"Dead End Street Blues," by Frank van Dun (Libertarian Papers)
Libertarian Papers article: "Dead End Street Blues" by Frank van Dun.
Abstract: The long stagflation in the nineteen-seventies broke the Keynesian hold on economic policy. Last year we witnessed the spectacular unraveling of neo-liberal policies of manipulating money and credit. While these episodes might be studied to explain the specific weaknesses and errors of each of the two policy paradigms that have dominated in the West after the Second World War, this lecture highlights the ideas and presuppositions that remained in place throughout the whole period. Despite the alliance that once existed between libertarians and classical liberals, on the one hand, and neo-liberals, on the other hand, the latter did not have sufficiently coherent conceptions of freedom and free markets to produce a true alternative for the Keynesian idea of a scientifically managed economy as a utilitarian and pragmatic approach to the utopian goal of the greatest happiness for the greatest number, i.e., complete well-being for all.
Comments (1)
Ralph Fucetola JD
I certainly remember the slagflation of the late '70s... as a then young real estate lawyer, I also lived through the subsequent highest inflation in US history!
I also remember the snail-mail white paper that made the rounds the summer of '79. It was entitled "The Upright Spike" and in those days before the Internet, getting it in the mail three different ways was a big deal.
It did what some of the statistics on Mises.org do -- it made explicit what we all knew implicitly. The essay consisted of a series of graphs of money supply, gold price, CPI, etc, all rapidly trending toward infinity in October of '79.
When gold reached toward $1,000 an ounce (in 2008 dollars, $1,700) toward the end of that year, it seemed the end of the financial system had come.
It didn't collapse, however, and after a bout of severe inflation the fiat money boom of the '80s was followed by the '87 crash, the .com boom and bust and now the housing boom and general financial bust long predicted by economists like Murray Rothbard (his '92 comments about the coming housing boom and Fanny/Freddie-led bust have been published on Mises.org).
Are we in the middle of "the fire next time"? F. van Dun's analysis suggests so to me.
Published: January 25, 2009 9:40 PM