Gary's Column Has Wings

I posted a brief comment (and a recommendation that you READ!) a column by Gary North which first appeared as a regular post on his website for subscribers only (where I got to read it first! hahaha!), and then later appeared on LRC, at which time I commented on it since it would be available for your viewing pleasure. It was then commented on by Vox Day, and now it has moved to one of the daily columns on Mises.org. The reason this particular essay has legs is BECAUSE IT IS IMPORTANT! What we are seeing probably is just as big as he says that it is. When historians are writing their history books two centuries from now, they will say that American power began its final collapse in October, 2008, just as Soviet communism began its collapse with the fall of the Berlin wall. It was the event that revealed the Empire had no clothes. The ability and willingness to project overwhelming force held the Soviet bloc together. The American financial system is what is holding the "American empire" together, such as it is. This is the means by which America funds its military operations, projects power across the globe, and maintains domestic tranquility between some very unhappily wed countrymen. Without it, the American government is impotent, both at home and abroad. Similarly, the USSR had been in dire financial straits prior to the civil unrest which brought it down. I have a Russian friend whose mother's factory had been paying her in alarm clocks in the months prior to collapse, because the domestic economy had become something of a joke. Nobody took the financial system seriously anymore. It is difficult for a government to project power when money and finance has become a laughingstock. How does one pay its soldiers and police? How does one ensure that they don't pick up "side work" to help pay the bills? I think this is one of the major problems Mexico has, and it seems to be getting worse lately. The money and lifestyle available from illicit activities simply overwhelms what legally legitimate activities can provide. The mismanagement and dysfunction with which their domestic affairs are handled has ensured that their economy cannot offer up substantial legitimate opportunity, while at the same time ensuring that the domestic government hasn't the resources to effectively dissuade illegal activity. Coupled with a northern neighbor whose citizens can afford to pay a fortune for certain substances that for some reason it is also intent on banning, and you have a recipe for, well, Mexico. This is an important lesson: the ability of a government to project power/maintain order is at its most fundamental level based upon its willingness to refrain from using that power, which entails tolerating a bit of liberty and that other players acquire a bit of power in their own right. Without a bit of liberty, economies simply don't function. When a government tries to control everything, in effect it is able to control nothing. In other words, for a society to function, it has to embrace a certain level of Austrian theory. This is because, simply, Austrian theory is true. Acting on what is true results in positive outcomes in a world governed by universal laws, both physical and ethical. "The truth shall set you free," as a very wise Man once said, at least to what is possible within the confines of this physical existence. An economist, politician, or civilization can no more do just as one pleases than an engineer can design an aircraft in the shape of a cube simply because he desires it. An engineer that ignores the truth of physical law will forever remain on the ground. An engineer that submits to them and takes them into account may one day fly among the clouds. So it is with civilizations. China appears to have learned this lesson to some degree, probably from the example of the USSR. America knew this lesson once, and seems to have forgotten. Of course, said future historians probably still won't understand economics, certainly not as well as Gary North does, and the collapse will just go down as the end of an excessively free financial system that was allowed to rum amok. At least that is how history has treated other such occurrences, as we perpetually hear the Great Depression being explained and we are currently being force-fed about the present crisis. Some truth we simply never accept.