05-30-2017, 12:31 AM
Mises was not mainstream. People outside the mainstream are often recognized as fools or cranks. Until at least 1980 most people, even conservatives, thought that the Soviet Union was an Evil Empire with great powers of survival. It could repress anything. by economic measures of the West, the Soviet Union was generally recognized as a prosperous society even if the masses seemed not to prosper. 'Experts' were valuing Soviet output at prices for comparable objects in the West -- never mind that the Soviet Union was producing lots of stuff for which the rest of the world had a glut or that the Soviet economy was wasting energy (world energy use fell during the 1990s because Russia and the former Socialist states of Europe quite wasting energy as they did.
Is the mainstream always right? No. There just might be some quack cure for cancer, heart disease, AIDS, or arthritis that really works. I would not bet on it. If I am to ever buy a copper bracelet, then it will be strictly for appearance and not out of any expectation that it will give any relief from arthritis. So it is with economics. The purist libertarianism of Mises has consequences that most people find objectionable. Economic inequality that leads to mass deprivation offends too many sensibilities.
Do I have use for some of the teachings of libertarians? Sure. Hayek has a very good explanation of economic bubbles and how they cause economic meltdowns. Economic bubbles devour capital, pulling it away from investments that might do some real good and create a monstrous imbalance in the economy. Just think of the real estate boom of the Double-Zero decade. Without the bubble there might not have been so much wasteful development in housing that people could not afford. Americans would have been better off with more investment in industrial plant and equipment that creates jobs that make housing affordable, as the solid economy of the 1950s demonstrated. But with a bubble, capital is turned into garbage and only when people recognize that the investments are unworthy of the cost that a financial panic ensures.
But Hayek satisfies me on this without convincing me that pure plutocracy is the way to go.
Is the mainstream always right? No. There just might be some quack cure for cancer, heart disease, AIDS, or arthritis that really works. I would not bet on it. If I am to ever buy a copper bracelet, then it will be strictly for appearance and not out of any expectation that it will give any relief from arthritis. So it is with economics. The purist libertarianism of Mises has consequences that most people find objectionable. Economic inequality that leads to mass deprivation offends too many sensibilities.
Do I have use for some of the teachings of libertarians? Sure. Hayek has a very good explanation of economic bubbles and how they cause economic meltdowns. Economic bubbles devour capital, pulling it away from investments that might do some real good and create a monstrous imbalance in the economy. Just think of the real estate boom of the Double-Zero decade. Without the bubble there might not have been so much wasteful development in housing that people could not afford. Americans would have been better off with more investment in industrial plant and equipment that creates jobs that make housing affordable, as the solid economy of the 1950s demonstrated. But with a bubble, capital is turned into garbage and only when people recognize that the investments are unworthy of the cost that a financial panic ensures.
But Hayek satisfies me on this without convincing me that pure plutocracy is the way to go.
The ideal subject of totalitarian rule is not the convinced Nazi or the dedicated Communist but instead the people for whom the distinction between fact and fiction, true and false, no longer exists -- Hannah Arendt.