Video: Fraud. Why the great recession

Video: Fraud. Why the great recession

Free markets are not to be blamed for the Great Recession. On the contrary, its origins rest upon the deep government and central bank intervention in the economy. Through fraudulent mechanisms, this causes recurrent boom and bust cycles: bad policies create phases of irrational exuberance, which are then followed by economic recessions, a result that every citizen ends up suffering from.

Comment about the film:
1. The connection between the free market and the philosophical idea of law has not been touched. As Bruno Leoni says "even those economists who have most brilliantly defended the free market against the interference of the authorities have usually neglected the parallel consideration that no free market is really compatible with a law-making process centralized by the authorities". Reforms in the direction of the free market such as the ones suggested without changing the philosophical idea of the law (i.e. without replacing the idea of law intended as particular decision of authority and therefore as instrument of power with the original idea of law intended as abstract and general principle and therefore as limit to arbitrary power) would be utterly useless.
2. The solution is found in the gold standard and not, as Hayek proposes, in the competition of private currencies: via a competition process the currency based on a gold standard could emerge as the best currency (i.e. the currency best able to maintain and even increase its purchasing power in time) but we cannot know before competition works its magic. As Hayek say, competition is a discovery procedure (like experimentation in science): imposing the gold standard ex ante would imply to waste the opportunities offered by competition.

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