Category: Economics

Books that Built the Austro-Libertarian Movement
The Framework
These are the books that built the austro-libertarian movement as we know it – all available in the perfect size and for the right price. There was a time when a month’s salary couldn’t acquire these books – if you could find them. And then they were also huge and unwieldy. We’ve fixed that with these brilliant and fun pocket editions.

Article: The Global Reserve Army of Labor and the New Imperialism

Loyalist Arms Factory
Image by Burns Library, Boston College via Flickr

I managed to read this article while having coffee today in a exquisite café in front of the Palace Museum in Weimar. It was very hard to try understanding the author’s ideas while he refuses to accept that the value of a product is the result of an objective theory of valuation done by the consumers and sellers in specific contexts. He gives for granted that labor force is the one deterministic condition behind production and trying to get his point seems quite difficult at points. Nonetheless, this is a great opportunity to understand the mainstream ideas of Karl Marx theories in regard to Globalization and what some of them call “Global Capitalism / New Imperialism”. Here’s the intro and then a link to the article via EbscoHost,

The article discusses the ways in which the growth of the global capitalist labor force has altered the imperialistic nature of global capitalism, as represented by powerful multinational corporations, by negatively affecting wages in both developing and wealthy countries. The authors rely heavily on philosopher Karl Marx’s theories on the industrial reserve army and capital accumulation, which posit that wealth accumulation will invariably lead to increased suffering for the working masses. They go on to explain the exploitative nature of global labor arbitrage, which essentially means a corporation’s benefiting from low wages in developing countries. The process of arbitrage is related to the development of massive global supply chains.
Read more: The Global Reserve Army of Labor and the New Imperialism. (AN 66933797) Academic Search Complete. FOSTER, JOHN BELLAMY; McCHESNEY, ROBERT W.; JONNA, R. JAMILMonthly Review: An Independent Socialist Magazine; 11/01/2011

China Is Asked for Investment in Euro Rescue

Euro
Image by Images_of_Money via Flickr

A new chapter is being written in the History of Money, Bank and Credit as news of how European leaders are asking for China to rescue them from the chaos they created. I wish this guys reconsidered before continue acting some of the most important principles of Deficit Financing, Freedom, Inflation, Money, Property Rights, Savings, Welfare State, Consumption, Credit; Gold Standard, Market Value, Objective Theory of Values, Production, Purchasing Power, Sanction of the Victim, Selfishness and the Trader Principle just to mention a few before going on making more business that en debts their country’s economy while make their citizens poorer.

And as Ayn Rand cleverly mentioned in regard to Deficit Financing,

The government has no source of revenue, except the taxes paid by the producers. To free itself—for a while—from the limits set by reality, the government initiates a credit con game on a scale which the private manipulator could not dream of. It borrows money from you today, which is to be repaid with money it will borrow from you tomorrow, which is to be repaid with money it will borrow from you day after tomorrow, and so on. This is known as “deficit financing.” It is made possible by the fact that the government cuts the connection between goods and money. It issues paper money, which is used as a claim check on actually existing goods—but that money is not backed by any goods, it is not backed by gold, it is backed by nothing. It is a promissory note issued to you in exchange for your goods, to be paid by you (in the form of taxes) out of your future production.

“Egalitarianism and Inflation,”
Philosophy: Who Needs It, 133

Read more of this news:

PARIS — A day after European leaders unveiled their latest plan to save the euro, top officials opened talks with China in an effort to lure tens of billions of dollars in additional cash, giving China perhaps its biggest opportunity yet to exercise financial clout in the Western world.

China is expected to demand significant concessions, including financial guarantees and limits on what Beijing sees as discriminatory trade policies, in exchange for any investment in Europe’s emergency stability fund. The head of the rescue fund, Klaus Regling, got a cautious reply from Chinese officials Friday during a visit to Beijing, where he said he did not expect to reach an investment deal with China anytime soon.

A senior Chinese official, Vice Finance Minister Zhu Guangyao, said China — like the rest of the world — was still waiting for the Europeans to deliver crucial details on how the rescue fund, the European Financial Stability Facility, would operate and be profitable before deciding on whether to participate. via: China Is Asked for Investment in Euro Rescue by Liz Alderman and David Barboza.

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Video: A History of Economic Booms and Busts

When an economy falls into a recession, we typically observe a cluster of people making similar investment mistakes.  According to historian Stephen Davies, these investment errors occur because governments or central banks manipulate the supply of money. These manipulations place artificial downward pleasure on interest rates, creating false signals that entice individuals to invest in what end up being unprofitable ventures. Booms and busts are not a new phenomenon of this century, but rather, have occurred throughout history both in America and around the globe.

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The Great Narrative and the School of Salamanca

The Great Narrative in regard to 16th Century Spain is focused on the expansion of Spanish Mercantilism in America and in how the Ottomans were defeated at the naval Battle of Lepanto bringing their dominance of the Mediterranean to a close.

Sadly (to a great extent), this Euro-centric perspective started to change and more emphasis was given to the production of knowledge in the Peninsula via the appropriation of the culture and scientific knowledge brought to Europe by the al-Andalus Muslims. The Great Narrative and its “Western exceptionalism” discourse won the battle again and it focused on how “Europe” or the “West” acquired this knowledge and created a “Renaissance of Knowledge” while forgetting the source of it.

This Western Renaissance is today widely know and studied as the School of Salamanca.  A School that Western historians like to remember as the product in 100% of Catholic Religion, Spanish rationalist theological work, Western humanism and by the Protestant Reformation that was consolidated in Salamanca with the writings of the Scholastics Francisco de Vitoria, Domingo de Soto, Martín de Azpilcueta (or Azpilicueta), Tomás de Mercado, and Francisco Suárez.

The “non-western” roots of this Renaissance in the Spanish Peninsula are still not well discussed nor researched.  There’s still the need for further study the inherited knowledge from the al-Andalus Muslims (who were later known as Mudéjars) and to establish a direct link of many of the roots of “Europe’s Renaissance” in places as far as the Tigris and Eufrates.

Today, my book recommendation will be a great work that exemplifies how this Great Narrative idealized the School of Salamanca as the product of 100% “Western values”.  It is worth reading and studying carefully in order to not commit the same mistakes.

School of SalamancaThe School of Salamanca

Marjorie Grice-Hutchinson’s remarkable classic, The School of Salamanca, posed an extraordinary challenge when it first appeared in 1952. The book is not only a pioneering presentation of this lost school of monetary theory—fantastic thinkers of Old Spain that were more advanced than the English classicals centuries later–it is also beautifully written.