It would likely smack of excessive optimism to suggest that there was ever a time when dangerous sophisms, destructive half-truths, and self-serving biases held no sway over the public mind. And yet, it might plausibly be suggested that, due to the harsh lessons of the previous century and the widespread availability of modern information-gathering technologies, today’s societies are perhaps as well equipped to counter their influence as they have never been before. However, one distinct set of essentially age-old, though contemporarily repackaged fallacies is still very much with us, and – such is their perverse nature – their popularity keeps feeding on the calamities that they themselves continue to bring.
They are the fallacies rooted in the denial of the existence of the logical structure of human action, and the consequent negation of economic laws. They are the sophisms that lead people to believe that with sufficient determination and coercive power, one can eliminate the constraints of scarcity. They are the supposed panacea eagerly peddled by the representatives of politically connected special interest groups, whose purported effects they often refer to as "paradoxically salutary" or "counterintuitively beneficial". Taken together, they constitute a vision of an upside-down world, whose inhabitants are expected to believe, among other things:
1. That the only sure way of protecting oneself against violence, aggression and coercion is to help institute and continually support a vast, monopolistic apparatus of institutionalized violence, aggression and coercion, whose representatives do not own any of the said entity’s assets, and yet arrogate to themselves the right to expropriate any private property owner for the purposes whose utility it is up to them to appraise.
2. That the free market economy, whose participants – in order to prosper – have to supply one another with productive goods and services, as well as bear the full financial responsibility for the potential failures of their actions, can survive only when subjected to the regulation of a monopolistic group of non-producers, who can always shift the costs of their failures onto the shoulders of producers.
3. That an institution which coercively imposes its protective services on others, unilaterally determines their price and forcibly excludes all competition in this area will not attempt to benefit from initiating conflicts or letting them develop rather them resolving them or preventing their occurrence, and that ceding the task of maintaining justice onto such an entity will not lead to it continually perverting justice in its favor.
4. That economic development is primarily caused not by the processes which allow for and enhance value productivity – such as extension and intensification of the division of labor, investment in more roundabout production processes, and saving, which provides funds for such investment – but by the processes which drive value destruction, i.e., spending, consumption, and massive indebtedness.
5. That printing large quantities of colored paper tickets or creating large numbers of virtual bookkeeping entries can, in all seriousness, not only reverse the effects of major financial downturns, caused by massive squandering of real, scarce assets, but also increase the amount of such assets, and thus the level of real social wealth, during normal times.
6. That siphoning funds from the free market, i.e., that sector of social relations which is the sum total of mutually beneficial interpersonal transactions, guided by price signals and disciplined by the threat of incurring losses, and transferring them to the state apparatus and its clientele, i.e., that sector of social relations which is insulated from the profit and loss system and beneficial only to the transferees, can not only avoid plunging the economy into the quagmire of parasitic attitudes, calculational chaos and prolonged investment uncertainty, but can actually stimulate it into prosperity.
7. That falling prices in a recession, instead of helping to restore the environment conducive to sound economic calculation, restructure the bankrupt firms, and generally ease the burden of readjustment, will actually further hurt the economy and thus need to be propped up by inflationary measures.
8. That disasters, catastrophes, and cataclysms of all sorts, be it natural or man-made, far from being the destructive and crippling forces they so obviously appear to be, are in fact blessings in disguise, capable of lifting failing economies back into good times.
9. That, to paraphrase a prominent "libertarian extremist", there is nothing fishy, let alone straightforwardly contradictory and logically grotesque, about "the head of the world's most powerful government bureaucracy, one that is involved in a full-time counterfeiting operation to sustain monopolistic financial cartels, and the world’s most powerful central planner, who sets the price of money worldwide, proclaiming the glories of capitalism".
10. That we live in a world of curious moral thresholds, where gathering a sufficiently large clientele turns robbery into "provision of social welfare", Ponzi scheming into "provision of social security", and counterfeiting into "provision of financial stability".
Allow me to refrain from commenting further on any of the above pearls of received wisdom, except for making one thymological observation: just as the deflationary effect of productivity growth can offset, and thus conceal the inflationary effect of manipulating interest rates via fiat money creation, an unprecedented advancement in natural sciences, technology and material welfare can divert one's attention from an abysmal retrogression in understanding the logical reality of human action, the kind of retrogression that plunged the 20th century into totalitarian barbarism and can certainly do likewise with the 21th.
What remains is to quote the ever prophetic words of a great man: "No one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result." This task might be easier today than ever before. There is the Internet and there is a growing distrust for the kind of "knowledge" offered by coercion-wielders. Thus, let us not miss the opportunity to make logic and commonsense the only game in town again.
[Reprinted from LewRockwell.com]