Quotation of the Day…

by Don Boudreaux on July 10, 2011

in Civil Society, Complexity & Emergence, Seen and Unseen

… is from page 614 of Will Durant’s 1950 book, The Age of Faith:

Every cultural flowering finds root and nourishment in an expansion of commerce and industry.

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{ 109 comments }

vidyohs July 10, 2011 at 9:20 pm

Profound, and true.

Don Boudreaux July 10, 2011 at 9:26 pm

I, of course, agree.

It’s a truth that people benighted by romance miss.

vidyohs July 11, 2011 at 1:11 pm

I would submit that if one looks, this truth can be seen demonstrated in as small a unit as the individual

JBaldwin July 10, 2011 at 9:42 pm

Great quote…but I’m still reeling from Geitner’s admission on Meet the Press today: “We don’t have the ability, because of the overhang in housing and the problems in the financial system, to engineer artificially a return to recovery.” …he’s almost ready to admit the administration has a knowledge problem.

Greg Webb July 10, 2011 at 10:07 pm

Timothy Geithner is learning the “curious task of economics.”

muirgeo July 10, 2011 at 10:36 pm

Yeah that it’s hard to clean up the mess of free market fundamentalism when it gets out of control and blows up the global economy like an economic black death. The world is still in the prodromal phases of the complex financial derivatives contagion.

http://www.smartmoney.com/invest/markets/the-next-financial-crisis-will-be-even-worse-1309984020176/

Steve_0 July 10, 2011 at 11:13 pm

When did this free market fundamentalism happen? Somehow all the people on this site aching for such a thing managed to sleep through it, or blink when it happened.

You really want to try to make the argument here that the housing market, medical industry, insurance market, and securities trading aren’t the most heavily regulated, subsidized, licensed, and government enmeshed sectors?

Please, oh please, try to make the argument that those were wild frontiers with no government involvement. I can’t wait to see this.

muirgeo July 11, 2011 at 10:06 am

OK if Wall Street is so heavily regulated how come $1 trillion dollars worth of mortgages were allowed to be leveraged over $100 trillion dollars using complex opaque financial derivatives that NO ONE understands that blew the hell out of the GLOBAL economy? Wake the hell up and stop saying mindless useless things they taught you in Libertarian Sunday school about how heavily regulated Wall Street is.

Seriously, the only reason you guys can say things so stupid and not feel like a total twit is because you are surrounding by like-minded inculcated unthinking people like yourself. To those of us not plugged into the Matix you look like any other religious fanatic who is incapable of recognizing reality.

Answer my question…you can’t… you won’t… these IS NO ASWER that supports your brainwashed unthinking position.

Josh S July 11, 2011 at 10:36 am

muirgeo posts this exact same crap on every single post on this site. It’s pointless to even respond to him; he’ll just repeat again and again that Hoover cut spending, that Bush was a Hayek disciple, that socialism makes everyone rich, blah blah blah.

Sam Grove July 11, 2011 at 12:04 pm

George channels Benito.

Seth July 11, 2011 at 12:35 pm

“OK if Wall Street is so heavily regulated how come $1 trillion dollars worth of mortgages were allowed to be leveraged over $100 trillion dollars using complex opaque financial derivatives that NO ONE understands that blew the hell out of the GLOBAL economy?”

I know that this will fall on deaf ears. But since you asked a good question before launching into your name calling diatribe, I thought it deserved an answer.

The reason the regulators allowed these derivatives is because their political masters in government endorsed them. Politicians endorsed these derivatives because they served their very clearly stated goal of spreading the dream of home ownership.

So, that’s why the regulatory backstop failed to prevent these things.

Unlike you, we are skeptical of the effectiveness of regulators because they are hampered by a knowledge problem (they do not know everything), are so easily influenced by politics and have a seemingly limitless fund to pay for their mistakes (pockets of taxpayers). We think the first reason is enough to be skeptical. The second and third make it worse because those create a moral hazard for regulators and politicians to be careless (who cares if we can spread the costs out across other people while I get my campaign slogan?).

The next logical question is why did markets let these things happen? More clearly stated, why did individuals pay more for these derivatives than they were worth?

I believe there were a combination of reasons.

One reason was that there was an overconfidence in the statistical models used to package these loans, just like there was an overconfidence in the futures of internet companies around 1999. But that’s a typical market swing.

I think another key reason (Russ wrote an essay on this) that made this an atypical market swing is that these investors felt the government was guaranteeing them. So while the underlying asset had a potential of going bust (or booming), there was value in that implied guarantee. It was like playing the lottery with someone elses’ money. And as Russ points out, they turned out to be right. So, the implied guarantee from government distorted the free market.

Do you think the Internet bubble would have been worse or better if government established a quasi-governmental agency to buy risky internet companies? I think worse.

muirgeo July 11, 2011 at 8:22 pm

Seth wrote,

“I know that this will fall on deaf ears.”

“The reason the regulators allowed these derivatives is because their political masters in government endorsed them. Politicians endorsed these derivatives because they served their very clearly stated goal of spreading the dream of home ownership.”

No deaf ears here but you claim is BS. Commodity Futures Modernization Act of 2000 and the Gramm–Leach–Bliley Act were lobbied for, written by and written for bankers not for politiicans wanting to increase home ownership. Youre just making stuff up. It took Wall Street going to DC 9 times before they could finally get GLB passed…. it wasn’t politicians seeking out bankers.

That’s why we need lobby and campaign finance reform… but again these facts fall on deaf ears here.

Greg Webb July 11, 2011 at 12:30 am

LOL, George!

muirgeo July 11, 2011 at 10:09 am

Greg,

It’s really not that funny… millions of lives around the world have been destroyed and humanities progress has been stalled. The real issues humanities needs to address are placed on a back burner while we deal with stupidity and greed.

Ken July 11, 2011 at 2:01 pm

muirgeo,

We’re laughing at YOU. You are the clown of Cafe Hayek and are always good for a laugh.

Regards,
Ken

Greg Webb July 11, 2011 at 2:42 pm

George, you are wrong. Your comments are hilarious! To turn things around, it would be like me, with my education and experience in law, economics, finance, and history, trying to diagnose and explain a childhood illness. I hope that you had a good vacation.

muirgeo July 11, 2011 at 8:28 pm

Nice argument from authority Greg…. I guess we should all bow before Wall Street and submit to their 40% of all corporate profits. Greg… you’re a protector of the political class. That’s why you and others here can’t be bothered to try to explain why 1 trillion dollars of bad loans were the problem and nnot $100 trillion of casino finance… you can’t, you won’t… denial is all that’s left for you guys. It’s notmy absurd arguments that end in the claims of me being irrational. It’s your guys irrationality meeting unanswerable questions that leaves you unable to reply coherantly and to default to things like arguments from authority.

Greg Webb July 12, 2011 at 12:15 am

No, George, not authority. I make my statements based on knowledge, education, and experience.

You do not ask questions because you do not seek knowledge or wisdom. You make false accusations in the form of a question. You do this in the anarchic mob tradition of the French Revolution known as “j’accuse”. In your world, as in the world of Robespierre, there are no crimes, only criminals.

If I were to act as you have, I would have to loudly ask you in a room full of your patients if you beat that child abuse rap. Of course, there would be no truth to such a question as there is no truth to your inaccurate and inflammatory questions to the commenters of this blog. You have acted inappropriately and should apologize.

You clearly support the political class because you advocate giving government, and therefore the political elite, more control and spending power. You are no dummy so quit trying to convince yourself that by opposing individual freedom you are doing anything other than facilitating the political class.

Now, people who want to learn ask legitimate, non-accusatory questions, like “would you explain comparative advantage” or “why does increasing taxes cause economic activity to decline?”. You should start your education in economics by reading Henry Hazlitt’s “Economics in One Lesson” or Thomas Sowell’s “Basic Economics.”

Subhi Andrews July 11, 2011 at 2:45 am

George,

I wanted to give you the benefit of doubt. You wanted debate, and Greg Webb took you upon it. You haven’t responded to Greg’s comments, but you are trolling ( yes, trolling), Cafe Hayek as usual.

You seem to be just flinging invectives at everyone here. Baseless accusations. Most important thing to have an honest debate is to assume good intent on the part of the people you are debating. If I say, you are the worst thing ever happened to humanity, muirgeo wants chinese people to starve to death by the millions, or creating secret plans to bring black death to Vallejo, it will not create a conducive environment for honest debate. That goes both ways.

It reflects poorly on Dr. George Balella.

If one of your patients, your kids, or you wife searches your name, and if this is what comes up, What will they think of you George? If they are fine with it, I have wonder what kind of family you have managed to raise!

maximus July 11, 2011 at 3:34 am

Great observation, Subhi. Better be careful what you write down or say in public. It might come back to bite him. I had employee who was mouthing off in public and it got back to the regional, I had a shitstorm in my ear a couple of days later. But then maybe Kaiser is a horseshit organization and doesn’t care.

muirgeo July 11, 2011 at 10:20 am

“What will they think of you George?”

They will think that I am an advocate for the future of our kids. I stay up through the night sometimes making life and death decisions on children with medicaid… who in your world would be left to die with no insurance or money to pay for their care… what are you doing? How are you serving the world? What will people think of YOU when they know your true beliefs…. You think you could win over my patients and their parents who know me with what YOU believe???? I can confidently say they will hand you your ass!!! Don’t ever try to impugn my intentions… And why don’t you man up and list your full name for all of us to see.. What is your name and whay city do you live in?

You subhi have done nothing to defend your position… you clearly are like everyone else here… with the same ideological beliefs that when confronted with real world rationality is incapable of coping and defaults to attacking personally and ad hominems.

The best you do is run a list of questions that maybe I should ask myself on every position or belief I have… MAYBE you should run yourself your on list on your own beliefs because IMO reality is not supporting your claims.

Sam Grove July 11, 2011 at 12:07 pm

They will think that I am an advocate for the future of our kids.

Or they will realize you are an unwitting advocate of their enslavement to the corporate state through perpetual debt and ubiquitous rules governing every aspect of their lives.

maximus July 11, 2011 at 4:02 pm

@Greg Webb

” I stay up through the night sometimes making life and death decisions on children with medicaid… ”

This is sanctimonious BS. There’s no way he’s the final arbitrator on a decision like this. He might make a recomendation, but no way Kaiser let’s some employee make the final decision. Kaiser carries his freight for him and he fuckin knows it. He thinks he’s above board because someone gave him a title. I had titles too when I was working, I was just never arrogant enough to believe I was always right and there was nothing left to learn.

Greg Webb July 11, 2011 at 9:43 pm

@Maximus, you’re right about George. He does not have the decision making authority that he would like for you, and the rest of us, to think that he has. He has, like all statists, an obsessive need for status and adulation by others. Another example of this was revealed in H. L. Mencken’s quote about Theodore Roosevelt’s need for “applause” that was posted on the Cafe a few days ago.

George needs to feel important and he has “appointed” himself as the “protector of all children.”. And, to be a real superhero, he has has to have a villain. Not a real villain, of course, because, like most statists, he is a coward. So he portrays libertarians — people who advocate freedom for the individual and oppose government coercion — as “evil.”.

What a scam! It’s like CNN “bravely” criticizing President Bush while agreeing not to criticize Saddam Hussein so they could keep their Baghdad office open during the first Gulf War. The reality, however, is that CNN knew that President Bush would not kill CNN reporters no matter what they said. But, CNN also knew that Saddam Hussein would kill CNN reporters for even a slight criticism. So much for “brave” liberal reporters.

Another example is Walter Duranty, a Pulitzer Prize winning reporter for the New York Times who wildly praised Stalin and the Soviet communist system, while knowingly covering up the intentional murder of millions of Russians and Ukrainians when the Soviet central planning system failed and resulted in mass starvation of the surfs. A brave journalist would have reported the truth regardless of the risk. But, Duranty was a liberal who knew that the communists would hunt him down and kill him no matter where he was.

I do not think that George is a bad man. He likes to camp, hike, and enjoy his family. He just has an obsessive desire to control his environment, and everyone in it, and desperately needs to be loved by creating a fiction that he is saving defenseless children from evil “welfare mothers” and libertarians.

And that is why he should never be given any real power over anyone. After all, Adolf Hitler was only an unemployed ex-soldier and bad painter who wanted to save the “good” Germans from the “evil” Jews…at least until he was able to convince a large enough mob to give him virtually unlimited, centralized power. Similar things can be said about Lenin, Stalin, Mao, Pol Pot, etc. There are a lot of cranks in the world and, for the most part, they are harmless, though annoying. The key, as the Founding Fathers knew, is to defuse power and set the factions against each other.

Per Kurowski July 11, 2011 at 7:39 am

@muirgeo “free market fundamentalism”… What?

Yes there was some market fundamentalism but it was quite little of it when compared to the regulatory fundamentalism present when regulators, instead of regulating or supervising, with incredible hubris took upon themselves to be the risk-managers for the world.

The regulators arbitrarily set risk-weight that odiously discriminated against those perceived as “risky”, like the developing country sovereigns, and small businesses and entrepreneurs everywhere, and favored developed sovereigns and whatever was rated triple-A, without the slightest thought about whether the banks were fulfilling the social mission of correct capital allocation that we expect them to do.

And all that was done ignoring, first that the banks and the market already clears for perceived risks by means of the interest rates they charge, and second the fact that no bank crisis ever has resulted from excessive lending to those ex-ante perceived as “risky”, they have already resulted from either fraudulent behavior or excessive lending to those ex-ante perceived as “not-risky”

And as a result, because of that banks were allowed to leverage 62 to 1 when investing in triple-A rated securities backed with lousily awarded mortgages or when lending to Greece, or even leverage to the sky-is-the-limit when lending for instance to the US, UK and Portugal… we are suffering this crisis… and because they can only leverage 12 to 1 when lending to those best in place to provide us the next generation of decent jobs, the small businesses or entrepreneurs… we are kept in this crisis

PS. Loony bank regulations explained in red and blue! http://bit.ly/mQIHoi

muirgeo July 11, 2011 at 10:24 am

Wrong Per,

The reason they could leverage to such extremes with opaque derivatives and keep interest rates low is because they lobbied to get the rules changed and because they captured the regulatory agencies. Greenspan and a total hands off and the Treasury and the FED were filled with their own people. You are denying reality and making up your own to fit your beliefs.

Sam Grove July 11, 2011 at 12:09 pm

The reason they could leverage to such extremes with opaque derivatives and keep interest rates low is because they lobbied to get the rules changed and because they captured the regulatory agencies.

Damn George. Libertarians are well aware of regulatory capture.

Have you any comprehension of the importance of systemic incentives?

Obviously not.

T Rich July 11, 2011 at 2:38 pm

thanks for explaining it to him (again), Sam.

Muir,
why do you always, unfailingly describe an event like regulatory capture as though it is a problem caused by lack of regulation? If the government didn’t make it worthwhile for companies to try to capture their regulators, there wouldn’t be all of the dreadful lobbying and there would be a lot less of the money in politics that you always decry. We want the government to have less influence through regulation.

Banks that are not transparent would be dealt with accordingly. Look what happened to GE stock after Enron crashed (which was not becuase of a lack of regulation or oversight) – their stock dropped 20% or so because the market said, “hey, we can’t make sense of your books either. Clean it up and come back to us, but we are not risking our money on you until you do.” BAM, one day and much more effective than Sar-Box without the ongoing costs.

Greg Webb July 11, 2011 at 2:50 pm

Excellent analyses by Per, Sam, T, Saul, and Steve. One nice thing about a big government ideologue like George is that he gives you the opportunity to sharpen your analytical skills and expand your knowledge base. It is easy to make generalizations, but much more difficult to see through simplistic generalizations and talking points, and carefully craft logical, coherent arguments supported with objective, verifiable facts and evidence. Thanks!

muirgeo July 11, 2011 at 8:35 pm

T Rich wrote,

“Muir,
why do you always, unfailingly describe an event like regulatory capture as though it is a problem caused by lack of regulation? ”

Hmmm…. maybe because from 1933 to 1980 when we had good regulation we didn’t HAVE REGULATORY capture and NO major Bnak collapses or massive economic crisis… and then maybe because when Ronnie Reagan started deregulating we saw regulatory capture, bank collpases and the this ultimate grand finale of an economic morasse we now find ourselves in. HMMM.. that’s not rational thought for you…. the facts are the facts… hstory is history and it does NOT support your claims. No new regulation or control by regulators has been allowed and we are heading for the next big cliff.
So THTA is whyu I … as you say… “unfailingly describe an event like regulatory capture as though it is a problem caused by lack of regulation”…. because I look at the FACTS!!!!

Dan J July 11, 2011 at 9:59 pm

Nothing to see in the 70′s… No economic problems there.

Henry Morgenthau conceded govt policies had failed by 1939. Facts are the NRA was used to set wages, prices, and standards ( expensive standards set by industry leaders that small competitors could not meet and still compete). This industry standards were illegal to not abide by. Businesses were destroyed, unemployment rose, and men landed in jail for setting the price of dry cleaning to a nickel instead of a dime.
The AAA forced African-Americans off the land they worked as their own by farmers who were paid to not use land to artificially raise prices.
Minimum wages were used to discriminate. Blacks would work for less in the south than whites in the north and businesses were investing down south. So, a minimum wage is set o prevent blacks from ‘stealing jobs’. Unemployment rose as technology was used o offset the mandated higher wages and people lost their jobs.
The WPA was a slush fund for politics in buying votes. Money was distributed unequally and into regions, mostly higher populations, not higher unemployment areas, for making sure those voters knew where the money came from. Not surprisingly, the places where the money flowed gave FDR a better voting percentage than elsewhere.
Such corruption. Such filth.
And when FDR policies were challenged and lost in court, he sought to re-order the courts to suit his agenda.

Sam Grove July 12, 2011 at 5:31 pm

Hmmm…. maybe because from 1933 to 1980 when we had good regulation we didn’t HAVE REGULATORY capture

Riiiiight. What did you pay for the bridge?

http://www.independent.org/newsroom/article.asp?id=3116

brotio July 13, 2011 at 3:42 am

Have you any comprehension of the importance of systemic incentives?

Sam,

This is why you’re still the nicest among us. Even after all these years of dealing patiently with Yasafi (and suffering insults only exceeded by those directed at Methinks), you still didn’t write, “Have you any comprehension?” and left it at that.

Kirby July 11, 2011 at 9:19 am

Yep, America has been lasseiz-faire ever since the DOW dropped, according to Muir.

SaulOhio July 11, 2011 at 2:22 pm

Again, WHAT free market fundamentalism? We had:

The Federal Reserve lowering interest rates to 1% between 2002 and 2005, pumping a couple trillion dollars into the economy.
Fannie Mae and Freddie Mac buying up mortgages and bundling them into those derivatives you hate so much.
Clinton’s National homeownership Strategy urging Fannie and Freddie to do it, and urging banks to lower lending standards.
The SEC requiring investment banks (Wall Street) to use ratings agencies, but only certifying three of those agencies, giving them a monopoly.
Measures and laws as far back as the CRA pressuring banks to lower lending standards.
FHA
HUD
Their local equivalents like CMHA here in Cleveland.
Bush’s American Dream Downpayment Act
A long history of previous bailouts, making Wall Street feel safe that if they got into trouble they would be bailed out again.

All of the above, and MUCH, MUCH more, and you blame the consequences on “free market fundamantalism”?

Steve_0 July 11, 2011 at 2:35 pm

1. The existence of Fannie Mae
2. The existence of Freddie Mac
3. The existence of an SEC
4. Medicare
5. Medicaid
6. Social Security
7. SSI
8. Regulations against insurance companies competing across state lines.

Right away, those basic things are clear evidence that there was certainly no free market paradise. Regulation has increased on markets through every presidential term in my lifetime at least. You cannot simply claim this isn’t the case.

A. The intervention in the housing market caused the bubble. Period. Who in the world can dispute this? Congress forced banks to lend to people who could not repay their mortgage.

B. The SEC introduces a positivity bias in the securities market by outlawing insider trading. Those who know Enron, WorldCom, or Healthsouth are worth less than claimed are prevented, by law, from introducing that information into the market. Thus we have securities bubbles.

C. 41% of every dollar on healthcare spending, even before any Obamacare, came through government sources. The ways in which this increased prices have been clearly established many times over.

You can still try to make your argument that any of these interventions are good things, or make your case for government control, but you cannot in good conscience continue to make the absurd assertion that there has been any free market state. Just quit saying it. You’ve been soundly refuted every time you make the claim, and you never manage to provide any evidence to back up your nonsense claim.

Dan J July 11, 2011 at 2:42 pm

Yes! Yes! Saul…… That is it. No sarcasm…..

The first 20 dominos were govt schemes. Then govt dominos placed throughout whenever a gap arrived.

Progressives think all of their schemes would work, if the ‘animal spirits’ can be legislated out.
All of the govt interventionist measures would have been successful, if only govt micromanaged more.

SaulOhio July 11, 2011 at 3:19 pm

Its amazing to me that there still ARE people who blame the Great Recession on the free market. All you need to do to prove them wrong is write out a list of the government programs, law, interventions, regulations and subsidies on the specific market in question, and they SHOULD slink away in shame, if they had any respect for reality at all. But instead, they accuse you of all sorts of nasty things, call you a religious fanatic, extremist, crazy, whatever. They seem to prove that everything they are saying about you is simply psychological projection. They exhibit the very traits they claim you have.

Sam Grove July 12, 2011 at 2:01 am
Jim July 12, 2011 at 1:11 pm

In Muirgeo’s comments today, we find Inconsistency #1 in Progressive thought: Big companies, reliant on customers for their prosperity, can not be trusted and will reduce our freedom, but Big government, reliant on involuntary taxes, can be trusted to protect our well-being.

If I follow the reasoning, human beings entering business are somehow substantially more evil than human beings who enter government. Now if only we could sort them out when they are children!

Methinks1776 July 10, 2011 at 11:05 pm

Wish he’d learn the curios task of paying his taxes.

Steve_0 July 10, 2011 at 11:14 pm

<3

In my mind, I imagine you as the child of H.L. Menken and the resurrected, alien-DNA infused Ripley from Alien 4.

maximus July 10, 2011 at 11:46 pm

I suspect that’s one of the reasons he’s rumored to be the latest rat deserting the sinking ship. After all. with big hitters like Chaz Gasparino following your every move as a guvvie servant, gotta be pretty tough to cheat on those taxes. Time to rehabilitate that image and land that big time goldy saks job.

Jonathan M. F. Catalán July 10, 2011 at 10:19 pm

Geitner’s argument is similar to Greenspan’s and others. They believe that a strong housing market is a sign of a strong economy, and thus without a recovery in the housing market you can’t have a strong recovery in general.

SheetWise July 11, 2011 at 2:25 am

“They believe that a strong housing market is a sign of a strong economy, and thus without a recovery in the housing market you can’t have a strong recovery in general.”

But only an open and free market. It means nothing in a manipulated market. Go figure.

Kirby July 11, 2011 at 9:20 am

Manipulated markets don’t have rules; they long since lost funding for law books.

Jim July 12, 2011 at 1:18 pm

Since most economic activity relies on real estate in some form, there is reason to believe that stagflation will persist until the market in real estate is resolved.

But that makes Geitner’s comments even more perplexing. For surely TARP delayed ALL real estate prices from finding their new levels through debt and pricing restructure. It is part of what made TARP such a horrendous and stupid idea; those loans are still rotting away on Balance Sheets all over the country while the Fed denigrates the dollar to buy up even more of them.

Economiser July 11, 2011 at 1:21 pm

When DO we have the ability to engineer artificially a return to recovery?

muirgeo July 10, 2011 at 10:51 pm

Renaissance -> Reformation -> Enlightenment -> THEN the industrial Revolution – > Then the Age of Revolutions -> Then Contemporary Democracy -> now the Corporate Takeover -> next ?

Good policy is a prerequisite to good economics.

Dan J July 10, 2011 at 11:43 pm

Thanx, Marxist.

muirgeo July 11, 2011 at 12:21 am

No problem economic terrorist.

Dan J July 11, 2011 at 1:25 am

Recognize that Karl Marx path. ‘historical process of capitalism to socialism to communism’? Marx forgot authoritarian takeover and then death and destruction of tens of million. Labour exploitation by the corporations who are ‘taking over’? Technology replacing labour, as Obama complained about ATM’s. The Republican working with corporatists to thwart worker revolt (minimizing unions)?

muirgeo July 11, 2011 at 10:26 am

It’s not Marx’s history… its real world history.

Dan J July 11, 2011 at 2:34 pm

Be careful, doc. The legend about Licking the tip of the otoscope can give you a high is supposed to be a myth. I find it hard to believe that cerumen is a hallucinogen. How’s it working for ya? When looking at history, don’t use a kaleidoscope.

Greg Webb July 11, 2011 at 12:32 am

George is not a Marxist. He’s a pediatrician.

Terc July 11, 2011 at 10:24 am

Are you saying that Dr. George Balella, pediatrician, has been taking time out of his workday, treating patients, to type hateful invective in the comment section of a blog? I don’t believe it.

muirgeo July 11, 2011 at 8:37 pm

And Marx was more of a historian than an economist.

Dan J July 11, 2011 at 10:06 pm

And you more of a pediatrician than an economist?

Greg Webb July 11, 2011 at 12:34 am

Dan J., and you have studied both economics and history.

Ken July 11, 2011 at 1:36 am

Thanks again, muirgeo, for putting on display your historical ignorance.

I guess you were just unaware that the Magna Carta predated all those things you just mentioned. It’s only the first document in the west that limited a kings powers and began the diffusion of liberty to the lower classes. This document came about after a combination of higher taxes and unsuccessful wars and religious conflict. Sound at all familiar?

This set the foundation for wealth creation that financed the Renaissance. Care to guess where that wealth came from? That’s right muirgeo, liberty and free trade. A diffusion of power away from a king who wanted nothing more than to take as much from his subjects and spend on his own pet projects.

Or do you really think that the Renaissance just happened in a vacuum after centuries of stasis?

Regards
Ken

ArrowSmith July 11, 2011 at 4:13 pm

The key thing about the Magna Carta is that it signified the beginning of the end of “divine right of kings”. Until that point there was no possibility of emerging from the Dark Ages.

muirgeo July 11, 2011 at 8:39 pm

Oh so you guys are for redistributing the private property of Kings????

But isn’t private property a key element of libertarianism. Why do you think you have a right to steal what the kings earned?

Do you hate the wealthy and the productive?

Fricking commies….

Ken July 11, 2011 at 11:12 pm

Hey dumbass,

This didn’t redistribute the private property of kings. It restricted the kings ability to redistribute other people’s property to himself.

Idiot.

Regards,
Ken

ArrowSmith July 12, 2011 at 2:09 pm

My god…. Dumb is just dumb.

frank33328 July 11, 2011 at 6:43 am

“Reformation -> Enlightenment -> THEN the industrial Revolution
Good policy is a prerequisite to good economics.”

Actually, I agree with Murigeo on this one (at least the part quoted above).

Kirby July 11, 2011 at 9:25 am

Renaissance -> Reformation -> Enlightenment -> THEN the industrial Revolution – > Then the Age of Revolutions -> Then Contemporary Democracy -> Communism -> Billions dead, whole countries impoverished, technology set back 30 years -> economic collapse and facism -> Capitalism, except for sad, sad countries like Cuba, NK, and afghanistan, with defunct facist governments. ->Modern Day

muirgeo July 11, 2011 at 10:30 am

Which contemporary democracy is now communist???

I didn’t think so….

Kirby July 11, 2011 at 4:24 pm

sorry, I meant to replace contemporary democracy with oligarchy/monarchy.

muirgeo July 11, 2011 at 8:41 pm

You might want to read your history a little more…. then get back with us… cus that made no sense.

Ken July 12, 2011 at 5:24 pm

muirgeo,

Pot? Kettle?

Regards,
Ken

Josh S July 11, 2011 at 10:38 am

If you think Wall Street isn’t regulated, try starting your own bank or your own hedge fund without consulting a lawyer, and see how quickly you end up in jail.

Steve_0 July 12, 2011 at 2:50 am

Above, you said regulatory capture was a problem.

What is there to be captured if we have such a free market?

Single Acts Of Tyranny July 10, 2011 at 11:53 pm

Yes indeed, so it always makes me laugh when I hear about government support for “The Arts”

Dan J July 11, 2011 at 1:45 am

Cowboy poetry festival.

Oh, Harry Reid, you silly man.

http://www.politico.com/blogs/glennthrush/0311/Reid_Save_federal_funding_for_the_cowboy_poets.html

For the love of God, govt must fund the arts.

maximus July 11, 2011 at 2:15 am

Believe me, I’ve been to Elko. There’s enough money floating around there that if the locals cared enough for their poetry festival it could be funded without taxpayers help.

SheetWise July 11, 2011 at 2:30 am

Elko — you’ve been to Elko? Tell Murray that the $5 he asked me to bet on Clear Sailing in the fourth placed, and that he can collect from Flo the $7.80 I owe him.

maximus July 11, 2011 at 2:42 am

More than once. But us big hitters in Elko don’t worry about your pocket change. Go play the penny slots in Reno, Jacko.

Actually would love to move there if my family would let me. There are places in Nevada that are absolutely beautiful. If you don’t mind the high desert.

vidyohs July 11, 2011 at 7:25 am

@Maximus
Drove the stretch between Reno and Tooele, Ut, every weekend for about 6 months when I was getting a business in Reno off the ground and doing it in the dead of winter is when it is the prettiest when the snow squalls chase you for miles.

If you want a really good look at the high desert, drive the stretch between Ely and Reno along the “nation’s loneliest highway”.

maximus July 11, 2011 at 2:29 pm

@Vidyohs:

Always wanted to make that trip from Reno to Ely. You got huge cahones driving around Nevada in the winter. I was driving the highway that runs from Winnemucca to Nampa ID one time back in the 80″s coming off a mountain pass trying to see how fast my bitchin 2.6L 4 banger would go when I looked up and saw this fighter jet coming straight at me a few hundred feet off the ground. After coming to an almost complete stop trying to figure out what this guy was doing, he got within a mile or so from me and peeled off to the west. When I got to my destination I told my father about it (he’s ex-Air Force), he told me I was probably being used as target practice cause I was the only thing moving around out there. Now that’s a lonely stretch of highway.

DG Lesvic July 11, 2011 at 12:05 am

I attended a lecture by Will Durant, I believe, in Pasadena around 1946 or 47, I believe.

He said that nuclear war between Russian and the US was inevitable.

maximus July 11, 2011 at 2:13 am

“He said that nuclear war between Russian and the US was inevitable”
Who won?

vikingvista July 11, 2011 at 2:57 am

Nobody. Destruction was mutually assured.

DG Lesvic July 11, 2011 at 3:00 am

He did. He married a student of his whom he described as the cutest thing from head to toe he’d ever seen.

maximus July 11, 2011 at 3:24 am

Thank God you have a sense of humor D G. Looks like Viking took the question seriously.

DG Lesvic July 11, 2011 at 4:05 am

Viking doesn’t need a sense of humour. He’s the joke.

Incidentally, my wife had pretty cute toes, too. Unfortunately, that’s where it ended.

vidyohs July 11, 2011 at 7:59 am

DGL,
I am not sure I understand your comment. Can you chart or graph that for us so we can visually see your point?
Tks in advance.

vikingvista July 11, 2011 at 8:44 am

Yep. Because everyone knows Russia and the US were destroyed.

DG Lesvic July 11, 2011 at 9:26 am

Don’t mention charts and graphs to Viking. That’s a painful subject for him.

maximus July 11, 2011 at 2:46 pm

@Viking:
Just needling you a lil bit. LOL. I actually have alot of respect for your comments on this blog.

@DG:
Yeah I’d like to see the calculus along with the charts Vidyohs requested. Without that I can’t be sure the world didn’t end 40 years ago.

DG Lesvic July 11, 2011 at 8:20 pm

Max,

You’re right. Viking is one of the best.

I just seem to bring out the worst in otherwise good people, and turn the sane into raving lunatics.

My wife, my dog, and most Austrian School economists.

It’s a gift.

gold bracelets July 11, 2011 at 12:22 am

I think the author have written the good thing that “Every cultural flowering finds root and nourishment in an expansion of commerce and industry.”
The quotation he wrote is very nice and inspirational.

Iain July 11, 2011 at 12:48 am

Lol, historically the Marxists are the “economic terrorists”.

vidyohs July 11, 2011 at 7:32 am

Yep! When you sit in a room of 50-60 college age kids who are being led in a “Kill Capitalism” chant by a 50 year old anarchist you know two things, socialist/communist are stupid and this nation is in trouble if we take that group as representative of a noticeable portion of college kids.

I had the experience at St. Thomas University here in Houston. Until then I didn’t really realize how bad it was on a typical campus.

Steve_0 July 12, 2011 at 2:53 am

Hey… you’re giving anarchists a bad name with your passion play. Can you change that to “aging communist”.

I’m met some anarchists. They’re quite nice, and we differ only by degrees. Of course, I’ve also met some “anarchists(TM)” who don’t seem to really understand what it is they are calling themselves.

vidyohs July 12, 2011 at 7:13 am

“I’ve also met some “anarchists(TM)” who don’t seem to really understand what it is they are calling themselves.”

Yes sir, I can understand that. However, in the case I mentioned, what matters is what he called himself and how that warped what the kids believed.

Were they mature enough to ask, “why would an anarchist want to destroy or kill capitalism”? The absence of government doesn’t equate with the killing of capitalism except in twisted little minds.

Chucklehead July 11, 2011 at 2:16 am

Sorry for being off topic but thought you might want to know:
Keynes v Hayek at the LSE
By Dr Tim Evans, on 6 July 11

This will be interesting. An LSE and BBC Radio 4 public debate on Keynes v Hayek is to be held on Tuesday 26 July 2011 at the LSE Old Theatre, Old Building, between 6.30pm and 8pm. To be chaired by Paul Mason, the speakers are still being confirmed. However, an early email suggests that Professor Lord Skidelsky will be defending Keynes while TCC Advisory Board member Dr. Jamie Whyte will be promoting Hayek.

This event is free and open to all with no ticket required. Entry is on a first come, first served basis. For any queries email events@lse.ac.uk or call 020 7955 6043.

Media queries: please contact the Press Office if you would like to reserve a press seat or have a media query about this event, email pressoffice@lse.ac.uk

Alternatively, the debate will be transmitted on Wednesday 3rd August, 8pm (repeated on Saturday 6th August at 10.15pm) on BBC Radio 4.

Fake Herzog July 11, 2011 at 2:48 pm

I hate to rain on Durant’s parade, but his quote is nonsense. I would argue much of great Western art/culture found root and nourishment in the church, not the “expansion of commerce and industry” (although perhaps commerce and industry helped sustain culture, although military conquest also helped).

jjoxman July 11, 2011 at 3:16 pm

I don’t think your argument holds water. Maybe the best discussion of this is McCloskey’s “Bourgeois” series, currently on the second book.

But consider this: without the division of labor and mechanization, how much “culture” could possibly exist?

Ken July 11, 2011 at 4:09 pm

Fake,

“much of great Western art/culture found root and nourishment in the church”

Didn’t Homer, Euripides, Aeschylus, Pindar, Plato, Aristotle, Socrates, Xenophon, Pythagoras, Archimedes, Virgil, Ovid, etc. predate the church. In other words, those that laid the foundation for western civilization and culture came BEFORE anyone even heard of Jesus or the church even came into existence?

In fact, the rise of Christianity is notable for its coincidence with the decline of Western Civ into the era known as the Dark Ages. The Renaissance is notable for the return of Greek philosophy and art. The church survived by internalizing much of the Greek philosophy. This Greek internalization period is coincident with the rise of the modern West.

In other words, your comment is notable for its lack of historical knowledge and understanding, i.e., its utter nonsense.

Regards,
Ken

Ken July 11, 2011 at 4:11 pm

Also, what I didn’t make clear is that Greek philosophy championed individual liberty and free thought, and ancient Athens was built on commerce and industry.

Regards,
Ken

ArrowSmith July 11, 2011 at 4:16 pm

and all those slaves…

Kirby July 11, 2011 at 4:26 pm

A minority of slaves is better than the entire country being comrades.

Dan J July 11, 2011 at 4:31 pm

Wasn’t until recent history that slavery became taboo. Yet, it is still used.

Ken July 11, 2011 at 4:44 pm

AS,

Ah, yes, the cheap shot reference to slavery with no context, nor historical knowledge, nor, especially, comparisons to other societies. I often forget there are others on this site as historically ignorant as muirgeo.

Regards,
Ken

Fake Herzog July 11, 2011 at 4:41 pm

Ken,

Fair enough — both Athens and Jerusalem gave much to Western Civilization. Personally I’d take Dante over Homer or a Gothic cathedral over the Acropolis, but the Greeks were remarkable in many ways. However, even in classical Greece, it is not clear to me how much culture “found root and nourishment in the expansion of commerce and industry”. It seems like the Ancient Greeks were much better at war and empire building than “commerce and industry” and their art often reflected those themes (see e.g. Homer). But certainly trade helped sustain their empire, so again, I don’t think it is wrong to say “commerce and industry” help art and culture grow, but to claim that “every cultural flowering finds root” in “commerce and industry” seems like a stretch to me.

Ken July 11, 2011 at 4:58 pm

Fake,

“It seems like the Ancient Greeks were much better at war and empire building than “commerce and industry””

Not so sure about the empire part, but the war part is definitely true, as was true for ALL OTHER ANCIENT SOCIETIES. Well what made the Greeks special? Have you ever read The Iliad? It’s as much an anti-war book as Full Metal Jacket is an anti-war movie. The whole point of The Iliad is to illustrate the barbarism, the horror, and utter destruction associated with war. It puts on full display the inhumanness of Achilles as he gives into his killing rage upon the death of Patroclus. He commits the gravest of sins by desecrating the body of Hector.

Read the Iliad and you’ll find that Homer understands the terribleness of war. He humanizes the deaths of Greeks and Trojans alike, never glossing over a death as if it were nothing, almost always providing a short bio for each fallen man. The word “Rage” is the first word in the Iliad. A word that isn’t about glory or reason or honor. The war was fought over a cheating wife for gods sake. You think Homer didn’t see the absurdity or did you just not pick up on that as you read it?

The Greeks differed from all other cultures by recognizing war as the terrible event that it is and respecting commerce and industry to a far greater extent than any other at the time. It is certainly not a stretch to say that every flowering culture roots in commerce and industry. Can you name one in history that isn’t built on the wealth created by commerce and industry? Just one ? Of course not.

Regards,
Ken

Fake Herzog July 11, 2011 at 5:44 pm

“It is certainly not a stretch to say that every flowering culture roots in commerce and industry. Can you name one in history that isn’t built on the wealth created by commerce and industry? Just one ? Of course not.”

How about Viking culture — again seems like it depended more on conquest than on commerce and industry. Or course, other than “Grendel” and some Norse myths, I’m not sure there is much I really admire in Viking culture, but you asked for one example…

Anyway, I think we’ll just have to agree to disagree about what it means to “find root and nourishment”. Again, I agree that commerce and industry and help sustain and maybe even grow a culture, but it generally cannot give a culture inspiration and produce cultural ideas. I would also agree that a society that values property rights will probably sustain great culture better than communal cultures — an artist can make money off of his art and can hope for a home for his art in posterity. But the artist might be just as inclined to sculpt a great work of art for the church as he would be for a merchant.

Ken July 11, 2011 at 6:18 pm

Fake,

“How about Viking culture”

You mean the culture that was predominately farmers and seagoing traders? That culture? Yeah, while it’s true that they could be a group of marauders, they were by and large farmers and traders.

“I think we’ll just have to agree to disagree”

This is the pussy’s way of saying “I’m not really interested in the truth” particularly in the case of people like you who seem to be ignorant of important historical events and stick pretty much their preferred narrative.

“it generally cannot give a culture inspiration and produce cultural ideas”

What makes you say that? The inspiration of the individual spirit that gives rise to commerce and industry as much as to culture. And it’s true that commerce and industry have to come first in order to develop the wealth needed to develop the resources necessary to develop the culture.

“an artist can make money”

An artist can only make money if there is wealth to be spent on luxury items like art. In other words, a wealth culture.

Regards,
Ken

Regards,
Ken

Sam Grove July 11, 2011 at 7:05 pm

With out commerce and industry, any culture is geared toward subsistence.

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