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Monday, September 29, 2008

Walter Block, Call Your Office

Martin Masse the publisher of the libertarian webzine Quebecois Libre has an article in The National Post:

"In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”
If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him...
Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.
As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about ...”
The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction."

Read the rest.

(h/t Jeffrey Tucker)

Posted by Kalim Kassam on September 29, 2008 | Permalink


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Fiat currencies and credit expansions are time bombs. Solid "money" doesn't blow up.

Posted by: JC | 2008-09-30 11:19:34 AM

Fiat currencies and credit expansions are time bombs. Solid "money" doesn't blow up.
Posted by: JC | 30-Sep-08 11:19:34 AM

Could you give examples of solid money that don't inflate or deflate?

Posted by: The Stig | 2008-09-30 12:33:08 PM

We've already been over this.

Posted by: JC | 2008-09-30 12:35:14 PM

We've already been over this.
Posted by: JC | 30-Sep-08 12:35:14 PM

It is quite fascinating that you would use oil as one of your "solid money" examples. In the last week oil has dropped in value by 20%. In one day it dropped by 9%. I can't wait until my money is valued in oil. It's really "solid".

Posted by: The Stig | 2008-09-30 12:44:28 PM

Stig, you have a point with oil. However, I've given other examples which you chose not to address. You constantly come across as very much "pro Status Quo". And that is your privelege.
However until you are able to see that our existing system is flawed (decayed?) beyond repair and that we need pro active ideas on how it should evolve...we simply are not going to agree.
Have a good day.

Posted by: JC | 2008-09-30 12:54:26 PM

The Federal Reserve is Guilty of Helping Create the Global Financial Meltdown

Show your outrage at the what the Federal Reserve has done to the American economy
with their easy money policies which caused the credit & real estate bubble and subsequent
global financial meltdown.

Sign and comment on the Abolish the Federal Reserve Petition at

Posted by: Ron Holland | 2008-10-12 8:26:26 AM

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