World War Two
Published 12 Jan 2021As the United States enters World War Two, a huge industrial giant awakens from hibernation. This episode covers industrial mobilization plans, their execution, and their potential.
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Written by: Joram Appel
Director: Astrid Deinhard
Producers: Astrid Deinhard and Spartacus Olsson
Executive Producers: Astrid Deinhard, Indy Neidell, Spartacus Olsson, Bodo Rittenauer
Creative Producer: Maria Kyhle
Post-Production Director: Wieke Kapteijns
Research by: Joram Appel
Edited by: Karolina Dołęga
Sound design: Marek Kamiński
Map animations: Eastory (https://www.youtube.com/c/eastory)Colorizations by:
Dememorabilia – https://www.instagram.com/dememorabilia/
Norman Stewart – https://oldtimesincolor.blogspot.com/Sources:
– Library of Congress
– National Archives NARA
– Picture of the first class of the Army Industrial College from National Defense University
– FDR Presidential Library & Museum
– Icons from the Noun Project: Artillery by Creative Mania, Douglas SBD Dauntless by Lluisa Iborra, Man by Milinda Courey, Factory Workers by Gan Khoon Lay, Soldier by Wonmo Kang, Old Car by Andri Graphic, progress 20% & 40% by Roberto Chiaveri.Soundtracks from Epidemic Sound:
– “The Inspector 4” – Johannes Bornlöf
– “London” – Howard Harper-Barnes
– “Break Free” – Fabien Tell
– “Last Point of Safe Return” – Fabien Tell
– “Force Matrix” – Jon BjorkArchive by Screenocean/Reuters https://www.screenocean.com.
A TimeGhost chronological documentary produced by OnLion Entertainment GmbH.
January 13, 2021
Waking the Sleeping Giant – America Prepares for War – WW2 Special
QotD: Bureaucracy as a filter
Imagine there’s a new $10,000 medication. Insurance companies are legally required to give it to people who really need it and would die without it. But they don’t want somebody who’s only a little bit sick demanding it as a “lifestyle” drug. In principle doctors are supposed to help with this, but doctors have no incentive to ever say no to their patients. If the insurance just sends the doctor a form asking “does this patient really need this medication?”, the doctor will always just check “yes” and send it back. Even if the form says in big red letters PLEASE ONLY SAY YES IF THERE IS AN IMPORTANT MEDICAL NEED, the doctor will still check “yes” more often than a rational central planner allocating scarce resources would like. And insurance companies are sometimes paranoid about refusing to do things doctors say are important, because sometimes the doctor was right and then they can get sued.
But imagine it takes the doctor an hour of painful phone calls to even get the right person from the insurance company on the line. Now there’s a cost involved. If your patient is going to die without the medication, you’ll probably groan and start making the phone calls. But if your patient doesn’t really need it, and you just wanted to approve it in order to be nice, now you might start having a heartfelt talk with your patient about the importance of trying less expensive medications before jumping right to the $10,000 one.
Organizations have a legal incentive not to deny people things, because the people involved can sue them. But they have an economic incentive not to say yes to every request they get. Seeing how much time and exasperation people are willing to put up with in order to get what they want is an elegant way of separating out the needy from the greedy if every other option is closed to you.
This story makes sense and would help explain why bureaucracy gets so bad, but I’m not sure it really fits the evidence. People complain a lot about bureaucracy in places like the Department of Motor Vehicles, but the DMV doesn’t lose anything by giving you a drivers license and isn’t interested in separating out people who really want licenses from people who only want them a little. If the DMV can be as bureaucratic as it is without any conspiratorial explanation, maybe everything is as bureaucratic as it is without any conspiratorial explanation.
Scott Alexander, “Bureaucracy as Active Ingredient”, Slate Star Codex, 2018-08-31.
December 14, 2020
QotD: Goodhart’s law
This is why planning an economy simply doesn’t work. Issue targets that must be hit and people game the system to hit the targets without actually doing the desired underlying thing. Or, as it is formally constituted:
Any observed statistical regularity will tend to collapse once pressure is placed upon it for control purposes.
Or as it has been reformulated:
Goodhart’s law is an adage named after economist Charles Goodhart, which has been phrased by Marilyn Strathern as: “When a measure becomes a target, it ceases to be a good measure.” One way in which this can occur is individuals trying to anticipate the effect of a policy and then taking actions which alter its outcome.
Set a target for tonnes of shoes and you get one tonne shoes. Set a target for 100 shoes and you get 100 left feet. Set a target for being on time and people fiddle their definition of time.
It is, by the way, entirely fine to insist that airlines play fair with telling us how long a flight will take. You said it will take 4 hours, then 4 hours should be about the time it takes. Yes, sure, we understand, airports, crowded places. Idiot passengers forget to board, luggage must be taken off. Winds vary, thunderstorms happen, French air traffic controllers actually turn up to work today, their one day in seven. Sure, there’re lots of variables. But if you say it’s about four hours then it should be about four hours. Great.
But to complain that they pad their number a bit is ludicrous. We’re holding their feet to the fire, insisting that an underestimate will lead to financial costs. Thus, obviously, they will overestimate. That’s not really even Goodhart’s Law, that’s just human beings. But then, as we know, those who would plan everything don’t deal well with the existence of people, do they?
Tim Worstall, “Goodhart’s Law Applies To Economies, To Everything – Why Not Scheduled Airline Flight Times?”, Continental Telegraph, 2018-08-27.
November 12, 2020
QotD: It’s impossible to plan the economy
So, government is this all knowing, all seeing, entity which can plan, in detail, what should be produced, by whom, where, at what price. That’s what we need to be true if we are to have an interventionist government which tries to plan the economy.
Government is so ill-equipped to judge the future that it sold €6 billion’s worth of property off for £1.6 billion – that’s what we need to be true for that £4.5 billion loss, no? This is not a world in which we can trust government to plan our economy, is it?
And which government exists in reality? Well, the complaint is that second. And the people complaining are largely those who insist that we should act as if we’ve government of the first type. No, they don’t note the discord in that logic either. Governments aren’t very good at economic decisions therefore governments must make more economic decisions for us all. If you can manage to believe that you too can join the Labour Party.
Tim Worstall, “That Ministry Of Defence Housing Deal Proves It’s Impossible To Plan The Economy”, Continental Telegraph, 2018-07-13.
October 7, 2020
QotD: The gullible generation
World War II, which I have described (in The Probability Broach) as a struggle between competing brands of fascism, was much the same thing. For the beleaguered people of Europe, it meant being forced to choose between Adolf Hitler and Josef Stalin. Would you rather be shot or gassed?
For Americans, it meant looking for protection by a political regime so grossly and criminally corrupt that future historians will shake their heads, wondering how an entire people could be such suckers. “The Greatest Generation”, that miserable collectivist mouthpiece Tom Brokaw has called them. Looking back over what my father told me of his life, how his family suffered in the government-caused Great Depression, how he and his comrades risked unspeakable danger in the war, and how he became a prisoner in Germany — all to aggrandize the virtual godhood of Franklin Delano Roosevelt — I call them “The Gullible Generation”.
On the other hand, people loved the Roosevelt Administration so much that they passed a Constitutional amendment to make sure that no sonofabitch could ever be elected to more than two Presidential terms again.
World War II gave government complete, dictatorial control of American society, control of industry, control of communications, control of the economy, control that Roosevelt had desperately lusted after before the war, but failed to achieve. If anyone objected, or insisted on his rights under the Constitution, all the other side had to say was, “Don’t you know there’s a war on?”
The government enjoyed that level of control. Once the war was won, and people looked forward to a period of peace, the government plunged us into the Korean War, Vietnam, and an increasing number of undeclared and stupid conflicts in order to retain its power. “Don’t you know there’s a war on?” never worked quite as well as it had to shut dissenters up, but it’s clear that this scam will go on and on and on until something drastic is done to stop it.
L. Neil Smith, “The Deep State”, Libertarian Enterprise, 2019-04-14.
August 10, 2020
FDR’s “New Deal” and the Great Depression
The Great Depression began with the collapse of the stock market in 1929 and was made worse by the frantic attempts of President Hoover to fix the problem. Despite the commonly asserted gibe that Hoover tried laissez faire methods to address the economic crisis, he was a dyed-in-the-wool progressive and a life-long control freak (the Smoot-Hawley Tariff Act which devasted world trade was passed in 1930). Franklin D. Roosevelt won the 1932 election by promising to undo Hoover’s economic interventions, yet once in office he turned out to be even more of a control freak than Hoover. His economic and political plans made Hoover’s efforts seem merely a pale shadow.
For newcomers to this issue, “New Deal” is the term used to describe the various policies to expand the size and scope of the federal government adopted by President Franklin Delano Roosevelt (a.k.a., FDR) during the 1930s.
And I’ve previously cited many experts to show that his policies undermined prosperity. Indeed, one of my main complaints is that he doubled down on many of the bad policies adopted by his predecessor, Herbert Hoover.
Let’s revisit the issue today by seeing what some other scholars have written about the New Deal. Let’s start with some analysis from Robert Higgs, a highly regarded economic historian.
… as many observers claimed at the time, the New Deal did prolong the depression. … FDR and Congress, especially during the congressional sessions of 1933 and 1935, embraced interventionist policies on a wide front. With its bewildering, incoherent mass of new expenditures, taxes, subsidies, regulations, and direct government participation in productive activities, the New Deal created so much confusion, fear, uncertainty, and hostility among businessmen and investors that private investment, and hence overall private economic activity, never recovered enough to restore the high levels of production and employment enjoyed in the 1920s. … the American economy between 1930 and 1940 failed to add anything to its capital stock: net private investment for that eleven-year period totaled minus $3.1 billion. Without capital accumulation, no economy can grow. … If demagoguery were a powerful means of creating prosperity, then FDR might have lifted the country out of the depression in short order. But in 1939, ten years after its onset and six years after the commencement of the New Deal, 9.5 million persons, or 17.2 percent of the labor force, remained officially unemployed.
Writing for the American Institute for Economic Research, Professor Vincent Geloso also finds that FDR’s New Deal hurt rather than helped.
… let us state clearly what is at stake: did the New Deal halt the slump or did it prolong the Great Depression? … The issue that macroeconomists tend to consider is whether the rebound was fast enough to return to the trendline. … The … figure below shows the observed GDP per capita between 1929 and 1939 expressed as the ratio of what GDP per capita would have been like had it continued at the trend of growth between 1865 and 1929. On that graph, a ratio of 1 implies that actual GDP is equal to what the trend line predicts. … As can be seen, by 1939, the United States was nowhere near the trendline. … Most of the economic historians who have written on the topic agree that the recovery was weak by all standards and paled in comparison with what was observed elsewhere. … there is also a wide level of agreement that other policies lengthened the depression. The one to receive the most flak from economic historians is the National Industrial Recovery Act (NIRA). … In essence, it constituted a piece of legislation that encouraged cartelization. By definition, this would reduce output and increase prices. As such, it is often accused of having delayed recovery. … other sets of policies (such as the Agricultural Adjustment Act, the National Labor Relations Act and the National Industrial Recovery Act) … were very probably counterproductive.
Here’s one of the charts from his article, which shows that the economy never recovered lost output during the 1930s.
August 6, 2020
Congress legislating on high tech is like your Grampa telling you how to play your favourite online game
Brad Polumbo on the notion that the politicians in Washington (or Ottawa, or London, or Canberra, …) are in any way capable of sensibly regulating the high tech sector:
While many principled small-government conservatives, such as Sen. Rand Paul, still back a free-market approach to tech policy issues, Hawley is not an outlier by any means.
Indeed, President Trump has also backed the regulation of social media companies to combat perceived anti-conservative bias. And the most popular conservative media personality in the country, Fox News host Tucker Carlson, regularly rails against Big Tech — even agreeing with progressive proposals to use the heavy hand of government antitrust regulation to break up companies such as Facebook and Google.
So, if major figures from both parties can agree on regulating Big Tech, it must be a good idea, right? Not so fast.
From left to right, the intentions behind these regulatory proposals are often good. After all, most reasonable people would likely share Democrats’ desire to see Big Tech better handle misinformation, “fake news,” and foreign election interference, while conservative Republicans’ calls for political neutrality online are no doubt appealing in the abstract.
Unfortunately, in their haphazard rush to score political points through government action, would-be regulators from both parties are forgetting the inevitable “knowledge problem” that plagues any central planners who try to dictate the minutiae of complicated industries from the halls of Washington, DC.
Economic philosopher Friedrich A. Hayek diagnosed this fatal flaw of government control in his seminal work “The Use of Knowledge in Society.”
“If we can agree that the economic problem of society is mainly one of rapid adaptation to changes in the particular circumstances of time and place,” Hayek wrote. “It would seem to follow that the ultimate decisions must be left to the people who are familiar with these circumstances, who know directly of the relevant changes and of the resources immediately available to meet them.”
“We cannot expect that this problem will be solved by first communicating all this knowledge to a central board which, after integrating all knowledge, issues its orders,” he continued. “We must solve it by some form of decentralization. But this answers only part of our problem. We need decentralization because only thus can we insure that the knowledge of the particular circumstances of time and place will be promptly used.“
August 4, 2020
Nationalism DOESN’T explain WHY Austria-Hungary collapsed
TIK
Published 3 Aug 2020The go-to answer is that national or ethnic divisions caused the collapse of the Austro-Hungarian Empire. But is this really the case? Using multiple sources, it’s time to provide YouTube with a narrative which doesn’t confirm nationalist beliefs. The Habsburgs survived the collapse, with Emperor Karl / Charles trying to reclaim his throne later on before being exiled. However, by about mid-November 1918, he had lost all power. The fact that there is no specific date when Austria-Hungary collapsed, and the fact that the “national revolutions” were met with relatively little opposition, speaks volumes. As does the fact that the new states were all multinational, which undermines the narrative that nationalism was the reason why Austria-Hungary collapsed. Leave your thoughts in the comments below.
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📚 BIBLIOGRAPHY / SOURCES 📚
Judson, P. The Habsburg Empire: A New History. Belknap Press, Kindle 2016.
Kiste, J. The End of the Habsburgs: The Decline and Fall of the Austrian Monarchy. Kindle 2019.
Macgregor, J. & Docherty, G. Prolonging the Agony: How the Anglo-American Establishment Deliberately Extended WW1 by Three-and-a-Half Years. Trine Day LLC, 2018.
Marx, K. Capital: A Critique of Political Economy: Volume III. PDF, English edition, 2010. (Originally written 1894)
Mises, L. Socialism: An Economic and Sociological Analysis. Liberty Fund, 1981. 1969 edition (roots back to 1922).
Oxford Dictionary of English, Oxford University Press, Third Edition 2010.
Rady, M. The Habsburgs: The Rise and Fall of a World Power. Perseus Books, Kindle 2020.
Watson, A. Ring of Steel: Germany and Austria-Hungary at War, 1914-1918. Penguin Books, 2015.Cornwall, M. “Propaganda at Home (Austria-Hungary).” 1919. https://encyclopedia.1914-1918-online….
Online Latin-Dictionary http://www.latin-dictionary.net/defin…
Online Etymology Dictionary https://www.etymonline.com/word/publicFull list of all my sources – https://docs.google.com/spreadsheets/…
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ABOUT TIK 📝
History isn’t as boring as some people think, and my goal is to get people talking about it. I also want to dispel the myths and distortions that ruin our perception of the past by asking a simple question – “But is this really the case?” I have a 2:1 Degree in History and a passion for early 20th Century conflicts (mainly WW2). I’m therefore approaching this like I would an academic essay. Lots of sources, quotes, references and so on. Only the truth will do.
This video is discussing events or concepts that are academic, educational and historical in nature. This video is for informational purposes and was created so we may better understand the past and learn from the mistakes others have made.
April 14, 2020
QotD: The Edict of Diocletian, 301 AD
The most famous episode of price controls in Roman history was during the reign of Emperor Diocletian (A.D. 244-312). He assumed the throne in Rome in A.D. 284. Almost immediately, Diocletian began to undertake huge and financially expensive government spending projects.
There was a massive increase in the armed forces and military spending; a huge building project was started in the form of a planned new capital for the Roman Empire in Asia Minor (present-day Turkey) at the city of Nicomedia; he greatly expanded the Roman bureaucracy; and he instituted forced labor for completion of his public works projects.
[…]
Diocletian also instituted a tax-in-kind; that is, the Roman government would not accept its own worthless, debased money as payment for taxes owed. Since the Roman taxpayers had to meet their tax bills in actual goods, this immobilized the entire population. Many were now bound to the land or a given occupation, so as to assure that they had produced the products that the government demanded as due it at tax collection time. An increasingly rigid economic structure, therefore, was imposed on the whole Roman economy.
But the worst was still to come. In A.D. 301, the famous Edict of Diocletian was passed. The Emperor fixed the prices of grain, beef, eggs, clothing, and other articles sold on the market. He also fixed the wages of those employed in the production of these goods. The penalty imposed for violation of these price and wage controls, that is, for any one caught selling any of these goods at higher than prescribed prices and wages, was death.
Realizing that once these controls were announced, many farmers and manufacturers would lose all incentive to bring their commodities to market at prices set far below what the traders would consider fair market values, Diocletian also prescribed in the Edict that all those who were found to be “hoarding” goods off the market would be severely punished; their goods would be confiscated and they would be put to death.
In the Greek parts of the Roman Empire, archeologists have found the price tables listing the government-mandated prices. They list over 1,000 individual prices and wages set by the law and what the permitted price and wage was to be for each of the commodities, goods, and labor services.
A Roman of this period named Lactanius wrote during this time that Diocletian “… then set himself to regulate the prices of all vendible things. There was much blood shed upon very slight and trifling accounts; and the people brought no more provisions to market, since they could not get a reasonable price for them and this increased the dearth [the scarcity] so much, that at last after many had died by it, the law was set aside.”
Richard M. Ebeling, “How Roman Central Planners Destroyed Their Economy”, Foundation for Economic Education, 2016-10-05.
March 25, 2020
QotD: The broken feedback mechanism that brought down the chain bookstores
… the push-model of book sales. Long before there was an Amazon, chain bookstores had cozy deals with publishers that sent most indie bookstores (now beloved in effigy by the left) out of business.
And then the left dominated publishing establishment had a brilliant idea. For decades they’d been trying to forecast failure and success, and failings. Books they pushed out the wazzoo (A river in Sundon’tshine) died on the vine when bookstores refused to stock them because the owners had read them. The books they had designated as to be ignored caught someone’s fancy, and suddenly were all over.
This was inefficient. It caused way too much printing that never got distributed, and much last minute rushed reprinting. (Even leaving aside how often people chose to read the WRONG things, something that started to matter more and more in the last two decades.)
So they came up with the push model. It was, from a certain perspective, brilliant.
That perspective is the one where the real world doesn’t really exist, so you don’t need to hear from it.
Because the managers of the big corporate bookstores ALSO didn’t read, they took instruction beautifully. So the publishers could say “you’ll take 100 of x and 2 of y” and they DID.
For a little while it worked beautifully, in the sense that there were no surprise bestsellers, (and publishing houses hated those. I know someone who unexpectedly sold out her print run in a week. The publishing house took the book out of print. No, seriously.) and the books that got seen and talked about were picked by the publisher. (BTW this wasn’t even always or primarily political. Sure, that existed too sometimes, but mostly it was the crazy fads that publishing convinced itself of. For instance, sometime in the mid two thousands they convinced themselves no one wanted historical mysteries — they weren’t selling, true, probably because they were on NO shelves — but everyone wanted “chick-lit mysteries” that had covers with lots of shoes and dresses and whose plots were “Sex in the City with murder.” I remember trying to find something to read, giving up and going to the used bookstore (then a hundred miles away in Denver) for my mystery fix.)
Of course, they sold less. In fact, as time went on and people got out of the habit of going to the bookstore, because there was never anything they could find to read. I mean, I remember being chased from Science Fiction to Mystery to finally History, to at last the sort of “utility” book you find in the discount bins you know “a chart of history” type of thing just to find something to buy on our bookstore night.
Then we gave up.
Eventually the broken feedback mechanism gave us the demise of Borders — and B & N is not feeling so good itself — and a yawning, desperate chasm in customers’ need for books that meant the way was wide open for Indie and Amazon. Even the early badly proofed indie books were like a breath of fresh air because for the first time I could read outside the trends being pushed.
Sarah Hoyt, “Breaking the Gears”, According to Hoyt, 2018-01-03.
January 4, 2020
QotD: “Starchitects”
In my school, the status of “Corb” (as we were encouraged to affectionately call him) as a hero was a given, and dissenting from this position was risky. Such is the power of group-think which universities are, sadly, no less prone to than anywhere else. To be fair, nobody was still plugging the megalomaniac aspect of their hero; his knock-down-the-center-of-Paris side. All those undeniably God-awful tower blocks for “rationally” housing “the people” that sprang up all over Europe in his name? Well, we were assured, they could not be blamed on Corb; it was just that his more pedestrian architectural acolytes hadn’t properly understood what he had meant. In addition to the persistence of Corb-hero worship itself, two cancerous aspects of its radical mindset have survived intact in our schools of architecture.
One is the idea that an architect aspiring to greatness must also aspire to novelty. It is this imperative to “innovate” that underpins the diagrammatic design concepts of the Deconstuctivists. There is of course nothing wrong with innovation per se; it is the knee-jerk compulsion to innovate, or “reinterpret” — as a kind of moral imperative — that is the mid-20th-century aesthetic legacy. To be fair to the profession, I would come to the defense of much innovative public and commercial architecture, most of it by architects that the public has never heard of. Tragically though, these unpretentious and unsung essays in steel, glass, and masonry have been eclipsed in the public imagination by the “starchitect” bling that is currently turning the centers of our great cities into a collection of (in James Stevens Curl’s memorable phrase) “California-style roadside attractions”.
The other cancer is the idea that building design has sociological, psychological, and macro-economic dimensions that the architect — simply by virtue of being an architect — is competent to judge. What really matters to your average architecture student is drawing — which is fine, and just as it should be, until the vain idea emerges that their drawings represent some kind of implicit vision for mankind. At my school, any student’s design presentation had to include a verbal rationale — often post hoc and invariably half-baked — of how the form, massing, and materials of the design are expressive of such imponderables as the supposed psychological “needs” and “aspirations” of the users and the wider “community” that the building is to serve. The students were simply reciting the bogus language of their tutors — in which buildings might be said to be “fun,” “thought provoking,” “democratic,” “inclusive” and other such nonsense.
Graham Cunningham, “Why Architectural Elites Love Ugly Buildings”, The American Conservative, 2019-11-01.
January 3, 2020
QotD: Against The Grain
Someone on SSC Discord summarized James Scott’s Against The Grain as “basically 300 pages of calling wheat a fascist”. I have only two qualms with this description. First, the book is more like 250 pages; the rest is just endnotes. Second, “fascist” isn’t quite the right aspersion to use here.
Against The Grain should be read as a prequel to Scott’s most famous work, Seeing Like A State. SLaS argued that much of what we think of as “progress” towards a more orderly world – like Prussian scientific forestry, or planned cities with wide streets – didn’t make anyone better off or grow the economy. It was “progress” only from a state’s-eye perspective of wanting everything to be legible to top-down control and taxation. He particularly criticizes the High Modernists, Le Corbusier-style architects who replaced flourishing organic cities with grandiose but sterile rectangular grids.
Against the Grain extends the analysis from the 19th century all the way back to the dawn of civilization. If, as Samuel Johnson claimed, “The Devil was the first Whig”, Against the Grain argues that wheat was the first High Modernist.
Scott Alexander, “Book Review: Against The Grain“, Slate Star Codex, 2019-10-15.
September 14, 2019
Stalin’s 5 Year Plan for Economic Mass Murder | BETWEEN 2 WARS I 1932 Part 1 of 4
TimeGhost History
Stalin has to deal with the consequences of forcibly changing the Soviet Union from an agrarian economy into a modern industrialized society as his first five-years plan reaches its final year.
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Hosted by: Indy Neidell
Written by: Spartacus Olsson and Naman Habtom
Directed by: Spartacus Olsson and Astrid Deinhard
Executive Producers: Bodo Rittenauer, Astrid Deinhard, Indy Neidell, Spartacus Olsson
Creative Producer: Joram Appel
Post-Production Director: Wieke Kapteijns
Research by: Naman Habtom
Edited by: Daniel Weiss en Wieke Kapteijns
Sound design: Marek KaminskiA TimeGhost chronological documentary produced by OnLion Entertainment GmbH.
From the comments:
TimeGhost History
1 hour ago (edited)
Debating the concepts, definition and framework of Marxism, Communism and Socialism is something that historians don’t seem to get enough of, much like applying these theories to historical and contemporary phenomena. The study of how these theories turned into ideology and what effect that had on nations, cultures, peoples and wars is a very interesting field of history, which can be debated to great lengths, which we ourselves also like to engage and participate in. However, we want to once again emphasise that we will only allow debate within the generally accepted rules of academic debate. Keep it civil, substantiated, name your sources whenever possible and stay away from pseudo-science and contemporary politics. We are fierce believers in the benefits of academic debate and don’t want to resort to turning off the comments, as other channels might do when talking about subjects like the 5-year plan or the Holodomor.Cheers, Joram
August 29, 2019
“‘Neo-liberalism’ is actually little more than … ‘market socialism'”
Peter Boettke responds to a New York Times opinion piece by Binyamin Appelbaum, blaming economists for the state of the western world:
But the problem is deeper than economists, it is ANYBODY put in this position of power and prestige, and to do so is fundamentally anti-democratic as was argued by Frank Knight in various writings, and then by Vincent Ostrom in The Intellectual Crisis of American Public Administration, and more recently in David Levy and Sandra Peart’s Escape from Democracy. We cannot fix this problem by replacing one set of “experts” with another set. We have to stop thinking of the relationship between economics and public administration along these lines altogether.
I try to lay out the argument in my SEA address on “Economics and Public Administration“, which also served as an attempt to summarize two decades of research that several of us have undertaken in this spirit. The critical argument in that text for this issue is that I argue that economics is a derived demand, if we conceive of the task of public administration one way, that will shape not only shape the supply and demand of economists, but dictate what it means to produce an economist — and thus, what is means to be an economist.
The problem with narratives like Appelbaum’s isn’t that he is suspicious of the pretensions of economists, it is that he is blaming the wrong culprit for the mess we’re in. Here it is important that everyone of these critics read Gregory Mankiw’s very important piece, published BEFORE the financial crisis, on the macroeconomist as scientists (read Chicago New Classical and Monetarists) and the macroeconomists as engineers (read MIT/Harvard Keynesian and New Keynesians). The Chicago folks — and the Austrian, Virginia, UCLA, etc. folks — did not go to DC, did not write laws, didn’t attempt to orchestrate economic miracles abroad, or stimulate growth at home. They taught, they lectured, the researched and wrote papers in journals and published books, and a subset of them wrote opinion editorials and did interviews in various forms of popular media. In short, they were teachers and students of society. They did not get paid to be experts for the government in general. They were not advisors. But others were — from Keynes to Larry Summers — the line is long. Just look at the number of central bankers that were PhD students under Stan Fischer at MIT. Can you trace that same lineage to Milton Friedman? How about to F. A. Hayek? Mises? Right, I didn’t think so.
“Neo-liberalism” is actually little more than an effort to bring neoclassical models of efficiency into the operation of governmental agencies — that in another era was called “market socialism” — just look at Abba Lerner’s The Economics of Control. He actually thought he had found the right way to combine socialist aspirations with the teachings of economics so he could ensure microeconomic efficiency and macroeconomic stability and provide economists with the tools to successfully steer the economic ship. That basic idea from mid-20th century to today has never disappeared in those halls of power — what has appeared is a waffling between liberal (in the American sense) Keynesianism, and conservative Keynesianism, but Keynesianism exists throughout. The Samuelsonian Neo-classical synthesis achieved the status he hoped for it … and provides the meaning behind his statement in the teachers manual “I don’t care who writes a nation’s laws … if I can write its economics textbooks.” Samuelson knew that if he could wrest control of the tacit presuppositions of public policy functionaries, then there thoughts and actions would be guided by what he taught about market failure, macroeconomic instability, and government as a corrective to our economic woes. It’s an amazing achievement what he did. For at least a generation, perhaps two, he controlled both the introduction to economics market, and the advanced training of PhD students in economics market.
Thinkers rose up in opposition to this hegemony from the older generation such as Knight, Mises and Hayek, but also among his contemporaries such as Alchian, Coase and Friedman, and of course a younger generation such as Becker and Lucas, but also Demsetz, Kirzner, etc. But, look at those names … they did not go to Washington DC to work for domestic policy agencies or the international agencies in economic policy. They were content in their jobs as economic scholars/teachers. They were humble students of society, and some among them rose to the status of social critics and intellectuals. But again none were master manipulators of the organs of power to try to shape the economy into the image of their ideal.