A Conversation With Andre

This is an email conversation I had with Mr. Andre Gaudwin.

Andre,

I’m in agreement with you that the way we’re living today is destructive both to ourselves and to our planet.  Whether it be our forms of government or our philosophies toward life and the Earth, our planet is taking a serious beating.

I’ve wondered why our leaders do the terrible things that they do.  Maybe it is because they primarily concern themselves with reelection and pandering to the dumbest members of society.  Maybe it is because they’re just not very smart.  Or maybe it’s greed and since they’re only a temporary caretaker, they try to exploit the people and the country to their own personal benefit.  Whatever the reason, I wonder if we can continue on the path we’re on without killing ourselves.

With nuclear missiles pointed at every inch of civilization, I sometimes lose sleeping wondering when a missile will fall into the wrong hands and KABOOM, the Earth goes up in a mushroom cloud.

We’re currently ravaging the Earth and destroying the biosphere.  Within the next century nearly half of all living species will be killed off as there’s no room for their habitats.

Global warming is a huge threat and could lead to massive crop failures in the future, not to mention massive changes to the environment.

Our views on economics are certainly bad.  Unmitigated capitalism leads to large inequalities in wealth, and a class of parasitic mega-rich who sit at the top, doing nothing productive at all.  Communism is politically repressive, as the central government enforces equality on a sea of diversity.  Can freedom and equality go together?  That seems to be the question.

Both economic systems keep people from being all they can be.  When politically repressed and forced to be “equal” to their neighbor, they’re not allowed to express and fulfill their own individuality and self-passions.  Yet when given freedom in our current economic systems, a small group of greedy bastards control all the money and the average person isn’t able to get his or her hands on enough money to do much of anything worthwhile.  They become slaves to money until they eventually die, stuck in the rat-race.  Most of them rarely get a chance to live out their true inner passions and dreams.  The wealth lingers up in the stratosphere of the mega-rich and never makes it back down to Earth.

The wealthy also then have incentives to keep the status quo in order to keep bringing in their profits. They gain control over the media and stop any meaningful social reforms from taking place.  They have incentives to keep the public conversations dumbed down, because a smart public would demand changes in society – changes which would ruin and destroy their power structure. They spread propaganda from all corners of the globe, confusing everyone in a sea of rigged studies and bad data.  As everyone who has studied Statistics knows, statistics and data can be rigged to say anything. Percentages and data, without proper randomized controls for example, lead to misleading results.  All sorts of poll numbers and “studies” are being quoted, and most of them conflict with one another.  People struggle to make sense of all the information they drown in within this “information” age.

This oil spill is a disaster.  This is yet another instance of the Earth taking a beating.  How long is it before all our drinking water is filled with pesticides?  Before all the fish are contaminated with small bits of plastic and other chemicals?  Before our modified crops start to cause us all kinds of health problems?

I think we have too many people living on this planet and we’re living on borrowed time, hoping scientists will find cures to the problems we’re creating.  But the more people who live on this planet, the more food we’ll need to produce, and that means more destruction of natural habitats as well as genetically modified crops to produce higher yields.  And as the third world further industrializes, without clean energy sources they’ll continue burning fossil fuels contributing to massive warming on the planet.  They’ll also become worse polluters as their corporations search for ways to save money, and start wrapping their products in plastic, etc.

I recently watched some films by David Attenborough and his ending to his ‘Life Of Mammals’ series was quite powerful.

I think scientists would be able to create new technology to fix these problems, but, as you said, our politicians and leaders waste money building weapons instead of helping the planet.  It’s a shame that the brightest members of our society, our scientists and engineers, are subject to some of the dumbest people on our planet — elected officials.  If you look at the election process in any detail you see that it’s a complete joke.  They stick a few signs up in people’s yards with their name on it, and quote a few party one-liners and pit a mob of mostly uneducated common-folk against one another based on shallow political rhetoric. Also, unless you have millions of dollars for mass media exposure, you’re unlikely to win a powerful seat in our government.  This leads to the rich ruling us, mostly to their own benefit. The winners of this political contest then control the funds to our scientists, and they use it for all the wrong things.  They use it to build weapons to defend their empires.  They use it to steal from and exploit foreigners. They use it to rig the economy further in their favor.  And for those who try to fix things, most of them are unqualified and do not understand all the complications involved.  They don’t know what they’re doing.

As the power of the state expands, these rather stupid and greedy elected officials are given greater and great control over our lives.  In the origins of the United States the government was far less powerful, and life was more simplistic.  Most people were farmers and the economy was self-regulating under a laissez-faire model.  Now things are much more complicated and we have unqualified and evil people setting the rules for immigration laws, tariffs, taxes, banking regulation, currency supplies, healthcare systems, and other complex economic policies which they do not understand or will exploit nefariously.

But having a completely hands off approach, with very little government at all, doesn’t fix things either.  As already mentioned, pure laissez-faire capitalism doesn’t lead to a beautiful world. Corporate greed knows little bounds and they’ll ravage the planet and exploit their workers without any thoughts of long term consequences.  They’ll dump their waste in our streams. They’ll exploit their workers until they’re too weak to work and then throw them aside and hire someone else instead. And if the workers unionize to fight for better wages and better working conditions, the rich and powerful will pass new laws allowing poor immigrants into the country to work for them, or even better, they’ll just relocate to an impoverished country and exploit their citizens instead.  They’ll work children in hot warehouses exposed to dangerous machinery, and when they’re injured, won’t even provide for medical costs.

Have we outgrown our political and economic systems?  I think so. Technology can save us, but with our terrible social systems, it may well destroy us instead.  With all these new problems brought into play by our new technology, our social systems are getting falling dangerously far behind, and that’s a serious problem.

Einstein saw these problems.  Quoting him:

* The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor — not by force, but on the whole in faithful compliance with legally established rules.

* I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals.

* Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio-political problems: how is it possible, in view of the far-reaching centralisation of political and economic power, to prevent bureaucracy from becoming all-powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured?

– Albert Einstein, ‘Why Socialism’ writing for the Monthly Review
http://www.monthlyreview.org/598einstein.php

I’m in agreement with Einstein that some new economic system needs to be in place.  We need a system which removes all the competition among ourselves, yet still provides outlets for growth and self-determination.  It needs to utilize scientific mass production techniques, and share the rewards with all.  But communism, as implemented all over the world such as East Germany, Russia, and China, have not created paradises.  It’s been a nightmare for a lot of people who have lived under such regimes.  And liberal capitalism was implemented in India, leading to a class of rich entrepreneurs, yet the general population is still living in poverty. Some nations such as Japan have taken a “soft authoritarian” approach, using a mixture of liberal capitalism gently directed by a central authority. It’s worked well for them yet at the same time, their economy is hurting right now too.  Their scholars today are debating whether they’ve outgrown their current setup.

Most scientists I meet share comments on these issues and talk about a world where we all share things and work together.  Problem is, how do you actually implement a society like that?  Once you get into the technical specifics it gets really difficult.  I personally feel that our best bet is to somehow use the computer and the internet to distribute our resources.  A lot of the problems money solved was the fact that transactions could be done and people could efficiently exchange goods with one another, yet nobody had to understand what was going on in the big picture in order to do business.  Central planning has always failed because it all gets too complicated far too quickly.  Things become inefficient and wasteful because the human mind is too fragile and weak to plan such a complicated system.  It also falls prey to greed and corruption.

But if somehow computers could do it.  If everyone was constantly inputting their situation into a computer, and it was managing the resources of society.  If programmed correctly, maybe it could distribute the goods in an efficient manner, and never overlook the poor and impoverished, who are struggling.  Political leaders can get too busy and overwhelmed, but a computer would have time to notice every individual.

It’s just a thought. I’ve been thinking how such a system may work, but it will take a lot of research.

I agree with you that our philosophical views on the world, going all the way back to the Greeks, have been wrong. I think we view both ourselves, and the way we relate to the planet in the wrong ways.  We try to dominate nature instead of living in harmony with it.  We think using our reptile brain, hoping to achieve some sort of hierarchical dominance, instead of trying to be one with nature and the universe. When we see ourselves in the mirror we don’t understand what it is we’re looking at.  That’s why people even to this day believe in religions of all sorts.  They’re so busy working jobs that they haven’t been educated in all the new scientific knowledge which is out there.

Not too long ago I had a Jehovah’s Witness confront me while I was out getting a pizza.  She handed me a book called, ‘What Does The Bible Really Teach’, and within it it tells how when I die I will inherit my own planet, which I will populate and rule over for all eternity.  It says that when I get angry, demons are flowing into my body causing me to do evil.  And on and on it goes, filling people’s minds with complete nonsense.

And what about those who have learned all the science of our day?  I feel they face a crisis of meaning. Everything is advancing so fast that people don’t know what direction the world is going. Where will this technology take us?  They see sheep being cloned, talk of genetically modifying the human body, mixing our brain with micro-processors, nano-chips controlling DNA assemblage, the possible colonization of Mars… and it’s all too much.  They see how dumb we are as humans, and yet science has given us such incredible powers.  Are we even ready to handle such responsibilities?

As our science progresses we’re going to have to change how our society works.  We can’t continue business as usual.  And people are going to have to become aware of all the technology around them, because it’s dangerous to have stupid people living in a high-tech world.  It’s fine to be stupid when all you have is a spear, running around chasing grazing animals.  It’s not ok to be stupid and have control of nuclear weapons.

– Jason

From: Andre Gaudwin
Sent: Tuesday, June 22, 2010 5:20 PM
To: jason@jasonsummers.org
Subject: “YES WE CAN.”????

“YES WE CAN.”????

Of course we can, but we won’t do anything about it until we understand what is really happening to us. And we don’t, since none of the professionals in all sectors of society ―who should lead us into doing it, and who all together know everything there is to know about our particular problems― is remotely fit to understand the nature of the global problem presently affecting the whole of humanity. And this, because of a mistaken premise about their dominant status, which, when analyzed from an evolutionary psychological point of view, becomes an evident logical fallacy.

And it is not the first time that such a fundamentally false premise opens up an unbreachable space between our ability to know and our capacity to understand.  In Ancient Greece, astronomers knew everything there is to know about the behavior of the stars and the planets that they were observing in the heavens. However, they were incapable of understanding their true nature and the nature of the irregularities among them, because of their belief that the earth was fixed at the center of the universe. The same is true today for our intellectual elites, who know everything there is to know to dominate their own sectors of society, but who cannot understand the true nature of our problems, because of this generally accepted logical fallacy.

If such a close parallel can be made between the Ancient Geek astronomers’ incapacity to understand the true nature of the stars, and our elites’ incapacity to understand the true nature of the problem that we are facing, it is because that the two false premises causing these limitations stem from the same fundamental natural phenomenon: inertia.

For the Greeks, it was their ignorance of physical inertia ―still today interfering with our sense of motion― that was keeping them from understanding the true nature of the Heavens.  For our present day elites, it is their intellectual inertia created by the mass of knowledge that they have assiduously accumulated on a few subjects during their years of formation as specialists ―they all are― that is interfering with their sense of responsibility, and which is preventing them from understanding that they are integrated part of  the global problem that they have themselves contributed to create, and which is being dramatically worsen by their ignorance of the fallacy on which their dominant behavior is grounded.

It is because of my understanding of this fallacy―which became clear to me, after forty years of independent and “single-minded” academic inquiry on the subject―that I came to perceived “them” (humanity’s elites) as “degenerated baboons,” who, in time of dangers, have forgotten how to step ahead on the first lines of defense to protect us, as dominant baboons do to protect their troupes, which initially gave them  their dominant standings for this reason alone. Of course, our elites are still driven by the same urge to protect and defend, and they do it well. However, because of our assumed dominance over nature, they have to constantly create new enemies to satisfy these urges and the needs of the technologies that they are using to wage their wars from afar, “to save lives.” Ignoring the fact, thus, that the real enemies of our species are not among ourselves, but still in nature, on the forms of catastrophic events, as floods, droughts, famines, severe weather conditions, epidemics, earthquakes, volcanic irruptions, and today the Oil Spill from the guts of the earth in the Gulf of Mexico. All of which we would be well equipped to overcome, if we were not using all the resources that we are presently using to wage irrelevant wars.

Simply put: Our war economy need to be “converted” into a peace economy, to defend all of us against our true enemies, the furies of the elements and the aging of the world infrastructures. If this happened, we would be able to double the “defense budgets” of the whole word and put everybody to work at the maintenance of our home planet, for the good of all.

* * *

To illustrate the ground of my argument, let me tell you what happened the other day when I met a new acquaintance of mine for the first time after the Gulf of Mexico Disaster.

During our conversation, I eventually came to tell him how offended I was to see that the “hundreds of trillions” (sic) of dollars floating around in the world markets were not used in a way or another to do something about the Spill. He look at me, stunned, as if I didn’t know what I was talking about, and told me: “But…but… that is “investment money.”

What he was telling me was that this money cannot be used to overcome such man-made catastrophes as the one presently threatening the whole Gulf of Mexico, but that it is money exclusively used to  “make money.”

I hope to show you that this is the essence of the invalid argument made about our social power, which is the type of arguments that the market dwellers make all the time, on different forms, and which is directly based on this fallacy that I am talking about.

Regarding investment specialists, who claim to “play the role of God” in the economy, and who are the ones benefiting the most from this virtual wealth that they are “managing,” —if not ultimately the only ones benefiting— this type of reflections made about material “security” is exactly the same type of reflections that clergymen were making before the Reformation, about money to buy indulgences for “spiritual” security. Indeed, the  present days  investments in “security” will be as irrelevant for our survival as a species, as the investments in “indulgences” were for individual salvation.

To come back to my conversation on this subject with my new acquaintance, it stopped immediately after his mention about “investment money.”  It would have taken me too long, since what I was thinking about was too much in the line of a “mobilization” of all our resources against  the oil invasion’s of the Gulf of Mexico, as FDR did to counter the German invasion.

It is not our freedom that is at stake at the moment, but the health of of the North Atlantic and eventually the whole Earth, if we don’t succeed in stopping these oil leaks soon.  Doesn’t it call for the mobilization of all our resources? For this, though, we need political leadership, but, as I already realized many years ago, “political leadership” has become an oxymoron, since today’s politicians have only one preoccupation, there own reelection. And, it happened that the Gulf of Mexico oil Spill has followed  Murphy’s law to the letter, by happening at the worst of time, during a year of US election.

* * *

I say “single academic inquiry” above, since the only reason that kept me going for all these years was the need to find out what was this “mistake” that I have always believed we made as a rational species, somewhere in the course of our evolution.  After forty years, I have finally found it. If you want to know what it is, stick with me, if you can!  It won’t be an easy realization for anybody, believe me, since it has to do with a misunderstanding that happened tens of thousands of years ago, before the Ancient Greek, when we first acquired a proto-consciousness of our social nature.  And, since the Greeks philosophers didn’t know about this misunderstanding, it happens that it has imbued all of our philosophies of life, and that it will be a lot tougher to accept, especially for the “high priests” of finance, than heliocentrism was for the clergy of the time.

First, though, I have to explain the context in which my findings came about. (Work in Progress)

Jason, it is done and coming after your comments on this email

Greenspan Calls For Fiscal Restraint

Alan Greenspan himself, calling for fiscal restraint and a “tectonic shift” in fiscal policy.  The man who pumped the economy with all that cheap money now seems to be saying, “Uh oh.  I screwed up big time.  Guys, it’s time to rethink economics.”

Read the Bloomberg article here:

http://www.businessweek.com/news/2010-06-17/greenspan-says-u-s-may-soon-reach-borrowing-limit-update1-.html

Former Federal Reserve Chairman Alan Greenspan said the U.S. may soon face higher borrowing costs on its swelling debt and called for a “tectonic shift” in fiscal policy to contain borrowing.

“Perceptions of a large U.S. borrowing capacity are misleading,” and current long-term bond yields are masking America’s debt challenge, Greenspan wrote in an opinion piece posted on the Wall Street Journal’s website. “Long-term rate increases can emerge with unexpected suddenness,” such as the 4 percentage point surge over four months in 1979-80, he said.

Greenspan rebutted “misplaced” concern that reducing the deficit would put the economic recovery in danger, entering a debate among global policy makers about how quickly to exit from stimulus measures adopted during the financial crisis.

….

The United States, and most of the rest of the developed world, is in need of a tectonic shift in fiscal policy,” said Greenspan, 84, who served at the Fed’s helm from 1987 to 2006. “Incremental change will not be adequate.

….

“The federal government is currently saddled with commitments for the next three decades that it will be unable to meet in real terms,” Greenspan said. The “very severity of the pending crisis and growing analogies to Greece set the stage for a serious response.”

….

“Our economy cannot afford a major mistake in underestimating the corrosive momentum of this fiscal crisis,” Greenspan said. “Our policy focus must therefore err significantly on the side of restraint.”

None of this is news to you if you’re fluent in Austrian economics.  Greenspan sees the writing on the wall.  The United States’ position is just like that of Greece and we’re currently on a trajectory to dive right off the cliff, just like they did.

It’s not a time for huge deficits, and no, the economy has not recovered, as all the propaganda is telling us.  It’s time for major spending cuts, to stop borrowing money from foreigners, quit printing money and set out on the road to paying off our credit cards and debts.  No monetary juggling is going to pull us out of these problems.  Deficit spending’s not going to help either.  We need a total change in state and federal government budgets.  We need major spending cuts.  In fact, we’ve already hit our peak debt limits.  Most Austrian economists say we’ve passed the point of no return already.

Greenspan’s nervous.  He’s calling for major fiscal restraint and cuts in spending.  I’m with him.  That’s exactly what we need.

Paul Volcker’s been telling us this same sort of thing for quite a while too:

http://www.usatoday.com/money/economy/2008-01-16-volcker-nytm_N.htm

Former Federal Reserve Chairman Paul Volcker thinks the U.S. central bank is to blame for allowing bubbles to inflate asset markets, and says that current Fed chief Ben Bernanke is in a tough spot.

Too many bubbles have been going on for too long … The Fed is not really in control of the situation,” the Times quoted Volcker as saying, seemingly clear criticism of both Bernanke and his predecessor Alan Greenspan.

A slumping U.S. housing market following years of rampant price rises has sparked a global credit crunch and could tip the economy into a recession.

Critics blame the ultra-low interest rate policies of the final Greenspan years — when the U.S. central bank steered overnight federal funds rates to 1% and held them there for a prolonged period of time — for fueling the housing bubble.

Bernanke, who was also a Fed board governor between 2002 and 2005, inherited the problem to an extent.

Greenspan has long been criticized for being very aggressive in cutting interest rates when growth was threatened, but slower to raise them when it picked up and the risks flipped toward higher inflation.

Volcker, a towering man known widely as ‘Tall Paul’, is credited with breaking the back of rampant 1970s inflation by aggressively tightening monetary policy, for which he was greatly criticized in some quarters at the time.

“It’s no fun raising interest rates,” Volcker said.

I hate to prophesy doom and gloom, but I think there’s a very rough road up ahead.   Here’s an excerpt from an Austrian economist:

http://mises.org/daily/2728

Austrian Business Cycle Theory

According to Ludwig von Mises and his followers, the boom-bust cycle is not inherent in the free market, but is rather caused by the government’s interference in the credit markets, specifically its manipulation of interest rates. The government causes the boom period when it injects new credit into the system (pushing down rates), and then the unsustainable, non-economic investment projects put into motion necessitate a bust at some future date. (Here is a reading plan for this topic.)

The following chart illustrates the Misesian explanation. Note the chart does not include the recent September cut.

Real Yr/Yr GDP Growth (blue, right)
vs. Real Effective Fed Funds Rate (red, left)

Generally speaking, the chart indicates an inverse relationship between the two series. This accords with the commonsense view that cutting interest rates provides a stimulus while hiking them is contractionary. However, what the Austrian approach provides is the understanding of the real forces behind the boom-bust cycle. In other words, most financial commentators think that today’s interest rates affect today’s economic growth, end of story. But if a previous boom period has led to massive malinvestments, there must be a bust period to liquidate the various projects (for which there is an inadequate capital structure to complete).

To put it another way, many commentators seem to believe that if the Fed held interest rates low indefinitely, then we’d never have high unemployment, just rampant price inflation. And yet, the recent experience shows that this is dead wrong. The Fed didn’t cause the recent problems by “responsibly” hiking interest rates. No, rates had been steady at 5.25% for some time, and then the housing bubble burst and the mortgage market faltered, thus “forcing” the Fed to take action.

Looking back at the chart above, we can see why the worst may be yet to come. In (price) inflation-adjusted terms, the early-2000s levels of the actual fed funds rate is the lowest since the Carter years. And many readers may recall the severe recessions of 1980 and 1982 that followed that period.

Conclusion

In the Austrian view, the boom-bust cycle is caused by the Fed’s maintenance of artificially low interest rates, which causes businesses to expand, hire workers, buy other resources, and so forth, even though these projects are not justified by the true supply of savings in the economy. The greater the “stimulus” the worse the malinvestments.

From 2001–2004, the Fed kept (real) rates at the lowest they’ve been since the late 1970s. One of the consequences that has already manifested itself is the housing bubble. But a more severe liquidation seems unavoidable. The recent Fed cut may postpone the day of reckoning, but it will only make the adjustment that much harsher.

Charts like the one provided in that article give a nice look at how interest rates influence economic growth.  You can see that when the economy starts to constrict the Fed is dumping interest rates and the economy spikes back up.  But cheap money, like cheap pleasures in life, has nasty side effects.

Many economists don’t even believe in bubbles.  It’s all in your imagination.  Take the praised Eugene Fama of the Chicago School.

http://www.newyorker.com/online/blogs/johncassidy/2010/01/interview-with-eugene-fama.html

JOHN CASSIDY: Many people would argue that, in this case, the inefficiency was primarily in the credit markets, not the stock market — that there was a credit bubble that inflated and ultimately burst.

EUGENE FAMA: I don’t even know what that means. People who get credit have to get it from somewhere. Does a credit bubble mean that people save too much during that period? I don’t know what a credit bubble means. I don’t even know what a bubble means. These words have become popular. I don’t think they have any meaning.

CASSIDY: I guess most people would define a bubble as an extended period during which asset prices depart quite significantly from economic fundamentals.

FAMA: That’s what I would think it is, but that means that somebody must have made a lot of money betting on that, if you could identify it. It’s easy to say prices went down, it must have been a bubble, after the fact. I think most bubbles are twenty-twenty hindsight. Now after the fact you always find people who said before the fact that prices are too high. People are always saying that prices are too high. When they turn out to be right, we anoint them. When they turn out to be wrong, we ignore them. They are typically right and wrong about half the time.

CASSIDY: Are you saying that bubbles can’t exist?

FAMA: They have to be predictable phenomena. I don’t think any of this was particularly predictable.

Well, (it’s easy) to say after the fact that things were wrong. But at the time those buying them [subprime-mortgage-backed securities] didn’t think they were wrong. It isn’t as if they were naïve investors, or anything.

*Sigh*

And while you’re out struggling to buy your first home, the academics are sitting in their ivory towers claiming bubbles don’t exist.  Nobody saw it in advance after all.  Well, Austrian economists did!

He’s an efficient market hypothesis (EMH) advocate.  He thinks that prices instantly adjust to news so that at any given time prices reflect all there is to know.  Bubbles can’t form.  What is a bubble?

If you want to hear an Austrian economist’s perspective on Fama, you can read this article here:

http://mises.org/daily/4056

Economics is a strange subject.  So many people have a different take on everything.  I don’t have a lot of respect for the subject.  I think most of what’s out there is bullshit.  If people really understood the economy we wouldn’t be having this worldwide recession.

Someday on here I’m going to write a post on what I think about economics in general.  I have a whole shelf of economics books I’ve read.  I’ll just write up what I think of them.  Unfortunately I get tired of studying it because most all of it doesn’t work.  You labor for years mastering various economic school perspectives and think you understand things, then you don’t.  It was all wrong.  *pulls hair out*  How many other posts have I promised to write on here?  Instead I just typically rant… Oh well.

Economics isn’t like Physics which actually does work.  If it was, the world would be a much better place.

The Epic Life Of Physicists

Physics is the only subject I know of which allows a person to look out of a telescope, measure the spectral lines emitted from a gas cloud way out in outer space, and determine the origins of the universe.  Sherlock Holmes makes some brilliant deductions in Sir Arthur Conan Doyle’s masterpieces, but I have to say, physicists have surpassed any deduction made by the great Holmes!

It’s time to solve a great mystery!

First you stick a radio antenna up into the air and receive a tiny bit of static.  What could that be?  It must be random emissions from the atmosphere.  So you move the antenna around, yet no matter which direction you point it you get the same static.  It’s annoying the hell out of you, but it’s quite intriguing nonetheless.  Hmm.

It’s time to sit back in your armchair, get out the tabacco pipe, light up the fire, take a few puffs and think this one through.  Your butler brings you in a cup of hot cocoa, “Thank you”, “Now if you’ll excuse me master.”  After the butler leaves you get up from the chair, take a few puffs from your pipe, and pace around the room.  What could this be?  You’ve checked the circuitry thoroughly, you’ve cleaned off the birds which have been nesting up on your dish, you’ve double checked all your scopes and equipment… It’s not an equipment malfunction yet where could all this background radiation be coming from?

Being the physicist that you are you know that the small things lead to much bigger things.  Everything must be accounted for.  Nothing is random.  Every observation matters and this troublesome static cannot be ignored.

So you think about past experiments and observations which have been taking place in astronomy.  You recall the redshifts observed in distant galaxies and how they’re all receding away from us.  Could it all be connected?  Of course, everything in nature is connected.  Yes, yeeesss.  Then you rub your chin and think, “Hmmm.  All the galaxies are moving away from us, yet if we were to play this all backward that would mean all the galaxies were once all crammed together.  Hmm.  A giant explosion of sorts, happening at all points in space all at once.  Let’s see…”

So you get out your notepad and pen, write down some equations, and do some calculations.  “Mmmhmm.  I see.  Mhmmm.  Yes, it’s coming to me now.”

You theorize that this may well be the same sort of blackbody radiation which was researched by Dr. Planck and Einstein.  If you take the universe back far enough, cramming all that matter into a smaller and smaller space, the temperature increases.  You theorize that this radiation originates in that original explosion.  It’s all been cooling down since the big-bang.  My my my.  Things are getting interesting.

If you haven’t already, you need to read Steven Weinberg’s The First Three Minutes!

For instance, Penzias and Wilson found that the intensity of the microwave static they had discovered corresponded to a temperature of roughly 3° K. This is just what would be expected if the universe has expanded by a factor of 1000 since the time when the temperature was high enough (3000° K) to keep matter and radiation in thermal equilibrium. If this interpretation is correct, the 3° K radio static is by far the most ancient signal received by astronomers, having been emitted long before the light from the most distant galaxies that we can see.

But Penzias and Wilson had measured the intensity of the cosmic radio static at only one wavelength, 7.35 centimetres.  Immediately it became a matter of extreme urgency to decide whether the distribution of radiant energy with wavelength is described by the Planck black-body formula, as would be expected if this really were red-shifted fossil radiation left over from some epoch when the radiation and matter of the universe were in thermal equilibrium.  If so, then the ‘equivalent temperature’, calculated by matching the observed radio noise intensity to the Planck formula, should have the same value at all wavelengths as at the 7.35 centimetre wavelength studied by Penzias and Wilson.

Now you’re skipping across the room.  Ha ha ha haaaa haaaaa, da da da daddhhhaaa!  Ah ha!  Yes yes!  It’s obvious what must be done.  We need more observations!  But we have a problem — the atmosphere.  It blocks various wavelengths of incoming radiation and is in the way.  We need to get out into space.  If we were to take more observations out there beyond the atmospheric blanket, and all the background static radiation we received followed the Planck black-body formula for a 3 degree Kelvin temperature… How telling that would be!  To the lab!  You call the in butler.  Ready the car, there’s work to be done!

But how in the world can you get out into space?  Hmm, troublesome indeed.  You’re quite wealthy, but building your own rocket, launching your own satellite out into orbit, just to make some background observations… not very practical.  Argh.  What to do, what to do.

But you’re a skilled physicist.  You’ve been in this sort of situation before.  There’s never enough money for science equipment.  You’re going to have to be clever.  Ah yes, the fundamental rule of science: every individual atom contains in its motion and properties the entire story of the universe if you’re only clever enough to deduce it.

Back to your study.  If you can only think up an experiment.  Well, the atmosphere blocks some wavelengths of radiation, but not others.  What if you were to search through the visible spectrum.   Hmmm.  You throw your legs up on your desk, puff your pipe, lean back, and exhale a plume of smoke. You close your eyes and picture yourself looking out of the giant telescope back in the observatory.  In your imagination you pan around gazing, then… Yes.  YES.  The Ophichus constellation.   There’s a gas cloud out there inbetween a star and the Earth which will do nicely!  But before you call in the butler, you finish your smoke.

This will require some subtle reasoning but you wonder if maybe, just maybe, by examining the dark bands in the spectral analysis from this distant gas cloud, you’ll see a slight perturbation in molecular motion induced by the background radiation.   You know how the spectrum is supposed to look because you can observe this gas and test its properties in your lab.  That’s not too hard to do.

Oddly enough, the radiation background was measured at shorter wavelengths, long before any of the astronomical work discussed so far in this chapter, and by an optical rather than by a radio or infra-red astronomer! In the constellation Ophiuchus (‘the serpent bearer’) there is a cloud of interstellar gas which happens to lie between the earth and a hot but otherwise unremarkable star, t, Oph. The spectrum of S; Oph is crossed with a number of unusual dark bands, indicating that the intervening gas is absorbing light at a set of sharp wavelengths. These are the wavelengths at which photons have just the energies required to induce transitions in the molecules of the gas cloud, from states of lower to states of higher energy. (Molecules, like atoms, exist only in states of distinct, or ‘quantized’, energy.) Thus, observing the wavelengths where the dark bands occur, it is possible to infer something about the nature of these molecules, and of the states in which they are found.

One of the absorption lines in the spectrum of t, Oph is at a wavelength of 3875 Angstrom units (38.75 millionths of a centimetre), indicating the presence in the interstellar cloud of a molecule, cyanogen (CN), consisting of one carbon and one nitrogen atom. (Strictly speaking, CN should be called a ‘radical’, meaning that under normal conditions it combines rapidly with other atoms to form more stable molecules, such as the poison, hydrocyanic acid [HCN]. In interstellar space CN is quite stable.) In 1941 it was found by W. S. Adams and A. McKellar that this absorption line is actually split, consisting of three components with wavelengths 3874.608 Angstroms, 3875.763 Angstroms, and 3873.998 Angstroms. The first of these absorption wavelengths corresponds to a transition in which the cyanogen molecule is lifted from its state of lowest energy (the ‘ground state’) to a vibrating state, and would be expected to be produced even if the cyanogen were at zero temperature. However, the other two lines could only be produced by transitions in which the molecule is lifted from a rotating state just above the ground state to various other vibrating states. Thus, a fair fraction of the cyanogen molecules in the interstellar cloud must be in this rotating state. Using the known energy difference between the ground state and the rotating state, and the observed relative intensities of the various absorption lines, McKellar was able to estimate that the cyanogen was being exposed to some sort of perturbation with an effective temperature of about 2.3° K, which could lift the cyanogen molecule into the rotating state.

So you point your telescope up there and BAM.  There’s your dark bands, just at the wavelengths indicating the proper background radiation.  So this radiation truly is everywhere.  It’s not just some fluke in your radio antenna or electrical circuitry.  You jump in the air and click your heels.  (Yes, I do this sometimes!)

You publish your paper and the scientific community’s in an uproar.  What is this radiation?  From the origin of the universe?  Can we tell the age of the universe just from this?  Everyone gets into the action.

As we have seen, at the time of the discovery by Penzias and Wilson there already was another effort under way in New Jersey to detect a cosmic microwave radiation background. Soon after the original pair of papers by the Bell Laboratories and Princeton groups, Roll and Wilkinson announced their own result: the equivalent temperature of the radiation background at a wavelength of 3.2 centimetres was between 2.5 and 3.5 degrees Kelvin. That is, within experimental error, the intensity of the cosmic static at 3.2 centimetres wavelength was greater than at 7.35 centimetres by just the ratio that would be expected if the radiation is described by the Planck formula!

Since 1965 the intensity of the fossil microwave radiation has been measured by radio astronomers at over a dozen wavelengths ranging from 73.5 centimetres down to 0.33 centimetres. Every one of these measurements is consistent with a Planck distribution of energy versus wavelength, with
a temperature between 2.7° K and 3° K.

It’s confirmed.  Various wavelengths are measured and their energy distributions all line up.  How awesome.  You call your friends at MIT and they tell you about a young theoretical physicist named Dr. Pebbles.  He’s also worked out a model which predicts this background radiation.   It’s time to visit him and exchange ideas.

You’re thrilled when you receive a letter in the post.  Remember all that expensive research you couldn’t afford personally?  Well, it’s now starting to happen.  The National Science Foundation is willing to dish out some serious money to get answers.  Rockets and balloons are sent up into space to do measurements.  And of course, you’re right there in the action.  It’s time to make a trip to Berkeley and help out with some measurement balloons.

It has only been possible to attack this problem by lifting an infra-red receiver above the earth’s atmosphere, either with a balloon or a rocket. These experiments are extraordinarily difficult and at first gave inconsistent results, alternately encouraging either the adherents of the standard cosmology or its opponents. A Cornell rocket group found much more radiation at short wavelengths than could be expected for a Planck black-body distribution, while an MIT balloon group obtained results roughly consistent with those expected for black-body radiation. Both groups continued their work, and by 1972 they were both reporting results indicating a black-body distribution with temperature close to 3° K. In 1976 a Berkeley balloon group confirmed that the radiation energy density continues to fall off for short wavelengths in the range of 0.25 centimetres to 0.06 centimetres, in the manner expected for a temperature within 0.1° K of 3° K. It now seems to be settled that the cosmic radiation background really is black-body radiation, with a temperature close to 3° K.

And so the epic life of a physicist continues.  With every observation you become that much closer to solving the problem of the origin of everything.  What began as some static received your radio dish has now led to telling evidence toward the big-bang and the evolution of the universe.  In what other field could you possibly live this epic of a life?  There is none.

A Case For Mars

A new symphony of science video!

One guy in the comments section said he wouldn’t mind a 90% tax rate to fund science related projects.  I think that’s excessive myself.  Even so, if I were in charge of the country, scientific research projects would increase many many times.  All the money now spent on wars and making weapons would go into science research and space exploration.

I have some major concerns about the future of mankind.  First off we haven’t learned how to live in harmony with nature.  Our society is completely out of sync with nature, and we can’t have that.  I think our research needs to be focused less around going to Mars and more about harmony with nature.  We need clean energy sources.  We need to stop using plastics and things which can’t biodegrade.  We need to change how we live and be far less wasteful.  Cruelty to animals needs to end.  Deforestation needs to end.  Nuclear disarmament is imperative.

I worry about the millions of people around the world who don’t have medical insurance.  I think secondary education, especially related to science and engineering, needs to be completely funded and free.  I think celebrities need to get behind scientists and shed that aura onto them so kids want to grow up and be engineers instead of rock stars.  That stereotype that if you’re a physicist you have to be some nerdy guy with big glasses, no social skills, and incapable of getting a date has to go.  That’s scaring kids away from the very career paths that benefit humanity the most.

I worry about all the people who are falling into poverty under this tyrannical financial system we have.  We have the Federal Reserve and their cartel going here in the USA.  Other nations have their central banks exploiting all of them.  On the international scale we have the IMF burying all these poor countries in debts they’ll never be able to pay off.  We still have third world countries living in abject poverty.  I don’t think we can have a world with such disparities in lifestyles and expect to have a stable and safe world.

I don’t feel I can ethically endorse expensive Mars research programs when problems of such gravity exist here at home.  We need to fix these things first.  Things like carbon emissions need to end entirely, so we don’t destroy our environment and ecosystem.

I hope one day someone comes up with a brand new economic system that works a lot better than capitalism.  Sometimes I think some sort of resource allocation mechanism using computers and the internet might be possible.

But for now we need capitalism.  I just posted a set of lectures on Austrian economics, who are very strict capitalists.  I don’t find capitalism very beautiful, but I think it’s the only thing we know of that actually works, despite its cruelty. Like Friedrich Hayek (1976 Nobel Laureate in economics who held the Austrian economics perspective), I worry that socialist programs simply don’t work.  Freedom and socialism are simply incompatible.  You’ll have to read his book Road To Serfdom to hear the arguments, which I find very convincing.  You can see a short illustrated version of the book here.  It contains a vague sort of outline of what’s in the book.  You can buy the book here.  The store link I gave was from mises.org, which is the central hub of Austrian economic thought.  Buy it from there so you can support those guys!

What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less liveable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.

Nazism, he wrote, is not different in kind from Communism. Further, he showed that the very forms of government that England and America were supposedly fighting abroad were being enacted at home, if under a different guise. Further steps down this road, he said, can only end in the abolition of effective liberty for everyone.

Capitalism, he wrote, is the only system of economics compatible with human dignity, prosperity, and liberty. To the extent we move away from that system, we empower the worst people in society to manage what they do not understand.

I couldn’t believe that it’s became a #1 best-seller on Amazon.com.  I was beyond happy.  I heard that Glenn Beck had some guys from the Mises Institute on his program one night and millions of people started buying the book.  I’m not a fan of Glenn Beck, but I’m happy he’s promoting something good!  Milton Friedman (another Nobel laureate in economics) wrote the introduction for the 50th anniversary edition.

I read The Road To Serfdom years ago.  It’s a great read.

It seems the majority of our last century’s history has been over how to implement an economic system that doesn’t suck yet still can utilize our scientific methods of mass production and the division of labor.  Communism has shown itself to be a terrible failure.  The cruelties of capitalism have led many nations to implement middle grounds between pure capitalism and communism — the welfare state.  Hayek argues in detail how these sorts of programs can’t work in the end.  They’re incompatible with liberty.

Even so, I still want science and medicine degrees to be funded for all students.  Maybe it will distort the price mechanisms and cost way more than it should.  But then I consider how making science degrees free gives incentive for people to go and learn.   I’m for funding all secondary education really.  I also believe in protecting our environment, even if the government has to build big fences around it and post “Keep out” signs.  Our capitalist system and lifestyle today will ravage and destroy the biosphere and most every species on this planet if left unchecked.  Just look at this BP oil spill.  Geez.

I don’t see more regulations fixing future oil spills.  I think this was an accident.  Obama can act tough and look for whose “ass to kick”, but the real ass kicking should be his own for promoting offshore drilling months prior, getting us entangled in more wars, and wasting our money bailing out banks, which should’ve went to better things.

Too many problems here on Earth.  I took another walk outside today.  I saw trash littered all along the roadside.  I sighed and walked on.  I get so tired of picking it up.  Miller Lite beer cans.  Another look up into the sky staring into the stars!  *Dreams of levitating off into space*

I’m not going to end on that sad note.  Watch this video of Neil deGrasse Tyson, talking about the Hubble Deep Field.  🙂

Astrophysicists must certainly live in a state of bliss while doing their observations.  I’m sure those big telescopes suck them in and they lose themselves.  Happiness always seems to come when you lose yourself in your work.  I know that would happen to me.   I lose myself when I study quantum mechanics, pondering the Hall effect and currents in superconductors.  It’s such a shame that science research costs so much money.

Learn Austrian Economics

I had been wanting to write up a series of articles on here explaining the basics of Austrian economics, especially their views on pricing and the business cycle.  Unfortunately I never got around to doing this.

Then I was pleased to find that two top Austrian economics professors have already produced an introductory course and its posted on YouTube.  The video lectures are found below.

I wish they’d gone into more depth and included more, but this is definitely a good introduction.  If you wish to learn more you’ll have to read Ludwig von Mises books, as well as those of Fredrich Hayek and Murray Rothbard.

Unlike a lot of other schools of economic thought, these guys saw the housing bubble way in advance.  When it comes to the business cycle, I think these guys have more credibility than any other school.  They’re never talked about, and if you take economics in college you may well only hear Mises, Hayek and Rothboard mentioned in passing, but you won’t be taught any of their work.  When Krugman wrote his article for the New York Times, “How Did Economists Get It So Wrong“, you won’t hear any talk about Mises or Hayek.  And what’s strange is Friedrich Hayek won the 1974 Nobel prize in economics yet nobody is interested in his work.  His theories perfectly predicted everything but you won’t hear his name mentioned by anyone.  I guess considering the article is “How Did Economists Get It So Wrong”, Hayek doesn’t belong 🙂

Maybe Austrian economics seems less scientific because it lacks all the complex mathematical models and econometrics (which don’t even work).   I don’t know.

From what I’ve seen, most rich Wall Street investors and wealthy entrepreneurs hold views similar to the Austrian school (not necessarily exactly), especially when it comes to the business cycle and the effects of government policies, such as deficit spending.  Take Robert Kiyosaki for instance.  He made fortunes investing in real estate during the Fed inflated boom.  He’s known for his books like Rich Dad Poor Dad, and writing mindset books for entrepreneurs.  He understands this stuff (though his books don’t share technical details) and knows the correlation between Fed interest rates and housing prices.  He recently wrote a new book called Rich Dad’s Conspiracy Of The Rich.  Here’s an article about the book:  (here)

“Robert Anton Wilson, in his book Everything Is Under Control, reported that “a random telephone survey of 800 American adults in September 1996 found that 74 percent – virtually three out of four citizens – believe that the U.S. government regularly engages in conspiratorial and clandestine operations.”

Robert Kiyosaki – the author of Rich Dad’s Conspiracy of the Rich – agrees with the 74 percent surveyed in 1996.  As Kiyosaki writes in his book:  “So has there been a conspiracy?  I believe so, in a way.”  He goes on to explain why he believes so, citing the lack of financial education in the school systems, the Federal Reserve Act, and Nixon’s 1971 dismissal of the gold standard.  And most interestingly, Kiyosaki believes that 401(k) retirement vehicles placed the retirement money of average people in the hands of Wall Street.

The first chapter of the book is entitled ‘Can Obama Save the World?’  Kiyosaki’s answer is no.  And apparently, Obama doesn’t want to even if he could.  For he appointed Summers and Geithner, both of who played a part in repealing the Glass Steagall Act.  In other words, it’s the same old same old.  Nothing has changed.  Which means that the average person needs to understand how taxes, debt, inflation, and retirement affect them.  Kiyosaki sums up the chapter by stating that once one understands the new rules of money, then one can “opt out of the conspiracy of the rich.”

From there, Kiyosaki moves on to explain how we got where we are.  He points the finger at the Federal Reserve Bank, which inflates the money supply, which destroys the value of savings and retirement plans.  And he makes it very clear that the rules of money changed dramatically when the U.S. went off the gold standard in 1971.  For up until that time, “technically, prior to 1971, the U.S. dollar was a derivative of gold.  After 1971, the U.S. dollar became a derivative of debt.”

Kiyosaki proceeds to discuss what he calls ‘The Invisible Bank Robbery.’  He says “since money is invisible, a derivative of debt, bank robberies by bankers have become invisible.”  Two ways these invisible robberies occur are:  fractional reserve banking, which is nothing more than banks lending money they don’t have; and deposit insurance, which “protects the bankers – not savers.”  Then he asks a very pertinent question:  “why should an insurance company like AIG receive bailout money in the first place?  Isn’t bailout money reserved for banks?”  His answer is gloriously simple:  “because it owed the biggest banks in the world a lot of money and didn’t have the cash to pay up.”

After allocating the first half of his book to talking about the conspiracy, Kiyosaki utilizes the second half of the book describing how to fight back.  And although he acknowledges that the Fed is the culprit, he does not advocate abolishing it.  For as he asks, “What would replace it?  How much chaos would that cause?  And how long would that take?”  Instead, Kiyosaki advocates using the new rules of money to one’s advantage.

….

Kiyosaki then states that he thinks the present financial crisis will only get worse, not better.

….

And in his summary to the book, he reminds his readers that “knowledge is the new money.”

Kiyosaki has made millions through real estate, all because he knew the economics of what was going on.  Now he sees that the bubble is popping.  He’s warning everyone and letting people in on the game that the rich are playing.  His mindset is, “Well, I know this system is terrible and unjust, but I’m not going to live a life of poverty getting screwed.  Here’s how it works and here’s how you can protect yourself and your money.”   And in his case, exploit the same loopholes the rich are using.  Is it unethical?  I don’t know.  It’s a gray area to me.

I’ll say this though.  When it comes to economics, I find the subject very disappointing, no matter which school of thought you use.   Austrian economics isn’t perfect, it’s just the best I’ve found.

The reason I prefer Austrian economics to all others is their love of liberty, protection of personal property, and sound money.

A major problem with Austrians is that they’re almost always negative about the economy.  Some argue that, “Sure they’ll predict an oncoming crash — they’re ALWAYS predicting an upcoming disaster and never anything else.”  That’s not really true.  Austrians are predicting booms in various foreign countries.  They just seem negative all the time because the politicians in most nations don’t believe in or follow true free market policies anymore.  Their central banks are always expanding the money supply inflating bubbles.

Even so, the Austrian theory of the business cycle being induced by artificially low interest rates set by the central banks which brings about a spending binge, various booms, then a subsequent bust from all the mal-investments, seems pretty sound to me.   Keynesians, like President Obama, during a recession see the problems completely differently, thinking it’s a lack of demand and that we need more spending.  They’re completely opposite perspectives and bring about completely different tactics to addressing the problem.

What pisses me off watching the news is they make the debate about government regulation (progressives and democrats) versus low taxes and no regulation (Republicans).  Neither side ever deals with the real problems inherent in the banking system and the Federal Reserve.

It’s not so much about regulating them as shutting down fractional reserve banking, stopping the excessive flow of printed money, and restoring the soundness of money by backing it with a gold standard.  The gold standard is to keep the government from printing more money and debasing the currency.  It’s to protect us from inflation, bankers loaning out money out of thin air, and wild government spending. Proper free market mechanisms would be superior to any regulations that could be imposed centrally.  But Keynesians don’t see it that way.  They have all kinds of reasons why the money supply must always increase.

I think Keynesian economics, and their belief in fractional reserve banking, has left us all buried in debts which were cooked up out of thin air.  Bankers have come to dominate the world.  Such policies are also a big reason behind dominance by the big corporations.  Low interest rates and cooked up money from the Federal Reserve give the Fortune 500 corporations access to cheap credit, which they use to expand their empires.

Keynesian policies and the Federal Reserve also destroy our savings, making it harder for entrepeneurs to save up their money and build up their businesses.  It’s an indirect form of eliminating competition.  It gives them access to cheap funds, and naturally since you’re just a start up entrepeneur without an established track record, you don’t get access to the cheap funds.

Keynesian policies of spending cooked up money keeps the status quo.  Once the big corporations profits begin to drop the Fed and politicians say, “Uh oh.  Consumption is down.  The economy is contracting.  We need to rev things up!  Lower the interest rates.  Get people spending borrowed money!”   The corporations make a killing yet we as a nation get buried in mountains of debt and the prosperity they promised us (and which they were counting on the pay off the debts) never comes.  Just look at Japan.  Read about how pissed they are, and after decades of Keynesian policies leaving them buried in mountains of debt, huge stimulus after huge stimulus, they now are saying, “We want a leader who will cut government spending.  This Keynesian stuff doesn’t work.”

In fact, officers at the Fed right now are mad that we’re not spending more.  They’re currently working on policies to inflate away everyone’s savings – a sort of forced spending.  This is the sort of invisible robbery Kiyosaki is talking about.  Got to love ol’ helicopter Ben.

Austrian economics is common sense economics.  We all know that America is in the mess its in now because we’ve been living too lavishly, living beyond our means.  We’ve buried ourselves in mountains of debt and things aren’t going to turn around if we take one last trip to the buffet and gorge, stuffing ourselves with as much Chinese imported goods as possible, purchased on credit.  We have to begin producing things again.  We need to get our factories back.  We need to stop juggling money around and start producing real products and services.  No more paper money fortunes.

Austrian economists have a respect for currency and money that you won’t find anywhere else.  They hate the paradox of thrift and believe that savings has to be the fuel behind all real investment.  They don’t fear deflation.  In fact it’s praised.  Deflation indicates the purchasing power of the currency is increasing which I think is a good thing.  Their theory of pricing is way better than what you find in most economic texts with their abstract concept of “utils”.

I wish the lecture on banking was more detailed but oh well.  It should’ve been 3 or 4 lectures instead of just one.   To learn more about that you’ll have to read Murray Rothbard’s Case Against The Fed and America’s Great Depression.

Some accuse Austrian economists of abandoning scientific method, which is nonsense.  Watch the lecture on Praxeology and you’ll see the real argument.  One of professor Hoppe’s examples is great.  He asks, “If I were to set the minimum wage rate at $1,000,000 an hour, I know that unemployment will be very high.  How do I know this?”  Then he shows how stupid it is to think that every economic statement has to be empirically verified or falsified.  It’s more akin to geometry where you begin with a set of intuitive axioms and build on top of those, assuming the axioms as true.  Those axioms are rooted in the nature of human action.

Anyways, here’s the lectures. These guys are both economics professors who hold the Austrian perspective.  Professor Hülsmann is from Université d’Angers in France. Professor Hoppe used to be a professor of economics at the University of Nevada Las Vegas (UNLV) before his retirement in 2008. There’s eleven lectures total.  Enjoy  🙂

Mises and the Austrian School (by Jörg Guido Hülsmann) – Introduction to Austrian Economics, Lecture 1 of 11

Value, Utility and Price by Jörg Guido Hülsmann

Division of Labor and Money by Hans-Hermann Hoppe

The Theory of Banking by Hans-Hermann Hoppe

Capital and Interest by Hans-Hermann Hoppe

Praxeology: The Austrian Method, by Hans-Hermann Hoppe

Business Cycle Theory, by Jörg Guido Hülsmann

The Economics of Deflation, by Jörg Guido Hülsmann

Theory and History, by Hans-Hermann Hoppe

The Foundations of Welfare Economics, by Jörg Guido Hülsmann

Law and Economics, by Hans-Hermann Hoppe