A Tom Woods Must See On Book TV

Tom Woods was recently on Book TV giving a 40ish minute talk on his new book "Meltdown". Somewhat updated from the recent link I posted of his interview on Financial Sense -- although you should listen to that one too.

I can't recommend strongly enough that you click over and watch it. If you pay only even moderate attention, you'll come away understanding why F.A. Hayek won the Nobel Prize for economics back in 1974 and why it couldn't be more relevant to properly resolving the current disaster.

And if you want a real education, you might click over to Hayek's Nobel lecture on what he called "Scientism": "The Pretense of Knowledge". Yes, it turns out that an eminent academic actually understands the insanity of his fellows. Here's a taste:

The theory which has been guiding monetary and financial policy during the last thirty years, and which I contend is largely the product of such a mistaken conception of the proper scientific procedure, consists in the assertion that there exists a simple positive correlation between total employment and the size of the aggregate demand for goods and services; it leads to the belief that we can permanently assure full employment by maintaining total money expenditure at an appropriate level. Among the various theories advanced to account for extensive unemployment, this is probably the only one in support of which strong quantitative evidence can be adduced. I nevertheless regard it as fundamentally false, and to act upon it, as we now experience, as very harmful.

This brings me to the crucial issue. Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones.

1974. Oh, and Hayek was of the Austrian school of Economics -- one of the founders actually. And not only did the Austrians predict the current crises, but the Great Depression also.