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Nov. 1, 2008 As the world financial system willingly hurtles itself, at a rapid speed, into a major, worldwide economic depression, one seriously wonders as to why presumably so many intelligent, thoughtful, educated, sincere, etc. people, the elite leadership class of this planet, wishes urgently to bring about such a terrific but yet avoidable disaster. Is there some overriding and, perhaps, ideological reason for this act of blatant public insanity observed on such a massive scale of endeavor? The answer, in essence, is explained (in its most basic terms) by referring to how John Maynard Keynes, in the 1930s, almost totally intellectually displaced Friedrich von Hayek concerning the former’s Fabian Socialist analysis, diagnosis, and prescriptive cure for economic crises; this is even though the medicine taken never really works as can, moreover, be seen historically. For instance, it is the largest consensus of the vast majority of historians, American and otherwise, that the New Deal of FDR did not, in fact, ever end the Great Depression. So, further explanation is yet needed regarding a modern kind of what could be called the Cassandra Syndrome continuingly suffered by the adherents of the Austrian School of Economics. In the late 19th and early 20th century, Socialism, under various euphemisms, had greatly gained an increasing respectability and acceptance among the upper classes in specific terms of the intellectual elite; also, a version of collectivism, Soviet communism in Russia, had supposedly shown an empirical case of actual economic success respected by growing numbers of academicians, intellectuals, writers, commentators, pundits, etc. And, of course, the Great Depression of the 1930s had most handily capped off all of these matters and tendencies of associated Leftist thought. The ideological avant-garde, therefore, suitably made collectivism widely fashionable, and so it became the hot rhetorical coin of the realm, (to keep with financial word play). In opposition, Hayek, Ludwig von Mises, and many others had intelligently argued and wrote against the high tide of collectivist activism in the Western world. The Austrian School of Economics (ASE) lost out substantially to Keynesianism, which saw itself, not without some genuine justification, as the main inheritor of classical economics, as it had transformed itself from the old “political economy” designation into the modern social science recognized today as economics. Against the seemingly persuasive Leftist juggernaut and Zeitgeist of the then modern (economic) world, the ASE could not successfully compete regardless of having always nearly superior critiques and recommendations of how to get economies successfully out of economic difficulties, if there were a serious desire to do so, of course. Major and minor governments are, today, trying to properly follow Keynesian prescriptions, meaning State interventionism, for trying to supposedly avoid the coming of a worldwide depression that their actions are, in fact, greatly assisting in the very creation of, both now and in the future. Once again, as in the 1930s, the thinking of the ASE is being almost totally ignored; and, even after about a century of time during which collectivist economic policies have repeatedly failed throughout the world. If the advocates of State intervention, starting in the broad spectrum from mixed economies to, e.g., the Scandinavian socialist-oriented economies, then the 2008-09 Depression ought not to have occurred; surely, such governments had put into place secure ways and means of basically controlling what had happened, which, of course, failed miserably. The heavily micromanaged economy of Japan is not really that much better off than the economies of Europe or that of the USA either due to their main heavy reliance upon mercantile/state-capitalism, not true free-market economics. The Leftist Zeitgeist still strongly exists, however, in terms of many variants of Keynesianism by which governments falsely think that they have, more or less, the magical formula for certain basic success in controlling macroeconomic destinies; this is for achieving, of course, only assumed pro-market results by doing those things that necessarily corrupt, distort, pervert, or damage the market economy, especially in specific terms of genuine free-market economics or free enterprise. What, therefore, is really happening? The gigantic interventionist efforts are, rather, actually meant to save capitalism, meaning state-capitalism or mercantile-capitalism (the horrific combination of Big Government, Big Business and Big Labor), not, in strong reiteration, the free-market economy, as many would (falsely) allege to be the true case. Saving capitalism through interventionism, therefore, does not simultaneously help entrepreneurship but, generally speaking, hurts it. In addition, the vast majority of today’s Ph.D. economists, all trained in various schools of thought that more or less accept degrees of Keynesianism, including the Chicago School of Economics, which approves of at least partial acts of government activism to, thus, control needed economic outcomes and activities, both directly and indirectly speaking, are, logically, employed by governments. It is a kind of “incestuous” matter that those who advocate state-capitalism are the assumed “experts” who offer the axiomatic ideological advice for, thus, so handling economic matters, regardless of the negative consequences of such asserted expertise that brings forth, after their advocated interventionism becomes “successful,” both real recessions and, if unfortunately continued, actual depressions. Supposedly impressive macroeconomic theorization is in line with modern hyper-modeling, on a grand scale, with mathematically intricate and precise statistics, diagrams, graphs, and charts, supported by a fantastic panoply of advanced “scientific” computer programs, that had all, let it be noted, failed; all this was created to handle, much less fully predict, what had occurred and, moreover, will keep on occurring toward a basically full-scale depression; this is if, of course, Keynesian economics is either mainly or totally followed in the years to come. So, no matter how strenuously Austrian-tradition economists advocate opposite efforts that would try, at least, to minimize trends or options favoring collectivism, they are rarely, if ever, listened to because, when all is finally said and done, they simply are not believed. Thus, the interestingly cited Cassandra Syndrome of knowingly predicting what must logically and, usually, systematically happen as more and more State activism is alleged to supposedly “solve” the many problems caused, in fact, by such ignorant and often ongoing interventionism. Ultimately, one “guesses” that interventionist stupidity is really its own odd but just reward. But, all ASE economists can easily have clear consciences, however, by valiantly speaking the truth; this is even to an indifferent or simply unbelieving world ignorantly enthralled by the macroeconomic dynamics of a mathematically-attuned economic science heralded by many (thick) textbooks not in touch with the real world. The highly remarkable geniuses of high finance, celebrated presidents and CEOs of many major financial institutions throughout the world, backed appropriately by their various Keynesian or neo-Keynesian- inspired governments jointly had produced the chaotic economic circumstances that are leading from a mere temporary recession into the expected realm of a depression. But, nonetheless, advocates of free enterprise for the sake of free-market economics are denounced as absurd idealists, reactionary dreamers, or, more typically, uninformed miscreants not in touch with the complex realities of advanced capitalism. Verily, it is quite true, therefore, that it surely takes really sophisticated morons to financially mess things up at such a high level of explicit incompetence for so extended an amount of time. At an absolute minimum, however, the ASE economists and their supporters could not do any worse; moreover, it is a very good guess that they would, in fact, do a great deal better in creative and critical terms of needed policies directed toward requisitely restoring confidence in the market. What’s mainly needed includes at least all of the following: Cutting many taxes or substantially reducing taxation as much as possible; encouraging competition by eliminating all ideologically- based/approved regulations that have nothing to do with good business practices; a gold standard would also help; the governments must all stop, in effect, massively subsidizing failure with the money of the taxpayers; the welfare-warfare State ought to be abolished. Entrepreneurship should be greatly encouraged; corporate welfare programs by government, in all various forms and programs and policies, ought to be all ended as quickly as possible; Big Business ought not to be ever protected by government from real competition. If the majority of these recommendations were followed as quickly as possible, the now predicted deep economic depression can be averted fairly successfully by just keeping the difficulties reasonably within a temporary recession. As the supporters of the ASE would agree, therefore, the faster a free-market economy is mainly or nearly totally restored to the USA, the faster will this so highly important influence tend to support such efforts elsewhere; although it rarely gets mentioned popularly, the world economy still, in fact, very heavily depends on the American economy’s fundamental success or failure, as easily and empirically proven by the many and continuing startling events in this year of 2008. ------------ About the author: Joseph Andrew Settanni, CRM, CPC is a Certified Records Manager and Certified Professional Consultant with 30 years of professional experiencein data, archives, records and information management. Email: mkeegan311@earthlink.net Comment on this article here! ------------ All articles are EXCLUSIVE to Useless-Knowledge.com. Please link to this article rather than copying and pasting it onto your site (which would be unauthorized and illegal). |
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