Mises Wire |
- Kabul's Collapse and DC's Incurable Arrogance
- Saras Sarasvathy On The Entrepreneurial Method
- Cronyism: Liberty versus Power in Early America, 1607–1849
- The Demise of the Gold Standard
- The Pentagon and the Generals Wanted This Disastrous War
- Cuba: The Dictatorship and the "Blockade" Lie
- Egypt's Bread Subsidies May Bring Millions to the Brink of Starvation
| Kabul's Collapse and DC's Incurable Arrogance Posted: 18 Aug 2021 04:00 AM PDT After the Taliban captured Kabul far faster than anyone in Washington forecast, secretary of state Tony Blinken went on Sunday morning talk shows and announced that the US mission in Afghanistan had been "successful." Unfortunately, there will be plenty of robotic civil servants and political appointees who recite that deranged verdict in the coming years. There is no reason to expect the twenty-year US debacle in Afghanistan to humble Washington policymakers. Korean War fiascos were swept under the rug, paving the way for fresh delusions that led to the Vietnam War. The debacles of the Vietnam War were buried long ago, spurring similar follies in the Afghan and Iraq wars in this century. John Sopko, the special inspector general for Afghanistan reconstruction (SIGAR), reported finding "a USAID lessons-learned report from 1980s on Afghan reconstruction but nobody at AID had read it!" Foreign policy makers will likely remain arrogant and myopic regardless of how many more nations they despoil. On a winter hike almost a decade ago, I witnessed firsthand both the haughtiness of officialdom and its human cost. I arrived at Great Falls National Park in Maryland early for that Sunday morning jaunt and found a wooden rail fence to lean against as I awaited the arrival of other hikers. A few minutes later, a handicapped van pulled to the side of the nearby road. A twenty-something woman bounded out of the shotgun seat and zipped around to the side of the van. Her long brown hair was pulled back into a single ponytail topped by a St. Louis Cardinals baseball cap. That bright red hat perfectly complemented a bit of rouge—or maybe she was naturally red cheeked. When she slid open the side door, her husband poked his head out warily. He had a sturdy jaw rounding out Hollywood-caliber rugged good looks. His military-style close-cropped haircut and his Army Rangers T-shirt settled any doubt about his occupation. She reached up to provide a slight assist as he moved gingerly out of the van like a toddler taking his first steps. One shirt sleeve was cut off. Instead of a left arm, I saw a metal rod with a wire hand at the end protruding from it. As he exited the van, I noticed that in place of legs he had two metal rods extending downward from his knees. The soldier clenched a monogrammed wooden cane in his right hand while his wife eased him forward by his left side, brightening a cloudy morning with an unforgettable radiant smile. Perhaps this was a day that she had been hoping and praying for ever since she got the bad news from the other side of the world. This couple was desperately seeking to regain a little normalcy and recapture some of the joys they feared were lost forever when the husband was maimed by a roadside bomb, likely one of thousands of American casualties during Obama's surge in Afghanistan.  I had no idea how long this guy had been in rehab or how much progress he might have already made. Walter Reed Hospital, the nation's top military hospital, was only a dozen miles away from the park. The drop-off point the van chose offered quick access to the C&O Canal Towpath and a vista overlooking the Potomac River. I have seen many such couples at this park, at the National Zoo, and at the National Mall. The vast advances in medical treatment had assured that far more soldiers survived grisly wounds than in prior wars. But there had been no corresponding progress in assuring that politicians gave a damn about the plight of the soldiers they sent off to fight. As I waited, a chunky, blue-eyed blond recognized me from earlier hikes and plumped down hard on the fence rail next to mine. The hangover she boasted of having made her look fortyish before her time. She sported a bright green down vest over a maroon running outfit and the latest chic walking shoes. Heather was an affable Midwesterner who, like many hikers, defined herself in part by athletic feats she flourished like a row of Olympic medals. She told me she'd hiked half of the two thousand–plus–mile Appalachian Trail all by herself and was forced to abandon the quest to become a "through hiker" because of severe ankle problems. Twenty years earlier, as a college student in Switzerland, she had continued hiking in the Alps even though altitude sickness spurred severe migraines and heavy vomiting day after day. She wanted to prove beyond a doubt that she was not a "quitter"—perhaps the most despised term in her vocabulary. Turnout was sparse for the hike and Heather couldn't find anyone else to brag to. She probably assumed that I was not "the sharpest knife in the drawer" based on my barn coat and battered Aussie-style canvas hat. (Okay, maybe it was the scruffy beard.) Her hunch that I was a loser was confirmed when in response to her question I said I'd never done a marathon but had run 880-yard relays for the high school track team. Any distance less than twenty-six miles was beyond contempt. She confided that when she applied to grad school for her master's in business administration, "my GMAT scores were very impressive." After she repeated that point, I wondered if she had the test scores tattooed where the sun doesn't shine. She had transcended that triumph by passing the Foreign Service Officer exam. And she was off and running with the "my brilliant career" storyline. She boasted that she had an extremely high level of security clearance—unlike the other half million Washingtonian-area employees with humdrum security clearances. She spent a decade based at US embassies in South America, defending the US drug war and other policies that made life hell for the locals. She extolled the State Department as the wisest of federal agencies. Other government agencies were not only technologically far behind the State Department, she said, but they also had failed to develop ways to assure that the best and brightest (such as herself) rose to positions of command and influence. "What about Americans who say the invasion of Iraq in 2003 was the biggest blunder since the Vietnam War?" I asked. "It is unclear whether invading Iraq was a bad idea," she curtly replied. "Saddam Hussein was an evil ruler. There is a lot of inside information that has not been made public that would put the Bush administration's decision in a very different light." "Didn't bipartisan congressional investigations conclude that the Bush team blundered horribly?" Heather scoffed: "There were a lot of facts that Congress didn't know—you can't rely on their conclusions." This woman sounded like she had exclusive access to the Temple of Delphi, or at least the inside-the-Beltway equivalent. Tapping my "innocuous country boy" tone, I asked, "What do you make of Wikileaks disclosing all those secret State Department cables that contradicted the public statements of the US policymakers?" She snorted. "I have not looked at any of those cables. We were told that we would lose our security clearance if we read any of those unauthorized disclosures." Since the information had not been officially disclosed, good Washingtonians were obliged to pretend it did not exist. I mentioned in passing that I was a journalist but that tidbit did not hold her attention. She was enjoying strutting her expertise—which was fine by me. She then revealed why private citizens could not make competent criticisms of US foreign policy: "Even if you study the relationship between the US and another country the whole time, you would only know at most 80 percent of the most important facts. It is like trying to judge a married couple who you casually know—it is simply not possible to do." And since Heather was between the sheets of US foreign policy, I should take her word that Americans weren't getting screwed. "If you want to deal with unadulterated mass stupidity," she said, warming to the subject, "just look at the opinion polls on foreign aid. Almost everybody is against it but they don't even know how much money the US distributes abroad. Even worse, people totally fail to recognize how aid advances America's grand strategic objectives." "Haven't there been some controversies about US aid money bankrolling atrocities by foreign governments?" "The US has no responsibility for the actions of foreign governments that receive US foreign aid. They are separate entities. It is like responsible adults—they do their own thing." I silently lamented that the US government hadn't given me a few billion dollars to "do my own thing." I had been writing about foreign aid for decades but couldn't recall it previously vindicated as a windfall for foreign politicians' self-expression. "Help me figure this out," I said. "Any American who donates to a foreign group that commits atrocities gets charged with material support of terrorism. Why isn't the same standard applied to recipients of US foreign aid?" "It's different when our government does it, because it serves the national interest." "How do we know that?" I asked. She affixed me with the glare a schoolmarm uses to smite the dumbest kid in the class: "That's why we have a democracy—there are checks and balances." "How can we have self-government when the feds withhold so much information from citizens?" "People know what they need to know," she replied testily. "They don't need to be told everything, because the people in charge are experts. Besides, sometimes it's more important for the government to do what's right, not just what's popular." She omitted mentioning that the US State Department is doing God's work—or doing what God would do if He knew the facts of the matter. "But if the government is so secretive … " "Americans are free because they can vote—everybody knows that," she snapped. Sensing that her patience with my pesky questions was damn near done, I asked if she felt any personal responsibility for promoting policies that worked out badly for the US or foreigners. "I have to be an adult—and being an adult means taking responsibility. It is like proposing a budget … Sometimes you don't have control of all the items in your budget and not all the numbers are met. But you have to take responsibility." Heather knew all the rhetorical tricks to absolve the government and herself. "How does that apply to cases where the US bombs foreign nations and unleashes mass killing and chaos like in Libya?" "You know, I should not even be talking to you," she growled as she glared with disgust. "Kind of late, honey," I didn't say. Instead, I gave her my best Cheshire Cat smile as she scowled and raced ahead on the trail. Heather was a classic Washington high achiever, a very intelligent woman whose career progress hinged on zero intellectual curiosity. She only read official sources, and thus knew that officialdom was wonderful. Disputing with her was like conversing with a religious devotee who had memorized responses from a foreign policy catechism. For her, any alleged US foreign policy debacle was either nonexistent or irrelevant. Her guiding principle was "government is smarter than you are." Her notion of democracy consisted of little more than inferiors submitting to the secret decisions of their anointed superiors. And as long as government keeps so much information classified, it can always deride ignorant critics. As I headed back to my car, I saw another van pull up at the edge of the parking lot. A reddish-curly-haired lass barely out of her teens sprang out of the shotgun seat and circled around to the side door. She was wearing a puffy pink sweater and a calico skirt, but her young face was riddled with angst. Her soldier husband/boyfriend was missing only one leg but I suspected that he also suffered a lot of other physical damage that would not be evident to a passerby. He repeatedly grimaced in pain, but that couple advanced together bravely regardless. Heather was long gone by that point, but I suspected she would not have given that couple a second glance. She would have presumed that none of the maimed soldiers hobbling through the park that day could have passed the Foreign Service Officer exam.  This posting includes an audio/video/photo media file: Download Now |
| Saras Sarasvathy On The Entrepreneurial Method Posted: 17 Aug 2021 08:00 PM PDT The scientific method has served us well to date. The entrepreneurial method, informed by the principles of Austrian economics, can take society much further. Dr. Saras Sarasvathy joins the Economics For Business podcast to distill the essence of the value generating and wealth producing method. Download our knowledge graphic for the Entrepreneurial Method: Mises.org/E4B_131_PDF There is an entrepreneurial method — a systematic way to achieve the unpredictable.The scientific method aims to discover universal laws that make the future predictable. If we have enough scientific understanding we can, for example, build bridges that we can predict will not collapse. We can construct an entire scientific infrastructure in our society. The entrepreneurial method aims higher, at human flourishing. It aims at discovering how we can all work together to achieve our human purpose, including new purposes that we all agree are worth achieving. We can construct an entrepreneurial structure to build a better human life and a better society. Entrepreneurs choose a control strategy that's appropriate to uncertainty.Some people fear entrepreneurship because its outcomes are uncertain. But this is worrying about the wrong things: outcomes are outside your control. Entrepreneurs are more discerning about what can be controlled: means. Dr. Sarasvathy lists several control strategies: The Bird-In-The-Hand Principle: work with what you've got and can control, which she sums up in the questions: Who Am I? What Do I Know? Whom Do I Know? What resources do I own or control now? This is the first principle of control. Affordable Loss Principle: Entrepreneurs can control their downside, making it affordable and limiting uncertainty, by asking "What one value generation project would I undertake even if I risk losing everything I invest In it?" Crazy Quilt Principle: How do entrepreneurs control the uncertain process of identifying the right partners, including hiring the right people? They don't try to predict the results of hiring and pitching. Instead, don't hire, don't ask. Just talk to people — those who fit best will self-select into your project. Lemonade Principle: Don't fear the unexpected. Welcome surprises. All unexpected happenings are opportunities and can become resources. Leverage contingency, and make lemonade out of lemons. The Pilot Is The Plane Principle: Everyone on the plane is a pilot, co-engaged in shaping history. The plane will reach a destination, the exact nature of which is unclear, and everyone on the plane contributes to getting there. There are some guidelines that entrepreneurs have established over time. Non-Predictive Action Is The DriverEverything in the entrepreneurial method is driven by action. Or, more completely, action, interaction and reaction. Things you care about, things you can actually do, things we can do together, and how we handle surprises. Interacting with the environment with a sense of purpose, and thereby changing it in some way. Even-If ThinkingOur aspirations and the outcomes we experience may not be symmetrical. Not succeeding is not the same as failing. Even if a new idea does not work out, what is the worst that can happen? We shouldn't make decisions just because we can't predict the future. Embrace the unpredictable but make sure the downside is under your control. IntersubjectivityThe great productivity of entrepreneurship comes from intersubjectivity — two or more people can interact and come up with something neither one had actually thought about or dealt with or considered or contemplated before. Intersubjectivity is more than interpersonal and beyond negotiation. It's a question: "I am doing this. What do you think?" The Entrepreneurial Method leads to social good and a new role for business in society.A side effect of everyone in society learning the scientific method was the emergence of the middle class, defined by income. Science brought productivity which enabled a large swath of society to earn enough money to escape poverty. Everyone was able to harness science. Let's teach everyone the entrepreneurial method. Let everyone start companies, grow companies, invest in companies, all with no thought of prediction. A middle class of business will emerge, defined not by income but by venturing. This middle class will produce more jobs and more enduring, more stable companies, embedded in strong communities, with greater well-being and less churn. The fruits of creativity take root in endurance and durability — not in Schumpeterian creative destruction — and contribute to stability and the taking on of bigger challenges. Decade after decade, the middle class of business will generate value and produce wealth, employing lots of people and educating successive generations to take the entrepreneurial method with them into a better future. Additional Resources"The Entrepreneurial Method" (PDF): Mises.org/E4B_131_PDF Among the innovations planned for the Economics For Business platform is a series of encapsulations of important research papers. Here is a sample: "The World-Making Scope Of The Entrepreneurial Method — An Encapsulation" By Gabriele Marasti (Original paper: "The Middle Class Of Business"): Mises.org/E4B_131_PDF2 Some links: Effectual Entrepreneurship (PDF): Mises.org/E4B_131_Book "What Makes Entrepreneurs Entrepreneurial?" (PDF) Mises.org/E4B_131_Paper "Entrepreneurship As Method: Open Questions for an Entrepreneurial Future" (PDF): Mises.org/E4B_131_Article  |
| Cronyism: Liberty versus Power in Early America, 1607–1849 Posted: 17 Aug 2021 01:30 PM PDT From the Introduction of Cronyism: Liberty versus Power in Early America, 1607–1849. Available October 2021 at the Mises Bookstore and online retailers. Pre-order your copy today. The present book is an economic and political history of early America, describing government policies and their effects on marketplace activity. In particular, it is a history of cronyism: when the government passes policies to benefit special-interest politicians, bureaucrats, businesses, and other groups at the expense of the general public. Examples include a central bank's selective credit expansion, discriminatory taxes and regulations, business subsidies, territorial acquisitions, and other foreign policy maneuvers, and new constitutions. The rewards of cronyism take the form of monetary gains, particularly increased incomes and profits for individuals and businesses, or psychic gains from greater power and authority. The government's claim that it passed legislation to enhance public welfare is only a thin veneer for privileges and redistribution. Special-interest legislation is inherent in the very nature of government. On the free market, the network of voluntary exchanges, all activity is based on individual liberty and results in mutually beneficial outcomes. The competitive profit and loss mechanism incentivizes individuals to produce goods and services that consumers desire. However, the government, the legitimated monopoly of power, lacks this mechanism and produces outcomes that are harmful to society. The incentive structure is different: unlike the Invisible Hand of the market, individuals that control the coercive Visible Hand are encouraged to pass legislation that benefits themselves at the expense of others. The stronger the government, the more lucrative the rewards. To control the government machinery is to control the levers of cronyism. Researchers have analyzed American special privileges before, but their studies focus on individual cases in select time periods that remain unintegrated into an overarching narrative. There is still a need for an overview of cronyism that covers the motivations behind and development of relevant policies, their effects on the economy, and the critical attempts to reform the system. To achieve this goal, I utilize the "Liberty versus Power" theory, developed by Murray Rothbard in his five-volume Conceived in Liberty series. It contains three core components. First, history is a clash between the forces of liberty, or those in favor of individual decision making and the market allocating resources, and the proponents of power, the factions that support coercion and government organization of production. Libertarians want to reduce government power to limit cronyism while statists strive for the opposite. Favoritism is limited when a substantial interest with an ideological and pecuniary incentive to promote freedom exists. Otherwise, only clashing groups that want to control power mitigates special privileges. The liberty and power forces, with a spectrum in between, continually define the evolution of a government's interference with the free society. When liberty triumphs overpower, cronyism is reduced; when the opposite occurs, privileges increase. Second, those who control the government's power are corrupted over time. To quote Lord Acton, "power tends to corrupt and absolute power corrupts absolutely." I define corruption as the willingness of government officials to push for interventions that benefit themselves and other favored interests. Coercion and the use of force increases the ability to dispense favors, which incentivizes its occurrence. While there is often a strong moral element to corruption, my primary focus is the increased inducement to secure special-interest policies. Lord Acton's famous quote can be modified accordingly: "power tends to incentivize cronyism and absolute power incentivizes cronyism absolutely." Cronyism is due to the corrupting nature of government power and only by eliminating it can society destroy such favoritism. Third, reforms that eliminate restrictions and redistributions are difficult to achieve because they require smaller government. This can only be accomplished through an outside amputation of power, particularly secession, or a change in the administrative leadership that internally dismantles the government's power. The problem with reform, internal or external, is that any attempt requires laissez-faire proponents to use the coercive structure to enact their preferred policies. However, power tends to corrupt, which means that the previous advocates of freedom ineluctably start to pass their own special privileges. Radicals lose sight of their original goals, moderates stress the need to compromise with the opposition, and political office increases the incentive to provide favors to supporters. Soon the temptation to grant cronyism becomes irresistible. While in office, the libertarian faction transforms into a new coalition indistinguishable from the former statist party. My thesis is the following: in early American history, special privileges increased in a staggered fashion and the Liberty versus Power theory explains this evolution. A majority of the population adhered to a basic libertarian ideology while the remainder supported big government. When the interventionist parties, i.e., the Federalists, National Republicans, and Whigs, secured control, cronyism shot upwards. When the people elected the reform parties—the Anti-federalists, Republicans, and Democrats—cronyism declined before increasing due to the corrupting nature of power. The ultimate driver of privileges on both sides was the insatiable urge to create an empire, a territorially vast and influential country. Statists wanted to replicate the European empires that easily facilitated cronyism. In stark contrast, libertarians envisioned their empire consisting of small independent governments that shared classical-liberal values. However, power and the lure of territorial acquisition corrupted the libertarian parties into creating the same belligerent empires they previously weakened. Therefore, cronyism increased in a nonlinear fashion. To prove my thesis, I describe the history of special-interest legislation over the backdrop of political history. My narrative concentrates on the motivations of the major "players," or America's "Great Men"— the politicians and businessmen involved in the legislative process— and their attempts at reform. As a result, my work is "a throwback to a traditional approach to politics, focusing on elections, parties, and the maneuvering of elite white males in government." By utilizing the Liberty versus Power theory and a political narrative that stresses the Great Man perspective, I have intentionally made this work "old fashioned," and deservedly so, given that the goal is to accurately study American cronyism. Patrick Newman, discussing Cronyism: Liberty versus Power in Early America, 1607–1849:Patrick Newman at Mises UniversityPatrick Newman on the Human Action Podcast |
| The Demise of the Gold Standard Posted: 17 Aug 2021 12:00 PM PDT This is the fiftieth anniversary of the demise of the gold standard and the beginning of the current fiat paper standard. Many will say "good riddance" to gold and "thank goodness" for the "good ole greenback"! Reflection, however, produces an alternative conclusion. To be sure, the opinion of current experts places great weight on paper money. Economists, bankers, and central bank bureaucrats are so universally in support of paper and in opposition to gold that a person would be hard pressed to think otherwise. However, Larry White has shown that monetary and macroeconomists are biased by the professional incentives they face. In contrast, history has much to say in support of commodity monies, such as gold. Paper monies have lost value over time, with price inflation, as more and more paper money has been created. Paper money economies have also experienced instability in the form of business cycles and economic inequality, including the Great Depression and the post-1971 experience. In the limit, economies have resulted in hyperinflation or have facilitated war, most especially World War I and subsequent wars. To resurrect the potential of gold, one only needs to reflect on the current use of the term "gold standard." While we can no longer rely on gold for money, companies often attach the "gold standard" label to their products and services to advertise the quality, consistency, and reliability of their business. It could be protein shakes, delivery companies, or security systems; everyone knows what the term means even though they have no personal experience with gold itself. President Richard Nixon ordered the "gold window" closed, preventing other nations' central banks from exchanging their US dollars for our government's gold hoard at $35 per ounce, as agreed under the post–World War II international agreement known as the Bretton Woods system. Why did he do so? Why in 1971, and why has this temporary dictate lasted fifty years? Money came into existence thousands of years ago when people started trading, for example, grain for silver and then trading silver for a tool, rather than trading grain for a tool. Gold and other metals have served as money, or the medium of exchange, for thousands of years. Humans have risen from an animalistic hunter-gatherer society to their modern existence through trade, specialization, and entrepreneurship that was spawned by a good form of money. Governments have intervened in this process, created monopolies, and inflated the money supply by various means, with often disastrous results. However, little more than a century ago, money was still a commodity that was traded internationally and was beyond the strict control of governments. That changed with the advent of central banks around the world before World War I. The Bretton Woods system was meant to mimic a gold standard for international trade, but it was doomed to a miserable failure, because in it the US, and only the US, could, in effect, print gold to pay its bills. What is the real gold standard and what is it not? The gold standard is the phrase for the international system of money that developed over thousands of years. It replaced self-sufficiency, economic primitivism, barter, and early commodity monies, such as grain, salt, and shells. The quality of money improved hand in hand with economic development and improved living conditions. Eventually, people adopted monetary metals, such as silver, copper, and gold for exchanging goods and services. The gold standard is simply the near-universal use of these metals in trade, but history shows that early adopters were the economic success stars of their times. The value of the monetary unit was simply a measure of weight and purity, and its purchasing power and international flows were governed by markets, not governments. The key distinguishing feature of the system was that the metals were private property and not a mere symbol or representation of ownership. Rulers were not blind to this goose that laid golden eggs. Government monopolies, the replacement of state images for minter's marks, and eventually paper replacements debased the system. Government central banks were established in the major economies by 1920. This in turn fed the devastation of the world wars. Nixon's closing the gold window should be seen as the end of the last remnant of the gold standard, not some kind of internal breakdown. Governments controlled most of the gold and set its price. The gold standard does not mean that governments decide what is money, how it shall be produced, and what is its market value. In the absence of centuries of government intervention, money could have morphed into an even more sophisticated system. The emergence of bitcoin and cryptocurrency is a reminder of this potential and the turmoil of problems that government can cause. Returning to the gold standard will be difficult, not because of its profound benefits and miniscule cost, but because of the political roadblock governments will place in its way as well as the revelation of the harms that have been imposed in its absence. Here are some of the benefits of a renewed gold standard. The most obvious benefit would be a rollback of price inflation around the globe and relative price stability. Although there are no guarantees, stable money will encourage saving and economic growth. Stable purchasing power of money will allow entrepreneurs and consumers to better calculate and plan for the future. Market- instead of Fed-determined interest rates might very well be more volatile in the short run, but that would also make the timing of investments more efficient and less prone to error. With constant high price inflation, paper assets depreciate and often lose their function while physical assets appreciate. Monetary stability would remove that divide and restore the viability of long-term assets like corporate bonds and life insurance. The destruction of wealth that occurs with central bank paper money is bad enough, but this money also skews the distribution of income in favor of high incomes (wealth and capital) and reduces the relative incomes of lower incomes (labor and pensions). Historians have long noted that these effects occur during inflationary periods. Austrian economists have more recently tried to demonstrate this paper disturbance in more modern times. Even Thomas Piketty has unknowingly showed that the increase in inequality in the US occurred after Nixon's dirty deed in 1971. Austrians have also led the charge against the Fed's monetary policy as the generator of the business cycle and the social dislocations that result. This is a two-step process. First the Fed sets its target, i.e., price control on interest rates, and then it manipulates the money supply to maintain the target by manipulating the banking system. Interest rates set below market-determined rates cause booms in long-term investment projects and an expansion in the economy. As the boom accelerates, some wages and prices increase, along with land and real estate values. The Fed then raises its target to dampen those increases and the economy falls into a contraction, with its inevitable unemployment and bankruptcies. After the contraction is recognized by the Fed, they start a new round of lower rates and expansion: the business cycle. Some people are enriched, many are harmed, and the economy is destabilized. The current scheme has also resulted in much more government spending and deficits, which were partially controlled even under Bretton Woods. Since its demise, the national debt has exploded ever higher, accompanied by persistent and increasing trade deficits. The gold standard as money was a tremendous bargain for humanity and an effective check on government, and its end should be sorely lamented.  This posting includes an audio/video/photo media file: Download Now |
| The Pentagon and the Generals Wanted This Disastrous War Posted: 17 Aug 2021 09:00 AM PDT In early July, Ron Paul penned a column titled "It's Saigon In Afghanistan," invoking the imagery of the fall of Saigon in 1975, when US military helicopters scrambled to evacuate personnel from the roof of the US embassy. But Paul suggested that maybe the situation in Afghanistan was "perhaps not as dramatic" as the situation in Saigon forty-six years ago. But that was six weeks ago. Now, it looks like the end of the US's war in Afghanistan may be in many ways every bit as chaotic as the US regime's final defeat in Vietnam. When Paul was writing his article in early July, we were already getting hints of the direction things were going. US forces abandoned Bagram Airfield in the middle of the night, and the US didn't even tell its allies what was going on. Afghan officials discovered the US was gone hours later. Shortly thereafter, looters ransacked the base. But that, it seems, was just the beginning. Over a period of a mere ten days, provincial capitals in Afghanistan have fallen one after the other. On Sunday, the Taliban entered the strategically key capital Kabul. The Taliban's reconquest of the country was so fast that even the US regime's spokesman admitted "the militants' progress came much more quickly than the U.S. had anticipated." Now, after spending twenty years implementing "regime change" in Afghanistan, and after spending more than $800 billion—an official figure that's likely far smaller than the real monetary cost—the US's strategy in Afghanistan has completely collapsed. Indeed, for the US's local allies, the situation is far worse now than what it was in 2001. Those who were unwise enough to ally themselves with the Americans over the past twenty years now face reprisals from the Taliban. Death will likely be the result for many. Not surprisingly, then, Afghanis in recent days have flocked to Kabul International Airport, desperate to find some way out of the country as the Taliban closes in.
It's doesn't take an immense amount of imagination to recall the images of those who were desperate to escape from the US embassy in Saigon. Blame the Generals and the PentagonSo now we reach the stage of figuring out who is to blame for this total strategic failure in Afghanistan. Some politicians will try and use the US regime's failure in Afghanistan to score points against the Biden administration. We already see it with some Republicans who still haven't figured out that the American public long ago stopped caring about the war. It's easy to see the partisan reasons for this, but if we want to honestly focus on who's to blame for the utter waste of time and resources that was the war in Afghanistan, we have to look far beyond just a handful of civilian politicians. Yes, much of the blame should go to the civilian bureaucrats, because they share an immense amount of the blame in bringing about this strategic blunder. George W. Bush, Donald Rumsfeld, Condoleezza Rice, Paul Wolfowitz, Hillary Clinton, Barack Obama, and Madeleine Albright are just a few of the politicos who encouraged the continuation of this lost war. But the fact is the civilian war architects were encouraged and enabled every step of the way by Pentagon bureaucrats (i.e., the generals), who were only more than happy to have an excuse to pad their budgets and increase their relevance on Capitol Hill. As Ron Paul put it this week:
Or, as Timothy Kudo describes it,
Nor did the military officers council caution or peace. Douglas MacGregor at the American Conservative correctly recalls:
Moreover, Petraeus and countless military technocrats continued to call for more military action while trying to place the blame on others.1 Doug Bandow sums it up:
Indeed, the incompetence of the US's military leadership has been on clear display in recent weeks as the US-trained and US-armed military personnel have been impotent in the face of Taliban advances. The US's military hierarchy was specifically tasked with training these Afghan forces, yet it's now clear how well that directive was carried out. Unwarranted Trust in Military BrassThe complicity of the military brass's role has always been especially damaging, because the generals have long banked on the unwarranted amount of credibility they enjoy with the public. As Kudo notes:
Unfortunately, because of this, military personnel are likely to continue to be shielded from the criticism they deserve. After all, there is a persistent habit among many Americans to repeat the narrative that all wars will be won if only the politicians listen to the generals, and "let the generals do their job." One still hears this today from those who still engage in wishful thinking about the Vietnam War and who still cling to the idea that the war could have been won if only the military "experts" had been in charge. In actual experience, however, the lost war in Afghanistan is what we get when we listen to the generals. But don't expect any meaningful reform. In the United States, when bureaucrats fail, they usually get rewarded with larger budgets, such as when the US's "intelligence community" allowed 9/11 to occur right under its collective nose. The same is likely—at least in the short term—for the Pentagon. The generals will simply "pivot" to argue for ever-larger military budgets in the name of fighting China, Iran, Russia, and other perceived enemies. In other words, the generals and the civilian politicians are hard at work planning the next Afghanistan. Let's just hope the taxpayers who pay for it all may be a little less naïve next time.
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| Cuba: The Dictatorship and the "Blockade" Lie Posted: 17 Aug 2021 06:00 AM PDT All the propaganda that whitewashes the Cuban dictatorship is based on two lies: the nonexistent "blockade" and the allegedly excellent "public health." Original Article: "Cuba: The Dictatorship and the "Blockade" Lie" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.  |
| Egypt's Bread Subsidies May Bring Millions to the Brink of Starvation Posted: 17 Aug 2021 04:00 AM PDT In Egypt, the recent announcement that bread prices, long subsidized for much of the population, would likely have to rise was met with cries of despair. Indeed, over two-thirds of the population of Egypt depend on inexpensive bread for daily sustenance. In order to understand the current situation in Egypt, it's imperative to learn how the current situation was created in the first place. First, the word used for bread in Egypt is different from the word common to other Arab countries, and is intertwined with the word meaning "to live." Also, the most common type of bread in Egypt, consumed by 85 percent of people there, uses a word that means "traditional" or "my country." Perhaps this sort of nationalism via food is why bread production has been subsidized in Egypt since 1941. With state reliance for this long, the provision of low-cost bread is "an expected part of the state's social contract with its public…. Within most people's lifetimes, they remember cheap bread being available…. It's something that has always been there." This was perhaps never so clear as when bread riots erupted in 1977 in Egypt following the ending of subsidies for flour and other basics, which resulted in the rise of food prices by up to 50 percent. During the riots, at least seventy-nine people died, and 556 were injured, following deployment of the army. The riots only ended when the Egyptian government reinstated the subsidies. But why had the Egyptian government embarked on this plan in the first place? You have to look at Egyptian president Anwar Sadat's "infitah" policies, which took Egypt's "Soviet-style system" and replaced it with different central planners, including the World Bank, which criticized the subsidizing of basic foodstuffs. In order to pay back the loans, which fueled the new policies that largely benefited friends of Sadat, several concessions had to be made, including the subsidy cuts. Today, we see a similar story in Egypt. The Egyptian government owes the International Monetary Fund billions of dollars, and a condition of these loans was that food subsidies should only reach those who need it most. Also, prices for fuel and electricity must be higher as well. Finally, the currency has been devalued as part of the IMF "reforms" in an attempt to curtail black market activity (i.e., voluntary trade). This also increased the prices of ordinary goods for Egyptians. The basic underlying problem here is that the state has inserted itself between producer and consumer. In order to "help" the poor, central planners in Egypt have been running this "bread for all" program, which may now make it very hard for the poor to get bread. The retail price for a loaf of bread in Egypt is currently 0.05 Egyptian pounds ($0.0032), and it has remained at this level for decades. Meanwhile, the cost to produce one loaf is currently greater than ten times the retail price. In the typical style of central planners, in an effort to make the system more efficient, the quota of subsidized bread loaves has remained the same, but the weight of a loaf of bread has gradually been reduced over time. Perhaps this has something to do with the ineptness of the centrally planned scheme of wheat purchasing in order to supply flour for bread making. The government set a wheat price assumption in their budget of $255 per ton but recently was forced to pay $293.74 per ton on the open market. And this is also related to the fact that many Egyptians live in poverty and have poor indicators of health—21 percent of children under age five exhibit stunted growth and 27 percent have signs of anemia, along with 25 percent of women of childbearing age. I guess the whole nationalistic bread idea isn't such a good plan after all. If a market system were allowed to work, the right signals would be sent to producers and consumers. In addition, even a country like Egypt, which relies heavily on food imports and doesn't have good conditions for food production, could find ways to produce more of its own food with the right signals. The Nile Delta has been used for agriculture for thousands of years, with the natural patterns of flooding supplying nutrients to the soil. Unfortunately, but sadly not surprisingly, the construction of the Aswan Dam, a public, centrally planned projected, disrupted this natural fertilization process. While it's true that wheat yields have increased since the Aswan Dam was completed, likely due to many factors, the real impact of the change has been to grow cotton. In addition, the protein content of wheat has been declining for unknown reasons—not good when it's supplying nutrients to a large number of people. Relying on the state for food is a bad idea. Free market actors would coordinate food supplies much better than a top-down, centrally planned approach by people who probably don't have much problem getting the bread and other foodstuffs that they desire.  This posting includes an audio/video/photo media file: Download Now |
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