Business Tides, The Newsweek Articles of Henry Hazlitt

952 Pages·2011·6.83 MB·English

by  Henry Hazlitt

Business Tides
The Ludwig von Mises Institute dedicates this volume to all of its generous donors
and wishes to thank these Patrons, in particular:
Dr. and Mrs. George G. Eddy
Hunter Lewis
Everett C. Nelson
James M. Rodney
Robert J. Stewart
Harvey Allison
Anonymous
John H. Bolstad
J. Robert and Rita Bost
Mary E. Braum
John Lucius Buttolph, III
James R. Cook
Mr. and Mrs. Jeremy S. Davis
Tony Delserone
Robert D. Fellner
Mr. and Mrs. T.J. Goss
Bill Haynes
James D. Heiple
Richard J. Kossmann, M.D.
Leopoldo Leyendecker
Patrick T. Mahon, Jr.
Frederick L. Maier
Paul F. Peppard
Sheldon Rose
Charles S. Rowe, Jr.
Jeffrey S. Skinner
Mr. and Mrs. Quinten E. Ward
Dr. Thomas L. Wenck
Mr. and Mrs. Walter F. Woodul, III
Business Tides
The Newsweek Era of Henry Hazlitt
Compiled by Marc Doolittle
Introduction by Paul Charles Milazzo
LvMI
MISES INSTITUTE
© 2011 by the Ludwig von Mises Institute and published under the Creative
Commons Attribution License 3.0. http://creativecommons.org/licenses/by/3.0/
Ludwig von Mises Institute
518 West Magnolia Avenue
Auburn, Alabama 36832
mises.org
ISBN: 978-1-61016-203-6
Contents
A Note from the Compiler by Marc Doolittle........................................................... xxv
Introduction by Paul Charles Milazzo................................................................xxvii
1946 .............................................................................................1
How ‘Stabilization’ Unstabilizes .....................................................................3
New Ironies of Price Control .......................................................................3
Inflation, Deflation, Confusion......................................................................4
Price-Fixing Brings Bottlenecks.....................................................................5
Meat and the Speed of Decontrol ....................................................................6
Squeezing the Price Balloon ........................................................................7
Leonard Ayres on Business Cycles ...................................................................8
The Consequences of Decontrol......................................................................9
Repeal Anti-Employer Legislation ...................................................................9
How to Taper Off Rent Control ....................................................................10
What’s Wrong with Our Labor Policy ............................................................... 11
Inviolate Rights—For One Side ....................................................................12
Twenty Labor-Act Revisions.......................................................................13
The New CIO Wage Drive ........................................................................14
1947 ............................................................................................15
The ‘Purchasing Power’ Theory .....................................................................17
The High Cost of Judicial Legislation................................................................17
How to Reduce the Budget ........................................................................18
‘Stabilizing’ the Economy..........................................................................19
The Fruits of Foreign Lending......................................................................20
They Are the Workers’ Corporations.................................................................21
Boom in Mexico ................................................................................22
Mexico’s Oil and Export Problem...................................................................23
Chinese Handwriting on the Wall ..................................................................23
How England Got That Way.......................................................................24
‘Planning’ vs. the Price System......................................................................25
Foremen under Judicial Legislation..................................................................26
Six Principles of Foreign Aid.......................................................................27
High Taxes vs. Incentive and Revenue ...............................................................28
Our Fiscal Irresponsibility.........................................................................29
The German Paralysis ............................................................................30
Switzerland as a World Mirror ..................................................................... 31
France on a Quiet Volcano.........................................................................32
Belgium: Experiment in Freedom...................................................................32
Austerity in Holland .............................................................................33
The Middle Way Swings Left ......................................................................34
England vs. the Price System.......................................................................35
v
vi Business Tides
Why Europe Is in a Mess .........................................................................36
Why Living Costs Have Risen .....................................................................38
Subsidizing Planned Chaos........................................................................39
The New Labor Law .............................................................................40
Mr. Truman Invited Strikes ....................................................................... 41
Consequences of Rent Control .....................................................................42
The World’s Santa Claus ..........................................................................43
Telling Prices What to Do ........................................................................43
The Midyear Economic Report.....................................................................44
A Pro-Labor Law................................................................................45
The Myth of A Dollar Famine......................................................................46
The Bankruptcy of ‘Planning’ ......................................................................47
A Modern Corporation Reports ....................................................................48
The Fund vs. World Recovery ......................................................................48
Why Not Also Capital Day? .......................................................................49
Lenin Was Right................................................................................50
The Profiteer Hunt Is On.......................................................................... 51
How Much Does Europe Need?....................................................................52
Europe’s Four-Year Plan ..........................................................................53
The Drive against ‘Gambling’ ......................................................................53
Are Profits Too High? ............................................................................54
The Dilemma of the Marshall Plan..................................................................55
Who Told Us What? .............................................................................56
Export Demand Lifts Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Must We Subsidize Socialism? .....................................................................57
Back to Police-State Controls? .....................................................................58
Cheap Money Means Inflation .....................................................................59
Can We Buy Off Communism? ....................................................................60
Our Inflationary Bond Standard.................................................................... 61
Inflation Has Two Faces ..........................................................................62
1948 ............................................................................................63
The Uncalculated Risk............................................................................65
A Century of Communism ........................................................................65
Blueprint for Disruption ..........................................................................66
Marshall Plan Pro and Con........................................................................67
How to Get Rid of Rent Control ...................................................................70
France at the Crossroads ..........................................................................70
Significance of the Break in Prices ..................................................................71
Inconsistencies of European Aid....................................................................72
Who Advises the Advisers?........................................................................73
Communism and the Marshall Plan.................................................................74
For a Customs Union.............................................................................74
The Cost of ‘Soaking the Rich’ .....................................................................75
Steel as a Scapegoat..............................................................................76
Fallacies of the Third Round.......................................................................77
To Improve the Taft-Hartley Law...................................................................78
Britain’s Collectivism vs. ERP .....................................................................78
An Anti-Inflation Program........................................................................79
How Not to Cure Inflation ........................................................................80
The Fallacy of Exchange Control....................................................................81
Rewarding Railway Strikers .......................................................................82
Contents vii
Price Fixing into Famine..........................................................................82
The Incubus of Exchange Control...................................................................83
The GM Wage Pattern ...........................................................................84
Who Started the Third Round?.....................................................................85
How to Combat Communism......................................................................86
Ordeal by Planning ..............................................................................87
Republican Platform Economics....................................................................87
Dangers of Dollar Diplomacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
Collectivism on Relief............................................................................89
Democratic Platform Economics....................................................................90
The Phony War against Inflation....................................................................91
Will Inflation Stop Inflation? ......................................................................91
Dollar Shortage Forever ..........................................................................92
Hypocrisy about Inflation .........................................................................93
A Bear by the Tail ...............................................................................94
Repressed Inflation ..............................................................................95
Does Stalin Want War?...........................................................................96
The Ethics of Capitalism ..........................................................................96
The Fetish of Bond Parity .........................................................................97
Bond Parity without Inflation......................................................................98
Suppressing Free Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
Cheap Money Causes Inflation....................................................................100
Cripptic Economics.............................................................................100
Texas Grows and Votes .......................................................................... 101
How Free Will Our Economy Be? .................................................................102
Where Was the Opposition? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
Pitfalls of Forecasting ...........................................................................104
Meat and the Price System .......................................................................104
Exchange Control in Peru........................................................................105
Exchange Control vs. Peru .......................................................................106
The Myth of Dollar Shortage .....................................................................107
Are Profits Too High? ...........................................................................108
1949 ...........................................................................................109
We Impose Collectivism ......................................................................... 111
Rent Control in France .......................................................................... 111
Paradise on a Platter ............................................................................112
Balance Whose Budget? .........................................................................113
Our Discompensated Economy....................................................................114
Planned Unemployment .........................................................................115
‘Planning’—Ah! Magic Word .....................................................................115
‘Me Too—But Not as Much’......................................................................116
What Are We Trying to Do?...................................................................... 117
The Case for Private Loans .......................................................................118
Rent Control vs. Housing ........................................................................119
4,000 Years of Price Control ......................................................................119
Sense Instead of Dollars .........................................................................120
Military vs. Economic Aid .......................................................................121
Whose Bold New Program? ......................................................................122
Bankruptcy of the Welfare State...................................................................123
The Welfare State Runs Wild .....................................................................123
Legally Certified Monopolists.....................................................................124
viii Business Tides
Salvation through Squandering? ...................................................................125
The Right to Strike .............................................................................126
Our Irresponsible Budget ........................................................................127
Arms and the Money............................................................................127
World Statism in Wheat .........................................................................128
What Are We Paying For? .......................................................................129
The Ideological War.............................................................................130
Private Enterprise Regained ...................................................................... 131
Self-Perpetuating Pump Priming .................................................................. 131
The Folly of Point Four: I.........................................................................132
The Folly of Point Four: II........................................................................133
More Inflation to the Rescue......................................................................134
Forcing a Fourth Round .........................................................................135
The Economics of Arms Aid......................................................................135
Wrong Diagnosis, Wrong Remedy .................................................................136
Legislating Unemployment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137
When Government Fixes Wages...................................................................138
Abolish Exchange Control .......................................................................138
Collapse of a Trick Solution ......................................................................139
The Case for Capitalism..........................................................................140
Camouflaged Fourth Round...................................................................... 141
The World Monetary Earthquake ..................................................................142
Fourth Round in a False Face .....................................................................143
Illusions of ‘Social Security’.......................................................................144
Power of Industrywide Unions .................................................................... 145
Devaluation Instead of Freedom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Collectivism Marches On . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146
Union Monopoly vs. Capitalism ................................................................... 147
What ‘Monetary Management’ Means..............................................................148
Gold Goes with Freedom ........................................................................149
Instead of ‘Integration’...........................................................................149
In Praise of Paper...............................................................................150
The Compensatory Budget........................................................................ 151
Voices for Freedom..............................................................................152
1950 ...........................................................................................155
If Foreign Exchanges Were Freed..................................................................157
The Future of Foreign Aid........................................................................157
The Forgotten Taxpayer..........................................................................158
Free Trade or State Domination? ..................................................................159
Our Irresponsible Budget ........................................................................160
Take out the Goat .............................................................................. 161
Fifty Billions for Tribute? ........................................................................ 161
Future of the Marshall Plan ......................................................................162
The Needless Crisis in Coal.......................................................................163
The American Giveaway Mania....................................................................164
Where Do We Go from Here? ....................................................................165
That European Payments Union ...................................................................165
Rent Control Forever?...........................................................................166
How We Subsidize Collectivism................................................................... 167
Global Spending Forever? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
How to Buy More Unemployment .................................................................169
Contents ix
For a Responsible Budget ........................................................................169
How to Tell a Totalitarian........................................................................170
Self-Perpetuating Rent Control ................................................................... 171
The Giveaway Mania Grows ......................................................................172
The Fairdeal Family at Home .....................................................................173
Toward State-Managed Cartels?................................................................... 174
Salvation through Spending ...................................................................... 174
Drought Fighting in a Flood...................................................................... 175
Who Are the Isolationists? ....................................................................... 176
Free Trade or Coercion? .........................................................................177
Planning for a ‘War Economy’ ....................................................................178
A Bad Tax Bill.................................................................................178
The Inflation in Housing .........................................................................179
Program for the Crisis...........................................................................180
War Measures—Or Hysteria?..................................................................... 181
The Fraud of Price Control .......................................................................182
Transform EGA................................................................................182
Some Notes on War Taxes........................................................................183
Sham Fight against Inflation......................................................................184
Dilemmas of Price Control .......................................................................185
Shadow-Boxing with Inflation ....................................................................186
When Prices Go into Politics .....................................................................187
The Need for Credit Control ......................................................................187
Communism Imitates Capitalism..................................................................188
Canada Takes the Lead..........................................................................189
ERP Reverses Its Aims ..........................................................................190
Credit Control at the Source ..................................................................... 191
The Great American Giveaway ....................................................................192
‘Bankruptcy’ Is Here ............................................................................192
On Taxing ‘Excess’ Profits........................................................................193
‘Full Employment’ as Inflation.....................................................................194
Gray Is for Giveaway............................................................................195
This Is the Peace We Bought......................................................................196
More Inflation Ahead? ..........................................................................196
Total Muddleization ............................................................................197
1951 ...........................................................................................199
The Price-Control Straitjacket.....................................................................201
How to Stop Inflation ...........................................................................201
Inflation Has One Cure..........................................................................202
Mr. Truman’s Wrong Remedies ...................................................................203
An Irresponsible Budget .........................................................................204
Fighting Fire with Gasoline ......................................................................205
Price Control Means Politics......................................................................205
Inflation Plus Usurpation ........................................................................206
Abolish the RFC...............................................................................207
How to Cause a Famine..........................................................................208
Inflation Is Government-Made....................................................................209
The CED on Price Controls.......................................................................209
Point Four Is Growing Up........................................................................210
International Statism Rampant.................................................................... 211
Is Price Control Necessary?.......................................................................212
x Business Tides
Controls Create Inflation.........................................................................213
Priorities vs. Price Control........................................................................214
Gold Standard vs. Inflation.......................................................................214
We Have Asked for Inflation......................................................................215
Why Price Control Should Expire .................................................................216
End Price Ceilings—and ‘Parity’ .................................................................. 217
More Powers—or More Curbs?....................................................................218
The Future of ‘Fair Trade’ ........................................................................218
Foreign Giveaway Grows.........................................................................219
Price Controllers in a Panic.......................................................................220
An Anti-Inflation Program.......................................................................221
‘They Told Us Then . . . ’..........................................................................222
The Cause of Currency Chaos .....................................................................222
Price Fixing as Red Herring ......................................................................223
Government: Plan Thyself........................................................................224
Iran vs. Point Four..............................................................................225
The Dangers of Profit Control.....................................................................226
Why the New Controls Act Is Bad . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227
Off to the Races................................................................................228
Congress’s Monetary Duty .......................................................................229
Inflation for Beginners—I........................................................................229
Inflation for Beginners—II .......................................................................230
Inflation for Beginners—III ...................................................................... 231
Inflation for Beginners—IV ......................................................................232
Inflation for Beginners—V .......................................................................233
The Real Problems of France......................................................................234
To a Mitigated Socialism.........................................................................235
Britain’s ‘Third Crisis’ ...........................................................................235
This Is Where We Came In.......................................................................236
Chaotic Spending and Taxing.....................................................................237
How to Denationalize...........................................................................238
Who Is Mislabeling What?.......................................................................239
How to Depoliticalize Money.....................................................................239
Day of Disillusion ..............................................................................240
‘Arms’ or ‘Economic’ Aid.........................................................................241
Guns, Butter, and Disruption .....................................................................242
A Budget Out of Control.........................................................................243
Canada Breaks the Ice Jam .......................................................................243
1952 ...........................................................................................245
The Limits of Taxation...........................................................................247
More about Arms Aid...........................................................................247
A Ceiling on Spending ..........................................................................248
One Message Too Many .........................................................................249
‘Where Would You Cut?’.........................................................................250
Delusions of ‘Productivity’........................................................................ 251
Calling the Market Black ........................................................................252
Price-Control Follies of 1952......................................................................252
Footnote on ‘Statism’............................................................................253
The Lull in Inflation ............................................................................254
Case against Price Control .......................................................................255
Are These Handouts Necessary? ...................................................................256