Trade Deficits and Collectivism

Lately I’ve written several articles (1, 2, and 3) warning Austro-libertarians of a dangerous trend. I am concerned that many bona fide Rothbardians are so disgusted with fiat money and fractional reserve banking systems that they endorse criticisms of these institutions even when they are based on faulty economics. In particular, much of the handwringing over the large current account deficits in recent years would, if valid, be just as applicable to deficits arising in a purely free market.

The Tepid Movement Before Mises

What counted as radical market liberalism in the days before the Misesian revolution? B.K. Marcus considers a famous pamphlet by Milton Friedman and George Stigler. It was an attack on price controls called “Roofs or Ceilings.” It was fine as far as it went. But it also makes this claim: “Heavy taxation, governmental economies, and control of the stock of money are the fundamental weapons to fight inflation.” “Roofs or Ceilings” was a pale shadow of classical liberalism and a less than prestigious foreshadowing of the libertarian movement to come.

Bono the Capitalist Exploiter

Bono and his wife, Ali Hewson, have been traveling the globe endorsing their new clothing line, Edun. According to Bono’s mistaken economic theories, he is no champion of the poor in his own factory. These wages are incompatible with the message Bono and Ali are trying to portray. Bono speaks about creating a new business model that can be emulated by other companies. In fact, he is doing what others are doing and have done for a very long time, and it is good for everyone.

The Fallacy of Collectivism

According to the doctrines of universalism, conceptual realism, holism, collectivism, and some representatives of Gestaltpsychologie, society is an entity living its own life, independent of and separate from the lives of the various individuals, acting on its own behalf and aiming at its own ends which are different from the ends sought by the individuals. Then, of course, an antagonism between the aims of society and those of its members can emerge.

Don’t Sell Short Selling Short

Stockholders and managers of firms, whose interests lie in higher prices for what they own or manage, miss few opportunities to deride short sellers, writes Gary Galles. Regulators, whose blunders short sellers frequently reveal by discovering fraud that escaped their attention, respond similarly. That combination of interests helps explain why, at various times, short selling has been banned in many countries, including England, France and Japan. And yet, to attack or restrict short selling is then to restrict the market’s ability to elicit and integrate all available information.
Subscribe to