Economics Gone Awry

[Originally published in the Front Range Voluntaryist, article by Mike Morris]

In today’s world, where the long-overdue effects of government meddling in the markets (central bank intervention, for one) are beginning to reveal their fragility and failure, proper economic understanding is needed more than ever to explain the cause-effect of such courses of action. Blame must be assigned, not on the markets they’ve inhibited, but squarely on the government when the time comes. But economics has sort of been dissolved into other disciplines, or taken on other roles that have nothing to do with it, to become something of a confused mush which isn’t considered highly important as far as education goes. People think of these laws of nature that economics can establish as something which can be usurped, since they must be approximate and inexact anyway. They’re insignificant to our daily lives or deserve no attention.

But this isn’t so. All the things we do as humans is economics, whether recognized or not. At its core, and appearing simplistic, economics is the social science of human action, the formal fact that man acts to attain ends he values using scarce means. Man has nearly unlimited and unsatisfied wants, and only a limited means to achieve them. Nature has not blessed us with superabundance, which we all would love. Resources and time are scarce in relation to our desires. Acting man must therefore make choices, and in doing so, forego other possible courses of action, at least hoping before the fact that they will bring a greater satisfaction than other possibilities. What he foregoes is his costs, but only he can know what is right for himself and learn over time what’s better. Man is always seeking to alleviate this felt-uneasiness, as Ludwig von Mises would explain it, and to achieve a more satisfactory state of affairs, whether monetary or personal. He makes for himself a goal, places a value on this end sought, and he then tries to attain it. He may make mistakes about his choices, but this is acceptable. He is a human after all and may at times err in his decisions.

The corpus of economic theory is derived from this simple axiom of action, which is irrefutable on the basis that one must contradict themselves in the act of asserting that man doesn’t act. Economics needs the human. It deals with the realities humans face in the world—scarcity—and the resulting implications—the ranking of values, the costs incurred in making some choices versus other alternatives—up to deriving the laws of diminishing marginal utility, law of demand and supply, time-preference and the phenomena of interest, businesses cycle theory, and so forth.

The science, though, has gone astray. It has become something more of an art, a guessing-game where people play around with figures and come up with theories to explain their observations. Many today think of something else other than a social science when someone says economics. Business comes to mind, the activity of the stock market, finance in general such as writing checks, making predictions of an uncertain future, reading over boring statistics and using them to make correlations, coming up with equations, the necessity of mathematics, etc. But none of these things are necessary economics, which is concerned strictly with the implications surrounding man’s conscious, purposeful behavior in life: employing scarce means, of at minimum his body and time, to achieve subjectively valued ends.

While businessmen don’t need to be trained economists, and economists don’t need to be good at business, both are certainly complementary, though not inextricable, to each other. Either could do without the other, though not understanding subjective value, or what it is you’re actually doing as an entrepreneur, could be detrimental to your business. This lack of economic understanding could lead to bad ideas ideas like “cost-plus pricing”, holding the fallacious labor theory of value, or believing that raising prices is always the means to making more money, etc. But knowing how it works (economics) isn’t the same thing as successfully playing the game (entrepreneurship). Indeed, many businessmen are highly ignorant of economics, and many economic theoreticians aren’t businessmen and don’t aspire to be. Moreover, this entrepreneurial element is almost entirely taken out of economics, and yet this role is an essential driving force of the economy. Nonetheless, economics deals with theory, not exactly business acumen and strategy.

Another thought is that, if one knows some elementary economic theory, some principles, they must excel in math too. While it might be helpful, or even related in that they’re both aprioristic, math and economics are two different things. Economics has been “mathematized”, so to speak, turned into an effort of statistic-taking and correlation-making of data, of drawing charts and lines in a boring manner, explaining things in equations, etc. This “econometrics” makes economics look daunting, or “dismal”, to those outside of it, likely preventing many from having an interest. Sometimes it seem this is the purpose. But the actions of so many individuals cannot be condensed into a single, convenient number that is useful to the central planners of the economy, who use the consumer price index or gross domestic product to calculate their future planning. While math is logical too, economics doesn’t have much to do with math. While cost-accounting is essential in an economy, and may help the business person, math doesn’t have much to do with economic theory. One can come to understand economics without math.

Economic logic should be explained in words, through reason, not math and charts. The problem is that economics has been overly complicated to the point of incomprehensibility. This “Keynesian jargon” or “Fed-speak”, as they’ve been named, somehow impresses people though. It’s no longer the everyday common-sense of the layman. It has evolved into something much more serious, but for the worse. Econometricians are regarded as the sophisticated economists while anyone who presents a more clear-cut picture is considered dull. Concocting new equations is the fashion. Looking to whatever mumbo-jumbo Greenspan, Bernake, or Yellen screech is considered fascinating. One is refreshed, however, when they read authors like Henry Hazlitt, who clearly wrote what economics is really about in no uncertain terms.

There is little vigorous defense of markets today in mainstream circles. There’s Modern Monetary Theory (MMT) which fully supports the government’s monopolization of money and printing thereof, Marxist economics still lives on, Keynesian central bankers still think they can fix the economy they’ve rigged, and other bad ideas continue to thrive. The study has been swept with overly sophisticated models meant to explain the economy and prescribe policies to the government, with new ideas of how to use the government and central bank to centrally plan the economy, etc. The faith has been lost that natural forces of the market can be left to function on their own. Even the so-called free market schools, i.e., Chicago (Friedman, et al), which make up what’s thought to be free-market economics, calls for many government interventions in the way of: monetary policy, solving “externalities” by socializing them, basic income guarantees, etc. A fringe minority stand to defend complete liberty.

This is why the Austrian school is so important today. For one, methodological individualism shows us how to look at things: Only the individual acts; groups do not; groups are made up of individuals. Thinking of “the economy” as this entity unto itself allows excuses for government intervention to be made under the notion that this living-being, the economy, could be steered back on course if only the right actions were made against it, for the “common good”, of course. The market is where man is free to pursue his ends, not those chosen for him by someone else. The market we might say is just a result of the non-aggression principle: people—individuals—exchanging their property titles freely in a network of voluntary exchange in a division of labor. This is cooperation and civilization, not state-coercion as we’re made to think. Other economists who advocate government policy however have little to no theory of the State, not defending a system of ethics when stepping outside the bounds of positive economics to regard this violent institution simply as some useful, convenient mechanism for retooling the economy to correct so-called “market failures” and such. The state, to them, isn’t a gang of thieves: it’s the necessary forum for performing economic stunts.

Austrians are also the natural enemies of the Marxists. Since as far back as the late 19th century, early Austrians as Menger, Bohm-Bawerk, and Mises had destroyed economically the core of Marxian theory, respectively attacking the idea of a labor theory of value, capital theory, and the possibility of socialism to rationally calculate how to allocate resources in the absence of privately owned means of production as to not incur any costs or losses. The debate rages today, with Marxism far from dead in the culture or academia. Fortunately, it would seem, as Austrians are the only ones who can explain the business cycle, interest rates, money, banking, prices, capital, and everything else, the attractiveness in a view that challenges the orthodoxy seems to be on the rise.

Yet another inevitability the economist will face by the public that is a confusion of the scope of this discipline is the request to predict the future. Economists are looked at as people who can give precise information about future events (e.g., when the stock market will crash, how much demand for X there will be on Y date). But this is impossible: the future is uncertain. If it wasn’t, if it was sure, then I doubt there would be a need for economic science at all, as actors would no longer be. There would be no need for the entrepreneur, whose role is to anticipate future demand and prices and produce accordingly in hopes of a profit. While he may describe what must happen given certain variables, the economic theoretician is not a fortune teller. As Lew Rockwell put it in a fabulous and short pamphlet everyone should read, “forecasting the future is the job of entrepreneurs, not economists.”

This also misses the ceteris paribus notion of economics, i.e., that its propositions are on an “if all things are equal” basis when speaking of predictions. And here’s where another misconception occurs. Thus we can say that increasing the money supply will cause prices to rise, if every factor remains the same (though it doesn’t), but we cannot say exactly how much and when. We can say that central bank policy is making an artificial boom appear in the economy which must eventually collapse, but we cannot know this precise date, indeed one that awaits us in the near future. It is generally hacks that try to say, “on September 30th of next year, the market will finally implode.” We can’t know this. This would assume that economics can make quantitative predictions of man, when its statements are merely qualitative.

In addition, this quantification is thought to be achievable by government statisticians who believe they can aggregate many factors of the economy into one number, such as “Gross Domestic Product” (GDP), to give us a picture of the economy. This, necessarily, isn’t possible either, and statistic-taking is in large part only to continually plan the economy. There is no need in the free economy for an extra-market institution (the state) to collect data. Considering the economic loss of paying people to gather this data for the government, all the fancy econometricians should be relieved of their duties. Those people should be freed to go be productive elsewhere in the economy rather than to make up numbers for central planners.

But of this wrongful idea of economics as quantitative, man, again, is a conscious actor. He is an individual. He is unlike subjects of the physical sciences that do not purposefully act. In fact, it’s thought economic laws can be invalidated because it can’t say precisely what the effect will be and when. But we can only, at best, explain the ceteris paribus notions of economics: that an increase in demand, supply being unchanged and remaining the same, will cause a rise in prices. Being that humans are freely acting with ever-changing preferences in an uncertain future, we cannot know exactly how this will play out. For instance, supply might rise, too, and no rise in prices is seen. But this doesn’t refute the basic logic of supply and demand. We can’t say, “the central bank created X amount of money, so we will see Y amount of rise in prices on Z date”, and nor could we say, seeing as the central bank has engaged in expansionary monetary policy, that “on X date, the economy will fall into recession.”

As Ludwig von Mises has said of this problem in his aptly-titled Human Action, “…the main fact is that there are no constant relations. Economics is not, as ignorant positivists repeat again and again, backward because it is not ‘quantitative.’ It is not quantitative and does not measure because there are no constants. Statistical figures referring to economic events are historical data.”

In other words, there are no causal constants in human action, and for this reason economics is necessarily qualitative. Quantitative modeling, widely practiced today, has no place in economics. Perhaps past data is useful for the economic historian, but not in constructing economic theory. We need not experiment with silly economic ideas like “minimum wage laws”, as a prime example, to see if they work. Economic propositions can be irrefutable on their own, through logic. Experimentation is unnecessary and inappropriate for the social sciences, where we have instead the thought experiment to hold one variable constant as opposed to the physical science’s empirical methodology. Humans cannot be made into a laboratory, despite those who remark, “I wish we could just test it to see who’s right.” This empiricism should remain in the physical sciences, its rightful home, not the social science of economics where real, conscious, acting humans are involved. In fact, it isn’t even possible to reproduce in experimentation human actions, because all factors are always changing.

Thus, yet another point where economics has gone wrong is that its practitioners wish to apply seamlessly the empirical methodology of the physical sciences to the social sciences, where it’s not applicable. Economists have largely adopted the positivist approach to the study, even those like Milton Friedman who believe in positive economics (positive, not in the empirical sense, but in that there is something to say about economics rather than merely normative statements). They hold that no propositions can be true without being “tested”, that it’s insufficient to do logical thought experiments, that everything must be tried out first. Minimum laws might work, but who knows? But we need not rely on empiricism to establish these truths of economics. Man is capable of rational thought and reasoning through these issues. You can’t explain economic theory using using this empirical methodology. Economics is a logic science, elaborated upon through thought rather than experimentation. This misunderstanding is precisely where many go wrong. Perhaps the prestige of the physical sciences is too tempting not to carry over to economics.

Another still-prevalent, though fallacious, idea is that there’s some sort of objective-value in economics. Ironic, because those that espouse this are also moral relativists. Why wouldn’t they think value is subjective too? Marx took this idea of an inherent or intrinsic value of a good coming from the amount of labor imputed into it from the classical economists, like Smith and Ricardo, who hadn’t yet solved the problem. It took the Marginal Revolution, of the Austrians like Carl Menger, to restore the value problem with the marginal concept. Since all of Marxism is basically centered around this fallacious view, i.e., that a given-good is worth a given-value because a given-amount of labor was used in making it, such as seeing the employee-employer relationship as exploitative like that of the state and tax-slave, basically all of Marxist theory is incorrect and fallacious too. This theory of value is espoused today, for one, in the idea of a “living wage” or the minimum wage, which the defender must posit some arbitrary number that they think is the correct one. But it doesn’t matter how hard or long one labors for something that no one wants, it has no value on the market. Driving around in circles for hours before delivering a product would not increase its value. Value is a subjective matter. We all know this, really. Why can a Jackson Pollock splatter-painting sell for more than a Van Gogh? Because the buyer, the subjective and unique individual himself, believed it to be worth more than the other, despite anyone else’s opinion. Value, like beauty, is in the eye of the beholder.

The significance of the subjectivity of value, like the inability to use empiricism in economics, is that there is no way to measure our values. Our preferences are ordinal, not cardinal, and we all rank our preferences differently. Thus there is no way for the redistributor-politician to measure, or know, utility-gained vs. utility-lost. And it is the egotistical idea of politics that someone else knows what’s best for us, what we value most. We’re all too ignorant, and need our all-knowing benevolent men in government to choose for us, they think. These are the bad ideas that give us wasteful, bloated bureaucracies that bog down the progress of mankind in attempt to make the collective “society” richer.

It would seem another key point in the corruption of economics has been to separate “microeconomics”, where generally good theories are taught of basic economics from the standpoint of the individual, from so-called “macroeconomics”, where former theories are abandoned and excuses are made for why and how the government can intervene in the economy on a “macro” level to make supposedly needed corrections. It’s popular to ask if one is studying “micro” or “macro” under this misconception. But there is really only one integrated economic theory. If supply and demand applies to the price of apples, in the case that prices rise if demand for apples is unchanged and supply falls (or if the supply of applies is unchanged and the demand rises), then it applies to money, too. There’s no reason a natural money, such as gold, can’t be beholden to supply and demand too, though many have the idea of “stable prices” to be stabilized by the central bank, as if this is something desirable. Increasing the supply of money (inflation) will cause the price of money to fall in terms of other goods, i.e., its purchasing power will be diminished, or prices as expressed in terms of money will rise. I imagine the large majority of the American population thinks that printing money might be a solution to economic problems, and the remaining who intuitively feel it’s not a real thing that printing money is the same thing as creating new, real wealth, in terms of goods and services, couldn’t necessarily tell you why.

Mainstream economists want us to believe that central bank meddling in the markets, namely via inflation, can “stimulate” the economy, inducing us to spend more under the notion that consumption, rather than savings, investment, and production, is what drives an economy. Of course, they’re the ones who cause the instability. The business cycle is an effect of central banks manipulating the rate of interest, not people freely acting in the market. There’s no reason to assume a free market would be anything but stable and growing, not subject to random shocks or sudden, systemic business failures were it left alone.

With this out of the way—with the fact that “stable prices” aren’t needed, but an economy can operate on any supply of money; that interest should be determined by people’s time-preference, and if they’re manipulated, the business cycle ensues; and that, to add, all unemployment would be voluntary in a market economy without the disemployment effect of government policies—the whole purpose of the central bank (see last link) is smashed. The Federal Reserve System should be outright abolished, not simply audited.

Many of today’s economists adhere to statist-economics, however, which isn’t economics at all. It would seem to me they’ve created this vast body of work posing as economics in order to justify government intervention. There are many antidotes to this, but new theories are continuously erected, and the youth of today is turned on by the failed ideas of socialism, seen in the rise of Bernie Sanders in 2016. Bernieites who would never claim to be economists, but nonetheless have policy proposals which are necessarily regarding the economy. His hopes are to divert attention to emotional issues, and away from the economic realities behind them, such as to just state a fact, like “X amount of people are without healthcare”, divorcing this of a solution of making it more affordable, i.e., in freeing the extremely over-regulated market for health care. His hopes are that none of his voters will question him on things he can’t answer, such as the money problem (that the government has a paper-money monopoly and replaced it with gold) or the banking problem (that the Federal Reserve is just a means to cartelize the banking system) or how minimum wage laws would actually raise real wages (since there’s no logical explanation for how they would). The problem is that Bernie Sanders doesn’t have a theory on money banking, he has a mouth that angrily shouts things to disaffected Leftists. Sadly, many millions believe him.

While economics itself could be taken for a value-free science, i.e., can explain the effects of taxation without saying if taxation itself is morally just or not, “good” or “bad”, to mount an attack against taxation that goes further than to explain its relative impoverishing effect we must resort to ethics, which for us has been summed up quite simply in online-meme pop-culture spreading beyond the libertarian community that: taxation is theft. We could elaborate, but shall it suffice here that this is our view. An economist who has stepped outside this scope of economics to propose things the state should do, without defending a set of ethics too, is not really acting as an economist anymore. And really, it would seem to me, these types (like Keynes) are using their sophisticated, incomprehensible “economics” as an excuse and shield to justify interventionism. Most economists, like the rest of the population, simply see the state as this useful mechanism for correcting so-called market failures. Bernieites wouldn’t want you to mention any government failures, now.

Yet the people who are talking of these problems, which they’ve turned political, forget that they necessarily require an economic understanding to be qualified to deal with them. Government cannot simply make policy and call it good, but they must know what the effects of said policies will be. Of course, politicians aren’t principled men, but no less should they know economics. To the extent economics is value-free, it is not concerned with men’s opinions on such matters. It doesn’t matter if Bernie Sanders personally believes a minimum wage law can work to raise wages, or that, by some other magical means, he has found the perfect number, $15, which it should be set at; the law still will not work. Again, economics doesn’t care for opinions. Economics is a science.

I’m not from the United Kingdom, but one doesn’t have to be to point out that the Labour Party is a fine example in the promotion of economic fallacies today. The Labour Party—the U.K.’s social-democratic party—is busy pushing the same fallacious collectivist theories as always. Social democracy is softcore communism, and it doesn’t work. Apparently the communism of Corbyn, the U.K.’s Bernie, is quite popular though. Unashamedly, they’re calling their plans a “New Deal for the Economy” and a “Fair Deal at Work.” They didn’t learn anything from the disastrous New Deal of Roosevelt, because history is still taught that he “saved us from the Depression” and that these acts are of enduring benefit to today’s economy.

The Labour Party offers us a run-down of all the bad economic policies that have been concocted in the world, and refuted many times over, so we can just use their “manifesto” to make a short example. Believing in minimum wage laws, which is price-fixing for wages, as expected the LP is proposing rent controls, too, saying, “Labour will make new three-year tenancies the norm, with an inflation cap on rent rises.” Few people still believe in rent-controls, though the concept of the widely practiced minimum-wage is the same idea. The problem with rent-controls (a maximum selling-price for an apartment) is simple: if prices are not allowed to rise, then producers will have no incentive to add to the supply, and in turn lower the price again, since they cannot turn a profit off such a deal. If I was told I’m not legally allowed to sell guitars for more than $100, but it costs me anything close to $100 to produce one, I will stop producing them. The availability of guitars will decline. Thus the intention of increasing availability, the egalitarian dream, achieves just the opposite: a shortage. Other effects will result too (e.g. the elderly hoarding older, bigger apartments at fixed-rates rather than giving them up to larger families to downsize for smaller, cheaper living, etc). We need a free-market in housing as much as anything else. Furthermore, they state that a “Labour government would introduce new legal minimum standards to ensure properties are fit for human habitation.” So, it meets the one-size-fits-all government-standard, or it’s out. This is a problem in healthcare too, as in other industries: if it doesn’t meet government approval, no one gets to consume it. They call this being fair.

They never want to fix the inflation (money printing) problem, but always want to intervene in belief they can mitigate its effects through other policies. As in Venezuela, the government inflates, prices begin to rise for all sorts of goods, then they implement price controls to try and stop it,and then, in addition, they blame the rising prices on the non-existent free-market when the source was themselves. It’s those “greedy price-gouging capitalists who caused things to get more expensive, not us!”

As per usual of the democratic socialist, they intend to “raise the minimum wage to the level of the living wage.” But how can anyone know what a “living wage” is? Why don’t they talk about “living prices?” The effect is the same here too. If there’s a minimum someone can pay, then at some point (the point above the market price for labor), they’ll stop buying labor. Indeed, this artificial raising of the wage my cause an artificial expediting of replacing labor with machines, too. But raising the arbitrary minimum wage level doesn’t raise wages, it causes unemployment, as no one facing a downward-sloping demand-curve is forced to hire anyone, but only to pay them said amount when and if they do. I think the point was made most succinctly in Economics in One Lesson by Henry Hazlitt: “You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less.” That’s really all anyone needs for an argument. This is all the minimum wage law says: all jobs under X-sum an hour are now banned; and since the buyer of labor is a consumer too, less labor will be purchased.

Assuring as always that the vast majority of people’s incomes (95%) will be left unaffected, Labour says, “only the top 5 per cent of earners will be asked to contribute more in tax to help fund our public services.” Asked to contribute!? Taxation is not a voluntary act. It’s patently coercive, which is the point. If one was simply asked or encouraged to donate more, then the government would be nothing more than a private charity. There’s obviously consequences should one deny their offer to “contribute” more to them, making it indeed involuntary. But of course, they know this. I guess people are supposed to thank their governments when they say, “we will not ask ordinary households to pay more?” How nice of you! Why should it matter anyway, because if you were only asking them, they could just say, “no thanks,” right? If the government were voluntary, and offered its services to willing customers, it would be none other than a business. Like any other private business, it would receive its income voluntary; no one would be forced to buy their products. This idea of soaking the rich not only won’t work, but many people have became rich off the political means that government places before them. And in another failing of economics, the economists have forgot to apply the theory of monopoly, that prices will rise and quality will deteriorate, to crucial areas as money, defense, and the whole of the state, which many would suggest cannot be free, private, competitive, and voluntary as food and other goods and services.

Funny enough, the Manifesto is covered with the title, “for the many, not the few.” Makes you wonder why Bernie is driving one-hundred thousand-plus dollar cars and owning multiple homes when he spent his life in public office, or why Maduro of Venezuela is eating caviar from his balcony while others are looking for dog-meat in the garbage can, or why others, such as Hillary Clinton, who spent their life “serving the public”, are millionaires. With government, a small, privileged ruling-elite will always rise to the top at the expense of everyone else. Our current President is a billionaire himself, and it looks like rich interconnected political dynasties are set to rule the U.S. government forever. Democracy cannot evade the Iron Law of Oligarchy.

England, I believe, like the U.S. without a Department of Education, became the most literate country in the world under a privately provided education system, but the Labour Party now thinks “governments have the responsibility to make lifelong learning a reality by giving everyone the opportunity to access education.” They can’t give though without first taking. Government is not a producer. It steals from producers and redistributes what was already produced. This is the essence of why socialism causes impoverishment: it takes from the productive, which discourages them from producing more, and allows people to consume who are non-producers, therefore lowering the cost of non-production and raising the cost of production, i.e., welfare vis-a-vis work.

Contrary to the Labour Party, who tells us “taxation is what underpins our shared prosperity” under this false “common-good” premise, a tax on production is a tax on everyone, paid for in lower output. Raise taxes high enough, and watch the economy completely fall apart and mankind return to a more primitive standard of living. What bloody rubbish for them to pitch taxation as the source of prosperity!

In conclusion, the “economists” and the non-economists are both doing irreparable damage to the allocation of resources which so many millions depend on for survival. From Paul Krugman to Bernie Sanders, either’s utopia realized would be ruinous for economic progress—Krugman’s mounds of paper money or Bernie’s nationalization of everything. (I have a theory, or, a hunch, that Bernie Sanders knows full-well the effects of state-intervention into the economy, but that he’s a pure fraud and crony for the system. But maybe I’m wrong. Perhaps he is just an somewhat-innocent economic ignoramus.)

But just like in the United States, where the government’s conceived and limited role was to protect life, liberty, and property, which of course is a contradiction for it to do, the role and reach of government has extended far beyond what anyone could have imagined. There is no sector of the economy today untouched by government policy. Most everyone, being born it, takes it totally for granted the endless government programs, agencies, bureaucracies, etc., that exist today. The American State is completely unprecedented in size and power, and poised to grow ever-more authoritarian.

For many reasons, such as that the USD remains the world’s “reserve currency”, or other central banks are colluding with ours in a concerted inflationary effort, the United States is able to sustain its program for now. If there had not been such a large capital stock to draw from due to the preceding relatively free markets to initially create wealth, the U.S. government would have brought us disaster long ago. In places in Venezuela, it’s already being more quickly realized that state socialism destroys the pool of real wealth. Europe’s time will come too. Its welfare state is entirely unsustainable as well. If we had the present regulatory system imposed in early America, it would have never become what it did today. Poor African countries, for example, could not just enact minimum wage laws and begin printing truckloads of paper money, and expect to see wealth come out of it. Wealth comes out of production and exchange of these goods and services, not by plundering these resources through the state bureaucracy.

To return economics back to its rightful path, it will need to be stripped of moral relativism, empiricism, and emotion, and return to speaking of the seemingly “cold-hearted” reality that governments cannot repeal economic laws, but are subjected to them too. I suppose it’s comforting, albeit disastrous, to believe governments can create wealth by legislative act, but it isn’t true. There are no shortcuts or magic in the world that make wealth appear from nowhere. One fundamental economic lesson is indeed that there ain’t no such thing as a free lunch.

Everyone wants to be passionate about something. We must help everyone to the path of liberty, and to liberty in the economic sphere as well as the social sphere. To have men adopt voluntaryism as an organizing principle for society—and as the means of prosperity—will rely largely on economic education. While the market economy is full of complexities which aren’t necessarily easy to grasp, such as the division of labor, money as a medium of exchange, the price system, the structure of production, etc., socialism offers the simple, naive solution that a monopolist of resources can take care of all our needs for us. It’s just that much easier to adopt the latter, unfortunately. At this stage in our evolution, most haven’t come around to seeing the beauty of markets. Capitalism is a shunned term.

But even if Bernie isn’t a bad man, he’s still simply wrong. Well-intentioned people with bad ideas cannot improve the world. It doesn’t matter if everyone is convinced that socialism is a good idea, it must still fail. There is no “good in theory” but fails in practice. It’s a matter of good theory and bad theory. This is why, contrary to the socialists, our libertarian ideas of peace and freedom, though maybe a hard road to attain, are actually achievable and workable. Of course, we must convince the populace too. But our ideas work.

Frankly, I fear the do-gooders the most! My idea of a government, if it must exist at all, is one that does little to nothing. The White House is a cigar-smoking lounge for three-piece suits. Everyone nowadays expects a superman. Preferably the President plays golf every day! But most are of this mind set that Congress needs to “get to work.” They ought to be churning our new pieces of legislation against liberty or else we’re not advancing the progressive agenda.

The future is not yet written. It depends on good ideas (liberty) prevailing over bad ones (government schemes against liberty). Men act upon ideas, and if they do so with bad ones, with socialist ideas, then this cannot be good for our future. If people come to believe in bad ideas, or ignore sound economics at their own peril, they will come to implement them, ending in disaster. Only time will tell if what presently prevails can be logically smashed once and for all. Since men are self-interested, and since many benefit directly from property redistribution, though overall we all lose, it might be difficult to get anyone to buck the system. We must convince the masses however that this doesn’t work for them; it works for the beneficiaries only, which often are those already at the top. Free markets are what would help them achieve the ends they truly want.

I can’t say Marx would have endorsed how his ideas were implemented, but his ideas had power, and they remain today, just as they did back then, when communist governments began seizing the means of production and centrally-planning whole economies. Equally, long after Keynes has died, central banks still manipulate economies in belief they can stimulate them, keep prices stable, and unemployment low.

We’re all, soon, going to be a victim of a decade of experimental, unprecedented monetary policy when the scheme that was ramped up after the Great Recession unfolds. At that time, I fear governments may implement their final schemes, such as a one-world government, a one-world paper-money, a cashless society, and putting the police state in full-throttle. This, of course, will largely be blamed on the [non-existent] free-market, with the people crying “capitalism has failed us” when it’s only statism that has.

To have a sustainable social order, i.e., to have civilization, it’s necessary for the people at large to heed the principles of economics in their everyday life, and to not consider them of a study which has nothing to say of the world. One cannot have a complete worldview without an economic understanding. It is essential. Otherwise, without it, stagnation, or decline, largely wrought by state intervention, though thought to be progressive, will roll back the gains we have made. We must keep up the fight in convincing everyone that free-markets, not socialism, is what will do the most to serve their ends. This is why winning the ideological battle of our times, of liberty over socialism, is just as important as it ever was.