Mises Wire

In his review of Claes G. Ryn's The Failure of American Conservatism, David Gordon points out that Austrian economic methodology is not a value-laden Jacobin experiment, but rather a workable explanation of how a successful economy works.

While the “Great Reset” involves an unholy alliance between governments and big businesses, implementing its policies is impossible without central banks suppressing interest rates. Now that rates are rising, people are finding firsthand the real costs of the “Great Reset.”

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.

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

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.