{"id":7899,"date":"2015-05-07T06:24:52","date_gmt":"2015-05-07T11:24:52","guid":{"rendered":"http:\/\/olduvai.ca\/?p=7899"},"modified":"2015-05-07T06:24:52","modified_gmt":"2015-05-07T11:24:52","slug":"the-problem-isnt-overproduction-its-malinvestment","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=7899","title":{"rendered":"The problem isn\u2019t overproduction; it\u2019s malinvestment"},"content":{"rendered":"<h3><span class=\"blue\"><a href=\"https:\/\/mises.ca\/posts\/blog\/the-problem-isnt-overproduction-its-malinvestment\/\" target=\"_blank\">The problem isn\u2019t overproduction; it\u2019s malinvestment<\/a><\/span><\/h3>\n<p>Mr. Max Ehrendfreund, writing in the Washington Post\u2019s Wonkblog, believes that he has discovered something new: that\u00a0<a href=\"http:\/\/www.washingtonpost.com\/blogs\/wonkblog\/wp\/2015\/04\/24\/wonkbook-the-global-economys-weird-problem-is-that-we-have-too-much-stuff\/?postshare=1711430407312041\">the world is producing too much<\/a>\u00a0and doesn\u2019t know what to do with it. His solution, of course, is to confiscate the overproduced products, such as oil and cotton, from its rightful owners and give it to the people who need it. This phony problem and its statist solution goes back at least as far at the 1930\u2019s socialist calls for \u201c<a href=\"http:\/\/en.wikipedia.org\/wiki\/Production_for_use\">production for use<\/a>\u201d vs. the hated capitalist concept of \u201c<a href=\"http:\/\/en.wikipedia.org\/wiki\/Capitalist_mode_of_production_(Marxist_theory)\">production for profit<\/a>\u201c.<\/p>\n<p>Mr. Ehrenfreund commiserates that a \u201csurplus\u2026challenges some basic principles of conventional economics\u2026\u201d. Ah, now we see why Mr. Ehrenfreund has a problem; he understands only \u201cconventional economics\u201d. Austrians have no such problem understanding why many commodities are currently in surplus. Our understanding of Austrian business cycle theory tells us that years of interest rate suppression by monetary authorities worldwide has disrupted the time structure of production; i.e., that artificially low interest rates have led entrepreneurs and their business partners to believe that sufficient resources exist for the profitable completion of longer term projects, such as increasing investment in oil and cotton production. Austrians do not contend that there cannot be a surplus of some goods. Of course, there can! But we know that a surplus of some goods means that there is a scarcity of others. Resources were \u201cmalinvested\u201d in some projects instead of those more urgently desired by the public.<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The problem isn\u2019t overproduction; it\u2019s malinvestment Mr. Max Ehrendfreund, writing in the Washington Post\u2019s Wonkblog, believes that he has discovered something new: that\u00a0the world is producing too much\u00a0and doesn\u2019t know what to do with it. His solution, of course, is to confiscate the overproduced products, such as oil and cotton, from its rightful owners and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5226,2125,111,202,498,5227,5223,5228],"class_list":["post-7899","post","type-post","status-publish","format-standard","hentry","category-economics","tag-austrian-business-cycle-theory","tag-austrian-economics","tag-capitalism","tag-deflation","tag-malinvestment","tag-max-ehrendfreund","tag-overproduction","tag-washington-post"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7899","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7899"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7899\/revisions"}],"predecessor-version":[{"id":7900,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/7899\/revisions\/7900"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7899"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7899"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7899"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}