Germany today, argues Frank Vogelgesang, is a country marked by often suffocating regulation, a social security system that lies like a wet blanket over the private sector, and a labor market in desperate need of breathing room. This goes against the kind of market economy envisioned by Ludwig Erhard after World War II, based largely on ideas of the Freiburg School with its intellectual roots in the Austrian School.
According to Ludwig von Mises, socialism was doomed to failure because the lack of private property, plus the absence of a profit and loss system, meant that accurate economic calculation would be impossible in those regimes. Instead of order, there would be chaos--something that was borne out time and again as we witnessed the poor performances of socialist economies.
A recent academic study by economists Karl Case, John Quigley, and Robert Shiller of consumer-spending behavior in the U.S. and 13 other developed nations indicates that the wealth effect from housing is twice as great on consumer spending as comparable changes in stock-market wealth. In the U.S., for example, they found that a 10-percent gain in housing prices would provoke an average 0.62-percent increase in consumption, while a similar jump in stock-market wealth only elicited about a 0.3-percent to 0.2-percent increase in spending (Barron’s, April 15, 2002).
The meltdown of liberty can be stopped. But it won’t be stopped until those who understand the problem speak out courageously against the clear and present danger, which is the state at war. It is a danger even if the state wins. As Mises says: “no citizen of a liberal and democratic nation profits from a victorious war.”
“To retaliate for wrong suffered, to take revenge and to punish, does satisfy lower instincts, but in politics the avenger harms himself no less than the enemy,” Mises wrote addressing Germany in Nation, State, and Economy (1919). “What would he gain from quenching his thirst for revenge at the cost of his own welfare?”
In a recent New York Times article, Hal Varian — a respected mainstream economist and textbook author — describes the contributions of Nobel Laureate John Nash:
So what did John Nash actually do? Viewers of the Oscar-winning film A Beautiful Mind might come away thinking he devised a new strategy to pick up girls.
One major reason people are not loyal to the principle of the right to private property is that they have a misconception of its main function. Many think only the wealthy benefit from it. And even if they do not have anything against being rich, they do have something against unfair legal advantages for those who are.
