Is life so dear, or peace so sweet, as
to be purchased at the price of
chains and slavery?

I’ll blog shortly about the Independent Commission on Banking’s Interim Report but, as I see Spain is thought by some to be next for a bailout, this quote from Mises’ Causes of the Economic Crisis seems apt:

In discussing the situation as it developed under the expansionist pressure on trade created by years of cheap interest rates policy, one must be fully aware of the fact that the termination of this policy will make visible the havoc it has spread. The incorrigible inflationists will cry out against alleged deflation and will advertise again their patent medicine, inflation, rebaptizing it re-deflation. What generates the evils is the expansionist policy. Its termination only makes the evils visible. This termination must at any rate come sooner or later, and the later it comes, the more severe are the damages which the artificial boom has caused. As things are now, after a long period of artificially low interest rates, the question is not how to avoid the hardships of the process of recovery altogether, but how to reduce them to a minimum. If one does not terminate the expansionist policy in time by a return to balanced budgets, by abstaining from government borrowing from the commercial banks and by letting the market determine the height of interest rates, one chooses the German way of 1923.

It’s my view that the fundamental cause of the crisis has been Governments’ use, over the last 40 years, of our institutionally-inflationary financial system to bankroll politician’s promises. Sooner or later, it must and it will end.

The challenge of our time is to stop this statism, this fantasy that we can consume without producing, before the social and political consequences are too grave.

This post originally appeared on cobdencentre.org.

Cobden Centre Chairman, Toby Baxendale, and Corporate Affairs Director, Steve Baker, are this week in Salamanca, Spain for the Ludwig von Mises Institute’s Supporters Summit 2009:

One of the great discoveries of the 20th century concerns the origins of economic science in the late middle ages in Spain and Italy. Long before Adam Smith wrote, many scholastics from the 14th through the 17th centuries were writing systematic economic theory.

We heard this morning how the Salamancan friars were liberals, believers in freedom, who advocated:

• Free markets and free enterprise
• Low taxes and a small state
• Free movement of people and products
• The rule of law and the equality of all before the law
• Individual liberty
• Separation of the powers of the state
• Democracy within limits set to protect minorities and individual rights
• Justice: the defence of life, liberty and property

The Salamancans promoted subjective value and argued that an abundance of money makes it worthless. As early as 1544, they argued from legal principle for 100% reserves on demand deposits with depositors paying for safekeeping services.

In other lectures, we learned:

• How recent Nobel Laureate Oliver E. Williamson has opened the way to a capital theory in neoclassical economics which could converge on Austrian-School theory through his “asset specificity”.
• How timely is Adam Smith’s Wealth of Nations, a systematic treatise which, despite its limitations, could still refute today’s flawed policies.
• Some lessons from a career in modern banking: how bank failures occur and what history has to teach us.
• What Federal Reserve Chairman Ben Bernanke could learn from Juan de Mariana’s 17th century treatise De Monetae Mutatione: stop inflating the money supply.

Toby speaks tomorrow, presenting “An Entrepreneur’s Tale: The Meltdown of 2008”.

Five-way assembling (click to enlarge)

Once the wind subsided, we had a great day. Eight jumps, knocked out as fast as possible: first an eight-way, then five-ways when three lads left for the airport.

More photos when I’m not behind a filter blocking flickr.

Jumping would have been a little chilly today, but here’s a still from Lillo:

Toledo rooftops, originally uploaded by stevenjbaker.

Rain stopped skydiving on Saturday, hence a rather damp visit to Toledo.