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Reliance on historical data as a foundation for understanding economics is problematic. Data cannot explain the facts of reality without a theory that both “stands on its own feet” and is not derived from the data itself.

Most mainstream economists believe the application of quantitative methods on historical data can explain the state of the economy. Others such as Ludwig von Mises held that the data utilized by economists is a historical display, which by itself cannot provide the facts of economics. Ludwig von Mises wrote, “Experience of economic history is always the experience of complex phenomena. It can never convey knowledge of the kind the experimenter abstracts from a laboratory experiment.”

To make sense of historical data, economists must have a theory that stands on its own and does not originate from the data itself. Even economists who call themselves “practical” must employ a theory to make sense of historical data. Even seeking correlations between the various pieces of historical data is using a theory that says correlations help explain reality. There cannot be historical data analysis without a theory to direct it.

A theory resting upon the view that human beings act consciously and purposefully fulfills this requirement. That human beings act consciously and purposefully cannot be refuted, for anyone who tries to do so does it consciously and purposefully, thus contradicting himself. Murray N. Rothbard wrote, “But while most things have no consciousness and therefore pursue no goals, it is an essential attribute of man’s nature that he has consciousness, and therefore that his actions are self-determined by the choices his mind makes.”

That human action is conscious and purposeful allows one to make sense of historical data. Contrary to various theories that rely on correlations, which merely describe the data, the theory that human actions are conscious and purposeful explains it.

Why Methods of Natural Sciences Are Not Applicable in Economics

Most economists believe that the methods of natural sciences such as laboratory experiments can lead to a major breakthrough in our understanding of economics. According to Rothbard,

This methodology, briefly, is to look at facts, then frame ever more general hypotheses to account for the facts, and then to test these hypotheses by experimentally verifying other deductions made from them. But this method is appropriate only in the physical sciences, where we begin by knowing external sense data and then proceed to our task of trying to find, as closely as we can, the causal laws of behavior of the entities we perceive. We have no way of knowing these laws directly; but fortunately, we may verify them by performing controlled laboratory experiments to test propositions deduced from them. In these experiments we can vary one factor, while keeping all other relevant factors constant. Yet the process of accumulating knowledge in physics is always rather tenuous; and, as has happened, as we become more and more abstract, there is greater possibility that some other explanation will be devised which fits more of the observed facts and which may then replace the older theory.

In contrast,

while laboratory experiments are valid in the natural sciences, it is not so in economics. In the study of human action, on the other hand, the proper procedure is the reverse. Here we begin with the primary axioms; we know that men are the causal agents, that the ideas they adopt by free will govern their actions. We therefore begin by fully knowing the abstract axioms, and we may then build upon them by logical deduction, introducing a few subsidiary axioms to limit the range of the study to the concrete applications we care about. Furthermore, in human affairs, the existence of free will prevents us from conducting any controlled experiments; for people’s ideas and valuations are continually subject to change, and therefore nothing can be held constant. The proper theoretical methodology in human affairs, then, is the axiomatic-deductive method. The laws deduced by this method are more, not less, firmly grounded than the laws of physics; for since the ultimate causes are known directly as true, their consequents are also true.

While scientists can isolate various particles, they do not know the laws that govern these particles. All that they can do is hypothesize regarding the “true law” that governs the behavior of the identified particles and can never be certain what that law might be.

According to Mises,

The physicist does not know what electricity “is.” He knows only phenomena attributed to something called electricity. But the economist knows what actuates the market process. It is only thanks to this knowledge that he is in a position to distinguish market phenomena from other phenomena and to describe the market process.

Mainstream economists employ various quantitative methods. Rothbard and others, however, have had serious misgivings on the use of quantitative methods in economics. On this Rothbard wrote,

Not only measurement but the use of mathematics in general in the social sciences and philosophy today, is an illegitimate transfer from physics. In the first place, a mathematical equation implies the existence of quantities that can be equated, which in turn implies a unit of measurement for these quantities. Second, mathematical relations are functional; that is, variables are interdependent, and identifying the causal variable depends on which is held as given and which is changed. This methodology is appropriate in physics, where entities do not themselves provide the causes for their actions, but instead are determined by discoverable quantitative laws of their nature and the nature of the interacting entities. But in human action, the free-will choice of the human consciousness is the cause, and this cause generates certain effects. The mathematical concept of an interdetermining “function” is therefore inappropriate. Indeed, the very concept of “variable” used so frequently in econometrics is illegitimate, for physics is able to arrive at laws only by discovering constants. The concept of “variable” only makes sense if there are some things that are not variable, but constant. Yet in human action, free will precludes any quantitative constants (including constant units of measurement). All attempts to discover such constants (such as the strict quantity theory of money or the Keynesian “consumption function”) were inherently doomed to failure.

Again, contrary to the natural sciences, the factors pertaining to human action cannot be isolated and broken into their simple elements. However, in economics we know that human beings act consciously and purposefully. This knowledge, in turn, better helps us to understand economics.

Consider a situation in which the central bank announces that raising the money supply growth rate while price inflation is low could lift real economic growth. Being the medium of exchange, however, money can only facilitate existing wealth. It cannot generate more wealth on its own. Money is not a physical factor of production, nor can it be consumed. Thus, we can conclude that printing money cannot expand economic growth. On the contrary, increasing the money supply growth rate will lead to economic impoverishment. Hence, we can conclude that money supply is not a suitable mean to raise real economic growth.

The fact that individuals pursue purposeful actions implies that causes in economics emanate from human beings, not outside factors. This means that quantitative methods will not be helpful in explaining economics. All that quantitative methods can do is describe movements of historical data; it cannot identify the driving forces of economic activity.

Conclusion

Reliance on historical data as a foundation for understanding economics is problematic. Data cannot explain the facts of reality without a theory that both “stands on its own feet” and is not derived from the data itself.

Milei’s results are likely to serve as a global PR campaign for (or against) the policies and worldview that Milei promotes leading to political and economic implications far beyond Argentina’s borders.

Amidst rampant peso inflation and his scathing pro-free market speech at Davos, new Argentine president Javier Milei has taken office with radical proposals to overhaul the country. While his brief month and a half in Argentina’s Casa Rosada isn’t long enough to know if his bark will really match his bite, here’s a summary of some of his biggest actions so far:

Among his first moves after taking office was slashing the number of government ministries from 18 to just 9. These make up the presidential cabinet. Milei consolidated the Ministries of Culture, Education, Health, Labor, Social Development, Public Works, Transportation, Telecommunications, and Energy and Mining. Their functions are now contained under 3 different umbrellas: the Ministries of Health, Human Capital, and Infrastructure.

In a controversial move, he also appointed his sister Karina Milei as General Secretary of the Presidency. Given their relationship and the importance of the role, helping determine everything from policy to public relations messaging, her performance will be watched closely by critics. Argentines are used to political families (two of their last four presidents shared a last name), but it still raises eyebrows when a president appoints a direct relative to one of the highest ministerial offices.

The pressure is on Milei and his team to rein in runaway inflation, which has roughly doubled since November and threatens to spiral further out of control. To his credit, Milei doesn’t expect a magic wand without pain, calling his reforms “shock therapy” for the country. Peter Schiff and other libertarian commentators have said this for decades — central banks are great at kicking the can down the road, but it only feeds an even bigger crisis later. Despite the pain, the only way is to rip off the proverbial band-aid and let free markets sort themselves out:

“Politicians promise the world, but they can’t deliver. Milei knows that free markets, not government handouts, fulfill needs.”

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To that end, perhaps the most-watched development since Milei took office is his sweeping reform bill enacting everything from higher export taxes to ending subsidies for energy and media companies. It also privatizes dozens of public companies, shifting public works projects away from government management. 

Among the many questions for Argentines is what will happen to the affordability of fuel and other essentials when subsidies are removed by this “Mega-Reform” bill. As Argentine Minister of Economy Luis Caputo explained, for years the government has stepped in to help its citizens with their energy costs:

“Today the state artificially maintains very low prices in energy and transportation rates through subsidies.”

When a government gives subsidies it can’t afford to give, they do long-term economic damage. But the pain Argentines will feel in the short term from having those subsidies and other artificial comforts ripped away may create a public relations backlash against his policies. Unfortunately, when the failures of artificial monetary expansion lead to rampant inflation, mainstream economists don’t take it as a lesson against the dangers of money printing — but the same can’t be said for the reverse.

source: tradingeconomics.com

Perhaps the most alarming part of the bill shifts some legislative powers from Congress to the president, stoking concern that Milei plans to grant himself increasing levels of authoritarian control. Either way, the bill is expected to meet heavy opposition from Congress, where the strong pro-Milei faction is small. In fact, Milei has repeatedly altered aspects of the bill to try to increase its chances of passing, including diluting some of its clauses increasing presidential powers. With the concessions, analysts expect some version of the bill to pass.

A separate decree to deregulate the government was put into effect in December, but parts of it have already been struck down in one of Argentina’s highest courts. It will be among many challenges to Milei’s heavy-handed style of reform, which will test the country’s checks and balances as it falls under the scrutiny of the legislative and judicial systems. 

One of the biggest unanswered questions of Mileiconomics is how it will begin to dig Argentina out of its immense dependence on loans from China, historically financed through rounds of money printing, and billions in IMF loans. The country has defaulted on its sovereign debt multiple times. Whatever the measures, undoing a long history of economic damage in Argentina will take years, along with coordination beyond a single administration.

Perhaps more importantly, Milei’s results are likely to serve as a global PR campaign for (or against) the policies and worldview that Milei promotes leading to political and economic implications far beyond Argentina’s borders.

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Bipartisan Border Bill Gives Biden Dictatorial Powers, 2.3 Billion To NGO Human Traffickers, And Millions of Aliens Legal Status

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The free market is a problem solver if nothing else.

The government, federal or otherwise, has no business model because it is not a business. We know this at the outset because government does not compete in the market for people’s money, as every other business must do. With a monopoly of violence, it seizes the money it wants through taxes and monetary inflation. As long as the government doesn’t get carried away by taxing and inflating too much, most people—many of whom call themselves libertarians—regard this setup as necessary.

In “America Loves Paying Taxes,” Vanessa Williamson writes for The Atlantic:

In national surveys, over 95 percent of Americans agree with the statement, “It is every Americans’ civic duty to pay their fair share of taxes,” and more than half see taxpaying as “very patriotic.” One man from Ohio called it a responsibility to “the Founding Fathers.” A former Marine said taxpaying is “the cost of being an American,” while a man from California said tax avoidance is the equivalent of “shorting the country.”

Comforting, isn’t it?

Every business, if it is to stay afloat, must produce a profit. It must make more money than it spends. Competition will force companies to keep their prices as low as possible while still bring in enough revenue to make a profit. Without a sound business plan that adjusts to challenges from competition and changing consumer preferences, a firm’s existence will be short-lived.

Consider the once-strong demand for Microsoft Disk Operating System (MS-DOS) personal computer applications in the early 1980s (I had a side business writing them). When the Macintosh came along in 1984 with its graphical user interface, Microsoft was caught flat-footed. Users no longer had to type cryptic commands they couldn’t remember at a blinking cursor; they could do everything they wanted from pull-down menus and a mouse. The Mac was the computer “for the rest of us.” Bill Gates immediately ordered the creation of a DOS shell that he called Interface Manager, later changed to Windows. It lacked the elegance of the Mac, but it sustained the company’s leadership until they created a Windows operating system from scratch.

Apple helped Gates by failing to include a killer business app with their radical offering. Critics said the little Mac couldn’t do anything except paint pretty pictures. At a price of $2,495.00 ($7,604.88 in 2024), it sold poorly. Later, after Steve Jobs returned to Apple after being dismissed by the board, he decided to empower individual users instead of hidebound organizations and developed a successful marketing strategy with the lowercase “i” and colorful, more powerful home computers.

Assuming he’s allowed to vote freely with his money, the consumer always benefits from innovation and competition. Companies gathering the most votes stay around and possibly grow but are always subject to the changing preferences of the ones putting their money down.

One Is Not like the Others

One could argue that government does indeed have a business plan, and it can be found in small print somewhere. Having far more guns than other organizations and virtually limitless latitude to use them, the government gravitates naturally toward coercion rather than persuasion. When it needs more money, it doesn’t innovate or economize, it plunders the public. Resist and you could end up dead, and everyone understands this. Judging it as we would a business organization, it stands out starkly as criminal.

Apple, Microsoft, and all the other companies would never get away with forcing people to deal with them at prices they dictate. Don’t like iPhone’s price? You don’t have to buy it. Don’t like any pocket phones (as with my antiquated friend in the Ozarks)? You’re free not to buy any. However, with government, that relationship changes.

Should we wonder why the economy has become a house of cards when there is a government-provided counterfeiter directing money matters? However, fiat money inflation is part of the government’s business plan. In conjunction with the Federal Reserve, it creates gargantuan mountains of debt that it never worries about because it’s powerful enough to force taxpayers to pay the interest on it.

The argument that the kind of government we have is necessary lacks noncontradictory support. No other entity can legitimately initiate force except this one we call government. Where did it originally get that authority? Did you vote for it?

Ludwig von Mises in Omnipotent Government writes:

With human nature as it is, the state is a necessary and indispensable institution. The state is, if properly administered, the foundation of society, of human cooperation and civilization. It is the most beneficial and most useful instrument in the endeavors of man to promote human happiness and welfare. But it is a tool and a means only, not the ultimate goal. It is not God. It is simply compulsion and coercion; it is the police power.

Since we can’t recruit angels, “human nature as it is” applies to those conducting state affairs too, which is why we’ve seen so few Ron Pauls and an onslaught of Joe Bidens. Since no other entity in society possesses this power, are we not granting validity to contradictions? By what definition has any state in history been “properly administered”?

Later in the same book, Mises writes: “When the men in office and their methods no longer please the majority of the nation, they will—in the next election—be eliminated and replaced by other men and another system.”

Does that sound like what has happened in the United States? Each administration seems to outdo the previous one in the loss of rights and economic destruction. If the majority love big government—and the country’s schools are promoting it—voting won’t fix anything. As we’ve seen recently, voting has been about as reliable as the fiat dollar.

The free market is a problem solver if nothing else. In A Critique of Interventionism, Mises wrote: “Measures that are taken for the purpose of preserving and securing the private property order are not interventions in this sense.” Because of the criminal nature of the state, I would rather trust market forces “for preserving and securing the private property order.”

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Bipartisan Border Bill Gives Biden Dictatorial Powers, 2.3 Billion To NGO Human Traffickers, And Millions of Aliens Legal Status

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Former president named Sen. Tim Scott (R-S.C.) and South Dakota Gov. Kristi Noem (R) as potential running mates.

Former President Donald Trump joined Fox Business’ Maria Bartiromo’s Sunday Morning Futures program over the weekend for a wide-ranging interview discussing his potential choices for vice presidential running mate, his predictions for the Republican National Committee and his plans for the largest mass-scale deportation of all time.

The current GOP frontrunner hinted there “will probably be some changes coming,” when asked his thoughts on RNC Chair Ronna McDaniel.

Admitting he won’t announce a VP pick “for a while,” the former president named Sen. Tim Scott (R-S.C.) and South Dakota Gov. Kristi Noem (R) as potential running mates, going on to refute rumors his campaign once considered Democrat candidate Robert F. Kennedy for the position.

On the invasion unfolding at America’s southern border, the 45th president reiterated his commitment to deporting “a lot of them” following remarks he plans to implement the “Largest Domestic Deportation Operation in History” once re-elected.

“It’s not sustainable,” Trump said, adding that 28,000 people from China have illegally entered the US over the past few months.

“28,000,” Trump said, going on to ask “What’s [Joe Biden] doing? Building an army?”

Trump also addressed efforts to flip blue states red, saying he’s open to the idea of holding a rally at Madison Square Garden arena and possibly in the South Bronx borough of New York City, where black voters have said they would like to see him speak.

Trump also covered Biden’s 2023 Chinese spy balloon controversy, saying the fake news media tried to claim a balloon flew over the US during his presidency only to find out that was false.

Watch the full interview:

?President Trump’s full Interview with Maria Bartiromo on Feb 4, 2024 #Trump2024 pic.twitter.com/IsMVTcjanG

— AJ Huber ?? (@Huberton) February 4, 2024

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The globalists are increasing their attacks on Infowars and the stakes have never been higher!

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Border security bill nothing but a huge sellout of the American people, the ending of U.S. sovereignty, and billions of dollars to foreign nations and NGOs facilitating the migrant invasion.

Alex Jones breaks down the Senate’s new $118 billion bill on border security, Ukraine, and Israel.

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Australian Senator Malcolm Roberts has proof the Covid-19 pandemic was “planned and globally coordinated” decades in advance by globalist figures determined to seize totalitarian control of humanity. “It has become clear that people in this […]

The post Australian Senator Has Legislative Proof Covid Was Planned Decades Ago: ‘We Will Expose Your Global Agenda’ appeared first on The People’s Voice.