It’s a fallacy to believe the US has a free market economy. The economy is run by a conglomerate of individuals and special interests, in and out of government, including the Deep State, which controls central economic planning.
The Chinese government has recently produced a lot of international news: the trade war with the U.S. government; the suspicious financing on Malaysia’s former corrupted ruling party; the suppression on Taiwan’s foreign and diplomatic space, etc.
No stranger to controversy, critically acclaimed rapper Kanye West has generated a whirlwind of media attention since returning to Twitter in late April .
One of the few things economists agree on is that prices are determined by supply and demand. This is summarized by means of supply and demand curves, which describe the relationship between the prices and the quantity of goods supplied and demanded.
Within the framework of supply-demand curves, an increase in the price of a good is associated with a fall in the quantity demanded and an increase in the quantity supplied. Conversely, a decline in the price of a good is associated with an increase in the quantity demanded and in a decline in the quantity supplied.
Trump is on a collision course with its trading partners: the U.S. trade deficit apparently proves that the U.S. is being fooled by its foreign trading partners. Its trading partners sell more to the U.S. than that they buy in return. Hence, Trump thinks that he can “win” a trade war by slapping on import tariffs until the trade deficit with any given individual country exactly equals zero. Any country that has a trade deficit with the U.S. is at risk of Trump’s insanity.
Many commentators are of the view that the US central bank should pursue policies that will prevent the possible decline of the economy into a liquidity trap hole. What is this all about?
In the popular framework of thinking that originates from the writings of John Maynard Keynes, economic activity is presented in terms of a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings.
As the Trump administration announces 25% tariffs on over $50bn of Chinese goods, and Europe and China prepare retaliation measures, The Economist concludes that “Rising tariffs are the worst of many threats to the world economy”, because, among other things, “Tariffs temporarily push up inflation, making it harder for central banks to cushion the blow.” This statement displays a deeply entrenched confusion—if not utter misunderstanding—of some basic economic concepts.
Mises Institute Associated Scholar has been named the BB&T Professor of Economic Freedom within the Johnson Center for Political Economy at Troy University. Dr. Manish, a former Mises Research Fellow, has been a member of the Troy faculty since 2012. His research focuses on Austrian economics, macroeconomic theory and development economics, and teaches a course on Advanced Austrian Economics for the university’s Masters program.
His Mises Institute work can be found here.
The term “cultural Marxism” has gained traction in recent years, usually employed pejoratively against young leftists and Social Justice Warrior ideologues. Like any such political pejorative, including those used by both the left and the right, the common rejoinder is that, by the overuse of the term, it has either been rendered meaningless or has always been without meaning.
