Chapter 20: Deflation Reconsidered
This is an aspect of thinking which has been called “thinking the unthinkable,” deflation having had an extremely bad press everywhere. I want to reconsider the concept of deflation even though it is now unthinkable. After all, five to ten years ago the concept of default in New York was also unthinkable, and yet it has at least partially happened and hopefully will continue to intensify in the future.
Chapter 19: On the Definition of the Money Supply
The concept of the supply of money plays a vitally important role, in differing ways, in both the Austrian and the Chicago schools of economics. Yet, neither school has defined the concept in a full or satisfactory manner; as a result, we are never sure to which of the numerous alternative definitions of the money supply either school is referring.
Section IV: Money, Banking, and the Business Cycle
Chapter 18: Essentials of Money and Inflation
Money is a crucial command post of any economy, and therefore of any society. Society rests upon a network of voluntary exchanges, also known as the “free-market economy”; these exchanges imply a division of labor in society, in which producers of eggs, nails, horses, lumber, and immaterial services such as teaching, medical care, and concerts, exchange their goods for the goods of others.
Chapter 17: The Myth of Tax “Reform”
Everyone will agree that the American tax system is a mess. Taxes are far too high, and the patchwork system is so complicated that even IRS officials don’t understand it. Hence the evident need for some sort of dramatic, even drastic, reform. As often happens, a group of dedicated and determined reformers has arisen to satisfy that need. But before we embrace this new gospel, we should heed the old maxim about jumping from the frying pan into the fire, and also remember the warning of the great H.L.
Chapter 16: Outlawing Job: The Minimum Wage, Once More
There is no clearer demonstration of the essential identity of the two political parties than their position on the minimum wage. The Democrats proposed to raise the legal minimum wage from $3.35 an hour, to which it had been raised by the Reagan administration during its allegedly free-market salad days in 1981. The Republican counter was to allow a “sub-minimum” wage for teenagers, who, as marginal workers, are the ones who are indeed hardest hit by any legal minimum.
Chapter 15: The Union Problem
Labor unions are flexing their muscles again. Last year, a strike against the New York Daily News succeeded in inflicting such losses upon the company that it was forced to sell cheap to British tycoon Robert Maxwell, who was willing to accept union terms. Earlier, the bus drivers’ union struck Greyhound and managed to win a long and bloody strike. How were the unions able to win these strikes, even though unions have been declining in numbers and popularity since the end of World War II?
In 2008, the Federal Reserve began paying interest on reserve balances held on deposit at the Fed. It took more than seven decades from the US leaving the gold standard — in 1933 — for the fiat regime to do this and thus revoke a cardinal element of the old gold-based monetary system: the non-payment of any interest on base money.
[Excerpted from Notes and Recollections: With the Historical Setting of the Austrian School of Economics.]
When I first arrived at the University, Carl Menger was close to the termination of his teaching career. The idea that there was an Austrian School of economics was itself hardly recognized at the University, and I myself was not at all interested in it at that time.
Last week, I suggested that since Turkey seems intent on starting a war with the Russians, NATO might be wise to dump Turkey, or face war with Russia over a part of the world that is not European. This suggestion came out of no special animosity for the Turkish state, but for the fact that I oppose NATO in its current form, and it’s obvious that Turkey is the soft underbelly of NATO that should be exploited accordingly.
