The Other Side of the Transaction

To call enterprise a risk is really to understate the problem, writes Jeffrey Tucker. Entrepreneurs have a special capacity to discern the uncertain future but they possess no power to actually create that future. It could be that tomorrow morning, no one will show up at the grocery store. That could persist through the afternoon, and so on through the evening. The same could happen the next day and the next, until the company goes bankrupt. And how long will that take? It depends on how much money the owners are willing to lose in the course of betting on a profitable future. This crazy uncertainty of the future — a factor which we cannot overcome, no matter how much data we accumulate or how many fortune tellers we call upon — is a universal condition, always maddening and infuriating but completely unsolvable. It doesn’t change for rich or poor. The largest corporation and the smallest lemonade stand face this trial in precisely the same way. Neither knows what the future truly does hold.

Ron Paul vs. the Fed et al.

For 94 years, Americans were supposed to be awed and bored by the central bank, and pay no real attention to the greatest counterfeiting machine in the history of the world. Yet Ron has made an issue, and a huge one, out of the Federal Reserve and its destructivism and business cycles. Last month, 2,000 University of Michigan students cheered his calls for sound money by chanting “Gold, Gold, Gold.” And last night, as he was walking through National Airport, a man with a British accent approached him.

GG on Capital

Sorry to revisit the same topic so shortly, but in that same AA edition cited in my previous post, I simply cannot praise Garrett’s piece, entitled ‘Mythologies of Reconversion’, enough. This is not just a witheringly effective dismissal of the central planner’s and inflationist’s folies de grandeur, but one of the most evocative treatments you could wish for of what that much-misunderstood word ‘capital’ really means.

The World That Might Have Been

One great discovers another: Garet Garrett reviews two books by Ludwig von Mises in this newly discovered essay from 1945. Garrett writes: Ludwig von Mises writes tragedy in the language of political economy. There is in man the very principle of frustration. Once, and perhaps for the first time, he did find the right way. Beginning with the optimistic social philosophy of 18th-century liberalism he discovered the solutions of the free market, free competition, free private enterprise — that is to say, capitalism — and how at the same time to put government in its place. After that he had only to go in a straight line toward a world of peace and unlimited plenty. For a while he did go in a straight line and there was the 19th century, in which political freedom and material well-being advanced together, inseparably and wonderfully. But the government, which he had put in its place, began to overtake him, offering to do him good and to help him on his way.

Protectionist Rhetoric Will Accelerate the Dollar’s Slide

Pat Buchanan’s recent attempt to diagnose the sinking dollar demonstrates that ignorance of basic economics is not limited to the Left, writes David Veksler. Buchanan points out the plummeting value of the dollar relative to other currencies and major commodities such as gold (up 24% this year) and oil (up over 50% in 12 months). He then declares that “the prime suspect in the death of the dollar is the massive trade deficits America has run up” to “maintain her standard of living and to sustain the American Imperium.” This diagnosis offers a tantalizing glimpse of the truth, yet shatters it with protectionist bromides. The primary reason for the growth of the $9 trillion federal debt is the so-called “War on Terror,” including the spending on Homeland Security, Afghanistan, and Iraq. Unless you believe these funds averted an economic meltdown due to terrorism, these funds represent a near-total loss. Tanks, bombs, and bureaucratic paper pushers consume vast funds, yet they contribute nothing to the economy, aside from benefiting military contractors. This economic destruction is one of the biggest reasons for the declining dollar.
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