If the part played by profits in the economy is found to be misrepresented for purposes of analytical tidiness, the need for correction is all the more urgent in an age of increasing recourse to government action. Inasmuch as realism in our economics points to the same need, it would be unwise to cling to any theory — no matter what its other attributes — which sacrifices this need for reasons of arbitrary neatness; more, it would be scientifically indefensible.

The bad economist sees only what immediately strikes the eye; the good economist also looks beyond. The bad economist sees only the direct consequences of a proposed course; the good economist looks also at the longer and indirect consequences. The bad economist sees only what the effect of a given policy has been or will be on one particular group; the good economist inquires also what the effect of the policy will be on all groups.

The interview on Brian Lamb is up!

In response to requests:

There are many factors behind the sharp increase in the oil price, but one is usually overlooked: it’s a bubble. Where bubbles appear in the market (think of housing and tech stocks, to name two in recent memory), you will find the hidden hand of monetary policy at work. This is an underlying issue that helps explain the price. Recognizing this also helps us make a better judgment concerning the future of the oil price as it relates to overall economic well-being.

The remnants of socialist central planning killed the kids. Yes, the government is to blame. The survivors and their families are right about that. But they have another enemy as well. It is the deadly ideology that set out to put government in charge of economic life, which includes building structures to house children for educational purposes. They can add the tragedy of the Xianjian Primary School to the list of deaths caused by socialism.

To get a taste of the approved “environmental education” activities of government bureaucrats, we can do little better than looking at a games website called “Planet Slayer,” recommended for children by various Australian governments. To assist in their “fun and games,” children are guided by the protagonist cartoon character, “Greena, the Worrier Princess,” who invites children to use the website’s Greenhouse Calculator to “find out what age you should die at so you don’t use more than your fair share of Earth’s resources.”

There are many striking examples of how transition can be effective, and many depressing ones on how transition has, in fact, stalled in the face of state intervention. While more research is needed, it is clear that the outcomes Austrians expect in all economies indeed hold true in transition economies as well. Given the results of the past 20 years, it is difficult for policymakers to argue that socialism can work here while it didn’t work there.