Posts Tagged Mises

Austrian Economics and teaching

A teacher who obviously enjoys his work, talks about teaching and Austrian economics.

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Guerrilla Hoarding – Wendy McElroy – Mises Daily

A timely article on the libertarian site on hoarding. Although it is not directly related, and makes no reference to, the Japanese disaster, it is a pertinent topic.

Maruetsu store, Tokyo, 19:18, March 16th, 2011

No bread, but most Japanese eat rice anyway - photo by Mike Rogers

After the Japanese disaster in March, it soon became apparent that there was a) a dire need for certain goods, and b) that there was a growing shortage of these goods in an ever-widening area of Japan. This was because people were either buying them for themselves or buying to send to needy relatives and friends in disaster-hit areas.

Even in areas unaffected by the disaster, such as Kansai or Kyushu, batteries and torches and bottled water were soon sold out and unavailable. People in disaster-hit areas were obviously buying these things like crazy because they needed them immediately. People in more distant areas were also buying up these and similar items and sending them to needy friends and relatives. Yet more people also bought these kinds of items “just in case” and because they could see that these items were quickly running out and who knows when supplies would be restored?

Inevitably, government officials came out and urged people not to buy certain desperately needed items in bulk, such as batteries and bottled water. Of course, the temporary scare of radioactive iodine in the Tokyo water supply did not help matters, and the government had to hand out bottled water to mothers with infants.

However, the Japanese government was not chiding people for stock-buying, but making a pretty sensible request and for a reasonable reason that most people could agree with: the people directly affected by the disaster need these items more than you do; please help avoid short supplies by not buying more than you immediately need. The same was true for electricity. The shortage of electric power may be felt most strongly in the coming summer, even more than now.

Below is an article that explains why governments tend to criticize hoarding in general. This is not exactly the case in Japan at the moment – most people understand the need the refrain from hoarding or panic buying at this time, and are willing to go along.  However, the principles revealed in the article remain true pretty much across cultures.

The argument is really the old one of “who, whom?” Who gets to tell whom what to do? The Japanese way of doing things blurs this issue because rather than giving direct orders, they prefer people to come to a common agreement autonomously. So commands become requests.

A common example of hoarding is stocking up on durable grocery items — such as canned goods, rice, or pasta — when they are on sale, so that your family has a years supply of staples in the house. In rural areas, this is known as “keeping a good pantry.”Historically, governments have frowned upon hoarding. Especially in bad economic times, stigmatizing the hoarder for “causing” high prices or shortages because he buys more than his “share” serves a useful political purpose. They divert attention away from government policies, such as tariffs, that are the true cause of empty shelves and high prices. By stirring up resentment toward neighbors who own one more can of peas than you do, politicians avoid the full and just brunt of public anger…

Hoarding, like any other human activity, can become obsessive. But in its common form, hoarding is nothing more than preparing for the future by laying aside a store of items you and your family may need. This is an especially valuable practice during economic instability, when necessary supplies can become scarce or suddenly double in price.

The Austrian investment counselor Jack Pugsley once explained another perspective on hoarding: it is an investment. A low-income family may not be able to afford precious metals, but they can afford to invest in dry or canned consumables. Last year, with some frequency, my grocery store sold a 900-gram package of pasta for 99¢. With wheat shortages, and with the American government diverting almost 30 percent of corn crops into producing ethanol, food products dependent on grain have skyrocketed. The same package of pasta now regularly costs $2.99. If a struggling family bought 60 packages of the 99¢ pasta for a future consumption of one package a week, then their hoarding would have knocked perhaps $100 off their grocery bill. By consistently buying more than they immediately need of bargain items, the family can build a solid pantry to sustain them through unemployment, inflation or scarcity.

A key point is that it is sensible to prepare: do so well ahead of time, and without drawing undue attention to yourself.

The navy man’s fate is a cautionary tale in more than one way. The store of food for his family was discovered because a grocer and neighbors informed upon him. Thus, a sad corollary to the wisdom of hoarding food for your family is the need to do so with discretion. This is sad, because the natural impulse of people in a community is to assist those in need. Measures like the Food and Fuel Control Act mean that sharing food with a neighbor who has hungry children is no longer simply a gesture of compassion and generosity; such government acts make sharing into a danger to your safety and your own children’s well-being.

There is still time to hoard the items upon which your family depends. Prices are rising, to be sure, but the full force of inflation and shortages is probably several months in the future. Hoard now; hoard quietly.

via Guerrilla Hoarding – Wendy McElroy – Mises Daily.

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The gift that keeps on giving…Your taxes!

Speaking of taxes, Trooper Thomson writes on the Englands Freedome, Souldiers Rights blog:

PFI: Labour’s gift to future generations
The Telegraph reports:

“Official figures show that, under Private Finance Initiative [PFI] schemes, British taxpayers are committed to pay £229 billion for new hospitals, schools and other projects with a capital value of just £56 billion. Several contracts are due to run for 60 years, documents released under freedom of information requests show, meaning taxpayers will be paying for the projects for generations to come. ”

Thanks Labour. What was that Mises said about socialism and economic calculation?

Hat tip: The Angry Exile

Mises? Who dat? Click to find out.
And what DID he say about socialism and economic calculation? He said it was impossible! Click to read more on the website.

Or read Mises’ 1920’s monograph Economic Calculation in the Socialist Commonwealth, for free, online, and kindly translated from the German for you. Plus it costs nothing except your time.

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Economics books that help you tell the future

Atlas sculpture, New York City, by sculptor Le...
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Historian and Austrian economist Gary North writes that many people are confused by the media’s pronouncements on gold, inflation and deflation:

Self-Inflicted Confusion and Paralysis: Thinking About the Economy Without Understanding Economics

If called upon to outline the arguments of each position, they could not do it. They have no idea of what they have read. They are utterly confused. Why? Because they do not read books on economics. They read only websites.

For years, I was one of “they”: I was trying to educate myself about finance, investing and economics by reading only websites. I wasted a lot of time. I eventually discovered the 3 books that Gary North recommends below.

If you are confused, you can get clear by reading three short items: Rothbard‘s mini-book, What Has Government Done to Our Money? (pdf), my mini-book, Mises on Money, and Rothbard’s The Case Against the Fed (pdf). All of them are free. If you really want to understand, read Rothbard’s textbook on money and banking, The Mystery of Banking (pdf). It is free. Then you will be ready for the booklet published by the Federal Reserve Bank of Chicago, Modern Money Mechanics.

I sent the above quote to a friend who wrote back that he finds reading economics books incredibly tedious. Not long ago, I would have had the same reaction. What changed? Read the rest of this entry »

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