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The Other Austrian Economics: Reimann’s Vampire Economy

Published in September 1939, Günter Reimann’s study The Vampire Economy: Doing Business Under Fascism set out to describe “the extent of economic decay” in Germany before the outbreak of the war. It described a centrally-planned, hyper-regulated economy in which government, like an inept but stubborn watchmaker adding an ever growing series of counter-balances to make his machine run on time, had to interfere more and more in order to counteract the imbalances caused by its previous interferences, such as imposing price caps in response to inflation.

Although there are obvious parallels with modern economic dogmata, this is not meant as a version of Leo Strauss’s reductio ad hitlerum. Rather, we should observe that all command economies must inevitably share certain features: if economics has any claim to be a science, empirical observation must show that people and prices respond in predictable ways to given stimuli. As such, the practical realities of this planned economy are a useful admonitory. Read more

Quote of the Day

Comedian Eddie Izzard has decided to pursue a second career. Unlike most middle-aged career-changers, he is moving down rather than sideways, in this case by choosing politics over comedy. Still, while he appears to be a more genuine and thoughtful individual than those sorry creatures of the mere poseur class of celebrity activist – albeit one with whose political opinions we have little in common – it is hard to escape the suspicion that a prominent role in the Labour Party is hardly likely to make it seem less urban, fashionable and even alien to most voters. This drift by the elite towards metropolitan modishness is nothing new: as Uncle Jack observed in 1762,

“You politicians of the town are so totally engaged in the transactions of the great world, that I suppose you will hardly think it worth while to take notice of any occurrences, however important, that happen amongst the obscure folks of the country.” Read more

Anglodämmerung

The end of three centuries of separation between press and state in the United Kingdom is not just a milestone in the individual political history of one particular country: it is yet another victory for those cultural and intellectual forces whose ultimate enemy – although few of them are coherently aware of it – is the network of concepts which constitute modernity itself.

The cumulative vicissitudes of British history from the Dark Ages to the Glorious Revolution led us to stumble across the most powerful social toolkit hitherto discovered by mankind. The nation, which had already spread to the Americas, emerged blinking and hung-over into the 1690s to find that we lived in an open society; that social hierarchies were more fluid and porous than they had ever been (class but not caste, de Tocqueville said); that the ideological obsession with individual liberty and private property had completely won the culture wars; that the Act of Settlement had made the judiciary independent; and that the expiry of the Licensing Act had added a free press so that this awkward, quarrelsome and restlessly ambitious people could bicker and insult each other to their hearts’ content. Read more

Quote of the Day

As press regulation makes its way towards the statute books, like the procession of some noisy and sinister circus into the world’s most gullible town, let us at least try to bear in mind the very first words of the first issue of John Wilkes’ paper The North Briton:

“The liberty of the press is the birth-right of Britons, and is justly esteemed the firmest bulwark of the liberties of this country. It has been the terror of all bad ministers; for their dark and dangerous designs, or their weakness, inability and duplicity, have thus been detected and shown to the public, generally in too strong and just colours for them long to bear up against the odium of mankind. Can we then be surpriz’d, that so various and infinite arts have been employed at one time entirely to set aside, at another to take off the force, and blunt the edge, of this most sacred weapon, given for the defence of truth and liberty? Read more

UKIP Alienates Only Sane Constituency in the City of London

Apparently we were not the only members of the small but stalwart band of sound-money enthusiasts in the City who, ignoring the less exciting stuff like company and market news, flicked eagerly to the City AM forum page on seeing the paper’s front-page banner headline advertising Nigel Farage’s guest column on UKIP Economics. Indeed, the letters page has been full of responses. Unfortunately, they have generally drawn attention to the important and sadly unarguable point that this article is somewhat diappointing.

Mr Farage, for reasons defying our comprehension, argues that the Bank of England, which has printed hundreds of billions of ‘pounds’ and monetised literally unimaginable amounts of government debt, is obviously being far too cautious about inflation. Therefore, it should be given the task of horsing around with some other economic indicators instead: “driving employment, growth and confidence”. It is genuinely difficult to know where to begin with what is wrong with this approach. Read more

Quote of the Day

As Allister Heath points out, albeit in his restrained and civilised style, the PM’s speech on the economy seems likely to cause Google’s PageRank algorithm to start giving Australian recruitment consultants and estate agents much higher priority in its search results. It raises the obvious question of why his backbenchers, many of whom know very well how dismal things are, do so little. But Wilkes knew all about those politicians who experience, like Gilbert’s Peter the Wag, the coward rage that dares to burn but not to blaze:

“When the opposition to the minister is the subject of conversation, it is remarkable to observe how men, who are in their hearts well-wishers to it, but have not spirit to speak out, retire back into themselves, how cautiously they hint their love of their country, as if it was a fault, and how sparingly they praise those who openly avow themselves the defenders of it. Read more