30 February 2009
The global economic crisis that the reckless monetary policies of the world’s central banks visited upon us still leads the great majority of economists, economic commentators and know-all pundits mislabelling the situation as one of either market failure or another example of the innate increasing instability of the capitalist system1. That vulgar Keynesian2 thinking contributed mightily to the crisis never enters the heads of these economic commentators — but then very little ever does.
These crises are a very old story. David Ricardo and his contemporaries had a far greater understanding of the phenomenon than all the members of the economic commentariat put together, including those with Nobel Prizes. Paul Krugman, for instance, argues that recessions “happens when, for whatever reason, a large part of the private sector tries to increase its cash reserves”3. This is pure baloney. No recession in economic history was ever caused by a sudden demand to increase cash balances. One only has to look at the profits and cash situation of firms in 1929 to see that Krugman’s assertion is completely baseless.
Continue reading Keynesian dogma is creating our economic crises, not the free market part I
30 January 2023
The late Professor Haydn Washington1 was a deep green and like so many deep greens he was an economic illiterate whose idea of a idyllic society was based on the concept of a “steady state economy”, condition that the classical economists called a “stationary state”, an imaginary long-run economic state of affairs in which all economic progress has ceased because the economy has reached, so to speak, its final point of rest. Of all the classical economists John Stuart Mill2 was the only one who welcomed this prospect, not that readers would ever learn that from reading deep green propaganda. Whereas Mill’s3 vision was one of a stationary economy that comes to rest of its own volition the greens’ vision is that of a dystopian nightmare imposed through force and duplicity and ruled by an iron fist.
Continue reading Australian Greens’ lies, distortions and oysters
9 January 2023
Part 1 gave examples of Ricardo’s contemporaries refuting his rent theory. I finished with the Rev. Jones total destruction of Ricardo’s theory of how economic rent emerges. Nevertheless, some economists tried to dismiss the Reverend’s argument on the spurious grounds that Ricardo — at least in the instance of rent — was using a purely historical argument to make a point. This is the line that Wesley C. Mitchell seemed to support when he presented his view that
that Ricardo was not taking into account actual historical circumstances; that his was a schematic, theoretical view of the subject; that… none the less the Ricardian theory of rent remained true…1
This is unbelievable. Ricardo emphatically stated that the best land is always farmed first and that the pressure of population growth would bring marginal lands into cultivation thus creating the differential he called rent. There were no buts or equivocations. He understood that the theory rested entirely on this statement. Once it could be shown that the sequence of events were not as he described them then the theory would collapse. But it should not be forgotten that for his critics the key point was not the existence or non-existence of marginal land but the fact that what really mattered was the land’s productivity. This is why Ludwig von Mises said:
Continue reading AUSTRALIA’S ANTI-GROWTH ANTI-CAPITALIST GREEN PARTY IS SCREAMING FOR A FALLACIOUS RENT RESOURCE TAX PART 2