Free book of the day: Rothbard - Power and Market: Government and the Economy

From Mises.org:

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Power and Market

What can government do to enhance social and economic well being? Nothing, says Murray N. Rothbard. Power and Marketcontains the proof. It will inoculate the reader against the even the slightest temptation to invoke the state as a solution to any social or economic problem. It is ultimate manual for completely de-mystifying the myth of the state.

This beautiful new edition is the first to truly do it justice.

The Rothbardian claim is perhaps the most radical made in the history of political economy. But how can it be convincing? What must an author do to back up this claim?

Here is what Rothbard did. He systematically classified every form of intervention into three types: autistic, binary, and triangular. Within each category, he discusses their ill effects, and does so with precision and insight. Free market scholars have been using and expanding on his insights for years. But in this book we have the source.

He is like an expert house inspector examining the edifice of the state. Brick by brick, nail by nail, he shows that it is fundamentally unsound. The seeming edifice is really a house of cards.

This book is the ideal answer to the person who says: "I favor free markets but…." and then proceeds to advocate some intervention they believe to be helpful. Rothbard shows that it is not helpful, no matter what it is. And he provides the logic for understanding how all forms of government aggression make society worse off.

Some of the topics covered: price control, compulsory cartels, licenses, quality standards, safety precautions, tariffs, child labor laws, conscription, subsidies to unemployment, subsidies to employment, base-point pricing bans, conservation, antitrust laws, patents, public utilities, eminent domain, wage taxes, corporate taxes, capital gains taxes, property taxes, progressive taxes, the single tax, government ownership of anything, and all forms of government spending.

Within each category he lays out the rationale for why the measure must fail.

Here is a sample of the prose and analytics you can expect:

Many "right-wing" economists have advocated general sales taxation, as opposed to income taxation, on the ground that the former taxes consumption but not savings-investment; many “left-wing” economists have opposed sales taxation for the same reason. Both are mistaken; the sales tax is an income tax, though of more haphazard and uncertain incidence. The major effect of the general sales tax will be that of the income tax: to reduce the consumption and the savings-investment of the taxpayers.

Or what about taxes that are designed to bolster savings and reduce consumption. Here is Rothbard:

Why does consumption possess less merit than saving? Allocation between them on the market is simply a matter of time preference. This means that any coerced deviation from the market ratio of saving to consumption imposes a loss in utility, and this is true whichever direction the deviation takes. A government measure that might induce more saving and less consumption is then no less subject to criticism than one that would lead to more consumption and less saving. To say differently is to criticize free-market choices and implicitly to advocate governmental measures to force more savings upon the public.

Such pithy arguments make up the entire book, as Rothbard's laser hits topic after topic. Nor does he avoid the moral arguments for state intervention, and here his work really shines. He shows that intervention cannot make a society more religious, cultured, or healthy. It can only do precisely what it is capable of doing: taking our lives and property, actions which only reduce wealth.

The statist reading this book can only feel like a cornered rat.

This book was originally written as part of Man, Economy, and State, but it culled out because it was too controversial for the publisher. The Mises Institute included it again in its Scholar's Edition of Man, Economy, and State.

And yet the demand for Power and Market in a single volume remains high. Hence, this edition, designed for classroom use, individual use, or to hand to a politician before he makes his very first campaign stop.

The introduction is by Edward Stringham of San Jose State University.

Is the World Spinning Out of Control?

From Greg Hunter’s USAWatchdog.com 5 DECEMBER 2011

More Europe bailout news. Last week, the world was elated with news that the Federal Reserve and five other central banks got together to prop up Eurozone banks drowning on sour sovereign debt, but the crisis is far from over.  The latest scheme is for countries to trade sovereignty over their budgets in return for more bailout money. The Sunday Times is reporting the ECB is putting together €1 trillion that will be used for a “colossal” intervention in European bond markets.  The paper goes on to say, “The cash injection will only be carried out if leaders can agree on handing over more fiscal control to the EU and for strict controls to be imposed on nations struggling to control their debts.”  (Click here for more.)  Ann Barnhardt, an outspoken commodities brokerage owner who shot to notoriety because she closed her doors in the wake of the MF Global bankruptcy, says it will take much more than €1 trillion.  Barnhardt thinks the MF Global implosion and coordinated action by central banks is an early sign of systemic failure approaching.  In an interview last week, she said, “Europe is done.  Europe is mathematically impossible.  It cannot be saved.  You even want to make a start at trying to bail out Europe, we’re talking $25 trillion JUST TO START…we’re in excess of $100 trillion to bail out Europe.”  (Click here for the entire interview from Barnhardt.)

You think the $100 trillion number is a little high?  That is the exact same number that came out of the World Economic Forum in Davos Switzerland at the beginning of the year.  (Click here for more on that story.)  While Barnhardt thinks the entire commodities market has been “destroyed” and a collapse is near, an article on Jesse’s Café American speculates a coming gigantic confiscation scheme is in the works.  The story says, “At some point a ‘black swan’ event, or perhaps something the classical world would have simply called ‘nemesis,’ is going to knock the US futures market off its foundations.   The government and exchanges will seek to force a solution on market participants through the de facto seizure of positions and accounts, with a settlement dictated by the Banks.   MF Global looks like a dry run for that much larger default.”  (Click here for more from Jesse’s Café American.) 

Another ominous view of the EU was reported by NewsMax.com on Friday.  The story said, “Bank of England Governor Sir Mervyn King has told banks to get ready for a Eurozone collapse, according to The Courier newspaper in the United Kingdom. . . . “Maybe it won’t break up, maybe it will continue in various forms, but maybe there will still be questions of default.”  (Click here for the complete story.)  The default probability was echoed by Nigel Farage, Member of the European Parliament, who said Sunday the big intervention spearheaded last week by the Fed spells trouble.  Farage said, “I think what it tells you is there must be, there just has to be, some very major banks that are teetering on the edge of collapse.”  (Click here for more from Mr. Farage from King World News.)

Economist John Williams from Shadowstats.com said in his latest post, the downfall of the European Union is not near as troublesome to the world as a collapse of the U.S. dollar.  Williams said, “In contrast, the deliberate debasement of the U.S. dollar, and the unwillingness or inability of the U.S. government to address its long-range insolvency, promise an ultimate collapse of the U.S. currency that will leave the U.S. dollar absolutely worthless to its holders.  The hoopla out of the major central banks, on November 30th, over renewed coordinated global efforts at maintaining banking-system liquidity, suggested a rapidly deteriorating circumstance.  Further, the continued lack of meaningful growth in either the U.S. broad money supply measure, or in domestic bank lending, remains suggestive of deteriorating banking stability in the United States.”  (Click here to go to the Shadowstats.com homepage.) 

Jim Rickards, author of the new best-selling book called “Currency Wars,” thinks the risk of a meltdown is greater than most experts think.   Rickards said in an interview over the weekend, “The likelihood of a collapse is higher than a lot of analysts assume . . . therefore we are in very dangerous territory. . . . Ben Bernanke is probably a greater threat to US dollar stability than the Chinese Communist Party; his beliefs on monetary policy aren’t dynamically stable.  He believes there’s no limit to the amount of money you can print, and if the economy is in trouble, print more, and if bank’s are in trouble print more, and if Europe’s in trouble print more. . . .The Fed thinks they’re playing with a thermostat at home–but in reality, they’re playing with a nuclear reactor–and the danger is they melt the thing down.”  (Click here for more from Jim Rickards.) 

On the geo-political front, Iran claims it has shot down a U.S. spy drone over the weekend and is threatening to retaliate.  The Telegraph is reporting, “Iran’s military said on Sunday it had shot down a US reconnaissance drone aircraft in eastern Iran and warned it would retaliate on foreign soil for the incursion.”  (Click here for more from The Telegraph UK.)   The Iranians have become the black sheep of the world ever since the International Atomic Energy Agency confirmed it is developing nuclear weapons earlier this year.  What do you bet the downed drone had something to do with spying on that program?  Sanctions have been building against Iran from around the world, but the smell of war is in the air.  Meanwhile, a story recently on Chinese state run Television said China would side with Iran if it were attacked, even if it means “World War Three.”  (Click here to see more on that story.) 

If war breaks out in the Persian Gulf, Iran’s first move would be to shut down oil flow from that region by closing off the Straits of Hormuz.  40% of the world’s oil moves through this narrow 30 mile passage every year.  Between war or sanctions, oil prices will spike and push a world economy teetering on the brink over the edge into an abyss.  If the global economy is not killed off by the EU debt crisis, it would surely collapse under the weight of $300 barrel oil.  Never in history has the world been this close to total financial chaos and nuclear war at the same time.

Gold and US Official Debt Instruments Held by Central Banks

From Jesse - Le Café Americain, December 05th, 2011

If the Eurodollars chart wasn't enough heartburn for the paper-huggers, here is a chart from Ed Yardeni showing the correlation between the price of gold and the amount of US Treasury and Agency Debt held by Central Banks.

Personally I like to track the Eurodollars and the real interest rates, but this works about the same as I had suggested. Central banks are not profit-seeking organizations and are notorious for mispricing risk when it suits them.

__________

Related:

Europe’s banks will compete with their governments to borrow $2 trillion next year as the two groups refinance maturing bonds and bills.

Ben Bernanke Is Going To Print, Bailout, Buy And Nationalize Until His Eyes Bleed

Fed to bypass Congress and offer funds directly to IMF/Germany

ECB Buys €3.7 Billion In Bonds Last Week, Total Now €207 Billion: All Eyes Turn To Tomorrow's Sterilization Procedure

Stephen Leeb - Expect Gold Price to Double in Twelve Months

Gold Demand up 6% in Q3 2011

“Major Buyers Are Finding It’s Hard To Get Physical Gold”

Households hold $950bn gold in India

Gold’s 4th wave consolidation nears completion and breakout

Chinas September gold purchases leap sixfold

Clive Maund: Gold Market Update

Silver Ready For Take-Off?

Clive Maund: Silver Market Update – 12.5.11

South Korea raises gold reserves amid global fears

How We Benefit From Central Banks Supercharging Gold

Silver Forecast: Silver To Follow Gold And Double Its 1980 High At Least

Gold-Hating Economists


Perpetual QE Without the Billboard

Joe Biden "Jokes" About Bringing Hundreds Of Millions Of US Taxpayer Dollars To Bailout Greece

Merkel and Sarkozy meet in Paris: 'And now for our next coup...'

From Mail Online - Euroseptic: Mary Ellen Synon in Brussels 

By Mary Ellen Synon

It is 3 pm here on the Continent and President Nicolas Sarkozy of France and the German Chancellor, Angela Merkel, have just come out of their meeting in Paris, the kick-off to the EU summit later this week.
The two – right, call them Merkozy -- have just told the Press they want a wholesale change to the EU treaties to lock-in fiscal discipline and restore investor confidence in the eurozone.
Two points. First, it will take more than a re-jigging of the treaties to make the vastly indebted and uncompetitive countries of the eurozone look like a good place for investment.
Second, I don’t think either Mrs Merkel or Mr Sarkozy means it. I don’t think they believe there is any chance of treaty change soon enough to make any change at all in investor attitudes towards this aging and ever-shrinking part of the global economy called the EU.
The tell is in their throw-away line that followed their united call for treaty change. If they couldn’t get that, they said, they were open to an agreement just among the 17 members of the eurozone.
Too right they are. The only way Merkozy are going to take the control over member states fiscal policy – in effect, over the budgets of all the member states of the single currency bloc – is by ‘intergovernmental’ means.
Actually trying to get a wholesale treaty change through would trigger at least one referendum. And given how people – French, Dutch, Irish, all of them members of the euro – vote when given a chance to do so, I’d say the chances of treaty change of this magnitude getting through are slim to zero.
So there will be no big-time treaty change because there must be no referendum. Which doesn’t mean there won’t be big-time change. Up until today, the phrase the eurocrats and Brussels elite have been using – and using it so much in harmony that they were clearly sent the memo reminding them to use the phrase – was ‘limited treaty change.’
That ‘limited’ is a weasel word. As I’ve pointed out before, everything is limited except cosmic expansion and mother love, so saying treaty change would be ‘limited’ is meaningless.
But it’s subtext was: too minor to merit a referendum, so we will change the treaties by the self-amending mechanism laid out in the Lisbon Treaty, and no you don’t know about that mechanism because it wasn’t much advertised. That subtext was blown apart today.
Merkozy have said they want a wholesale change. No Brussels propaganda can now squeeze ‘wholesale’ into ‘limited.’
So, what Merkozy are admitting is that they want big-time change: a surrender by the 17 eurozone member states of their power over their own national budgets. The power will be put instead under German and French direction.
But Merkozy knows they won’t get this phenomenal change in power by orthodox treaty change, because any people given a referendum will reject it. So, Merkozy will get it by ‘intergovernmental’ means.
The plans of Chancellor Merkel and President Sarkozy have been well-advertised, since long before today.
The chancellor has called for a full fiscal union and automatic punishments for any state which exceeds fiscal limits defined by the Germans.
Mr Sarkozy has called for further erosion of the power of any small EU state to stop any of this: for example, at a speech in Toulon last week he said there must be more council decisions by qualified majority voting.
This policy is meant to destroy the veto power of small states. (And once this new fiscal-union cartel gets to work in the European Council, it will destroy Britain’s veto power, too, but that is for another blog.)
Merkozy want all these new powers over the budgets of member states to be established by the ‘intergovernmental’ method. That means the muscle of the governments of Germany and France will direct all future decisions on fiscal policy in member states. The established EU institutions such as the European Commission won’t.
Though it is not worth complaining much about that particular manoeuvre. Having the European Commission control all national budgets would be no better than having the Germans and French control all national budgets.
You can forget the EU propaganda that the commission protects the small countries of the EU. What the commission protects is its own powers, and what the commission wants is an extension of its budgets, its ‘own resources.’ That is, it wants the power to claim revenue by taxing you directly
But the ‘intergovernmental’ plan shows how Mrs Merkel and Mr Sarkozy intend that these new powers must not be exercised by the commission but by the German and French governments.
More, by the intergovernmental method, these new powers and the Germans and French in charge of them will not be controlled by the treaties.
Which is the point I am coming to in all this.
We know that Mrs Merkel and Mr Sarkozy plan to take away the power of all eurozone nations to control their own budgets. But the assumption so far in eurozone countries has been that this plan could only be put into force following agreement to treaty change.
Certainly this Merkel-Sarkozy plan amounts to a whole new constitutional settlement for eurozone member states: taxation without representation, the end of the power of the democratically-elected representatives of the nation to decide what tax to levy, and what spending to do.
These powers are at the foundation of any parliament. All other parliamentary powers are no more than parsley sprinkled across the meat and potatoes of tax and spend. Take away tax and spend powers from a parliament and you take away representative democracy.
And, repeat, this Merkozy removal of powers is meant to be permanent. This is far beyond any idea of temporary control to which the eurozone bail-out countries of Greece, Portugal and Ireland now submit.
The reasoning in the eurozone countries has been that, since these plans clearly give vast new powers over to ‘Europe’ that were never agreed in any earlier treaty, a referendum must happen, right? Wrong.
Both Chancellor Merkel and President Sarkozy have made it clear there must be no chance of any referendum that could stop their plans. Nothing that came out of today’s meeting in Paris changes that.
All the clues have been there all along that they intend to put in place all these powers by methods outside the EU institutions. They are determined to prevent a treaty change before these new fiscal powers are activated, thereby preventing any referendum which would stop the creation of a fiscal union.
And where they can’t put them in place by methods outside the EU institutions, they will agree simply to interpret the treaties as though their plans were allowed under the present text.
A recent comment on the Irish Economy website gave one good suggestion on just what means could be used: Protocol 14 of the Lisbon Treaty. Read the protocol and it seems innocuous. It talks about ‘the ministers of the member states whose currency is the euro’ and about how meetings shall take place between them ‘to discuss questions related to the specific responsibilities they share with regard to the single currency.’
But if the ministers decide to take on responsibility to hand over control of their budgets to a new eurozone finance committee created by the Germans? No treaty change needed, because it is already allowed for in the protocol.
The euro-fanatics who framed the treaty put in nothing by accident. The German and French leaders are ready to decide the treaty articles and protocols mean just what they want them to mean.
Remember that Article 125 of the Lisbon Treaty, the so-called no-bail out clause, says the EU shall not be liable for the debts of member state governments. That hasn’t stopped those European empire builders who want to establish a centralised fiscal and monetary power in the EU doing exactly that: landing the burden of one state’s debts onto the governments of another and onto the European Central Bank.
Expect such a clause as Protocol 14 to be used the same way. Some years from now, the Germans and the French may allow a treaty change to tidy it all up, after the peoples of the eurozone countries have been forced into this new regime. But Germany and France will take fiscal power in the meantime.
Mrs Merkel has made it clear she wants the new powers up and running in a matter of months: and treaty change within a matter of months is impossible.
At which you ought to be outraged. But you should hardly be surprised. What we have now is a German and French-led EU cartel which has so far pulled off coups in Greece and Italy. Each of those states is now ruled by unelected governments dropped into office by Berlin, Paris, the European Commission and the European Central Bank
These successful coups have made Germany and France confident of further success. They are on a roll: next target, a coup of the entire system of EU treaty law covering fiscal powers.
And here’s the surprising part – or maybe not so surprising, given his history of Vichy-like behaviour – Merkozy can count on the cooperation of David Cameron in this manoeuvre to stop any chance of any of the peoples of the eurozone countries being given a chance to vote ‘No!’
What we saw today in Paris was an announcement by Merkozy that they intend to go ahead with their drive to destroy democracy across 17 European states. By agreeing to this -- and he will -- Mr Cameron will act as collaborator in establishing Germany and France as the fiscal commanders over these nations of Europe.
Across Europe, one can only feel dread. In Britain, one ought to feel shame as well.
____________-


Related:

Italian minister breaks down in tears over austerity budget

Boiling Frogs: F. William Engdahl, Part 2 of New World Order Series

From Peter B Collins:


This is Part 2 of our interview series on the New World Order, part of the Boiling Frogs interview series, co-hosted with Sibel Edmonds.William Engdahl joins us to discuss the geopolitics behind the phony US war in Afghanistan, how the real purpose of US military presence in that pivotal Central Asian country is obscured, and the crucial importance of restoration and control of the world’s largest supply of opium for the world heroin markets and heroin’s use as a geopolitical weapon against opponents, especially Russia. He talks about Washington orchestrating the Egyptian as well as other regional regime changes from Syria to Yemen to Jordan and well beyond in a process referred to as “creative destruction,” Libya’s role in Washington’s greater Middle East project, the major players in the New World Order such as the Rockefellers, Soros, Washington’s National Endowment for Democracy, the New Silk Road project and pipeline politics, and more!

original audio (PBC_20111203p321.mp3)

F. William Engdahl is an American-German freelance journalist, historian, and economic researcher. He has a degree in engineering and jurisprudence from Princeton University and graduate study in comparative economics at the University of Stockholm, and has been working as an economist and free-lance journalist in New York and in Europe. Mr. Engdahl is the author of several books including A Century of War: Anglo-American Oil Politics in the New World Order, and may be contacted through his website at www.engdahl.oilgeopolitics.net

Pepe Escobar on The shadow war in Syria

From Antiwar Radio:


Globetrotting journalist Pepe Escobar discusses his article “The shadow war in Syria;” how Turkey is helping NATO and GCC foment a Syrian civil war; why the Muslim Brotherhood is best situated to replace the Assad regime, not the Syrian exiles favored by the US and Europe; Jordan’s susceptibility to an Arab spring revolution (not that King Abdullah II would mind much – he’d rather be in NY City); how the US and NATO are provoking a new Cold War with Russia; and the US backup plan for world domination, should the 1000+ foreign military bases become untenable in future.


MP3 here. (40:22)


Pepe Escobar is the author of Globalistan: How the Globalized World is Dissolving Into Liquid War and Obama Does Globalistan.


An extreme traveler, Pepe’s nose for news has taken him to all parts of the globe. He was in Afghanistan and interviewed the military leader of the anti-Taliban Northern Alliance, Ahmad Shah Masoud, a couple of weeks before his assassination. Two weeks before September 11, 2001, while Pepe was in the tribal areas of Pakistan, Asia Times Online published his prophetic piece, “Get Osama! Now! Or else …” Pepe was one of the first journalists to reach Kabul after the Taliban’s retreat, and more recently he has explored and reported from Iraq, Iran, Central Asia, US and China.