Tuesday, August 31, 2010

Letters in spirits erode nothing but the ‘evil’

Recently I happen to read some of articles written by Jude Blanchette. The following are some of collection of letters written to various newspapers by Professor F A Hayek and Mises and Oskar Morgenstern. in the early decades of twentieth century.

From the "Austrian Economists as Denizens of the Popular Press"

  • In 1923, a 24 year old F.A. Hayek wrote a letter to the editor of The New York Times in which he detailed incipient inflationary forces in Germany that had already devalued the mark to 1/500 of its value. "It is a matter of common knowledge," the young Hayek wrote, "that Germany's middle classes, including the small merchant and manufacturer, have lost almost everything."

  • In a series of letters to the editor of The New York Times, for example, Mises outlined the socialistic nature of the Nazi regime. In a 1942 letter, he wrote that in Germany, "Market exchange and entrepreneurship are thus only a sham. The government, not the consumers' demands, direct production; the government, not the market, fixes every individual's income and expenditure. This is socialism with the outward appearance of capitalism ¾ all-round planning and total control of all economic activities by the government."

  • The need to overcome economic nationalism through trade and commerce, an important theme throughout the work of Mises, was the subject of a 1943 letter to The New York Times. In this letter, entitled, "Super-National Organization Held No Way to Peace," Mises writes that, "The building up of a lasting union of the peace-loving nations is not a technical problem of conventions, constitutions and bureaucratic organizations. Economic nationalism cannot be eradicated by measures of a purely institutional character. What is needed is a radical change in political mentalities and social and economic mentalities."

  • In a series of New York Times op-eds published in the 1950's, Oskar Morgenstern championed the capitalism of Hong Kong and noted the failings of the "third way" in Sweden. A 1954 piece entitled "Capitalist Oasis" details the remarkable progress made by the tiny island of Hong Kong, "a paragon of capitalist freedom."

  • What would be of particular interest to Austrians, and indeed was for Morgenstern, was the regulation of money, or lack thereof. "The money market is remarkable in that three private banks are still allowed to issue banknotes of their own, which constitute the local currency in circulation apart from government coins. There is no central bank, but whether because of this or in spite of this, the money system is very stable. Every currency can be transacted freely and there is no control over capital movements in and out."
  • In a remarkable four-part series appearing in the Wall Street Journal beginning December 12, 1949 and ending four days later, Mises condensed his critique of socialism and addressed it to the masses. The four op-eds were published under the titles "The Socialist Society," "The Socialist Planner," "Socialism's Unique Problem" and "Socialism in Disguise."

  • Hayek, for his part, took to the offensive in articulating the ideas of freedom. In a response to Professor Harold Laski, appearing in The New York Times, on the question of "Is the World going to the Left?" Hayek reiterates the need for individual thought and freedom in the face of totalitarian pressures.

  • "The century from 1848 to 1948 will probably come to be known as the century of Socialist delusion, a century during which, as a result of sheer intellectual error, so much good-will was canalized into efforts which very nearly succeeded in destroying the values the people most wanted to preserve."

  • In Socialism, Mises wrote that, "Only ideas can overcome ideas and it is only the ideas of Capitalism and of Liberalism that can overcome Socialism. Only by a battle of ideas can a decision be reached."

Also read:

  1. Education is the Effect, Not the Cause, of Affluence by Jude Blanchette
  2. Government Is Better than the Market at Producing Human Capital? by Jude Blanchette
  3. We Have Enough Globalization?by Jude Blanchette

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