Some economists, such as Finn Kydland and Edward C. Prescott (KP)—the 2004 Nobel Laureates in economics—believe that a major cause behind economic boom-bust cycles is technology shocks. In order to validate this view, KP employed the Solow growth model (Robert Solow, the 1987 Nobel Laureate) which, in turn, is based on the Cobb-Douglas production function of the following type:
Y=A*K(1-α)*Nα
The prominent international commentator Saifedean Ammous wrote a very didactic article where he claims that Milei has used Austrian economics as a cover to run one of the most inflationary presidencies in the long history of high inflation in Argentina. He wrote, “. .
When asked why he robbed banks, Willie Sutton reportedly said, “Because that’s where the money is.”
That wasn’t necessarily a wisecrack, and Sutton denied having said it, though late in life he admitted, if he had been asked, that likely would be his reply. Success for some is measured by the amount of money they have, and banks are known to have lots of it. For a bank robber, it’s a matter of switching ownership of it through a threatened act of violence.
“You can see the computer age everywhere but in the productivity statistics.” — Robert Solow, 1987
The dream of upward mobility has long anchored the economic fabric of society, but expanding webs of government regulation increasingly choke off the entryways to entrepreneurship. While massive corporations easily absorb the compliance burdens of dense legal mandates, small business creation faces a steep uphill battle against regulatory excess.
[This article is adapted from the final chapter of Raico’s book The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord Acton. The book was written as his PhD dissertation, under the direction of F.A. Hayek, and later published by the Mises Institute.]
