Mises Wire

Government efforts to expand “aggregate demand” involve new spending and money creation. In reality, these activities destroy wealth in the name of expanding it.

As the recent election of Javier Milei in Argentina shows us, there still is a place in the political world for libertarian thinking. Liberty is a goal still worth pursuing.

Money is far too important to be left in the hands of bankers and of Establishment economists and financiers. To accomplish this goal, money must be returned to the market economy, with all monetary functions performed within the structure of the rights of private property and the market.

Since Adam Smith, economic thinkers have failed to understand that profits in a market economy are not extractions of wealth from laborers. In truth, profits lead to higher wages and higher living standards for those workers.

Under free competition, and without government support and enforcement, there will only be limited scope for fractional-reserve banking. Banks could form cartels to prop each other up, but generally cartels on the market don’t work well.

Javier Milei has begun his presidency by taking action against much of Argentina’s vast welfare state. One hopes it is the beginning to a successful term in office.

By borrowing money and “creating” new jobs, the government is creating the illusion of a strong economy. This does not end well.

The natural tendency of government, once in charge of money, is to inflate and to destroy the value of the currency. To understand this truth, we must examine the nature of government and of the creation of money.

As Oregon struggles with the aftermath of drug legalization, some are calling for new criminalization of drugs. The problem, however, isn’t the drugs but rather the socialistic mindset of people in Oregon who refuse to protect property from drug users.