"South Korea's 'Prophet of Doom' Indicted"

“South Korea’s ‘prophet of doom’ indicted”

—January 22, 2009 ⁴³⁸

South Korea’s economic bust has paralleled the bust of every other developed world economy, since all developed economies are intimately connected via the various world central banks’ coordinated monetary policies, and since their bubbles largely stem from our trade deficit. Yet South Korean officials have blamed and arrested an unemployed blogger for causing the decline in its economy, currency, and stock market because the blogger correctly forecasted most of these events (as did most free-market economists). The South Korean government charged the blogger with “false information” (even though it was far from false) and prosecutors said he hurt the local economy by posting incorrect information online.

So much for freedom. So much for stating opinions. It is now illegal in South Korea to forecast the negative results of the government’s policies. Korean officials could have at least blamed the free market and a lack of regulation as other countries have — blaming a single blogger for disrupting the economy will not as easily fool even the ignorant public. Still, people are convinced that we need more of this regulation and government control.

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¹ This book uses the term “socialist” and “socialism” very loosely, yet economically accurately. I call those who do not advocate at least 95 percent capitalism as socialists, because if they do not support this level of capitalism, they are supporting substantial government intervention. The intervention might be in the form of government ownership and operation of companies or industries, or in the form of laws imposing regulations, restrictions, taxes, subsidies, etc., each of which serves to benefit one group at the expense of another. The usual aim of government intervention is to benefit most of society at the expense of the few (usually the rich). Hence, even the United States and Switzerland, since they engage widely in such government intervention, can be called socialist, although most citizens would refuse to accept such a reality and label. Similarly, anyone who proposes government intervention of any kind, which includes Republicans as well as Democrats, and even many Libertarians, is thus labeled socialist in this book. It should be kept in mind, however, that when I apply the term socialist, I am usually referring to those with a more intense desire for government control and wealth redistribution.

Ideally, we should all seek 100 percent capitalism, but such a proposal, which includes such notions as private ownership and control of things like roads and schools, is hard for most to swallow. Thus, I am happy proposing and settling for “95 percent capitalism,” which, in my definition, would consist of government providing such basic services as law enforcement, road-building, etc., but having absolutely no influence whatever on the way in which individuals and companies operate, providing that they cause no physical harm to others or their property or person.

² Contrary to popular notions, most diseases were not eradicated by government. For evidence of this, see: Timothy Terrell, “A Pox on Government Vaccines!,” The Free Market (April 2001). Additionally, even where disease eradication was performed by government-funded scientists, the funding unambiguously originated with for-profit, wealth-producing entities. Had these entities not first created the wealth that the government then confiscated, it would not have had funding with which to perform research and pay researchers.

³ This includes economists at think tanks, banks and investment firms, the World Bank, the IMF, the Treasury Department, the Federal Reserve Bank, and virtually every economist in Washington, D.C., because they are all tightly linked with, or constitute, the government.

⁴ Based on flaws in Adam Smith, The Wealth of Nations, Edwin Cannan, ed. (London: Methuen, 1776).

⁵ Though he later, for all practical purposes, indirectly admitted his wrong thinking in the third edition of his work. Karl Marx, Das Kapital (Hamburg: Verlag von Otto Meissner, 1867).

⁶ John Maynard Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1936). His previously concocted theories from several years earlier were promptly refuted by Austrian economist Friedrich Hayek. The second time around Hayek decided it was not worth the trouble because he knew that once he spent the time and energy refuting Keynes again, Keynes would — as Keynes admitted he had a tendency to do — simply change his mind and come up with a new theory.

⁷ I make little attempt to speak to the die-hard socialist because their views will not be altered no matter what logic, reason, and facts are presented to them; their views are driven by emotions, not economic reality.

⁸ Jean-Baptiste Say, Traité d’économie politique, ou simple exposition de la manière dont se forment, se distribuent, et se composent les richesses (1803); English translation A Treatise on Political Economy, C.R. Prinsep, trans. and Clement C. Biddle, ed. (Philadelphia: Lippincott, Grambo, 1855).

⁹ George Reisman, Capitalism: A Treatise on Economics (Ottawa, Ill.: Jameson Books, 1996). The fact that a single producer/sole proprietor earns a profit, and not a wage, is a truism, but is not a commonly accepted notion.

¹⁰ Based purely on money incomes, which is without question the biggest factor in choosing between various employment opportunities. There are, of course, other factors such as commute distance, type of work, perks, career benefits, camaraderie with coworkers, etc.

¹¹ These three entities may or may not be the same person, or any two of them could be the same person. Were they the same person, the one who is running the business also had the idea and vision to create the company’s product, and also wholly or partly financed the business and its production.

¹² Profit is always discussed in percentage terms — in terms of the dollar amount of profit as a percentage of the dollar amount of sales revenues.

¹³ Joseph T. Salerno, “Pricing of the Factors of Production and the Labor Market” (a lecture from Introduction to Austrian Economic Analysis with Joseph Salerno, 2006); http://video.google.com/videoplay?docid=5503610910224878764#.

¹⁴ Tim Hepher, “Bic makes a point with 100th billion-ballpoint milestone,” The San Diego Union-Tribune (September 9, 2005).

¹⁵ Societe Bic (Bic) 2008 Income Statement,http://www.bicworld.com/inter_en/investor/index.asp#.

¹⁶ Marx, Das Kapital (1867). Marx’s argument is rooted in the idea that something is worth the amount of labor hours used to produce it, whereas in reality a thing is worth what one is willing to pay for it based on their subjective view of how much it would benefit them to have it. Thus, by calculating the number of hours needed to produce something, depending on how one calculates the cost per hour of labor (which is a separate issue up for debate), it could be calculated that workers are not paid for the total number of hours worked, and the money owed them is instead kept by capitalists as profit.

¹⁷ In a world where government did not create money to add to the economy, additional savings per se would not be needed to fund economic progress, only the sufficient devotion of saving to capital goods production versus consumption. The need for actual savings results largely from the effects of inflation, since inflation destroys capital. See Chapter 3 for more insight.

¹⁸ Federal Trade Commission, FTC Facts For Consumers: Buying a New Car (April 2006).

¹⁹ “The Economist Intelligence Unit,” Pocket World in Figures 2007 (pamphlet from The Economist).

²⁰ This data, like most government data, is likely fudged or inaccurate due to methodology flaws, but it is directionally correct.

²¹ Mark J. Perry, “The Miracle of the Market,” http://mjperry.blogspot.com/2009/03/miracle-of-market.html.

²² Most funds are borrowed from banks for the purpose of business investment; only a small amount is borrowed for the purpose of consumption. Even borrowing for long-term consumer consumption, such as for housing or automobiles, is a minority of total borrowing from banks.

²³ The other main reason for this, if the country is poor, is the fact that there is a lack of capital: the more capital, the lower the rate of profit will be, and vice versa (though it can never go to zero).

²⁴ Interest payments on borrowed funds, which are listed as items on an income statement, are different than interest to stock holders. In general, I am referring to profits prior to interest, taxes, etc. Interest payments can only be made if there are profits.

²⁵ Again, except for those firms temporarily making high profits from introducing new products or cheaper production methods, and, except by firms making below average profits because of the fact that they are uncompetitive.

²⁶ Murray N. Rothbard, Man, Economy, and State: A Treatise on Economic Principles (1962; Auburn, Ala.: Ludwig von Mises Institute, 2009) and For A New Liberty: The Libertarian Manifesto (1973; Auburn, Ala.: Ludwig von Mises Institute, 2006).

²⁷ Nonetheless, government spending on infrastructure is far more productive than outright consuming all of the money at once.

²⁸ If this comes as a surprise, consider that virtually every instance of a government service that is privatized (and not subsidized) results in reduced operating costs. This means that the operations under previous government management were much more inefficient and therefore less profitable, and almost certainly unprofitable. Similarly, socialist economist John Maynard Keynes promoted government funding of social projects because of the very fact that private companies would not engage in them due to their unprofitability.

²⁹ The majority of firms who take on investment capital operate in the capital goods industries where large-scale investment in factories and equipment with lives of 20 or more years are required. Consumer goods industries, for the most part, do not require such heavy investment. The use of monetary capital by the capital goods industries far outweighs monetary capital used by both the consumer goods industries and by individual consumers (for purposes of financing homes, automobiles, etc.).

³⁰ The space stations might eventually help us produce wealth, but do not currently. Even if they did, consumers would likely prefer to have other things for their lives instead of space stations. If space stations were to be a consumer preference (i.e., cost effective), they would likely be so decades or centuries down the road, not now. Plus, many things NASA is associated with having created were actually created by others. On this, see Tim Swanson, “What won’t NASA Build Next,” http://mises.org/daily/2434.

³¹ And to a lesser degree by other labor laws such as those dictating maximum hours one can work as well as laws restricting the hiring and firing of workers, both of which are more intensely implemented and destructive in Western Europe and South America, where unemployment rates often reach over 20 percent.

³² Joseph E. Stiglitz, Economics (New York: W.W. Norton, 1993).

³³ Vedran Vuk, “Professor Stiglitz and the Minimum Wage” (2006), http://mises.org/daily/2266.

³⁴ Naturally, pro-minimum wage economists managed to come up with “studies” where numbers were manipulated to show that a low minimum wage is helpful, but a high minimum wage is not.

³⁵ George Reisman, “Where Would General Motors Be Without the United Automobile Workers Union?” (April 19, 2006), http://mises.org/daily/2124.

³⁶ Ibid.

³⁷ Phil LeBeau, “GM and UAW Seal Deal: Was Strike Worth It?” CNBC (September 26, 2007).

³⁸ Katie Merx, “UAW contract: Nuts and Bolts,” Free Press (September 29, 2007).

³⁹ Armand J. Thieblot, Jr., Thomas R. Haggard, and Herbert R. Northrup, Union Violence: The Record and the Response of the Courts, Legislators and NLRB (1999).

⁴⁰ Ibid. (The list of offenses, and the book itself, was recently raised by Thomas J. DiLorenzo, “The Myth of Voluntary Unions,” Mises Daily (September 14, 2004) http://mises.org/daily/1604).

⁴¹ Skill level does not apply: there is always work available for unskilled people, and their salary will be in accordance to their skills.

⁴² Thomas Sowell, “Third World Sweatshops: Why Cambodian Workers Bribe for ‘Sweatshop’ Jobs,” (January 27, 2004), http://www.capmag.com/article.asp?ID=3487.

⁴³ Thomas J. DiLorenzo, “How “Sweatshops” Help the Poor,” Mises Daily (November 9, 2006), http://mises.org/daily/2384.

⁴⁴ Jeffrey Tucker, (The Problem with Child Labor Laws), http://insidecatholic.com/Joomla/index.php?option=com_content&task=view&id=2339&Itemid=48&limit=1&limitstart=1.

⁴⁵ Ibid.

⁴⁶ Global Property Guide, Square Meter Prices in Ecuador, http://www.globalproperty-guide.com/North-America/Ecuador/square-meter-prices/b.

⁴⁷ Global Property Guide, Square Meter Prices in The United States, http://www.global-propertyguide.com/North-America/United-States/square-meter-prices.

⁴⁸ Thomas Sowell, (Third World Sweatshops: Why Cambodian Workers Bribe for ‘Sweatshop’ Jobs), http://www.capmag.com/article.asp?ID=3487.

⁴⁹ Who was probably justified, incidentally, in stealing, because those he stole from had stolen it from society.

⁵⁰ George Reisman, “Classical Economics vs. The Exploitation Theory,” Mises Daily, (January 24, 2005).

⁵¹ As stated in the question and answer session of his speech to the nation on April 29, 2009, upon his first 100 days in office.

⁵² I am reminded of lyrics from one of my favorite musicians (the musical group James) which states, “if I hadn’t seen such riches I could live with being poor.”

⁵³ University of Newcastle (Australia).

⁵⁴ Sudha Shenoy, “The Case Against Neo-Protectionism” (lecture), http://mises.org/multimedia/mp3/ss06/Shenoy.mp3.

⁵⁵ Sudha Shenoy, ‘“Is America Living Beyond its Means?’ — Is That the Right Question?” http://hnn.us/blogs/entries/30606.html.

⁵⁶ It is true that Americans, due to government spending and tax policies, save very little of their incomes these days. But that shortfall has been made up for by savings from overseas, mainly Europe.

⁵⁷ Sudha Shenoy, ‘“Is America Living Beyond its Means?’ — Is That the Right Question?” http://hnn.us/blogs/entries/30606.html.

⁵⁸ Sudha Shenoy, “Foreigners and Those Vast US Dollar Holdings,” http://blog.mises.org/archives/006487.asp.

⁵⁹ It could also be argued that this is not true since the foreigners have actually already kept their savings, which were given to them in the form of local currency printed by the local central bank.

⁶⁰ Though it did steal resources for a while from neighboring countries such as China.

⁶¹ Not to mention that Sweden, importantly, permits low corporate tax rates, which prevents the consumption of capital.

⁶² Post-Chronicle staff writer, “Facing Mexican Tariffs, U.S. Seeks New Trucking Pact,” The Post-Chronicle (March 16, 2009).

⁶³ Brian M. Riedl, “How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too,” http://www.heritage.org/research/agriculture/bg2043.cfm.

⁶⁴ A quintessential example is the IMF’s attempt to create a new world money, the SDR, or Special Drawing Rights, in 1968, which would establish the IMF as the central bank of all world central banks, just as any nations’ central bank is the bank where all individual banks bank.

⁶⁵ Most of the insights in this section are based on George Reisman, “Globalization: The Long-Run Big Picture,” http://mises.org/daily/2361.

⁶⁶ For a detailed understanding of this, see George Reisman, “Globalization: the Long-Run Big Picture,” http://mises.org/daily/2361.

⁶⁷ Most of the insights in this section are based on George Reisman, “Globalization: The Long-Run Big Picture,” http://mises.org/daily/2361.

⁶⁸ Terry Fitzgerald, “Book Review: Economic Turbulence: Is a Volatile Economy Good for America?” http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=1144.

⁶⁹ Clair Brown, John Haltiwanger and Julia Lane, Economic Turbulence: Is a Volatile Economy Good for America? (2006).

⁷⁰ Or maybe even by American investors who would buy the failed businesses, or parts of them.

⁷¹ The same concept applies to letting banks fail, instead of bailing out their incompetent owners at the expense of the rest of society.

⁷² Though it used to be wholly owned by the French government, after its merger with KLM, Air France became only partially owned by the government.

⁷³ For a detailed account of the history of banking, see Jesus Huerta De Soto, Money, Bank Credit, and Economic Cycles (2006).

⁷⁴ In which case the depositor knowingly and intentionally gives up and forgoes the use of the funds for a specified time period.

⁷⁵ It was usually governments who began doing so before banks themselves.

⁷⁶ The U.S. Congressional Budget office, Fiscal Year 2007, http://www.gpoaccess.gov/usbudget/fy07/browse.html#budget.

⁷⁷ Thorston Polleit, “Inflation Is a Policy That Cannot Last,” http://mises.org/daily/2901.

⁷⁸ For various reasons, printing trillions and giving them to the banks does NOT necessarily cause high price inflation. It can also cause rapid asset inflation while causing little increased consumer price inflation.

⁷⁹ M1 to M3 are money supply measures used by the Fed. M1 is restricted to the most liquid forms of money: currency in the hands of the public, travelers checks, demand deposits, and other deposits against which checks can be written. M2 is a wider definition of M1, which also includes savings accounts, CDs under $100,000, and balances in retail money market mutual funds. M3 includes M2 and cash deposits, deposits of euros, and repurchase agreements. As such, M2 represents the aggregate money supply.

⁸⁰ Though the technical explanation is beyond the scope of this book, it should be understood that inflation from the U.S. central bank causes inflation to be increased in foreign countries as well. This is truer today than ever before.

⁸¹ The term in this case is not limited to programs such as Social Security, Medicaid, Medicare, etc. It includes any spending that effectively serves as income for any party that is paid for by another party.

⁸² The interest rate does not compensate the borrower as would be the case in a free market, because interest rates are kept artificially low by the government, as will be explained below. It should also be noted that with inflation, borrowers typically always benefit at the expense of lenders.

⁸³ Social security thus results in a rate of return of about 1.23 percent for the average middle class family, and is often negative for minorities. See William W. Beach and Gareth E. Davis, “Social Security’s Rate of Return,” http://www.heritage.org/research/socialsecurity/cda98-01.cfm.

⁸⁴ Though with the gold standard, since the quantity would increase to some degree, prices would fall more slowly. The production of gold, however, would not keep pace with the rate of increase of other goods.

⁸⁵ True real terms would consist of adjusting prices for true (not CPI) purchasing power. The comparison to gold gives an idea of what true purchasing power could be. In reality, gold has not adjusted to dollar/gold supply differences in many years for various reasons. Had the price of gold adjusted to reveal the true extent of supply increases of dollars over gold, the charts would be even more dramatic.

⁸⁶ This does not mean that people would not save, as they would still have incentives to for many reasons. It means that they would not have to save specifically to afford increased future prices. Additionally, less saving would be needed to fund companies because less capital would have been previously destroyed through inflation. See below for further effect of inflation on capital accumulation.

⁸⁷ Alan Greenspan, “Gold and Economic Freedom,” in Ayn Rand, Capitalism: The Unknown Ideal (1966).

⁸⁸ Federal Reserve Chairman Ben Bernanke, “Inflation Expectations and Inflation Forecasting” (speech), http://www.federalreserve.gov/newsevents/speech/bernanke20070710a.htm.

⁸⁹ For a complete and devastating critique of all of these explanations, see George Reisman, Capitalism: A Treatise on Economics (1995), pp. 895–921.

⁹⁰ To be technically correct, the increased wealth would actually be in the form of lower costs of living. I stated the gains in terms of higher salaries in order to describe it in a way most people can relate to. Either scenario is accurate in terms of the point being made because increased real wealth would bring higher salaries relative to the things we buy.

⁹¹ The reduction in spending actually arises from a decrease in the volume of spending, available credit and a decrease in the quantity of money, both of which result from a reduction in the rate of credit creation.

⁹² For a full explanation, see Doug French, “The Truth about Tulipmania,” http://mises.org/daily/2564.

⁹³ For detailed statistics, see Murray Newton Rothbard, America’s Great Depression (2000).

⁹⁴ This is where the proposal for a government bailout comes in. The idea is for the government to buy the bad loans so as to remove them from the books of the banks, so that the banks can become healthier and resume loaning out money.

⁹⁵ Friedrich Hayek, Monetary Theory and the Trade Cycle (1929).

⁹⁶ Because new money might flow disproportionately into asset prices instead of consumer prices.

⁹⁷ More realistically, the origination of modern financial bubbles.

⁹⁸ Wikipedia, List of Countries by Foreign Exchange Rates, http://en.wikipedia.org/wiki/List_of_countries_by_foreign_exchange_reserves.

⁹⁹ Even after all this detailed explanation, government economists would simply say that much of it is hogwash, that these assertions are not proven in “the data” (as I was told by central bankers at the Atlanta Fed).

¹⁰⁰ I call regulation any form of government intervention. Though this might not be customary, I feel that it is 100 percent appropriate: anything the government does to alter market processes is in fact some form of governing — regulating — the economy.

¹⁰¹ This statement excludes such murky issues such as the fact that McDonald’s can “hurt” us by selling us food that will make us fat or cause high blood pressure. One does not need to take the argument to that level — they can simply choose not to purchase the food. Similarly, one might think companies harm us by polluting. But most of us implicitly approve of this because we choose to continue buying the resulting products. Plus, we know that if we don’t pollute at all we will die for lack of food and medicines. These kinds of arguments lead us down the road of believing that any of our neighbors or competitors are doing something that is “harming” us, and thus we need government to intervene for what we believe.

¹⁰² A primary problem with regulation is that it allows “harm” to constitute virtually anything. For example, if a Jewish-owned company wanted to hire only Jews, they should be able to. But labor regulation makes it illegal for a privately owned firm to hire whom it wants; regulation makes such an act something that “harms” others who were intentionally not chosen because they are not Jewish, even though there really was no harm involved. (Though it is beyond the scope of this book to prove, it should be understood that in a free market, racial, gender, or ethnic discrimination would hardly exist: competition and the desire to achieve high profits would force employers to hire the most capable and suitable people for the job, not those they simply like best. As proof of this, consider that for all that we hear about women not making as much as men, in fact they do. Women with the same level of education, skills, number of years in the workforce, etc., make more on average than their male counterpart.)

¹⁰³ An example is the 1962 case of Kinney Shoes being prevented from acquiring the Brown Shoe Company.

¹⁰⁴ Thomas J. DiLorenzo, “The origins of antitrust: An interest-group perspective,” International Review of Law and Economics (June 1985), pp. 73–90

¹⁰⁵ Thomas J. DiLorenzo, “Anti-trust, Anti-truth,” Mises Daily (June 1, 2000).

¹⁰⁶ Ibid.

¹⁰⁷ Dominick T. Armentano, Antitrust and Monopoly: Anatomy of a Policy Failure (1990).

¹⁰⁸ Thomas J. DiLorenzo, How Capitalism Saved America (2004).

¹⁰⁹ Robert LeFevre, “The Age of the Robber Barons” (lecture), http://mises.org/mp3/lefevre/131.mp3.

¹¹⁰ Randal C. Picker, “Monopolization under Sec. 2” (powerpoint lecture), picker.uchicago.edu/antitrust/AT13Post.ppt.

¹¹¹ Thomas J. DiLorenzo, “Anti-trust, Anti-truth,” Mises Daily (June 1, 2000).

¹¹² Ibid.

¹¹³ Contrary to what the entire world of academic economics supposes, (manufactured goods) businesses in the real world do not assess marginal revenues and set prices equal to marginal cost. They set them on a cost-plus basis.

¹¹⁴ Condensed, summarized, and paraphrased from Reisman’s writings on predatory pricing: George Reisman, Capitalism: A Treatise on Economics (1995), pp. 399–402.

¹¹⁵ Based on research performed by economist George Stigler. http://mises.org/journals/rae/pdf/rae9_2_3.pdf.

¹¹⁶ Howard Baetjer Jr., (Deregulate the Utilities), http://www.thefreemanonline.org/columns/deregulate-the-utilities/.

¹¹⁷http://www.cato.org/pubs/journal/cjv14n2-6.html.

¹¹⁸ Thomas J. DiLorenzo, “The Origins of Antitrust: An Interest-Group Perspective.” International Review of Law and Economics 5 (June 1985).

¹¹⁹ For example see Profile: Dennis C. Mueller, http://ideas.repec.org/e/pmu110.html.

¹²⁰ For example: Yale Brozen, “The Antitrust Task Force Deconcentration Recommendation,” Journal of Law and Economics 13 (October 1970): pp. 279–92; Yale Brozen, “The Persistence of ‘High Rates of Return’ in High-Stable Concentration Industries,” Journal of Law and Economics 14 (October 1971): pp. 501–12.

¹²¹ Which was originally enacted to enable Rockefeller-dominated Roosevelt administration to cripple the Morgan financial empire: Alexander Tabarok, “The Separation of Commercial and Investment Banking: The Morgans vs. The Rockefellers,” http://mises.org/journals/qjae/pdf/qjae1_1_1.pdf.

¹²² As explained by Robert B. Eukland and Mark Thornton, “More Awful Truths About Republicans,” http://mises.org/daily/3098.

¹²³http://mises.org/daily/3162.

¹²⁴ This section is condensed from two articles, Don Matthews, “The Fallacies of Shrimp Protectionism,” http://mises.org/daily/1551 and Aleksandra Dunaeva and Don Matthews, (How the Shrimp Tariff Backfired), http://mises.org/daily/2644.

¹²⁵ At least as of the time of the research this story is based on, which was in 2004 and 2006.

¹²⁶ The Food and Agriculture Organization of the United Nations, Food Production Indices (2006) http://faostat.fao.org/site/612/default.aspx#ancor.

¹²⁷ As explained by George Reisman, Capitalism: A Treatise on Economics (1990), Chapters 12 and 19.

¹²⁸ The following argument was derived from George Reisman, Capitalism: A Treatise on Economics (1990).

¹²⁹ The introductory paragraphs that follow, and most historical facts and figures are taken from the following authors and papers: Dale Steinreich, Ph.D., “100 Years of Medical Robbery,” http://mises.org/daily/1547#_8_, and “Real Medical Freedom,” http://mises.org/daily/1588; Henry E. Jones, MD, “How Medical Boards Nationalized Health Care,” http://mises.org/daily/1749.

¹³⁰ This actually understates continual declines. Paul Starr, The Social Transformation of American Medicine (1982), p. 421, reports that in 1965 only 88 schools existed, meaning that the Council almost reached its goal of a more than 50 percent closure of schools.

¹³¹http://mises.org/story/1749.

¹³² People can’t afford the premiums and smaller businesses can’t afford to cover their employees. And since government does not cover everyone, and does not always cover all the costs incurred for those who need healthcare insurance, many are left out in the cold.

¹³³ Barbara Starfield, “Is U.S. Health Really the Best in the World?” The Journal of the American Medical Association 284 (July 26, 2000).

¹³⁴ Robert Longley, “Cato Claims FDA Denies Health Coverage to Over 7 Million,” http://usgovinfo.about.com/od/medicarehealthinsurance/a/fdacato.htm.

¹³⁵ The explanations in this section on nationalized healthcare are patterned after the explanation given by Professor George Reisman, “Papiere, Bitte (Papers, Please),” http://georgereisman.com/blog/2006_02_01_archive.html.

¹³⁶ James McIntyre, “Tony Wilson, founder of ‘Madchester’, dies after battle with kidney cancer,” The Independent UK (August 11, 2007).

¹³⁷ For an excellent exposition of this fact, see Ludwig von Mises, Bureaucracy (1944).

¹³⁸ Clifford Krauss, “Ruling Has Canada Planting Seeds of Private Health Care,” The New York Times (February 20, 2006).

¹³⁹ On this, see: Richard J. Maybury, “The Great Thanksgiving Hoax,” http://mises.org/daily/336, and Gary Galles, “Property and the First Thanksgiving,” http://mises.org/daily/1678.

¹⁴⁰ Paul Krugman, “Bad Medicine,” The New York Times (March 19, 2002).

¹⁴¹ As an aside, those same statistics are even more dramatic for the financial services industry.

¹⁴²4029TV.com, “Private Ambulance Services Upset With New Change,” http://www.4029tv.com/news/18396977/detail.html.

¹⁴³ Carolyn Lochhead, “Small airlines — and a few politicians — try to again put Washington behind the ticket counter,” Reason Magazine (July 1998).

¹⁴⁴ Charles Featherstone, “The Myth of ‘Peak Oil’,” http://mises.org/daily/1717.

¹⁴⁵ Featherstone, “Peak Oil.”

¹⁴⁶ Nancy Benac and Trevor Thompson, “With ‘Change’ in Mind, Voters Voice Expectations for the Next President,” Associated Press (January 12, 2008).

¹⁴⁷ Yes, the marketplace could figure out a way for a company to price the service and earn revenues for such an investment.

¹⁴⁸ The Ayn Rand Center for Individual Rights, “How Government Makes Disasters More Disastrous,” http://www.aynrand.org/site/News2?page=NewsArticle&id=17647&news_iv_ctrl=1021.

¹⁴⁹ Matt A. Meyer, “Hurricane Insurance: Forcing All to Subsidize the Few,” http://www.heritage.org/Research/Homelandsecurity/wm1972.cfm.

¹⁵⁰ Though the first publicly held corporation is thought to be that of the Stora Kopparberg mine in 1288.

¹⁵¹ Cornelius Walford, “The Famines of the World,” Journal of the Royal Statistical Society (March 19, 1878).

¹⁵²The Anti-Capitalistic Mentality, p. 2.

¹⁵³ Because producing for a loss means that more resources are being consumed in the production process than the production process is creating in new wealth.

¹⁵⁴ ExxonMobil, 2007 Summary Annual Report, http://thomson.mobular.net/thomson/7/2675/3201/.

¹⁵⁵ ExxonMobil, 1999 Consolidated Statement of Income, http://www.exxonmobil.com/Corporate/Newsroom/Publications/shareholder_publications/c_fo_99/page_16.pdf.

¹⁵⁶ Here we are discussing the rate of profit on revenues. The notion of a uniform rate of profit applies to the rate of return on capital invested. This is another reason why income statement profits — those usually reported in the media — are not a reliable source of true profitability. As an example, the grocery store industry, with regular profits of “only” 2–3 percent do much better in terms of return on capital invested.

¹⁵⁷ Since the financial services industry is far from a free market, it usually has high profits due to government regulation which allows these companies to gain from the central banks’ printing of money. This is why the size of the industry relative to the size of the overall economy has continued to grow over the decades.

¹⁵⁸ I used to work for such a company.

¹⁵⁹ A unique insight by economist George Reisman.

¹⁶⁰ In reality, these costs would be spread across multiple years, making his profit each year even larger.

¹⁶¹ Non-business-related costs such as education are not included on business income statements. Any personal costs, for the artists or the rich CEO, are just that —personal costs.

¹⁶² He also asserted that F.H. Hayek did not win the Nobel prize. In fact, he won it in 1974 for his work on the business cycle, which was presented in Chapter 3.

¹⁶³ The explanation has now been moved to an “off-site” web site: The U.S. Federal Reserve, “The Principle of Multiple Deposit Creation,” http://www.federalreserveeducation.org/fed101_html/policy/frtoday_depositCreation.pdf, and The U.S. Federal Reserve, “How does The Fed Create Money?” http://www.federalreserveeducation.org/fed101/policy/money.htm.

¹⁶⁴ Wikipedia, “Corporate Social Responsibility,” http://en.wikipedia.org/wiki/Corporate_social_responsibility.

¹⁶⁵ The GivenGain Group, “About GivenGain,” http://www.givengain.com/cgi-bin/giga.cgi?cmd=about.

¹⁶⁶ Thomas J. DiLorenzo, “The Union Conspiracy Against Walmart Workers,” http://mises.org/daily/2016.

¹⁶⁷ Joseph Schumpeter, Capitalism, Socialism, and Democracy (1992).

¹⁶⁸ The other part is that they do in fact compete unfairly, because our current system allows them to.

¹⁶⁹ Skip Olivia, in response to Jeffrey Tucker, “Is Walmart Illegitimate?” http://blog.mises.org/archives/002038.asp.

¹⁷⁰ WalMart, 2007 Annual Report to Investors, http://walmartstores.com/Media/Investors/2007_annual_report.pdf.

¹⁷¹ Unless one counts the returning of stolen money to its original owner as harming the thief who first stole it.

¹⁷² Schruti Date Singh, “Walmart gets 25,000 applications for Evergreen Park store,” Chicago Business (January 25, 2006).

¹⁷³ Llewellyn H. Rockwell, “Walmart Warms to the State,” http://mises.org/daily/1950.

¹⁷⁴ Socialism promoter and U2 frontman, Bono, learned this when he started a clothing line and had to pay himself wages. See Thomas J. Lorenzo and Vedran Vuk, “Bono the Capitalist Exploiter,” http://mises.org/daily/2529.

¹⁷⁵ For all practical purposes.

¹⁷⁶ Paul Kirklin, “The Ultimate pro-WalMart Article,” http://mises.org/daily/2219#13.

¹⁷⁷ The desired thing exists as long as it’s technologically feasible, or as long as there is enough demand for it that it is profitable to make.

¹⁷⁸ Murray Rothbard, America’s Great Depression (2000).

¹⁷⁹ Otto Friedrich, Hays Gorey, and Ruth Mehrtens Galvin, “FDR’s Disputed Legacy,” Time (February 1, 1982).

¹⁸⁰ Lawrence W. Reed, “Great Myths of the Great Depression,” http://www.mackinac.org/archives/1998/sp1998-01.pdf. A majority of the information in this section is derived from Reed’s paper.

¹⁸¹ Ibid.

¹⁸² Murray Rothbard, America’s Great Depression (1990).

¹⁸³ Ibid.

¹⁸⁴ Ibid.

¹⁸⁵ The low prices, remember, were brought about by previous government policies of inflation, which naturally ends with deflation.

¹⁸⁶ Murray Rothbard, America’s Great Depression (1990).

¹⁸⁷ Today, our politicians blame the lack of credit on the housing market bust, without identifying what caused the housing bust (the central bank’s printing of money).

¹⁸⁸ Murray Rothbard, America’s Great Depression (1990).

¹⁸⁹ Lawrence W. Reed, (Great Myths of the Great Depression), http://www.mackinac.org/archives/1998/sp1998-01.pdf.

¹⁹⁰ Paul Johnson, A History of the American People (1997), p. 740.

¹⁹¹ Lawrence W. Reed, (Great Myths of the Great Depression), http://www.mackinac.org/archives/1998/sp1998-01.pdf.

¹⁹² Jim Powell, FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression (New York: Crown Forum, 2003), p. 32.

¹⁹³ Ibid.

¹⁹⁴ David Beckworth, “What many of the Great Depression Comparisons Miss,” http://macromarketmusings.blogspot.com/2008/03/what-many-of-great-depression.html.

¹⁹⁵ Lawrence W. Reed, (Great Myths of the Great Depression), http://www.mackinac.org/archives/1998/sp1998-01.pdf.

¹⁹⁶ Lawrence W. Reed, (Great Myths of the Great Depression), http://www.mackinac.org/archives/1998/sp1998-01.pdf.

¹⁹⁷ “Person of the Year: Hugh S. Johnson,” Time Magazine (January 1, 1934).

¹⁹⁸ Lawrence W. Reed, (Great Myths of the Great Depression), http://www.mackinac.org/archives/1998/sp1998-01.pdf.

¹⁹⁹ Brookings Institution Tax Policy Institute, Historical Top Tax Rates, http://www.tax-policycenter.org/taxfacts/displayafact.cfm?Docid=213.

²⁰⁰ C. David Tompkins, Senator Arthur H. Vandenberg: The Evolution of a Modern Republican, 1884-1945 (1970), p. 157.

²⁰¹ Citizens for Tax Justice, Historical Tax Rates, http://www.huppi.com/kangaroo/TaxTimeline.htm.

²⁰² An insight obtained from Reisman.

²⁰³ Jim F. Couch and William F. Shughart II, The Political Economy of the New Deal (1998).

²⁰⁴ Thomas J. DiLorenzo, “The Truth about the Great Depression” (lecture), http://mises.org/multimedia/mp3/DiLorenzo/DiLorenzo-9.mp3.

²⁰⁵ A majority of this section on the Roman Empire was take from: 1) Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” http://www.cato.org/pubs/journal/cjv14n2-7.html; 2) Michel Rostovzeff, The Social and Economic History of the Roman Empire (1926); and 3) Ludwig von Mises, Human Action (1963).

²⁰⁶ Except in Egypt, which remained largely government-controlled.

²⁰⁷ Henry Hazlitt, The Conquest of Poverty (1973).

²⁰⁸ K. Hopkins, “Taxes and Trade in the Roman Empire (200 B.C-AD. 400),” Journal of Roman Studies 70 (1980), 101-25.

²⁰⁹ Michael Ivanovich Rostovtzeff, The Social and Economic History of the Roman Empire (1926), p. 172.

²¹⁰ Bruce Bartlett, “How Excessive Government Killed Ancient Rome,” http://www.cato.org/pubs/journal/cjv14n2-7.html.

²¹¹ Michael Ivanovich Rostovtzeff, The Social and Economic History of the Roman Empire (1926), p. 430.

²¹² David Gordon, “Nazi Economic Policy,” http://mises.org/daily/3274.

²¹³ At least in the specific case referenced, they were offered the reprieve of being exiled. See Stéphane Courtois, Nicolas Werth, Jean-Louis Panné, Andrzej Paczkowski, Karel Bartosek, Jean-Louis Margolin, Stephane Courtois, Mark Kramer, with Jonathan Murphy (Translator), The Black Book of Communism: Crimes, Terror, Repression (1999).

²¹⁴ Bryan Caplan, “The Museum of Capitalism FAQ,” http://www.gmu.edu/departments/economics/bcaplan/museum/faqframe.htm.

²¹⁵ Llewellyn H. Rockwell, “The Death Camp of Communist China,” http://mises.org/daily/2652.

²¹⁶ Associated Press, “Polish man emerges from 19-year coma,” USA Today (June 3, 2007).

²¹⁷ Rachel Kushner, “The Cuban Way,” The New York Times Magazine (October 19, 2008), p. 70. It was not known exactly what “hang” meant in this context. It must be noted that the Cubans are not as well known for murders of individual citizens.

²¹⁸ As explained by Yuri N. Maltsev, “The Decline and Fall of Gorbachev and the Soviet State,” http://mises.org/daily/3105. This phenomenon is also common in third-world countries that are much less economically free.

²¹⁹ Ibid.

²²⁰ As explained by Yuri N. Maltsev, “The Decline and Fall of Gorbachev and the Soviet State,” http://mises.org/daily/3105.

²²¹ George Reisman, “Why Nazism Was Socialism and Why Socialism is Totalitarianism,” http://mises.org/daily/1937.

²²² Ibid.

²²³ Stéphane Courtois, Nicolas Werth, Jean-Louis Panné, Andrzej Paczkowski, Karel Bartosek, Jean-Louis Margolin, Stephane Courtois, Mark Kramer, with Jonathan Murphy (Translator), The Black Book of Communism: Crimes, Terror, Repression (1999).

²²⁴ Stéphane Courtois, Nicolas Werth, Jean-Louis Panné, Andrzej Paczkowski, Karel Bartosek, Jean-Louis Margolin, Stephane Courtois, Mark Kramer, with Jonathan Murphy (Translator), The Black Book of Communism: Crimes, Terror, Repression (1999).

²²⁵ Wikipedia, “The Big Black Book of Communism,” http://en.wikipedia.org/wiki/Black_Book_of_Communism.

²²⁶ Yuri N. Maltsev, “The Decline and Fall of Gorbachev and the Soviet State,” http://mises.org/daily/3105.

²²⁷ The Indian Embassy, Extracts from The Constitution of India, http://www.indianembassy.org/dydemo/constitution.htm

²²⁸ See The Associated Press, “Indian Prime Minister Claims Victory, ‘Massive Mandate’ in Elections,” Fox News (May 16, 2009).

²²⁹ Daniel Singer, “Exploiting a Tragedy, or Le Rouge en Noir,” The Nation (November 25, 1999).

²³⁰ To be discussed in the next chapter.

²³¹ Listings and rankings will differ considerably. This is because data is difficult to obtain in order to provide a ranking in some cases. Thus, one index might rank using partial data, while the other might not attempt to rank at all.

²³² U.S. Central Intelligence Agency, Country Comparison: GDP Per Capita, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html.

²³³ U.S. Central Intelligence Agency, Country Comparison: GDP Per Capita, https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html.

²³⁴ See Brief Biographies, Mobutu Sese Seko, http://biography.jrank.org/pages/2974/Seko-Mobutu-Sese.html. However, many suspect he was never a billionaire at all.

²³⁵ Library of Congress Country Studies, Zaire: Sanitation and Nutrition, http://lcweb2.loc.gov/cgi-bin/query/r?frd/cstdy:@field(DOCID+zr0102).

²³⁶ For myriad examples, see Wikipedia, “Political Scandals of the United States,” http://en.wikipedia.org/wiki/Political_scandals_of_the_United_States. Also simply read recent articles about many of the officials Obama put in charge of the treasury department.

²³⁷ Zoning boards: yet another example that government exists so that one group can gain at the expense of others.

²³⁸ Many of the rich, misguidedly, do vote for their money to be redistributed, but most people do not, and do not want it taken from them. If you think I’m wrong, then you would surely not oppose making taxation voluntary, or letting the rich choose their own marginal tax rate, since if people want to give their money away, they in fact will. The mere existence of tax havens and tax evasion, both of which are highly moral, proves that rich people do not always want to willingly give up their money.

²³⁹ As occurred under Queen Elizabeth I, resulting in a more prosperous economy. Also, it is precisely because most people will not voluntarily pay the amount of tax they are currently paying that socialists have to use force in order to make people hand their money over.

²⁴⁰ A budget is not a profit and loss statement, and the revenues on a government budget are revenues expropriated from taxpayers, not voluntary purchases of the product or service being provided.

²⁴¹ Bruce Bartlett, “Tax Facts,” http://www.creators.com/opinion/bruce-bartlett/tax-facts.html.

²⁴² Andrew Chamberlain, “Who Pays Taxes and Who Receives Government Spending? An Analysis of Federal, State and Local Tax and Spending Distributions, 1991-2004,” http://www.taxfoundation.org/publications/show/2282.html.

²⁴³ The Tax Foundation, http://www.taxfoundation.org/.

²⁴⁴ The Tax Foundation, “Who Pays America’s Tax Burden, and Who Gets the Most Government Spending?” http://www.taxfoundation.org/files/sr151.pdf.

²⁴⁵ Will Wilkinson, “All Tax Plans Are Wealth Redistribution,” http://www.cato.org/pub_display.php?pub_id=9739.

²⁴⁶ Fox News, “Maxine Waters threatens to nationalize U.S. oil industries” (YouTube excerpt) http://www.youtube.com/watch?v=PUaY3LhJ-IQ&feature=related.

²⁴⁷ As originally stated by Ludwig von Mises.

²⁴⁸ Even taking away business revenues from other companies does not actually involve taking something from them, as other businesses never took the revenue; consumers simply decided to give the revenues to the more successful firm.

²⁴⁹ And wealth destruction is what happens in the cases of “public/private partnerships.”

²⁵⁰ Since most government spending and government deficits in fact fund such wealth redistribution.

²⁵¹ This is also why price inflation has not been significant over this period, a period in which an unprecedented amount of money has been created. Most of the new money flowed into the financial system and remained there. It did not leak very much into the real economy and push up consumer prices. For an excellent exposition on this topic, see Peter Warburton, Debt and Delusion: Central Bank Follies That Threaten Economic Disaster (1999).

²⁵² Robert E. Rector and Kirk A. Johnson, “Understanding Poverty and Economic Inequality in the United States,” http://www.heritage.org/research/welfare/bg1796.cfm.

²⁵³ Information in this paragraph obtained from Robert E. Rector and Kirk A. Johnson, “Understanding Poverty and Economic Inequality in the United States,” http://www.heritage.org/research/welfare/bg1796.cfm.

²⁵⁴ Thomas DiLorenzo, “Reinventing America’s Poor,” http://mises.org/freemarket_detail.aspx?control=289.

²⁵⁵ A majority of the information on minimum wage in this chapter was obtained from Shawn Ritenour, “What You Need to Know About the Minimum Wage,” http://mises.org/daily/1603.

²⁵⁶ Association of Community Organizations for Reform Now vs. State of California, Department of Industrial Relations, Divison of Labor Standards Enforcement, Case No. AO 69744, Appellant’s Opening Brief, in the Court of Appeal of California, First Appellate District, Division Five, August, 1995, cited in Employment Policies Institute, Q & A: Minimum Wage Employee Profile, (May 1997).

²⁵⁷ Pelosi’s Double Standard on the Minimum Wage, YouTube excerpt from interview with House Speaker Nancy Pelosi, http://www.youtube.com/watch?v=8pFC3LKMIQo.

²⁵⁸ Employment Policies Institute, Q & A: Minimum Wage Employee Profile, May 1997.

²⁵⁹ Though our constitution states that such a thing is illegal unless distributed equally among all citizens. For 137 years until this time, tariffs paid for the needs of the country.

²⁶⁰ In fact, since the government can actually print all the money it needs, the goal of taxation is, as stated by socialists themselves, “to leave less in the hands of the taxpayer,” as pointed out by Ludwig von Mises, Human Action: A Treatise on Economics (1963), p. 807.

²⁶¹ Clyde H. Farnsworth, “Connally Tells Bankers U.S. Will Defend Dollar” The New York Times (May 29, 1971).

²⁶² See Peter J. Sepp, “Congressional Perks: How the Trappings of Office Trap Taxpayers,” http://www.ntu.org/main/press.php?PressID=343 and Washington Windfall, http://www.fa-ir.org/alabama/corrupt/Congressional%20Retirement%20Benefits.htm.

²⁶³ See: Victor Sperandeo, Trader Vic II – Principles of Professional Speculation (1998), p. 257 and Steven Moore, “Congress vs. America: How Congress Raises Its Own Pay,” http://www.heritage.org/Research/GovernmentReform/bg744.cfm, and Chris Edwards, “Federal Pay Outpaces Private-Sector Pay,” http://www.cato.org/pubs/tbb/tbb-0605-35.pdf.

²⁶⁴ Ludwig von Mises, Human Action: A Treatise on Economics (1963), p. 850.

²⁶⁵ Don’t measure productivity by the official productivity numbers the government calculates. These numbers, as will be explained in the next chapter, mostly reflect inflation, not actual productivity.

²⁶⁶ Which among other things, are supposed to teach students how life works and how to prepare for the future.

²⁶⁷ Also, one would think that if someone could not afford to have children, they would not do so until they earned more (unless they were enticed to by the government’s offering to give money for each child birthed, as is the case currently).

²⁶⁸ Vinnee Tong, “Record $300B Given to Charity,” Deseret News (June 25, 2007).

²⁶⁹ Victor Sperandeo, Methods of a Wall Street Master (1993).

²⁷⁰ This topic is beyond the scope of this book, but interested readers can find many volumes of work on the topic at www.garynorth.com.

²⁷¹ I’m not targeting Catholics in particular; Jewish, Protestant, and Orthodox religions, as well as non-Christian religions do the same.

²⁷² For the details, see Matthew White, “Source List and Detailed Death Tolls for the Twentieth Century Hemoclysm,” http://users.erols.com/mwhite28/warstat1.htm.

²⁷³ In the 18th and 19th centuries, war was between the various rulers and their armies, and civilians were, as far as possible, left alone. These laws of war allowed warring parties to target each other’s forces and governments, not individual citizens.

²⁷⁴ Alvin and Heidi Toffler, War and Anti-War: Survival at the Dawn of the 21st Century (1993).

²⁷⁵ Just as economic cause and effect is rarely revealed to the public.

²⁷⁶ Even public (government) broadcasting has confirmed many accusations in this chapter: in 2009 Georgia Public Broadcasting aired “Behind Closed Doors,” which confirms many of my claims about Roosevelt and Churchill. Similar confirmations can be found from the Smithsonian Institute (see references), and Wikipedia, which I hold as generally reliable because of the fact that each topic has multiple contributors from various schools of thought, instead of a single source with its own political or ideological agenda (though none of the information relayed here is based on Wikipedia as a primary source).

²⁷⁷ Most information in this section is derived from John V. Denson, A Century of War: Lincoln, Wilson & Roosevelt (2006).

²⁷⁸ Evangelical religion, which will not be discussed here, was a dominant factor driving the statist ideology.

²⁷⁹ Not only were blacks slaves, but some whites were as well (criminals from Britain). Also, there were black slave owners who owned black slaves, many, who owned over 100 slaves: Robert M Grooms, “Dixie’s Censored Subject: Black Slaveowners,” http://americancivilwar.com/authors/black_slaveowners.htm.

²⁸⁰ See David Gordon, ed., Secession, State and Liberty (1998), which shows that both the North and South had promoted the “right” to secession and had both threatened such actions on numerous occasions before the Civil War.

²⁸¹ Stephan Kinsella, Tariffs, Blockades, and Inflation: The Economics of the Civil War (book review), http://mises.org/journals/jls/18_4/18_4_3.pdf.

²⁸² Ibid.

²⁸³ John Shipley Tilley, Lincoln Takes Command (1991).

²⁸⁴ James G. Randall, Constitutional Problems Under Lincoln (1951), p. 50.

²⁸⁵ Burke Davis, “The Price in Blood! Casualties in the Civil War,” http://www.civilwar-home.com/casualties.htm.

²⁸⁶ Walter Brian Cisco, War Crimes Against Southern Civilians (2007).

²⁸⁷ Mark E. Nealy, The Fate of Liberty: Abraham Lincoln and Civil Liberties (1992), pp. 10, 23

²⁸⁸ James G. Randall, Constitutional Problems Under Lincoln (1951), p.50.

²⁸⁹ Most of the information in this and the next section are taken, quite directly, from the section, “The Nationalities Question,” by Murray Rothbard, from the book The Irrepressible Rothbard: The Rothbard-Rockwell Report Essays of Murray N. Rothbard (2000).

²⁹⁰ Murray Rothbard, The irrepressible Rothbard: The Rothbard-Rockwell report essays of Murray N. Rothbard (2000).

²⁹¹ Churchill used to brag that he created Jordan in an afternoon.

²⁹² Charles Lane, “Haiti: Why the Coup Matters,” Newsweek (October 14, 1991), p. 34., http://www.newsweek.com/id/127115.

²⁹³ Most information in this section is derived from Niall Ferguson’s The Pity of War (1998) and Mises Institute lectures and papers on the war, predominately those by Ralph Raico and Murray Rothbard.

²⁹⁴ John V. Denson, A Century of War: Lincoln, Wilson, and Roosevelt (2006), p. 189.

²⁹⁵ Sir Kingsley Wood made the statement, as quoted by John V. Denson, A Century of War: Lincoln, Wilson & Roosevelt (2006).

²⁹⁶ Douglas Carey, (Wartime’s Lost Liberties), http://mises.org/story/844.

²⁹⁷ There is also no such thing as an “engine of growth” for the world. Just because one country can produce goods rapidly and advance, this action does not cause another nation to grow. Just becoming wealthy and being able to purchase goods from a poor country does not increase the amount of goods a poor country can create.

²⁹⁸ W.B. Allen, ed., George Washington: A Collection (1988).

²⁹⁹ Most information in this section is derived from John V. Denson’s book A Century of War: Lincoln, Wilson & Roosevelt (2006).

³⁰⁰ Caroll Quigley, Tragedy and Hope: A History of the World in Our Time (1974), p. 950.

³⁰¹ A. J. P. Taylor, The Origins of the Second World War (1996), p.100.

³⁰² John V. Denson, A Century of War: Lincoln, Wilson & Roosevelt (2006).

³⁰³ See Robert B. Stinnett, Day of Deceit: The Truth about FDR and Pearl Harbor (2000), p. 144–45, 152 and 154.

³⁰⁴ John V. Denson, A Century of War: Lincoln, Wilson & Roosevelt (2006).

³⁰⁵ Robert B. Stinnett, Day of Deceit: The Truth about FDR and Pearl Harbor (2000).

³⁰⁶ See Roth Amendment No. 388 to the Defense Authorization Act passed by the United States Senate for the 106th Congress, First Session May 25, 1999, and the Senate Congressional Record for May 24, 1999, Sec. 582, p. S 5879.

³⁰⁷ Much of the facts and discussion in this section are from William Blum, Rogue State: A Guide to the World’s Only Superpower (2006).

³⁰⁸ Ibid.

³⁰⁹ William Blum, Rogue State: A Guide to the World’s Only Superpower (2006) p. 141.

³¹⁰ Ibid, p. 147

³¹¹ Ibid, p. 147

³¹² William Blum, Rogue State: A Guide to the World’s Only Superpower (2006), p. 130.

³¹³ Ibid., p. 5.

³¹⁴ U.S. Government Printing Office, Public Papers of the Presidents of the United States (1996), vol. I, p. 614.

³¹⁵ William Blum, Rogue State: A Guide to the World’s Only Superpower (2006).

³¹⁶ IfAmericansKnew.org, “U.S. Military Aid and the Israel/Palestine Conflict,” http://www.ifamericansknew.org/stats/usaid.html.

³¹⁷ Agence France-Presse, “Iran’s Khamenei sees no easing of hatred for US,” (October 29, 2008), http://afp.google.com/article/ALeqM5iXsm0qMrnC8bDCjkshC7tu2mvxyA.

³¹⁸ Agence France-Presse, “Iran can change if US leads: Khamenei,” (March 21, 2009), http://news.theage.com.au/breaking-news-world/iran-can-change-if-us-leads-khamenei-20090321-94z5.html.

³¹⁹ During the cold war, the Soviets were truly scared that they would be attacked by America at any moment. America made no effort to let them think otherwise and to therefore work towards peace.

³²⁰ Both former ambassadors to the U.N., Madeleine Albright, and Bill Richardson, both Democrats, are on record as stating that the cost of half a million dead children in Iraq was worth the high price. They, of course, did not have to be the one paying the price.

³²¹ The Associated Press, “Jury watches ‘martyr’ video in airline bomb plot,” (April 10, 2008), http://www.msnbc.msn.com/id/24051411/.

³²² The Associated Press, “Plotters made martyrdom videos,” (April 4, 2008), http://news.bbc.co.uk/2/hi/uk_news/7330330.stm.

³²³ David Breyers, “British Muslim praises bin Laden in ‘airline terror plot martyrdom video,’” The Times Online (April 10, 2008), http://www.timesonline.co.uk/tol/news/uk/crime/article3721351.ece.

³²⁴ ABC News, Clip of Vice President Joseph Biden, http://www.youtube.com/watch?v=UCqgNWRjmAc&feature=PlayList&p=A30979D65E3F316F&index=0&playnext=1.

³²⁵ To understand the myth of the Marshall Plan, see: Jeffrey Tucker, “The Marshall Plan Myth,” http://mises.org/freemarket_detail.aspx?control=120.

³²⁶ A majority of the ideas in this chapter are obtained from two primary authors. The information relating to the current state of the environment can be largely attributed to Bjorn Lomborg, a former Greenpeace activist who learned through scientific research that the world was not quite in the terrible shape we are led to believe. The information relating to the economic effects of environmentalism and the threats to our standard of living which arise from them can be largely attributed to George Reisman.

This author’s case for the use of two dominant sources of information can easily be defended. The goal of this chapter is not to present contrasting views of environmentalism and to compare them, as the dominant pro-environmentalist view is omnipresent. The intent here is to present the little-mentioned alternative views, which this author strongly believes in. Since the alternative view can be found in robust form from two major sources, and since these two sources are a mirror representation of other sources of alternative views, efficiency of research material is the primary consideration. These two sources mostly fully encompass the anti-environmental concerns and subject matter, and are sufficient for presenting the alternative case to the public.

³²⁷ Bruce Walsh, Extinction, http://nitro.biosci.arizona.edu/courses/EEB105/lectures/extinction/extinction.html.

³²⁸ Jen Kelly, “Baby tax needed to save planet, claims expert,” The Advertiser (December 10, 2007). Who would receive these funds? Probably the environmentalists and the poor.

³²⁹ Chelsea Schilling, “Wanna help the planet? ‘Let’s all just die!’” http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=63755.

³³⁰ Michael Y. Park, “Anti-People Group Pushes for Man’s Extinction,” Fox News (July 29, 2001).

³³¹ The Associated Press, “Professor: Many Humans Have to Die for Earth to Live,” Fox News (April 5, 2006).

³³² Bjørn Lomborg, Cool It: The Skeptical Environmentalist’s Guide to Global Warming (2007).

³³³ Ibid.

³³⁴ George Reisman, Capitalism: A Treatise on Economics (1996).

³³⁵ Ibid.

³³⁶ Ibid.

³³⁷ The Intergovernmental Panel on Climate Change, IPCC Special Report on Emissions Scenarios, http://www.ipcc.ch/ipccreports/sres/emission/500.htm.

³³⁸ Wikipedia, “Global Warming Controversy,” http://en.wikipedia.org/wiki/Global_warming_controversy, and John Christy, “No consensus on IPCC’s level of ignorance” (editorial), BBC News (November 13, 2007), and Uwe Buse, “Is the IPCC Doing Harm to Science?”, Spiegel (May 3, 2007).

³³⁹ The Heartland Institute, “Global Warming: Was it ever really a crisis?” http://www.heartland.org/events/NewYork09/index.html.

³⁴⁰ Lomborg, Cool It (2007).

³⁴¹ Ibid.

³⁴² Ibid.

³⁴³ Ibid.

³⁴⁴ Wikipedia, The Amazon Rain Forest, http://en.wikipedia.org/wiki/Amazon_Rain-forest. Though some environmental groups claim that 20 percent of the forest has been razed, see Rain-Tree.com,. Rainforest Facts, http://www.rain-tree.com/facts.htm.

³⁴⁵ Wikipedia, Aurochs, http://en.wikipedia.org/wiki/Aurochs.

³⁴⁶ For issues related to organisms and species being killed in the process, please read further in Lomborg’s book.

³⁴⁷ Floy Lilly, “Three Myths about Trash,” http://mises.org/story/3887.

³⁴⁸ Lawrence Stone, The Family, Sex and Marriage in England 1500-1800 (1979).

³⁴⁹ Lomborg, Cool It (2007).

³⁵⁰ George Reisman, Capitalism: A Treatise on Economics (1996).

³⁵¹ George Reisman, Capitalism: A Treatise on Economics (1996).

³⁵² Wikipedia, “Oil Shale,” http://en.wikipedia.org/wiki/Oil_shale.

³⁵³ Wikipedia, “Tar Sand,” http://en.wikipedia.org/wiki/Tar_sand.

³⁵⁴ Wikipedia, “Nuclear Waste,” http://en.wikipedia.org/wlki/Nudear_waste.

³⁵⁵ Lomborg, Cool It (2007).

³⁵⁶ For detailed analysis, see Bjørn Lomborg, The Skeptical Environmentalist: Measuring the Real State of the World (2001).

³⁵⁷ For an excellent summary of this progression, see Alvaro Vargas Llosa, Liberty for Latin America (2005), Chapter 4.

³⁵⁸ Floy Lilly, “Three Myths about Trash,” http://mises.org/story/3887.

³⁵⁹ Ibid.

³⁶⁰ Karl Ritter, “Greenland’s Melt Mystery Unfolds, at Glacial Pace,” The Associated Press (September 10, 2009).

³⁶¹ Annie Ogden, “Another warm year as Bali conference ends,” http://www.eurekalert.org/pub_releases/2007-12/uoea-awy121207.php.

³⁶² Monte Hieb, “Global Warming: A Chilling Perspective,” http://www.geocraft.com/WVFossils/ice_ages.html.

³⁶³ Ibid.

³⁶⁴ These two paragraphs taken from Dr. David Evans, “Global Warming: A Classic Case of Alarmism,” http://joannenova.com.au/2009/04/03/global-warming-a-dassic-case-of-alarmism/.

³⁶⁵ Nigel Calder, The Carbon Dioxide Thermometer and the Cause of Global Warming (lecture), SPRU (Science and Technology Policy Research) seminar, University of Sussex, Brighton, England (October 6, 1998). Solar wind is used here as a measure of sun intensity.

³⁶⁶ Willie Wei-Hock Soon and Steven H. Yaskell, The Maunder Minimum and the Variable Sun-Earth Connection (2003).

³⁶⁷ Lomborg, Cool It (2007).

³⁶⁸ Ice Age Now, “Glaciers are growing around the world, including the United States,” http://www.iceagenow.com/Growing_Glaciers.htm.

³⁶⁹ Lomborg, Cool It (2007).

³⁷⁰ Ibid.

³⁷¹ Ibid.

³⁷² Richard Black, “Hurricanes and global warming- a link?” BBC News (September 23, 2005).

³⁷³ For a summary, see Robert Murphy, “The Cost of Carbon Legislation,” http://mises.org/story/3473.

³⁷⁴ “European countries phase out incandescent bulbs,” The Associated Press (September 1, 2009).

³⁷⁵ A majority of the thoughts in this section came from the works of Loyola University economist Walter Block: http://walterblock.com/publications.

³⁷⁶ This specific example came from Andrew Pack, “Environmental Preservation: A Matter of Property,” http://mises.org/story/2136.

³⁷⁷ Termed by biologist Garrett Hardin in his 1968 article.

³⁷⁸ As stated by Roy Cordato, “An Austrian Theory of Environmental Economics,” http://mises.org/story/1760.

³⁷⁹ To begin with, reference Walter Block, “Coase and Demsetz on Private Property Rights.” Journal of Libertarian Studies 1 (2) 1977; Israel Kirzner, “Welfare Economics: A Modern Austrian Perspective.” in Man, Economy, and Liberty: Essays in Honor of Murray N. Rothbard (1988); and Murray Rothbard, “Law, Property Rights, and Air Pollution,” Cato Journal 2 (1) (1982).

³⁸⁰ Most of the ideas and information in this section come from Thomas J. DiLorenzo’s “Why Socialism Causes Pollution” (1992), The Freeman: Ideas on Liberty – The Foundation for Economic Education,http://www.fee.org/publications/the-freeman/article.asp?aid=1909.

³⁸¹ According to the Technical Advisory Board of the Blacksmith Institute, an environmental NGO based in New York.

³⁸² Thomas J. DiLorenzo, “Why Socialism Causes Pollution,” http://www.fee.org/publications/the-freeman/article.asp?aid=1909.

³⁸³ Ibid.

³⁸⁴ Jim Rogers, On the Road with Jim Rogers: Investment Biker (1994).

³⁸⁵ Thomas J. DiLorenzo, “Why Socialism Causes Pollution,” http://www.fee.org/publications/the-freeman/article.asp?aid=1909.

³⁸⁶ Ibid.

³⁸⁷ Ibid.

³⁸⁸ Jeffrey St. Clair and Joshua Frank, “The Pentagon’s Toxic Legacy,” http://www.counterpunch.org/stclair05122008.html.

³⁸⁹ Matthew Greene, “The Rocky Mountain Arsenal: States’ Rights and the Cleanup of Hazardous Waste,” http://www.colorado.edu/conflict/full_text_search/AllCRCDocs/94-58.htm.

³⁹⁰ Thomas J. DiLorenzo, “Why Socialism Causes Pollution,” http://www.fee.org/publications/the-freeman/article.asp?aid=1909.

³⁹¹http://www.tva.gov/environment/air/tri_faq.htm.

³⁹² Thomas J. DiLorenzo, (Why Socialism Causes Pollution), http://www.fee.org/publications/the-freeman/article.asp?aid=1909.

³⁹³ Ibid.

³⁹⁴ Marxism was discredited before the arrival of the twentieth century, and it is currently not even adhered to by left-wing economists. The only people who support Marxism are ignorant students and literature, arts, and history professors who have no idea what Marxism really is or how it has been thoroughly abandoned by all economists.

³⁹⁵ Most of the changes in velocity are affected by changes in the money supply. Velocity does not, as most people believe, have a life of its own unrelated to other factors.

³⁹⁶ While economists believe that deflators wipe out all excess increases in prices except those which account for new goods and services, the fact is that they do not.

³⁹⁷ GDP ≈ National Income; National Income ≈ profits + wages + interest; profits + wages + interest ≈ total business sales revenues – (total business costs – wages). Total business sales revenues minus only capital goods costs leaves profits, wages, and interest. Thus, GDP approximately equals total sales revenues minus only capital goods costs. This means GDP has capital goods costs subtracted out, leaving only (mostly) expenditures for consumer goods (mostly consisting of wages). Therefore, the greater the amount of capital goods expenditures, the more that is subtracted from GDP and the lower is GDP.

³⁹⁸ This, and the next six sections are largely paraphrased directly from George Reisman, Capitalism: A Treatise on Economics (1996).

³⁹⁹ This statement is true with regards to most economists’ mathematical models.

⁴⁰⁰ E. Ray Canterbery, A Brief History of Economics (2001), p. 220.

⁴⁰¹ Though government intervention in the labor market is really Marxist-based, these are socialist policies nonetheless, and Keynes himself clearly promoted socialism.

⁴⁰² John Maynard Keynes, The General Theory of Employment, Interest, and Money (1936), p. 378.

⁴⁰³ As stated by Murray Rothbard, America’s Great Depression (2000).

⁴⁰⁴ Reisman has shown that profits are the difference between sales revenues and costs; net investment is the difference between productive expenditure (which is almost equivalent to sales revenue) and costs.

⁴⁰⁵ John Maynard Keynes, General Theory of Employment, Interest, and Money (1936).

⁴⁰⁶ Keynes formulas, as pointed out by Hans-Herman Hoppe, The Misesian Case Against Keynes (1992): “Income = consumption + investment; saving = income – consumption; therefore, saving = investment.

⁴⁰⁷ In the second case, one has to produce real wealth in order to obtain money. In the first case, one is simply handed money without first producing something to exchange for the money.

⁴⁰⁸ In a free market there would also not be a push to save at the expense of consuming. How much was saved and invested would be determined by individuals and their personal desires.

⁴⁰⁹ It should be noted that almost none of the free-market economics relayed in this book was taught to me in the seven years I spent in universities learning economics. Instead I was taught pro-government economics.

⁴¹⁰ As an investor in our current government-manipulated economy, I, too, benefit from central bank policies of inflating and have incentives to cheer on these policies. But as one seeking increased standards of living for everyone, I abhor them.

⁴¹¹ In fact, many of them abhor economic progress.

⁴¹² Jeffrey Tucker, “Crazy Economists Still Believe in the Free Market,” http://blog.mises.org/9559/crazy-economists-still-believe-in-the-free-market/..

⁴¹³ Thomas E. Woods, “Supporters of Capitalism Are Crazy, Says Harvard,” http://mises.org/story/3379.

⁴¹⁴ As a side note, it should be pointed out that this is exactly what happened in Iraq after the 2003 invasion. Iraqi banknotes were no longer produced, and the currency quickly began to outperform all other currencies. But then the Americans forced the U.S. dollar to be legal tender instead, so that Iraqi citizens would have no choice but to accept a depreciating currency that the U.S. government could print more of at their expense (the wealth redistribution effect).

⁴¹⁵ Ludwig von Mises, Human Action: A Treatise on Economics (1963), p. 850.

⁴¹⁶ Victoria Shannon, “Amazon.com is challenging French competition law,” The New York Times (January 14, 2008).

⁴¹⁷ David Jackson, “Bush: U.S. is not headed into a recession,” USA Today (February 28, 2008).

⁴¹⁸ Robert A. Guth, “Bill Gates Issues Call For Kinder Capitalism,” The Wall Street Journal (January 24, 2008).

⁴¹⁹ Christopher Toothaker, “Some Chavez Allies Slow to Shed Luxuries,” Fox News (December 14, 2007).

⁴²⁰ Foster Klug, “China becomes popular issue in 2008 race,” USA Today (August 14, 2007).

⁴²¹ Individual Chinese companies might compete with American companies in the same industry, but this misses the larger point.

⁴²² Teresa Cespedes and Terry Wade, “Peru’s Fujimori gets 25 years prison for massacres,” Reuters (April 8, 2009).

⁴²³ William Blum, Rogue State: A Guide to the World’s Only Superpower (2006), p. 160

⁴²⁴ Ibid, p. 160.

⁴²⁵ Nicholas Kulish, “German City Wonders How Green Is Too Green,” The New York Times (August 6, 2008).

⁴²⁶ “Many doctors plan to quit or cut back: survey,” Reuters (November 17, 2008).

⁴²⁷ Jim Abrams, “Congress extends jobless benefits, stocks sink,” Fox News (November 20, 2008).

⁴²⁸ “FDIC warns US bank deposit insurance fund may tank,” Agence France-Presse, (March 5, 2009).

⁴²⁹ “Fed OKs Plan To Curb Shady Home Loan Practices,” CBS News (December 18, 2007).

⁴³⁰ Such as Anthony Snowball.

⁴³¹ Stan Liebowitz, “The Real Scandal: How The Feds Invited the Mortgage Mess,” The New York Post (February 5, 2008).

⁴³² Written by Stan Liebowitz, the Ashbel Smith professor of Economics in the Business School at the University of Texas at Dallas.

⁴³³ Holly Ramer, “Giuliani offers Health Plan,” USA Today (July 31, 2007).

⁴³⁴ “Edwards’ plan would raise taxes,” The Associated Press, MSNBC (July 26, 2007).

⁴³⁵ Kelly Olsen, “North Korea’s Kim Jong Il Makes Rare Election Pitch,” ABC News (February 18, 2009).

⁴³⁶ “Paul’s November 5 fundraising push,” CNN (November 5, 2007).

⁴³⁷ Adam Sage, “Oui-Ha! France brings line dancing craze under state control,” The Times Online (May 31, 2008).

⁴³⁸ Jack Kim, “South Korea’s ‘Prophet of Doom’ Indicted,” Reuters (January 22, 2009).