TheMarketForIdeas

Over the years, I have flirted with the idea of economic discussion with many people around me, both in my immediate circle and others. The libertarian utopian (advocating privatization, free trade and sound money) often sparred with the lukewarm liberal realist (generally advocating “what can you do, nothing you can do, the state is good, as it is, lesser evil, let’s vote” etc.). Ten years ago, the lesser evil brought us – in the meantime – a greater evil. Apparently, things don’t make sense, but somehow, some people say, we still have to put the stamp on the ballot.

Education for… economics

I often talk to my students about the mercantilism of the 16th-18th centuries and how absolutist monarchs were putting their boot on the economy, conferring privileges (monopolies, as that is the original definition of monopoly – privilege granted by the state) and controlling economic activity, extracting wealth through taxes, generating debt, manipulating currency (by melting and combining with alloys, debasing currency and multiplying the money supply and thus giving the population inflation, that is poverty). And in foreign relations by promoting protectionism, reducing imports, and subsidizing exports. In fact, this kind of economy can even be called a kind of fascism, avant la lettre. Take a look at Mercantilism: A Lesson for our Times or Mercantilism. Serving the Absolute State, two texts by Murray Rothbard.

Do you know the fundamental belief of mercantilism? Mercantilists thought that money was needed to finance (among other things) military expenditures, i.e. they were in favour of a regulated economy because this brought resources that they could direct to their military, expansionist or defensive ambitions. They were not pro-peace and, in fact, the idea of a link between free economic activity (essentially based on free trade) and peace was born a little later, after the classical liberals such as Adam Smith, David Ricardo, Jean Baptiste Say, Frederic Bastiat, all influenced by the (Enlightenment-Scottish) idea that there is a nature of economic phenomena and a natural order, etc. They were among the first to systematically ask the question: can we do whatever we want in economic policy?! Free trade has the power to install peace, protectionism installs war. There have been smarter people than us who have said these things, but back to the point.

Liberalism remains a weekend habit anyway

The bibliographical sources, arguments and reasoning, respectable for the lukewarm liberal up to a point, they became pure intellectual indulgence beyond that or at best a kind of “it’s all right, dear, that there are some who still say it like that, radical, but let’s be serious, these ideas are utopias”. That is, when they weren’t brandishing the euphemism of psychological bias, i.e. you’re one-sidedly developed, you support one school of thought, therefore you’re subjective, therefore you’re wrong. In their view, at their school, the cult of the state shows cognitive openness. OK! Now come and reap the harvest!

Let’s be clear, it is one thing to fall from libertarianism into lukewarm liberalism, it is quite another to cultivate lukewarm liberalism as a safety net and expect society to remain governed by the ideas of a genuine market economy. The higher you raise the standard, the less the fall will be felt. So you have to aim high and then see how low you go from there. But who is aiming high? Nobody. Where is the PR for genuinely liberal ideas and clear intellectual stances in that direction? Get it where it isn’t! A few years ago, a successful entrepreneur in Romania told me in a very loud and boorish way (hearing that I was floating liberal ideas, a sort of Molotov cocktail for the local political environment) that he was a convinced Keynesian, without explaining why. I’m not generalizing of course, but this was in the “big league”. I wonder what it is like down below…

We are what we grow

We are now being presented with interventionism of all kinds. One is nationalist, the other European. Essentially, both speak the same language, and the national one has often been inspired by the European one. Mihail Manoilescu (1891-1950), a proponent of corporatist protectionism and former foreign minister (1940), author of several books, advocated the idea of an ersatz, interventionist-nationalist state with industry and agriculture sheltered by protectionist trade policies. You would say that Manoilescu’s economic fascism is different from EU economic policy. Not necessarily! Look at the EU’s protectionism in agriculture, look at today’s state-led industrialism through policies of sustainability and cultural diversity, look at how the governing philosophy of EU economic policy is welfarism of all kinds, look at monetary policy (endless quantitative easing, stimulating consumption then targeting inflation, generated by artificial stimulus).

They all point to a typical fascist economic model, except that – horrified by this comparison – the EU prefers to shift the discussion or the focus to an economic technocracy. What do you expect? Money and peace? There is a causal relationship between economics and freedom. And we have to tell the good one, there are religions that are not compatible with economic freedom, do you think they will change culturally in the EU?! This is hilarious. Then the Marxists come along and slam it: the EU is pure neoliberalism, but yet they’re afraid of nationalist presidential candidates, and so seem better with neoliberalism. Well, you created the nationalist candidates by your own ignorance (leaving aside the idea that it’s not really neoliberalism, but statism, interventionism).

There is no public voice in Romania to attack the ecological fanaticism or the European redistributive model. The fascists were concerned about what you eat and how much you move, physical education and eugenics. Today traditional fascism is disguised as environmentalism, to give just one example. And those who would nationalize your plate and your fridge are simply communists, following the famous saying about environmentalists: they are green on the outside but red on the inside. The environmentalist discourse galvanizes hundreds, thousands of young people, who read nothing, just scroll through reels about how the planet can be made clean through anti-capitalist measures. What’s more, green parties are rising in the polls and in elections. And still no public debate on environmental extremism. As for attitudes to morality, Europe is increasingly forgetting the Christian values that founded it.

“The modern world has even come to define ‘progress’ in terms of how far it departs from Christian morality. If Christianity condemns abortion, homosexual acts and suicide, then secular law, which of course must not be contaminated by religious considerations, must uphold them as ‘rights’. Even infanticide and pederasty are undergoing a renaissance, and advocates are trying to get them legal status. In the meantime, modern warfare has overtaken not only what was not permissible in the old days but also what was unthinkable.” (Sobran, 2018)

Whether public policies in the EU on sexuality converge with eugenicist ideas, I can’t say, it depends on one’s own view. I would tend to say that they do, on a soft level and with a well thought out PR to lead in the progressive-humanist direction. Pardon my digression…

But back to the economy. The suspicious privatizations in Romania have remained unresolved to this day by the total absence of a clean liberal discourse (nobody is funding anything like that), and the hatred and/or fear of liberalism wears various disguises, the most obvious of which is that of the country sold for nothing. But it is everyone’s duty to educate themselves. Ludwig von Mises says:

“There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon ‘experts’ and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people’s domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake.” (Mises, p. 876)

Planning is multifaceted, not just Russian

Philipp Bagus wrote an interesting book about ten years ago about how the socialist party in Europe won the day, right from the beginning. Since then, the EU has easily, easily become a community of privileges, in which each country formally preserves the rhetoric of the market economy, while externally openly promoting economic isolationism (sovereignty). Here is what Professor Jesús Huerta de Soto has to say about Bagus’ book:

“Bagus’s theoretical analysis highlights even more clearly the inflationist approach of the Eurosystem, seen as a self-destructive mechanism, leading to massive redistribution within the EMU, with incentives for governments to use the European Central Bank (ECB) as a tool to finance their deficits. He points out that the notion of the ‘Tragedy of the Commons’, which I myself have applied to fractional reserve banking, also folds into the Eurosystem structure, where different governments can exploit the value of the single currency.”

What does that bring? (especially when you add irresponsible free migration policies on top of it)? Extremism! I mean everyone tries to defend themselves. Extremism in the EU has grown precisely because the bibliographical sources, the arguments, the reasoning remain for the lukewarm liberal a mere intellectual exercise. The lukewarm liberal is imagining himself in the 1950s, when the monstrosity of military cataclysms is being negotiated and a freer world is being born. Of course, in comparison with the inter-war period, the first ten or twenty years of the predecessor of the EU were years of a free economy. But interventionist policies then and now are widening the social gap/inequality, creating class conflicts while politicians who promise big deals will inevitably emerge. And the balanced ones will disappear. In the EU, what types of politicians do you see increasingly populating the scene?!

And yet education for… freedom

Without this firm pole of education for economic freedom, the option we are left with is lukewarm liberalism, ready to prostitute itself at any time for budgetary balance (aka maintaining privileges), development via European funds, coordinated inflation at European level or the philosophy of the sustainable plate/car/house. So something that will lead into extremism, especially if you also irritate the Christian sensibilities of a nation.

In the last round of the (now dismissed) Romanian presidential elections, we had two equally inconsistent political-economic options. We had a proposal for an interventionist state (with strongly expressed socialist tendencies and excessively lenient with the Russian model) which proposes peace (or, a controlled economy will generate bellicosity in foreign relations) and a variant of an interventionist state (with strongly expressed cultural progressive tendencies, based on a lukewarm liberalism, therefore more flexible, more private) but in the EU logic, welfarist-inflationist, which is totally pro-war (or, the question arises, with what resources will you finance these expenses if you are asked to?!). I would expect that people who fervently insist on continuing the war would minimally grasp this argument, that the prosperity they have gained is also as a result of… avoiding war. War will bring inflation, debt, poverty and deepening extremism. And “eugenics” of all kinds.

So, you don’t get into Russia’s arms so easily, with someone who comes and proclaims himself a guru, but you get there by betraying ideas, and this is a long process, where laziness and convenience prevail. And I would tend to say it is the betrayal of sound ideas on liberty. The struggle is always a struggle of ideas, but we seem to wake up every four or five years.

We are all in this business, to be honest and humble.

Photo source: PxHere.com.

References:

Bagus, Phillip, The Tragedy of the Euro, The Ludwig von Mises Institute, Auburn, Alabama, 2010.

Mises, Ludwig von, Human Action. A Treatise on Economics, Ludwig von Mises Institute, Auburn, Alabama, 1998.

Rothbard, Murray N., Mercantilism. A Lesson for our Times, chapter 34 in Economic Controversies, The Ludwig von Mises Institute, Auburn, Alabama, 2011.

Rothbard, Murray N., Mercantilism. Serving the Absolute State, chapter 7 in Austrian Perspective on the History of Economic Thought, The Ludwig von Mises Institute, Auburn, Alabama, 1995.

Sambuco, P., & Pine, L. (2023). Food Discourses and Alimentary Policies in Fascist Italy and Nazi Germany: A Comparative Analysis. European History Quarterly, 53(1), 135-155. https://doi.org/10.1177/02656914221140274.

Sobran, Joseph, Evul mediu întunecat, noua moralitate, Editura Contramundum, 2028.