In the effort to inject interesting economic thought into the discussion at ACC we present the following video by Jeff Deist recorded at the Mises Institute. This lecture will likely challenge many of your assumptions about money.
Over the medium to long term the only way a firm or a small group of firms can maintain a monopoly is if it has the backing of the government.
If a firm in a free market attains monopoly status, and this can happen, it won’t last as new firms with better equipment, techniques etc. will enter the market. If however a firm can get in good with the government, then the monopoly firm can get its politician buddies to regulate away competition.
China, despite what you may have heard is NOT now a capitalist country. It is a crony capitalist country. The chief cronies are the members of the old Communist Party.
The Chinese economy is one in which prices are often set by decree, as such there are massive inefficiencies in the system. This is not healthy, and it is destabilizing. The Chinese crony corps knows that there are serious problems with the economy and society, especially as China is witness to its first real economic slowdown in 3 decades. As such the party is reasserting itself to sure up its position.
An excellent article from Jack Curtis at The American Thinker.
America has stagnated. It isn’t dynamic. Government is thick and restrictive. Businesses are not being created at the rate they were in the past. 20% of households (according to the attached article) have no one working. 1 in 5 households have no workers.
A poison cocktail of fiat financialization and massive government has dripped into the American bloodstream over the last 4 decades or so. The vigor is gone. Increasingly desperate people look to the welfare state for solutions, or at least a fix.
It is the state which has created this situation, not capitalism. We haven’t had real, non-crony capitalism, in this country for a long time. And the culture of Obama has accelerated this move away from free markets and free prices.
They say that parasites rarely kill their hosts. But sometimes they do.
This op-ed from Walter Williams comes the same week that the World Bank has proclaimed publicly that it “will end extreme poverty by 2030.” If the institution wants to end such human desperation it would be wise to encourage the rule of law and free markets (and free prices).
I think that it’s funny that David Stockman, Ronald Reagan’s former budget chief, starts his column with this sentence:
“This morning’s market is more erratic than Claire Danes off her lithium.”
Seems a little gratuitously mean. Accurate (?) perhaps but mean. But that is one of the things we like about the guy. His acid.
Of course some people who clearly do not understand what makes a market, nor why the market mechanism drives down costs and increases quality of life for everyday people will argue that markets are evil because, well, because they’ve been told all their lives that markets are evil.
If the GOP was seen as a party of genuine free enterprise (I know, don’t laugh), which made the case to all people that free markets and free prices generate prosperity and that government intervention and cronyism lead to stagnation and despair, the party could make serious progress with non-white voters.
We are regulating our economy to death. One of the main reasons why there is an increasing disparity in wealth in this country is that the crony class is wrapping the middle class and the merchant class – the entrepreneurial class – in red tape. Pay a tax here. Pay a fee there. Do you have a license to do that? It is harder and harder to build a business – something which is plenty hard to do without the crushing weight of the state.
This fundamentally has been the bet of traders of all kinds for the past 3 1/2 years or so. If things get too bad in the markets the Federal Reserve will come to the rescue. The belief is that the Fed is bigger than the market. That come what may the shamans can offer a “wink and a nod” and all will be well. That is what these guys think they saw today.
This video is from March of 2012 at the Mises Institute. In it Hunter explains why it is that the current economic regime is fundamentally corrupt and what to do about the situation.
You bet there is. It’s what we are fighting for. An economic system based on real prices, open markets, and sound money would serve the world so much better than the centrally planned, top down, command and control, fiat money system we must now endure.
Being “pro-market” means being pro-innovation, pro-competition, pro-transparency, pro-rule of law, pro-hard work, pro-efficiency. Being “pro-business” can on occasion mean these things also but typically it does not.
Truly it will not end well if people keep buying into the simple minded notion that the government is somehow their friend. That the state will mete out justice on behalf of the “people.” That somehow by expanding the power of the politicians life will be made better.
The government is to be tolerated. There are things it must do. But it is not your friend unless you are in the political class. Most of us are not.