To "Get" Ron Paul You Have To "Get" Mises, Rothbard, Hayek, And Hoppe

To “Get” Ron Paul You Have to “Get” Mises, Rothbard, Hayek, and Hoppe

I had read a recent article in which a journalist described Ron Paul’s economic understanding as skewed, flawed, quirky and mistaken. Yet, the person had no understanding of economics and was totally ignorant of the Keynesian theory upon which our current monetary system is predicated and the implications for the manner in which human error, frailties, unintended consequence and second and third order effects manifest themselves within such a system that relies on central planning and government intervention.

 This journalist had no understanding regarding the flaws and inherent contradictions built into Keynesian economics and hence have no understanding of the business cycle. She continued to believe the advice and ideological assertions of those who never saw the current economic crash coming. The Keynesian experts refused to accept the Austrian economists analysis that proved not only to be correct, but that also accurately predicted, explained and then narrated the unfolding economic inevitability. Upon having all the predictions made by Austrian theorists come to fruition, many still refused to accept reality and continued to cling to the established statist orthodoxy that postulates government can provide productive jobs, cause wealth creation and ensure justice. Establishment politicians refuse to acknowledge the flaws in a Keynesian system and then revolt against reason by trying to redefine human nature and rationalize cause and effect to fit their ideology.

 The people who refuse to accept, understand or even acknowledge the existence of Austrian economic theory, either through sheer ignorance or willful ignorance, understand less than half of their own argument and so have no business speaking, let alone attempting to influence others as to what they think is the correctness of their economic understanding and arguments.   Ron Paul had often led Greenspan and Bernanke down the Socratic path of understanding during which time he would close by forcing them to make statements that ended up demonstrating the strength of Austrian arguments.  Yet, a journalist listening to a sound bite without any other frame of reference, who then tries to make sense of economic truths by listening to lies, will be at a lose in understanding the nature of things.  In our American monetary system Keynesian economists seek to superimpose their statist ideology over Austrian theory to obscure economic truths that Keynesians would rather have people believe are noting more than inconsequential nuances, trivialities and faulty suppositions.  One would have as much success determining economic truths in such a situation as one would have in determining what is right based upon the amount of military might a political entity can muster in  support of its imperial conquest.  It has long been recognized that those who believe such absurdities can be made to support atrocities.   Austrian economists understand that such a proposition is as likely to lead to truth as was Stalin likely to be praising free markets during a Politburo meeting. 

There are those who benefit from our current Keynesian system and know the truth, but one should not expect to hear any truths from those quarters.  As Rothchild said, ” “The few who understand the system will either be so interested from it’s profits or so dependent on it’s favors that there will be no opposition from that class.”  The deliberate lies of those who gain from a our Keynesian system and ideology at the expense of others causes very study of economics to become polluted.  Thus, the refusal to accept economic laws and logic or even investigate Austrian economic theory itself makes taking corrective action impossible.

To understand how Keynesian theory fails, you have to understand economic history. But, as important as economic history is to gaining understanding, you have to understand how government failed humanity throughout history and be honest as to the costs of these failures in the destruction of wealth, the loss of liberty and annihilation of lives.  Mises understood government and the business cycle.  He predicted The Great Depression and the fall of the Soviet Union for very different reasons than those claimed by warmongers and Keynesian statists.  

 Mises argued in a famous 1920 article “Economic Calculation in the Socialist Commonwealth” that the pricing systems in socialist economies were necessarily deficient because the government owned the means of production and hence no prices could be obtained for capital goods because their allocation and distribution were merely internal transfers of goods in a socialist system and not “objects of exchange,” unlike final or finished goods in a capitalist society. In the Soviet Union the ruble was nothing more than a from of food stamps.  Therefore, all factors of production were unpriced and hence the system would be necessarily inefficient since the central planners did not  have the local knowledge necessary to allocate the available resources efficiently.  Mises theorized that rational economic activity is therefore impossible in a socialist economic system that was based on central planning.

When political considerations by government trump market considerations people lose in the end.  Because the Soviet ruble was nothing more than a way to distribute basic neccessities and was never an international currency, there were times when the Soviet Union was forced to conduct international trade using vodka.  The saying in the Soviet Union was, “They pretend to pay us and we pretend to work.”  But, in an economy in which there is no rational system to reconcile costs, there is no way to determine losses.  If you lose money on every sale there is no way you can make up losses through volume.  Yet, our Keynesian system does not teach any of this and centrally plans money supply and interest rates, the lynch pin of production within a free market economy upon which the division of labor, use of natural resources, capital, and the various levels of production for manufacturing are based.     

This theory explains how central planning in money creates the hi-tech bubble, the credit bubble, the housing bubble and the dollar bubble which now threatens our currency.  Our monetary policy is being driven by easy credit and then by government bailouts after having made a political decision to rescue a consolidated banking system that has deliberately defrauded people to the tune of hundreds of billions of dollars.  People need to understand that government intervention caused a hazard by failing to allow risk and fear of loss to temper greed; therefore, people bet everything. Now government intervention seeks to keep the housing market inflated while market forces demand that housing prices come down to the level of affordability that allows the majority of people to obtain shelter.  If not, the majority of people can not buy a house, nor even rent a house, as most houses will not be affordable for rent or to be sold or bought.  People also need to understand that government intervention in markets always distorts the market, is based on violence and always harms the people.

If one takes into account the rise of empires and all their attendant evils that lead to inevitable collapse, not as a partisan to a winning or losing side but as one who documents destruction of property, wealth and lives, the tyranny that results, the reallocation of resources, the transferring wealth and the crimes like fraud and theft that occur as a result of a political class controlling the leviathan state, one ought to come to the conclusion that our current system is fatally flawed and only works by the wheels of the system being greased in human suffering, eploitation and blood. The individuals of the political class who argue against Austrian economics are the very people who use theft, human suffering and death to keep the empire’s wheels spinning smoothly.

The reporters who work in the media are not geniuses and have little historical understanding.  Our founders knew the media needed to serve as a fourth branch of government to allow people to organize against government tyranny.  But, the media views government as its friend and provider.  Its reporters are controlled and their message is filtered.  These reporters earn their living serving corporate and political power. They did not become engineers, doctors, physicists, inventers or entrepreneurs. Journalists work for people who own business interests and expect those interests to be served and furthered by those in their employ. The journalists who serve their masters are so inured by the system that they fail to even recognize how they are controlled and manipulated.  When a journalist writes a political peice disguised as an economic critique you can bet the article is written by someone with no economic understanding who never bothered to interview those whose ideas are being criticized while measuring their success by the extent to which they influenced the ignorant.  

These people who become stenographers to the elite, writing for the purpose of telling us what to think and believe, do not analyze economic history, understand much regarding war and generally believe as they are told regarding history, war, economics, government and human nature. These people are the antithesis of free and critical thinkers and are usually eager to assist in stifling inquiry and mocking that which they do not understand. Those who truly understand government know that the version of events given by government are a caricature of history and are merely used as part of an indoctrination process and propaganda system the state ironically calls education.

Mises’ “Human Action is over 1,100 pages and Rothbard’s “Man, Economy and the State with Power and Market is over 1,400 pages. All educated individuals recognize both men as geniuses. So, to not understand what they had to say nor share in their ability to know, understand and analyze human and economic history from which they derived their conclusions leaves journalists to do little more than bear their behinds in an exuberant display of ignorance with all the understanding and inherent intellectual value of a rude, misbehaving 10 year-old child mooning an adult trigonometry professor.

If you do not understand praxeology and refuse to accept the fact that no mathematical model can account for the complex decisions of billions of people all acting through trillions of decisions involving information that is unknowable to any central planner, you are a hopelessly lost individual. If you are ignorant of all the implications of catallactics as it relates to exchange ratios regarding time, labor, interest, buying, selling, borrowing, lending, producing and consuming, you have no right to engage in adult conversation and ought to stick to writing a gossip column for the marginalized masses. If you do not understand that all government intervention into the market is based on violence, coercion and tyranny, you will never be able to correctly identify why statism fails politically, socially and economically.  It is truly a sign of ignorance for  journalists to engage in ad hominem attacks against someone like Ron Paul who seeks to discuss philosophy and ideas while being ignorant of Mises, Rothbard, Locke, Hoppe, Spooner, Hayek and Menger.

Peoples’ perceptions are skewed by a statist paradigm that provides them with as accurate an assessment of reality as that of a rating agency assessing the risk and value of collateralized debt obligations during the housing bubble. People see money and think paper has always been money. But, when one learns that until recently paper had never been money, and that all attempts to make paper into money throughout history have failed, a thinking person begins to make closer examinations in an attempt to understand economic laws and market phenomena.  Those with no historical understanding do not know that for much of this nation’s’ history it had no central bank.  People are not aware of the dangers our founders experienced that caused them to disband the first central bank after a short time.   Those who refuse to do so will never foresee second and third order effects with all the unintended consequences that occur when economic policy is mixed with human nature, hence Austrian economists account for human nature by describing praxeology.

Before a journalist decides to place derision upon that which he or she has not thought much about and for which that individual understands even less, one ought to consider the reasons why our founding fathers gave warning  with regard to central banking.  Robert H. Hemphill, a member of the Federal Reserve, stated, “It is the most important subject intelligent persons can investigate and reflect upon. It is so important that our present civilization may collapse unless it becomes widely understood and the defects remedied very soon.”  Why is it these defects are never presented even though the gatekeepers of the system give warning.

Libraries are filled with history –mostly lies, being made by kings -mostly knaves, and military men –mostly fools. But, most conquering genocidal maniacs inevitably end up letting their contempt for humanity be displayed not only in deed, where rationalizations can cover intent, but by their words. Such individuals usually end up convicting themselves, and it is during such revelations that people should gain a modicum of moral and intellectual clarity and understanding as to injustices that lead to the horrors resulting from crimes being inflicted upon humanity by tyrants. It is during such times one comes to the realization of the fact that the evil of immorality is dwarfed in consequence by the amorality of systems of power and privilege.

We can not perfect man’s nature and therefore can not create a social utopia no matter how much force is used.  Just as force can not create a rational economic system, nor can it create a stable and just social order.  When one seeks to use violence to do so it always ends up in genocides like Stalin’s, Mao’s, Hitler’s, and Pol Pot’s.  With regard to democracies, the situation ends up like Viet Nam or Iraq when done by nations that wage war through political manipulation to manufacture the consent of the people.  When utopia becomes the goal there is no logical method to rationally weigh the lose of lives as the government seeks to kill its way to utopia.  The nature of politicians has always been to rationalize the means needed to acheive their ends.  After the first million people are slaughtered the millions that follow become increasingly easier for the politician to justify.  War becomes the genocidal equivelent of a gambling addict throwing good money after bad at a Las Vagas craps table. 

To refuse to understand human failings and observe government through a cynical eye,  or to refuse to investigate and understand economics from the perspective of history, government, human nature, and philosophy is to watch humanity rearrange deck chairs on the Titanic.