One of the elements of a capitalist system that induces purple-faced rage amongst statists and progressives is the existence of profit. This residual – the amount left over once an entity has deducted its costs from its revenue – is said to line the pockets of greedy shareholders while exploiting labourers and consumers.
During an economic malaise one of the endless reams of statistics to which pundits glue their eyes is the number of jobs that are either created or destroyed. The state makes “job creation” a central plank of its economic policy to put people back to work, and the impression that more people are being hired and fewer fired buoys their hubristic impression that we must be on the road to recovery.
The belief that economic progress is boosted by consumption is based upon the kind of misunderstanding that could be made only by intellectuals – the product of theorising that is completely detached from the common sense that everyone else possesses.
Author’s Note: This is the first in a series of short posts which will seek to rebut popular, but wrong, economic beliefs.
One of the positive indicators of our so-called economic recovery bandied about not only in the media but also by our monetary lords and masters at the head of central banks is the idea that rising prices are a sign of economic recovery. This mistaken belief is part of a wider myth that views the economy as little more than a giant number – a number which, if going up, means things are good and getting better, and if going down means the situation is bad and getting worse.
Together with other free marketeers, Austro-libertarians are adept at explaining the inefficient and destructive nature of the state. This compulsory aegis of taxation and redistribution destroys economic progress and the standard of living, siphoning off an increasing quantity of the fruits of our labour into vast bureaucracies. For our efforts, control and regulation of every aspect of our lives with a fine tooth-comb is all we can expect in return.
Conventional thinking about social, political and economic matters tends to narrow the options available to a set of policies advocated by two, possibly three political parties of scarcely dissimilar ideologies. Any genuinely radical approach concerning these topics is abandoned given that the fundamentals are deemed to be beyond question. Thus, alternatives to these entrenched matters – such as whether the state should have any positive role at all in anything – are seldom given the light of day, let alone the opportunity of being debated.