Category Archives: Economics

The Myth of Natural Monopoly.

Thomas Di Lorenzo explores the history of the concept of ‘natural’ monopolies, and its use to justify state interventionism in the economy.

It is a myth that natural monopoly theory was developed first by
economists, and then used by legislators to “justify” franchise monop-
olies. The truth is that the monopolies were created decades before the
theory was formalized by intervention-minded economists, who then
used the theory as an ex post rationale for government intervention.

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So much for “Carbon Credits”, scientist claims trees cause global warming.

The arguments infavour of “Carbon” trading is based on three assumptions:

a) that the limits set by government on carbon rationing is enforcable,

b) a liquid market can be established,

and most importantly

c) that it helps to reduce the effects of climate change.

The most common form of carbon credit is planting trees in the tropics. Some scientists claim this may lead to an increase rather than a decrease in overall “green-house” gasses. If this is true so much for “Carbon- trading”.

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Economics, knowledge and inappropriate methods of analysis.

In an earlier post I argued that the most important book of the twentith century was “The Road to Serfdom” by Friedrich August von Hayek.

The basic assumption of the book is the inability of social engineers to predict and control outcomes in complex economies. This failure of social planners, leads to the increasing use of authoritarian methods in an attempt to ‘match’ plans to actual outcomes.

The heart of his analysis relies on the understanding that social scientists have appropriated the methods of the natural sciences, and misapplied them.

Hayek’s first public delving into understanding this problem, was outlined in his Presidential address entitled “Economics and Knowledge”, delivered before the London Economic Club on 10 November 1936.

The full text is available Here ….

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Central Banking, the State and threats to Freedom: The United States Federal Reserve.

In “Money, Banking and the Federal Reserve”, a video dedicated to the memory of prominent Economist Murray F Rothbard and his work on the role of Money, a number of commentators argue that Central banking undermines the Economy and threatens the Free Society. Included in the commentators is current Republican Presidential candidate for preselection Ron Paul.

View here, best viewed using iTunes from Apple free download here

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