Courtesy of Hugo Salinas Price @ New Austrian.org:
Professor Antal E. Fekete has made a remarkable discovery in the field of Economics: artificially lowered interest rates – the fundamental instrument of economic intervention in all the developed countries, practiced in the US by the Federal Reserve – are detrimental to Labor, whether Manual Labor or Management Labor, i.e., detrimental to both the working class and the middle class.
So far as I know, Professor Fekete is the first thinker to point out this particular consequence of an artificially and rapidly lowered interest rate.
The “Developed World” goes along with the Keynesian proposition of lowering interest rates drastically, to juice economies that are re-adjusting to previous juicing through credit expansion not based on previous accumulated savings. Accordingly, the slowest rates of increasing employment (if indeed there is any increase at all, since the statistics are universally doctored to look good and justify Central Bank intervention) are presented by the countries of the Developed World, which are suffering incredibly low rates of interest.
On the other hand, the “Emerging Markets” which have not applied QE and suppression of the interest rate so vigorously, are showing higher rates of employment than the “Developed World”.
In a video on the Internet recently, viewers got a look at social conditions in Dhaka, the capital of Bangladesh. The number of humans is appalling. At the end of the period of fasting of Ramadan, incredible swarms of humans cram into the trains and climb up in hordes upon the roofs of the railroad cars.
The activity of boats on the massive river that goes through Dhaka is amazing; hundreds of boats are seen scampering over the river in constant activity.
There is no question of unemployment in Bangladesh, in spite of the fact that Dhaka is one of the most populated cities on the planet. Why? Because in Bangladesh, if you don’t work, you don’t eat. The economy of Bangladesh, left to itself, provides the maximum output possible for the massive population. Any intervention – and I do suppose they have some government intervention in their economy – must be minimal, because anything more than that would mean death for hundreds of thousands living at the very margin of sustainable life.
There is only one sort of economics in this world, because there is only one sort of human nature. Economics is simply one branch of the study of human nature: the study of the human being as an entity that acts, which is the same as saying that the human being chooses. Other species of living beings may exhibit a limited capacity for choosing, but the human being is entirely dependent on choosing – and making the right choices – for the sustenance of his life. The animal kingdom relies on instinct; the human being relies on his choices, which are not instinctive. Continue reading