The Experiment

JetBlue has released a video of a social experiment they conducted mid-flight with 150 passengers. A JetBlue spokesman went on the plane’s intercom to announce that everybody on the plane had won a free round-trip flight to anywhere in the world on one condition: the passengers must unanimously decide on one single destination for their free trip.

When Murray Rothbard published his book America’s Great Depression in 1963, Keynesian economics ruled supreme. Monetarism had just begun its campaign to conquer the mainstream while Austrian economics had fallen into slumber. Rothbard’s analysis of the Great Depression was the second wake-up call for Austrian economics, after the American publication of Ludwig von Mises’s Human Action.

In the wake of numerous cases of lead poisoning through Flint, Michigan’s government-managed water supply, some commentators immediately began looking for ways to blame the private sector. Shortly thereafter, David Brodwin of U.S. News and World Report wrote “Flint: The Big Cost of Small Government.”

Economists have long argued that irresistible market forces will crush a cartel that inefficiently restricts supply and raises the price of a product. These forces are: (1) external competition from new entrants into the industry eager to profit by expanding supply and undercutting the high cartel price;  and (2) internal competition from smaller and more efficient members of the cartel who “cheat” by offering secret price discounts to buyers and covertly violating cartel production quotas to steal market share from the other members.

Although the causes of economic crises recurring throughout US history and often spreading worldwide can’t be proven using empirical means, oppressive government regulations favoring special interests in relevant industries have preceded every crisis.

When used properly, and when restrained by the prevalence of a relatively laissez-faire ideology, democracy can indeed work as a brake on government power. Like Claudio Grass — who believes that Switzerland employs elections relatively well in the service of hobbling government power — I agree this can be done.

The 20th century was the progressive century, marked by the rise of war and socialism as entrenched features of American life. But perhaps the most lasting effects will be felt in the entitlement mindset woven into the American psyche, via decades of successful incrementalism. 

There has been much head-scratching of late as to why, with interest rates lower than they have been since the Universe first exploded out of the Void, businesses are not undertaking any where near as much investment as was hoped for beforehand by the academic cabal whose “effective demand” and “transmission channel” fixations have helped drive rates to today’s mind-boggling levels.

In the latest episode of Mises Weekends, Jeff Deist discusses why we should celebrate the death of supposed “democratic consensus,” why the progressive left doesn’t care about winning votes, how the alt-Right turns identity politics against social justice warriors, and what libertarians should learn from populism and even demagoguery. See also Socialist Left vs. alt-Right: What it Means for Liberty.