Friday, March 24, 2006

Some Recent Articles and Essays

In the past few weeks or so, I’ve come across some simply amazing articles and essays. Here are a sampling of a few of them:

Poltical Boundaries Are Not – And Ought Not Be – Economic Boundaries by Donald Boudreaux
Thinking of economies as national phenomena, we measure them as if they are so. We measure Gross Domestic Product of the United States and compare it to the GDP figures of other nations. We calculate America's trade deficit. These statistical exercises reinforce the presumption that the salient economic unit is the nation-state.

But as Arnold Kling
argues, this practice of using political boundaries to define economic boundaries is troublesome. In fact, the term "American economy" is more misleading than useful.
This has got to be one of the best articles explaining the shortcomings of the currently accepted way of analyzing economic health and the non-threats that free trade brings that I have read in a LONG time. And it’s short, too.

Trust the President? by Jacob Hornberger

Ask yourself: Why do government officials monitor anti-war protests and demonstrations? How likely is it that a person who is planning a terrorist attack is going to be speaking at or demonstrating at a public anti-war rally, where he knows that cops, secret agents, and cameras are all over the place?

The problem is that, as their policies begin to fail, the increasingly paranoid and fearful government officials come to believe that their “enemies” include those who are exposing the lies and false realities generated by the government. In the mind of the government official, telling the truth about government policy decreases morale and empowers the enemy.

Thus, people who oppose the government’s policies and tell the truth about such policies increasingly become part of the “problem.” They become a “threat,” one that can more easily be monitored and targeted than genuine terrorists can be.
…and to follow up on that theme...

The Fantasy of State Protection by Stefen Molyneux:

Governments protect their own interests, not those of their citizens. However, it does illuminate an interesting point, which is that – despite the evidence of the entire 20th century – people still believe that governments exist to protect their citizens. It is an interesting – and eminently testable – theory. To put it to the test, let's look at some of these State "protections" throughout history. If State power exists to protect citizens, then State power should rise and fall relative to the threats those citizens face. If I say that my dentist drills my teeth because they have cavities, then obviously he should drill less – or not at all – if they don't have cavities.

The first and gravest danger to a citizen is war. It is governments, of course, that always start wars, but those governments always say that they are protecting citizens from the aggression of other governments. In other words, other governments are bad, therefore war cannot be avoided – and so we must be partially enslaved by our own government to protect us from these inevitable wars.

Think about it… When a politician (or pundit) talks about “protecting American interests”…is he talking about your interests, or the interests of the State and it’s cronies? When a politician (or pundit) states that dissent empowers “the enemy”, who exactly is “the enemy”?

And finally…

Production versus Consumption by George Reisman

There are two fundamental views of economic life. One dominated the economic philosophy of the nineteenth century, under the influence of the British classical economists, such as Adam Smith and David Ricardo. The other dominated the economic philosophy of the seventeenth century, under the influence of Mercantilism, and has returned to dominate the economic philosophy of the twentieth century, largely under the influence of Lord Keynes.

What distinguishes these two views is this: In the nineteenth century, economists identified the fundamental problem of economic life as how to expand production. Implicitly or explicitly, they perceived the base both of economic activity and economic theory in the fact that man's life and well-being depend on the production of wealth. Man's nature makes him need wealth; his most elementary judgments make him desire it; the problem, they held, is to produce it. Economic theory, therefore, could take for granted the desire to consume, and focus on the ways and means by which production might be increased.

In the twentieth century, economists have returned to the directly opposite view. Instead of the problem being understood as how continuously to expand production in the face of a limitless desire for wealth resulting from the limitless possibilities of improvement in the satisfaction of man's needs, the problem is erroneously believed to be how to expand the desire to consume so that consumption may be adequate to production. Economic theory in the twentieth century takes production for granted and focuses on the ways and means by which consumption may be increased. It proceeds as though the problem of economic life were not the production of wealth, but the production of consumption.
This last one is rather long, but easy to read, even if it is only of interest to economics geeks like me. However, if you want a rather profound lesson in how economic ideas shape the very way we think, and the public policies that we often pursue, it’s worth taking the time to read.


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