"Broken supply-chains are the story of the moment but what I find truly remarkable is that virtually no one any longer understands that it is the price system, and the price system alone that allows the supply-chain to operate.... [to bring] food to your table, along with everything else. It is the price mechanism that makes the capitalist system indispensable. That this is not common knowledge makes our way of life vulnerable to being driven into the sand ..."~ Steven Kates, from his post 'The price mechanism is the single most important element of the market economy'
Friday, 28 January 2022
"Broken supply-chains..."
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4 comments:
Howdy, Peter! Hope you and yours are all safe and well!
Similar to the observation that we shouldn’t be focused primarily on why some places suffer poverty, but rather why some places don’t suffer poverty. Poverty, and ‘broken’ supply chain have been the norm for most of history. It’s only by virtue of specific systems and practices made possible by capitalism that we’ve recently taken the absence of both for granted.
One challenge for supply chains to overcome is the near-universal assault on the price mechanism that is massive inflation of the monetary supply.
If someone tells you the global pandemic explains the supply chain challenges underpinning the recent spike in inflation, ask them which countries have not adopted a Keynesian style easy money policy.
Monetary supply has nothing to do with inflation. The world has been drunk on Keynesian voodoo for decades. The monetary supply has increased during the last 40 years which coincided with falling prices (due to the Marxist ideology of centralization of credit in the hands of the state) through 40 years of declining interest rates. The current spike in inflation is 100% due to the lockdown. To further exasperate the continuing rise of the rate of inflation the Marxists will raise the interest rates. They too believe in the myth that inflation is and always will be a monetary phenomenon. (Thanks to another useful idiot Milton Friedman). I am not advocating for the equally destructive policy of zero interest rates either. I am advocating for capitalism and for the abolishment of central banking. Robert Lamb
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