The NAP is applied in the free market. The free market is
everywhere. It is only where production takes place. The
scale is free market - socialism - communism. Any government
intervention in the free market where production takes place is
socialism (a mixture of private and government exchange) such
as any regulations, the Federal Reserve (not born of the free market),
and bailouts that include government take-overs. Communism is
full blown government owned institutions throughout the society.
Socialism and communism are redistribution activities of the means
of production with communism being government intervention the
whole way along the economic process. Socialism happens in various
degrees between free market and communism. Socialism is government
intervention, but the private sector still exists. Socialism and communism
involve centralized planning and redistribution of wealth. Both of
these coerce the free market of the production it makes. All governments
are socialist in one form or another due to the government intervening
whether to tax, provide self-defense, or do economic planning. Some
governments are more socialist than others, meaning, they intervene in
the spontaneous free market activities more than others. To understand
economic planning in the U.S. and most countries is to understand
Keynesian economics. It does not recognize the individual consumer
and this has always been it's difficulty. Bernanke, Geithner, and Paulson
and others before them have been Keynesian economists. This dates
back to about the 1920's/30's that Keynesians became the intellectuals
the government used. They admit in their own writings that they can't
account for the consumer and therefore all their economic planning
involves mathematical models that try figure out the economy. It never
works. It never has. Keynesians point to logical positivism as their
philosophy. They can't understand value. They don't understand
free choice and call the powers that control consumers "animal spirits". Keynes
himself came up with that concept. One of the most damaging activities
Keynesians do, in the central bank, is artificially control interest rates.
When interest rates are low this encourages investing. The interest rates
are low and so investors put their capital into activities that produce.
Because
the interest rates are artificially pushed down, this means the free market is
not giving indicators that interest rates need to go down. What this does, and
has done for decades since the beginning of the Federal Reserve, is cause
numerous malinvestments to happen. This is the bubble being inflated.
Interest
rates are artifically low and the central bank is handing out billions of
dollars
in credit. For example, the housing bubble. More houses were built than
needed, but the Federal Reserve hands out low interest credit to certain
parts of the economy and cause malinvestments and a huge malinvestment
happened in the housing sector. The State of California is actually tearing
down houses cause too many were built. By tearing down the houses that
nobody bought the Federal Reserve and California is trying to stop the prices
of houses from dropping. Low demand = lower prices = poor people can
afford a house. But they aren't letting this happen. They are artifically
keeping
the prices of houses from dropping by printing huge amounts of money. The
biggest bubble right now is the monetary bubble.
This would have not happened if the Dot.com bubble would have been
allowed to burst all the way and clear the market of malinvestments. The
government stepped in and stopped it from bursting. That kept the
malinvestments in the market with government backing them. This thereby
lead to Bear Stearns, AIG, and others taking on all these malinvestments more
and more. So another huge bubble grew the housing bubble. But that needed
to burst too. So now the economy has large amounts of malinvestments in it.
They
are worth - nothing, nada, but the government is keeping their doors open. If
this bubble was allowed to burst back in September this would be all over by
now according to free market analysts. For instance, the 1920 depression was
two times
worse than the Great Depression. But it only lasted for about two years. Why?
Cause the
government didn't intervene. The Great Depression lasted for twenty years.
Why? Cause
the government wouldn't let malinvestments to clear out of the market and let
the
market have clarity. The government kept handing out bad credit. The private
sector
shrunk in the Great Depression and it wasn't over until after World War Two
when the
government cut taxes and cut spending that the Great Depression was over. FDR
didn't
stop the Great Depression. He didn't create jobs in the private sector. He
ballooned the
governments jobs with public works. But government doesn't produce anything.
The government can involve people in public work projects but this ends up
pushing out
the private sector and causes another problem on the private sector. The
government
outcompetes with the private sector, bidding lower on projects. But the
government
isn't creating jobs. It's taxing real producers to redistribute their money to
people
working for the government. Taxing and giving back isn't making money, isn't
earning
the money, isn't producing anything. Unemployment dropped during World War
Two. Why?
Cause over 1 million men were drafted to fight in the war. GDP rose, but not
in the private
sector. Only to make bombs and ammo. Not until after World War Two did the
Great
Depression finally end in real private sector growth cause the government
stopped
intervening in the free market.
The free market is the exchange of economic goods, ideas, and reasoning
without physical
coercion. A civil society (spontaneous order) involves the free market. The
government/State
is coercive by nature and is paternal and totalitarian in various degrees by
nature. Socialism
is an economic and a governmental application that is coercive by nature.
There are voluntary
socialists, but they are planning as a community a way to go about their
exchanges and civility to
various extents. These are surmised to be able to happen without governmental
interference, but
it is not free market. It is controlling outcomes whereas the free market
doesn't. I doubt voluntary
socialist societies will actually last long, for one, they can only occur based
parasitically off of a
free market to control and plan the exchanges. And that's what governments do.
They don't
produce anything. They can only exist by parasitically feeding off of the free
market civil society.
--
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