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32. How an Economy Grows and Why It Crashes
- Author:
- Daniel Wahl
- Publication Date:
- 09-2010
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes. . . .
- Topic:
- Economics and Government
- Political Geography:
- United States
33. The British Industrial Revolution: A Tribute to Freedom and Human Potential
- Author:
- Michael Dahlen
- Publication Date:
- 10-2010
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- For most of human history, the vast majority of people lived in squalor and bitter poverty. People labored hard in grueling conditions but produced little wealth for their efforts; food was scarce; disease was rampant; child mortality was about 50 percent; and life expectancy was twenty to thirty years. To borrow from Thomas Hobbes, life was “nasty, brutish, and short.” ©2008 Frankie Roberto http://commons.wikimedia.org/wiki/ File:James_Watt%27s_Workshop.jpg Today, by contrast, in developed countries such as Britain and the United States, the relatively few people who are considered “poor” typically work in comfortable jobs (if they work at all); have refrigerators, electric light, indoor plumbing, televisions, telephones, and the like; and can expect to live into their seventies. Their “poverty” appears rather fortunate compared to the wealth of kings past. The average person today works in even greater comfort; has a car, a computer, a cell phone, countless other devices of luxury, and a lifestyle that would make any king living in the pre-industrial era look like a peasant. The dramatic transformation from universal poverty to widespread wealth began in the late 18th century with the Industrial Revolution, which originated in Britain. The Industrial Revolution was just that: a revolution of industry—a revolution in which an enormous increase in the commercial production and sale of goods changed the world and improved man's standard of living by orders of magnitude. As historian Eric Hobsbawm remarks, “No change in human life since the invention of agriculture, metallurgy and towns in the New Stone Age has been so profound as the coming of industrialization.”1 To see what caused this dramatic transformation, let us look first at the political climate and living conditions of the medieval era that preceded the British Industrial Revolution; then we will consider the politico-economic system in which the Revolution occurred, several related developments that illustrate the nature of the era, and the economic growth that these developments brought about.
- Topic:
- Political Economy
- Political Geography:
- Britain, United States, and United Kingdom
34. How an Economy Grows and Why It Crashes
- Author:
- Daniel Wahl
- Publication Date:
- 10-2010
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Very few economists predicted an economic catastrophe in 2007. Even following the crash, many continued to claim that our present economic course was fine. As for today? “Three years into the mess, economists now offer remedies that strike most people as frankly ridiculous. We are told that we must go deeper into debt to fix our debt crisis, and that we must spend in order [to] prosper” (pp. xi–xii). The source of such seeming obliviousness, according to Peter and Andrew Schiff, is the early-20th-century economist John Maynard Keynes. According to the Schiffs, Keynes taught that governments could smooth market volatility, increase employment, boost growth, and raise living standards simply by going into more debt and printing more money. Although they grant that Keynes was smart, the Schiffs say he developed some very stupid economic ideas—ideas that are false, dangerous, and causing the collapse of America's economy. The Schiffs set out to counter these harmful ideas in How an Economy Grows and Why It Crashes. The book is an extended allegory of U.S. economic history, with supplementary discussions and illustrations. It begins with three men living on a tropical island, each subsisting on one fish per day, which he catches with his bare hands. One of the men, Able, devises a better way to catch fish: a net. Thus equipped, he hopes to catch more fish, and faster, leaving himself spare time to make new clothes.
- Topic:
- Economics
- Political Geography:
- United States
35. An Interview with Andrew Schiff about Fishing Nets, Hut Gluts, and other Economic Matters
- Author:
- Andrew Schiff
- Publication Date:
- 12-2010
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- The author and investor discusses his book, the state of economy, the cause of America's financial problems, and investment possibilities under the circumstances
- Topic:
- Security and Economics
- Political Geography:
- United States
36. The Dhandho Investor: The Low-Risk Value Method to High Returns, by Mohnish Pabrai
- Author:
- Daniel Wahl
- Publication Date:
- 12-2010
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- “From a standing start as refugees with virtually no capital, a person with the last name Patel today owns one out of every five motels in the United States” (p. 132). According to hedge fund investor Mohnish Pabrai, one word identifies how these Indian immigrants have achieved this extraordinary success in a little more than thirty years: Dhandho.
- Topic:
- Foreign Policy
- Political Geography:
- United States
37. From the Editor
- Author:
- Craig Biddle
- Publication Date:
- 12-2009
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Merry Christmas readers! And welcome to the Winter 2009-10 issue of The Objective Standard.
- Topic:
- Government
- Political Geography:
- United States
38. Pharmacide: The Pharmaceutical Industry's Self-Destructive Effort to Loot America
- Author:
- Cassandra Clark
- Publication Date:
- 12-2009
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Pharmaceutical industry executives are frequently accused of greedily putting "profits before patients" (as if drug companies could profit by means other than serving patients). This accusation would be unjust if these executives were after profits. Unfortunately, however, today's pharmaceutical executives are not after profits. They are after loot. They seek to gain, through legislation, money coercively taken by the government from American citizens. But, unbeknownst to these executives, their looting is self-destructive. In fact, by aiding and abetting the government in its violation of individual rights, the pharmaceutical industry is committing suicide. To see why, let us begin by examining some of the ways in which the industry calls for the violation of rights and receives loot as a result. Then we will turn to the reasons why this practice is killing the pharmaceutical industry. Consider the industry's support for the Medicare Modernization Act of 2003 (MMA). The MMA expanded Medicare to include coverage of prescription drugs for Americans over the age of 65 and was the largest expansion of welfare in America since the creation of Medicare itself.1 When the Act took effect in 2006, it made the U.S. federal government the single largest purchaser of prescription drugs in America.2 In 1999, years before this bill had been conceived, Alan Holmer, then president of Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's lobby group, made clear in a trade journal the industry's view that "the question is not whether, but how, to expand Medicare coverage of prescription drugs."3 In 2000, Holmer testified before the Senate Finance Committee that at "some point in the not-too-distant future, a Congress will pass, and a President will sign, legislation to expand drug coverage for Medicare beneficiaries. . . . Expanded drug coverage for seniors will be a positive development." Holmer emphasized: The pharmaceutical industry strongly supports . . . expanding Medicare coverage of prescription medicines. . . . Medicare beneficiaries need high-quality health care, and prescription medicines often offer the most effective therapy for them. We believe that the best way to expand prescription drug coverage for Medicare beneficiaries is through comprehensive Medicare reform.4 The pharmaceutical industry got its desired "reform," and when the MMA became law, the government not only began dictating the terms by which private insurers would provide prescription drug coverage to Medicare beneficiaries, it also began spending tens of billions of dollars annually to subsidize that coverage. From where does the U.S. government get this money? The government does not create wealth; it does not produce anything. Every penny the government spends on drugs (or anything else) comes from taxpayers. The government gets this money by taking it under threat of force from hard-working Americans (or by printing or borrowing it, which is deferred taxation). This is legalized theft; the money taken by force is loot. And when the government spends this loot on prescription drugs for the elderly, the loot is passed on to the pharmaceutical industry. Now, merely receiving loot from the government does not in and of itself constitute the moral crime of complicity in the government's coercion. But the pharmaceutical industry is not merely receiving money from the government as a result of the MMA. The industry advocated this socialist scheme of forced wealth redistribution from the start, supported it at every stage of development, and is now receiving the loot as planned. Although the industry exchanges drugs for the loot, the entire arrangement on the part of taxpayers whose money is taken by force to buy the drugs is involuntary. Taxpayers do not choose to fund the industry in this way; they are forced to do so-by a law that the pharmaceutical industry enthusiastically helped to create. . . . To read the rest of this article, select one of the following options: Subscriber Login | Subscribe | Renew | Purchase a PDF of this article.
- Political Geography:
- United States and America
39. What the "Affordable Health Care for America Act," HR 3962, Actually Says
- Author:
- John David Lewis
- Publication Date:
- 12-2009
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- What does the bill recently passed by the U.S. House of Representatives, HR3962, short-titled the "Affordable Health Care for America Act," actually say about major health-care issues? I here pose a few commonsense questions, cite some relevant passages, and offer a few brief comments. (The bill is available at http://docs.house.gov/rules/health/111_ahcaa.pdf.)
- Political Geography:
- United States
40. The Barbary Wars and Their Lesson for Combating Piracy Today
- Author:
- Doug Altner
- Publication Date:
- 12-2009
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- Over the past few years, Somali pirates have attacked numerous ships, hijacking more than forty in 2008, holding more than six hundred seafarers for ransom that same year,1 and extorting more than $150 million in ransom payments from December 2007 to November 2008.2 More troubling is that, as of September, reported pirate attacks for 2009 have already surpassed the total number reported in 2008-a strong indication that the problem of piracy is only worsening.3 Because of these attacks, shipping companies must choose between navigating dangerous waters and taking costly alternate routes in order to protect their crews and goods. In November 2008, Maersk, one of the world's largest container shipping companies, announced that, until there are more convoys to protect its ships from attacks, some of its fleet will avoid taking the most direct sea route to the East through the Suez Canal, which leads to pirate-infested waters.4 By taking the next best route from Europe to the East-around South Africa's Cape of Good Hope-shipping companies such as Maersk will add an average of 5.7 days and three thousand miles to each trip. The average annual cost of this route change to such a shipping company will range in millions of dollars for each of its ships that uses the alternate route,5 not to mention short- and long-term expenses from additional wear on its vessels. And, of course, given the integrated nature of the economy and the amount of goods shipped to and from the East, such route changes negatively affect all industries, directly or indirectly. Although the piracy threat has been well known to those in the shipping industry for a few years, it became manifest to most Americans in April 2009 when Somali pirates hijacked the Maersk Alabama and captured twenty U.S. sailors. Although the sailors soon regained control of the ship,6 four pirates took Captain Richard Phillips hostage on a lifeboat. The three-day standoff that ensued ended when a team of navy SEAL snipers rescued the captain.7 Fortunately, neither the captain nor any sailors were seriously harmed during this attack-but it is disconcerting that a small gang of third-world pirates dared to attack an American ship and abduct its captain. Why were the pirates not afraid of a standoff with the most powerful navy on earth? To determine what is motivating these pirates and how the U.S. Navy should best combat their attacks, many policy analysts, historians, and defense experts are looking to the Barbary Wars-two wars the United States fought in the early 19th century to end North African piracy-for guidance. These experts are wise to look here, for the situation surrounding the Barbary pirates of the revolutionary era is similar in important respects to the situation surrounding the Somali pirates of today. Like the Somali pirates, the Barbary pirates attacked trade ships, stole goods, took prisoners, and demanded ransom from wealthy nations with strong militaries. And like the Somali pirates, the Barbary pirates got away with their thievery for some time. But unlike the Somali pirates, who continue their predations, after the Second Barbary War the Barbary pirates stopped assaulting U.S. ships-permanently. Toward establishing a policy that can bring about this same effect with regard to the Somali pirates, it is instructive to examine those aspects of late-18th- and early-19th-century U.S. foreign policy that were effective against Barbary piracy and those that were not. In particular, it is instructive to identify why the First Barbary War failed to end the pirate attacks but the second succeeded. Let us consider the key events surrounding these two wars. . . . To read the rest of this article, select one of the following options:Subscriber Login | Subscribe | Renew | Purchase a PDF of this article
- Topic:
- Foreign Policy and War
- Political Geography:
- United States, Europe, South Africa, and Somalia