A Spanish Entrepreneur v. The State
Bureaucrats using the coercion of the state in whatever capacity consume capital in the course of their duties, writes Sterling Morton. The results of coercion and its related expenditures are ultimately paid through price inflation, high taxes, or interest rates that do not reflect the natural conditions of the market. What is not widely discussed is the damage these bureaucrats inflict on the passion of risk takers. Such a case in point is the tragic tale of Montesa. FULL ARTICLE
Comments (5)
Fascinating story! The same thing has happened all over Europe. For example, the pharma industry used to be centered in Europe. Now it's in the US. Of course, as you wrote, business is leaving the US for Asia. Good for Asia.
Published: November 1, 2005 8:24 AM
I remember the Bultaco Metralla with its 250-c.c. single-cylinder 2-stroke engine: it could almost reach 120-miles per hour. So sad to see a great motorbike company fold due to bad politics and bad economics.
Harry
Published: November 1, 2005 2:49 PM
A sad story for this old european country. Nevertheless, it's surprising the force of human creation and innovation. I'm thinking in Amancio Ortega Gaona, founder and president of Inditex (Zara, Massimo Dutti, Pull and Bear, Stradivarius, Bershka, Oysho, Zara Home, Kiddy's Class). Starting from scratch (Mr. Ortega began working as a caretaker in "La Maja" (A Coruña)), this spanish entrepeneur has succeeded in forming the second most important textile firm in a world-wide basis. It remains to be seen the end of this entrepreneurial adventure.
It's very sad to see how a country that saw the light of the teachings of XVI century jesuits in Salamanca Univesity (thoroughly studied by professors Hayek and Rothbard) lives in the darkness of pure interventionism, "alleviated" with a rampant housing bubble.
Greetings from Manresa (Catalonia - Spain), where Saint Ignatius from Loyola wrote his Spiritual Exercises in 1522.
Published: November 2, 2005 2:37 AM
Good article. In my country entrepreuners will find even worst coercion from the state power. If you like, read the post of mine in the Austrian Economics Forum about an idea (read it without prejudice because in a first glance it seems to be strange but in the end you will find that it is entirely libertarian) for society to get rid of all taxation. Clik in my name bellow to go to the topic of the forum.
Published: November 2, 2005 6:33 AM
Dr. Vitor:
I will admit to not having read your proposal but believe that its essentials are simple enough that I can pose the following questions regarding the likelihood of it constituting an improvement in monetary conditions.
First. Due to constant increase (of varying proportions), the present money is already subject to nearly constant devaluation. Without going to the trouble of creating a new and physically distinguishable type of currency, it could simply be proposed that the government be enabled, by law, to simply produce its budget-determined need for purchasing power (i.e., a specific number of dollars) and to then produce and add these to the economy via entries in the account of the US Treasury. The height of dislocation to current currency-holders would likely be similar (though falling with differing incidences) and, as with your plan, those individually affected would (with what graduality cannot be predicted) learn to adjust to the new monetary circumstances, especially if it were legislated that the monetary additions be published (announced in advance). That plan, like yours, would similarly eliminate the need for the entire federal tax-collection system with no change in currency or creation of a "parallel" one.
Second. The new stuff is, I take it, to be loaded with a specifically KNOWN amount (and rate) of diminution in purchasing power. If you think it in any way simple for people to assess its value at a given time, consider: diminution must be expressed absolutely or proportionately and must refer either to itself or the regular currency, which itself is changes in value over time (and, over time, constantly downward).
Third. You represent yourself as "Austrian" and by no means do I suggest you aren't honest and honorable in that representation. But you are mistaken (and in distinctly non-Misesian fashion) in believing any system of government management (save getting out of the way and eschewing other interference than prevention of criminal activity) can provide lasting improvement in monetary affairs. The essence of the Misesian position (and of Austrians) is that money is, first and foremost, a commodity chosen (historically) by individuals in ever-increasing (and narrowing) agreement and that one of its benefits, arising from its uses--as a medium of exchange and time-store of value --is its ability to coordinate--almost as if by magic or mind-reading--the economic thinking and planning of all, everywhere, who participate in the market economy. Shorter and simpler: every instance of attempt by authority to influence any aspect of the monetary phenomena (except that specifically unavoidable as a market participant itself) has the specific result of damaging--whether in degree slight or great)--the very benefit (coordination of economic maximization) for which money has proven so spectacularly useful.
A few side comments are in order. There are anarchists and minarchists, as most are aware. And, though Mises would have most definitely fallen into the latter category in most social- matter discussions, he would have advocated (as would have Rothbard) for the most complete separation possible of monetary matters from authority (subject to exception noted previously). Those who don't "get it right" will, first of all, find themselves in the "Chicago School" and, after that--who knows how far they may fall?
In my view, the anarchic (monetary) view of the Austrians is the correct one; I would, however, not insist that this is a proven matter or even one that is (under present circumstances) provable one way or another. I have what I believe to be a novel (and potentially revolutionary) view of the matter. I've mentioned this before and invited those interested to receive (privately, off the blog) a full exposition of my thoughts on the matter, which, I assure, are as thoroughly "Austrian" (and anarchic, I might add) as could possibly be wished. This has not yet been produced nor can I promise just when it shall be--only that it will. Those wishing to be included on my list should send their e-mail address to me at: gene.berman@verizon.net (I don't seem to be able to use links).
Published: November 4, 2005 9:02 AM