Schizophrenic Economists
Gary North is currently publishing a series on money in his fortnightly newsletter. His latest article, highlights one of the most serious problems with modern economic theory.If monetary theory is accurate, it is a subset of general economic theory, which must also be accurate. Monetary theory is not an independent theory of human action that is divorced analytically from a general theory of human action.
This disconnect between monetary theory and general economic theory is the major flaw with modern economics. It is also the main reason that mainstream economisst did not foresee the financial crisis.
Only the Austrian School of economics believes this and adheres to it in practice. All other systems of economic thought segregate monetary theory from general economic theory.
There is a reason for this. Bankers for five centuries have benefited from a grant of privilege from the state: a legal privilege. Banks are allowed to write contracts that are prohibited to all other profit-seeking agencies. They are allowed to promise depositors immediate payment, yet they lend the depositors' money to borrowers.
Non-Austrian School free market economists do not challenge this legal arrangement, either in the name of economics (counterfeiting) or law (special privilege). They accept it. They do more than accept it. The applaud it, but in a value- free, totally neutral academic way. They are apologists for this grant of privilege.
They pay an intellectual price for their cheerleading. They cannot conceptually integrate this grant of privilege into their general theory of economic causation, which rests on a concept of private ownership and enforceable contracts. They make no attempt to square the analytical circle. They remain silent about this anomaly.
They pretend that their various rival theories of economic causation are coherent. They aren't.
2 comments:
Ron, I have a fresh clear word on the economy. We are about to reach a critical turning point. We may have already reached it.
Now, the question is how, how can I get this to the most people who have something to lose.
The Blog is under Read. Facebook is weak. I have a hundred people on an email list. I have Open Heaven.
BUT what to do? I'm pondering.
There is no easy answer.
First, ask the Lord how he wants the word delivered. If he is able to deliver a word, he is also able to give instructions about how he wants it delivered.
Second, your only responsibility is to deliver the word in the way that he guides. You are not accountable for the success or failure of the word, or the distance it travels.
Third, the Holy Spirit is responsible for watching over his word and ensuring that it gets to those who need to hear it. He can achieve that in a multitude of ways. If a word is pure and clear, he will get it to those who need to hear it. He is an expert at getting the word of a voice crying in the wilderness into the anterooms of kings.
Fourth, the first task of the prophet is to listen to the Lord and get the word clear. A confused or impure word will go nowhere.
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