Do Depressions Happen in Statist Economies?

It’s commonly believed that depressions don’t happen in statist economies.  It’s believed that business cycles happen from the market economy.  This is the result of monstrous lies.  This is horrendously wrong.  Cycles happen from intervention in the market economy.  There are business fluctuations in the market but not booms and busts.  Resources are misdirected from loans made with an artificially lowered interest rate.

The entrepreneurs are misled by the illusion of wealth the artificial interest rate creates.  It’s fictitious.  Resources are misdirected in the boom and values are reestablished during the bust.  The boom is not good times.  It’s a period of distortion.   The bust is actually the good thing.  While this is painful, it’s a necessary adjustment.  The longer the bust is pushed back, the worse it will be.  This is commonly done by printing more money.

Only the state’s values matter in a statist economy.  The masses are deprived of making decisions.  The overlords don’t bother whether the masses approve or not.  The masses can’t voice their displeasure.  Essentially, they must hold their tongues.  The masses values never become visible.  This could only happen if people could be honest.  The market is always in a depression.  There can be famine but it’s not a depression in a statist economy.

The idea that depressions don’t happen in a statist economy is a fairy tale.  The masses can voice their displeasure if they are free to choose.  They are not free to choose in the statist economy.  The depression happens indefinitely because people are not free.  They think cheap money will make them prosperous.  The pseudo-experts and false prophets convince people of this. It can, but only for a short time.

Reality is based on acting individuals and their preferences—not from fairy tales.  Booms and busts happen from intervention in the economy.  The solution isn’t to intervene more.  It’s time to stop listening to pseudo-experts and false prophets.  They are trying to mislead you to benefit themselves and those they work for.  You can be prosperous only if you save.  The economy grows by producing more than you consume.

Reference

Ludwig von Mises; Human Action

2 thoughts on “Do Depressions Happen in Statist Economies?”

Comments are closed.