Jew World Order

by
Gary North
GaryNorth.com

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by Gary North: Nisbet
vs. Plato and Rousseau

Ludwig
von Mises was resented by several generations of economists, 1912
(Theory
of Money and Credit) until his death in October 1973.

They had reasons
for this resentment. First, he held to a rigorously free market-based
explanation of economic causation. They were statists. Second, he
kept predicting things that kept coming true – events which
his critics had denied would ever happen. This made him look good.
It made them look bad. They resented this.

They wanted
to bring him down a notch – more notches, if they could. This
is always the motive of envy. Some of his critics were green with
it.

Recently, I
wrote an article on the decision of Yale University Press in 1963
to issue a grotesque edition of Mises’ masterpiece, Human
Action (1949). It is a forgotten story, even within Austrian
economics circles. You
can read my article here.

Mises was resented.
The extent to which he was resented can be seen in this scurrilous
incident. It showed the petty vindictiveness of obscure, resentful
men against a truly great thinker. It was pure envy at work. The
editor of Yale University Press was willing to issue an ugly, amateurish
looking book. He was willing to suffer the embarrassment of overseeing
an incompetent typesetting job. Why? Because he was able to bring
Mises down a notch, or so he thought. He was wrong.

Today, Mises
is known around the world. The Ludwig von Mises Institute’s website
has five times the traffic of the website of the American Economic
Association, the premier organization of academic economists.

The petty men
who sought to bring him down a notch were not known by many people
in their day. Mises was. Today, they are not even long forgotten.
They were never known by enough people to have become long forgotten.
Mises is better known today than he was in his lifetime. This almost
never happens to anyone, and surely not someone in academia, where
fads come and go, and so do reputations.

SOCIAL
SECURITY

Late in the
1949 edition of Human Action, which is online
for free, he offered an analysis of the political foundation
of the Social Security System. This program has been described as
the crown jewel of the American welfare state. He exposed this jewel
as made of glass – and not Steuben glass. It is more like the
glass used in mirrors, as in “smoke and mirrors.”

In the process
of government interference with saving and investment, Paul in
the year 1940 saves by paying one hundred dollars to the national
social security institution. He receives in exchange a claim which
is virtually an unconditional government IOU. If the government
spends the hundred dollars for current expenditure, no additional
capital comes into existence, and no increase in the productivity
of labor results. The government’s IOU is a check drawn upon the
future taxpayers. In 1970 a certain Peter may have to fulfill
the government’s promise although he himself does not derive any
benefit from the fact that Paul in 1940 saved one hundred dollars.
Thus it becomes obvious that there is no need to look at Soviet
Russia in order to comprehend the role that public finance plays
in our day. The trumpery argument that the public debt is no burden
because “we owe it to ourselves” is delusive. The Pauls
of 1940 do not owe it to themselves. It is the Peters of 1970
who owe it to the Pauls of 1940. The whole system is the acme
of the short-run principle. The statesmen of 1940 solve their
problems by shifting them to the statesmen of 1970. On that date
the statesmen of 1940 will be either dead or elder statesmen glorying
in their wonderful achievement, social security (pp. 843-44).

Today, the
present value of the unfunded liabilities of Social Security
and Medicare exceed $222 trillion.

Mises fully
understood in 1949 what the program was producing: government-issued
IOUs that cannot be paid off. His academic peers denied this when
they mentioned it at all, which was rarely. Their spiritual heirs
also do not mention it. But the numbers keep growing relentlessly.
The red ink is like a lake behind a dam – a government-built,
government-insured dam with cracks in it.

The
Social Security program was only a decade old when he wrote this
brief critique. He was an immigrant from Austria by way of Switzerland.
His critics asked: “What does he know?” He was not taken
seriously by critics, but his readers took him seriously. They still
do.

The Social
Security/Medicare programs are the biggest Ponzi schemes in history.
They are imitated throughout the West. They will all produce the
same result: default. When this happens, Mises will be seen as prophetic.
He was not prophetic. He merely (1) understood economic causation
and (2) followed the logic of his reasoning. But in an intellectual
world governed by Keynesianism, the man of economic understanding
looks like a prophet.

May
6, 2013

Gary
North [send him mail]
is the author of Mises
on Money. Visit http://www.garynorth.com.
He is also the author of a free 31-volume series, An
Economic Commentary on the Bible.

Copyright ©
2013 Gary North

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