War and Foreign Policy

The destruction of the gold dollar and the socialization of credit risk go together with the history of war. Warfare, whether victorious or not, retards the accumulation of productive and livable capital.

Trade with China is beneficial to the U.S. economy, writes Grant Nülle, but grave danger lurks in the area of monetary policy. Beijing is furnishing cheap credit to finance Washington's fiscal deficit and consumer indebtedness in America, accentuating a misallocation of capital and investment priorities propagated by the Fed-backed fiat money. Meanwhile, China's four largest state-owned banks, which together claim 61% of the country's loans and 67% of its deposits, are saddled with mounting bad debts.

If the ruling elite has its way, writes Scott Trask, we are to be faced with at least half a century of intermittent war and a further augmentation of the national security state that has been draining our wealth like a voracious vampire since 1950. There is no secret as to how they will finance it—by borrowing and inflating. If the Democrats are the party of "tax and spend," the Republicans are the party of "borrow and spend."

Today's neocons genuinely believe that the key to durable peace is establishing democracies throughout the world. Two problems here: first, it will require lots of warring and, second, even if achieved it will fail because peace depends on governments abandoning unlimited interventionism. As Mises said, "The tragic error of President Wilson was that he ignored this essential point."

Much has been made in recent years of the so-called "war on drugs." The pursuit of ecstatic sensations through chemical means, it is alleged, threatens the social order. 

President Bush’s invasion of Iraq made many observers gasp with amazement. What could have motivated such hasty and ill-advised action? 

The newest trade deals involving American corporations and the Chinese government look less like free trade and more like mafia thuggery, writes Jude Blanchette. Using the threat of trade sanctions, the U.S. government has bullied the Chinese into purchasing billions of dollars in goods from only a few corporations. Just as the mob would exact tribute, the U.S. government is now playing the part of the mob and the Chinese government playing the hapless storeowner.

Of all the myths that persist concerning economic history, writes D.W. MacKenzie, the myth that the United States rebuilt Europe and Japan following the Second World War is among the most popular. While there is considerable disagreement concerning other myths, like the notion that FDR saved us all during the Great Depression, the myth of the Marshall Plan enjoys wide support.

The Free Market 23, no. 11 (November 2003)