Here's Lionel Robbins, from his 1934 book The Great Depression, giving us the advice that was ignored then and is being ignored now:
"The habit of intervening to prop up unsound positions and to support particular interests must cease. Nothing must be done which will encourage business men to believe that they will not be allowed to go under if they make mistakes or if the conditions of the market make necessary a contraction of their industry. Instead of being more and more an official of the State, hampered on all sides by administrative rules and regulations, the business man should be freed as far as possible to perform that function which is his main justification in a society organized, not for the benefit of the part but of the whole, namely, the assumption of risk and the planning of initiative. The same principle must underlie the treatment of private property. Property must be left to stand on its own legs. Intervention to maintain the value of existing property - i.e., to frustrate the effects of change in the conditions of demand and supply - must cease. The property owner must learn that only by continually satisfying the demands of the consumer can he hope to maintain intact its value. Only in such conditions can we hope for the emergence of a structure of industry which is stable in the sense that it can change without recurrent catastrophe."
Monday 29 December 2008
Here's an Idea: Let's Learn Absolutely Nothing
From the Mises Economic blog:
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2 comments:
I agree entirely with the sentiments expressed in this extract but it should be noted that Robbins himself did an about face on this book in his later life, declaring at one point that he wished he had never written it. He abandoned the Austrian Economics that so deeply imbued the book's every page, rejecting it in favour of Keynesianism.
Sad realy 'cos its a rather excellent little book.
Yeah, those Austrians don't use maths and although all their core arguments are persuasive, sound and based on a solid understanding of human action they are still wrong.
Because..... um.... well we don't have to actually REFUTE their arguments. Let's just say something about how Keynes or Friedman rock.
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