairman Mao in China will not fly anymore.

From Soviet Central Planning to “Liberal Socialism”

Central planning seemed not to work too well, and the “communist” variation on the socialist theme also had a tendency to be “authoritarian” with some drawbacks for human life and liberty. (He tactfully avoids mentioning that Marxist-inspired regimes in the twentieth century murdered well over a 100 million people — with some estimates suggesting the number might have been closer to 150 million or more in the name of building the “bright, beautiful socialist future.” See my article, “The Human Cost of Socialism in Power”.)

…click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase