More powerful than CSPAN

I thought this note by Derbyshire might amuse the Dread Ilk who participated in the yesterday’s Amazon launch of RGD:

Yesterday’s airing of the Derb-Colmes knockdown on C-SPAN lifted WAD up into 400-something on Amazon sales rankings.

It’s certainly testimony to the relative power of the Internet vs cable media anyhow. Speaking of media, I’m on with Jerry Hughes now if you’d like to listen in.

WND depression poll

It’s interesting to see that an overwhelming number of WND’s readers – 88% at this point! – believe that the U.S. is headed for another Great Depression. I very much doubt they’re all readers of my column either. It would seem that neither the stock market rally nor the endless stream of happy talk from the politicians and the financial media has convinced many people of anything. Of course, what are mere words when banks like Citi are jacking up interest rates on credit cards to 29.99% and First Premier is charging 79.9% when depositors can’t get 2% on their savings accounts. Neither the Fed nor the politicians are going to be able to get the banks lending when no one in their right mind can afford to own a credit card. As Mike Shedlock points out, this isn’t a bad thing, it is in fact a necessary thing.

It’s pretty clear that those voting aren’t regular readers of my column, though, since 39% selected the option that says Obama is the most to blame. Obama isn’t even in the top 20 of those who are most to blame for the developing depression, although no doubt it will be a major part of his legacy. This event was a long time in the making and although Obama’s ill-considered actions have only made things worse, there was nothing he could have done to stop it. In fact, if he had acted properly, everyone would already be conscious that the depression is upon us and many people would be blaming him for that.

My answer is: “Yes, the Depression is, in fact, already here”. And even if the BEA avoids springing a UK-style surprise to the downside later this week, no pumped-up reports of “better-than-expected” 3.3% GDP growth later this week is going to change that.

I’ll be on the radio with our old friend Jerry Hughes discussing this and other things from 4-5 PM eastern. Listen in via the Internet broadcast.

History’s verdict

Economics and Moral Courage, by Llewellyn Rockwell, is one of the most intellectually inspiring articles I have ever read. It is a beautiful reminder of the transience of what we think is worldly success and accomplishment:

While Mises worked at the Chamber of Commerce because he was denied a paid position at the University of Vienna, [Hans] Mayer served as one of three full professors there, along with socialist Othmar Spann and Count Degenfeld-Schonburg. Of Spann, Mises wrote that “he did not teach economics. Instead he preached National Socialism.” Of the count, Mises wrote that he was “poorly versed in the problems of economics.”

It was Mayer who was the truly formidable one. Yet he was no original thinker. Mises wrote that his “lectures were miserable, and his seminar was not much better.” Mayer wrote only a handful of essays. But then, his main concern had nothing to do with theory and nothing to do with ideas. His focus was on academic power within the department and within the profession….

[Mayer] thrived before the Nazis. He thrived during the Nazi takeover. He helped the Nazis purge the Jews and the liberals from his department. Note that Mayer was no raging anti-Semite himself. His decision was a result of a series of discrete choices for position and power in the profession against truth and principle. For a time, this seemed harmless in some way. And then the moment of truth arrived and he played a role in the mass slaughter of ideas and those who held them.

Perhaps Mayer thought he had made the right choice. After all, he maintained his privileges and perks. And after the war, when the Communists came and took over the department, he thrived then too. He did all that an academic was supposed to do to get ahead, and achieved all the glory that an academic can achieve, regardless of the circumstances…. He played the game and that was all he did. He thought he won, but history has rendered a different judgment. He died in 1955. And then what happened? Justice finally arrived. He was instantly forgotten. Of all the students he had during his life, he had none after death. There were no Mayerians. Hayek reflected on the amazing development in an essay. He expected much to come out of the Wieser-Mayer school, but not much to come out of the Mises branch. He writes that the very opposite happened. Mayer’s machine seemed promising, but it broke down completely, while Mises had no machine at all and he became the leader of a global colossus of ideas.

If we look at Mark Blaug’s book Who’s Who in Economics, a 1,300-page tome, there is an entry for Menger, Hayek, Böhm-Bawerk, and, of course, Ludwig von Mises. The entry calls Mises “the leading twentieth-century figure of the Austrian School” and credits him with contributions to methodology, price theory, business-cycle theory, monetary theory, socialist theory, and interventionism. There is no mention of the price he paid in life, no mention of his courageous moral choices, no mention of the grim reality of a life moving from country to country to stay ahead of the state. He ended up being known only for his triumphs, about which not even Mises was ever made aware during his own life.

And guess what? There is no entry at all in this same book for Hans Mayer.

Mayer was the typical academic intellectual dwarf and richly deserves to be forgotten by history, but to me the ultimate villain of the piece is Friedrich von Wieser. Can you imagine having the opportunity to anoint either Ludwig von Mises or Joseph Schumpeter as your successor and then somehow deciding to choose neither of them? That has got to be the worst employment decision in the history of economics, and quite possibly academics. It may even have been the most calamitous if one thinks through how much unnecessary economic pain and devastation could have been prevented.

As brilliant and revolutionary as Mises was, I think I would have preferred to hire Schumpeter to head the department. His History shows that his perspective was unusually broad and saddling him with the bureaucratic responsibilities would have kept Mises free to focus entirely on research. Then Schumpeter could have gotten rid of Spann, hired Hayek, and you’d have had the greatest economics department in history despite its small size. And with that collection of highly functioning brainpower assembled in one place, it’s quite possible that they would have achieved sufficient prestige to prove capable of preventing the Keynesian ascension. What a tremendous opportunity for Mankind missed. And what an interestingly esoteric possibility for an alternate history novel….

WND column

The Return of the Great Depression

Eighty years ago this Thursday, the Great Depression began. While the great stock market crash of 1929 actually began on Oct. 24, it was the fourth day of the crash, Oct. 29, 1929, now known as Black Tuesday, that confirmed the severity of the four-day decline and alerted the world to the fact that not all was well with the U.S. economy. Those who appreciate historical rhythm will probably be aware that the most intense part of the subsequent depression was the four years from 1930 through 1933 that Milton Friedman described as the Great Contraction. Although 1929 marked the beginning of the Great Depression, it is important to understand that very few people, let alone politicians or economists, recognized at the time that what they were experiencing was the Great Depression.

Discuss amongst yourselves