Austrian economics is the closest objective branch you will find. The principles of Austrian economics can be found in those philosophies which stood the test of time, going back thousands of years. Our society is afraid of facing the truth, dealing with the problems at hand with a white glove. We haven't evolved much in the past 2000 years. Most of us today can't read nor understand Plato, just like we can't read nor understand Mises. There is a reason most of the 'top' schools teach Keynes. Ignorant of being ingorant
For a strong, logical argument from a Nobel Prize winner pick up a copy of this book. http://www.amazon.com/Road-Serfdom-...=sr_1_2?ie=UTF8&s=books&qid=1229576891&sr=1-2
I've been frequenting the Mises forum lately and thinking about this subject. It seems that many Austrian economists believe in a system of barter, rather than the gold standard alone. If a paper currency is necessary, it should be backed by a basket of commodities and not just gold. I always felt that paper currency should be backed by food/agricultural products because they are the most basic human need. We currently live in an oligarchy disguised as a democracy. The ideal system that most Austrians propose (anarcho-capitalism) is not unlike America in the 16th-17th century. European explorers may have been acting on behalf of their royal families, but there was still limited or no government in the region. They did whatever the hell they wanted to do. Unfortunately, some felt that wealth can't be maintained without some form of government and a system of laws needed to be created. Later, a republic was formed. Somewhere along the lines, the republic turned into a democracy. Then the democracy turned into an oligarchy. Eventually, the oligarchy will transform into fascism as it always does. What the Austrian economists fail to understand is that governments are cyclical as well. An anarcho-capitalist system can't be maintained forever. People like to meddle and refine things. Power does what power wants to do and will always find a way.
I used to listen to some of their interviews, and everyone of their speeches they made it look like Austrian economics is about the very nature of people, or maybe the absolute written in stone laws and principles of the science of economics, they're obsessed with themselves. I used to believe in them, now I see them as just another subculture that is completely ignorant.
Simple error in logic/semantics - you are confusing mercantilism/corporatism (i.e. using violent force by government proxy to restrict competition & freedom in the market) with free markets. There is a huge difference between capitalists pursuing profit with no restraint (e.g. conquest, crime, fraud as well as more accpetable activities), and pursuing profit via the *free* market. Al Capone did the former directly, for example, so did the East India Company, Cortez/Pizarro, the southern slave owners and so on. General Motors does the former indirectly, by bribing/influencing representatives to vote to restrict trade or steal from others to fund them. The latter (*free* markets) has a prohibition on initiating force or harm, that's what makes it free as opposed to gangsterism, tyranny, slavery, or a protection racket. Austrian economics, along with other schools (e.g. classical liberals, or libertarians) thinks the role of government is to ensure the market interactions (and society as a whole) remain free. Without any government, you will get totally unrestricted markets, rather than free markets. Totally unrestricted markets are arguably even more harmful than socialism. What part of Austrian economics do you think supports using unprovoked violence to expropriate money or restrain trade?
I guess there is a difference between acting in self interest and doing so in an exploitative way. There is a difference between enriching oneself by selling stuff others agrees to buy and enriching oneself with what is collected through force. Theft by taxation or teft by inflation. Money buys power power buys money this is how democracy works, who ends up with what is stolen from citizens, certainly not the poor. Government and the fed makes exploitation possible. I dont see the paradox if austrian economics wants to remove the root cause of evil, government and the fed or as much of it as possible. Its not about self intrest but about the common good. The solution of course is to have government under democratic control but financed with voluntary contributions. This will never happen anywhere in the world ever...
You must be a progressive Scientologist Who are "they" anyway? If I am walking with two other men, each of them will serve as my teacher. I will pick out the good points of the one and imitate them, and the bad points of the other and correct them in myself. ~Confucius
Yes, to refine this just a little farther, Austrians think one of the proper roles of government is to ensure the enforceability of contracts with the rights of the individual in his person and private property as primary.
You're one of the few posters that actually "gets" the confluence between politics, corporate cronyism, and whats passed off as "secular" monetarism. For that, I applaud and congratulate you. Knowing the system is built on a fraud and a scam, designed to enrich a tiny oligarchical class at the expense of the masses, the question becomes: what do we do about it? The study of economic theory is similar to any other liberal discipline - psychology, history, sociology etc. Each field draws upon several paradigms to make their explanations of human behavior complete. I view economics in the same regard. Neo-classical, mercantilism, monetary, Keynesian, Austrian (hard money) - each School contributes elements of factual truth. Some more, some less. Austrian school is by no means perfect. In fact, its relative shortcomings stem from its political bias. Speaking of that, you've likely realized how each Economic School is incestuously intertwined with its own, unique political ideology. Big Government Oligarchs = Keynesian Monetarism! Small Government Libertarians = Austrian School. Aspiring Super-Powers = Mercantilism. My 2 cents regarding your questions: 1) Commodity-backed money is great - so long as production of that commodity cannot (unreasonably) outpace population/productivity growth. Acquiring extra gold reserves to print more is fine. Less gold on the market = currency appreciation + less money printing from foreign, gold-backed countries = net wash in global money growth (in theory). 2) Social Consequences matter. But under all circumstances, they should never be under the purview of Government. This is where politics trumps economics. Austrian promotes freest markets possible - no tax, no central bank (to rob), no Government (to waste). Taxation under the guise of social welfare grows exponentially higher until people are the subjects of Government, not the other way around. Present day Canada, America, Europe are living proof of Governments run amok from decades of incremental taxation and inflation all originally sold under the banner of "Helping". Wolf in sheeps clothing. So no, Libertarians would keep their own money, no income tax, very little sales tax. But from that offsetting amount in personal wealth, private charitable donations would be expected to pick up the shortfall. 3) To your major point - Libertarians don't harbor "anti-capitalistic" sentiment toward any industry, including banking. The key distinction here - they are anti-monopolistic Commercial Banks hold a monopoly over credit issuance by their ownership and control over the FED Reserve System This means everyone else gets fucked, as history and contemporary events have demonstrated in recent years. Banks are free to profit and speculate as much as they like under an Austrian System - so long as its their own, unleveraged capital thats risked, or capital from their depositors. Where's the fun in that??!!? The problem isn't banks making a profit. Its the Banks counterfeiting dollars on everyone elses tab, running the markets into the stratosphere, then putting everyone else out of work. Or taking over the Country. Thats where we're headed next, btw. Notice how the ultimate free market conclusion to every capitalist experiment is monopoly? Yea, well they're not gonna stop at just the banking and credit system. They're gonna try and commandeer the overt political machinations of the Country = Dictatorship. Some notable Scholars say they already have (Carol Qiugley, Bill Clintons academic mentor). This is the same group of people commonly referred to as the "New World Order". Back to your point - free markets aren't free when capitalism devolves into monopolies. Then it becomes a quasi-centrally planned economy for private profit. Sound familiar!?! I think any reasonable Libertarian would promote aggressive Anti-Monopoly Legislation/Boards to break up unruly companies that hold excessive market share. The crux of the issue is money supply. And how best to create a monetary system that can accommodate economic growth and capital creation without being subject to rampant exploitation and take-over by a small, moneyed elite. The later has already happened. Most Austrians who know their stuff, will tell you that a hard money deflationary system is not best. But its A LOT better than what we have. Best to settle for moderate growth in a deflationary system until we come up with something better. The alternative is to let the vultures takeover and rape the Country into the ground!! Last point - there are sects within sects within sects. Most Constitutionalists would fall under the category of Social Libertarian. Minimal Government welfare/healthcare net. Of course, you get the hardliners in every school of thought who yearn for the ultimate Utopic vision, no matter how "unworkable". For instance, hardcore Neocons wanting to "glass parking lot" the Middle East. Try not to throw the baby out with the bath water, and all that good stuff.
Can you name some booms/busts that weren't preceded by egregious money supply expansions? Be very interested to know. Also, are you suggesting 1/2% FED funds after 911 had nothing to do with the equity boom/real estate boom? Or 4% rates in the 90's had no relationship to the millennial NazzSpazz?