4 ms·

I don't understand the classical liberalism part. How do a bunch of empires, that don't operate on market principles, going to war with each other show that cla

I don't understand the classical liberalism part. How do a bunch of empires, that don't operate on market principles, going to war with each other show that classical liberalism is a 'colossal failure'?

jowea 3y ago
I believe the case against classical liberal economics has more to do with the economic crises of the late 19th century and specially the Great Depression than with the wars.
- churchill 3y ago
  Nope. The Great Depression doesn't indict classical liberal economics - the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%. When the bankers started calling in their loans, everyone went bust. That'd be equivalent to grow America's M2 ($20 trillion) by 12 trillion in just 4 years. 2019 to 2022 wasn't even that intense and, well, we can see how ugly things have gotten.
  - derstander 3y ago
    > the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%. I’m not an economist so I’m speaking from a position of ignorance here. But I thought the US was on gold standard during this time period. How was the Fed able to increase money supply by such a large % without e.g. the country mining a lot more gold? I tried a cursory search but was unable to find any answers.
    - Geee 3y ago
      That is exactly the problem. They issued more currency than there was gold in the reserve. I.e. they broke the gold standard.
      - marcinzm 3y ago
        Looking at charts of the US gold supply it seems to have grown fairly significantly in the early 1900s up to the great depression, and seems to have been more than the 60% cited for money supply growth.
    - churchill 3y ago
      The same reason Nixon had to take the U.S off the gold standard in 1971 - the government printed more dollars than it had gold to back. Just because you have a gold standard won't stop politicians from printing cash when they need it. The only way to stop politicians meddling with money is to denationalize it and eliminate legal tender laws.
  - marcinzm 3y ago
    Looking at charts the money supply mainly grew during WW1 and growth went back to the previous levels after WW1.
  - AnimalMuppet 3y ago
    Bankers don't usually start calling in loans when there's too much money, but rather when there's too little. So I think your explanation needs a few more causal steps.
cbau 3y ago
Not an expert, but if you read any of Keynes, he's basically critiquing classical economics and pointing out some of the ways it fails to explain economic cycles, hence the invention of macroeconomics. https://en.wikipedia.org/wiki/The_General_Theory_of_Employment,_Interest_and_Money https://en.wikipedia.org/wiki/The_General_Theory_of_Employme...
- dantheman 3y ago
  Keynes was always wrong, and is an excuse for governments to spend money. Stagflation...
  - churchill 3y ago
    Keynes has to be THE most confusing and self-contradictory personality in orthodox economics. He had no original insights and the only reason political elites took a liking to him was because he gave them a logical, complicated copout for money printer to go brrrrrrr. He frequently changed his theories and ideas for political expediency and the idea that modern 'economists' take his teaching as gospel truth is just sad. Murray Rothbard wrote an entire profile on the man [0] and I'd suggest anybody taking a stab at heterodox economics to read it. [0]: https://mises.org/library/keynes-man-1 https://mises.org/library/keynes-man-1
    - morelisp 3y ago
      > frequently changed his theories and ideas for political expediency... Murray Rothbard Man if there was ever a pot for a kettle...
  - roenxi 3y ago
    When dealing with Marxist or Keynsians (or modern monetary theorists for that matter) it is a safe bet that the people implementing the policies haven't read and don't intend to follow the theory. So I am simultaneously shy of saying "Kaynes was wrong" and confident that anyone claiming "Kaynes was right and we must do suchandsuch!" is saying the wrong thing. Ditto the other theories.
  - 3y ago
jay_kyburz 3y ago
I assumed the OP was saying The Great Depression led to WW2
dauertewigkeit 3y ago
Read on the rise of fascism in Italy. It had a lot to do with discontent with liberalism at the time.
- hef19898 3y ago
  And we are reaching (?) a similar point all over the democratic countries right now again.
- red-iron-pine 3y ago
  it was more than just a discontent with liberalism, it was also discontent with communism -- an attempt to find a 3rd way / fuse them. the ruthless capitalist approach led to the development of communism as a reaction. but communism had its own faults and, to many, egregious failures as well. Mussolini -- who was literally the editor of a socialist newspaper -- grew disillusioned with socialism, and proposed a 3rd way by mixing chunks of capitalism that he liked with the chunks of communism that he liked, as well as a good healthy dose of machismo and nationalism to paper over the gaps. similar approaches were taken in Germany, and there was a Nationalist (right wing) Workers Party (left wing) called the NSDAP that tried to do the same thing. Instead of pure corporatism they made it ethnic, but had vaguely similar approaches to corporations and the state, which often meant whatever they felt like at the time.
OO000oo 3y ago
Germany and Britain and France and Austria were all very much capitalist countries.

jowea 3y ago

I believe the case against classical liberal economics has more to do with the economic crises of the late 19th century and specially the Great Depression than with the wars.

churchill 3y ago
Nope. The Great Depression doesn't indict classical liberal economics - the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%. When the bankers started calling in their loans, everyone went bust. That'd be equivalent to grow America's M2 ($20 trillion) by 12 trillion in just 4 years. 2019 to 2022 wasn't even that intense and, well, we can see how ugly things have gotten.
- derstander 3y ago
  > the Federal reserve is to blame for it! Between 1923 - 1927, just 10 years after the Fed was formed, it grew money supply 60%. I’m not an economist so I’m speaking from a position of ignorance here. But I thought the US was on gold standard during this time period. How was the Fed able to increase money supply by such a large % without e.g. the country mining a lot more gold? I tried a cursory search but was unable to find any answers.
  - Geee 3y ago
    That is exactly the problem. They issued more currency than there was gold in the reserve. I.e. they broke the gold standard.
    - marcinzm 3y ago
      Looking at charts of the US gold supply it seems to have grown fairly significantly in the early 1900s up to the great depression, and seems to have been more than the 60% cited for money supply growth.
  - churchill 3y ago
    The same reason Nixon had to take the U.S off the gold standard in 1971 - the government printed more dollars than it had gold to back. Just because you have a gold standard won't stop politicians from printing cash when they need it. The only way to stop politicians meddling with money is to denationalize it and eliminate legal tender laws.
- marcinzm 3y ago
  Looking at charts the money supply mainly grew during WW1 and growth went back to the previous levels after WW1.
- AnimalMuppet 3y ago
  Bankers don't usually start calling in loans when there's too much money, but rather when there's too little. So I think your explanation needs a few more causal steps.

cbau 3y ago

Not an expert, but if you read any of Keynes, he's basically critiquing classical economics and pointing out some of the ways it fails to explain economic cycles, hence the invention of macroeconomics. https://en.wikipedia.org/wiki/The_General_Theory_of_Employment,_Interest_and_Money https://en.wikipedia.org/wiki/The_General_Theory_of_Employme...

dantheman 3y ago
Keynes was always wrong, and is an excuse for governments to spend money. Stagflation...
- churchill 3y ago
  Keynes has to be THE most confusing and self-contradictory personality in orthodox economics. He had no original insights and the only reason political elites took a liking to him was because he gave them a logical, complicated copout for money printer to go brrrrrrr. He frequently changed his theories and ideas for political expediency and the idea that modern 'economists' take his teaching as gospel truth is just sad. Murray Rothbard wrote an entire profile on the man [0] and I'd suggest anybody taking a stab at heterodox economics to read it. [0]: https://mises.org/library/keynes-man-1 https://mises.org/library/keynes-man-1
  - morelisp 3y ago
    > frequently changed his theories and ideas for political expediency... Murray Rothbard Man if there was ever a pot for a kettle...
- roenxi 3y ago
  When dealing with Marxist or Keynsians (or modern monetary theorists for that matter) it is a safe bet that the people implementing the policies haven't read and don't intend to follow the theory. So I am simultaneously shy of saying "Kaynes was wrong" and confident that anyone claiming "Kaynes was right and we must do suchandsuch!" is saying the wrong thing. Ditto the other theories.
- 3y ago

jay_kyburz 3y ago

I assumed the OP was saying The Great Depression led to WW2

dauertewigkeit 3y ago

Read on the rise of fascism in Italy. It had a lot to do with discontent with liberalism at the time.

hef19898 3y ago
And we are reaching (?) a similar point all over the democratic countries right now again.
red-iron-pine 3y ago
it was more than just a discontent with liberalism, it was also discontent with communism -- an attempt to find a 3rd way / fuse them. the ruthless capitalist approach led to the development of communism as a reaction. but communism had its own faults and, to many, egregious failures as well. Mussolini -- who was literally the editor of a socialist newspaper -- grew disillusioned with socialism, and proposed a 3rd way by mixing chunks of capitalism that he liked with the chunks of communism that he liked, as well as a good healthy dose of machismo and nationalism to paper over the gaps. similar approaches were taken in Germany, and there was a Nationalist (right wing) Workers Party (left wing) called the NSDAP that tried to do the same thing. Instead of pure corporatism they made it ethnic, but had vaguely similar approaches to corporations and the state, which often meant whatever they felt like at the time.

OO000oo 3y ago

Germany and Britain and France and Austria were all very much capitalist countries.