Pericles
The interventionists never seem to reflect that there are more interventionists upstream of them, with similar beliefs, and similarly heedless of the economic and social dislocation they are causing downstream. The current interventionists are determined to fix these problems with still more interventions. Thus the failure of one intervention becomes the pretext for the next. By the logic of interventionism, it never occurs to the interventionists to abolish the upstream interventions. Instead they call for more, expanding the sphere of government and shrinking the sphere of individual liberty, and thus spreading more of the planned chaos that characterises central planning.

Yet none will defend the logical end of totalitarian government. And none actually do defend each given step on the way, by showing that it will cause less destruction than the alternative of greater freedom. The standard argument is only ever a front line of presumed moral superiority and magic pudding, and a rearguard of personal invective and assuming what is in issue - with Fozz feigning incredulity at the onus of proof for a bit of comic relief. Have Tristan, Fozz or you actually shown how you know the detriments of these measures will be lesser than without them? No.

The broken window refers to the original violation of property rights from which social benefits are expected. You share the interventionists’ assumption that the original problem is somehow a given prior to government policy; and Tristan the assumption that the funds to fix it are to be conceived of as if they were not taken from society, but create a net benefit.

All the Keynesian fallacies - that we can create wealth by redistributions - rest on the underlying Marxian fallacy - that the relation of employment is intrinsically exploitative. Tristan is a socialist and believes in the exploitation theory of capital. Yet he is caught in a self-contradiction. If employment is exploitative, why is he trying to promote it? But if he's trying to promote it, why does he favour illegalising it at the market rate?

The interventionists having bashed voluntary contracts of employment into a shape they think desirable - (on the fictional ground that the workers should have no freedom as they are faced with starvation etc.) – they then look on the resulting institutional unemployment, and decide it must be part of the self-contradiction of capitalism! But obviously if you illegalise employment at the market rate, you will cause unemployment. During the boom workers and unions insist on wage-rises in step with inflation. During the bust, they want government to stop the tide from going out.

Nature imposes physical scarcity and limitations on man, and logical consequences from that must necessarily follow: from which sound economics derives its principles. Governments can no more suspend these principles than they can the law of gravity or thermodynamics. The misery of mass unemployment is to the account of the ‘smug’ ‘insufferable’ ‘sanctimonious’ interventionists who dream of making everyone better off by passing laws outlawing voluntary agreements. Channelling Marx’s view that economics is nothing but an apologia for rugged exploiters, they persist in erroneously thinkingwe can conjure away scarcity and establish a cornucopia by forcibly re-arranging property titles. Tristan seems genuinely at a loss to recognise the magic pudding fallacy that he is operating on: however much he is asked to justify it, he just keeps on re-supplying the original assumption.

The stimulus is not the least-pain option: that’s the whole point. The question is whether the market downside of achieving employment - the workers in loss-making employments moving to employments paying lower wages at the market rate - is worse than the interventionist downside - forcing everyone to accept lower real incomes to pay for the above-market-rate part of the wages of privileged pet workers in loss-making productions; the diversion of capital to relatively loss-making uses; the resulting general relative impoverishment; further inflation generating further bubble effects, crony capitalism, economic dislocation and unemployment further downstream; all of which disproportionately affect the poor. Logically, how can one justify the “wire-brush-and-Dettol” therapy of the interventionists? None of the stimulus advocates has even begun to join issue.

Peter Hume, you are starting to retreat behind a smokescreen of jargon, which is always a bad sign. Instead of making your observations on the content of my last post, and its commentary on your mis-application of the broken window theory, you have resorted to the broadest and most incomprehensible of generalizations.

>>The interventionists never seem to reflect that there are more interventionists upstream of them, with similar beliefs, and similarly heedless of the economic and social dislocation they are causing downstream.<<

What on earth is that supposed to mean, when translated into English?

Who are the "interventionists" here, and who are the "upstream interventionists"? And what is the "economic and social dislocation" that they are supposed to be causing?

Pure verbiage. Insubstantial sloganeering.

>>The standard argument is only ever a front line of presumed moral superiority and magic pudding, and a rearguard of personal invective and assuming what is in issue<<

So, you are competent at name-calling, at least.

>>All the Keynesian fallacies - that we can create wealth by redistributions - rest on the underlying Marxian fallacy - that the relation of employment is intrinsically exploitative.<<

You clearly need to go back to your Keynes.

He advocated the benefits of money circulating within the system, but nowhere suggested that this on its own "created wealth".

But at least it keeps the wolf from the door for a while for the workers, who benefit from earning and spending the money that the government has borrowed from their future taxation.

>>The stimulus is not the least-pain option: that’s the whole point.<<

OK, I'll bite.

What would have been, in your view, even with the luxury of hindsight, a less-pain option?

Be specific. Slogans don't cut it.

‘[Keynes] advocated the benefits of money circulating within the system, but nowhere suggested that this on its own "created wealth".’

"Credit expansion performs the miracle . . . of turning stone into bread":
J.M. Keynes, Paper of the British Experts, 8 April 1943.

Superstition.

It is you, not I, who have failed to grasp the broken window fallacy and the Keynesian embodiment of it.

Four main upstream interventionists are both causing the depression, and preventing the recovery.

1.
FRB and Fiat money. Lowering the price of money below the market rate causes the cycle of boom and depression, by diverting capital into loss-making activities that consume capital, and must eventually collapse.
http://mises.org/story/3353

2.
“But at least it keeps the wolf from the door for a while for the workers ….”

The problem is not with "the workers" in general. It is with specific enterprises that are making losses and cannot pay wages either
a) at all, or
b) above the market rate.

There is no reason for everyone else in society to be forced through taxation to pay for the above-market-rates component of these workers’ wages, nor for produce goods that consumers don’t want at market price.

The solution is for those workers to accept wages at the market rate; and if their employments are not viable, then to move to employments that are viable.

But look at the restrictions facing people trying to do so.

Industrial relations law illegalises mutually beneficial employment at the market rate, on the ground of Marx’s ‘iron law of wages’: the idea refuted both by history and theory that capitalism reduces the wages of the workers to the level of subsistence.

It is the socialists who are causing the unemployment they blame the market for!
If it were true that minimum wage laws don’t cause unemployment, then why not make them $1000 an hour?

3.
Occupational licensing: These days in Australia you need to pay for government permission to get a job pulling beers, holding a stop-go sign, shooting roos, picking fruit, and working as a builder’s labourer – let alone any higher-skilled occupation.

What occupations in Australia do not require compulsory licensing, qualifications, registration, insurance, training, fees, more fees etc.? We have forgotten what it is like to live in a free country.

The ‘consumer protection’ idea underlying occupational licensing is that people are too stupid to know what market transactions to enter into, when they are directly exposed to the costs and benefits and can choose between competing offers and have legal remedies for fraud. But the same people, acting through a once-three-yearly compulsory political vote for unaccounted benefits with no connection to costs, in polices bundled in package deals, with no remedy for fraud, suddenly acquire superior moral and economic acuity. More superstition.

4.
High taxation. When I employ someone to do $100 worth of work, I have to pay $134, and the worker gets $86. The rest is government’s bite: about $50 worth in a contract for about $100.

These interventions have consequences! They especially cause unemployment! The worst affected are the most marginal employees: with least literacy, skills, experience, capital or income – precisely whom the interventionists are trying to help most!

Yet the interventionists never seems to cognize these facts. Every time their social engineeering attempts at price-rigging produce their entirely predictable, and predicted effects, they externalise the blame for the resulting anti-social chaos, and redouble their efforts at more interventions.

There is no future in more socialism. It is a based on a monopoly of violence, and is an economically chaotic anti-social dead-end. It should more appropriately be called anti-socialism. Seeking a ‘least-pain’ option based on expedience, while ignoring the moral and intellectual bankruptcy of these interventions, can only make matters worse.

No-one has justified these interventions nor refuted the arguments against them.

Freedom is the only moral and practical solution. Instead of trying to solve the problem by urging for political action for more interventions, we should be urging for political action to abolish what’s causing the problems: central banking, fiat currency, wage regulation, occupational licensing and taxation.

But if you are in favour of these interventions, then stop feigning concern for those suffering their results.

If we did not have taxation then undoubtedly there will be problems providing infrastructure, the social wage and training/education. Government is the most efficient provider of these.

And in Australia - collective consumption of medicine is far more efficient in providing health care as compared to the US example..

And if we did away with welfare - then there would also be a social cost: indeed, social disintegration. The cost of a 'free labour market' is made clear by the US example: where sub prime has seen skyrocketing unemployment regardless of threadbare protections for workers...

Here - the underclass are reviled and exploited as 'trailer trash': while others are homeless - having 'fallen through the cracks'. This is not the kind of society and economy I want. And economics should never be considered out of the context of its social consequences...