Posts Tagged economic philosophy

Why the John Galt strategy won’t work

a fictional character made up by a terrible person
Image by sushiesque via Flickr

The Mogambo Guru (TMG, as he phrase it) is a regular contributor to Bonner and Wigginson’s “The Daily Reckoning” and in a recent piece he explains why the John Galt strategy won’t work, and at the same time, why Michelle Malkin‘s strategy won’t work, either:

Dr. Helen Smith, who is a Tennessee forensic psychologist and political blogger … “dubbed the phenomenon ‘Going Galt’ last fall” which is “a reference to the famed Ayn Rand novel Atlas Shrugged, in which protagonist John Galt leads the entrepreneurial class to cease productive activities in order to starve the government of revenue.” [Ms Malkin] apparently is not interested in guns, and sums up the situation of “Going Galt” as being that “There’s only one monkey wrench that can stop the redistributionist thieves’ engine. It’s engraved with the word: Enough.”

Ayn Rand came up with this “don’t work and starve the government of revenue” idea for the fictional John Galt in her novel Atlas Shrugged, which was written in 1957 when the dollar was still more-or-less linked to gold and thus the money supply was constant.

Back then, the only place that the government could get money was to borrow it from those who had saved their money, whereas today the poor old dollar is just a piece of fiat currency or computer-embedded digital crap that the Federal Reserve can create more of anytime it wants, whether or not anybody ever saves any! Hahaha!

So, if you think that the federal government needs your stupid tax money or that you can hurt them by working less, then I laugh – Hahahaha! – at the very concept! The Fed can, literally, create unlimited amounts of credit in the banks, which becomes unlimited amounts of money, with which to buy unlimited amounts of Treasury debt so that the government can spend unlimited more amounts of money than it collects in taxes!

And the only thing you can do about it, because the amount of corruption is always at its maximum at the end of long monetary booms, is to save yourself and get rich by buying gold, which is a bet against government and their stupidity, and which is the only sure-fire, can’t miss bet you will ever have in this cold, cruel world.

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Reading Rand can be good for business

John Allison retired at the end of last year as CEO of BB&T:

he had recently shepherded it through the worst banking crisis since the Great Depression, leaving it in fairly good shape. He’s certainly seen as a success where many others in his field have failed miserably as of late...“We didn’t do negative-amortization mortgages,” Allison told NRO, “and to the degree we’ve had more successes, I believe it’s because we’ve had a long-term integrated philosophy. We’re very much a principle-driven organization, and those principles we adhered to in the good times and the tough times are an example of the reason we didn’t do the negative-amortization mortgages.” Further, it’s worth noting that while troubled banks went looking for handouts, Allison slammed the government bank-bailout program.

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More on education

Ludwig von Mises
Image via Wikipedia

I wrote earlier about whether universities have a future, a subject I’m obviously interested in as a I work in one. After writing that entry, I came across these quotes from the Austrian economist Ludwig von Mises on the subject of education and schooling:

It is often asserted that the poor man’s failure in the competition of the market is caused by his lack of education. Equality of opportunity, it is said, could be provided only by making education at every level accessible to all. There prevails today the tendency to reduce all differences among various peoples to their education and to deny the existence of inborn inequalities in intellect, will power, and character. It is not generally realized that education can never be more than indoctrination with theories and ideas already developed. Education, whatever benefits it may confer, is transmission of traditional doctrines and valuations; it is by necessity conservative. It produces imitation and routine, not improvement and progress. Innovators and creative geniuses cannot be reared in schools. They are precisely the men who defy what the school has taught them.

In order to succeed in business a man does not need a degree from a school of business administration. These schools train the subalterns for routine jobs. They certainly do not train entrepreneurs. An entrepreneur cannot be trained. A man becomes an entrepreneur in seizing an opportunity and filling the gap. No special education is required for such a display of keen judgment, foresight, and energy. The most successful businessmen were often uneducated when measured by the scholastic standards of the teaching profession. But they were equal [p. 315] to their social function of adjusting production to the most urgent demand. Because of these merits the consumers chose them for business leadership.
– Human Action, Chapter XV The Market

and

The emphasis laid by sociologists upon mass phenomena and their idolization of the common man are an offshoot of the myth that all men are biologically equal. Whatever differences exist between individuals are caused, it is maintained, by postnatal circumstances. If all people equally enjoyed the benefits of a good education, such differences would never appear. The supporters of this doctrine are at a loss to explain the differences among graduates of the same school and the fact that many who are self-taught far excel the doctors, masters, and bachelors of the most renowned universities. They fail to see that education cannot convey to pupils more than the knowledge of their teachers. Education rears disciples, imitators, and routinists, not pioneers of new ideas and creative geniuses. The schools are not nurseries of progress and improvement but conservatories of tradition and unvarying modes of thought. The mark of the creative mind is that it defies a part of what it has learned or, at least, adds something new to it. One utterly misconstrues the feats of the pioneer in reducing them to the instruction he got from his teachers. No matter how efficient school training may be, it would only produce stagnation, orthodoxy, and rigid pedantry if there were no uncommon men pushing forward beyond the wisdom of their tutors.

It is hardly possible to mistake more thoroughly the meaning of history and the evolution of civilization than by concentrating one’s attention upon mass phenomena and neglecting individual men and their exploits. No mass phenomenon can be adequately treated without analyzing the ideas implied. And no new ideas spring from the mythical mind of the masses.

  • Theory and History, Chapter 11.
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