JEFF DEIST: Does economics need philosophy? The idea of a school of economics having a philosophical underpinning might strike some people as odd. Why should economists care about philosophy at all?

Money and Government: The Past and Future of Economics
Robert Skidelsky
Yale University Press, 2018
xiv + 402 pages

Listen to the Radio Rothbard version of this article.

I periodically explain that a European-sized welfare state can only be financed by huge taxes on lower-income and middle-class taxpayers.

Alienated America: Why Some Places Thrive While Others Collapse
Timothy P. Carney
Harper Collins, 2019
xiv + 348 pages

Timothy Carney, a researcher at the American Enterprise Institute and editor at the Washington Examiner, has a message of vital importance for supporters of the free market. This message is not, though, the only theme of his book. He pursues two other projects as well, also of interest, but for readers of The Austrian it is the first theme that demands our attention.

JEFF DEIST: Patrick Newman, I’ll start with the same question I asked Joe Salerno in his interview: how does a kid from New Jersey end up deciding to get a PhD in economics?

The European Central Bank continues to disproportionately inflate the debt bubble of the Eurozone, while the economic slowdown of the main European economies worsens. What was designed as a tool for governments to buy time in order to carry out structural reforms and reduce imbalances, has become a dangerous incentive to perpetuate the excessive spending and increase debt under two very harmful and wrong excuses: That there is no problem as long as debt is cheap and that there’s no inflation.

The current boom is heavily built on credit. This is because in today’s fiat money regime central banks, in close cooperation with commercial banks, increase the quantity of money by extending loans – loans that are not backed by ‘real savings’. The artificial increase in the supply of credit pushes market interest rates downwards – that is, below the levels that would prevail had there been no artificial increase in bank credit supply.

Every day, we as consumers, citizens, family members, and friends experience hundreds of examples of how our trust undergirds the world we live in, and how fragile the world can be when trust is violated or broken. We’ve all experienced relationships that have faltered and beliefs that have been challenged as the result of a moment that altered our trust in a person, institution, or even corporation. It’s something so basic that the average person likely spends little to no conscious thought about trust, and how it effects the efficiency of the world around them.