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The Hollow Promise of a Statist Economy

Summary:
Brainwashed by Academe Not a day goes by that doesn’t supply a new specimen of inane disclarity.  Muddy ideas are dredged up from tainted minds like lumps of odorous pond muck.  We do our part to clean up the mess, whether we want to or not. No longer in demand: famous Enlightenment philosopher John Locke (1632–1704), who is widely considered the “Father of Liberalism” (classical liberalism, that is). [PT] These days, individuals, who like John Locke “love truth for truth’s sake,” are far and away in the minority.  Out of the bowels of America’s higher learning institutions comes a young populace with soiled brains.  What’s more, you will likely end up on the hook for their idiocy. Take one Andy Vila, for instance.  The 21 year old

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Brainwashed by Academe

Not a day goes by that doesn’t supply a new specimen of inane disclarity.  Muddy ideas are dredged up from tainted minds like lumps of odorous pond muck.  We do our part to clean up the mess, whether we want to or not.

The Hollow Promise of a Statist EconomyNo longer in demand: famous Enlightenment philosopher John Locke (1632–1704), who is widely considered the “Father of Liberalism” (classical liberalism, that is). [PT]

These days, individuals, who like John Locke “love truth for truth’s sake,” are far and away in the minority.  Out of the bowels of America’s higher learning institutions comes a young populace with soiled brains.  What’s more, you will likely end up on the hook for their idiocy.

Take one Andy Vila, for instance.  The 21 year old immigrated from Cuba to Miami with his parents in 2004, receiving asylum and ultimately citizenship.  Nonetheless, the socialism he escaped from as a kid has become a rallying cry for his political activism.

The fantasy that big government can redirect goods, capital, and services, as Marx remarked, “from each according to his ability, to each according to his needs,” has garnered burgeoning support from America’s up and comers.

The anatomy of this transformation travels a common path.  For Vila, who as a teen identified as a “Libertarian-style Republican,” several dosages of fake learning took him down the rabbit hole:

“Course readings led him to question his beliefs further.  He started attending left-leaning campus events, interacting with students of varying racial and socioeconomic backgrounds.  He discovered a Miami beyond his manicured suburban neighborhood.

“By year’s end [2017], he had developed a disdain for capitalism and the political right. Now the sociology and geography major wants sweeping reforms, including Medicare for all, free access to higher education and a Green New Deal.”

The Hollow Promise of a Statist EconomyKarl Marx, hewn in stone. Regardless of the piles of dead bodies left in the wake of “real socialism” and regardless of the utter economic failures Marxist ideology has produced (without exception), Marxism is once again gaining in popularity. It is not surprising that many so-called “intellectuals” are Marxists – quite a few of them are envious of businessmen, whom they regard as intellectually inferior and hence not deserving of the money they make. Moreover, nowadays most intellectuals are employed by the State and won’t bite the hand that feeds them. To quote Hans-Hermann Hoppe:  “Intellectuals are now typically public employees, even if they work for nominally private institutions or foundations. Almost completely protected from the vagaries of consumer demand (“tenured”), their number has dramatically increased and their compensation is on average far above their genuine market value. At the same time the quality of their intellectual output has constantly fallen. What you will discover is mostly irrelevance and incomprehensibility. Worse, insofar as today’s intellectual output is at all relevant and comprehensible, it is viciously statist. There are exceptions, but if practically all intellectuals are employed in the multiple branches of the state, then it should hardly come as a surprise that most of their ever-more voluminous output will, either by commission or omission, be statist propaganda.”  [PT]

Tard Buckets “R” Us

One of the great conceits disseminated by fake education is that anyone and everyone can use the political system to remake the world in their image.  The popular image of Vila and his cohorts includes free drugs, free college, and an abundance of high paying green jobs.  Moreover, a socialist government is their chosen method for realizing this supposed utopia.

The Hollow Promise of a Statist EconomyHow to pay for all the “free” stuff…  [PT]

Truly, the world is what you make of it for these young socialists. Immutable principles of reality, truth, and arithmetic do not matter.  What matters are warm fuzzies with vegan chocolates and pulling rabbits from magician hats.  What matters are good intentions over bad decisions and entrusting dreamers and schemers to deliver the more abundant life.

Socialism, under their new and softer visions, is no longer a system of statist control that makes everyone – except the ruling elite – equally poor.  Rather, it’s a corner discount store – such as Tard Buckets “R” Us – where you can pick and choose the socialism of your liking.

We wish we were making this up.  But we’re not.  In fact, according to University of California, Irvine, political sociologist, Edwin Amenta:

“Today’s socialism for younger people means the Canadian health system and the Swedish welfare state.”

Somehow Amenta speaks this drivel with a straight face.  And somehow the tard buckets nod their heads in unison, looking past the Venezuelan food program option as they make their selections.

Different wants and needs…  [PT]

The whole exercise is absolutely ludicrous, if you’re in the mood for a practical joke.  Yet this is the distorted conception of political economy that policies of mass money debasement have wrought.

The Hollow Promise of a Statist Economy

The present arrangement is both elegant and absurd in its crude simplicity.  Here we will attempt to boil it down to its crystalline essence…

The Federal Reserve fixes the price of money by centrally planning the federal funds rate.  Their fake money – i.e., debt based legal tender – can be created without limits.  The over-issuance of fake money, above and beyond what the economy demands, distorts prices, including those of stocks, bonds, and property.

Inflated asset prices concentrate wealth in the hands of the few, at the expense of the many. To be clear, this present arrangement has little resemblance with capitalism. To the contrary, it has everything to do with a centrally planned economy via centrally planned capital markets.  The effects of greater instability and greater wealth disparity are dreadful.

The distortion of relative prices along the stages of production when interest rates are artificially suppressed and exchanges of “nothing for something” are set into motion by the creation of new money ex nihilo (for additional background information see also: “The Production Structure”, “Business Cycles and Inflation – Part 1 and Part 2” and “Forced Saving”) [PT]

Still, Vila and the young socialists want to resist it with statist solutions of extreme government intervention.  They want planners in Washington to exact private wealth and redirect it to some noble and arbitrary inkling of the collective’s greater good. They don’t have a clue.

Without market-determined prices for goods and services, including market-determined interest rates, discovered through free exchange, it is impossible to establish prices that reflect actual conditions.

Without prices that are grounded in reality, the production and consumption relationship becomes distorted. In the absence of the natural corrective mechanism of market-determined prices, oversupply and scarcity conditions extend out to absurdity.

Unfortunately, the young socialists are uninterested in these truths.  Not when the goal of hard work and paying one’s way in life has been reduced to a game for suckers.  Not when apathy and a life on the dole is filled with such hollow promise.

Chart by acting-man.com, adapted from Roger Garrison “Time and Money – The Macroeconomics of Capital Structure

Chart and image captions by PT

 

MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He is the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that tries to bring clarity to the muddy waters of economic policy and discusses interesting investment opportunities.

 

 

 

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The Hollow Promise of a Statist Economy 
 

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