What's the monetarist criticism of the austrian theory of the business cycle?

Taxation by force is the problem. Why is it so obvious to most that people should have the right to believe in what they want, when they can’t spend their money as they want? A separation of money from politics is needed to have a true free market.

Due to forced taxation politicians have a commodity to sell. Special interests are buyers. Money buys power, power buys money the problem gets worse. Many waste their energy fighting for their share of the stolen money, other waste their creativity trying to avoid taxes. In these wasteful fights those who can’t fight lose in a relative and absolute way, those who win lose in an absolute way. So many inefficient ways of spending labour, thoughts and money.

Market monopolies are a diminishing problem. New sectors and industries are created all the time, for each new sector a monopoly in one gives less power.

I’m not in favor of Anarchy. Altruism is real, in general I think self interest is a much more powerful drive than altruism, that’s the reason I think the free market utopia could work while the communist utopia don’t. What do u do if u have more money than u need? U either give some to the government to finance rule of law by altruistic reasons, or u give some money to the government to protect ur wealth from those without out of pure self interests.
 
Quote from Voodoo-king:

Taxation by force is the problem. Why is it so obvious to most that people should have the right to believe in what they want, when they can’t spend their money as they want? A separation of money from politics is needed to have a true free market.

Due to forced taxation politicians have a commodity to sell. Special interests are buyers. Money buys power, power buys money the problem gets worse. Many waste their energy fighting for their share of the stolen money, other waste their creativity trying to avoid taxes. In these wasteful fights those who can’t fight lose in a relative and absolute way, those who win lose in an absolute way. So many inefficient ways of spending labour, thoughts and money.

Market monopolies are a diminishing problem. New sectors and industries are created all the time, for each new sector a monopoly in one gives less power.

I’m not in favor of Anarchy. Altruism is real, in general I think self interest is a much more powerful drive than altruism, that’s the reason I think the free market utopia could work while the communist utopia don’t. What do u do if u have more money than u need? U either give some to the government to finance rule of law by altruistic reasons, or u give some money to the government to protect ur wealth from those without out of pure self interests.
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The problem with taxes is that everyone knows they create problems, and inefficiencies.

There are a few approaches as to how to finance the necessary services that the gov provides, if you eliminate the gov. One way is to minimize the gov giving control of most of it´s functions to private companies, that should charge a market price for their services... so if you want to use a freeway that was build by a private corp, you need to pay the toll first...

I would like to see, for instance political parties becoming publicly traded companies, giving the public a chance to choose the people directing the party... so they wont be able to simply pick a new set of puppets every 4 years for you to choose from.
 
Guys - first of all, great discussion, I'm enjoying this thread and all the replies quite a lot.

While doing unrelated research, I incidentally just came across this article, an episode in history that I hadn't heard of before: The Johnson Range Wars. http://www.wyomingtalesandtrails.com/johnson.html

Wyoming, even today the high temple of libertarian Republicanism, was as free a market as it gets in the late 1800s. Minimal to no government intervention in anything.

What happened there in the near-total absence of any governmental regulation? The owners of the few big ranches, guys with thousands and thousands of head of cattle, decided to squeeze out the smalltime ranchers who had a few dozen each. The little guys resisted.

After years of various shady tactics, the big ranchers got together and hired a bunch of thugs to murder the smaller ranchers rather than run the (extremely remote) risk that they might someday be displaced from their positions. The sheriff put together a possee, so the big ranchers used their political connections to get their hired guns off the hook.

I realize this is an extreme example, but it typifies what some people in any country and at any historical epoch or situation do when given the chance: try to seize whatever they can for themselves, and crush anyone who gets in the way. Laws, society, fair play, morals, ethics, honor, and any other abstract concept are all irrelevant to them.

The government (or at least a democratically elected government) differs from a monopoly in an important way: it is not centrally controlled by a tiny group of people exclusively for their own benefit. Politicians can be, and are, replaced by the social system when they get too corrupt and self-interested.

The market manipulators and monopolists consider themselves and act above any sort of system, even above human society. This leaves force as the only means of dealing with them, since they refuse to acknowledge any other forms of control on their behavior. The government is just an elaborate social mechanism for regulating the legitimate use of force. So long as governmental power remains to some extent decentralized, as the democratic process is designed to ensure, I think it is entirely appropriate that its force be wielded to ensure a level economic playing field, and it must use a very strong hand in doing so if we are to expect the violators of market regulations to pay any attention whatsoever. When there is a power vacuum, as in Wyoming in the late 1800s, somebody will step in to fill it (and in effect become the new government themselves, and assuredly not a democratic government.)

My question is, then, in the absence of a powerful government to regulate the markets, what is to be done about those small groups in every time and place who band together, pay no heed to annoying rules or contracts, and seize control of the resources the market is meant to allocate for themselves by means of force and deceit?
 
Quote from Hydroblunt:


You free market guys keep assuming that the players of the game would be honorable and noble about their business. Even with government regulations in USA, the welfare state, you can barely get even a fraction of these companies to be somewhat considerate, how in the world can you expect these same players to do the same in a free market environment?
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Nevadan

Please reread this. Then re-establish what you mean by "free market".

I stand by my statement that Russia in 1990s is the closest to "free market" you have ever seen. Minimal government involvement, free-for-all. If you wanted to come to the auctions, you could have. Just good luck finding out that info.

If you want true free market competition, someone has to play hall monitor. But that goes against the whole free market theory. Sounds like the concept is flawed.

Eventually you will get to the big picture.
 
Quote from Raul641:

Guys - first of all, great discussion, I'm enjoying this thread and all the replies quite a lot.

While doing unrelated research, I incidentally just came across this article, an episode in history that I hadn't heard of before: The Johnson Range Wars. http://www.wyomingtalesandtrails.com/johnson.html

Wyoming, even today the high temple of libertarian Republicanism, was as free a market as it gets in the late 1800s. Minimal to no government intervention in anything.

What happened there in the near-total absence of any governmental regulation?
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Whoa cowboy!

Austrian School free market thought doesn't imply nor endorse a state of nature vis-a-vis personal and property rights. In fact, it is just the opposite.Your example of Wyoming show a territory in its infancy, statehood only 2 years old, and land use laws still not common.

A gang of powerful ranchers with the instruments of the law in thier pockets that siezes the lands of small ranchers is but a naked example of property re-distribution by the gun.

Many people feel the same way about excessive taxation.
 
As one of my professors used to say,


Inflation is the tax you must pay for being poor. It is the most evil of all taxes, and that one that brings the most distortions to the market.
 
Quote from Raul641:

Guys - first of all, great discussion, I'm enjoying this thread and all the replies quite a lot.

While doing unrelated research, I incidentally just came across this article, an episode in history that I hadn't heard of before: The Johnson Range Wars. http://www.wyomingtalesandtrails.com/johnson.html

Wyoming, even today the high temple of libertarian Republicanism, was as free a market as it gets in the late 1800s. Minimal to no government intervention in anything.

What happened there in the near-total absence of any governmental regulation? The owners of the few big ranches, guys with thousands and thousands of head of cattle, decided to squeeze out the smalltime ranchers who had a few dozen each. The little guys resisted.

After years of various shady tactics, the big ranchers got together and hired a bunch of thugs to murder the smaller ranchers rather than run the (extremely remote) risk that they might someday be displaced from their positions. The sheriff put together a possee, so the big ranchers used their political connections to get their hired guns off the hook.

I realize this is an extreme example, but it typifies what some people in any country and at any historical epoch or situation do when given the chance: try to seize whatever they can for themselves, and crush anyone who gets in the way. Laws, society, fair play, morals, ethics, honor, and any other abstract concept are all irrelevant to them.

The government (or at least a democratically elected government) differs from a monopoly in an important way: it is not centrally controlled by a tiny group of people exclusively for their own benefit. Politicians can be, and are, replaced by the social system when they get too corrupt and self-interested.

The market manipulators and monopolists consider themselves and act above any sort of system, even above human society. This leaves force as the only means of dealing with them, since they refuse to acknowledge any other forms of control on their behavior. The government is just an elaborate social mechanism for regulating the legitimate use of force. So long as governmental power remains to some extent decentralized, as the democratic process is designed to ensure, I think it is entirely appropriate that its force be wielded to ensure a level economic playing field, and it must use a very strong hand in doing so if we are to expect the violators of market regulations to pay any attention whatsoever. When there is a power vacuum, as in Wyoming in the late 1800s, somebody will step in to fill it (and in effect become the new government themselves, and assuredly not a democratic government.)

My question is, then, in the absence of a powerful government to regulate the markets, what is to be done about those small groups in every time and place who band together, pay no heed to annoying rules or contracts, and seize control of the resources the market is meant to allocate for themselves by means of force and deceit?
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Great post. I agree totally.

Government regulation of markets should be minimal-to-none save swift and severe regulation of monopolies.

By definition, a free market can never be sustained because monopolies will invariably form and destroy the very thing that makes markets fair - competition.

Strange we'd even have to debate that.
 
Quote from achilles28:

Government regulation of markets should be minimal-to-none save swift and severe regulation of monopolies.
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Been there done that, look up the Sherman Antitrust acts. All that happened is that the broken up companies were still all owned by the same group of people and the same game continued. It takes much more than minimal regulation to prevent monopolies and oligopolies. It gets quite complicated, just so many tricks and loopholes around the simple monopoly.

What you basically want is an economic environment where the corporations are thwarted from their natural course & ultimate goal toward consolidation & monopolies (aka market domination) with minimal government interference. Just unrealistic.

Look at today environment, the consolidation of giant corporations. Eventually the government has to give in to the pressure.

That's why free-market-competition is a frivilous concept. It goes against the central concept & goal of capitalism.
 
Quote from Hydroblunt:

That's why free-market-competition is a frivilous concept. It goes against the central concept & goal of capitalism.
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isn't that ironic?
 
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