Gordon Brown, the G20, hyperinflation and economic incompetence


Gordon Brown promises increased economic intervention by the G20, including sales of gold reserves, and the emergence of “a new world order”:

Janet Daley looks for comfort:

Gordon Brown has announced – in his best portentous tones – that the G20 summit concluded that “global problems require global solutions”. What the summit actually proved was, to adapt Margaret Thatcher, you can’t buck national electorates. There will be no World Government today, thank heavens. The critique of Mr Brown’s summit (as it presumably must be known) in this country will probably concentrate on its failure to produce the humungous additional financial stimulus that the Anglo-American alliance was urging. So on that score, the Franco-German axis got its way.

via No World Government yet – thank heavens :: Janet Daley.

While the Mises Institute uses long-established economic theory to demonstrate that we will have hyperinflation and a progressive undermining of the free-market order — such as it has been — as a result of present policies:

[F]iat money created through bank credit expansion necessarily causes boom-and-bust cycles, inducing governments to push back free-market forces to prop up the economy and keep the fiat-money regime afloat; in fact, fiat money will increasingly undermine the free-market order.

via There Will Be (Hyper)Inflation – Thorsten Polleit – Mises Institute .

The logical facts of market phenomena are consistent through time; government intervention is “superfluous and useless, but also harmful”:

[S]ociety must choose between two systems of social organization: either it can create a social order that is built on private property in the means of production, or it can establish a command system in which government owns or manages all production and distribution. There is no logical third system of a private property order subject to government regulation. The “middle of the road” leads to socialism because government intervention is not only superfluous and useless, but also harmful. It is superfluous because the interdependence of market phenomena narrowly circumscribes individual action and economic relations. It is useless because government regulation cannot achieve the objectives it is supposed to achieve. And it is harmful be cause it hampers man’s productive efforts where, from the consumers’ viewpoint, they are most useful and valuable. It lowers labor productivity and redirects production along lines of political command, rather than consumer satisfaction.

via Critique of Interventionism by Ludwig von Mises .

Politicians may prefer ethics to economic theory, but is it ethical to ignore the economic realities one does not like?

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Comments & Responses

One Response so far.

  1. Steve says:

    Great analysis from Fraser Nelson:

    http://www.spectator.co.uk/coffeehouse/3509801/browns-illusory-g20-deal.thtml

    Britain has as its Prime Minister a master of political illusion. He may not be much of an orator, but there is no one better at dressing up old money as new. If the G20 nations wanted to fake progress, to spin a $1.1 trillion figure while committing no new money at all, then Gordon Brown is their man. “This is the day that the world came together to fight the global recession, not with words but with a plan,” said our Dear Leader. Well, let’s have a closer look at this supposed plan…