Se ying diu sau For the

Se ying diu sau

For the Hayekians fail to see that Keynesianism and other economic interventionist programmes take place against a complex real world background. A real world in which attempts at basic economic management i. e the alleviation and prevention of suffering are a bulwark against disaster. A bulwark against the sorts of regimes that are deeply and murderously antithetical to individual and economic liberty in ways economic-interventionist capitalist democracies have never been, nor ever will be. Libertarian state-minimalism and attendant Austrian laissez-faire economics are fine for fantasists pining to live in a fantasy world. But for those of us preoccupied with the perils, dangers and constraints of this real world, they and their loud-mouthed proponents are usually little more than a nuisance. Be the first to like this post. The really nutty crowd, of course, claim that without government there would never be any market failure, recession or depression. This se ying diu sau of deliberately self-serving wishful naivety is best treated by simply being ignored. Wrong, some Austrians believe that it is fractional reserve banking that causes recessions Mises, Rothbard etc, others that it is se ying diu sau central bank Selgin, Horowitz etc. Either way the Austrian Theory of the Business Cycle deserves serious consideration and should not be conflated with crude abolish government and all would be fine libertarian arguments. Incidentally I thought that the Hayek-Keynes video failed to make the point that Keynesian deficit spending can create a recovery but that such a recovery is artificial, based as it is on government-allocated spending rather than genuine private demand. The government will have to withdraw its funding at some point and the industries/projects the funding is withdrawn from will not necessarily receive private funding afterwards if private demand requires funding in other industries/projects. Incidentally I thought that the Hayek-Keynes video failed to make the point that Keynesian deficit spending can create a recovery but that such a recovery is artificial. And the relevant reply, in line with the OP being, so what if it s artificial? To think this is the important point is precisely to fail to see the wood for the trees. Because at some point the se ying diu sau recovery will result in a crash again when the government has to reduce spending. Better for a genuine long-term recovery to occur. Wrong, some Austrians believe that it is fractional reserve banking that causes recessions Mises, Rothbard etc, others that it is the central bank Selgin, Horowitz etc. Either way the Austrian Theory of the Business Cycle deserves serious consideration and should not be conflated with crude abolish government and all would be fine libertarian arguments. Do Mises et al think that if we abolished fractional reserve banking/the central bank and replaced it with whatever the preferred libertarian solution is, then there d be no recessions etc. If so, that just sounds like a more technical way of saying what Paul said get rid of govt and everyone will have everything they ever wanted, and a pony! Forgive me if I don t find that an especially plausible claim. We ve got the example of post-Soviet Russia right on Europe s doorstep to illustrate these points, by the way. Given the choice between the ruination and disaster that the nation became and an incredibly sinister but stable managed democracy led by violent and utterly corrupt thugs, the Russians have repeatedly opted for the latter. It seems that in times of great hardship which, as you note, are basically inevitable lots of people would much rather be repressed and comfortable than free and hungry. Not that this will deter Hayek s fans, who will no doubt rattle about genuinely free markets or some such, but still. There s a fair bit that could be said here about parallels between the free market yucksters that did such a stand-up job with Russia and the clique of overprivileged business school monkeys that tried to turn post-Saddam Iraq into an economic miracle, but that s probably a chat for another day. Do Mises et al think that if we abolished fractional reserve banking/the central bank and replaced it with whatever the preferred libertarian solution is, then thered be no recessions etc. If so, that just sounds like a more technical way of saying what Paul said get rid of govt and everyone will have everything they ever wanted, and a pony You could in theory have a socialist regime and a monetary policy run according to Austrian principles. It isn t the abolition of government that ends recessions but the removal of the banks ability to increase the money supply thus artificially lowering interest rates and creating malinvestments. The other Austrian theory based around the idea of monetary equilibrium doesn t have a problem with banks increasing the money supply as long as there are limits limits which the Central Bank removes. I think it might be worth making a distinction between Hayek and Hayekians given that the latter often ignore much of what Hayek said. Hayek, in The Road to Serfdom, suggested: probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez-faire capitalism. He seems there to be as unpleasant a reactionary as most of his followers. declineofthelogos said, It s worth pointing out that the nutty end of the libertarian spectrum believes all these things would happen because everyone would accept that appropriating someone else s property is always MORALLY wrong, so people would be happy to be complicit in their own exploitation, as to do otherwise would be immoral. This would be less hilariously ridiculous if America did not exist. It is true that people who find themselves in an unhappy enough situation will tend to do nearly anything, including resorting to violence, to escape it. However, as far as I m aware, there is no law of human nature which states that unemployment should provoke such a reaction. Our desires are largely a product of society and the messages conveyed to us by authority. Therefore, policies to increase employment also increase our need to be employed. To state that people who reject these policies are being hideously naive suggests that attitudes towards employment and life cannot change but clearly this is not the case. Criticising a small state libertarian for ignoring the disorder that would result from an end to interventionism, is a bit like criticising a communist for opposing the doctrine of transubstition or the introduction of an officially sanctioned prayer book. The whole point is that they want attitudes to change. I d like to point out that Hayek was fond of an interventionist monetary policy: namely some form of NGDP targeting by a central bank.