Monday, July 15, 2013
At last a sensible economist!
Well! At last an economic writer who understands the current situation, and doesn't adhere mindlessly to Friedman or Krugman.
The present state of this country cannot possibly be regarded by an impartial and attentive observer without much grief and apprehension. The continued drains of men and treasure produced by repeated wars through the last century have weakened the most prosperous and wealthy nation that ever existed. There are, however, some people so fully persuaded of its inexhaustible resources that the accumulation of its debts is considered only as a proof of its growing wealth, and the present poverty as arising mainly from increased population. Hence we see our legislators gravely proposing new national parks and wilderness reserves as the best means of preventing future scarcity. These legislators never stop to reflect that the multiplied debt produced by every new war constantly makes it harder for the poor man to maintain his family by his labor. Consequently, under these circumstances the poor man must be starved long before the resources available for his use can afford any subsistence to his family.Whoops! I lied. That wasn't a current writer. It was an editorial in a British literary journal in 1796, and the recent war was the failed attempt to bring America back into the Empire. (I changed "enclosing the commons" to parks and reserves.) Both of our modern economic fallacies were active back then: The right-wing** fallacy that infinite debt is OK because it produces a "wealth effect"; and the left-wing fallacy that eliminating resources solves resource problems. Result of both is to push all wealth and activity into the financial sector. This 1796 writer concluded accurately that being a superpower was purely destructive, and you're better off being an ordinary humble country. Good advice for us in 2013 Sharptonia. (Of course 1796 Britain didn't take his advice, and ran another failed war against America in 1812. We can be certain that 2013 Sharptonia won't take the advice either.) = = = = = **Footnote: The infinite-debt fallacy is mainly Friedmanite, but left-wingers like Krugman agree with it. The difference between the wings is not the effect of infinite debt, but how you produce it. Friedman wants to create it by zero taxes; Krugman by infinite spending. Total destruction either way. ¶ 5:21 PM
