There is a way out of the current economic mess, writes William Anderson: Stop the government merry-go-round. Malinvested resources must be permitted to be liquidated, government spending must be cut back, and the central bank must not try to "reflate" the currency or the stock market.
It was September 11, and panicked customers were flocking to the two gas stations Bobbie Jean Harvey owns near Midland, Mich., to top off their tanks in case the supply of gas was disrupted. It became apparent that sales on September 11 were going to be above average. In hindsight, however, Ms. Harvey wishes she had closed her stations.
Contrary to popular thinking, the stock market does not have causative powers as far as economic activity is concerned. The prices of stocks only reflect individuals' assessments of economic reality. And while individuals can change their evaluations of economic facts, writes Frank Shostak, they cannot alter the facts themselves.
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.
Capitalism is not so much a social system, writes Llewellyn Rockwell, but the natural result of a society wherein individual rights are respected, where businesses, families, and every form of association are permitted to flourish in the absence of coercion, theft, war, and aggression. In this way, and despite the current anti-business frenzy, capitalism is an indispensible expression of freedom.
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.
Argentina and now Brazil are the latest chapters in Latin America's long financial history of foreign debt and default, writes Antony Mueller. It is a consequence of bad policy, underwritten by international financial institutions and subsidized from a pervasive culture of debt.
Arbitration is under fire again, but it remains the best way to settle employer/employee disputes. It is more likely to protect the property rights of the parties to the lawsuit. Government courts, in contrast, principally benefit the lawyers and those who write the laws. Adam Young examines private-arbitration clauses.
American business, once held in high regard and master of all it surveyed during the frenzied booming 1990s, suddenly finds itself cast upon the rocks. The economic cycle of boom and bust is fascinating stuff. Its essential elements are repeated endlessly throughout the dusty pages of financial history. All of this makes Murray Rothbard’s book, The Panic of 1819, particularly interesting, timely, and enlightening.
The Austrian School of economics is known for its aversion to mathematical modeling of human behavior. The neoclassical mainstream, on the other hand, is quite fond of this approach, and uses the mathematical method for just about any problem. It is fair to say, writes Robert Murphy, that most mainstream economists would prefer the precision of a false formal model over the generality of a true verbal proposition.
