Menger showed that value is the name of an attitude or disposition that a particular person adopts toward a good: he chooses to value it. Although Menger set economics on the path to a correct theory of value in 1871, writes Gene Callahan, ancient errors die hard. We can still find many erroneous conceptions of value in contemporary discussions of economic issues.
Many economists have suggested that the weakening in the US dollar could actually be good for the economy—since a weaker dollar will boost manufacturing production, which in turn will lift employment and all this will set in motion economic growth. Nonsense, says Frank Shostak: the emergence of competitive devaluations is the surest way of destroying the market economy and plunging the world into a period of crisis.
Economic libertarians focus on the fallacy of minimum-wage legislation because the issue serves as a window through which to observe the very soul of a policy world view. It is the pons asinorum of the relationship between economics and politics. If the free market works—meaning the existence of exchange under private property and contract enforcement—then there is no need for such laws.
Back when the pegged currency was deemed to provide the only bastion of stability during the Asian crisis, and hence, a stable economy for which to sell American goods, no one cared a whit about establishing a "free market" for the Chinese yuan. While no one is ever safe so long as Congress is in session and 1600 Pennsylvania Avenue is occupied, this administration's policy, more so than any other in recent history, has been "buy here, sell elsewhere."
At the Mises University, George Reisman explained why many countries often thought to be socialist, either now or in the past, such as Sweden, Israel, and Britain under the old Labor Party, should be thought of as hampered market economies instead. For production in those countries characteristically takes place, or did take place, at private initiative, motivated by private profit.
Deflation is usually thought to be a synonym for falling prices. There could be no more serious error in all of economics, writes George Reisman. Calling falling prices "deflation" results in a profound confusion between prosperity and depression. This is because the leading cause of falling prices is economic progress.
The critics of free trade persist in their insistence that permitting individuals in this country the freedom to invest where they please undermines the effectiveness of the U.S. economy and ultimately leads to a lower standard of living. The implication: Americans are better off only if everyone else in the world is poor. This flies in the face of sound economics.
The historical record shows that commercial freedom is the best policy in peace and war. Cooperation is more fruitful than coercion. And if one wants the friendship or assistance of others it is better to appeal to their interests instead of their fears. Above all, foreign trade should be as free and unrestricted as trade within a nation.
Drug reimportation is not a panacea, nor is it likely to have any long-term effect upon the rising costs of prescription drugs. It is at best a temporary fix for those most in need of lower priced drugs. What will have a lasting impact, however, is the extent to which the entirety of the Washington conservative and libertarian alliance was willing to bypass the larger issue of free trade.
The authors of the Time article are correct in that coming energy crises are brewing. However, they are wrong when they assume that such problems occur because of the ineptitude of capitalists and the lack of political will by members of Congress. Whether it be gasoline or the making of bread, the production of goods is best left to economic, not political entrepreneurship.
