Blog archive from the golden age of London libertarianism
In this episode, we discuss the prospect of financial Armageddon. How far away are we from the next economic collapse? And can the current economic situation last much longer?
We also discuss why the French revolution happened, why Japanese people never get laid and pirates!
https://soundcloud.com/dose-oliberty/dose-of-liberty-3-financial-doomsday
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I am astonished, utterly astonished, by the fact we have not yet had a massive financial collapse.
The old saying “there is an awful lot of ruin in a great nation” (meaning a great system can survive insane policies for a very long time) springs to mind. For example the domestic policies of the Roman Empire were insane from the time of Emperor Diocletian onwards (crushing taxation, efforts to make everyone follow the occupation of their parents, state factories,…..), but it took more than a century for the Empire to collapse.
The fiscal and monetary policies of Japan have not been mad since 2008 – they have been mad since the end of the 1980s, yet Japan still exists. Although Japan did start from a relatively low base of government spending – and even after decades of insanity its government spending (as a proportion of the economy) is actually still LOWER than it is in Britain. A key fact that is often overlooked.
As for the banking and monetary situation of the Western world – it is indeed barking mad. Lending has no very little (if any) connection with Real Savings – at least not in Britain and the United States. It is pure (or rather impure) Credit Bubble.
When will our financial system collapse? I do not know – but it is “when” not “whether”.
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I get bored hearing libertarians wail that the end of the world is nigh and that world financial systems are about to crash. This view illustrates a basic misunderstanding of macro economics.
Through trade and technology the word has become greatly more prosperous over the last 100 years and it will continue to become more wealthy still. The only threat to this is from nation states which try to interfere in the operation of markets.
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More on the causes of the industrial revolution in Britain
https://libertarianhome.co.uk/2013/12/video-anton-howes-on-the-causes-of-the-industrial-revolution/
The Keynes vs Hayek debate was covered here (I was there)
https://libertarianhome.co.uk/2011/07/hayek-edges-keynes-to-victory/
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