“Dreary as all get-out.” That’s how National Post columnist Chris Selley describes Canada’s 43rd federal election (October 21). He says “None of the above” (NOTA) should be on the ballot, and he’s right. NOTA should be on the ballot. But what if NOTA wins the election? Then what? Selley doesn’t say, but I will.
Politicians habitually promise us greater economic prosperity, but their official policies usually contradict their promises. And if you dare to point out this contradiction, you will be ignored, as happened recently in London, Ontario.
First, let’s consider the source of economic prosperity.
Profits are sales minus costs. The costs reflect expenditures of money made in the past, sometimes, as in the case of depreciation on buildings, decades in the past. In contrast, the sales reflect money spent in the present, or at least in the current year.
To the extent that the quantity of money and thus volume of spending in the economic system increase over time, sales increase correspondingly, which means that profits increase correspondingly, because the costs are determined by expenditures already made.
Consumers do not gain because there are many producers of the same good, the number is irrelevant. They also do not gain from firms competing with each other, their strategies matter little. Consumers gain from production directed toward value creation.
We have been taught that competition “is” many actors trying to do exactly the same thing, which “forces” them to outdo each other. But it is a simplification that gets very close to being a lie.
As a co-host (along with Tom Woods) of the podcast Contra Krugman, I spend a lot of my time contrasting the typical Keynesian approach with that of the Austro-libertarian. And as fun as that is, it’s even more interesting to show how Austrians differ from another market-friendly paradigm, namely the “Law & Economics” paradigm associated with the Chicago School and UCLA.
I haven’t run an empirical study on the number of articles published, but it sure seems like conservatives are writing more articles than usual condemning economic freedom, and the people who advocate for it. This would make some sense in the Age of Trump when the the president has pushed the right’s policy agenda more in the direction of protectionism and runaway federal spending that makes the Obama Administration look almost fiscally responsibly by comparison. The right wing no longer talks about cuts to social spending.
Attacks on economic freedom animate both the Bernie Sanders socialist left and the Trumpite protectionist right.
As I noted last week, some conservatives of late have become especially enthusiastic about attacking the freedom of Americans to buy and sell freely without government interference. In fact, these conservatives insist there is too much market freedom, and that this has led to the destruction of the middle class, and growing exploitation of the poor by the rich.
The Federal Reserve, through its president Jerome Powell, has indicated that it is preparing to increase its balance “organically”. The effort to separate this latest monetary policy change of course from a full-blown new QE (quantitative easing) is, at the very least, amusing. If we look at what is being discussed, it has nothing to do with organic expansion and looks a lot like a new repurchase program.
Recently, the BBC produced a radio series on “50 Things That Made the Modern Economy”. One episode focused on the economics of prohibition, crediting the work of Mark Thornton’s Economics of Prohibition for helping write the script for the show.
The episode is available here.
Dr. Thornton’s book is available here.
(Thanks to Bob Broadfoot for letting us know!)
