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The Forum > Article Comments > The rule of law – or the rule of central bankers? > Comments

The rule of law – or the rule of central bankers? : Comments

By Sukrit Sabhlok, published 13/5/2013

Perhaps it is time, however, to ask whether the Reserve Bank – like the Fed – could do better when it comes to acting consistently with the rule of law.

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3.
Foyle’s “New Economic Perspectives” takes as its framework a “modern, fiat money system”. Thus it is intrinsically unsuited to a critique of the status quo, since it does not set out to question it, but to preserve it.

4.
Foyle’s NEP doesn’t aim to achieve sustainability; it aims to “address how policymakers … should address … the continued weakness in their economies” (translation: promote economic growth).

5.
It assumes that “economies” belong to “their” “policymakers” – the government. In other words, it’s national socialist. Government owns the economy and all the property. There is no right to freedom or property but what the government unilaterally decides not to confiscate. The people are some kind of chattel for the government to manipulate by violating their freedoms and properties as it sees fit.

6.
It assumes the representative theory of government ,which is demolished in the link I posted in challenge to Foyle: http://economics.org.au/2010/08/unrepresentative-government/

He hasn’t answered it because he can’t: his statist theory is fiction.

7.
Foyle, like NEP, assumes without ever examining, or justifying their conclusion that the GFC was caused by excessively free markets rather than by excessive government intervention.

8.
Yet at all relevant times all the relevant governments claimed and exercised monopoly powers over the supply of money and credit. According to you guys’ theory, the fact that government was actively manipulating interest rates, and the fact that the financial crises arose in the financial markets, is just some kind of strange coincidence – nothing to do with economics!

9.
Foyle’s theory assumes that government has the competence to manage financial markets, including the supply of money and credit. Yet obviously, if the assumption were true, the GD and GFC would never have happened in the first place.
So the technique is, any crisis, consequential on governmental manipulation of the money supply, is just met by squarking “neoliberal!” and assuming the problem is “unregulated capitalism”.

10.
No justification if ever given for the assumption that government knows how to perform the essential functions of financial markets.
Posted by Jardine K. Jardine, Tuesday, 14 May 2013 11:03:14 PM
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But if it’s true, why doesn’t it apply to all markets?

11.
If it’s true, why not have full socialism? Why don’t Foyle’s objections to full socialism apply to his own argument?

12.
Of course when challenged the interventionists like Foyle and NEP immediately resile from their logic in favour of full socialism. They assert instead the need for some kind of “balance” between consent-based transactions (private goods) and violence-based transactions (so-called “public goods” – as if goods in general aren’t for people. Translation: State-provided goods).
But when asked by what *rational principle* they define that balance, they go quiet, slink off without answering as Foyle did, and pop up somewhere else re-running the same vapid statist *slogans* they cannot defend in honest argument.

13.
Although Foyle talks about “new” economic theories and ideas, there is nothing new about ‘em. They are just EXACTLY THE SAME ideas as the national socialists’: the problem is too much personal freedom and private property; the solution is more unlimited arbitrary government power; printing money creates real wealth for society; society is made richer by more debt, more inflation, more taxes, more political power, more socialism.

14.
The Keynesian theory is that booms arise from mere irrationally exuberant spirits. It’s a theory of psychology, not economics. Furthermore it’s circular. The boom is explained by the exuberant spirits; but the proof of the exuberant spirits, is the boom. It does not take account of the more obvious *economic* explanation – the inflation of the supply of money substitutes, which is what central banks do.

15.
All the economists who declare the problem is not enough government, JUST HAPPEN to be government dependants and high priests! “It’s amazing how hard it is for some people to understand some things, when their income depends on not understanding it.”

16.
Austrian school (http://www.mises.org) theory provides a much more realistic, logical, simpler, and cogent economic explanation of economic booms and busts by reference to the far more obvious cause – manipulations of the supply of money and credit!
http://mises.org/tradcycl/econdepr.asp
Posted by Jardine K. Jardine, Tuesday, 14 May 2013 11:04:53 PM
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“What Has Government Done to Our Money?” by Murray Rothbard
http://mises.org/books/whathasgovernmentdone.pdf

“The Mystery of Banking” by Murray Rothbard
http://mises.org/Books/mysteryofbanking.pdf

"Economics in One Lesson" by Henry Hazlitt
http://www.hacer.org/pdf/Hazlitt00.pdf

The statists can’t and don’t refute Austrian theory, that’s why Foyle scurried off when I challenged him.

Thus I think I have shown good reasons why you should re-consider your statist opinions.

“And if one theory creates a Great Depression and or a GFC? Then surely any individual of even just average intelligence would concede, that there could be flaws in it, based on outcomes or results?”

Yes indeedy. The theory and policy causing those results is that government has the competence to manage the supply of money and credit; else what are your answers to my 16 points above?

(Also how can you criticize capitalism for depressions (not enough production) while simultaneously criticizing it for unsustainability (too much)?

“In science, we'd call it the law of cause and effect, or for every effect there is s cause, and for every cause there is an effect.
Throw a stone into a pond, and you will always get ripples.”

Yes but according to your theory, you’re incapable of distinguishing cause and effect, because that would require economic theory that is no better than a dart-throwing monkey, remember?

“Now, we simply can't keep growing our population numbers, or retain an economic model completely predicated on unsustainable population growth?”

See how you’re assuming that people are some kind of chattel, and their property some kind of “economic model”, belonging to the State?

“We approach a point by 2050, where to feed the world, we will need to double food production?”

And the solution is more government control of production and the money supply? What on earth makes you think that’s going to be more productive, responsive or humane?

“… we need a different economic model.”

How about freedom for a change? Now *that* would be a new economic perspective, wouldn’t it?

The superstitious belief that government can promote sustainability is demolished here:
http://forum.onlineopinion.com.au/thread.asp?discussion=5753&page=0
Posted by Jardine K. Jardine, Tuesday, 14 May 2013 11:10:07 PM
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Thanks Arjay.

>>Well Pericles address the reality of imputs interms of loans from private banksters,cannnot be repaid by outputs in terms of debt by us, on both increases in productivity + inflation. In this present system the more growth we have ,the more debt we incur.<<

I rest my case.
Posted by Pericles, Wednesday, 15 May 2013 8:49:23 AM
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Pericles,you don't want to understand.

Even our inflationary money gets created as debt by private banksters.In a $1.5 trillion economy with 3% inflation $45 billion pa is created as debt.This is over $4000.00 per working person pa plus interest that we the people of this country lose every year and it is compounding interest.

With inflationary money we lose out three times.First with the depreciation of our currency,then the principal created by private banks from nothing,then the interest to be paid on that principal.

I have yet to address the creation from nothing money to equal growth which private banks practise daily with a similar result.ie monetary slavery for the masses.

Debt should only be attached to money that already exists,since new money for growth represents the productivity of all society and not a select elite few parasites who create nothing of tangible worth.
Posted by Arjay, Wednesday, 15 May 2013 8:55:10 PM
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Arjay, you have never explained or justified your belief that the money supply needs to be inflated in line with population or productivity growth; nor your ridiculous belief that an increase in someone's productivity presumptively belongs to "all of us".

But in any case, you have never explained how inflating the money supply is going to be improved by replacing government-licensed banks with ... government-licensed banks.
Posted by Jardine K. Jardine, Wednesday, 15 May 2013 11:26:28 PM
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