Brexit: uma solucao simples, rapida e eficiente: no agreement at all - Gary North

Em 1846, ao abolir as famosas Corn Laws, a Grã-Bretanha fez exatamente isso: aboliu TODAS as tarifas e decretou o livre comércio, o livre intercâmbio universal.
Uma solução, aliás, que deveria servir ao Brasil também: esqueça qualquer negociação de novos acordos comerciais, qualquer um. Decrete o livre comércio: todo mundo estará bem, sobretudo nós, os consumidores...
Paulo Roberto de Almeida
Brasília, 17/11/2018

An Easy Alternative to the Brexit Agreement

Gary North

Mises Institute, 11/15/2018

https://mises.org/power-market/easy-alternative-brexit-agreement

Prime Minister May says that she has reached an agreement with the European Union.

The agreement is 585 pages long. Every time politicians vote to implement a 600-page document that was written by high-level bureaucrats, the liberties of the citizens of that nation decline. The devil is in the details, and there are a lot of details for the devil to get into.

She got it through her cabinet. Now she has to get it through Parliament, which is going to be a challenge. The pro-Brexit people hate conciliation, and the Remainers don't want to agree to anything remotely like Brexit.

She was never a big fan of Brexit. She is going along with the whole thing grudgingly. She has stalled an agreement for almost 2 years.

If Parliament won't vote for her agreement, then Britain will depart from the EU on March 29. It's automatic.

I have a solution. Parliament does not have to accept any agreement. No agreement is necessary.

Here is my Brexit solution. Parliament votes for this law.

Her Majesty's government adopts a policy of zero tariffs and zero import quotas, beginning tomorrow.

That's it? That's it!

There would be no negotiations with foreign countries. There would be nothing to negotiate.

If exporters located in EU countries want to sell something to the Brits, good for them. If there are Brits who like the products and accept them, good for them.

Tariffs are simply sales taxes on imported goods. Anytime a government cuts taxes, that is positive.

Revenues to the government would fall. This is also good.

Import quotas don't generate any revenues. There shouldn't be any import quotas.

Would trade go up between buyers in Great Britain and sellers in the European Union? You bet it would. Everybody likes to be able to sell at a discount, and, overnight, exporters to Great Britain would find that their goods now sell at a discount. No sales taxes are tacked onto the goods.

Would this be good for British buyers? Of course. Who wants to pay sales taxes?

Would financial companies leave Great Britain? No. Why should they? All of a sudden, the whole world would want to sell goods to residents of Great Britain. The doors would be open wide. If it's good for trade, it's good for finance.

If Great Britain did this, its economy would not sink. Other countries in the European Union would figure out that the benefits of staying inside the EU don't compensate for the liabilities associated with the surrender of national sovereignty. Anyway, a substantial minority of voters in those countries would figure this out. All it would take would be a policy of zero tariffs. In other words, all it would take would be a reduction of taxes. "We're outta here!"

No nation needs to sign a 500-page agreement in order to leave the EU profitably. It simply leaves the EU, abolishes tariffs and quotas, and starts trading.

Come one, come all! Let's make a deal!

This article originally appeared here at GaryNorth.com.

Is There a Difference Between Economic Power and Political Power? - Per Bylund (Mises)

Is There a Difference Between Economic Power and Political Power?

Per Bylund

Mises Institute, May 24, 2018

The term capitalism is highly confusing. The definition is clear enough: the private ownership of the means of production (capital). But the implications are very different depending on one's political or economic perspective. Both are right and wrong. Let's take a look at them.

Politically speaking, private ownership of the means of production provides owners with power. Why?

Because society is dependent on the production of value, and production is undertaken using capital. Whoever has ownership of capital can then influence society. Consequently, it is only intuitive that owners of immense capital can make demands from policy-makers, who need to at least consider this perspective when making new laws.

So the power of the state (usually thought of as the power of "the people") is in a sense limited by capital ownership. And, no doubt, policy-makers feel that their power is to some extent circumscribed by the influence of capital owners. (Whether this is a good or bad thing is a different issue.) So there's a constant scratching of each other's backs between the state and capital owners, as should be expected. Both want it their way, and the state's apparatus (and the state's means, to refer to Oppenheimer) only allows for one way. So no wonder capital owners and politicians are both cooperating and covering their own behinds.

In other words, politically capitalism is about power because capital ownership implies influence over the political process and capital owners are, in fact, invited to take part in policy-making by political decision-makers. They both gain from such wheeling and dealing.

Economically speaking, this analysis makes little sense. Why?

Because capital as a means of production has value only because and to the extent it is used to satisfy consumers' wants. As Menger famously exemplified this point already in 1871, a machine used to produce tobacco products has value because consumers like to buy and use tobacco products. But should they, suddenly, not be interested in (and thus not demand) tobacco products, that machine would immediately become worthless. (Or, rather, it would have only scrap value.)

In other words, capital ownership is strictly in the service of consumers. Whenever a capital owner chooses to restrict his/her use of existing capital, it becomes valueless. Capital that is not in use simply has no value. Capital that is used sub-optimally has more value in the hands of other capital owners, which means the owner's greatest "power" is achieved by selling it! But capital owners have no power over consumers: the consumer is still king and is sovereign in deciding what goods/services are worth his/her time and money.

In other words, what uses of capital are to be valuable. This is hardly a position of power for capital owners - it is the position of a servant. Capitalists have wealth only to the degree they are and continue to be of service to consumers (that is, the "masses"). As soon as they stop, they lose that value or are "forced" (in an economic sense) to sell their capital to producers who better understand how to serve consumers. So how does this servant become a master? That's the question that requires an answer in order to bridge the economic and political definitions.

One way is to adopt a faulty economic theory, such as Marx's, and thus claim that capital has objective or intrinsic economic value and that people are desperate to get jobs. But such a theory only begs the question, and leads back to the political dimension. Because there is nothing in an economy forcing anyone to work for a "capitalist." The very existence of productive capital implies that the economy is somewhat advanced. And this, in turn, means labor is specialized and productive. Which means there are options (see my book on the Unrealized).

The reason there are not options for people, so that they "have to" be employed by capitalists, has an extra-economic cause: it is, in other words, of political origin. So we're necessarily back to politics.

Another way is to consider a different political system, one that which is not based on hierarchical power claiming the monopoly of violence, which would then not provide policy-makers with power (as there would be no policies to be made) and thus no wheeling and dealing with capital owners: the former would need to contribute to the economy rather than be a burden on it, and the latter would be strictly servient of consumers.

The problem here is to treat both dimensions as they are equal. People of the left focus on the power aspect, and assert that it somehow has economic origin (in other words, they're economically illiterate). People of the right focus on the economic aspect, and assert that there is no power (or, at least, no problem) due to capital ownership (in other words, they're ignorant of the state's influence on society and economy). Still, they use the same term for their very different concepts.

No wonder there is confusion!

Per Bylund is assistant professor of entrepreneurship & Records-Johnston Professor of Free Enterprise in the School of Entrepreneurship at Oklahoma State University. Website: PerBylund.com.

Was Mises a Neoliberal? - Jeff Deist (Mises)

Was Mises a Neoliberal?

Jeff Deist

Mises Institute, April 23, 2018

https://mises.org/power-market/was-mises-neoliberal

Does neoliberalism, the tired slogan of our time, have a precise definition? 

The short answer is no, it doesn't. At least not readily one readily at hand, if this New Republic article is any guide:

For the left, neoliberalism often connotes a form of liberal politics that has embraced market-based solutions to social problems: the exchanges of the Affordable Care Act, for instance, rather than a single-payer, universal program like Medicare. {Jonathan} Chait argues that leftists use the word to “bracket the center-left together with the right” and so present socialism as the only real alternative. But the term has its critics on the left, too: Political economist Bill Dunn finds it too insular, rarely adopted by the people it is said to describe. The historian Daniel Rodgers, meanwhile, argues that neoliberal means too many different things, and therefore not enough.

But is neoliberal a slur, as some contend, used to attack Democrats who are overly cozy with Wall Street and global corporations? Does it describe left-liberals who have given up the fight for full democratic socialism, and sold out their principles to enjoy the fruits of unjust capitalism?

English anthropologist and geographer David Harvey implies as much, though he does assign reasonably cohesive elements to the term:

An economy built on just-in-time production, the internationalization of capital, the deregulation of industry, insecure labor, and the entrepreneurial self. In the years since, these trends have only accelerated due to improvements in, and the spread of, information technologies. But few call this “post-Fordism” any longer. They mostly call it “neoliberalism.”

Harvey references Henry Ford, not Gerald Ford, in his identification of neoliberalism as the political devolution of western societies from democratic nation states into subdivisions of borderless mass production and mass consumption. And this materialism is at the core of why left-progressives view neoliberalism as a pejorative term; and perhaps not surprisingly label the New Republic itself a neoliberal outlet (notwithstanding protestations by Chait and others). To progressives, the Clintons, the Democratic National Committee, and traditional old guard liberal media outlets are merely center-right leaning mouthpieces for big business.  

As with most political (and politicized) terms, definitions vary wildly depending on who uses them. Murray Rothbard and Elizabeth Warren hardly mean the same thing when they say "capitalism," and we all suffer from the tendency to imbue words with meanings that suit our purposes. Interestingly, use of the term "neoconservative" similarly has been attacked as a slur, one designed as code for undue Zionism or overeagerness to unleash military forces. Helpfully, however, neoconservative Godfather Irving Kristol himself provided us with the broad parameters, and the expression has lost much of its bite in the post Bush 43/Cheny/Rumsfeld era.

Within the current zeitgeist we can offer a less inflammatory yet still loose definition of neoliberalism than Harvey: the basic program of late 20th century liberalism (social democracy, public education, civil rights, entitlements, welfare, feminism, and a degree of global governance), coupled with at least grudging if not open respect for the role of markets in improving human life. In other words, neoliberals are left-liberals who accept the role of markets and the need for economic development as part of the larger liberal program. Think Bono, who considers himself a progressive "citizen of the world" yet admires markets and globalism.

With this definition in mind, the New Republic article goes badly astray when it asserts that neoliberalism "emerged from the ruins of the Austro-Hungarian Empire in the early twentieth century." First and foremost, it's hard to consider any century-old framework of thought as neo anything. And it's difficult to trace meaningful connection between first and second generation Austrian economists, writing before World War II, before truly global trade, and before the triumphant ascension of central banks, with today's neoliberal political program of social democracy and political globalism. Menger, Mises, and Hayek, with their deep regard for specialization, comparative advantage, and global trade, all wrote within a basic framework of nation states.  

As is often the case, critics of markets and private property mistake means with ends, and assume a lack of concern for "human" considerations is necessarily bound up with rigorous concern for material considerations. Hence author Patrick Iber travels a winding path of cherry-picking Misesian and Hayekian thought, the effect of which is deeply misguided though not malevolent. Not much is new here; Iber simply repeats the standard progressive arguments: they favored capital over labor. They supported democracy only as a means of reducing violent people's uprisings. They supported government, but only in service to wealth and property. And so forth. Yet by New Republic standards he treats both men somewhat fairly, far better than, say, The New York Times or Washington Post would and have. There is only one out-of-context cheap shot directed at Mises ("he was pleased when an anti-fascist uprising was violently suppressed in 1927"); meanwhile the article at least recognizes Hayek's moral concerns over apartheid in South Africa and Pinochet's dictatorship in Chile.

But the author errs badly in assuring the reader that Mises (the democrat) preferred capital to labor in service of the bourgeoisie, and that Hayek thought markets took priority over "human rights and social justice." This is especially interesting given Hayek's own perspective on the latter term, and the typically vague manner in which the author employs both.

For our purposes we can neatly distinguish "real" liberalism, or classical liberalism for lack of a better historical term, from neoliberalism. Liberalism in Mises's conception is fundamentally concerned with private property. In this view the means of production — capital — are in private hands. They are not owned by the state, by society, by "the people," or collectively. Full stop. No amount of regulated semi-capitalism or semi-socialism can evade this foundation, because both individual and economic freedom hinge on the free use and control of private property. Control over one's property, meaning the ability to use, alter, alienate, encumber, or sell it, is the essence of true property ownership—albeit always subject to tort liability for harms caused to others. Any amount of taxation, regulation, or outright confiscation necessarily erodes this control, which Mises acknowledged even within his framework of utilitarian democracy as a protector of property rights.

This insistence on property rights at the core of any liberal program is scarcely to be found in today's neoliberalism, yet again it remains at the heart of left-progressive antipathy to the term. They are suspicious of any introduction, or re-introduction, of markets and property into what ought to be a worldview of economic planning by the state.

We should note that Mises also appended his program of liberalism with two important corollaries that were "neo" for the time, specifically the interwar years: freedom and peace. In contrast with what he saw as the "old" 19th century perspective, a "present-day" liberalism had "outgrown" the old version through "deeper and better insights into interrelationships." Meaningful liberalism required political freedom for the individual, especially freedom from involuntary servitude. And peace was the foundation for all true economic activity, inescapably tied to civilization. Undoubtedly New Republic readers would benefit from understanding just how progressive Mises really was when Liberalism first appeared in 1927!

Meaningful argumentation, as opposed to politics and outright war, requires words and precise definitions. This is why, unfortunately, almost all political talk devolves into what Orwell accurately described as "meaningless words." Meaningless words attempt to impugn or attack the "other," rather than convey specific information or create understanding and consensus. Politics is not a science, but we would all benefit from insisting on rigor in definitions from political pundits just as we once did from social scientists. Imprecise meanings and shifting semantics generate more heat than light, and leave us all talking past one another.

A eterna luta entre o comerciante e o burocrata - Guglielmo Palombini (Mises Institute)

The Eternal Struggle Between the Merchant and the Bureaucrat

• 

Guglielmo Piombini 

Translated from the Italian by Bernardo Ferrero

[This article has been translated from Piombini's Italian original by Bernardo Ferrero.]
https://mises.org/blog/eternal-struggle-between-merchant-and-bureaucrat

Before the State

For a very extended period of time primitive men lived in small groups of hunters and gatherers at a time in which there was no state. The modus vivendi of these clans was such that after having exhausted all nature-given resources in a particular area, they would move elsewhere in search of other available food supplies. This system of nomadic life could endure as long as the human race was limited and the vast majority of land remained uninhabited. Yet, this lifestyle was not sustainable, and within a short period of time the intensification of these hunting activities provoked an ecological crisis that spread across Europe, the Middle East and America, causing the extinction of 32 animal species [that had been an important food source].
The disappearance of the megafauna inaugurated, around the year 10,000 B.C. the transition to a mode of production based on agriculture. The Neolithic revolution could in fact be described as the pragmatic response to the exhaustion of resources that resulted from the intensified exploitation of the system based on hunting and gathering. Even though the lives of the farmers were admittedly harder than those of the hunters, requiring long and heavy hours of labor in the fields, the sedentary life of the village made it possible for a far greater number of mouths to be fed: thanks to appropriations and to the cultivation of land, the human population increased considerably, giving birth to the first civilizations.

The Violent Origins of the State

According to historian William Durant:

Agriculture teaches men pacific ways, inures them to a prosaic routine, and exhausts them with the long day’s toil; such men accumulate wealth, but they forget the arts and sentiments of war. The hunter and the herder, accustomed to danger and skilled in killing, look upon war as but another form of chase, and hardly more perilous, when the woods cease to give them abundant game, or flocks decrease through a thinning pasture, they look with envy upon the ripe fields of the village, they invent with modern ease some plausible reason for attack, they invade, conquer, enslave and rule.

The first states emerged when these nomadic tribes of hunters and herders understood that the systematic exploitation of agricultural villages through taxation constituted a far more efficient and lucrative system than the old one of plunder and extermination. That the state was born in a brutal fashion is confirmed by every historical and anthropological research. On this matter, Friedrich Nietzsche wrote:

a race of conquerors which, aggressive, powerful and organized, pounces with its most horrid claws on an unsuspecting population, one which in numbers may be tremendously superior, but is still undisciplined and nomadic. Such is the origin of the ‘"state."

According to Sociologist Lester Ward,

The state as distinct from tribal organization begins with the conquest of one race by another.

Similarly, wrote the Austrian general and sociologist Gustav Ratzenhofer,

Violence is the agent which has created the state.

and as Franz Oppenheimer observed,

Everywhere we find some warlike tribe breaking through the boundaries of some less warlike people, settling down as nobility, and founding its state.

The concept of State above mentioned is meant in a sociological, rather than in a political sense. In the field of political science one intends the state to be a particular type of political organization that emerged in Europe at the end of the middle ages. According to the more generic definition used in sociology, instead, one talks about the existence of a state whenever society is divided in two distinct classes: a productive majority who gets by through the employment of economic means (production and exchange) and a ruling elite who gets by through the employment of political means (taxation and expropriation). The typical order of a state and the inevitable division in social classes which defines it emerge simultaneously, according to sociologist Franz Oppenheimer, in that very crucial historical instant in which for the first time the conqueror decides to save the conquered from immediate annihilation in order to exploit him permanently in the years to come.

The Struggle between Merchants and Bureaucrats Begins

From that moment onwards, writes the anthropologist Marvin Harris, producers have precipitated in a dramatic condition of servitude from which they have never really escaped:

For the first time there appeared on earth kings, dictators, high priests, emperors, prime ministers, presidents, governors, mayors, generals, admirals, police chiefs, judges, lawyers, and jailers, along with dungeons, jails, penitentiaries, and concentration camps. Under the tutelage of the state, human beings learned for the first time how to bow, grove, kneel and kowtow. In many ways, the rise of the state was the descent of the world from freedom to slavery.

The birth of the state was then accompanied by a real class struggle between producers and bureaucrats, a struggle which to a great extent remains alive to this day: while the first group desires to keep the fruits of its own labor, the second aspires to come into possession of those fruits through force and inaugurate a system of rule and exploitation. The eternal conflict throughout history is therefore that between men of freedom and men of administration, between social power on the one hand and state power on the other. As will be illustrated in the examples that follow, the progress or decadence of civilization are determined by the trend of this struggle.

Societies of Bureaucrats

1. The Ancient Empires
Since the early days of recorded History, the great majority of people lived miserably under the most tyrannical empires (the Babylonian, Egyptian, Chinese, Persian, Indian, Late-Roman, Arab, ottoman, Incas, Aztec) which extended themselves across large areas. In these ancient empires progress was so slow as to go unnoticed and the reasons for such stagnation were the following: Political power in those empires did not have any need to innovate, rather innovation was fought due to the fear that new discoveries would disrupt the established system; the bureaucratic and military elite that ruled used to come into possession, through force, of every surplus of production repressing every small sign of resistance; every autonomous social force was nipped in the bud and nothing escaped the control of the despot who was the absolute owner of all goods of the reign and of all its inhabitants; finally the people were submitted not only to a confiscatory level of taxation but to forced labor for the construction of grandiose public works such as canals, city walls, pyramids and buildings.
These ancient empires were agglomerates of illiterate peasants who toiled from the morning to the night just to be able to provide for themselves vegetables without protein. Not surprisingly, they were not in a much better condition than their oxen, and at the same time they were completely subjugated to the commands of their superiors who could read and who were the only ones possessing the right of manufacturing and using war like instruments. The fact that these societies have lasted thousands of years sounds like a severe warning: there is no intrinsic force to human activities that can assure material and moral progress.
2. A Perfect Example: the Chinese Empire
The millenary empire of China can serve as a typical example of a closed society, that was completely dominated by a cast of intellectuals and bureaucrats. As the greatest historian of ancient China, Etienne Balasz, has explained, the Confucian state was decisively totalitarian. No private initiative was allowed and no expression of the public life could escape official regulation: clothing, private and public constructions, music, parties, and even the colors that one was allowed to wear were subject to the rigid control of the state. In addition, there were prescriptions of birth and death and the state surveilled with terrifying attention every step of its subjects, from the cradle to the grave.
China in the days of the mandarins was an environment of changeless patterns, routines, characterized by traditionalism and immobility and therefore suspicious towards any possible kind of innovation and initiative, let alone free research and entrepreneurship. The ingenious and inventive spirit that was not foreign to the Chinese would have doubtlessly enriched the country, but it was the state that impeded the country to embark upon an age of technical progress and economic development, by crushing every kind of private initiative just because it was thought to collide with the interests of the bureaucratic cast.
It is not surprising that throughout Chinese history technical and economic progress have coincided only with those phases of relative weakness of the central power, like in the period of the warring states (453-221 B.C), probably the richest and most brilliant of all Chinese history, or the period of the three reigns (220-280 A.D.). Even after 907 A.D. when the Tang dynasty collapsed and the period of endless wars for supremacy began, during the so-called period of the five dynasties and the five reigns, the country experimented a striking explosion of inventions and prosperity due to the lack of centralization.
3. A Modern Case: The Soviet Union
In our epoch, communist regimes have brought back, albeit in a bloodier form, the totalitarian control that was so characteristic of the ancient oriental despotisms. Marxist ideology with its radical hostility towards property, commerce and free enterprise, revealed itself to be the most suitable paradigm in satisfying the will to power of the parasitic classes. In every country where the political and bureaucratic classes have sought to destroy the productive sector, they have found it useful to uphold Marxist ideology as their mantra.
The extreme exploitation perpetrated by the communist bureaucracies against the productive classes, which in the case of the kulaks reached the stage of physical extermination, was denounced by Lev Trotzkij, Ante Ciliga, Milovan Gilas, Mihail Voslensky. Yet the most penetrating and most insightful analysis of the bureaucratic exploitation that took place under communism has come to us from the works of Bruno Rizzi, an ingenious, self-taught Italian scholar. Rizzi was arguably the first to comprehend that a parasitic class of bureaucrats had taken power in 1917, composed as he wrote of “state officials, policeman, writers, union mandarins and all the communist party in block” that kept plundering the workers in the most ferocious way ever to be seen.
The post-1917 Soviet State, Rizzi noted, had been drastically inflated. The bureaucrats with their respective families constituted a mass of 15 million people who had stuck to the upper levels of the administrative throne with the only job of sucking a great portion of the national product. In the Kolchoz, the state owned agricultural enterprises, only 37% of production remained in the hands of the workers, while the remaining went to the state who then turned it over to the bureaucracy. State functionaries, in addition, continuously made deals at the expense of ordinary citizens by fixing wages and prices for various products and by treating the “workers” as its “forced clients”, obliging them to acquire products in state owned stores with a markup that at times reached 120%.
Officials of the state in addition, obtained notable advantages by being able to destine many of the accumulated capital funds, set aside for the construction of public works, in projects that went to the exclusive benefit of their own class, a lucid example being the headquarters of the bureaucracy, the sumptuous 360 meter’s tall house of the soviets (the workers, meanwhile, had to cope with a home that was 5 meters squared on average). By having total control of the economic levers, guaranteed by an extremely invasive police state in the USSR, the bureaucracy was really omnipotent and every action on her part was aimed at maintaining its political hegemony and its well-established economic privileges.

Societies of Merchants

1. The Phoenicians and the Greeks
Around the year 1200 B.C. the empires of the bronze age (the Egyptian, Minoan, Mycenaean, Hittite and Assyrian empires) succumbed into a period of stagnation caused by the progressive suffocation of productive and mercantile activities. The crisis of the central powers gave freedom of action to certain commercial people in the Middle East coming mainly from modern Lebanon, who, with their ships, began to sail the sea transporting goods and products of any kind. For the first time in history one saw the development, in the Mediterranean basin, of a catallactic system based on an integrated division of labor where markets and ports began to grow up to the point of becoming established cities. Commerce soon became the fly wheel of innovation: The Philistines invented iron; the Canaanites the alphabet; the Phoenicians discovered glass and at the same time improved boats, navigational knowledge and accounting systems.
“In truth, writes Matt Ridley, was there ever a more admirable people than the Phoenicians?” Those ancient merchants connected not only the entire Mediterranean, but also the accessible coasts of the Atlantic, the Red Sea and the overland routes of Asia, and yet they never had an emperor and never participated in a memorable battle. In order to prosper the Phoenician cities of Tyre, Byblos, Sidon, Carthage and Gadir did not feel the need of uniting into a single political entity, and therefore never went beyond a very modest federation.
In the words of Matt Ridley:

The Phoenician diaspora is one of the great untold stories of history- untold because Tyre and its books were so utterly destroyed by thugs like Nebuchadnezzar, Cyrus and Alexander, and Carthage by the Scipios, so the story comes to us only through snippets from snobbish and envious neighbors.

Even the Greek miracle confirms the important lesson, first formulated by David Hume, that political fragmentation, by putting a break on the extension of political power, is the real ally of economic progress. The extraordinary dissemination of prosperity and of Greek culture between the years 600 B.C. and 300 B.C presents us with a development similar to that of the Phoenician cities: Miletus, Athens and the other hundred independent cities of Magna Grecia, enriched themselves through the extension of commercial relationships without being part of a single empire. Furthermore, the circulation of ideas that the increased trade made possible, gave birth to the grandiose discoveries of the time. The lesson of the Greek miracle is the following: It is always the merchant who opens the door to the philosopher, not the other way around, by enriching the city and opening it, through foreign trade, to new ideas. Unfortunately, this period of Greek enlightenment died out as soon as new empires began to ascend: first the Athenian, then the Macedonian, and ultimately the Roman.
2. The Communes of Medieval Europe
The fall of the Roman Empire in 476 A.D. represented the luckiest event in the history of the old continent. Thanks to circumstances that one could describe as miraculous, Europe never returned to being a unified political entity, after the repeated failures of Charlemagne and the Germanic emperors. The lack of political unity enabled a widespread social experimentation that unleashed into a creative competition between thousands of independent political units of which the byproduct was rapid economic, social and cultural progress. The weakness of the central authority favored the cities which became the leaders in the 11^th century of a political and commercial revolution that would mark the European institutional setting for centuries to come. In fights that lasted even hundreds of years, the inhabitants of the cities escaped the dominion of emperors and feudal lords, rebuilding society through self-government from the bottom up. The inhabitants of these communes oriented themselves toward the economy and not toward politics because, unlike those of the ancient cities they lacked a great mass of slaves at their disposal: they found themselves forced to abandon predation (which had been the common means of increasing one’s own well-being up to those days) and engage in manufacturing activities and commerce. In this manner, the medieval bourgeois extended the market economy beyond the limits of the feudal world and by the year 1200 A.D. Europe was a region inundated by working men, farmers, entrepreneurs, artisans and merchants who exchanged the fruits of their own labor at the many annual fairs: this was a very different scenario from the one that prevailed in other areas of the civilized world, where the masses continued to be subjugated by omnipotent imperial bureaucracies.
3. 3 Modern Cases: Holland, England, and the United States
In the 17^th century the incredible success of the little country of Holland and the disastrous ruin of the Spanish empire, stands to confirm, in the eyes of contemporary historians, the superiority of the commercial society over the bureaucratic one. In Spain, during those years, a new anti-bourgeois ideology had developed among its elite, an ideology that saw with great scorn and contempt the accumulation of wealth through value enhancing work. The Spanish bureaucratic state as a consequence began to be directed by men who were completely foreign to the world of economics and business and who pushed the country into adopting economic policies that played out to be a disaster for commerce and industry.
In the United Provinces at the time, matters were different. Laissez-faire was a consolidated and fully legitimized praxis, and the success that Holland derived from the adoption of free trade caused a mix of admiration, amazement, and envy all around Europe. In 1670, the Dutch were by far the biggest players in the international trade arena to the point that their merchant navy was bigger and mightier than those of France, Scotland, Germany, Spain and Portugal put together. Holland, in the 1600s was a laboratory in which one could observe and study the capitalistic and bourgeois society in its purest form. Its example showed the path toward self-propelled development: ignoring the Dutch reality meant condemning oneself to continued stagnation.
The English were the first to understand how the prosperity of Holland was closely connected to the liberty that individuals and economic agents enjoyed over there, and it was by imitating the Dutch, that they began to build the basis of their world supremacy. In the 19^th century then, England adopted unilaterally a series of measures that opened its harbors to the rest of the globe and such a drastic and unprecedented move provoked a reduction of custom tariffs in all major countries, via a competitive process. Finally, humanity was able to experience the birth of a free and authentic market economy that operated internationally: a Phoenician experiment on a planetary scale. Each country that participated in this international division of labor benefited, and this is shown by the fact that the world economy throughout this period grew by 3 times. But It was in the two most free-market countries, namely England and the United States, where economic growth surpassed by far that of the rest of the world: from 1820 to 1913 the gross domestic product of England increased six-fold, while the American one grew by 41 times.
Decisive for the success of Victorian England and the young United States, according to economic historian Deirdre McCloskey, was the consolidation at the social level in those years of a bourgeois mentality that praised and honored the common man who created his fortune through work, commitment, creativity and ingenuity. Nothing probably better symbolizes the cultural victory of the productive classes of society than the statue placed in Westminster abbey in 1825 in honor of James Watt, inventor of the steam engine.

For a Libertarian Historiography

One can therefore see how the great intellectual and material creations that have elevated human civilization through the ages have not been the product of bureaucrats, but of producers, merchants, entrepreneurs, some of whom have been obscured, exploited, mistreated and others who have simply been forgotten. The protagonists of human development are not the emperors, kings, presidents, ministers or generals who most often appear in our conventional history books, but the farmers, artisans, entrepreneurs and merchants who improved the many arts, techniques and professions. The bravest among these have defended freedom and civilization arms in hand, refusing to be subjugated by the powers of their day.
The common thread in human history is the endless conflict between tax payers and tax consumers which brings us to the following conclusion: Libertarian scholars should narrate historical events through the lenses of those men who represented the ideas of freedom, not those of power. Civilization, ought to be remembered, has been edified by those men who have resisted power, not by those who have exercised it.

Guglielmo Piombini is an Italian journalist who has collaborated in various magazines and newspapers including Liberal, il Domenicale, and Elite.  His articles have also appeared at Ludwig von Mises Italia. Piombini is also the founder of Tramedoro: the online platform that provides a detailed overview of every major classic of the social sciences. Specializing in medieval institutions he is the author of the book “Prima dello Stato, il medioevo della liberta” (“Before the State: The Middle Ages Of Liberty”). 

Historia economica: dois textos sobre a penuria organizada e equivocos de politica economica - Mises.org

"Free Stuff" Isn't All That It's Cracked Up to Be by Louis Rouanet

Democratic socialism in Britain in the late 1940s brought a wave of shortages with rations falling even below WWII standards.
https://mises.org/blog/free-stuff-isnt-all-its-cracked-be

Hazlitt, 1946: Inflation, Deflation, Confusion by Henry Hazlitt

In his Newsweek column, Henry Hazlitt addresses inflation, deflation, and criticisms of capitalism by "democratic socialists."
https://mises.org/blog/hazlitt-1946-inflation-deflation-confusion

Disponham...
Paulo Roberto de Almeida
11/04/2016

Mises Brasil (Helio Beltrao) interviewed by Mises Institute; audio

Ouçam aqui: https://mises.org/library/helio-beltr%C3%A3o-will-brazil-choose-marx-or-mises

Helio Beltrão: Will Brazil Choose Marx or Mises?

• 

August 21, 2015Helio Beltrao Jeff Deist

Tags Big Government Free Markets Global Economy

Brazil is in a meltdown: its stock markets are crashing, inflation is over 10%, and huge numbers of people are marching in the street to demand the impeachment of President Dilma Rouseff. And while collectivism runs deep in Brazilian politics and academia, the tide may be turning—some protesters now carry signs demanding “Less Marx, More Mises.”
Our friend Helio Beltrão, President of Mises Institute Brazil, is here to explain what’s going on. Will Brazil continue to unravel, even as it prepares to host the world for the 2016 Summer Olympics? Or is there a path forward, led by a growing movement eager to shrug off the old guard of Marxist cronies?

Download audio file

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

Economia: a propriedade privada preserva recursos escassos - Patrick Barron (Mises Institute)

A contrario senso do que pensam a maioria dos ativistas ecológicos e ambientalistas pouco dotados de conhecimentos econômicos, a propriedade privada é mais propensa a preservar os recursos ambientais e garantir o tal de "desenvolvimento sustentável" -- um conceito totalmente enganoso -- do que a propriedade pública desses recursos e as políticas intervencionistas estatais no contexto dos chamados "bens comuns".
É o que argumenta esta nota do Mises Institute, como sempre partidário das soluções liberais e privatistas na regulação de TODA a atividade econômica. Vamos ler...
Paulo Roberto de Almeida 

Why We Need Private Property to Deal with Scarce Resources
Patrick Barron
Mises Daily, November 2, 2015

Scarcity of resources exists in many forms and is the problem in economics. If resources were not scarce, there would be no need to economize. The existence of scarcity is true of all resources (such as time, human energy, and natural resources). However, it is not necessarily intuitive that allowing scarce resources to be owned privately is the solution to this problem.

Consequently, socialism appears attractive to many and they turn to having all resources owned collectively for the “common good.” Unfortunately, a society which spurns private property — and hands resources over to government planners instead — often learns the terrible lessons of central planning and the tragedy of the commons (i.e., commonly held resources will be plundered to extinction).

If society spurns allowing private ownership of resources, it must find some other means to prevent the tragedy of the commons and to allocate goods. Historically, the means chosen is the use of force and central planning. Throughout history, most of mankind has been divided into a hierarchical system of masters and slaves with some gradations between the two extremes. The masters (pharaohs, emperors, kings, sultans, warlords, etc.) devised complex rules-based systems for resource distribution that were decided by a small number of people and not by markets. And ultimately, these plans depended upon pure terror for enforcement. But this so-called solution to the problem of scarcity — restricting the people’s liberty through the use of force — does not work.

Problem 1: We Can’t Economize Without Effectively Ordering Our Preferences First
The gradual growth in the understanding of what we now regard as basic economics eventually ended thousands of years of subsistence existence for the masses in the West. Modern economics explained that without private ownership of resources, there was no mechanism for observing or acting on ordinal preferences in which persons prioritize desires from highest to lowest. Without a way to allocate goods according to ordinal preferences, there is no rational means to economize for the betterment of society.

In other words, without markets and prices, there is no way to know what people really want or need, so the masters never really knew what to order the slaves to produce, what technical means to use, what alternative materials to use, the quality desired, or how much to produce. Thus, the commissars of the Soviet Union ordered the production of inefficiently produced, shoddy goods. The Soviet empire collapsed, despite the fact that Russia is blessed with vast natural resources and an industrious population.

Problem 2: Few Raw Materials Are Ready to Consume
A second fatal problem with common/government ownership of resources is that few readily available, consumable resources actually exist. There are no resources on the planet that do not require at least a minimum of effort to transform into a consumable product. Even edible berries growing in the wild must be harvested, meaning that someone must transport himself to the berries’ location and pull them from the bush at just the proper time. The cost of doing so is the value one places on forfeiting his leisure. Of course, other natural resources require much more effort to convert to consumable products, passing through many stages of production.

For example, timber and minerals must be extracted, harvested, etc. and then molded into something that can be consumed. Consider a hiker lost in the wild. It matters not at all to him that great stands of timber lie within easy reach or that valuable minerals lie under foot. These natural resources require great effort over very long time periods to be converted into something consumable, as is the case with converting timber into a shelter or crude oil into gasoline. A lost hiker does not have the knowledge, time, or previously produced means to convert these basic resources into consumable products to ensure his survival. All this is far beyond anyone's autarkic abilities.

Now let us assume that someone did harvest trees by felling them, transporting them to a lumber mill, milling them, storing them in a ventilated and dry place for many months before kiln-drying them (all processes that are required to turn trees into useable lumber), advertising their availability to contractors, keeping sales records, sending out bills, and collecting the bills, only to have a socialist call him a plunderer and confiscate his lumber for free distribution to whomever the masters deemed to be politically advantageous to their continued privileged position. No one other than the favored cronies of government would ever harvest another tree. In other words, production of usable lumber would be monopolized, and as with all cases of monopolies, prices would increase and quality would decline. Moreover, with no voluntary market at work in timber and forest land, there would be no means of knowing if these resources were being used in a way valued by those who valued them most.

At the same time, the central planners could not let just anyone harvest the trees or access the land. If the trees had no owners, great forests would be denuded in short order because there would be no social mechanism to prevent what would amount to a tragedy of the commons by order of the state.

Problem 3: We Need Private Property to Build Capital
Without the ability to profit from privately owned property, there would be no incentive to provide or withhold capital for any endeavor. Also, a system of private ownership is necessary to determine if that capital is being used in a way the consumers value. The consequences of ignoring this fact of economic science is most evident today in China's ghost cities, where resources, both natural and human, have been expended for no observable benefit except to advance the careers of politicians who can claim to have met the requirements of the latest Five Year Plan. Timber and other resources were provided to build ghost cities, not because the owners of the resources sought to be economical with their resources, but because government edicts required that timber, concrete, gasoline, and more be used to produce what are now empty cities.

The opposite case of resource waste comes from special interest groups who capture the political apparatus of the state and prohibit exploitation of resources by private individuals. In the name of protecting Mother Gaia from being plundered, modern environmentalists have convinced the political class that most progress is unsustainable, dangerous to our health, or any number of other specious claims. Society is prevented from benefiting from their conversion to consumable products. The poor suffer the most from these policies as the prices of raw materials — and thus finished consumer goods — are driven up.

Private ownership insures that valuable resources will never be plundered to extinction, because their value will have been capitalized. Instead, private owners will seek to make resources as widely available as possible without endangering the long-term prospects for future harvesting of resources. The process of determining a resource’s capitalized value is impossible absent free-market capitalism with strict defenses of property rights.

Despite both the theoretical and empirical evidence to the contrary, socialists tell us the opposite; i.e., that state ownership of all resources will prevent their plunder and ensure prosperity for all. As Ludwig von Mises explained, though, socialism is not an alternative economic system of production. It is a system of consumption only, and a system of economic ignorance and economic plunder.

Estado empreendedor que faz inovacao? Critica do livro de Mariana Mazzucato - Peter G. Klein (Mises)

Recebi este livro da Editora, e pretendo lê-lo assim que abrir uma janela de oportunidade em minhas atividades acadêmicas.
Mas aqui vai uma crítica fundamentada de seus principais argumentos.
Paulo Roberto de Almeida

Government Spending on "Innovation": The True Cost Is Higher Than You Think
Peter G. Klein
Mises Daily, JUNE 15, 2015

University of Sussex Professor Mariana Mazzucato is making headlines with her 2013 book The Entrepreneurial State, which argues that government, not the private sector, ultimately drives technological innovation. In a series of detailed case studies from information technology, pharmaceuticals, biotech, and other industries she argues that government labs and public agencies are mainly responsible for the fundamental, high-risk discovery and development that makes these technologies possible, with profit-seeking entrepreneurs jumping in only later, after the difficult work has been done.

This is a very old argument, skillfully brought to life in Mazzucato’s writings (and a popular TED talk). Remember President Obama’s “you didn’t build that” remark to entrepreneurs, during his 2012 presidential campaign? “Somebody invested in roads and bridges. If you’ve got a business — you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.”

The view that private actors are short-sighted, and that only government can afford (or is willing) to make the long-term, high-risk, patient investments in research and development needed for technological progress is in every basic economics textbook. Even economists who are generally favorable toward free markets and limited government will say sure, the market is good at producing shoes or trucks or laptop computers, but the market cannot provide basic research — it is a “public good” that only government can provide. The New York Times recently opined:

Fundamental innovations such as nuclear power, the computer and the modern aircraft were all pushed along by an American government eager to defeat the Axis powers or, later, to win the Cold War. The Internet was initially designed to help this country withstand a nuclear exchange, and Silicon Valley had its origins with military contracting, not today’s entrepreneurial social media start-ups. The Soviet launch of the Sputnik satellite spurred American interest in science and technology, to the benefit of later economic growth.

There are several problems with this kind of argument. First, it confuses technological innovation (impressive to engineers) and economic innovation (valuable to consumers). Second, it confuses gross and net benefit — of course, when government does X, we get more X, but is that more valuable than the Y we could otherwise have had? (Frédéric Bastiat, call your office.) Third, it confuses treatment and selection effects of government spending — government typically funds scientific projects that would have been undertaken anyway, such that a main benefit of government spending on science and technology is to increase the wages of science and technology workers. Fourth, as writers like Terence Kealey have pointed out, if you look carefully at the details of the sorts of programs lauded by the Times, you find they were grossly inefficient, ineffective, and potentially harmful. (Kealey offers a powerful critique of Mazzucato’s specific views here.)

Does War Drive Innovation?

It’s useful to illustrate these points by considering the specific argument that war is an important, and even necessary, source of scientific progress, because technologies developed by the state to fight wars often have important civilian uses. Innovation is a side benefit of war, say war’s defenders.

Social science textbooks also assume that war spurs innovation and note that the large-scale manufacturing of penicillin, for example, and the development of nylon and aerosol sprays occurred during the First World War. But that’s nothing compared to the many benefits of the Second World War, we’re told, which brought us benefits ranging from atomic energy to jet engines and the world’s first electronic computing devices, which were developed to break the Nazi “Enigma” codes. Moreover, key innovations in management practice came out of the Second World War, we’re reminded, including management techniques used to improve logistics, procurement, and operations research.

The Second World War changed the nature of scientific research as well. After the war, large-scale federally-funded laboratories devoted to practical applications for new research replaced the small academic laboratories that had existed before the war. Naturally, these new laboratories were geared toward producing new technologies that the federal government wanted, and scientists flocked toward these jobs and new well-funded facilities.

It’s true that many (though not all) of these technologies were developed — typically not invented, but refined — by government scientists working on military projects. The question nevertheless remains as to whether or not this model of innovation benefits society at large. Is this a “good side” of war?

“Crowding Out” and Interest-Group Politics

The answer is no, for multiple reasons. First, if we look at each of these cases carefully, we find that the government was usually inefficient, chose bad technologies that crowded out other, privately-funded technologies, and led to inertia in research in directions that the private sector would likely never have supported.

But there is a more basic theoretical problem with the claim that military research gives us great new technologies we otherwise wouldn’t have.

It is certainly true that governments spend money on building things or doing things that otherwise would not have been built or done. But this is not necessarily a good thing.

Take the Egyptian pyramids, for example. Had there been no pharaoh, commanding a huge budget, with the ability to mobilize vast quantities of resources (including labor), there would be no pyramids. But were the pyramids unambiguously good for the people of Egypt? They were not, of course, and the pyramids were simply monuments to the power of the pharaoh and the state religion. To this day, governments build monuments to themselves all the time, whether they’re huge statues or atomic bombs. Sure, without the federal government, we might not have the Lincoln Memorial. Is that an argument for government?

Pyramids and statues are cases of the state producing a good that likely would not have been produced in any form by the private sector, but even in cases in which the government shapes the development of private goods and technologies, the distorting effects on the final outcome of research and development can be significant.

We can see these distortions in the effects of the work of Vannevar Bush, the initiator of the Manhattan Project. Bush was chairman of the National Defense Research Committee (NDRC), and later director of the Office of Scientific Research and Development (OSRD), in the Second World War.

Bush wanted a peacetime successor to the OSRD and pushed for creation of the National Science Foundation, which was established in 1950. The NSF was controversial (one proposal was vetoed by Truman in 1947) because of the lack of accountability. A key figure was Senator Harley Kilgore of West Virginia, who initially opposed Bush’s plan to distribute the money through universities (he preferred the government to own the labs) but later agreed to Bush’s model. As Kealey describes it, Kilgore’s goal was not to generate new knowledge. Rather,

Kilgore wanted to create a reserve of scientifically trained personnel who could be mobilized for strategic purposes. ... The National Science Foundation, therefore, was created in 1950, in the same year (and for the same reasons) as the National Security Council.[1]

A few scholars have recognized the potentially harmful effects of this approach. Best known is the “distortion thesis” of historian Paul Forman, which holds that WWII and Cold War national security concerns distorted the path of the physical sciences.

Applied to technology, there is the “crowding out” thesis, most closely associated with Seymour Melman, which maintains that, during the Cold War, commercial R&D was crowded out by government-funded R&D. As summarized by the distinguished historian of technology David Hounshell,

Research, development and manufacture for a single customer (the national security state or the military) led firms and whole industries into a kind of fatal attraction, which ultimately undermined their ability to compete in the global economy in which consumers had very different wants than those of the military; “spin offs” from military projects into the civilian economy simply did not compensate for the drawbacks of being dependent on military contracting.

Again, the Broken Window Fallacy

We see once again the relevance of Frédéric Bastiat’s Broken Window Fallacy. That is, the research and development institutions created and sustained by government are like the pane of class in the broken window. We see it being repaired but cannot see what might have been produced with those same resources had the glass not been broken.

Similarly, we see what is produced by government scientists producing R&D for the state, but we don’t see things we would have had the market been able to function in the absence of a giant militaristic government.

There is no doubt that military spending had a substantial effect on technological innovation. But was it a good one? Military spending distorts the efforts of scientists and engineers, and redirects them to particular projects, ones that do not necessarily generate benefits for consumers.

Military-funded R&D, like any government-funded projects, does not have to pass any kind of market test, so there is no way to know if it is actually beneficial to consumers. We cannot rely on the judgments of government scientists and scholars to say what are the “best” technologies. Remember Betamax? The experts told us that Betamax technology was superior to VHS tapes, from an engineering point of view. Yet, in the end, VHS proved to be economically superior in that consumers ultimately chose VHS over Beta. Betamax failed the market test in spite of its arguably superior technology.

Today, when we look at private companies like Google, Apple, and Facebook and marvel at their innovations, we should remember that these companies are constantly subject to market tests, and that the goods and services they innovate must be accepted by consumers to be profitable. When they succeed, we know that they are creating value for society because consumers have chosen their products and services over others.

Success, for government-funded researchers and engineers, on the other hand, means winning grants and contracts, and getting more money from the taxpayer, who has little say in what gets done.

The reality is far more complicated than the myths repeated by those who claim that many of the technologies and innovations we now value were produced single-handedly by government. Yet, the historical reality does not diminish the ease with which Obama and other fans of government spending can point to innovations like the internet and the interstate highways and say “you didn’t build that.” We can only speculate on what might have been produced had the market been allowed to function. Likewise, we can still see the pyramids today and marvel at the innovation that went into their construction, but unfortunately, the wealth and labor stolen from ordinary Egyptians to build them has now been long forgotten.

--------------------------------------------
1. Economic Laws of Scientific Research, p. 154.

O keynesianismo de botequim do Brasil - Antony P. Mueller (Mises)

Os companheiros praticam no Brasil aquilo que eu chamo de keynesianismo de botequim.  Este autor o chama de vulgar. Em qualquer hipótese, somos todos vítimas de coisa que vem destruindo a economia brasileira.
Paulo Roberto de Almeida

Brazil: Victim of Vulgar Keynesianism
Antony P. Mueller
Mises Daily, MARCH 27, 2015

All Keynesian roads lead to stagflation. That was the case in Europe and in the United States in the 1970s when both stagnation and inflation hit the economies at the same time. Currently, this is the case in Brazil.

Since coming into power in 2003, the Brazilian labor government has religiously implemented the economic policy doctrine of growth by spending. Now, the country has fallen into stagnation with a recession looming while inflation is on the rise. All economic indicators flash red lights: from economic growth to inflation and the exchange rate, from productivity to investment and industrial production.

Booms and Bubbles, Brazilian Style
Once again, Keynesian policies have led to stagflation. Reality has finally set in. The illusion of easy wealth is shattered. The Keynesian wonder weapon has become impotent. The economic policy teams at the Ministry of Finance and the Central Bank have no notion what to do now. After all, they know of no other economic policy doctrine than to stimulate the economy by spending ever more. Yet with the government’s coffers empty and inflation high and rising, the policy tools of deficit spending and monetary expansion have run out of fuel. Favorable external conditions such as the China boom and high demand for commodities had benefited the Brazilian economy during the presidency of Luiz Inácio “Lula” da Silva. These external factors together with massive internal stimuli accelerated economic growth. With the end of the commodities boom and the slowing of economic growth in China, the external environment factors no longer helped when at the same time internal consumption hit the wall, as consumers had to scale back along with the government as the debt burden approaches its limit.

In early 2015, it became obvious that the country has lived in an illusionary world under the Labor Party over the past twelve years. Now it seems like a joke that President Lula once announced that Brazil’s economy was about to overtake that of the United Kingdom and from then on move upward on the ladder of the large economies. Yet when it was announced in 2007 that Brazil was to host the Soccer World Championship in 2014 and when in 2009 the Olympic Committee selected Rio de Janeiro for the Olympic Games in 2016, it seemed that the much-wanted international recognition of the president’s achievements had arrived. The jubilation at home was fully matched by the exuberance abroad about how Lula would lead Brazil into the twenty-first century.

Just as much as many Brazilians did not want to recognize, foreign observers, too, shut their eyes to the fact that the Brazilian Labor Party has been practicing one of the crudest forms of Keynesianism. The Brazilian kind of Keynesianism is deeply mixed with the Marxism of Michal Kalecki. In Europe and the United States remnants of sound economics survived at the onset of the “new economics,” and later on partially recovered classical and neoclassical principles. In Brazil there has been an almost complete victory of “Kaleckian Keynesianism” with most other types of macroeconomics cast aside.

Can the Government Turn Stones into Bread?
Even today, the Polish economist Kalecki is still held in high esteem at some of the most prominent Brazilian universities. The version of “Keynesianism” that he developed in the 1930s has become the leading paradigm for economic policymaking albeit this type of macroeconomics lacks any micro-foundation and is largely void of realistic content. The Kaleckian version of Keynesianism takes the macroeconomic symbols for real and by moving them around according to the basic rules of algebra, the model finally is brought to the conclusion that “workers spend what they earn,” while “capitalists earn what they spend” (as this theory was once summarized by Kaldor).

Kalecki and his Marxist followers consequently decided that when the state assumes the capitalist function, government could spend the country to wealth while workers would get their fair share as consumers. Even more so than Keynes, Kalecki’s gospel preached that its believers could turn stones into bread. Government spending for whatever purpose combined with mass consumption promised a most pleasurable way to prosperity. This promise has been the economic policy principle of the Brazilian Labor Party government over the past twelve years.

During much of the two presidential periods of da Silva from the beginning of 2003 to the end of 2010, the Kaleckian-Keynesian recipe seemed to work. The Brazilian government under the former trade union leader spent, the consumers consumed, and the economy grew. All the while, price inflation remained subdued and the unemployment rate fell. No wonder that President Lula enjoyed immense popularity during his two terms and that Lula’s Labor Party would remain in power when his handpicked successor won the elections for presidency in 2010 and in 2014.

Dilma Rousseff, however, a politician by trade and former urban guerilla fighter, had a hard time winning the elections. When running for her second mandate, dark clouds began to overshadow the still blatant optimism of the ruling party. In 2011, the economic growth rate began to fall. The government first brushed it away as a temporary dip, yet when the rate continued to decline even more in 2012, the government began to panic. With the election coming up in 2014, the government did what the Kaleckian-Keynesian recipe prescribes and accelerated even more its expansive policies. This may have won the election for her, but the price to pay came in high later on.

Disillusion Sets In
Now, in early 2015, disillusion has fully set in. People feel cheated by the false optimism of the government. The corruption scandal of the Brazilian oil company Petrobras together with the rapidly deteriorating economic conditions drove over a million of Brazilians to the streets on March 15 in protest against the government.

What many of the protesters fail to see, however, is that Brazil needs more than just a change of government. The country needs a change of mind. In order to get on to the path of prosperity, Brazil has to discard its prevalent economic ideology. Brazil has to get rid of its tradition of profligate government spending and easy money, Marxist-inspired state involvement in the economy, and the protectionism that had come with the adoption of Cepalism (the economic policy concept of the Economic Commission of Latin America). Not special circumstances lie at the heart of the current malaise, but wrong ideas about economic policy.

Brazil needs a huge dosage of economic liberalization to find its way out of the current crisis. Less state intervention and much more freedom of doing business must be the first steps. For this to happen a change of mind is needed. Brazilians must open up to an alternative beyond state capitalism. Brazil must embrace laissez-faire in order to prosper.

This task is tremendous and not much different from earlier elections, almost all parties currently represented in the Brazilian Congress belong to the left and the extreme left. There is neither a truly conservative nor an authentic pro-market political party. This situation is more than peculiar because, as surveys consistently show, most of the Brazilians locate their political orientation at the center-right and in favor of free markets.

Marxism Still Dominates the Universities
The reason for this discrepancy lies in the fact that the left dominates higher education, particularly in the social sciences, economics, and law. It is from this group that most political activists come. When the military dictatorship ended in 1984, the university system fell under almost complete control by leftists of all kinds. This way, academic life is ideologically very different from the rest of the Brazilian society where common sense still has prevailed.

Fortunately, intellectual evolution is no longer largely dependent on academia. While the Kaleckian brand of Keynesianism and Marxism still dominates the universities, a strong libertarian movement is on the rise spearheaded by the Brazilian Mises Institute. Young people in particular flock to this site like the proverbial wanderer in the desert in the search for water. In the past, changes of mentality took decades and even centuries in order to unfold.

Nowadays, with the internet, ideas have a market place of their own with free access for all. It should be easy for the Brazilians to learn that it is not enough to be fed up with the present government, but it is high time to transform the country’s state capitalism into a free market system in order to prosper.

Mises Institute: The Free Market tornou-se agora The Austrian, publicacao mensal

The Austrian
In the January–February issue of The Austrian:

For more than thirty years The Free Market has been the Mises Institute’s flagship monthly publication for our members. Recently we introduced The Austrian, a bolder and more robust version of what you’ve known for decades.

It’s enlightening these days to hear everyone from Obama and Krugman to Putin and Hollande proclaim their belief in the superiority of free markets (invariably adding several qualifying provisos, of course). Even Bono from U2 has had a change of heart. Only Mr. Piketty appears to be clinging (tenuously) to his support for outright central planning.

So it appears we’ve made great strides in the rhetorical battle when it comes to the beauty and power of markets to vastly improve the human condition. We are all free-marketers now, and some of us actually mean it.

Thirty years ago, however, our outspoken support for free markets was radical. And since our beginning the Mises Institute has advocated a free market in everything. But today the term has been diluted through overuse and misuse, as demonstrated by Messrs. Obama and Krugman. It no longer captures the radical and uncompromising nature of the Institute and its members.

Our new moniker, The Austrian, goes to the heart and soul of what we are: an organization dedicated to the brilliant scholarship of Austrian economics. Mises is our touchstone, Rothbard our animating spirit, and the classical liberal tradition our north star.

Inside this inaugural issue of The Austrian, you’ll find lots of new, original content from our writers. Lew Rockwell makes the libertarian case for secession, James Bovard reports on the latest antics from Washington, DC, and David Gordon reviews Judge Napolitano’s new book. You’ll also find the latest news on Mises Institute scholars and alumni, plus new analysis of pop culture from Ryan McMaken, and a Q and A with one of our alums who’s making a real difference as a high school economics teacher.

The Austrian has analysis, news, and the same radical, uncompromising Austrian free-market analysis you’ve come to expect from the Mises Institute. We hope you enjoy it.

A subscription to physical copies of The Austrian is available to all who request it. Simply send your name and mailing address to membership@mises.org.

Emprego nao resulta necessariamente em crescimento economico - Frank Shostak (Mises)

Você também é daqueles que acredita que em momentos de crise é melhor o governo pagar gente para abrir e fechar buracos?
Pois pense duas vezes. Think again.
Este artigo vai fazer você revisar essa opinião...
Paulo Roberto de Almeida

Employment Does Not Drive Economic Growth
Frank Shostak
Mises Daily, February 19, 2015


For the head of the Federal Reserve Board Janet Yellen — and most economists — the key to economic growth is a strengthening in the labor market. The strength of the labor market is the key behind the strength of the economy. Or so it is held. If this is the case then it is valid to conclude that changes in unemployment are an important causative factor of real economic growth.

This way of thinking is based on the view that a reduction in the number of unemployed persons means that more people can now afford to boost their expenditures. As a result, economic growth follows suit.

We Need More Wealth, Not Necessarily More Employment

The main driver of economic growth is an expanding pool of real wealth, gained through deferred consumption and increases in worker productivity. Fixing unemployment without addressing the issue of wealth is not going to lift economic growth as such.

It is the pool of real wealth that funds the enhancement and the expansion of the infrastructure, i.e., an expansion in capital goods per individual. An enhanced and expanded infrastructure permits an expansion in the production of the final goods and services required to maintain and promote individuals’ lives and well-being.

If unemployment were the key driving force of economic growth then it would have made a lot of sense to eradicate unemployment as soon as possible by generating all sorts of employment.

It is not important to have people employed as such, but to have them employed in wealth-generating activities. For instance, policy makers could follow the advice of Keynes and his followers and employ people in digging ditches, or various other government-sponsored activities. Note that the aim here is just to employ as many people as possible.

A simple commonsense analysis however quickly establishes that such a policy would amount to depletion in the pool of real wealth. Remember that every activity, whether productive or non-productive, must be funded. When the Fed or the federal government attempt to increase employment through various types of stimulus, this can result in the expansion of capital goods for non-wealth generating projects which leads to capital consumption instead of growth.

Hence employing individuals in various useless non-wealth generating activities simply leads to a transfer of real wealth from wealth generating activities and this undermines the real wealth-generating process.

Unemployment as such can be relatively easily fixed if the labor market were to be free of tampering by the government. In an unhampered labor market, any individual that wants to work will be able to find a job at a going wage for his particular skills.

Obviously if an individual demands a non-market related salary and is not prepared to move to other locations there is no guarantee that he will find a job.

For instance, if a market wage for John the baker is $80,000 per year, yet he insists on a salary of $500,000, obviously he is likely to be unemployed.

Over time, a free labor market makes sure that every individual earns in accordance to his contribution to the so-called overall “real pie.” Any deviation from the value of his true contribution sets in motion corrective competitive forces.

Purchasing Power Is Key

Ultimately, what matters for the well-being of individuals is not that they are employed as such, but their purchasing power in terms of the goods and services that they earn.

It is not going to be of much help to individuals if what they are earning will not allow them to support their life and well-being.

Individuals’ purchasing power is conditional upon the economic infrastructure within which they operate. The better the infrastructure the more output an individual can generate.

A higher output means that a worker can now command higher wages in terms of purchasing power.

Aquecimento global: os custos e as alternativas de mercado - Ryan McMaken

Must Free-Marketers Reject Global Warming?
Ryan McMaken
Mises Institute, Friday, August 29th, 2014

You can’t make this stuff up. Someone at the UK Guardian named David Grimes has declared that “economic liberalism,” by which he means the ideology of laissez-faire, “clashes” with “scientific evidence.” Which scientific evidence, you might ask? Well, the unassailable scientific dogma of global warming is one:

Climate change illustrates this well, because despite overwhelming evidence of anthropogenic influence, there is a tendency for those with pronounced free-market views to reject the reality of global warming. The reason underpinning this is transparent – if one accepts human-mediated climate change, then supporting mitigating action should follow. But the demon of regulation is a bridge too far for many libertarians.

There is no doubt that some people who purport to be advocates for free markets reject arguments of anthropogenic global warming out of hand without even considering the evidence. I’m agnostic on the matter myself, although I certainly reject the ludicrous assertion that there is such a thing as “settled science” and that the matter is not debatable. And unlike many allegedly great men and women of scientific inquiry, I refuse to agree that global warming “deniers” are heretics who should be burned at the stake (or the modern equivalent of having one’s career ruined). To anyone capable of logical thought, it should be obvious that one’s support for free markets is utterly independent from one’s opinions on the matter of global warming. There’s no reason at all why someone who accepts the reality of anthropogenic global warming would have to support government regulation of all energy usage. To argue such would be like arguing that one’s acceptance of the Bering Strait theory determines one’s opinions about the minimum wage. So why would Grimes think this? We can see it in his quotation above where he says:

The reason underpinning this is transparent – if one accepts human-mediated climate change, then supporting mitigating action should follow.

Ah, so there it is. Acceptance of global warming = acceptance of “mitigation” = acceptance of government regulation. Case closed.

Grimes packs many assumptions into just this one statement. Let’s look more closely:

If one accepts that global warming is a grave danger, is it nonetheless necessary to support “mitigating action” even if it can’t be shown to actually improve anything at all? Even assuming that global warming were proven beyond a reasonable doubt, the burden of proof of success is still on those who want mitigating action. Specifically, they need to be able to prove that such action has a reasonable chance of achieving the desired ends. They most certainly have not done so. Indeed, many scientists say it’s already too late to stop it. Many argue that even if major global action were taken right now, the expected result over the next century would be too small to make any difference. In other words, it’s futile at this point to enact mitigating actions. (Also here.) Presumably, if it’s too late, then there’s no reason we should still be debating mitigating action. But of course, having realized that the “it’s too late” message is a PR disaster, the message has instead been changed to “it won’t be too late if we act right now!”
By their own admission, if global controls on production and energy use are not imposed by 2020, we’re all doomed. When 2020, rolls around, however, look for the date to be changed to 2025, and so on. Indeed, the global warming gang is like the Seventh Day Adventists who kept predicting the end of the world in the nineteenth century, and then changing the date when it didn’t happen.

Note, however, that the entire narrative depends on the assumption that all mitigating action must consist of socialist edicts and regulations. Could there be mitigating action that is not based on socialist command and control systems? We all know that any such suggestion would be laughed out of the room by global warming scientists, who in addition to being experts on climate, are also experts on politics, economics, and anything else they decide to be “experts” on. Private solutions aren’t even worth discussing in their view, so even if a laissez-faire minded global-warming enthusiast were to suggest something other than government control of the global economy, he would be immediately excluded from the debate. We all know what “mitigating action” really means.

So, there may be any number of mitigating actions supported by global-warming minded free-market people, from better water filtration, to agricultural engineering, to desalinization, to water delivery systems, all which might be done within the context of markets. But no, none of that is acceptable. The only acceptable “mitigating action” for people like Grimes is global governmental control of the entire means of energy usage and production.

Also important to the support of any mitigating action is an analysis of the cost. Knowing that the true cost to people of submitting to a global warming regulatory regime would be very high, it is necessary for the global warming regulators to portray the effects of global warming as being nothing less than a nightmarish post-apocalyptic landscape of Mad Max proportions. This enables them to argue that no cost is too high to adopt their regime.

Back in the real world, however, costs must always be considered.

Most of the “solutions” to global warming offered by the global elites involve the widespread impoverishment of much of the human population by limiting the production of goods, and the use of transportation resources. Such “solutions” would massively undermine advances in the standards of living for billions of ordinary people just as they are finally starting to come out of grinding levels of poverty. In other words, most of the anti-global warming regulators (most of whom are wealthy white people in first-world countries) want to deny the poor of the world their washing machines. For Grimes, a white intellectual in a wealthy country, he won’t bear the true brunt of the global warming “solutions.” But for many people, the cost of the “solutions” for global warming will be extremely high indeed. So perhaps many people can be forgiven for rejecting the rich-white-man assumption that restrictions on energy usage and production are the bee’s knees.

The proponents of global warming regulation completely ignore these costs, and instead insist that desertification will destroy human society, so it’s better to just make everyone poor now, rather than later. The argument goes something like this: global warming will make many areas of the earth uninhabitable and people will become starving bands of scavengers as a result. So, the only solution to this is to force people back down to nearly-unbearable subsistence levels now, so that they don’t become post-apocalyptic cannibals later. They argue, for example, that much of the American South will become a desert and that many coastal cities will be flooded by rising water levels.

All they’re really saying, of course, is that in case of global warming, large numbers of people will have to migrate to other places. When noting that the South will become a desert, they never mention, for example, that Canada, will become much more hospitable in climate, or that the Hudson Bay would become a more temperate area and a natural location for major trade networks and new cities.

So what the global warming crowd has to do is prove that the cost of migration in the future is evidently higher than the cost of destroying the global economy right now. This has most certainly not been proven, and given that huge migratory flows are relatively common in human history, depicting such a situation as akin to the apocalypse is dishonest at best. Moreover, since the sea levels and desertification processes would not occur overnight, we also know that there would be time for persons to migrate, and we also know that many of the places to which they would migrate, are now virtually uninhabited.

Indeed, it would seem that if mass migration is in our future, we would want to do everything we can to encourage economic growth now. To invest in technologies that contribute to making capital more easily transportable (like smaller and lighter computers and vehicles) and encouraging people to save for the future.

The alternative offered by the proponents of global warming regulation -pushing much of the developing world back into abject poverty- would be sure to bring something far worse, such as endless civil wars among populations where had a middle-class lifestyle within sight, but was then ripped away by the global elites in the name of saving the world.

So, if global warming is indeed on our horizon, it would appear that perfecting technologies like water desalinization, aqueducts, improved agricultural practices, and lowering the costs of basic staples such as housing and labor-saving appliances would be essential. Much of the world has already been working on these problems, and global warming has had nothing to do with it. The Israelis have been developing better and better water and agriculture systems for decades. Many desert countries (including the western United States) have been working on better water filtration and delivery systems. Many societies, such as The Netherlands and Singapore already deal with various issues related to dense populations.[1]

But can you guess which societies are the best as dealing with these issues? Not surprisingly, the societies that have the wealthiest populations and the most industrialized and capital-intensive economies offer the best solutions for dealing with all the problems that global warming has to offer. In other words, the most free economies offer the best hope for addressing these issues. We don’t hear much from Venezuela, for example, about the latest scientific advances in energy production, water cleanliness, and housing.

Meanwhile, those who support global warming “mitigation” are most interested in crippling the very system that makes it easiest to deal with climate-related issues. By impoverishing the world, the global warming regulators wish to see to it that few could afford the very sorts of technologies that would be most helpful in a warmer world. For David Grimes, “science” apparently tells him that poor population are better at mastering their environment than rich populations. If that’s “science” then we can only hope that “anti-science” eventually prevails.

Notes

[1] See the Copenhagen Consensus project for more reasonable comments along these lines.