News & Analysis
Elite Media Downplays Austrian Economics by Building Up MMT
Heterodox economics ... Marginal revolutionaries ... The crisis and the blogosphere have opened mainstream economics up to new attack ... The market monetarists do not fret about the side effects of the activism they seek, which can misdirect capital, inflate bubbles and seduce people into over-borrowing ... Meanwhile mainstream economists continue to look at all the options askance, though not equally so. Some, particularly on the left, are getting quite enthusiastic about the market monetarists' NGDP targeting. Few are as keen on neo-chartalism. The late Bill Vickrey, a Nobel prize-winner, had sympathy for its take on debt, but it remains largely confined to academic redoubts in Kansas City, Missouri and Newcastle, New South Wales. As for the Austrians, Brad DeLong, a Keynesian Berkeley professor who also blogs, has called an acquaintance with their ideas a useful part of a diversified intellectual portfolio. But his frequent comrade in arms, Mr Krugman, does not seem to have revised his view that their business-cycle theory is "as worthy of serious study as the phlogiston theory of fire". – The Economist
Dominant Social Theme: The Internet and blogosphere have given rise to numerous new financial-economic theories. Oh, Austrian economics is one of them. But it's only one of many. Not more important, man. Just another one. So many of them. At least one other.
Free-Market Analysis: Another day, another attempt by the mainstream media to marginalize Austrian economics. We're using the Economist article (excerpted above) as an example but in our view this is a powerful elite dominant social theme.
How does the article marginalize Austrian economics? By taking an oblique approach, reporting not on the phenomenal rise of free-market economics but on the blogosphere's enabling role. This is a little like reporting on the latest American Idol by describing the role the Internet played in his or her advancement. It's part of the story but not the main story.
So why does the Economist use this approach? Because the Economist is a prime Anglosphere power elite mouthpiece. The Anglosphere elites are trying to set up world government and the last thing they want or need is a popular economic philosophy showing that a New World Order is neither feasible nor practical.
The Economist and other mainstream media have marginalized Austrian economics for nearly a decade now, ever since the economic philosophy began to make a comeback thanks to the Internet. It has virtually overtaken Keynesian economics on the 'Net as the most popular and relevant economic theory. But mainstream articles about Austrian economics are rare and usually diffident.
The Anglosphere power elite REALLY dislikes Austrian economics for three reasons. First, it advocates human action and in doing so shows that the foundation of mainstream economics – econometrics – is merely a variant of the USSR five-year plan.
Modern mathematical projections can never be used to pass laws because the laws and regulations themselves change human behavior. This is why laws and regulations almost always seem to work exactly in the opposite way from which they are intended.
Second, Austrian economics shows us that the monetary basis of the world's modern economy – central banking – is a theoretical falsehood and ruinous reality. You can't fix the price of money anymore than you can pass laws and regulations to force changes in basic human behavior.
Modern central banking creates tremendous booms and busts. During the bust phase, those who control central banks further consolidate their control of modern economies and businesses. This analysis of modern monetary practices was developed by famous Austrians Ludwig von Mises and FA Hayek.
The final point inherent in Austrian economics is that money often does best when it is has some relationship to commodities, preferably gold. This is, however, the least clear part of Austrian theory and the most in flux.
Modern Austrians are often apt to agree with the idea that ANY money is viable so long as it is accepted in the marketplace and divorced from government/monopoly control. Libertarian Congressman Ron Paul falls within this latter category, arguing in his current presidential campaign that there ought to be monetary competition within the marketplace.
This article is a variant of the "ignore Austrian economics" meme. The article doesn't actually ignore Austrian economics but by lumping it in with two other economics "theories" it marginalizes the growth of Austrian – free-market – economics and, more importantly, minimizes its success.
Implicit in the article's composition is the idea that the INTERNET has driven interest in Austrian economics, and is driving interest generally in hitherto non-mainstream economic theories.
Of course, here at the Daily Bell we often talk about what we call the Internet Reformation. But we are carefully to make a distinction between the Internet Reformation and the Internet REVOLUTION. This is an article partially about the Internet Revolution.
The Internet Revolution is just another mainstream meme that seeks to minimize the truly radical aspects of the Internet and substitute for them a generally clichéd appreciation for the Internet as a facility that is "changing the way we live."
We see the Internet as a fundamentally subversive technology that is undermining the manifestations of global governance that the elites are working hard to implement. The Internet "Revolution" is technology "changing our lives" – as a mainstream commercial might put it.
The Internet Revolution might change our lives by making it easier to choose pet food for our favorite animals or compare prices for a long-sought-after getaway in the sun.
The Internet Reformation changes our lives by introducing us to information about the strategies that the elites are using to consolidate their New World Order – from phony wars to authoritarian legislation to ruinous economic policy that seems intentionally aimed at causing a depression.
The Economist article fits right into the elite's larger effort to marginalize Austrian economics by making it merely part of the larger Internet "phenomenon." Austrian economics, we see, would not have achieved popularity without modern technology, and neither would these "other" economic disciplines.
This is a deeply disingenuous analysis, in our view. One of the hallmarks of the Internet was how quickly it developed into a kind of echo chamber for views on freedom and free markets. It turned out there was a whole history of deep intellectual thought concerning human action and the markets that had been missing from the mainstream for 100 years or more.
Once the elites lost control of the conversation on the Internet they never got it back. But they've been chipping away by creating false flags – including individuals and whole theoretical schools that are tailored to cause confusion about free-markets and freedom generally.
The idea is to provide intellectual firepower for anti-freedom and pro-government activities. This is most important to the continued success of the current elite conspiracy, as those in charge seem well aware that they need to animate their various power grabs with various moral arguments.
This is, in fact, the reason dominant social themes are so important to the elites. They are coercive devices that do the work that brute force cannot. The Internet has been undermining these themes with regularity, however. This is one reason that the elites have turned to war and authoritarian legislation.
But chaos and brutality is not a good substitution for coercion, by which people willingly submit to increased world governance under the impression they will ensure their solvency and safety. This is the reason that the elites continue to promote dominant social themes even though the Internet has increasingly made them less effective.
The toolbox simply is not that big or deep, from what we can tell. This article is a good case in point. Let's take a quick look at the two "theories" that are trotted out in opposition to Austrian theory.
Chartalism's theoretical constructs are known as Modern Monetary Theory. Here's Wikipedia: "Because the government can issue its own currency at will, MMT maintains that the level of taxation relative to government spending (the government's deficit spending or budget surplus) is in reality a policy tool that regulates inflation and unemployment, and not a means of funding the government's activities per se."
Market Monetarism, the other "theory," has to do with the idea that central banks should target the "nominal employment" rather than price inflation or other indices. The idea is that the central bank should print enough money to ensure that people have jobs.
Of course, this is economically illiterate stuff. The reason the West is suffering from so much unemployment is BECAUSE the economy has been stimulated and re-stimulated by monopoly money printing for about a century now – and certainly for the past 30 years with increasing energy and power.
By now Western economies – and actually the world's – have been so distorted by this extra money printing (literally tens of trillions of late) that people simply don't know whom to lend to. It's not clear which companies are solvent and why.
Weapons companies, green companies, environmental energy companies, lobbying and law firms, educational and public unions – the list of companies being supported either by central bank money printing or by governments themselves is overwhelming.
This is the reason that the Western model of "capitalism" is dying. It has nothing to do with free markets themselves and everything to do with a monetary system that prints endless trillions to prop up the crony capitalist enterprises of the elites themselves.
You won't learn any of this in the Economist article – or in other similar articles. The problems of Western economies are simple enough. They have to do with the almost psychopathic amounts of control that the Anglosphere elites now exercise – via mercantilism – on governments and economies around the world.
Between wars, laws, taxes and monopoly and fiat money printing there is almost no aspect of modern society that the elites have not distorted virtually into bankruptcy.
This is the reason that Austrian, free-market economics has grown so popular so quickly. It actually explains what is going on and what is necessary to change it.
Such knowledge drives the powers-that-be wild. Thus, articles like this one in the Economist that explain, basically, that Austrian theory is merely one "opinion" among many and that those economists who advocate yet MORE central bank money printing and MORE monopoly control of money have valid points, too.
Conclusion: They don't.
l 
|
You must be a site member to submit suggested edits or post feedback. In addition to submitting edit suggestions and posting feedback, your Free Membership to The Daily Bell gives you access to our Member Zone where you will discover a plethora of other member benefits. Want to learn more? click here |
|||||
|
|
||||
 |
Posted by pater_tenebrarum on 03/24/12 04:22 AM
'Getting rid of interest' misconceives what interest actually is. It is, as Mises points out in Human Action, a non-monetary phenomenon. Interest is merely an expression of time preference. Since time preference is always positive, there is always a positive interest rate. Without interest it would become impossible for the the proper balance between production, consumption, savings and investment to spontaneously emerge. The production structure and could not be intertemporally coordinated by entrepreneurs absent interest. However, the phrase 'absent interest' is in any case entirely hypothetical, as the phenomenon of time preference simply can not be 'absent'. Abolishing interest would be tantamount to attempting to abolish a category of human action that is an integral part of our being and without which there could be no functioning complex market economy.
 |
Posted by dave jr on 02/12/12 12:53 PM
BK: "If these minimal conditions are not met, such a market will not be advantageous for the non-elites (most of us), and will likely be conducive to more control by Money Power. Is this what you want? What is more important to you: that it is a "true" free market (which may be inimical to your interests) or that you are, yourself, free from elite domination?"
Except for government regulation and the destuction it has caused in the economy, I am free from elite domination by choosing to live debt free. The point was, a free market can not be "advantageous" to any social group, or it isn't free.
BK: "Wrong. What do you make of alternative currencies, like the LETS, the Chiemgauer (interest-negative in this case), Migchels' Gelre, the interest-free credit system of JAK bank (yes, even with the Mosquito's claims about this system)? Dave, this is simply not true. Sorry."
You make my point. None of these currencies are widespread and successful.
BK: "Market control was definitely not purposely left out (at least not by me). You are the one who refuses to acknowledge the existence of interest-free currencies that are not government-sponsored. Either this is an honest mistake (which I will assume for now), or because you "purposely" leave them out."
I acknowledge they exist. Don't make false claims and then hint of my dishonesty. I question their viability.
BK: "And I claim you are either making an honest mistake (which I hope), or you have said little to combat the domination of Money Power."
If I recall, I recognize that money is power, and in the hands of its rightful owner will do much to end domination by a centralized few. Remember?
 |
Posted by Summer on 02/12/12 07:02 AM
"Also, the Austrian school seems to ignore the fact that, when two parties agree on a voluntary transaction (an example of freedom of choice), this constitute a forced choice (and sometimes an unwanted one) on other parties operating in the same market. Thus, "freedom" is a subjective concept, depending whether a party is a "voluntary actor" or an "involuntary recipient" of a forced choice. It seems to me that the Austrian school always considers only the viewpoint of the "voluntary actor", and ignores the "involuntary recipients", as if their choice somehow did not matter or was subservient to that of the "voluntary actor"."
This is a very good point, one that is equally applicable to libertarianism viz., effect of one's actions upon the society at large...
|
Posted by Black_Knight on 02/12/12 02:19 AM
D: "If you set conditions for a currency, then it is not a free market deciding. Therefore you are not for free market currencies."
BK: If these minimal conditions are not met, such a market will not be advantageous for the non-elites (most of us), and will likely be conducive to more control by Money Power. Is this what you want? What is more important to you: that it is a "true" free market (which may be inimical to your interests) or that you are, yourself, free from elite domination?
D: "Lastly, the only way a currency will be interest free is by government fiat. So this is promoting a monopoly which you say is to be removed. Albeit, different master."
BK: Wrong. What do you make of alternative currencies, like the LETS, the Chiemgauer (interest-negative in this case), Migchels' Gelre, the interest-free credit system of JAK bank (yes, even with the Mosquito's claims about this system)? Dave, this is simply not true. Sorry.
D: "The dialect being presented is either government protected central banking control of currency vs. direct government control of currency. As if there is no other choice, and market control of currency is purposely left out."
BK: Market control was definitely not purposely left out (at least not by me). You are the one who refuses to acknowledge the existence of interest-free currencies that are not government-sponsored. Either this is an honest mistake (which I will assume for now), or because you "purposely" leave them out.
D: 'I still claim you have said little to promote freedom and liberty and much to aid centralized control.'
BK: And I claim you are either making an honest mistake (which I hope), or you have said little to combat the domination of Money Power.
|
Posted by dave jr on 02/12/12 12:01 AM
Thank you Agent Weebley.
 |
Posted by Agent Weebley on 02/11/12 10:24 PM
That was great, dave jr. Well said.
|
Posted by moralrealist on 02/11/12 01:22 PM
I really appreciate the Bell deciphering of elite media. I surely don't want to read any of it. Of all the commenting that goes on, there is so much that is as gobbledygook as what is in the mainstream press--some of you commenters don't make a whole lotta sense. The minds of--Americans, at least, being those that make little sense--middle class trying to figure out what would enable the world to work in a more equitable and moral fashion need only to understand the basics of austrian economics and stop listening to Keynesians, and the rest. Unfortunately, we've been educated, er, so narrowly manipulated that our thinking is dull.
Thanks Bell. You give me a lot to think about.
|
Posted by Daryl Vansack on 02/11/12 01:04 PM
Most trenchant article I have read on the tendentious media's reporting of the American economy- more articles like this please !
|
Posted by dave jr on 02/11/12 11:42 AM
I would like to, but I can't agree to contradictions, for example:
"I am all for a free market of currencies, as long as participants have the option to save in physical gold (the store of value function), and, ideally, as long as some of these currencies (those functioning as means of exchange) are interest-free."
If you set conditions for a currency, then it is not a free market deciding. Therefore you are not for free market currencies.
Furthermore, participants can always save in physical gold, so you do not need to claim this in order to build consensus.
Lastly, the only way a currency will be interest free is by government fiat. So this is promoting a monopoly which you say is to be removed. Albeit, different master.
But you have tempered your position by saying "ideally" as long as "some" of these currencies are interest free, and I can apprieciate that.
So how to you propose the existence of free market currencies in the midst of government fiat? It is not possible. Once government declares their note legal tender, I HAVE to accept it for my product. This is the problem we have now.
The dialect being presented is either government protected central banking control of currency vs. direct government control of currency. As if there is no other choice, and market control of currency is purposely left out.
'Market control' simply means than anyone can negotiate to accept whatever they define as value in their transactions. And anyone can ask rent for THEIR property and anyone can accept or deny.
I still claim you have said little to promote freedom and liberty and much to aid centralized control.
|
Posted by Agent Weebley on 02/11/12 01:34 AM
For those of you that do not know what a "merket" is . . . me neither. I think I meant Merkel, as in Angela.
Let Angela Merkel decide. Yep, that sounds about right.
|
Posted by Agent Weebley on 02/11/12 12:45 AM
You should read what I'm writing oh hunter of memes. It'll be up soon.
Basically, you seem to want to "plan" things. That is mistake number 2.
Mises had that problem fully masticated and the answer spits out as . . . wait for it . . . . wait for it . . . can't.
Give everyone the money fairly and equally . . . beyond that, nothing, no coersion, no planning, let the merket decide what the plan is.
Click to view link . . . wait for it . . . wait for it . . .
|
Posted by memehunter on 02/11/12 12:01 AM
"All I have heard from you so far is to put the money power directly into the seat of government."
Not true. I said that this was not an ideal solution, but at least it would get rid of interest. But I also mentioned other ideas. Here is what I wrote earlier on this thread:
"I am all for a free market of currencies, as long as participants have the option to save in physical gold (the store of value function), and, ideally, as long as some of these currencies (those functioning as means of exchange) are interest-free."
By removing the monopoly over the money supply, and by giving market participants the opportunity to borrow in interest-free currencies, I think we would neutralize the two main weapons of Money Power. Do you agree?
|
Posted by dave jr on 02/10/12 08:59 PM
I guess I had that coming. They sure do spooky stuff. Drones and droids.
|
Posted by Agent Weebley on 02/10/12 08:34 PM
Hi dave jr,
Nay, I cannot. The element of surprise is the best way to promote our screenplay, and with my connotative writing style, you never know which end is up, or where we're going to end up, so I can only whet your whistle with the main outline . . .
The movie involves a stealth attack on the system. After resting for the night in the forest on the outskirts of DARPA Central, we gather our weapons and gear, stack them onto the back of Rocinante, our Horseless HeadMan, who we nicknamed TF, and begin the stealth attack . . . DARPA Perimter Defence is just over the hill.
Remember. Stealth. Surprise the enemy . . . catch them off guard.
Heck, I can't keep a secret . . . here's a clip . . .
Click to view link
|
Posted by dave jr on 02/10/12 05:46 PM
"As I said already, Money Power managed, non-violently (well, at least not using violence on a large scale), to progressively take control of European governments, and later, of most of the world's governments."
We have wandered far from the topic of possible solutions. All I have heard from you so far is to put the money power directly into the seat of government. The corruptors will not have to do it again, because they will have got what they wanted. The consolation prize is money can be interest free. It's true, slaves do not pay interest.
By what other means do you believe the 'money power' can be eliminated?
 |
Posted by Abu Aardvark on 02/10/12 05:07 PM
"As I said already, Money Power managed, non-violently (well, at least not using violence on a large scale), to progressively take control of European governments, and later, of most of the world's governments. So who is to say that they could not do it again? Who is to say that they could not manage to corrupt the fiber of society even in the absence of government?"
-------------
NO ONE CAN. But one can acknowledge HUMAN NATURE and how to minimize the ramifications of our darker sides. Ironically, one achieves this best (NOT "perfect") with a MAXIMUM of individual freedom, of course, which in itself is most desirable (no?) - apart from being the most effective means of avoiding tyranny. THAT'S the whole point, isn't it?
Suppose Money Power is out of business for a moment ...
Now ask yourself what what "they" would prefer as the more promising environment for a comeback?
- Existing government levers with a "minimum of coercion"-monopoly and money out of thin air - interest-bearing or not.
- No government levers. Voluntarist private justice. Competing forms of free-market money - interest-bearing or not.
Well?
|
Posted by memehunter on 02/10/12 04:14 PM
As I said already, Money Power managed, non-violently (well, at least not using violence on a large scale), to progressively take control of European governments, and later, of most of the world's governments. So who is to say that they could not do it again? Who is to say that they could not manage to corrupt the fiber of society even in the absence of government?
This example shows the tremendous power wielded by the holders of "financial weapons". You might say that the bankers were helped in their endeavors by the greed and weakness of kings and ministers, and that if people had refused to borrow at interest from bankers this would not have happened. This may be true - this would be another argument for insisting on educating people and pointing out the "spiritual dimension" of this centuries-old conspiracy.
This is not making a case for government, by the way - I don't think that government can fight Money Power efficiently given the corruptible nature of most human beings (and especially, it seems, of those in power). Rather, this is simply making a case against Money Power and its practices, including chiefly compound interest.
Reply from The Daily Bell
Who is to say that they could not manage to corrupt the fiber of society even in the absence of government?
This is another logically fallacious statement. What the heck is the "fiber of society" and how is to be corrupted in the absence of government?
|
Posted by memehunter on 02/10/12 04:03 PM
AA: Ha, how about evidence that supports your claim that the elite uses what you call "Austrian/Keynesian dialectic" to further their goals when they fight, for decades a least, tooth and nail literally EVERTHING that Austrian Ecomnomics stands for in order to keep and expand their most vital tool, i.e. mercantilist central banking WORLDWIDE?
M: I have quoted the article from the "Real Economics" blog, and provided my personal speculation as to why some elites might find a community of interests with Austrian economics. Do not take my word for it - I invite readers (including you, Abu) to read the entire article for themselves.
AA: Look, if this "Austrian/Keynesian dialectic" existed - as a means of the elite that is - how come they never came up with a "solution/synthesis"? How come, then, that they promote, live and breath ONLY ONE of the alleged "sides" of the asserted "dialectic" FOR CENTURIES?
M: "For centuries" is a bit much. I don't have an answer to your question. Perhaps the "solution/synthesis" is coming - we hear more and more talk about a return of gold to prominence as a reference point. Maybe the elites are not a monolithic bloc themselves, even though the DB refuses to even consider this possibility.
AA: To the contrary: I fully understand that you peddle, among other things:
M: Talk about a non-sequitur. This is what you asked in your previous post:
"AA: Well, since Austrian Economics takes hold on the elite's money power machinations like bright sunlight on vampires your rant amounts to the claim that "some power elites" are holding (a secret?) wish for loss of power - or even death."
|
Posted by dave jr on 02/10/12 03:41 PM
"Agent Weebley Does DARPA"
please provide some video.
|
Posted by Abu Aardvark on 02/10/12 03:39 PM
MH: "What more evidence do you need?"
AA: Ha, how about evidence that supports your claim that the elite uses what you call "Austrian/Keynesian dialectic" to further their goals when they fight, for decades a least, tooth and nail literally EVERTHING that Austrian Ecomnomics stands for in order to keep and expand their most vital tool, i.e. mercantilist central banking WORLDWIDE?
Look, if this "Austrian/Keynesian dialectic" existed - as a means of the elite that is - how come they never came up with a "solution/synthesis"? How come, then, that they promote, live and breath ONLY ONE of the alleged "sides" of the asserted "dialectic" FOR CENTURIES?
MH: "you haven't understood (or rather, pretend not to understand) my points"
AA: To the contrary: I fully understand that you peddle, among other things:
- free lunch for all money out of thin air without a clue when you "created" enough - too much - "money".
- a "minimum of coercion" by government without a clue as to WHO would do the coercing based on NO LEGITIMACY whatsoever, of course ... but your say-so.
Doesn't sound like much of a freedom agenda on your part ...
|
|
