Hayek's Planned Economy

"It is of the utmost importance to the argument of this book for the reader to keep in mind that the planning against which all our criticism is directed is SOLELY the planning against competition — the planning which is to be substituted for competition. This is the more important as we cannot, within the scope of this book, enter into a discussion of the VERY NECESSARY planning which is required to make competition as effective and beneficial as possible. But as in current usage 'planning' has become almost synonymous with the former kind of planning, it will sometimes be inevitable for the sake of brevity to refer to it simply as planning, even though this means leaving to our opponents a very good word meriting a better fate." Hayek, Road to Serfdom, Chap 3

LIFE beyond scope ... IS beyond hope

We look back on medieval theologians arguing about how many angels could dance on the head of a pin while princes and peasants killed one another in the name of God and we marvel at their appalling neglect of the REAL world around them. And yet contemporary neo-classical economists and the corrupt politicians who disingenuously chant their mantras will someday be regarded as engaging in an even more horrifying and destructive feat of existential miscreance.

What has happened to their minds? They have disclaimed metaphysics and are blind to the REAL and PHYSICAL world around them. AN Whitehead explained it well:

"The study of philosophy is a voyage towards the larger generalities. For this reason in the infancy of science, when the main stress lay in the discovery of the most general ideas usefully applicable to the subject matter in question, philosophy was not sharply distinguished from science. To this day, a new science with any substantial novelty in its notions is considered to be in some way peculiarly philosophical. In their later stages, apart from occasional disturbances, most sciences accept without question the general notions in terms of which they develop. The main stress is laid on the adjustment and the direct verification of more special statements. In such periods scientists repudiate philosophy; Newton, justly satisfied with his physical principles, disclaimed metaphysics. The fate of Newtonian physics warns us that there is a development in scientific first principles, and that their original forms can only be saved by [narrow] interpretations of meaning and [pretended] limitations of their field of application ... interpretations and limitations unsuspected during the first period of successful employment."

EF Schumacher affirmed the foolishness of substituting prevailing prejudices for eternal metaphysics:

"All philosophers - and others - have always paid a great deal of attention to ideas seen as the result of thought and observation; but in modern times all too little attention has been paid to the study of the ideas which form the very instruments by which thought and observation proceed. On the basis of experience and conscious thought small ideas may easily be dislodged, but when it comes to bigger, more universal, or more subtle ideas it may not be so easy to change them. Indeed, it is often difficult to become aware of them, as they are the instruments and not the results of our thinking - just as you can see what is outside you, but cannot easily see that with which you see, the eye itself. And even when one has become aware of them it is often impossible to judge them on the basis of ordinary experience. We often notice the existence of more or less fixed ideas in other people's minds - ideas with which they think without being aware of doing so. We then call them prejudices, which is logically quite correct because they have merely seeped into the mind and are in no way the result of a judgment ... ideas that are patently erroneous and recognisable as such by anyone except the prejudiced [wo]man."

And so it is that contemporary neo-classical economists increasingly retreat from the rapidly approaching limits and threatening consequences of the REAL and PHYSICAL world they should be inhabiting to seek intellectualized and financialized comfort by closing their dimming eyes and arguing with one another by imagining life within the theoretical, quantitative confines of collapsing play houses which their noble ancestors [like Hayek] NEVER intended to become castles in which a foolish and immature progeny would hide to avoid and ignore NATURE.

PLAN for the ecosystem's hierarchy first ... then for competition

Those who are sowing uninhibited individualism are reaping an uninhabitable world. They puritanically dismiss ALL planning as coercive and immoral when the ecological system [not to mention the neoclassical economic system they advocate] demands it ... like baseball depends on rules and referees to make the game fair and keep it going. "Survival of the fittest" may be an appealing proverb to the simle minded, but even Mises held it was a flawed strategy for achieving what should be our goal: social cooperation under the division of labor as a legitimate objective of government:

"There is in nature nothing to which the name of liberty could be given. The concept of freedom always refers to social relations between men. True, society cannot realize the illusory concept of the individual’s absolute independence.  ... [but] government is not, as some people like to say, a necessary evil; it is not an evil, but a means, the only means available to make peaceful human coexistence possible. ... The ultimate end that men aim at by establishing government is to make possible the operation of a definite system of social cooperation under the principle of the division of labor."  Mises, Liberty and Property

Yes, "survival of the fittest" is competition  ... but not the kind that results in "social cooperation". The PURPOSE of competition is to help every actor identify his or her comparative gifts and to promote intelligent interdependence ... not to dominate one another by doling out slavery and death.

"I judge it to be piety, not to sacrifice many hecatombs of bulls to Him and to burn incense of innumerable perfumes and cassia, but first to learn myself, and afterwards to teach others too, how great He is in wisdom, how great in power, and of what sort in goodness. For to wish to adorn in every way possible the things that should receive adornment and to envy no thing its goods—this I put down as the sign of the greatest goodness." Galen, On the Use of Parts

 

 And make CAPITAL compete with LABOR fairly

 

 

Common currency is a scale of values ... a "voting system"

Contrary to popular belief, the purpose of money is not to enable dominion or morally acquit the glutton but to provide a scale of values that reveals the "sorts of goodness" without envy ... just like the rules of baseball. Mises goes even further and describes it as a "voting system":

"The market is a democracy in which every penny gives a right to vote."

The Federal Reserve is the fountainhead of anti-competition

It does not take much mental acquity to understand that the US Federal Reserve is the major source of anti-competitive planning in the world. Can the ramifications of this be of minor significance? And yet, when was the last time you heard a "conservative" economist arguing about "appropriate" Fed policy ... instead of concluding that there is NO GOOD REASON for the Fed to exist ... IF you believe in virtuous planning ... period ... end of discussion.

 

 

values of  liberty, responsibility and commitment

The end of private property

 

Some say the world will end in fire,
Some say in ice.
From what I’ve tasted of desire
I hold with those who favor fire.
But if it had to perish twice,
I think I know enough of hate
To say that for destruction ice
Is also great
And would suffice. - Robert Frost

Pivots

50 years ago America was faced with a "pivot" ... whether to embrace fiat credit via the Nixon Shock or private property via Small is Beautiful.

Today I read an article entitled "Death of Ownership" and it caused me to reflect on which way we pivoted and why people can no longer afford to "own" much other than the food on their table and the clothes on their backs ... which are increasingly being bought on credit. Has the era of private property ended ... and if so why ... and what comes next ?

They rose together ... from labor

First came the natural world ... then labor ... that is the order of things and the hierarchy that rules us. And from those two Ecological  elements arose the structures of Economic regulation that, via common sense then common law, over time became the pillars on which the West constructed modern civilization ...

• private property
• common currency and
• the division of labor.

These three had interacted for centuries among the ancients ... then lay dormant [in the West at least] during the middle ages ... but they always presupposed one another so that one could not be re-discovered, understood or utilized without the other two rising with it ... until they were finally re-accepted as "self-evident" and became the basis of the modern western nomos. ... now broadly known as classical liberalism [or as conservatism by some].

Durable ... they persisted and grew through revolutions, wars [foreign and civil] and natural disasters ... continuously shaping the emergent nations and social unions which rested on them.

But unquestioned and unexamined, they began to be taken for granted and those who benefited from them forgot why they arose in the first place ... to protect, divide and balance labor as the foundation for capital and government.

They fell together ... from fiat finance

Then those who prefer not to work ... who despise labor ... imagined how to use fiat finance to plan and subvert the functioning of Economy.

And in the short space of 50 years, the deep pillars of modern civilization ... the nomos of the west ... buckled then collapsed ... first the common currency ... then the division of labor ... and finally but inevitably private property ... for they presuppose one another and none can exist alone.

And while the superstructure of the west still appears to tower in the distance like the frowning face of a once mighty power ... for those who look with more than a cursory glance, it is bereft of its foundations ... a colossal wreck rapidly sinking into the sands of time ... a hated and dead monolith which nature is burying in an impartial and just judgment.

But as long as natural resources and labor persist [for lasting Ecology judges temporal Economy] ... they promise to rebuild the perennial foundations for those who will use private property, common currency and the division of labor to honor labor with protection, division and balance.

More on The end of private property

Epilogue

I met a traveller from an antique land,
Who said—“Two vast and trunkless legs of stone
Stand in the desert. . . . Near them, on the sand,
Half sunk a shattered visage lies, whose frown,
And wrinkled lip, and sneer of cold command,
Tell that its sculptor well those passions read
Which yet survive, stamped on these lifeless things,
The hand that mocked them, and the heart that fed;
And on the pedestal, these words appear:
My name is Ozymandias, King of Kings;
Look on my Works, ye Mighty, and despair!
Nothing beside remains. Round the decay
Of that colossal Wreck, boundless and bare
The lone and level sands stretch far away.” - Shelley

Planning against despotism

 

Legitimate planning

All law is planned, but not all planning is law-full. Furthermore, it is well known that the rule of law facilitates planning that is more organic [ie. less partial and specific] and thus more consistent with liberty and justice for all:

"Formal rules intended for such long periods that it is impossible to know whether they will assist particular people [or tend] toward the satisfaction of particular needs ... could almost be described as a kind of instrument of production, helping people to predict." - Hayek, The Road to Serfdom, Chap 6 Planning and the Rule of Law

Mises was even more specific about the objective for legitimate planning in the form of law:

"The ultimate end that men aim at by establishing government is to make possible the operation of a definite system of social cooperation under the principle of the division of labor." - Mises, Liberty and Property

Externalities

The problem with all finite planning [ie. by creatures as opposed to the Creator] is that it is non-comprehensive: there are always externalities for which it did not account:

But Mousie, thou art no thy-lane, [not alone]
In proving foresight may be vain:
The best laid schemes o’ Mice an’ Men
          Gang aft agley, [go oft awry]
An’ lea’e us nought but grief an’ pain,
          For promis’d joy! ― Robert Burns, To a Mouse

Subversion & perversion

However, the biggest problem with legitimate planning is perversion which ALWAYS takes the form of attempts to fine-tune results thru non-organic [ie. increasingly partial and specific] short-term interventions via the intentional and partisan/divisive subversion of the collective power to plan. The perversion inevitably begins gradually and temporarily but gains both speed and standing as it proceeds until the planners replace the plan. As Bastiat observed, this subversion can result from either evil or ignorance but the result is always the same: despotism.

"It is as if it were necessary, before a reign of justice appears, for everyone to suffer a cruel retribution—some for their evilness, and some for their lack of understanding." - Bastiat, The Law

Planning against despotism

So the challenge for legitimate planning is how to restrain the forces of despotism. And the twofold answer is ALWAYS the same:

1. use COMMON SENSE to publicly expose growing despotism and
2. use COMMON RESISTANCE to subject the subverted power to its proper limits under law.

Any other course of action will only substitute one despot for another without regaining the benefits of legitimate planning.

Hussman's common sense !!

In Fabricated Fairy Tales and Section 2A, John Hussman has used common sense to expose the Federal Reserve's growing despotism by

• invalidating its perverted use of the Phillips Curve [employment v inflation] as a policy justification for its increasingly dangerous interventions and
• clearly restating then thoughtfully explaining the import of the Fed's 2A charter from which it has patently, illegally and disastrously departed.

Our common resistance ??

All that remains is for reasonable liberals to

• put aside their pride,
• gather behind Hussman's irrefutable arguments and
• join together to RESIST THE GROWING DESPOTISM by calling for a public trial of the Fed and its patently illogical and unlawful actions.

What say ye?

more on

Planning against despotism

The BLUSHING and the REALLY NAKED

 

And the eyes of both of them were opened, and they knew that they were naked; so they sewed together fig leaves and made coverings for themselves. Then the man and his wife heard the voice of the LORD God walking in the garden in the breeze of the day, and they hid themselves from the presence of the LORD God among the trees of the garden. But the LORD God called out to the man, “Where are you?” “I heard Your voice in the garden,” he replied, “and I was afraid because I was naked; so I hid myself.” “Who told you that you were naked?” asked the LORD God.  Genesis 3

the Devil revealed

Strange things are happening as the world of fiat finance collapses around us ... now featuring crypto ponzi schemes, crashing tech and the beginning of bank closures. But nothing prepared me for what I heard today.

 

In what can only be described as an apocalyptic revelation [for those who are watching and know what to look for], the European Central Bank’s program director for the digital euro, Evelien Witlox, when asked if cryptocurrency was "REAL MONEY", without even pausing to blush, answered:

“In our view [at the ECB], cryptocurrencies are not money, because there’s nothing behind them.”

You see, there is only one creature in the universe who can deceitfully persuade mankind to depart from trusting in the common goodness of nature then, once the foul deed of isolation and alienation is done, turn, in bold two-faced hypocrisy that chills the soul, to shame and enslave the ignorant victims by pronouncing them to be naked ... the Devil. The ECB is certainly an instrument of hell.

 

It is one thing for a child in a fable to call out the clothes-less-ness of a foolish king, but entirely another for the REALLY NAKED TYRANT of our world to condemn to hell the now rapidly blushing crypto enthusiasts who claimed [and some even believed] they could create a functioning alternative currency based solely on "mutual trust" in a fallen world.

Of course, the REAL TRUTH is that the crypto-ists were simply trying to get rich and powerful by imitating the central bankers who "GOT NAKED" [with the help of Richard Nixon in '71] and have become increasingly rich and powerful ever since. And the central bankers were only imitating the libertarian hippies at Woodstock in '69 who showed the world how much fun it is to just go naked. The difference is that the hippies grew up and put their clothes back on ... but the central bankers have not only paraded themselves thru the world STARK NAKED for 50 years but have somehow managed to persuade the world that they are the most elegantly dressed group of elites in history ... while they call out the cryptos' nakedness.

blushing cryptos lead to failing banks

Of course, with the cascading collapse of cryptos now reaching thru the tech sector to pull down a large US bank, the ECB sounds wise to denounce crypto as a naked grab for wealth and power. But again, it is the naked arrogance of the central banks yanking the increasingly dysfunctional levers of financial power up and down that is responsible for the rise and fall of cryptos as a way to avoid [or join in on?] the robbery of central bank fiat credit and to share in the profitable intercourse with technology [ie. the rape of Labor] via repressed interest rates. Once again, the central bankers commit crimes against humanity and the environment then denounce their victims in unprecedented DoubleSpeak that goes publicly unchallenged by a captive [or incredibly ignorant] press.

 

incest and nepotism rule

And if the nakedness of our financial masters is not lurid enough, they flout their deviance by committing incest of the foulest sort in public. The CEO of the large Silicon Valley bank that suddenly failed was ... until today ... on the board of the San Francisco Federal Reserve Bank. It is a story that makes Oedipus [who killed his father then procreated with his mother] look like a model citizen.

And to add further insult to injury, the Fed pays its children of incest [including your local bank] 5% interest on "their" demand deposits at the Fed ... which are in reality "YOUR" deposits at that local bank which pays you next to nothing for them. Nepotism of the worst sort.

go back to nature

What are we to do? Go back to nature ... but not in the way you might think.

You see, going back to nature does NOT [as the hippies thought] mean glorying in our nakedness as the central bankers do and as the cryptos are still trying to do. It means tying our common currencies to things that are REAL and NATURAL ... like precious metals or commodities or energy or even labor. Until we are willing to tie our Economy to nature's Ecology ... our currency to God's REALITY ... we too are naked and we will sooner or later be rightfully accused and ashamed. It does not matter if our accuser is the Devil himself, our guilt is upon us.

The last days of global financial fiat are also upon us. The havoc which is our doom due to our lack of modesty [much less diligence] is now unavoidable. But that does NOT mean we must surrender to the Devil. There is ALWAYS time to call out our accuser as NAKED and resist. Whatever the cost, let us put our clothes back on ... reconnect our common currency to REAL Nature ... and let the chips fall where they will. In the end, we will be glad we did ... and our justly deserved shame will be behind us ... regardless of the suffering we must pass thru along the way.

 

From Marketplaces to Banksters

When the Jewish Passover was near, Jesus went up to Jerusalem. In the temple courts He found men selling cattle, sheep, and doves, and money changers seated at their tables. So He made a whip out of cords and drove all from the temple courts, both sheep and cattle. He poured out the coins of the money changers and overturned their tables. To those selling doves He said, “Get these out of here! How dare you turn My Father’s house into a marketplace!” John 2

Then Jesus entered the temple courts and drove out all who were buying and selling there. He overturned the tables of the money changers and the seats of those selling doves. And He declared to them, “It is written: ‘My house will be called a house of prayer. But you are making it a den of robbers.” Matthew 21

A brief word study

Our word "bank" comes from an older word that means "table". It was customary for a banker [acting as both money lender and foreign exchange dealer] to open and close his business from a small "table"  he could carry with him ... a portable "bank". How BANKS have changed ... today they are much too big to carry ... even TOO BIG TO FAIL ... but not too big to still be overturned by a godly society [if you can find one].

The Greek word for house is oikos and for God [in John 1:1] is logos ... putting them together in English is ECO-LOGY ... literally the house of God ... a place of justice, mercy and humility [Micah 6:8].

Finally, the Greek word for management is nomos ... and putting that together with oikos is ECO-NOMY ... household management ... a task charged with sustaining profit, strength and security for all members of the household [Proverbs 31].

The wrath of God ... then

On two separate occassions in his brief career as a public policy expert, Jesus made a whip and used physical violence to drive both merchants and bankers from the temple ... overturning the "banks" in the process on both occassions.

The first time he denounced those driven out as conflating the temple [prayer] with the marketplace [bargaining] ... confusing justice with profit ... equating ECONOMY with ECOLOGY. Both are present and essential in our lives, but when we pretend that ECONOMY is ECOLOGY, we replace God's will with our own and miss the vital hierarchy of ECOLOGY in which one [the manager] serves the other [the owner] and not vice versa.

 The second time Jesus condemned them for committing their robbery in the temple ... a compounded problem ... because they had evidently converted the marketplace and banks into a den of thieves through price gouging and unjust scales, weights and measures as is frequently recorded in and spoken against by the Old Testament prophets. However, this was not people robbing the banks [like the thief on the cross] ... it was the merchants and bankers robbing people ... an unjust system that should have been exposed and condemned by the people of God outside the temple as well.

 Does this sound familiar?

... and now

Today we live our lives and build our churches on fiat credit provided by a global central banking system ... debt created from thin air. Jesus, were he to return, would not dare to overturn our "banks" unless he wanted all the churches and their members to go BOOM [and not the good boom of a "booming stockmarket" but the bad boom of a "nuclear explosion"].

Today, the banksters do not have to bring their tables of thievery [fractional and ZERO reserve lending] into the house of God ... their ECONOMY into God's ECOLOGY ... we as the people of God have done it for them. And now it is Jesus who stands outside ... knocking ... to see who might let him in.

... so beware

Do you hear him knocking? Do you want to let him in? Beware lest you think it is safe ... because he will surely set the "tables" flying ... once again.