Thread: The biggest reason gas is too dam' expensive...

The principle mistake, that Hayek made, was labeling the government interference in the economy and markets as a road to totalitarianism. Any kind of planning, he saw as sure sign of the disaster waiting to happen. He thought that the market will regulate itself and that any kind of government involvement will be counterproductive. His book, “Road to Serfdorm” sketches this principle. He thought that the free market, led by the principles of self interest will create stability. So basically the government needs to keep its hands of the economy in order to be tamed. The government….

Friedrich August von Hayek, joined voluntarily, to the Austro Hungarian Imperial Army, by laying about his age, and fought in the artillery unit, where he was decorated for bravery and sustained minor injuries. Why on Earth, a guy would lie about his age and put his life in danger if he belonged to the wealthy aristocratic family, his father was a prominent botanist and his mother was quite wealthy. The only thing that comes to mind is that Hayek loved the Empire so much that he was willing to lay his life for it. So many of you would say, he was a patriot so what? Well, he loved the Empire and the Empire lost. So what effect would that have on young mind aside form post traumatic stress caused by the war? Was it cathartic? He devoted his whole life after that to make a world a better place so it must be cathartic…Yes, he did devoted himself to make a world a better place, but he always blamed the government for all evils. So is it rude to suggest that Hayek, deep down hated the Empire and blaming it for losing the war and than, by mechanisms of projection and inversion, transformed it into a “love” toward man kind.
Communism was rising and it promised to solve problems that capitalism couldn’t at the time. Hayek saw the communism as a threat because it planned the economy and was suffocating freedoms. It promoted collectivism and sacrificed individualism. Hayek got the mission, to save capitalism. But the new threat emerged, much closer to home, the National Socialism which will became Nazism in Germany and Fascism in Italy. All three systems, the Nazism, Fascism and Communism had a strong social component.
Hayek saw his worst nightmare come true, the collective madness whom seek the strong leader to guide them. And they all drove their power from the economy which was planned during the war. The second shock for Hayek came after the war, when Keynes model became accepted. For 30 years, it showed results and than in 70’es started to crumble. Stagflation emerged, inflation and unemployment grow and it looked like a road to Serfdorm started to open its gates once again threatening the capitalism. At that time Hayek emerged and was accepted by Ronald Regan, which created “Regan economics” and Margaret Thatcher and created “Thatcherism”. Hayek was pleased and received the Nobel prize for the economy. But what he missed was that Regan economic actually became Reganism and Thatcher economic became Thatcherism. So new isms emerged and new wars too. Regan had Libya and Margaret had Falklands. So actually nothing new happened, leaders created their isms and wars that they fought. But wars were not global, they were local and those two isms were smaller than communism. But they were still wars and they were still isms. Reganism and Thatcherism created the foundations for new thinking in the economy to be applied the neo conservativism. With the fall of Berlin wall and disintegration of communism, the need for a strong state disappeared and conditions for global economy were created. In the 90’es that was thing to happen. So now at the 21 century after almost exactly 30 years since Hayek boomed we have stagflation and looming fears, just as it was the case with Keynes theory.

So my question is why this cycle of 30 years exist, no matter what you do? I think I have the answer but I'll wait a little bit to see what others have to say.

Originally Posted by Shek

As far as free educations, you get that up through 12th grade, and then it's heavily subsidized in college at state schools. In fact, at the most expensive private schools, it's the wealthy that have to pay. Those who don't have wealthy parents get grants that either heavily subsidize tuition and room and board or completely pay for it. It doesn't take money in the US to get a decent education, although it does take smarts and effort, just like anywhere else.

Not just private schools either. I know that UNC Chapel Hill covers tuition for all students below the poverty line. I expect there are other flagship state schools that do also. If only I had wanted to go to UNC or Harvard instead of a tiny private school I'd be sitting pretty right now... Oh well. It's been worth it.

Originally Posted by Versus

But the new threat emerged, much closer to home, the National Socialism which will became Nazism in Germany and Fascism in Italy. All three systems, the Nazism, Fascism and Communism had a strong social component.

Wow. Someone who realizes that the Nazis were socialists. You revive my faith in humanity.

So now at the 21 century after almost exactly 30 years since Hayek boomed we have stagflation and looming fears, just as it was the case with Keynes theory.

I don't think we've come close to what was called stagflation in the '70s. First, we're not even sure we're in a recession yet, at least on this side of the pond. Second, inflation hasn't come close to what it was like in the 70s and early 80s, with several years of double digit inflation. We haven't even matched reached the inflation rate we had in the recession of the early 90s, where it was between 5 and 6% for much of the time, compared to about 4% right now.

The only reason why inflation is at such low rate is becaouse of globalisation. The problem is still present but due to a larger scale it takes more time to develop to a catastrophic proportion.

Originally Posted by JAD_333

But, my ancient friend, consider that we are merely the extension of a colonial empire inculcated with values from you-know-who, and if we tend to believe we are the best and the greatest, to whom do we owe our boundless confidence if not to you-know-who. Perhaps you are looking into the mirror and not liking what you see. But look further and you'll see much to like. )

Thank you, Methusala!
We got our expansionist views from the Romans, and someone must have thought it to be such an exemplary idea that we tried to follow suit. Not considered very pc today.

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Originally Posted by Shek

Let's see what The Economist, a UK publication, is reporting:


What isn't mentioned is what has been happening for some considerable time. American firms are offering jobs to our brightest and best graduates at salaries UK firms cannot match. The US has also bought out our companies so they can get hold of existing patents or the accumulated research of these companies. (Asset mining). These then become 'American' by transference. Does it matter when the average American is convinced that their country is responsible for all inventions and discoveries anyway?

As far as free educations, you get that up through 12th grade, and then it's heavily subsidized in college at state schools. In fact, at the most expensive private schools, it's the wealthy that have to pay. Those who don't have wealthy parents get grants that either heavily subsidize tuition and room and board or completely pay for it. It doesn't take money in the US to get a decent education, although it does take smarts and effort, just like anywhere else.

Originally Posted by Versus

The principle mistake, that Hayek made, was labeling the government interference in the economy and markets as a road to totalitarianism.

That post took a lot of work to put together. It's appreciated.

Ok, so Hayek was a ultra-conservative, and instead of being content to wave flags at the eqivalent of a Ron Paul rally of the day, he wrote a book, which in essense says that every action has a reaction, and like so many books about economics he sees a linear worldtime whereas in fact reality is circular-sprial, the only way to go around and around repeating the same sequence of general events without actually coming back to any extact moment in time. Take a bedspring, lay it down and put a pencil across the coils and another 180 degrees away...Now imagine economic life moving along the coils. Wherever time comes to the first pencil, a totalitarian state reaches its apex and begins to disintegrate, and when it reaches the second pencil, the diametric opposite of a totalitarian state reaches its apex and begins to disentrgrate. Hyak was just another ant who climbed a pebble and thought he saw the whole world at work... It's still an achievement compared to most ants.

So my question is why this cycle of 30 years exist, no matter what you do? I think I have the answer but I'll wait a little bit to see what others have to say.

Ball is in your court.)

Originally Posted by glyn

Thank you, Methusala!
We got our expansionist views from the Romans, and someone must have thought it to be such an exemplary idea that we tried to follow suit. Not considered very pc today.

Victimization requires a perpetrator; I think we somehow fell into the role of the latter.

. But what he missed was that Regan economic actually became Reganism and Thatcher economic became Thatcherism. So new isms emerged and new wars too. Regan had Libya and Margaret had Falklands. So actually nothing new happened, leaders created their isms and wars that they fought.

How was Libya a war? Also please define "Reaganism" in comparsion to socialism, communism, nazism.

So now at the 21 century after almost exactly 30 years since Hayek boomed we have stagflation and looming fears, just as it was the case with Keynes theory.

We have stagflation, really? Stagflation is defined as high unemployment and high inflation. The unemployment rate in 1977 in the US was 7.1%, in 2007 it was 4.6%. In 1977 the inflation rate was on average 7%, in 2007 it was about 3%. Let's wait until the statistics warrant it before we call a return to stagflation.

Originally Posted by Versus

The only reason why inflation is at such low rate is becaouse of globalisation. The problem is still present but due to a larger scale it takes more time to develop to a catastrophic proportion.

Care to elaborate on this theory?

Originally Posted by JAD_333

That post took a lot of work to put together. It's appreciated.

Ok, so Hayek was a ultra-conservative, and instead of being content to wave flags at the eqivalent of a Ron Paul rally of the day, he wrote a book, which in essense says that every action has a reaction, and like so many books about economics he sees a linear worldtime whereas in fact reality is circular-sprial, the only way to go around and around repeating the same sequence of general events without actually coming back to any extact moment in time. Take a bedspring, lay it down and put a pencil across the coils and another 180 degrees away...Now imagine economic life moving along the coils. Wherever time comes to the first pencil, a totalitarian state reaches its apex and begins to disintegrate, and when it reaches the second pencil, the diametric opposite of a totalitarian state reaches its apex and begins to disentrgrate. Hyak was just another ant who climbed a pebble and thought he saw the whole world at work... It's still an achievement compared to most ants.
Ball is in your court.)

I forgot to add another thing that he overlooked. Since he saw any type of gov. meddling in the economy is counter reproductive, govt actually became poorer and subjected to corporate interests whom took power. By growing powerful,corporations took the role of limiting factors making the govt their dependences. Lobbying for example is one of ways to make pressures on the govt...
Well, the reason for 30 years cycle is something I call an "Photocopy effect".
When you copy something for a long time, copies faint depending on number of copies. If you apply that to the economy, the initial energy which was used to drive the process in a certain direction, bleeds over time. The 30 years period is not connected with the economy directly it is connected with the human life. If you were born during the war and had hard time growing up, when you reach 30es, supposing that you have kids, the kids have "smaller momentum" since they grew up in the conditions which are far more better than ones in which you grew up. But if you taught them the ways that you know, they have a less obstacles to achieve their goals simply cause road has been paved already. Since things are easier, they require less energy and thus when your kids have their kids they will need even less energy till the whole process losses momentum and comes to a stop.
I mean I don't know if this makes any sense, making physics and economics but since someone mentioned market forces I guess they are subjected to a law of "economic physics"

Originally Posted by Herodotus

Care to elaborate on this theory?

No problem but it will take some time for me to put the reply together.

Originally Posted by Versus

IWell, the reason for 30 years cycle is something I call an "Photocopy effect".
When you copy something for a long time, copies faint depending on number of copies. If you apply that to the economy, the initial energy which was used to drive the process in a certain direction, bleeds over time.

One can avoid that by using a master copy, but I get your drift. Your analogy is questionable. Nature renews even in human activity. It kills off all the old screwups and replaces them with fresh ones who are eager to reinvent the wheel. Dealing with immediate problems in the right way forestalls the inevitable. But if you are in the grip of Socratic thinking, you won't try? People as a whole don't much care what happens after they're gone; they'll feather their nest as long as they can. The result is an imperfect legacy for future generations. Obama represents that course politically speaking.

The 30 years period is not connected with the economy directly it is connected with the human life. If you were born during the war and had hard time growing up, when you reach 30es, supposing that you have kids, the kids have "smaller momentum" since they grew up in the conditions which are far more better than ones in which you grew up. But if you taught them the ways that you know, they have a less obstacles to achieve their goals simply cause road has been paved already. Since things are easier, they require less energy and thus when your kids have their kids they will need even less energy till the whole process losses momentum and comes to a stop.
I mean I don't know if this makes any sense, making physics and economics but since someone mentioned market forces I guess they are subjected to a law of "economic physics"

You're on to something here. Those who have felt the pain of bad times cannot convince those who have never felt the pain to avoid the causes. Why? Keep thinking.

Originally Posted by Versus

Well, the reason for 30 years cycle is something I call an "Photocopy effect".
When you copy something for a long time, copies faint depending on number of copies. If you apply that to the economy, the initial energy which was used to drive the process in a certain direction, bleeds over time. The 30 years period is not connected with the economy directly it is connected with the human life. If you were born during the war and had hard time growing up, when you reach 30es, supposing that you have kids, the kids have "smaller momentum" since they grew up in the conditions which are far more better than ones in which you grew up. But if you taught them the ways that you know, they have a less obstacles to achieve their goals simply cause road has been paved already. Since things are easier, they require less energy and thus when your kids have their kids they will need even less energy till the whole process losses momentum and comes to a stop.
I mean I don't know if this makes any sense, making physics and economics but since someone mentioned market forces I guess they are subjected to a law of "economic physics"

Then I would argue the way to lessen this "photocopy" effect is to get government out of the economy as much as possible.

The free market is far better equiped to deal with dead weights and failed policies. Look at the Big 3 auto companies in the US. For years they profitted on huge trucks and SUVs. No rules and regulations could bring their average fleet fuel efficiency up. They dragged their feet or lobbied to water down the rules or whatever to resist any type of regulations.

Gasoline hits $4/gal. Overnight GM shuts down 4 factories that produce large SUVs. Ford and Chrysler are also trimming back truck productions. All of a sudden the Big 3 will meet and then exceed the most ambitious fuel economy goal set by the government.

All the government attorneys and personel working on pushing the Big 3 to comply with the rules are instantly out of a job. What are they going to do now? I know. Let's make up some new rules.