Honorable mention goes to Jeff Riggenbach for “Hushing Up Conspiracy Theories” :Price movements are neither good nor bad; it depends on the cause of them. In a properly functioning economy, prices go up and down. Rising prices suggest scarcity, signaling to consumers that they should switch to substitutes. And they tell producers to get on the ball and stock the shelves with new supply. Falling prices send the opposite message…trimming profit margins and telling producers to cut back.
Here at The Daily Reckoning, when we go into a liquor store and find lower prices, we are delighted. We stock up. But we are clearly out of step with mainstream economists. Most economists want to see higher prices in the liquor store. And they think they can improve the economy by forcing prices upward. Their beef with falling prices is that they trigger what Keynes described as a “propensity to save.” Consumers see lower prices, he theorized; they then delay spending in the hopes of a better price. Demand falls, incomes go down. And you have a depression on your hands.
“Unfortunately, most historians and economists are conditioned to believe that steadily and sharply falling prices must result in depression…” writes Murray Rothbard in his History of Money and Banking in the United States. Mr. Rothbard noted that falling prices were neither cause nor effect of depression, but a natural feature of prosperity.
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This is just the way of the world, when the world is allowed to have its way. In a normal economy, prices are honest. They tell capitalists where and how to invest their money. Businesses increase capacity. They get better at what they do. Unit costs go down. Increased productivity brings higher wages and lower prices – prosperity, in other words.
If that is all there were to it, the world would be more prosperous, but less entertaining. There are honest price movements. And there are the other kind, prompted by changes in the money supply. Natural price movements send useful information; inflation (or deflation)-driven signals are a form of economic counter-intelligence – fraudulent signals intended to mislead. Monetary inflation pushes prices up; but only because money is becoming more abundant, not because goods are becoming more scarce. Businesses, investors and consumers get the wrong idea. Typically, consumers overspend and businesses over-invest. The consumer thinks he sees increasing scarcity. The businessman thinks he sees rising demand. Both are wrong. Both lose money. Even the government is misled by its own flimflam; it sees increasing tax receipts and expands services.
But not all conspiracy theories are harmless, say Sunstein and Vermeule. Some conspiracy theories do great harm. They create a "problem for government to solve." For example, a conspiracy theory that portrayed the federal government of the United States as a "morally repellent organization" could have such "pernicious effects" as "inducing unjustifiably widespread public skepticism about the government's assertions, or … dampening public mobilization and participation in government-led efforts, or both."
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... Aren't at least some so-called "conspiracy theories" the simple historical truth?
Sunstein and Vermeule acknowledge that. They write that "some conspiracy theories, under our definition, have turned out to be true." But, they assert reassuringly, "our focus throughout is on false conspiracy theories, not true ones. Our ultimate goal is to explore how public officials might undermine such theories, and as a general rule, true accounts should not be undermined."
"As a general rule, true accounts should not be undermined." But that's only as a general rule.
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Government officials are not, by and large, happy with this state of affairs, because history is the natural enemy of the state. Sustained reflection after the fact on exactly what the state did and why inevitably has the tendency to undermine any confidence one might have had in the state's good motives and desire to promote "social welfare." ...
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One particularly "venerable" example of this alliance between the state and the intellectuals is the existence of what Rothbard calls "official or 'court' historian[s], dedicated to purveying the rulers' views of their own and their predecessors' actions."
It is important, Rothbard reminds us, "for the State to inculcate in its subjects an aversion to any "conspiracy theory of history"; for a search for "conspiracies" means a search for motives and an attribution of responsibility for historical misdeeds. If, however, any tyranny imposed by the State, or venality, or aggressive war, was caused not by the State rulers but by mysterious and arcane "social forces," or by the imperfect state of the world or, if in some way, everyone was responsible ("We Are All Murderers," proclaims one slogan), then there is no point to the people becoming indignant or rising up against such misdeeds. Furthermore, an attack on "conspiracy theories" means that the subjects will become more gullible in believing the "general welfare" reasons that are always put forth by the State for engaging in any of its despotic actions. A "conspiracy theory" can unsettle the system by causing the public to doubt the State's ideological propaganda."
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Yet, Barnes argued, "if the complete official documents would support the generally accepted views with respect to the causes and issues of the war, there would seem to be no reasonable objection to allowing any reputable historian to have free and unimpeded access to such materials."
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Such theories might "undermine democratic debate; in extreme cases, they [might] create or fuel violence." What would Sunstein and Vermeule have the federal government do? Well, they write, "the most direct response to a dangerous conspiracy theory is censorship.… We could imagine circumstances in which a conspiracy theory became so pervasive, and so dangerous, that censorship would be thinkable. [However,] censorship of speech is notoriously difficult."
It's good that it is so difficult. If it weren't, it might be resorted to more frequently by men like Cass Sunstein, Administrator of the White House Office of Information and Regulatory Affairs — men who don't seem to mind violating their fellow human beings' natural rights when such an important issue as public skepticism about the government is at stake.
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