Predicting the Future is Really Hard. Economics is worse.

By Rich Kozlovich

A really strange article was posted on the Ludwig Von Mises Institute website by Murray N. Rothbard titled, “A Hard Money Revolt”.  The article starts out saying;

The idea prevails that to favor gold or silver money is to be a mossback reactionary; nothing could be further from the truth. For gold (as well as silver) is the People’s Money; it is a valuable commodity that has developed, on the free market, as the monetary means of exchange. Gold has been replaced, at the dictate of the State, by fiat paper—by pieces of paper issued and imprinted by the government. Gold cannot be produced very easily; it must be dug laboriously out of the ground. But if paper tickets are to be money, and the State is to have the sole power to issue these virtually costless tickets, then we are all at the mercy of this gang of legalized, sovereign counterfeiters. Yet this is the accepted monetary system of today.

He goes on to say that;

Not only is this system of the State’s having absolute control of our money been accepted by Establishment economists; it has been just as warmly endorsed by the powerful “Chicago” branch of free-market economists. Twenty years ago, almost all conservative, or free-market oriented, economists, favored a return to the gold standard and the elimination of fiat paper. But now the gold standard economists have almost all died out and been replaced by the glib, technically expert Chicagoites, to a man scoffers at gold and simple-minded endorsers of fiat paper. The gold standard has died from desertion of its cause by the right-wing and its economists. Numerous right-wingers who should know better yet continue to fawn upon Milton Friedman and his Chicagoites. Why? Presumably, because they have power and influence, and one never finds conservatives lacking these days when it comes to toadying the power. (Editor’s Note:  You will have to read the whole article in order to understand why I say this article is strange.)

I am also an admirer of Milton Friedman, but I admire him for his sound intellectual stands against socialism.  However, I also recognize that there was a reason a gold standard was created in the first place, and I also recognize there is a reason we are printing tons of money for which there is no real economic foundation. 

I am not a student of economics because it makes my eyes glaze over.  To me books on economics are kind of like books on statistics, and with great pain and suffering I have read a few on both, and they both make my eyes glaze over.  It is said that statistics is the arcane science.  Can economics be far behind?  How can so many so-called economic experts espouse so many divergent views of the same events and facts and still have economics called a science? 

It seems to me that economics a bit like astrology.  Astrologists all claim it is “a science”.  Yet that which is foundational to astrology is the start date used on the charts for the subject.  Is the start date the date of birth, or is it date of conception?  There are two different schools of thought on this subject, and in the meanwhile each is practicing this “science” for pay.  What I find even more interesting is that which must be absolutely foundational for astrology to be factual is completely wrong; the position of the planets and stars.  The astrological charts were developed during the high days of ancient Babylon.  No big deal except those stars are no longer in those positions.  The North Star is now Polaris.  During that time period it was Vega.  It will be once again be Vega, but in the meanwhile…..those stars are not in those positions.  So how can anything predicated on those criteria be valid when the foundational basis for its existance is so flawed?

As for economics, truthfully, it seems to me that it matters little if the standard is paper or gold if those in charge are people of integrity. Do we really believe that is who's in charge? 

I know what I’m about to say next will seem totally simple minded, but the fact is there are only two rules needed to have a stable economy.  Don't spend money you don't have and don't steal from your neighbors.   After that everything else falls into place.  Too simple you say?  Ok.....so tell my how all these complex mixing and mashing economic policies are working for the world.  Then tell me how well they're working after the EU collapses, followed by…….well, you get the picture.  

At least I hope you do