Who is ruling and who is ruled

James Mill and Libertarian Class Analysis

by Murray N. Rothbard

The theory of class conflict as a key to political history did not begin with Karl Marx. It began, as we shall see further below, with two leading French libertarians inspired by J.B. Say, Charles Comte (Say's son-in-law), and Charles Dunoyer, in the 1810s after the restoration of the Bourbon monarchy. In contrast to the later Marxist degeneration of class theory, the Comte-Dunoyer view held the inherent class struggle to focus on which classes managed to gain control of the state apparatus. 

The ruling class is whichever group has managed to seize state power; the ruled are those groups who are taxed and regulated by those in command. Class interest, then, is defined as a group's relation to the state. State rule, with its taxation and exercise of power, controls, and conferring of subsidies and privileges, is the instrument that creates conflicts between the rulers and the ruled. What we have, then, is a "two-class" theory of class conflict, based on whether a group rules or is ruled by the state. On the free market, on the other hand, there is no class conflict, but a harmony of interest between all individuals in society cooperating in and through production and exchange.

Booming Sweden’s Free-Market Solution

The northern Europeans have little tolerance for the statist conservatism of Southern Europe

By Anders Aslund

Not so long ago, Sweden could claim world leadership in unmitigated Keynesian economics, with a 90 percent marginal tax rate and a welfare state second to none.

Now Swedes look at the conflict between the U.S. and German examples over whether more spending or more austerity is the key to financial salvation, and for them the choice is easy: Germany was right. Northern Europe harbors no sympathy for the spendthrifts of Southern Europe.

Americans still think of Sweden as a tightly regulated social-welfare state, but in the last two decades the country has been reformed. Public spending has fallen by no less than one-fifth of gross domestic product, taxes have dropped and markets have opened up.

Who Lost Greece?

Taking a Spring Break

A relatively insignificant southern European country threatens the very survival of the euro in its present form. How did we get here, and what lessons does Greece hold for the rest of the European periphery?

By Desmond Lachman

With Greece now literally in a state of economic and political collapse, and with the country on the cusp of an official debt default and an exit from the euro, it is not too early to pose some uncomfortable questions. Who lost Greece? How did we get to a situation in which a relatively insignificant southern European country threatens the very survival of the euro in its present form? And what lessons does Greece hold for the rest of the European periphery?

Japan is driving towards a brick wall

Can Japan No Longer Afford Ambitious CO2 Cuts?

By By Mari Iwata

The Japanese government, busy trying to win parliamentary approval for its proposed sales tax hike, has so far been lukewarm on the United Nation’s “Rio Earth Summit” in Brazil on June 20-22, when politicians, businesses and non-governmental organizations from around the world will try to thrash out standards for sustainable development.

“We are not sure who will lead our delegation,” to the meeting, an official at Japan’s Ministry of Foreign Affairs told reporters on Wednesday. “It probably depends on how Parliament goes.”

The apparent lack of enthusiasm comes only three years after Japan won worldwide praise for its leadership on global environmental issues following its pledge to cut carbon dioxide emissions by 25% from 1990 levels by 2020.

The "Solution" Is Collapse

Only collapse will force everyone to go do something more sustainable to get by

So the root problem is the system, human nature, blah blah blah. There are no "solutions" that can fix those defaults. Thus the "solution" is collapse.

by Charles Hugh Smith

Policies create incentives and disincentives. Some are intended, some fall into the category of unintended consequences. Regardless of their intention, policies that create windfalls ("easy money") or open spigots of "free money" (or what is perceived as free money by the recipient) quickly gather the allegiance of everyone reaping the windfall or collecting the free money.

The World Before Central Banking

The Zombification of the Free Market

by John Aziz

In today’s world, there are many who want government to regulate and control everything. The most bizarre instance, though — more bizarre even than banning the sale of large-sized sugary drinks — is surely central banking.

Why? Well, central banking was created to replace something that was already working well. Banking panics and bank runs happen, and they have always happened as long as there has been banking.

The House of Cards is collapsing

Living within your means is now considered ‘austerity’. And unfair.

By Simon Black

One of the great absurdities of our modern financial system is that a nation living within its means, i.e. spending less than what it confiscates in tax revenue, is no longer the norm.

Whether in the UK, Europe, or North America, many voters have become so accustomed to the government’s massive role in the economy, they can’t begin to imagine how it could be scaled back.

You usually hear heavy objections from people like– “What about roads? If we start cutting budgets, there would be no more roads!”

The ‘road argument’ is one of the most widely misused defenses of government… as if there are no private roads in the world.

Scrap the Euro Now

The common currency was doomed from the start

By Robert J. Barro

Until recently, the euro seemed destined to encompass all of Europe. No longer. None of the remaining outsider European countries seems likely to embrace the common currency. Seven Eastern European countries that recently joined the European Union (Bulgaria, the Czech Republic, Hungary, Latvia, Lithuania, Poland, and Romania) have announced their intention to revisit their obligations to adopt the euro.

Two non-euro members of the European Union, the United Kingdom and Denmark, have explicit opt-out provisions from the common currency, and popular opinion has recently turned strongly against euro membership. In Sweden, which lacks a formal opt-out provision (but has cleverly refused to fulfill one of the requirements for membership), a November poll on whether to join the euro was overwhelmingly negative: 80 percent no, 11 percent yes.

The “cold turkey” approach

Paul Krugman and the European Austerity Myth

by Daniel J. Mitchell

With both France and Greece deciding to jump out of the left-wing frying pan into the even-more-left-wing fire, European fiscal policy has become quite a controversial topic.

But I find this debate and discussion rather tedious and unrewarding, largely because it pits advocates of Keynesian spending (the so-called “growth” camp) against supporters of higher taxes (the “austerity” camp).

Since I’m a big fan of nations lowering taxes and reducing the burden of government spending, I would like to see the pro-tax hike and the pro-spending sides both lose (wasn’t that Kissinger’s attitude about the Iran-Iraq war?). Indeed, this is why I put together this matrix, to show that there is an alternative approach.

An Open Letter to Southern Europeans

I’ll Gladly Pay You Tuesday

by Toomas Hendrik Ilves, President of Estonia

Slowly, ever so slowly, we are realizing, or at least should be, that the fundamental reordering of Europe that began with the crumbling collapse of an overextended and unsustainable communist glacis in the late 1980s has had far greater and far-reaching reverberations than we then would or could have predicted.

Soviet-style communism, even in the short run an unworkable form of despotism since its imposition in 1917, remained so through its iteration by military force and occupation in Eastern Europe in the 1940s. We know that crony capitalism leads to economic busts but crony communism never really even gets off the ground, just seedy privilege — bigger bad cars, better bad health care, better bad education for the children of the well-connected — justified not by achievement but by self-appointment to bring about a more radiant future, because only the self-appointed party is capable of giving hope of a better future. We will shortly meet this phrase again.

Deng Xiaoping realized already in the late 1970s, a decade before the collapse of what by then was simply a Soviet khrushchyovka of worn-out cards that a society or a country cannot borrow on the future, that productive creative labor is what must needs be allowed, and that privilege without merit leads to Soviet-style stagnation. Deng realized social stratification based on party membership, not on accomplishment, was unsustainable and proclaimed: “It is glorious to get rich.” He didn’t say, nota bene, that it is glorious to have free speech and free and fair elections. China realized it needed to change and embraced capitalism without democracy. Moscow was more obtuse, at least until the second half of the 1980s.

How to built an economy from scratch

Estonia Uses the Euro, and the Economy is Booming

It’s the euro zone, but not as we know it.

Sixteen months after it joined the struggling currency bloc, Estonia is booming. The economy grew 7.6 percent last year, five times the euro-zone average.

Estonia is the only euro-zone country with a budget surplus. National debt is just 6 percent of GDP, compared to 81 percent in virtuous Germany, or 165 percent in Greece.

Shoppers throng Nordic design shops and cool new restaurants in Tallinn, the medieval capital, and cutting-edge tech firms complain they can’t find people to fill their job vacancies.

It all seems a long way from the gloom elsewhere in Europe.

Estonia’s achievement is all the more remarkable when you consider that it was one of the countries hardest hit by the global financial crisis. In 2008-2009, its economy shrank by 18 percent. That’s a bigger contraction than Greece has suffered over the past five years.

Is Greater Productivity a Danger?

There are always new uses for human labor

by David Gordon

It is bad enough that opponents of the free market wrongly blame capitalism for environmental pollution, depressions, and wars. Whatever the failings of their causal theories, at least they are focused on undoubtedly bad things. We have really gone beyond the pale, though, when the market is blamed for something good.

Tim Jackson, a professor of sustainable development at the University of Surrey, does just that in his article. "Let's Be Less Productive," which appeared in the New York Times, May 26, 2012.

Jackson suggests that greater productivity may have reached its "natural limits." By productivity, he means "the amount of output delivered per hour of work in the economy." He acknowledges that as work has become more efficient, substantial benefits have resulted: "our ability to generate more output with fewer people has lifted our lives out of drudgery and delivered us a cornucopia of material wealth."

Despite these benefits, danger lies ahead:

Freedom To Leave May Stop Oppressive Government

"When they persecute you in this city, flee into another"

By Lawrence Hunter

The United States of America is in the early stages of a government-induced crack up.  Stress has begun to create structural failures in the interstices but, as yet, has produced only surface cracks on the social facade.

As the stress of oppressive and tyrannical government increases, however, and as its destructive by-products corrode the social edifice—abusive government actions mount, profligate and destructive policies bring economic ruin on the country, corruption becomes endemic, imperial war abroad, class warfare and civil upheaval at home plague the nation, cities decay—structural cracks will appear and become visible even to the most stupefied American.  More and more people will become aware of the extensive damage that oppressive, albeit democratically elected government has inflicted on American society.  At that point, people will be roused from their stupor to ask, “What happened” but by then, it will be too late.

The Danger of External Debts

Large trade and government deficits often go hand in hand

by Philipp Bagus

Economists and journalists often point to the danger of external public debts — in contrast to internal debts, which are regarded as less troublesome. Japan is a case in point. Japan has an enormous public-debt-to-GDP ratio of more than 200 percent. It is argued that the high ratio is not a problem, because the Japanese save a lot and government bonds are held mostly by Japanese citizens; it is internal debt.

In contrast, Spain with a much lower public-debt-to-GDP ratio (expected to be at 80 percent at the end of this year) is regarded as more unstable by many investors. One reason given for the Spanish fragility is that about half of Spanish government bonds are held by foreigners.[1]

At first sight, one may doubt this line of reasoning. In fact, as an individual living in Spain, I do not care if I get a loan from a Spanish or a German friend. Why would the Spanish government be different? Why care if loans come from Spaniards or from Germans?

We All Prefer Growth to Austerity

Making Growth or Letting It Grow?

By Anthony de Jasay

Galactic Happiness Consultants L.P. have just released the results of a survey of ten thousand adults in 27 European countries who were asked to rank chocolate cake and thin gruel in order of preference. 72.6 per cent chose chocolate cake, 4.3 thin gruel, 23.1 thought the question was daft. The Scientific Advisory Board recommended that the latter be considered as preferring chocolate cake.

EU: neither the destroyer nor saviour of Europe

The cause of and the solution to all of life’s problems 

As the Euro crisis intensifies, it’s becoming clear that both Europhiles and Eurosceptics are driven by the same responsibility-shirking instinct.

by Brendan O’Neill 

Over the past year, as the Euro crisis has intensified, there has been a really interesting revelation – which is that Europhiles and Eurosceptics are not that different from each other. In fact, Europhiles and Eurosceptics are driven by very similar impulses, by similar anti-democratic instincts.

Both of these groups seem keen to absolve national governments of responsibility, to absolve nation states of responsibility for political and economic chaos.

The Europhile does it by kowtowing to Brussels, calling upon EU institutions to do more to save Europe. And the Eurosceptic does it by blaming the EU for almost everything that goes wrong, treating Brussels as a kind of Death Star that has sucked decency from every inch of Europe.

Gimme more

Give-and-Take

By Mark Steyn

Some years ago in this space, I cited a famous Gerald Ford line he liked to use when trying to ingratiate himself with conservative audiences: "A government big enough to give you everything you want is big enough to take away everything you have." And I posited an alternative thesis: A government big enough to give you everything you want isn't big enough to get you to give any of it back.

That's what the political class of Europe's cradle-to-grave welfare states have spent the last three years doing: trying to persuade their electorates to give some of it back. Not a lot, just a bit. In France, President Sarkozy raised the retirement age from 60 to 62. French life expectancy is 80.7, so you still get to enjoy a quarter of your entire human existence as one long holiday weekend. In Greece, where those in officially designated "hazardous" professions such as hairdressing and TV-announcing get to retire at 50, the government raised the possibility of ending the agreeable arrangement by which public-sector employees receive 14 monthly paychecks per annum. They didn't actually do it but the mere suggestion that Greeks should, like lesser mortals, be bound by temporal reality was enough for the voters to rebel.

The Truth About Europe

There Is No Solution

By Raul Ilargi

Whatever data we can look at, past, present and future, none of it will make an essential difference. The title stands: There Is No Solution For Europe. Period. All I can do is keep pointing to news and stats and data that confirm that. All of them do, so that should make it a lot easier, even if most voices out there never tire from pointing out the opposite.

Nor is it limited to Europe; it's not as if the US, or Australia, or any other industrialized country, has any other fate to look forward to. This global debt deflation is truly global, the only thing that differs is the exact time the hammer comes down. Maybe those people are best off who never had much, though they will be sure to be squeezed ever harder by us, the declining rich.

The Restaurant At The End Of The Eurozone

It’s Just Lunch

                           “Time is an illusion. Lunchtime doubly so.”

                                                    -Douglas Adams

By Mark Grant

Imagine if you will a very large and diverse restaurant. It is not the Restaurant at the End of the Universe of Douglas Adam’s fame but the biggest one on this world and it is known as  "Investeros." Here there is a group of people that have been dining together for the past thirteen years. 

For most of the time the food was good, the service polite and paying the bill was never an issue. Then Don Grekko got into trouble and then Don Paddy and also Don Portugesse. They still went to lunch, of course, everyone being good friends but the other diners had to pick up their bill and this was getting tiresome. There was huffing and puffing and each of them said, in turn, that it was not their fault. There was the usual polite finger pointing and these three gentleman ate, but what they could order was severely curtailed because of the prices. This caused some issues but everyone still dined and the world went on albeit not quite as pleasantly as before.

We

Brainwashing Starts With This Two-Letter Word

by Simon Black

The big news out of New York City these days is Mayor Mike Bloomberg’s proposed ban on the sale of soda drinks over 16-ounces (about 1/2 liter) at restaurants, movie theaters, sports stadia, street carts, fast food chains, etc.

Bloomberg stressed that we have a responsibility to combat obesity, diabetes, and heart disease, and that the government must consequently regulate what people can/cannot put in their bodies. Michelle Obama even came down to applaud the idea.

Last night I was out with a group of friends at a chic Soho restaurant called the Dutch, and we started talking about the soda ban.