Free Market Fundamentalist Ideology is based on a Logical Fallacy.

Well, here is some very unhappy news about economy and the Ukrainian proxy war from economist Jack Ramus. He has written a short, but concise history of recent Ukraine history and NATO to date (On US Imperialism’s Proxy War with Russia in Ukraine,March 26, 2022 by jackrasmus). All of the financial sanctions against Russia is meant to drive them out of the European markets in a takeover by the US even at the risk of nuclear war.

But, the near term economic outlook viewed by Dr. Ramus is not good either, and I hope he is wrong:

"...Biden and Democrats see the ‘war issue’ as the only tangible position to run on in November elections after having abandoned all promises of social spending benefiting US workers and facing a coming debacle in November 2022 as inflation accelerates and the US central bank embarks on a policy of extraordinary interest rate hikes that are clearly intended to generate a recession no later than 2023 and possibly even earlier."--Reply to the US ‘Left’ on the US-Russia Proxy War in Ukraine, Part 2, April 16, 2022.

 

Capitalist Speculative Inflation as a Way to Discipline Wage Earners​

Prof. Harvey examines the current US inflationary crisis in this video and suggests that its cause goes beyond the mainstream explanation of supply and demand. He argues that the crisis has been engineered by capital in an effort to protect profits, weaken the power of labor and discipline social movements.

When Capital's power is threatened, they just push the Inflation-Recession Button and, abracadabra, all their problems evaporate.

Harvey looks back at the inflation of the 1960s and the 1970s and the relationship that existed between wage rate, profit rate and inflation rate. I lived through those decades of inflation; if you get a wage increase, its gone in a snap with inflation by way of higher gas bills, electric bills, water, trash bills, food bills, public transportation, etc.. You're just running in place...if you can run.

This is the way the Republican and corporate Democrats punishes wage labor asking for a living wage. Prof. Harvey predicts this current wave of inflation to be with us for the long term, and urges us to consider whether the resulting recession is caused by a lack of opportunity, or if it is simply a means for the capitalist class to seize more power and control.

Anti-Capitalist Chronicles: Inflation and Class Struggle
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Please provide a link to the libertarian party's platform that states they want to go back to slavery.

 

No, this is what happens when govts spending more than they take in for decades on end, plus MMT at the federal reserve because low interests lead to excessive borrowing; and now the chickens are coming home to roost.

 

Economist Prof. Michael Hudson Extraordinaire​

Here is one of Michael Hudson's most interesting interviews since it is about his own intellectual development as an economist of which he rarely talks about. Hudson is usually introduced as a "Michael Hudson is Professor of Economics at the University of Missouri-Kansas, former balance of payment economist at Chase Manhattan, political consultant," but his biography is much more than a economist in academia.

The CIA attempted to hire Hudson at least once which is not unusual during the beginnings of the Cold War. The OSS (Office of Strategic Services that later became the CIA) hired the famous Hegelian-Marxist philosopher Herbert Marcuse of the Frankfurt School Social Research to write a report (Soviet Marxism: A Critical Analysis,1958) on the economic structure and viability of the Soviet Union as a state. Marcuse described the Soviet Union as a "third rate welfare state" and predicted it would economically collapse in 40 years--the Soviet Union collapsed in 1989, or 31 years after the report. The CIA didn't like Marcuse's report because they needed an emerging threat to justify Cold War military spending and so buried the report.

American Economics - Prof. Michael Hudson
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Right-Wing Revisionist History of Weimar Germany’s Hyper-Inflation Strategy of 1923. ​

Here is an example of this Right-Wing talking points:

Remember Greenspan was an Ayn Randian Libertarian that believed markets could regulate themselves. Greenspan has since admitted that his economic philosophy was illusionary. Japan followed Reagan's lead in America during the 1980s based on Milton Friedman's monetarist policies that lead to the Savings and Loan scandal. Unlike the Americans, however, the Japanese refused to bailout Japanese banks that invested heavily into the real estate bubble and went bust resulting in the lost decades.

This right-wing revised history is so wrong that it is difficult to know where to start. The political right resort to rewriting history to fit their ideology, and “Keynesianism” is the null bucket to throw all economic failures—failures often the result to Laissez- faire policies. The Right’s revisionist history on the one hand blames Keynes for Weimar’s post WWI inflation, and then on the other accuses Keynes’ policies of bring Hitler to power. Keynes warned in “Economic Consequences of the Peace” (1919) that severe reparations would bring about despotism and prolong recovery. Keynes was harshly criticized by his fellow countrymen and Allies for holding this view accusing him of treason.

Keynes in no way supported, or advocated the Weimar’s deliberate effort to crash the German currency. Big business, the Army and the State consciously planned to pay reparations in cheap currency and to enrich themselves. William Shirer has recounted the correct history of Germany’s hyper-inflation of 1923. Hitler did not come to power until ten years later in 1933.

As a matter of historical fact Keynes argued the opposite in regard to Germany’s hyperinflation. Austrian economist and darling of the Rightwing, Friedrich von Hayek, began his economic studies as a Fabian socialist, but was never attracted to Marxism. After the WWI armistice of November 11, 1918, he returned to Vienna in defeated German-Austria intending to study economics. The former Austrian-Hungarian Empire was reduced to a lesser state of German-Austria that suffered from economic depression as the allies extracted postwar reparations. During this difficult time in post WWI German-Austria, the nineteen years old Hayek read John Maynard Keynes’ book “Economic Consequences of the Peace” that was critical of the victorious Allied leaders’ desire to punish Germany with harsh reparation agreements, and warned of revolution in the chaotic defeated states. Because of Keynes’ concern for these suffering countries from extreme hardship, hyperinflation being one, Hayek said Keynes was “something of a hero to us Central Europeans.” (Wapshott, Nicholas, Keynes Hayek: The Clash that Defined Modern Economics, Norton, Kindle, p.4.). So one can say Hayek was a Keynesian on this issue of the post war Treaty of Saint-Germain-en-Laye that placed economic hardship on Germany and Austria. Hayek was also impressed and agreed with Keynes’ solutions for the government to stabilize Austrian prices and currency as proposed in Keynes’ article “A Tract on Monetary Reform.”

Notice that Keynes' warnings of the destructive effects of inflation are often stolen from him by his critics and quoted back at Keynes as if he was unaware of the dangers. Keynes critics have to plagiarized Keynes’s own writing in order to counter-argue Austrian economics. Austrian economics is not a theory build from observing any real economic system as much as it is a contrary reaction to Keynesianism.

And the contrary reaction most popular with Austrian economists and Libertarians is to advocate austerity in economic depression. Reduction in public spending and wages traumatizes those it is directed against and has unpredictable social consequences. John K. Galbraith recounts how inflation fighting austerity measures affected Germany in the 1930s after the nation experienced massive hyperinflation following WWI.

Contrary the Keynes-caused-Hitler thesis, it was Germany’s deliberate act of crashing the German currency and then imposing austerity measures that paved the way for Hitler.

 

Here is a topic by topic time stamped two part video interview of economist Michael Hudson on American Super Imperialism and gives up to date analysis of Ukraine; fictional capital of modern Wall Street's occult financial instruments; how classical and neo-classical economic ideology paved the way to a deliberate move from a production economy to the unearned income in a Rentier economy; China and Russia move to independent to American economic homogeneity; GDP econometric monkey business distorting value creation in the economy...and the new road to serfdom!

All this while everybody else is trying to figure out what is happening: this is why Wall Street banks hired Dr. Hudson as an economic analyst.

A Philosophy for a Fair Society (Part I of II) | Michael Hudson & Jonathan
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Economist Michael Hudson has written an essay on the coming long term depression titled, "The Fed’s Austerity Program to Reduce Wages," (6.19/2022). The article has important econometrics which supports his diagnosis.

Hudson covers all the same points in this article during his recent interview with Benjamin Norton at Multipolarista:

Economist Michael Hudson on inflation and Fed plan to cut wages: A depression is coming
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In a "Fair Society" why shouldn't accounting/finance be mandatory in the schools?

Shakespeare is so much more important!

Pay tuition to have your time wasted on drivel.
Doesn't an astrophysicist have to decide whether to rent or buy a house?

 

Hudson has a lot of good analysis. The central banks are planning to cut real wages through inflation, The debt overhang -- which zero interest rates and huge deficits during COVID made so much worse -- is so severe, inflation is their only way out.

 

Forgot about this article interview of Hudson.
Dirk Bezemer and Michael Hudson: Finance is Not the Economy
Posted on August 19, 2016 by Yves Smith

 

Wealth of Nations by Adam Smith has been in the public domain for some time and can be downloaded from Project Gutenberg and searched. The printed book can cost you $15 and take a lot of effort to search. Has Smith's "Invisible Hand" been used as a propaganda tool for decades since most people would never read WoN?

Smith used the word 'invisible' six times but only once as "invisible hand". It is really curious that we hear about the 'invisible hand' so much.

Smith used the word 'education' EIGHTY(80) TIMES. We are not told about that. Search for "and account" and you will find multiple instances of "read, write, and account", not "read, write and arithmetic". Double entry accounting was more than 300 years old when Smith wrote Wealth of Nations, but 50% of Brits were illiterate and public schools did not exist in 1776.

The United States could have made accounting/finance mandatory in the schools since Sputnik. Wouldn't that have helped everyone better serve their own self interest? But we do not hear the people who propagandize us about the "invisible hand" advocating mandatory accounting because that might make their invisible rip-offs more difficult.

Adam Smith never used the word 'depreciation' in WoN. He mentioned paper money being depreciated one time. Marx wrote about 'depreciation' 35 times in Das Kapital, sometimes regarding the depreciation of machines and sometimes of money. Marx even mentioned Adam Smith 130 times though not much about education.

Consumers did not buy automobiles, air conditioners, televisions and microwave ovens before 1885. Marx died in 1883. What does reliability have to do with the depreciation of durable consumer goods? How many people know what bathtub curves have to do with evaluating complex technologies that did not exist in the times of Smith and Marx. How free is the market if the buyers cannot evaluate the products?

But it's OK! Our brilliant economists do not talk about the depreciation of under engineered consumer trash today. Every time you buy a replacement the purchase is added to GDP. What about NDP? Oh sorry, when do you ever hear an economist explain NDP? That's OK too, they only depreciate the Capital Goods and ignore the depreciation of consumer junk anyway.

Wealth of Nations has probably been in the public domain for a very long time but cheap computing did not make it available in Project Gutenberg until 3/17/2001. Milton Friedman died in 2006. Was Friedman giving us the straight dope on economics or treating us like a bunch of dopes for decades?

 

For Adam Smith the "free market" meant free from parasitical land rent, free from industrial monopolies, and free from privatized financialization of the economy leading to de-industrialization (Neo-Liberalism).

 

Yes, we have been propagandized with a distorted interpretation of what Smith had to say for decades, probably more than a century.

 

Right. A free market cannot include privilege: legal entitlements to benefit from the abrogation of others' rights without making just compensation, such as private titles of ownership to land and other natural resources, IP monopolies, or bank licenses that legally enable private commercial banks to increase the money supply. All such privileges force others to subsidize the privileged, and forced subsidies are by definition not permitted in a free market.

 

Garbage. It's what happens when the monetary system -- the debt money system -- is rigged to provide unearned profits for parasitic private banksters.

The extreme low interest rates led to excessive private borrowing, with private commercial banks creating loans that now cannot be repaid or even serviced at positive real interest rates, purely to generate interest income for themselves. The alternative to inflation is massive debt defaults. Inflation is less painful, and I predict that will be the path the Fed is forced to choose.

 

The World under U.S. Dollar Debt Feudalism​

"A legal principle should be written into international law that no country should be obliged to pay foreign debt by forfeiting its own natural resources, or monopolies, or capital investment and should not be required to cut back living standards of labor in order to pay its foreign debt. The right of any independent nation is economic independence--not to let it self be impoverished by foreign creditors. In other words, countries that owe dollar debt would simply negate it as essentially odious foreign debt.

This foreign debt was taken on by and under military and political force; by a deliberate U.S. warping of their economic development to push their balance of payments into deficit requiring a debt to American bondholders in the international monetary fund and bondholders among the client oligarchies of these countries. All these debts should be wiped out in order to wipe out the savings of the oligarchy faction because what is at stake is a fight between democracy or socialism, and oligarchy and militarized oligarchy.

So throughout history from classical Greece and in Rome down to modern debtor countries the common denominator of all democracies for 2500 years has been debt cancellation (Michael Hudson | Why Europe is WEAK @ 4:05 minutes).”

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There is nothing "free market" about a monetary system monopolized by the government and in which fiat paper currency is forced, by law, to be treated as legal tender to the exclusion of all else.

But, speaking of fallacies, can you explain from where comes the right of some individuals to violently control other? I am certain that you cannot argue an objectively legitimate source of the right to rule, or the existence of political authority in reality, without calling upon multiple fallacies.

Yes, libertarians are "fundamentalists' when it comes to the principles of liberty. That it is always wrong to use aggression to achieve economic or social goals. And you cannot argue that it's objectively right to ever do so, you will simply use fallacies like an appeal to numbers, an appeal to bandwagons, or appeals to consequence.

 

"I do not desire freedom, therefore freedom is undesirable."

Moralizers always hold their morals to be superior.

 

When have you heard a Libertarian advocate for mandatory accounting/finance in the schools?

Robert Heinlein is the patron saint of many Liberians.

"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly.

Specialization is for insects" - Robert A. Heinlein

 

Sorry, that was supposed to be Libertarians.

This autocomplete in the phone is wrong as often as it is right. LOL

 

Michael Hudson’s Summary of the Financing of the Peloponnesian Wars between Athens and Sparta: An Analogy with American Dollarization of Imperial Wars
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“I don't think the Russian and post-Soviet victims understood how their economies were being defeated by being privatized and financialized and made dependent on dollar diplomacy. The appropriate analogy, if you're going to talk about the societies problem, with ancient Greece in the war between Athens and Sparta in the fourth fifth century. It was an existential conflict between oligarchy and democracy: it wasn't a rivalry between politically similar city-states. They were quite different from Sparta that was the leading protector subsidizing Greek oligarchy. It had turned its neighboring Messenia population into surf-like helmets: they were forced to produce a crop surplus to feed a militarized non-commercial and even non-monetized citizenry in Sparta. What Sparta opposed wasn't Athenian prosperity, so it wasn't jealous of prosperity-- it shunned it. They very carefully avoided any show of prosperity within Sparta itself. What they opposed in Athens was democratic reform; Sparta feared that this might be contagious and that democracy might spread and there goes the Spartan oligarchy.

In 594 B.C. under the statesman, Solon, Athens had been one of the last Greek city-states to end debt slavery. Soon thereafter this Pisistratus and his sons developed the Athenian public sector; public spending to employ Athenians and the economy was further democratized in the fifth century under Pericles and Affialties. Athens backed other democracies through what it called the Delian League based on the sacred island of Delos just as in modern times people will have a the united nations offices in Switzerland, or somewhere in Geneva, somewhere not in the empire's core.

Athens had organized its alliance through the Delian League, but the system became exploitative as Athenian demands for military; support and the cost of building its ships to oppose Sparta. Allied city-states had to pay the costs. Athens is doing what the United States does when it taps its allies for military support in NATO; and the coalition of the willing to take over Iraq; and fight other countries or boycott their exports that are targeted by U.S. officials.

So the Thucydides problem, and the clash of civilization theory both neglect the strains that were caused by Athenian attempts to create an empire to rival Sparta's oligarchic alliances. Thucydides who was a general for Athens, and also wrote the history of the Peloponnesian war that we all had to read in college, wrote that the whole Hellenic world (that is the Greek world) was convulsed as struggles being everywhere made by particular chiefs being in the Athenian democracy, league, or the Sparta's Akiha league.

Macedonia and Delphi were part of the Spartan Persian alliance and they were opposed by the Delian league, and the treasurers of the Delphi and league were all Athenians and they financed as much as two-thirds of Athens a public budget just from its allies by the annual tribute of about 400 talents originally; that's a large amount of silver. This tribute from its allies enabled Athens to avoid imposing new taxes on its own citizens the money was paid in the form of Athenian Owls-- Athenian silver coins had an owl on them that was the symbol of Athens (Transcript: 4:49 to 9:06 minutes).”

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As a libertarian, I oppose govt regulation of the market because govt is always destined to be used as a tool to monopolize the market by those who succeed the most in the market. At least in an unregulated market, Big Lemonade Inc cant show up at my house with guns and force me to shut down my lemonade stand. When we give a governing body regulatory power, that governing body becomes a target for capture by Big Lemonade Inc because all they have to do is buy enough influence and the govt will come and shut down my lemonade stand for them. Thats how it always end up.

 

We had dialogue before!

You stated the libertarian viewpoint clearly! Thank you, for your response Moderpaladin:

“As a libertarian, I oppose govt regulation of the market because govt is always destined to be used as a tool to monopolize the market by those who succeed the most in the market.”

Anything can be used as a tool for anything. In LA a heart surgeon performed open-heart surgery on 30 patients that did not need it—he was just collecting the medical fees. Should we not go to doctors? Could this surgeon be called “successful?” There are always auto accident fatalities, so should we abolish traffic lights?

“At least in an unregulated market, Big Lemonade Inc cant show up at my house with guns and force me to shut down my lemonade stand.”

In an unregulated market you having nothing to say about the price of your utility bill, you medical bill, your insurance cost, or even a box of Band-Aids at DVC Drugs. About a third of the price of everything you buy is to pay bank interest on the loans used to produce the product (add paying for land rent, and monopoly rent who make their profit while their sleep).

Penny capitalism (Lemonade stands) is not corporate capitalism which is a whole new creature that does not need to use firearms, but rather zoning laws, nuance laws (blocking the sidewalk), and health laws if a customer gets ill (What if your Super Juicer model IV leaves metal fragments in the lemonade?) And what if the customer refuses to pay? Do you expect the courts to bail you out? And how much should the banks set the currency exchange rate for the lemons imported from Mexico? How much money should the US Treasury print so people can buy a glass of lemonade not made with privatized polluted water produced by the Super Juicer Inc. factory?* If there is no debt, there is no money.

*(By the way, Super Juicer customers only have "arbitration" to settle law suits which you signed automatically when you bought the defective juicer; but you lost the case, and now have to pay Super Juicer's legal fees because they are legally a person--plus the judge is the CEO's son-in-law--and you are only a customer!).

My experience has been that Libertarian Utopian thinking assumes all these government, financial, and social institutions just magically exist, and on this vast, vast super-structure they imagine a “free market” that could not even in principle exist. Even though the Greek word, οἶκος, oikos, means "house/household," modern industrial society could not possibly work on the same principles of a single household. Macroeconomics cannot be constructed from the same principles as microeconomics. The whole is greater than the parts.

“When we give a governing body regulatory power, that governing body becomes a target for capture by Big Lemonade Inc because all they have to do is buy enough influence and the govt will come and shut down my lemonade stand for them. Thats how it always end up.”

That’s because “Big Lemonade” and Super Juicer Inc. paid the Republicans and Democrats billions of dollars to “de-regulate” the market-place in the name of “libertarianism” by redefining “personhood,” so that legally corporations are actually persons, money is speech (money is power), and Nixon’s Supreme Court Judge Powell allowed unlimited contributions by corporations to political leaders all in the name of Libertarian freedom. To say “That’s how it always ends up” is not a statement of historical fact, but some folklore “truism” because in folklore there is some tiny truth to the expression. If one really believes in human freedom, then all a priori fatalism, despair, and vulgar nihilism must be eschewed. That’s how George Orwell would view the situation. We don’t have to be “Animal Farm,” which is why he wrote that wonderful parable.

 

Im fully opposed to corporate capitalism (corporatism). The corporation was invented a thousand years ago by the Roman Empire as a means for govt to be able to hire and keep entities that can get away with things the govt itself would not be able to get away with, and they remain such a tool to this day (though they have grown to such power that is arguable which is tool and which is weilder now).

Theres no justification imo to grant personhood to an organization. It only serves to sheild the organization from being held meaningfully accountable to the law (which is why corrupt govt loves having such entities around- laws would restrict govt power as much as it does the rest of us, if it werent for corporations which can literally commit genocide and get away with just paying a fine that they can easily afford because they make such assurances beforehand with the authorities whose bidding they are usually doing in the commission of such crimes).

The mere existence of corporate 'personhood' undermines any supposed reason to regulate markets in the first place. The corporation can ignore regulations as long as it can afford the fines, and it can afford the fines because of the profits involved in being able to ignore regulations.