Posted on 10/25/2013 11:12:59 AM PDT by Para-Ord.45
Video at link:
A common belief is that conservatives caused the government shutdown, while liberals are the ones who want to legalize marijuana.
But both ideas come from the same school of thought, which is much older than the Democratic and Republican parties.
It is called Austrian Economics, and one of its leading proponents calls south Louisiana home.
Dr. Walter Block holds an endowed chair at Loyola University and is a faculty member of the Mises Institute. He has taught at several universities and written books about controversial economic topics.
He was one of many people angry about the recent partial shutdown of the federal government, but his reasons differed from most.
"If government is bad, then a shut-down government is good," he stated. "I wish they would've shut more of it down, they didn't shut enough of it down for long enough."
The Austrian School of economic thought was devised by a handful of economists in Austria in the 15th century; otherwise, it has nothing to do with the country. Free enterprise is the school's main tenet. Austrian theory says regulation is bad for the general welfare, as well as for economic growth and stability.
One thing Block mentioned he would do if tasked with improving the U.S. economy would be to eliminate the minimum wage, because it unnecessarily raises unemployment.
"We believe," he said, "that it really is a law that when you have a minimum wage, you'll create unemployment for people whose productivity is below that level stipulated by the minimum wage."
According to Austrian theory, the market alone should decide the value of products and services. If a company is not successful, it should go bankrupt. Another change Block suggested is to end subsidies for American farmers. If agriculture is not profitable for enough farms, some of them should go out of business, allowing supply to balance out demand and creating prices that are more sustainable.
Austrian economics holds that people should be allowed to make whatever choices they feel are best for them, so long as they do not hurt other people.
A website called The Silk Road was shut down recently by the FBI. It let users buy and sell drugs, guns, and other contraband.
"We shouldn't have any illegal drugs," Block argued, "because they should all be legal."
He said crime would drop the instant drugs were legalized.
"An awful lot of it is predicated on fighting over turf," he claimed, "and if two gangs disagree over something, they shoot it out and kill innocent people. Whereas if two tie manufacturers had a dispute, they'd go to court. They don't shoot it out!"
Austrian theory is not a mainstream section of economics. Americans tend to believe there is a need for regulation, especially in the financial sector. But Washington state and Colorado have already legalized marijuana for recreational use, and a recent poll suggested that a majority of Americans want marijuana to be decriminalized. Combined with legalized prostitution in Nevada, Block said Americans are pushing for greater personal freedoms.
Politically, Austrian economics lines up closely with libertarianism The most famous current practitioner of Austrian economics is former presidential candidate Ron Paul. He also wants to shrink the government, get rid of the Federal Reserve, and let people make the decisions that are best for them.
If it is good enough for clothing companies, "why don't we apply it to everything?" Block asked.
The most common criticism of Austrian economics is that it relies solely on logic, and does not seek statistical validation for its claims. Some people also claim that allowing the economy to move unchecked allows for greater volatility and longer recessions.
I agree with these ideas ideologically... but as for the unforeseen results... well, it would be interesting. At least there would be more liberty than the current situation.
But no matter who wins, it's still a 'tie'......................
bfl
Must watch/listen if you haven’t done so already.
Economics rap song !!!
Fight of the Century: Keynes vs. Hayek Round Two
http://www.youtube.com/watch?v=GTQnarzmTOc
I question that date. That was well before Adam Smith and the Wealth of Nations. Wikipedia (yes, I know the warnings) says:
It originated in late-19th and early-20th century Vienna with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser, and others. (citing Joseph A. Schumpeter, History of economic analysis, Oxford University Press 1996).
An honest application of this way of thinking will arrive at the conclusion that there are some things that government can do more efficiently than the market. Those things will encompass far less than most people on the Left or Right will believe. The U.S. Constitution (as written) is a pretty good example of limiting government to its efficient ends.
Any honest examination of Keynesian economics would conclude that the rich will get richer relative to the poor that they are trying to help.
It relies on the idea that people are too stupid to make their own decisions.
The Keynesian model is fundamentally “Racist”, as it is being applied here in America.
Do you walk to school or carry your lunch?
Okay. It's Capitalism.
I’m not sure what that has to do with what I said, but:
“It relies on the idea that people are too stupid to make their own decisions.”
That belief is probably held by many who espouse Keynesian economics, but I don’t think it relies on that idea. My understanding of it is that it relies on the idea that government can prod economic growth by using its power to stimulate demand via redistribution. That is wrong, perhaps even stupid, but I don’t see how it is racist.
Austrian economics is pure free market!
There’s a difference between capitalism and free market although the terms are frequently interchanged.
What part is controversial?
Besides trying to apply it to social issues
Okay. It's Capitalism.
"Capitalism" is a pejorative term used by
Marxists to describe freedom and liberty.
Longer recessions and high unemployment during recessions are due to government intervention which establishes an improper relationship between money wage rates and the aggregate demand for labor in the economic system.Specifically, government intervention keeps wage rates and prices too high.If, during a recession, government allowed average money wage rates and prices fall to equilibrium levels dictated by the free market in labor and goods, recessions would end more quickly like it did in 1920, when average wage rates dropped 19% and the recession was extremely short-lived as a result.(This is an example where empirical data confirm the logic of the theory.)
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