It is hard to understand the vague and ill-defined laws Martha Stewart and Sam Waksal are accused of violating. But the premise of the law is not hard to divine: Competition in capital markets must proceed from a level playing field. All investors are entitled to the same information advantage irrespective of effort and abilities. In a word, socialism!
The Socialist Calculation Debate did not end with the fall of the communist systems of the former U.S.S.R. and Eastern Europe, writes William Anderson. Socialism is alive and well today, and is still wreaking havoc wherever it is implemented. But there is an intellectual antidote to socialism: Austrian economics.
Nearly a lifetime ago, John Maynard Keynes launched his economic revolution, largely on the basis of his belief that interest rates do not do their job and that the market economy is inherently flawed by this shirking.
At a time when the foundations of freedom are again threatened by collectivist hysteria, we need more books like the new one by Ed Younkins, that do away with the fallacies and reaffirm the tenets of a "just and proper political and economic order that is a true reflection of the nature of man and the world properly understood."
News reports now indicate that WorldCom's overstatement of its profits in the last few years may exceed initial reports. But, writes George Reisman, whatever the ultimate figure may be—$7.1 billion or even $10 billion—it pales into insignificance in comparison with the overstatement of profits regularly engineered by the U.S. government.
Gregory Bresiger offers his compassion for the regulatory Quixotes, and says that it is time to think the unthinkable: Forget about the system of regulation; consign it to the garbage bin of history. Close down the SEC, along with myriad other regulatory bodies.
D.W. MacKenzie contrasts economic methodologies to show how Austrian economists employ sound theoretical concepts that guard against the wiles of political and ideological fashion. Data alone will not keep us grounded, while indulging in socialist fantasies end only in our sinking to the worst depths of poverty and despotism.
Errors are an inevitable part of human action, writes Gene Callahan. If the future were certain, we would not need to act. Yet many economic models assume all economic actors possess perfect information, all plans are coordinated, and all adjustments to new data are made instantly and without cost.
Popular thinking about economic growth is still strongly influenced by the productivity theory of capital, which presumes that capital engenders a yield like the fruits from a tree, writes Antony P. Mueller. If it were merely aggregate investment that mattered, economic development and continuous wealth creation would be child's play.
Despite its great appeal because of its simplicity, the supply-demand graphic as employed by mainstream economics is a tool that is detached from the facts of reality. The real-world economy is far too complex to be faithfully rendered on simple graphs that take no account of uncertainty, entrepreneurial speculation, and the ceaseless change of the market economy.
