[This article is a continuation of How Anarchic Market Forces (And Not the State) Created Civilization]
The epoch following the Neolithic Revolution in 10,000 B.C. was characterized by unprecedented growth in human population, culture, technology, and trade unrivaled in all of human history. The natural emergence of ideas and technology through entrepreneurial innovation and market processes over many years of natural selection led to the creation of the necessities of advanced civilization–agriculture, husbandry, pottery, medicine, metallurgy, trade, law, and money. States, as we consider them today, were conspicuously nonexistent.[1]
While some social stratification based on ability, function, or gender existed, on the whole, Neolithic societies were much more egalitarian than those found today. Most societies were centered around the family and the village, with some even looking down on excessive accumulation of wealth. Likely, there were wise elders or elites that emerged in each village based on reputation and respect, who adjudicated any possible disputes between community members; but they were not held to be a separate, superior class. The marvels of archaeological sites like Çatalhöyük, Abu Hureya, and Ain Ghazal in Ancient Mesopotamia are testaments to the success of voluntary relations and market exchanges. Based on the evidence found within these sites, it is accurate to say that human civilization predates the State by 4,000 years.
Some of the earliest States to be established were Arslantepe and Uruk, in the form of powerful cities dominating a surrounding hinterland. The “great” empires of old, Egypt, Babylon, and Assyria would model themselves on these Sumerian structures. Contrary to whatever fashionable methods are proposed today, a State can only arise through a very specific three-step process: through conquest, establishment of institutions, and ex post facto justification.
Jobs! Jobs! Jobs!
(Facts, Fictions, Fallacies)
The biggest spotlight in public policy today, especially due to the dismal economic climate, is the level of employment in the economy. Professional economists and citizens alike eagerly await the latest government statistics on “job growth” or more accurately, job losses. Despite these abundantly clear signals of economic and personal pain, establishment mouthpieces still have the effrontery to proclaim “the recession has passed.”
This claim is all the more ironic, as the siren song of political economy to always increase the amount of jobs in a nation, regardless of climate. Jobs are politically popular – from pork-barrel spending projects that enrich a single district[1], to massive public works programs, the jobs fetish of politicians and mainstream economists knows no bounds. The epitome of this viewpoint was the quip by the king of make-work programs, British economist John Maynard Keynes, who advocated the government in tough times to “pay people to dig holes and fill them back up again.”[2] Bear in mind, lest we forget, “we’re all Keynesians again.”[3] The Keynesian viewpoint manifests itself in the Obama-Geithner-Bernanke triumvirate over economic policy. These views are currently being encapsulated in President Obama’s propaganda campaign for a second new round of fiscal stimulus, known as the “jobs bill” to succeed the dubious $787,000,000,000 stimulus package in 2008.
While there might be a strong empirical correlation between the total number of jobs and total economic output (or their respective growth rates), it does not necessarily imply causation. Sycophantic Keynesians and their devout adherents in Washington make an offering at the jobs-altar with the sacrifice of causal economic laws. It is not the jobs that are the underlying engine of growth in an economy, but the savings and wealth that they produce.
While there are many fallacies in putting “jobs” on a pedestal, this article will deal with two of the most important: First, that jobs are intrinsically more valuable than the income they provide, and that thus everyone must have one; and second, that the free market naturally tends towards less than “full employment” in the long-run (the brunt of the Keynesian onslaught).
Before addressing the specific theoretical problems in the Keynesian system, every citizen in America, knowledgeable or not, should ask themselves one question: “Why should we ever trust the same people who promised us unprecedented prosperity and made an absolute mess of things to provide the solution to the problems they created?”
Understanding Economics Series
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Common sense economic lessons for the interested layman. How a free market economy works, from an Austrian School perspective.
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Lesson Zero: Thinking Like a (Good) Economist.
Learn how to sort through some of the largest fallacies in economics, and apply good economic thinking to your daily life. All of this comes with mastery of a single fallacy that is the root of all economic error. Also, a brief note on ethics in economics. Continue reading »
Every political ideology since the dawn of time has suffered from exaggerations and false impressions, either from a layman’s innocent confusion or through strategic deception by rival ideologies seeking to discredit it. Perhaps no political idea has ever been more falsely understood, so hopelessly marginalized, and so pretentiously reprimanded than that of anarchy.
“The two greatest obstacles to democracy in the United States are, first, the widespread delusion among the poor that we have a democracy, and second, the chronic terror among the rich, lest we get it.”
-Edward Dowling
At first glance it might seem like those are pretty radical things to say. “How could you possibly be against democracy? Why, that’s unAmerican!” But at closer inspection, we can see not only the fact that democracy isn’t all it’s trumped up to be, but also the inherent dangers of democracy.
We all “know” that America is a democracy, and most people believe that we ought to spread our version of democracy around the world. For some strange reason, whether it’s innocent ignorance or disingenuous deception, the word “democracy” has become synonymous with our system of government.
But We Are A Democracy, Right?
Think about it for a minute. What do you “pledge allegiance” to?
“I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.”
After all, following the Constitutional Convention in Philadelphia in 1787, a woman asked Benjamin Franklin what they had given us, to which he replied, “A republic madam, if you can keep it.” Not to mention, the Constitution of the United States explicitly states in Article IV, §4 that:
“The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.”
So the short answer is, no, we are not a democracy, our Founding Fathers gave us a republic. There are democratic elements in our republic as we shall see below, but we are a federal republic first and foremost. In fact, our founding fathers feared and loathed democracy.
The Global Economy Is Getting WORSE, Not Better
Last week I commented very briefly on the Currency Crisis that is frothing out of the Greek Debt Crisis. Today it came to an even greater head, with a substantial impact on global markets, so I want to analyze the devastation in Greece and its implications in much more depth.
Continue reading »