In his various writings, Murray Rothbard argued that in a free market economy that operates on a gold standard the creation of credit that is not fully backed up by gold (fractional-reserve banking) sets in motion the menace of the boom-bust cycle. In his The Case for 100 Percent Gold Dollar Rothbard wrote,
An economy that only serves the prosperity of the protected top 5% is an economy doomed to rising inequality, stagnation and widespread social discontent.
If we seek a coherent context for the new year, we would do well to start with the foundations of widespread prosperity. While the economy is a vast, complex machine, the sources of widespread prosperity are not that complicated: abundant work and a low cost of living.
The four essays in this volume, each written by a major figure in the Austrian school of economics, set out and apply a distinctive theory of the business cycle. The span of years (1932–1970) over which they appeared saw a dramatic waxing and then waning of the prominence—both inside and outside the economics profession—of the Austrian theory.
An essential element of the “unorthodox” doctrines, advanced both by all socialists and by all interventionists, is that the recurrence of depressions is a phenomenon inherent in the very operation, of the market economy.
Colorado was among the four states where voters approved a minimum wage hike in November. Among the specific provisions for the new wage hike was the stipulation that tipped workers — such as waiters who receive tips and are paid below the standard minimum wage — will receive a mandated wage hike of 99 cents.
RELATED: “Four States Vote to Punish Low-Skilled Workers With Minimum Wage Hikes“
Between 2000 and 2008, two of the largest financial bubbles in history — in technology stocks and housing, respectively — suffered spectacular collapses. Opinions vary, but some market commentators believe at the peak of the tech bubble, total stock market capitalization exceeded 180% of US GDP.
Americans live in a world where regulation and taxation at multiple levels of government erode their ability to make choices for themselves. That is, we face constant government assaults on our property rights, as they increasingly limit owners’ power over their property. As James Fenimore Cooper could already write in 1838, “There is getting to be so much public right, that private right is overshadowed and lost. A danger exists that the ends of liberty will be forgotten.”
Happy New Year from the Mises Institute!
