For centuries, entrepreneurial talents in China were diverted to military wars, political struggles, and government services. But now things are changing.
Booms and BustsBusiness Cycles
Even if business people learn to expect easy-money caused bubbles and busts — this would still not prevent the formation of a boom-bust cycle.
After quoting H.L. Mencken’s famous quip, “Nobody ever went broke underestimating the intelligence of the American people,” Andrews wonders, “I don’t know if old H.L. was a bookmaker, but he would have been a great one if he had been.”
Protectionism and Free Trade
Since 1900, the number of American farms in operation has fallen 63 percent. Meanwhile, the American standard of living is far beyond what the farmers of yesteryear could have imagined.
The differences between government stats and reality are a problem, especially since these estimates are used to make policy.
Booms and BustsAustrian Economics OverviewBusiness Cycles
The “boom-bust” cycle is generated by monetary intervention in the market, specifically bank credit expansion to business.