Greta Thunberg, the Swedish teenage climate change activist, was not invited to attend the 27th United Nations Climate Change Conference, and therefore denounced it, explaining that her true objective was not to battle climate change but to undermine the rotten racist Western capitalist system. Thereby she showed herself in her true colors, which are the deep red of the vast majority of the climate change movement. For them, the precise temperature of the planet in 2100 is of only moderate interest; by far their greater objective is to subject what remains of the free market to their own control, and thereby achieve a planned economy, Communist rather than socialist since it would control speech and leave no place for individual freedom. Continue reading →

The British pension funds’ sudden vulnerability to an interest rate blip two weeks ago due to their misguided derivatives games showed that financiers make the same mistakes, decade after decade. While a few financial techniques are new, the errors are not; indeed they can be traced back to the era when modern finance was being created, in Britain in 1693-1720. Those wishing to learn how finance really works should take a course in the financial history of that era, when it was all invented for the first time, and the vulnerabilities were discovered by trial and error. The errors at least appear to be immortal. Continue reading →

China’s President Xi Jinping is a devotee of Austrian economics. Unfortunately, he does not follow the enlightened and intelligent economics of the “Austrian School” — Eugen von Böhm-Bawerk, Ludwig von Mises and Friedrich Hayek. Instead, China’s attempts to dominate the economies of its neighbors through “Belt and Road” investments, its use of slave labor, its exploitation of foreign investment through intellectual property theft, its protectionism and its military buildup and adventurism, together follow the economics of a different Austrian. Yes, you know who I mean! Continue reading →

The Nobel prize in economics this year went to Ben Bernanke, Douglas Diamond and Philip Dybvig for “work adding to understanding of the relationship between banking crises and the broader economy.” Like other Nobels, the prize has a mixed reputation, having been given to outright Marxists like Gunnar Myrdal in the past. Looked at that way, this year’s prize fills a gap that must be a matter of deep regret to the Nobel Committee: they never gave an Economics Prize to GOSPLAN. Continue reading →

The Bank of England re-instituted “quantitative easing” last week because British pension funds were threatened with insolvency, having hedged their bond portfolios with unstable derivatives. We have seen this movie before, in 2007-08. Dopey behavior by financial institutions, central banks and regulators causes a massive unnecessary financial crash that blights the lives of billions of innocent people. It’s about time they made these people pass an IQ test! Continue reading →

Conventional wisdom has it that James Watt invented the steam engine, which became economically important in the 1780s, setting off the Industrial Revolution. All three of those beliefs are wrong. This column will lay out the true process, which was a 3-stage one over a century in duration, intensifying the Industrial Revolution but not directly setting it off. Understanding that process properly has important implications for how we adopt new technology today. Continue reading →

I am glad I am not rich! If I were, I would be subjected to bombardment by the financial services sector, attempting to sell me fancy products just when they are going out of style. The plumbing of financial services is very apparent: as far as possible you want to get to the source of deals and stay well away from the elegantly dressed salesmen who deal with the rich. Maximizing your return is simply a matter of maneuvering yourself further up the food chain. Continue reading →

Since the middle 1990s, investors and entrepreneurs have focused almost solely on the youth market, generating endless devices and amusements for youth. Many of these (smartphones, for example) older people can use only with difficulty, because of limited eyesight or coordination. This has been demographically foolish and has increasingly stymied economic growth. The real opportunity, demographic and technological, lies in the opposite direction: in providing services for the ever-increasing number of partially debilitated seniors. They are much richer than the young, their numbers are growing faster, and they have a major unmet demand for what technology can supply: goods and services that allow them to continue living independently in their own homes. Continue reading →

Prime Minister Liz Truss’s £150 billion subsidy to energy consumers is yet another economically foolish policy, of a type that have been regrettably predominant since Lord Liverpool left office in 1827. For a country where previously sound policies had produced the Industrial Revolution, Britain has developed a remarkable propensity to shoot itself in the foot economically, providing a Shakespearean low comedy to disinterested observers but condemning its people to increasing impoverishment. Alas, there is little sign that this behavior is about to change. Continue reading →

Edward Chancellor’s admirable “The Price of Time” (Allen Lane, 2022) demonstrates clearly that interest rates are a matter of time preference; lenders charge interest because $1 today is worth more than $1 in say two years’ time. That is all very well, but at present, with markets heading downwards, interest rates heading upwards and interest rates still far below inflation rates, a real $1 in September 2024 is likely to be worth considerably more than $1 today. Time preference for rational investors has thus gone into reverse; it is worth discussing the strategies and economic implications of this bizarre phenomenon. Continue reading →