1.11 - Chicago School (Commanding Heights Sample)

[PrivateAckbar]

I want to fucking cuddle Milton Friedman.

[jimbob1969]

clowns

[doublestrokeroll]

Friedman and his like are nothing more than pretentious assholes who think that they can run economics like a science. What a joke they and their theories have proven to be.

But hey! Prosperity is just ONE more deregulation away right? And any problems while you are deregulating are just "distortions" caused by the regulations still in place.

My god the fact people believe that type of shit with a straight face...grown men no less...is truly sad. EVERYONE should just ignore these idiots.

[Nintendomanwill]

So is it not more idiotic to impose a regulation (like expropriating the rich to give alms to the starving, with little dissent from the masses), see that it has caused a problem (increased prices of the goods contained in those alms, a suffering middle income bracket who receive no aid & less saving per annum by the rich investors) and then argue for a further intervention? Like price controls? Then underproduction of those goods occur!

Freedom is not the problem where it's not to be found.

[reddwarf2300282]

Part 1, 2 were really good. Part 3 only average. Does not contains much about source of financial crisis and solution.

[diadorim1234]

colonialism, slavery and the slavetrade were never important economic factors to contribute to the rise in power of western europe. I am from holland and the dutch were the most powerfull country, militairy and in terms of trade of the 17the century. The total amount of money that came from all aspects of colonial trade were superceded by Whale hunting of the coast of Greenland.

[TimeWarp66]

3:55

great point

[emremokoko]

Jean Baptiste Say said (the guy who came up with Say's Law):

"Under every for of government, a state, whose affairs are well administered, may prosper. Nations have risen to opulence under absolute monarchs, and have been ruined by popular councils"

(in "A Treatise on Popular Economy", 1804)

[Nintendomanwill]

@emremokoko

Why should popular councils decide property accumulation, rights and dispensation? Why not the free market i.e. the volition-based ordination of the division of labour and responsibility by way of its mutual assessment of productivity-why not that? Because the Syndicalists and the democrats (and the Democrats with a capital D too) ave a spurious value judgement against the successful savers and investors in the free economy.

[emremokoko]

We must be careful to use statistics and mathematics.

We use the Fisher formula to infer the velocity of money. Simply take the nominal income and divide it by quantity of money. BUT if there is no OTHER way to measure velocity, we can not know if the formula is correct, can we?

The same argument is for demand and supply of money. We can measure (with some approximation) the existing quantity of money, but not its supply and demand.

[emremokoko]

Friends, let us not forget that throughout the history of mankind, almost all economies has been a mixture of govenment intervention and free markets.

Only recently in human history we see this "total command" versus "total free market" economy debate. Both are idle fantasies.

Both these ideas are something of a historical anomaly in my opinion. The world has been, is and always will be a "mixed economy".

[billyysands]

The Third Way is a term that has been used to describe a political position which attempts to transcend left-wing and right-wing politics by advocating a mix of some left-wing and right-wing policies.[1] Third Way approaches are commonly viewed as representing a centrist compromise between capitalism and socialism, or between market liberalism and democratic socialism.

[billyysands]

The Third Way is a term that has been used to describe a variety of political philosophies of governance that embrace a mix of market and interventionist philosophies. Third Way approaches are commonly viewed as representing a centrist compromise between capitalism and socialism, or between market liberalism and democratic socialism

[billyysands]

keynesian policies worked very well throughout the 1950s and 1960s

i think the problem is balance if governement becomes to big when regualtions to restricitve when the government takes control of too much of the economy its like being overweigh and it slows things down. monetarism or suplly side wasnt so much an absolute but a re adjustment of excess.

[stick1to2the3issue]

I bought this entire dvd set and have shown it to as many people as I can. I'll show my kids someday.

[IllegalInvasion]

If you don't understand history you are doomed to repeat it. We started our country as Socialist and were nearly starved out of existence before we even had a chance to build our great country. Yes the Pilgrims began with a communal all for each according to his need from each according to his abilities. Once they agreed to parcel the land for each families ownership their community thrived.

[cassell1986]

The greatest economic school ever in human being's history. Shinning with uncountable hournors.

[khallaghi]

But the worst damage of Friedman economics is not fiscal but what it has done to the social and moral principles that made America what it was before the greedsters of neo-capitalism began taking it apart. The underlying principle of laissez faire economics is that power is intrinsically good and decency intrinsically irrelevant.

Sam Smith

[ozzlefozzle]

Man I'd like to a Masters there

[TehBANN3D]

I dislike the Chicago School since it ignores moral or utilitarian rights. Rothbard > Freidman.

[sunstorm007]

You are wrong about that.

[Searle8]

Transfinancial Economics is the way to the future. It is my research, and development project.

Robert Searle

[illinoisgrad]

"Chicago is geographically isolated?!?" (0:40) Nonsense. Look on any maps of railroads - the city is at the center of a spiderweb of tracks.

[jackson32]

Achilles222

I disagree. On monetary issues they either show an amazing lack of understanding - their is no reason to keep the price level steady, look at the price level in 19th century America, prices went down steadily amidst unprecedented growth - or they are simply protecting a system of hidden theft. I guess the latter wouldn't have anything to do with the fact that it's almost impossible to get tenure in academia if you believe in a gold and silver backed monetary system.

[sunstorm007]

Your one of these nuts who believe in all these vast collusive conspiricies between the government and all the major universities to lie to people. Acedemia is full of people who think on the farthest ends of every spectrum. George Mason's economics dept is full of Rothbardian and Mises Ideaologs and I'm sure there is a lot in other universities as well

[jackson32]

"Acedemia is full of people who think on the farthest ends of every spectrum."

Unfortunately you ran into someone who knows that's bullshit. Success in academia has a lot to do with being PC. In subjects like economics, history, and political science having the "wrong" ideas can mean you are denied tenure, and the reasons for this are 100% political.

[jackson32]

"who believe in all these vast collusive conspiricies between the government and all the major universities to lie to people."

As Prof. Murray N. Rothbard wrote:

It is also important for the State to inculcate in its subjects an aversion to any "conspiracy theory of history"; for a search for "conspiracies" means a search for motives and an attribution of responsibility for historical misdeeds.

continued

[jackson32]

If, however, any tyranny imposed by the State, or venality, or aggressive war, was caused not by the State rulers but by mysterious and arcane "social forces," or by the imperfect state of the world or, if in some way, everyone was responsible ('We Are All Murderers," proclaims one slogan), then there is no point to the people becoming indignant or rising up against such misdeeds.

continued

[sunstorm007]

"A "conspiracy theory" can unsettle the system by causing the public to doubt the State's ideological propaganda." That knife can cut both ways such as anti sementic views that the Jews rule the financial world. This can be used to foster Fascism as much as anything else. The reason? because it it based on spectulation and unfalsifiable evidence, in otherwards propaganda, or in laymans terms Lying

[jackson32]

Furthermore, an attack on "conspiracy theories" means that the subjects will become more gullible in believing the "general welfare" reasons that are always put forth by the State for engaging in any of its despotic actions. A "conspiracy theory" can unsettle the system by causing the public to doubt the State's ideological propaganda.

[sunstorm007]

1st of all do you hava an original idea of your own, or do you need Rothbard to think for you? As a side note you are free to look at George Mason's or any other College's econ dept any time you please.

[TehBANN3D]

At My highschool I got points market off for saying the fed created the great depression through the expansion of false credit. My teacher wanted me to explain why free markets dont work using Keynesian rational. I know its not University level Scholastics, but the education system does try to imbued students with ideologies.

[sunstorm007]

I can't speak as to highschools because I never went to highschool. Any College worth it's salt will encourage independent thought although you still get a couple bad eggs here and there. If you go to a Univesity you will be expected to be able to defend your postion based upon agreed methods on all sides in the acedemic world. You still have to follow certain rules of Argumentation.

In the University "even way more at the graduate level" only the method matters not which ever side you are on.

[gth824c]

I am guessing you went to public school correct me if I am wrong. Socialist institutions will teach socialist things that's no surprise.

[billyysands]

i went to public school and got a very good education. and only the rich can afford private schools so that is so arrogant of you only a few can enjoy education or housing or health care.

that sort of ignorance and arrogance repeating some clich you heard at bible school or the gun club is why you now have a socialist in the white house

and i hope your enjoying it. next hes coming for your bible and your guns.ew

hide hide

[shanklinmike]

That is true!

watch?v=fpPNjkeL-Ks

[stick1to2the3issue]

If you read "Free to Choose" by Milton Friedman, you'll find that the fed actually contracted the money supply, which created the great depression.

[BNMWE]

I watched this documentary more than five times it is so deep in ideas and i will watch it more.

[jackson32]

The Chicago School is not for true capitalism. They still support fiat money and central banks, thus allowing governments to inflate money at will, which always leads to poverty for the majority of people. The rich elites are the ones who benefit most from this. Also they believe in school vouchers which is not a solution because it still leaves education in the hands of the state. Their idea that you must add to the money supply to keep prices stable is just silly, their is no need for that.

[Achilles222]

Chicago economists area true capitalists and defenders of liberty. They simply act within the political and intellectual constraints that are present.

[jackson32]

Why not just allow completely private schools that don't have to answer in any way to the government. No they cannot recommend that, first of all it goes against everything academia believes, anyone recommending this would never get tenure, and of course it would not allow government to brainwash kids while they were still young. I know, the government would never do such an evil thing.

[fernandorosdav]

there is one person who defeats them in the philosophical sense, thats noam chomsky, his argument is that the neo liberal economic policy deters democracy and the will of working people and put power on oligarchs , when the keneysian system in the US has been a democratic decision

[jackson32]

"when the keneysian system in the US has been a democratic decision"

I hope you don't believe in keynesian economics, it has been thoroughly debunked

[Nintendomanwill]

Except that Friedman was a Keynesian. As I see it, quantitativists might as well be Mercantilists trying to expand the circulation of money media into their jurisdiction by hampering imports i.e. sale of money outside of that jurisdiction. Why do I think that if 17th century monarchs taxed in kind rather than in gold money, that the Mercantilits would have argued for imports of that good in kind? Because I'm perceptive. If I can see that inflation disrupts intersectoral prices why couldn't MF?

[LexPhilogus]

@Nintendomanwill That's very good thinking. However, I see a problem with your reasoning in that, to my knowledge, most economists of the Chicago stripe are pretty much unconcerned with trade deficits.

Also, contrary to popular opinion, monetarism is not a discretionary supply policy.

[Nintendomanwill]

The problem of trade deficits arises from floating currencies though so Chicagoites must take blame.

China's Mercantilist policy unfortunately succeeds in impoverishing their workers to enable exports and hoarding of dollars because rather than the price of goods in Yuan rising with their relatively great exportation, the Dollar is kept from rising against the Yuan by Chinese bureaucrats taking the simple step of expropriating the $ income of exporters. Common currencies cannot be thus abused.

[fernandorosdav]

their idea of a good economy is america in the 1870s during the gilded age were Rockefeller and Carnegie and the railroads owned all of the US, there was labor rights no environmental policy, people worked 12 hrs a day, thats the vision of people like Friedman and Hayek

[stick1to2the3issue]

Milton Friedman understood the need for the federal reserve. Yes they are chronically incompetant however its better to have it than to put up with constant runs on the bank.

[jackson32]

Your totally wrong about that. The FED is a private bank run for private interests, only a very stupid or very naive person does not see a problem with that.

The whole idea of a central bank is wrong, you don't have to keep prices steady as Friedman argued, during the 19th century prices dropped steadily throughout the century with unparalleled growth. You need to develop some critical thinking skills and stop believing everything you read.

[stick1to2the3issue]

Be carefull before you accuse me of not thinking critically when it is you who has not done your research. Friedman had no problem with falling prices or rising prices. What he had a problem with was an oversupply of money or an undersupply of money *especially during a recession. The worst thing you can do is contract the money supply during a period of contraction. Just as you should not over inflate the money supply during a period of growth. You did not address bank runs.

[jackson32]

Bank runs would be taken care of by the free market, as anybody with an INFORMED understanding of economics would know. People not understanding economics is serious a problem in the truth movement.

I respect Milton Friedman because he helped to spread real economics, in which the free market was unhampered as much as possible.

"You did not address bank runs."

I have now answered that and now I ask where is your outrage at what central banking has wrought in our country?

[stick1to2the3issue]

It's not an issue of free market vs. regulation. It's purely a monetary issue as Milton Friedman explains in his book "Free to Choose". It is very interesting I suggest you read it. You sound like you adhere to the Austrian school of economics.

While I respect the Austrian school I differ with it in a few areas. Monetary policiy being one of them.

[jackson32]

It IS an issue of the free market vs. government.

What your saying is trust people in government to manage the money supply, something that is a huge moral hazard. Sure trust government regulators, that's worked great so far hasn't it.

It's remarkable how you don't address anything I'm saying. As I said before, prices went down steadily all through the 19th century amid unprecedented real growth in standards of living.

The only people that benefit from a central bank are central bankers.

[Questfortruth86]

"I respect Milton Friedman because he helped to spread real economics, in which the free market was unhampered as much as possible"

No he didn't, he merely stole the theories of previous statist inflationist economists, and presented them as his own. He reintroduced Hume's quantity theory, mimiced Mises' rhetoric, and plagiarized Irving Fisher's work on price stabalization and the removal of the gold standard. Fisher was proven wrong, discredited; Friedman will share this fate

[stick1to2the3issue]

"No he didn't, he merely stole the theories of previous statist inflationist economists, and presented them as his own"

I laugh at the word you use "stole". Just like Socrates "stole" from Mises. Everyone "steals" from adam smith to karl marx.

[stick1to2the3issue]

"Bank runs would be taken care of by the free market, as anybody with an INFORMED understanding of economics would know. "

How does the above comment explain HOW bank runs would be prevented without the lender of last resort (Fed). Making a claim "the free market would take care of it" is not an explanation.

The facts are we have not had a major run on banks since the creation of the FDIC. Before the FDIC in 1934 bank runs were prevalent.

[Questfortruth86]

"Friedman had no problem with falling prices or rising prices."

Wrong, Friedman was very much apposed to rising and falling prices. in fact, all of his so-called "work" was devoted to "price stabilization."

"The worst thing you can do is contract the money supply during a period of contraction."

No, during recessions the money supply contracts on it's own; Friedmans response? Pump the market with liquidity. He merely suggests that the FED watches, and targets the money supply. Impossible!

[stick1to2the3issue]

The ratio of money supply to production is obviuosly what "contracting the money supply means". obviously were not talking about the government phsyically burning money.

[Questfortruth86]

On youtube it' not that obvious.

[stick1to2the3issue]

So your logic says that macro deflation is not a negative thing for an economy. This is lunacy. Do I really have to explain how macro deflation destroys an economy?

[Questfortruth86]

We had a steady to rapid period of deflation during the 19th century. The latter part of this period had annual deflation at around 2% per year, or 33% total deflation from 1880-1896; at the same time, real incomes rose by 5%, or, 80%. This lead to the most robust egalitarian period of growth in American history. The demand for money was very high (represented by k or 1/v), and banks were extremely liquid, leading to very low real interest rates, perpetuating our industrial boom.

[Questfortruth86]

*real income rose by 5% per year (80% total increase). I wasn't too clear about that in my original statement.

The gold standard was losing popularity due to the arbitrary redistribution of wealth from the debtors to the creditors (deflation). There was a massive inflationist movement; the people didn't understand how good they had it, which is quite typical. We gave up the gold standard due to slight losses incurred by debtors, and replaced it with inflation and volatile trade cycles.

[Nintendomanwill]

@Questfortruth86

But those creditors who lent money that appreciated due to falling or constant supply (and your argument could be misleadingly construed against deflation because you need to define it as the fall in money supply) deserve their remuneration according to contract and the increase in real terms that comes to them with falling prices making their loans deference of enjoyment of even greater wealth. It's like an automatic interest rate effect and entirely moral.

[Maradobbo]

The market, this "force of nature", IS something that can CLEARLY be influenced by policy, and whilst I accept that any attempted "fine-tuning" must be extremely sensitive to an array of variables (and hence the critical importance of economics as an academic discipline) it is only explicitly through policy that we can meet (hopefully democratically reached) social objectives.

[Achilles222]

"Social objectives" usually entails an elite forcing people at large into some egalitarian mold.

[Maradobbo]

However, considering the awesome extent of market imperfections in many markets, and especially across the developing world and at the global level, careful regulation and gradualist institutional reform are the only way of getting anywhere close to maximising social welfare.

[fernandorosdav]

thats crap, the one and only case where that has worked has been in Chile, and it has been applied in many other places like in the Caribbean and South America with awful results, now the economic success of Chile in my view is attributed to the strict social policies under pinochet

[Maradobbo]

i agree - don't ignore market forces. but yes - harness them for the benefit OF SOCIETY - the WHOLE of (our GLOBAL) society. that is - how can they best be managed to serve the interests of us ALL, 6 billion. Governance of all makets, up to the global market, is CERTAINLY required, even if this frequently means effectively liberalising market forces to optimise where the supporting institutional depth is sufficiently developed.

[jackson32]

Maradobbo

Oh you mean a NEW WORLD ORDER, a GLOBAL society, a one world government.