Furthest Right

Clash of Economic Visions

Conservatives and liberals diverge in exactly the way you would think based on the names: conservatives conserve known working order, while liberals liberalize methods so that the individual owes less to known working order. We view different things as important and see the world entirely differently.

This is why every “third way” and “hybrid system” since the dawn of time has essentially been liberalism with a few conservative notions grafted on. It is like saying that you can have anarchy, but here are a list of exceptions that must be applied to a few issues that are important (and by implication, none of the rest are significant).

A split in perspective of this nature applies to all disciplines since the same philosophy can be applied anywhere. Conservatives for example like supply-side systems where the wealth of the nation is increased through productivity; Leftists like demand-based systems where speculation drives an increase in wealth on paper.

A supply-side system however demands a lack of market distortions like excessive taxation and government social welfare programs, but a demand-based system is fickle and tends to lead into a boom-bust cycle that often leaves the value of actual properties devastated while properties on paper rise in value.

President Biden, like Carter before him, listens to the experts, journalists, intellectuals, and other people celebrated in the cities, which led him to an economic program that prioritized speculation and devalued actual, real-life objects as a result:

For years, economic thinkers on the left pushed for more government spending and urged the Federal Reserve to be less paranoid about inflation, with the goal of driving down unemployment as low as possible.

Their logic: Workers would have more leverage to demand higher wages, as employers competed for employees. With higher incomes, people would be able to spend more, which would fuel the economy by creating demand for goods and services. It could also yield higher productivity, as companies invested in technology to better meet demand.

Rent and grocery prices are both up roughly 20 percent in the last three years. Electricity is up more than 25 percent. While wage hikes have been outpacing cost increases for the past year and a half, they still fall short over the course of Biden’s presidency.

If you own a large number of stocks, bonds, and real estate properties the Biden economy will do great for you. Those properties will shoot up in value as speculation drives down the unit value of money but hides this behind the high demand for it that propels such an economy.

Those who recall the last few Leftist administrations will note that they started strong, then brought long-lasting declines which manifested generally late in or after the second term. Even the vaunted Obama boost was temporary and left behind economic malaise, almost as bad as the late Clinton or Carter years.

Conservatives inherit these recessions and tend to mitigate them by cutting taxes, which often works as it did during the early Bush years, before he gave in to a humanist impulse and turned the wars overseas into “occupations” instead of operations to defeat hostile regimes and then bail out.

The Leftist way of doing things relies on statistics and theory as an entry point to massive government spending, which like all Keynesian forays tends to create a temporary boost which then fades as the money slows to a trickle, mainly because speculation is directionless and builds nothing.

The conservative method, on the other hand, relies on reading the supply-demand curve literally and increasing supply. This may seem a simpler method, but it also seems to have fewer radical mood swings, and to produce in the long term a comprehensible and stable economy from basic economics:

Consistent with the Chicago, UCLA, and Vienna schools, we define price theory as “the study of how the price system coordinates the disparate plans of producers and consumers.” Because markets are connected by prices, we must understand how prices work in order to understand how markets work. What makes price theory unique in economics is its parsimonious balance between theory and empirical fact.

Unlike other approaches that influence young economists, price theory does not devote major effort to hyper-mathematical modeling; nor does it make heroic assumptions about rationality. Instead, it takes a few workhorse models and uses them to study an astonishing range of circumstances. Why might corn farmers prefer the government to subsidize ethanol instead of corn in general? Which firms are most supportive of minimum-wage hikes? What are the probable effects of corporate tax cuts on workers’ take-home pay? These are merely a few examples of perennial questions that price theory can help us answer.

Statistical approaches purport to “let the data speak for itself,” but they rarely yield generalizable results. Price theory strikes the right balance. It uses theory, but as a guide to measurement rather than as an end in itself. It lends itself well to empirical analysis because it teaches us what to measure and, more importantly, what not to measure. If an economist’s first instinct in researching the effects of minimum-wage laws is to gather data on unemployment and the number of jobs, he needs a price theory refresher.

As has been said here before, capitalism means economics itself, and every alternative is not economics but government control of the economy that creates a temporary boost through subsidies and speculation, but then falls off as the free money giveaway devalues money in the long term, as we are seeing right now.

Price theory tells us how to make our money more valuable by maximizing what it stands for, namely the total wealth of our economy in realizable (not theoretical) terms. Leftist economics on the other hand rely on devaluing currency in order to increase trading frequency, which drives up prices at the same time it makes those properties less valuable.

The conservative method has another powerful advantage as well: it is comprehensible and simple, leading to a reduction in the mind-numbing complication without complexity — resilient, redundant, order of replicated patterns — that makes modern life seem to run too fast to both stay on top of it and live a normal life:

When we were hunter-gatherers in small tribes, we lived in the “everyone knows everyone” kind of network. But as societies got larger, the topologies changed. There were still local social networks, but these became embedded in larger webs of relationships that handled everything from government administration to trade (think of Imperial Rome or Song Dynasty China). But while these “civilizational” networks were more complex than the ones humans inhabited 100,000 years before, the pace of change was still slow. If you were alive in 97 CE somewhere in the Roman Empire, you probably used the same kinds of tools your grandmother or grandfather used. (In fact, it’s quite possible you still used their tools.) Just as important, the rules of the social network changed slowly: Most generations didn’t see radical social change within their lifetimes unless some conquering army arrived, and even then, the rules of the social order (i.e. the social networks) might not have changed much.

In the world we’ve built over just the past century, however, the pace of significant technological and social change has occurred within fractions of a single human lifetime. Think about how many iterations of the telephone you’ve seen. At my advanced age of 61, I can remember when phones were connected by a cord to a wall. Now, technology advances so quickly that we are all forced to buy a new phone every few years because the old ones just can’t keep up anymore.

While people like to blame technology for these things, the proliferation of red tape, forms of usury, taxes, regulations, and other necessary elements of Leftist economics make society a black box. We cannot understand it without mastering many disconnected and arbitrary sub-fields, which means almost no one knows what is going on.

The current dialogue in our media involves a clash between democracy and dictatorship. More likely, we are seeing the conflict between those who want symbolism to manipulate others in order to drive economies, and those who want to revert to the known best way of doing things, which involves economies based on production.

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