Interventionism

Recorded at Mises University 2009.

As a result of his misunderstanding of economic theory, the Pope failed to see the connection between every depression we have experienced in modern times and governments' intervening in the free market — the very system that, if left free of distributive-justice actions on the part of governments, would guarantee the attainment of the common good.

An expansion of the money supply will cause discoordination, in the way that Mises, Hayek, and Rothbard have patiently explained — and Krugman has ignored. And if expansion proceeds by means of more bank credit, the upshot will be renewed malinvestment. To oppose monetary expansion is not moralism but simple common sense.

These transactions do suggest, however, that many aspects of labor market regulation may be unneeded.

When looking for a thorough and logically consistent analysis of broad market forces and the role of the Federal Reserve in promoting an unsustainable boom in long-term production, Tom Woods‘s Meltdown remains the best choice.

Within the space of days, we've been provided, courtesy of the Fed itself, with footage that perfectly distills the complete failure of Fed forecasting and planning, and audio that encapsulates splendidly the only thing that the Fed actually accomplishes: the destruction of money.

In the UK as well — thanks to nationalization, price controls, and government rationing of healthcare — thousands of people die needlessly every year because of shortages of kidney dialysis machines, pediatric intensive care units, pacemakers, and even x-ray machines. This is America's future, if "ObamaCare" becomes a reality.

To make things even worse, the unintended adverse consequences of government "solutions" undermine the premier example of unintended positive consequences in society — the "invisible hand" of market mechanisms that arise from self-ownership and lack of coercion.

I wonder if Paul McCulley has ever entertained the idea that massive fiscal and monetary bailouts actually retard recovery?

Almost invariably, furthermore, the union is not trying to discover the market rate, but to impose various arbitrary "principles" of wage determination, such as "keeping up with the cost of living," a "living wage," the "going rate" for comparable labor in other firms or industries, an annual average "productivity" increase, "fair differentials," and so forth.