January 17, 2022

The Dismal Science

"The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. Nine-tenths of the economic fallacies that are working such dreadful harm in the world today are the result of ignoring this lesson.”

— Henry Hazlitt

A word from Tim:

Sadly, since economics is a soft science it was ripe for politicization. From the time of Marx onward it's been used as a tool to justify socialistic policies and statism. In fact, it goes to well before Marx; the whole modern era can be traced backj to Thomas Malthus and his idea of overpopulation wrecking civilization, an idea that has been proven spectacularly wrong but remains a powerful incentive to the Ruling Class to this very day, and gave us such little goodies as eugenics (and thus Naziism) and a host of other terrible policies. Economics has been used to justify heavy government intervention in the economy and Keynes was just one of the later actors to promote encroaching government as a supposed means to protect the economy. Amazingly people still believe in Keynes, whose theories never worked.

Hat tip: K.C. Jenkins

Posted by: Timothy Birdnow at 09:49 AM | Comments (3) | Add Comment
Post contains 214 words, total size 1 kb.

1 I won’t claim that Keynes’ policies are valid, but one cannot say that they have never worked, because they in fact have never been tried. He said that government should engage in deficit spending when the economy is down, and then repay that debt when times are good.

Our government engages in deficit spending in both good times and in good times, and has never worked toward reducing that debt, which certainly doesn’t work but is not Keynesian policy.

Posted by: Bill H at January 17, 2022 10:25 AM (/sW5m)

2 Excellent point, Bill!

Posted by: Dana Mathewson at January 17, 2022 01:43 PM (FSK6u)

3 Well, that is a valid point Bill.

We DID try to repay our debts early in the 20th century and gave up. In fact, the repayment often hurt economic growth.

The depresion of '21 was a result in no small part of aussterity measures taken to pay off the WWI debt. The Fed began pumping money into the money supply as a result, leading to the Roaring Twenties, but ending when the Fed retracted the money supply.  That was their way of attempting to rein in the excesses of the '20's, alas.

It's politically impossible to quit spending. That's why spending should never be allowed in the first place. It's like heroin; once you take it you're hooked.

Posted by: Timothy Birdnow at January 19, 2022 09:40 AM (cMAT5)

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