Having the Manhood To Be a Coward

Having the Manhood To Be a Coward

01/01/2019Jim Fedako

Words are funny. Strung together, they can have multiple meanings depending on the perceived context and reader’s viewpoint. I can make a statement with the intent to convey argument A, but the reader interprets my statement as not-A.

An example: Trotsky, in “What Next? Vital Question for the German Proletariat” (published as “How Mussolini Triumphed,” in Fascism: What it is and how to fight it, 1944), disparaged the Italian socialist, Turati, for saying, regarding the political battle with Mussolini’s fascist movement, “One must have manhood to be a coward.”

Given the context, it appears Turati spoke with a sense of irony, defending his political strategy. Trotsky subjected those same words to close reading in order to bolster his argument that the Italian socialist was retreating before the fascists. Turati claimed he had manhood, while Trotsky insinuated Turati was a coward.

Forgetting the internecine war among socialists, let’s examine Turati’s prescient claim in another context: the draft.

During my high school years , “Jimmy Carter signed Proclamation (Registration Under the Military Selective Service Act) in response to the Soviet invasion of Afghanistan in the previous year of 1979, retroactively re-establishing the Selective Service registration requirement for all 18- to 26-year-old male citizens born on or after January t, 1960.” This made me eligible for the draft upon turning 18.

But who was I going to fight – who was I supposed to slaughter, burn, maim, etc.? In 1981, as my eighteenth birthday approached, it looked like a hot war in Nicaragua or elsewhere was possible – actually, likely. That meant I could have ended up in uniform shooting peasant farmers whose political worldview disagreed with the then-current policies of the US government – policies that changed with elections. Today’s enemy could be tomorrow’s ally.

Regardless of the side, I could have been required to do the bidding of those in power, to bloody my hands and taint my soul. As a quasi-radical, or what went for a quasi-radical in middle class, suburban Pittsburgh in the early 1980’s, I would have none of it.

In those days, I was a Deadhead – a fan of the rock group, the Grateful Dead. Each Sunday evening, a true public radio station (i.e. non-government funded) had a show that replayed recordings of the band’s concerts. Either before that show or after it (l no longer remember) was another show where antiwar activists discussed the evils of US interventions overseas – this is back when there was a strong antiwar left. That program greatly influenced me. And when there was talk about conscientious objection to war, I listened.

Initially, upon turning 18, I refused to register. However, based on information from the radio show, as well as consultations with my church minister and the antiwar mother of a friend, I learned my best chance to not being forced to point a gun – ironically, at the point of a government bayonet – was to register, but register as a conscientious objector.

However, I did not write this article as a guide to registering as a conscientious objector today – there are many resources on the internet. Instead, I wrote it to discuss the Turati-Trotsky rhetorical divide and answer the question of whether it takes manhood to be a coward. My article is also meant to encourage today’s youth to stand for peace and not war.

To answer the coward question in the context of this article, I revised Turati’s statement to read, “One must have manhood to object to war.” Sadly, that is a true statement, with an unwillingness to fight perceived by many as a sign of cowardice. This is especially so given the lack of any antiwar movement outside of libertarianism.

If the government institutes the draft and your number comes up, are you prepared? If you believe war is wrong, you need to begin documenting those beliefs well in advance of a draft. That documentation will be the primary evidence on your side as you stand before the draft board. 

Nevertheless, if your number comes up, you will be called to “serve.” And you may not get that deferral. You may end up being forced to fight. lf you choose not to, you will likely end up in prison, which is not a coward’s path. Additionally, where you would have probably been placed in a non-frontline position (most soldiers are not even near the frontlines, never coming face to face with a person in a different uniform), your objection may put you on the line as an unarmed medic. Again, not a coward’s path.

Nevertheless, folks will call you a coward. But it also takes manhood to hold your ground in face of social pressure.

Luckily, there was no draft in the 1980’s and I never had to find out whether I would have held true to my ideals – whether I truly had manhood. But you, youth of today, may not be so lucky. Plan ahead. Political positions change. War may be nearer than thought. These words, spoken by former Prime Minister Henry Palmerstone in the British Parliament in 1848, are as true in the US today, “We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.”

And those interests may indeed lead to war.

Ask yourself whether you are willing to kill in an unjust war, whether decrees from the US government can provide sufficient moral justification for you to slaughter folks in Afghanistan or Nicaragua (in my day), or anywhere, and whether being called a coward is more frightening than selling your soul, so to speak.

For me the answer is no, but I am long past the draft age. What is your answer?

Think, consider, and act today!

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Does the US need a rate cut? No.

1 hour agoDaniel Lacalle

Consumer confidence is high, unemployment is low and Treasuries’ yield is at 2.1%, while credit to the economy and corporate financing are not suffering.

The weakness in core consumer prices in May, which increased by only 0.1 %, was entirely due to lower prices of used vehicles, and core CPI inflation remains within the Fed target, falling from 2.4% in mid-2018 to 2.0% in May. Headline CPI inflation fell to 1.8% in May due to lower energy prices, so there is absolutely no logic in a rate cut. With unemployment at 3.6%and annualized GDP growth expected to remain above 2.3%, demands for a rate cut are only an excuse to keep financial asset prices higher at any cost

There are some elements that point to a slight weakness in the economy but no need for a rate cut.

  • Industrial production rose 0.4% m/m in May while it stalled in other global economies.
  • A strong 0.5% rise in underlying retail sales in May, along with upward revisions to previous months’ gains which means consumption is likely to grow close to 4% annualized in the second quarter.
  • The headline confidence index declined marginally to 97.9 in June, from 100.0, but remains at very high levels.

A rate cut would only fuel the debt bubble further, and leave the Fed with fewer tools to address a slowdown. When so-called “High Yield” means 365 bps for junk bonds of companies close to bankruptcy and Treasuries yield 2.1% there is no reason at all to cut rates. Rather the opposite.

The debt bubble is dangerously inflated and lower rates would only make it worse. The ratio of US corporate debt to GDP, as well as the high-risk loan figure and securitized debt,  have risen to pre-crisis levels.  US deficit is rising because spending soars and the government finds debt cheap and abundant. Government spending rose to $440 billion in May 2019, up 21% from May of 2018. Yes, up 21% from May of 2018. All this despite record revenues. Receipts increased to $232 billion, up 7% from the same month last year.

A rate cut would only create a larger problem in the future. If the already dangerous corporate and sovereign debt bubble grow significantly more, no monetary policy will prevent a debt crisis.

Daniel Lacalle | Fed rate cut less likely than expected

Republished from DLacalle.com
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The Real Tragedy of the Tragic War Hero

06/15/2019Alan Mosley

If you take an hour drive down the I-65 corridor south from Nashville, Tennessee, you’ll find yourself in Columbia. My hometown isn’t quite as sleepy of a southern town as it used to be, much to my chagrin, but it’s still home nonetheless. The county seat of Maury, Columbia does have a handful of claims to fame to save itself from being a complete afterthought. If claiming a title means you get to keep it for all time, then I suppose it’s proper that Columbia still styles itself as the “Mule Capital of the World.” It’s been a century and change since the mule trade featured prominently in Columbia’s economy, but if a former president is still “Mr. President”, then I suppose Columbia is still “Mule Town”.

Don’t think for a second this isn’t an adequate cause for celebration. They’ll be putting on their 179th Annual Mule Day celebration, which is more appropriately titled Mule Days than Mule Day since it stretches nearly a week long, replete with fried foods, music, and even a parade down Main Street. While he wasn’t born there (Pineville, NC gets that honor), Columbia likes to pride itself as being the home of an American president. The James K Polk Home, the final residence of the nation’s 11th executive, sits a couple blocks down from the courthouse. It’s a museum now, among blocks of buildings that would make one think they had traveled back to the 19 th century were it not for a Dairy Queen.

Another notable Columbian is John Harlan Willis, whose name graces a Columbia bridge that crosses the Duck River. Nearly 40 of the 3,503 individuals who have been awarded the Congressional Medal of Honor are natives of Tennessee, and one of them is John Harlan Willis. Willis was born in Columbia in 1921. He graduated from my high school alma mater, Columbia Central, in 1940, only a short 64 years before myself. I remember walking every day by the display case, which contained his portrait. He was a baby-faced young man with a bit of a mischievous grin wearing his dark blue uniform. John wanted to become a doctor, as he was far more inclined to aid the ailing around him than to bring them to any harm. It was no surprise, then, that when the United States entered World War II, he found himself taking up the role of a Pharmacist’s Mate, First Class, in the U.S. Navy. Willis enlisted in 1940, receiving his naval recruit training at Naval Training Station in Norfolk, Virginia, before moving on to his hospital corpsman training at the Norfolk Naval Hospital in Portsmouth. By the onset of 1944, having spent most of the war learning the healing arts rather than combat, Willis was finally transferred to the 3 rd Battalion, 27th Marine Regiment, 5th Marine Division and sent to the Pacific theater. It was on Iwo Jima where, on the last day of February 1945, he would earn the Medal of Honor.

The official citation that accompanies Willis’s Medal of Honor reads like something straight from a Spielberg film. While in the process of aiding a number of his fallen comrades during the fierce fighting near the Japanese-held Hill 362, Willis was struck by shrapnel from a nearby grenade explosion and was ordered to abandon his charges back to the safety of an aid station. After receiving some bandaging for his wounds, but before being given leave to return to action, Willis made his way back to Hill 362 to resume treating marines who were suffering significant casualties. Then, while administering plasma to the wounded, Japanese forces began to litter his position with hand grenades. He picked up the first to land in close proximity and hurled it back at the foes atop the hill. He then grabbed another, and another, until he had returned eight grenades. It was the ninth grenade to come down upon him that he could not return in time; it exploded in his hand, killing him instantly. Inspired by the scene before them, Willis’s companions rallied from their entrenchment and, despite being outnumbered and charging uphill, they launched the attack that would ultimately repulse the enemy. The citation ends with the statement, “His exceptional fortitude and courage in the performance of duty reflect the highest credit upon Willis and the U.S. Naval Service. He gallantly gave his life for his country.”

While Willis was unquestionably selfless and heroic, I’m not so sure about that last assertion. Did John Harlan Willis really give his life for his country? Did he race back to the front, dodging fire and explosions, in order to please his country with his sacrifice, or rather that he could be the difference in his allies returning home safely? Perhaps we can find some answer in this photograph, which shows his widow Winfrey Willis holding her baby boy in one hand and taking her husband’s posthumous medal in the other from the Secretary of the Navy. Does Mrs. Willis look like a woman content to know her husband’s violent death somehow contributed to protecting America from an enemy it provoked in the first place, or rather a physically and emotionally exhausted single mother who would hand the medal right back if it meant little John could be hoisted in the air by his namesake? I tend to think if John were here today, he would tell you that, if indeed his life were destined to be extinguished on Iwo Jima that day, then he wasn’t giving his life for his country, but rather he was giving it to save his brothers in arms.

 John Harlan Willis was laid to rest at Rose Hill Cemetery, just a couple blocks north of the courthouse. He sits today among Civil War soldiers, a handful of congressmen, a senator, and even a NASCAR driver. The hallowed burial ground, the honors, the memorial halls at medical centers, and even the destroyer USS John Willis are a bad trade for a devoted husband and father. He wanted to become a doctor. It might be a stretch to hope that he would have cured cancer had he survived the war, though he would’ve been valued all the same. A man who would brave bullets and shrapnel time and again, practically defenseless, in order to give a wounded man some plasma sounds like someone who would’ve made for an excellent neighbor. But we’ll never know what sort of family the Willis’s could’ve produced, the kind of physician he could’ve become, nor the sort of compassionate presence he could’ve brought to the community. And so the real tragedy of the tragic war hero is not in what they managed to accomplish, but rather in what they were never afforded the chance to.

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Why Attacking Big Business Is Back In Vogue

06/12/2019Tom Chanter

"Progressive" politicians like Bernie Sanders, Alexandria Ocasio-Cortez, and Elizabeth Warren are becoming more fashionable, and it follows that attacking big business is back in vogue. “Political and academic progressives expand their frenzied attacks on ‘wealth’ and on the alleged transgressions of ‘big business,’” writes Dominick Armentano, Professor Emeritus in Economics at the University of Hartford.

What is it about human nature that drives these attacks? Perhaps we must look to Ludwig Von Mises for an answer. But first, we can get a general idea of how the anti-big-business impulse remains so popular by looking at the work of economist Tyler Cowen.

In April, Cowen published his latest book, Big Business: A Love Letter to an American Anti-Hero, documenting how “Most young Americans hold highly critical perspectives on capitalism.” Indeed, the Harvard Kennedy School produced a report on young adults, revealing 51 percent did not support capitalism. Furthermore, 33 percent endorsed socialism as an alternative.

Clearly, that 33 percent is ignorant to the Two Reasons Why Socialism Repeatedly Fails;

1) the impossibility of economic calculation without true market prices, and

2) the lack of an incentive to produce only what consumers actually want.

Nevertheless, support for socialism endures, and we don’t have to look further than our TV screens and Twitter to observe what may be the one of the key points of origin of this critical narrative against big business. Yet this negativity is driven by more than radical rhetoric from the left-wing media. The very nature of media coverage has an effect.

Cowen adds, “Virtually all media outlets have a significant bias toward negative news of all kinds, including news about business. So scandals, corruption, and abuse of workers all receive much more publicity than the normal, everyday massive successes of America’s major corporations. “Corporations had another stellar day producing things and keeping people employed,” just isn’t a great news headline.”

Furthermore, big business is blamed for the failings of big government. We need look no further than the Occupy Wall Street movement. As the angry masses protested on Wall Street, a more appropriate place to fight for freedom was a short walk away: three blocks north of Wall Street at 33 Liberty Street sits a brownstone building — the home of the Federal Reserve.

Yet, there was little interest in addressing the outsized role of the Federal Reserve in manipulating the global economy. This blind spot for the role of the central bank illustrates just how wrongheaded are many leftwing approaches to diagnosing the source of our economic problems. 

Protestors would do well to consult Austrian Business Cycle Theory which helps explain how the stock market crash and economic downturn were attributable not to "big business," but largely to a prior bank credit expansion by the Federal Reserve and the Fed-regulated banking sector.

Yet, anti-capitalist agitprop spreads through social-media like typhus through the Gulags, even though it is private capital and private business which has made social media possible.

This sort of thing is nothing new. As Ludwig Von Mises wrote, “All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out.”

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The War Crimes That Don't Get Punished

06/12/2019Ron Paul

Rep. Duncan Hunter (R-CA) found himself in hot water recently over comments he made in defense of Navy SEAL Edward Gallagher, who faces war crimes charges over his alleged conduct while serving in combat overseas. Gallagher is charged with stabbing a 15 year old ISIS member while in custody, of taking photos posing with the corpse of the teen, and with killing several civilians.

Defending Gallagher recently, Hunter put his own record up next to the SEAL to suggest that he’s an elected Congressman who has done worse things in battle than Gallagher.

That’s where Hunter’s defense earned him some perhaps unwanted attention. While participating in the first “Battle of Fallujah” in early 2007, by Hunter’s own account he and his fellow soldiers killed hundreds of innocent civilians, including women and children. They fired mortars into the city and killed at random.

In the sanitized world of US mainstream media reporting on US wars overseas, we do not hear about non-combatants being killed by Americans. How many times has there been any reporting on the birth defects that Iraqis continue to suffer in the aftermath of US attacks with horrific weapons like depleted uranium and white phosphorus?

Rep. Hunter described his philosophy when fighting in Iraq:

“You go in fast and hard, you kill people, you hit them in the face and then you get out…We’re going to hurt you and then we’re going to leave. And if you want to be nice to America, we’ll be nice to you. If you don’t want to be nice to us, we’re going to slap you again.”

This shows how much Duncan Hunter does not understand about war. When he speaks of hitting people in the face until they are nice to America, he doesn’t seem to realize that the people of Fallujah – and all of Iraq – never did a thing to the US to deserve that hit in the face. The war was launched on the basis of lies and cooked-up intelligence by many of the people who are serving in the current Administration.

And that brings us to the real war criminals. Rep. Duncan Hunter and his fellow soldiers may have killed hundreds of innocent civilians and even felt justified. Their superior officers, after all, established the rules of engagement. Above those superior officers, going up and beyond to the policymakers, the lie was sold to the American people to justify a war of choice against a country that could not have threatened us if it wanted to.

Vice President Dick Cheney knew what he was doing when he kept returning to the CIA headquarters, strong-arming analysts to make the intelligence fit the chosen policy. John Bolton and the other neocons knew what they were doing when they made claims about Iraq’s weapons of mass destruction they knew were false. The Pentagon’s Office of Special Plans played its role in selling the lie. So did the media.

Edward Gallagher will face trial and possibly jail for his actions. Rep. Duncan Hunter may even face punishment – though perhaps only at the ballot box – for his admitted crimes. But until those at the top who continue to lie and manipulate us into war for their own gain face justice, the real criminals will continue to go free and we will continue pursuing a suicidal neocon foreign policy.

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Judy Shelton's Remarkable Attack on the Fed

06/11/2019Jeff Deist

Judy Shelton's recent interview with the Financial Times is nothing short of remarkable. Her comments represent the most substantive attack on the Fed, and central banking generally, by any potential nominee to the Fed board in recent history. She not only challenges how Jerome Powell and Fed officials conduct monetary policy, but whether they can conduct it competently at all.  

Consider this salvo against the Fed's inescapable role as central planner:

How can a dozen, slightly less than a dozen, people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone?” Ms Shelton said. “If the success of capitalism depends on someone being smart enough to know what the rate should be on everything . . . we’re doomed. We might as well resurrect Gosplan,” she said, referring to the state committee that ran the Soviet Union’s planned economy.

And her attack on the Fed's outsized role in the economy:

She also said that the Fed should continue to reduce its balance sheet below the $3.5tn target set by Jay Powell, the chairman. “I would rather the Fed be less of an entity. When a central bank buys up government debt, that’s the beginning of compromised finances.”

She also recognizes malinvestment:

“It’s the distorting aspect of the Fed that is the worst aspect — it’s a wag-the-dog situation. People are fixated on the Fed and are making money by arbitraging, trillions of a second after the latest FOMC announcement,” she added.

And she isn't afraid to support a role for gold in monetary policy:

Ms Shelton has long been sympathetic to the gold standard, which the US fully abandoned in the early 1970s in favour of a flexible exchange rate for the dollar. “People call me a goldbug, and I think, well, what does that make them? A Fed bug,” she says.

"Fed Bugs"! Why didn't we think of this?

Shelton, who works as an economic adviser to Trump, is not an economist by training. Her PhD in business administration, from Utah State no less, is sure to draw jeers from the Ivy League central bank crowd. But it's Ivy League economists, after all, who created the last crisis in 2008. And needless to say they're sounding alarm bells about Mrs. Shelton. The worst offender is former Treasury official Larry Summers, who shamelessly calls Shelton "dangerous." 

Sorry, but a financial terrorist and chief architect of the weaponized derivatives market in the 2000s should have the simple decency to keep quiet and thank his lucky stars he's not in jail. 

Judy Shelton is not an Austrian. She appears mostly aligned with the supply-side camp of her longtime friend and mentor Larry Kudlow, who heads the Trump administration's (useless) National Economic Council. And her support for a modified gold standard rests on shaky ground, as she unfortunately favors a rules-based approach under which the Fed would target a dollar price for gold—what Joe Salerno refers to as "price-rule monetarism." 

So Shelton doesn't want to End the Fed. But in the parlance of woke America, she's an "ally." Recognizing the limits of central bank omniscience, and challenging its benevolence, are important first steps on the road to redeeming our money and our economy.   

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The Fed Has Lost Control

06/11/2019Doug French

The gold price shot up $50 in the last 30 days during a time of the year when the yellow metal typically lays down to begin its summer nap. At the same time, Bitcoin’s price has rose from its slumber. What’s up? Luke Gromen, founder of Forest for the Trees LLC , a macro/thematic research firm catering to institutions and individuals may have put his finger on it during his interview with Ed Harrison on Real Vision .

Gromen points out that something happened in the 4th quarter of last year and on March 20th of this year. Alarm bells have gone off at the Fed because for the first time in 70 years, government deficits matter. According to Gromen,

With Fed Funds went over interest on excess reserves, that was a sign that the United States government's deficits were getting so big and foreigners' interest in treasury bonds, because FX had yields, were so negative, though the interest from foreign private sector investors was so low, that we are crowding out our own banking system. And so, if the Fed does not inject a significant amount of dollar liquidity soon- be that via repo, be that via rate cuts, and I think you're going to be seeing QE probably in six to nine months at the latest.

From October through April , Uncle Sam’s outflow exceeded his inflow by $531 billion or 38% more than a year ago. Foreign central banks used to buy up US Treasuries like there is no tomorrow, but now, not so much. Late last year,

the hedging costs for foreign investors to buy US Treasuries went negative. In other words, for a Japanese or German private sector investor- and again, the US government's now critically reliant on foreign private sector investors to buy Treasuries, the yield FX hedged turn negative.

Last year the U.S. government issued $10 trillion worth of Treasuries, 70 percent of which have less than one-year maturities. This year it’ll be $11.5 trillion, again with 70 per cent maturing in less than 12 months.

The upshot of all this is

the Fed is losing control of [the] Fed Funds Rate at the short end because US deficits are growing as fast as they are. And because foreign official sector is not buying really at all on net. The foreign private sector is not buying enough, they are buying some unhedged but not nearly enough relative to the size of the deficits we're running.

The price of money is the Fed’s business and the gang at the Eccles Building has lost its grip according to Gromen, who believes, Powell has no choice but “to cede control over the quantity of money in order to control the price of money.”

A year ago, it was tighten, tighten, tighten, now three rate cuts are expected by the market by year-end. Gromen told Harrison that Trump’s tariffs matter some, but, it’s the deficits that really matter and are forcing the Fed’s hand.

And so, ultimately, what that suggests is that any rate cut you have because, again, the reason why all this is happening is US deficits are big and growing and structural. And they're crowding out the US private sector. And so, basically, the primary dealer of last resort, I think I saw someone say, or call it, the Fed is going to have to start bidding for these bonds again. So, I think it depends a lot on messaging on July- we were talking before, if they don't do what's expected, it's not going to be good for risk. But ultimately, they're going to have to unless they don't want to exist anymore.

We can be sure Chairman Powell will not want the Fed to vanish under his watch. He’ll be printing and bidding (for Treasuries). QE will return, along with a growing Fed balance sheet.

So what’s a person to do? Gromen sees more asset price inflation on the way and it will accelerate. In particular, he likes gold, both the barbaric version, and the electronic version, Bitcoin.

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Prices and Entrepreneurial Decision Making

Value is subjective. Prices are objective. Subjective value comes from the mind of the consumer, and influences market prices. When an actor chooses, he must forgo other choices, and he is demonstrating a preference for something, revealing part of the rankings of his values. Since perceived value relative to the actor’s value scale influences prices, then all prices are a result of human actions and choices on the market, caused by the actors' values. Tracing back price changes to human actions on the market is part of what an entrepreneur must do in order to understand the market better. Value travels up the structure of production, from the consumer goods to the producer goods. Tracing the implications of prices changes is part of what an entrepreneur does to understand his market.

Hayek calls prices signals. They are signals that are generated by the market through the market process, which is the interaction between buyers and sellers through their transactions with each other (supply and demand). These signals, in the form of prices and their changes, inform entrepreneurs about what's going on, and guide their actions, and this coordination mechanism is scalable and connects everyone. The market and its prices are all that are needed to coordinate a vast number of people's actions with precision. The entrepreneur doesn't need statistics to make a decision on what to invest in. An entrepreneur that doesn't understand this system is missing out on what's really going on and would be at a disadvantage. Austrian Economics with its deductive method, reveals to us the workings of this price mechanism through its theories and its methodology.

Rothbard said in a lecture (paraphrasing), "An entrepreneur knows more about his specific market than any economist or expert. The reason is that he has skin in the game. A lousy entrepreneur would quickly be eliminated from the market. There is a self-selecting process. The economist or expert has no skin in the game and isn't risking anything when he's wrong about the market." The key insight here is that the entrepreneur knows more than any expert about his specific market and its actors. The entrepreneur gets his information from multiple sources, and forms an outlook on what will happen. The entrepreneur may talk to suppliers, customers, friends, he may hear rumors, read news, from these he would construct a narrative, on top of this can use prices, changes in prices and check it against economic theory to see what's true. From all of this the entrepreneur forms his understanding. This understanding plus other things like intuition, gut feeling, that help the entrepreneur form judgments about the future and judge the best course of action in the present. The entrepreneur has to filter out of the noise what information is the most significant, the factors that will influence the future the most.

In understanding prices and tracing the causes of their changes, an entrepreneur can understand his market better. Prices can inform an entrepreneur about what's happening before journalists and news outlets catch on to it. Prices contain within them information, they are the final outcome of a process of buying and selling by many actors, prices are a kind of average of what all the actors think the price should be. Each good has its own price behavior, which is influenced by the good's physical properties, and other properties such as scarcity, it's perceived value, and finally fluctuations in supply and demand, and the behavior of buyers and sellers. Austrian Economics gives the entrepreneur a correct theory that can help the entrepreneur narrow down on what's happening in the market and gain superior understanding of his market. Knowledge of economics can't guarantee success, but it can bring increased awareness of what's going on underneath the numbers and prices. Eventually helping the entrepreneur gain a better understanding of the market, which means the values of the consumers and the actions of the other actors in the market.

Mises says, "The only source from which an entrepreneur’s profits stem is his ability to anticipate better than other people the future demand of the consumers.” Correctly anticipating the actions of market actors and anticipating future prices and preparing for that future state is what generates entrepreneurial profit.

Mises says, "Monetary calculation is the guiding star of action under the social system of division of labor. It is the compass of the man embarking upon production." Prices determine costs, and not the other way around. Prices are determined in the market. All internal costs should be benchmarked to the market prices in order to have the most accurate cost calculation. Monetary calculation includes retrospective accounting of profit and loss, and prospective accounting with its anticipated costs and anticipated profits. If prices change in the market then not only do the present and future look different, but also the past accounts of profit and loss look different. What worked at one time in the past under the cost structure of that time may not work again with current prices. Accounts give a feeling of certainty in their numbers, but they are static. They are an oversimplified static representation of an inherently dynamic phenomenon.

Austrian Economics can help an entrepreneur have a deeper understanding of his market and of accounting. This can help the entrepreneur in making better decisions out of this better understanding. Here we narrowly focus on prices and costs, but there are many other areas of Austrian Economics that are applicable and will be covered in future articles.

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Blue Laws Won’t Fill America’s Churches Again

06/10/2019Zachary Yost

In the age of Trump, many American conservatives are adopting populist positions. Policies that were once considered the right-wing status quo are being questioned and assailed, particularly when it comes to capitalism and markets.

Fox News personality Tucker Carlson is often on the front lines of this iconoclasm, with his regular diatribes against unfettered capitalism and financial elites. His voice is that of a growing traditionalist movement that has begun to vocalize their idealistic challenges to basic capitalist principles. These traditionalists want a larger role for religion in the public square. Unfortunately, they want the state to help facilitate this, and in seeking government’s help, they’re shooting themselves in the foot.

Recently, a great many traditionalists were up in arms over North Dakota’s repeal of its blue laws, which prohibited retail businesses from operating before noon on Sundays. Blue laws were once in place across the country and increasingly have been rolled back. Usually they take the form of bans on alcohol and retail sales, hunting, and certain other recreations.

In response to North Dakota’s repeal, Father Dominic Bouck, a Catholic priest in Bismarck, argued in First Things that the move will hurt the poor and even make the siren song of socialism more palatable to the tired and restless masses.

Without blue laws, Bouck contends that many workers “conscripted into hourly wage jobs” will be denied the ability to attend mass and enjoy holidays with their families. In Bouck’s words, “the legal protection of Sunday rest helps the individual worker and preserves the family from the arms race that is our consumer society.” He also cautions that the decline of blue laws has helped facilitate the rise of our hyper-consumerist culture and the tendency to view man as “the sum of his production and consumption.”

Bouck is onto something here. However, blue laws aren’t going to address his concerns.

Rest from work is crucial, and a person’s worth doesn’t stem from his ability to be a cog in the retail machine. This lack of regularized rest has doubtless contributed to the current increases in anxiety and depression. In 1843 Magazine, psychoanalyst Josh Cohen notes that “anxieties about burnout seem to be everywhere these days.” Coupled with this problem is a lack of togetherness and fellowship. Whereas Sundays have traditionally provided opportunities for families and friends to spend time together, Cigna reports that there’s currently an epidemic of loneliness in the United States.

There can be no doubt that most people would benefit from taking Sundays slowly and spending time with their friends, family, and God. However, reinstating blue laws won’t solve the problem. It’s completely off-base to attribute the dramatic decline in American churchgoing to the lack of legal prohibitions on Sunday work. According to Gallup, weekly religious attendance has been going down since the 1950s.

Ask a young person why he didn’t go to church last Sunday, and I doubt he’ll offer a work shift as the reason. More likely, you’ll hear that church isn’t relevant to his life.

As sociologist Robert Nisbet noted in his classic work The Quest for Community, the relevance of a social institution depends on its maintaining a function and fulfilling the needs of its members. As the centralized state has usurped more and more of the traditional functions of important mediating institutions such as the church and family, the relevance of those institutions has waned. Relying on the same state to rejuvenate church attendance would only further religion down the path of irrelevance and decay.

In his essay “The Balance of Power in Society,” sociologist Frank Tannenbaum discussed the importance of maintaining a balance in society between the various institutions that comprise it: the family, the church, the state, and the market. According to Tannenbaum, these institutions are frequently in conflict and constantly trying to encroach upon the territory of the others. This push and pull is natural, Tannenbaum says, and even healthy when it results in societal balance. Unfortunately, when one institution gains too much power, the result is usually chaos and disorder.

There’s no doubt that our society is woefully out of balance. Family and church are deprioritized in favor of the market and job concerns, and all three are dominated by the powerful centralized state. Many in our Western world see their primary value in their jobs to the neglect of other aspects of their lives. It’s this imbalance that traditionalists are getting at with their call for more blue laws. But legislation is a poor method of restoring balance and order to society because it fails to address the underlying issue: the values that motivate people’s actions.

In the long run, consumers determine the shape of the market, a concept known as consumer-sovereignty. As I’ve argued previously, it’s inaccurate to say that markets are responsible for the decay of community and family. Markets are merely a mirror of people’s values. Employers can’t actually force or “conscript” others into working for them, Father Bouck’s hyperbole notwithstanding. Although man must eat “by the sweat of his brow,” that does not mean he must let the world determine in what manner he will sweat. Employers only have as much power as their employees give them. It may be uncomfortable and inconvenient to resist, but no one is forced to worship mammon.

Blue laws are merely an attempt to make the already very low barriers to church attendance even lower—to match the low value people ascribe to it. That isn’t going to fix anything. Early Christians were martyred and fed to the Roman lions because they valued their beliefs even more than their lives, much like the merchant seeking the pearl of great price. Have contemporary Christians really fallen so far that they’re unable to organize their economic lives so they too can worship?

Republished with permission of the author
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Economics 101: More Wealth Means Less Poverty

06/10/2019Per Bylund

Tweeting about poverty and wealth1 is quite instructive. It's obvious that many feel very strongly about it yet know so little.

Consider what wealth is: it is to have the means to satisfy wants. Those means can be anything, including berries or fruits growing in the wild. But the vast majority of means are created. There are no hamburgers, iPhones, or houses growing on trees.

In other words, most means to satisfy wants were created. So wealth, generally speaking, is created.

Many appear confused by this rather obvious fact, or take offense by it being stated.

That is not only ignorant, but counter-productive: whoever does not believe that the means to satisfy wants (wealth) are created surely is not acting to create them. So we are missing out on a lot of wealth because of this ignorant view; our standard of living could be higher.

It should also be obvious that the creation of one means does not makes anyone poorer or, as some claim, that the creation of any means to satisfy a want "creates poverty."

Imagine two people living without any created means to satisfy wants: they are naked and without any wealth other than the occasional berry or fruit provided by nature. If Person One spends her day creating a shelter, this provides a means to satisfy a want. She is thus richer. Does that make Person Two poorer? No. That person's situation has not changed. If anything, there is now a shelter that could potentially be shared, and the knowledge of how to create one is now available. So if anything, Person Two is (slightly) richer too.

Sure, there is now inequality because person one has a shelter and person two does not. You may have the opinion that Person One must share this wealth or think it is okay for Person Two to use force to take that shelter away from Person One. But neither changes the fact that this wealth – the shelter – was created and that, as a result, there is now more wealth in the world.

More wealth means less poverty.

The distribution of wealth is an important issue that needs to be properly discussed, but it is separate from the fact that wealth is created. And it must be created before it can be "distributed." Anything else is nonsense.

Sure, critics may claim shelters are different from the things people want today. That, for example, iPhones etc. do not satisfy "real" wants. But that's also an issue that is separate from the creation of wealth, and it is not really for them to make such judgments. The only thing that matters is that people who use – and choose to use – those means do so because their use satisfy some want that they have. It thus creates value in their lives.  Your opinion does change this fact; it does not decide the wealth or standard of living of someone else.

It's actually beautiful that we do want different things and have different skills, which means we can cooperate through specializing and exchanging and help everyone satisfy more wants than we would be able to on our own. So we're richer as a result (perhaps despite your opinion of people's choices).

Formatted from Twitter: @PerBylund.
  • 1. Link added by the editor.
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Tucker Carlson's Broadside Against Austrian Economics

06/06/2019Jeff Deist

Listen to the Audio Mises Wire version of this article.

Fox News host Tucker Carlson took to the airwaves of this popular show last night to lambaste Austrian economics and libertarianism, which he views as twin pillars of a failed ideology that doesn't protect American workers and their interests.

The GOP, he argues, is in thrall to free-market corporate interests and esoteric economic theories from dusty textbooks. Republicans remain wedded to unbridled libertarian political philosophy, tax cuts, deregulation, and unilateral free trade, all of which enrich elites but hurt average people. Meanwhile, presidential aspirants like Elizabeth Warren and Bernie Sanders offer the American electorate real-world solutions to economic insecurity, jobs, and healthcare.

It's a compelling story, but untrue. Does Carlson honestly think Republican members of Congress are overly theoretical and ideological? And here we thought they were a bunch of unprincipled and poorly-read hacks!1

Does he honestly think the budget-busting GOP of recent political memory, from Bush II (Iraq War, Medicare Part D, Department of Homeland Security, Patriot Act), John McCain, Mitt Romney are ideological libertarians? Why did Ron Paul and Rand Paul fare poorly among Republican primary voters, if in fact free-market ideology and its donor class dominate the party? And hasn't the party been overtaken by Trumpist protectionists?

Of course we're pleased when Right populists recognize the influence of the Austrian school, just as we're pleased when Left-liberals at the New Republic convince themselves that Misesean "neoliberalism" has taken over the world. We note that Mises and Rothbard continue to receive criticism decades after their respective deaths, a testament to their deep (and apparently nefarious!) influence and an honor given to few economists.

Carlson, a onetime Cato Institute staffer and Weekly Standard writer, understands both Republican politics and the DC world of think tanks and punditry. When he references the Austrian school or libertarianism, it's shorthand for "Koch money and influence" rather than any real ideology. It's his shorthand for the "self-interests of rich guys," interests given an intellectual veneer by academics and writers who are happy to accept billionaire crumbs in exchange for cozy non-profit sinecures. "Conservatism, Inc." (or "Libertarianism, Inc.") has become an self-serving industry unto itself, sclerotic and ripe for criticism.  

There is truth to this. But it's not an ideological truth. Tucker Carlson knows better. He knows full well how tariffs make society overall worse off, how markets make poor Americans far better off than the poor in many countries, why government medicine doesn't work, and how minimum wage laws hurt the least-skilled workers. His argument is about priorities and strategy (and TV ratings), not ideology. And it accepts a fundamental tenet of the Left: self-interest for me is noble and warranted, self-interest for others (especially the rich) is suspicious if not sinister.

In other words, Carlson presents a fundamentally zero-sum perspective, which is to say a fundamentally political perspective. 

That said, his populism—particularly his antiwar stance—should not be dismissed. Populism per se is not an ideology, but rather a strategy. It can be imbued with any political philosophy, and thus can be equally dangerous or beneficial. At its core populism questions not only the competence of elites, but also their worthiness. It asks whether elite interests comport with those of average people, and in most cases correctly concludes that political elites have interests at odds with those people. 

When elites are state-connected or state-protected, i.e., when they maintain or even derive their wealth and influence through their relationship with the state, libertarians have every obligation to object. Elites in the West—from politicians and bureaucrats to central bankers and media figures to defense contractors and patent-coddled pharmaceutical execs—richly deserve our ire. They screwed things up, and ought to be held accountable.  

Tucker Carlson is right about that.

Read more: Rothbard on Libertarian Populism

  • 1. As I write this, I'm privileged to sit in a conference room at the epicenter of Austrian economics. A group of graduate students from around the world is in residence at the Mises Institute this summer, and this week they're discussing (chapter by chapter) Rothbard's Man, Economy, and State.Apparently the GOP forgot to send its congressional delegation to attend.
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