In early June, the failure of the Spanish bank Banco Popular seemed to work smoothly under the new European resolution rules. The relatively new Banking Union seemed to work in achieving its goal to limit moral hazard. Losses were imposed upon junior bondholders and shareholders whereas Spanish taxpayers did not pay a dime. Although there are many defects with the new resolution framework, it seemed to be a step in the right direction.
The economist David Henderson has called attention to an argument used by Milton Friedman to defend freedom. Henderson believes, in my view correctly, that the argument fails; and I would like here to examine it.
Friedman’s argument was offered in an interview conducted in 1974 by Reason magazine. Friedman states the argument in this way:
In a government-controlled healthcare system, the state determines who can receive treatment and when. This has long been admitted. But, what is less often discussed is that once a patient finds himself within a state-run healthcare facility, the state may deny him treatment — even if privately funded.
This was recently illustrated when Charlie Gard, a small child suffering from mitochondrial depletion syndrome, was denied privately-funded treament planned by his parents.
Capitalism is essentially a scheme for peaceful nations. What the incompatibility of war and capitalism really means is that war and high civilization are incompatible. — Ludwig von Mises
Peace is popular.
That was Ron Paul’s message to our audience in Texas earlier this spring, and it has been his consistent message since first running for Congress in the 1970s. So why do seemingly endless wars remain such a stubborn feature of the American presidency, with the shameful complicity of Congress?
In these last days science has retrograded and been driven back. It has been bent and twisted under the obligation imposed upon it, if I may so speak, of denying the existence of Evil under pain of being convicted of denying the existence of God.
Writers whose business it is to display exquisite sensibility, unbounded philanthropy, and unrivaled devotion to religion, have got into the way of saying, “Evil cannot enter into the providential plan. Suffering is no ordinance of God and nature, but comes from human institutions.”
Janet Yellen finally did it, mark the date June 27, 2017. Something all modern Federal Reserve chairs do: open mouth, insert foot. Tuesday in London Ms. Yellen announced the end of financial panics...well...at least while she’s alive.
“If steel and iron works, copper mines, and sawmills cannot be operated to their full capacity, the reason can only be that there are not enough buyers on the market ready to purchase their whole output at prices which cover the costs” wrote Ludwig von Mises in Human Action.1
Chapter 2. Society
1. The Nature of Society
The idea of human destiny dominates all the more ancient views of social existence. Society progresses towards a goal fore-ordained by the deity. Whoever thinks in this way is logically correct if, in speaking of progress and retrogression, of revolution and counterrevolution, of action and reaction he lays on these concepts the emphasis adopted by so many historians and politicians. History is judged according as it brings mankind nearer to the goal or carries it farther away.
2. The Division of Labour as the Principle of Social Development
We are still far from understanding the ultimate and most profound secret of life, the principle of the origin of organisms. Who knows whether we shall ever discover it? All we know to-day is that when organisms are formed, something which did not exist before is created out of individuals. Vegetable and animal organisms are more than conglomerations of single cells, and society is more than the sum of the individuals of which it is composed. We have not yet grasped the whole significance of this fact.
