There is still one Austrian Economic School? Is it a minor deviation from Hayek’s methodological framework or is it still an existing tool for addressing today’s economic and social challenges? One can reason currency privatization In a world that witnessed the birth of cryptocurrencies? Does it still make sense to talk about excessive money supply inflation? Can the monetary policies of the European Central Bank and Mario Draghi be judged in light of Austrian monetary theories? These are all silly rhetorical questions that are answered in the affirmative pandemic and dirigisme by Huerta de Soto, on the types of Ibl, by one of the most interesting heirs of the history of economic and social thought.
Huerta de Soto, whose cultural roots were well planted in the twentieth century, has never ceased to apply the lesson of Austria to today’s world. We can go straight to the last chapter, to the unconventional reading of pandemic, in fact it would be better to say to the decomposing response to planning states and all-knowing states, to understand how today more than ever we must rethink the logical hake. The virus is treated by Our, with an explicit reference, in the same way Mises treated socialism: A good excuse to limit our freedoms Social and economic as a function of a noble but elusive goal on paper.
But the most interesting part is that of the disruptions, according to de Soto, caused by the monetary policies of European Central Bank And the feed itWho printed money as if there was no tomorrow. The economic mainstream, which for de Soto consists of Keynesians and monetarists, has Minimizing the mistakes of monetary policy that led to the crisis. However, the crisis of 2008, like that of 1929, arose from the so-called concessional credit, which was caused not by excess savings, but by the behavior of central banks. For De Soto, we had a drunkard in custody and to save him we filled him with wodka. The origins of the two crises are monetary as well as imminent and upcoming.
We have not realized, as the Spanish economist writes, how artificial expansions of credit and money, while not generating inflation, have prevented a “healthy deflation” of consumer prices in the past 30 years. The thesis, which will then be taken up more fully in the context of the book, is this The long-term monetary shock has a recessive character. Artificially low interest rates and policies aimed at creating a new monetary base that provide “bread today and hunger for tomorrow”. For the Spanish economist, we live in a continuous bubble, good when we are in the “baking” stage, bad when it deflates. The fact that monetary policy was expansionary until the 2008 crisis, and that it was not accompanied by a rise in consumer prices, derives from the fact that productivity increases masked inflation. As if to say: Inflation was there, okay, but buried by low prices at the industrial and production level. If there was no surplus money, consumers would have been able to enjoy this general reduction in prices.
To read a documented and intelligent critique of the mainstream on a topic interest rates The behavior of central banks, however one cannot think of it, except for this reading.
Nicolas Burrow, July 24, 2022
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