Handre
@Handre
Economic Historian. Storyteller. Free-market Pamphleteer.
5.2K Following 57.9K Followers
The public distribution system killed between 600,000 and one million North Koreans between 1994 and 1998, and the Kim regime designed it to do exactly that job.
Central planners in Pyongyang assigned food rations by political loyalty, not by production or need. The military received full rations. Party cadres received full rations. Farmers in the countryside who actually grew the grain watched the state confiscate it at gunpoint, then received starvation allocations in return.
No central authority can coordinate production and distribution across millions of people without the pricing mechanism. North Korea ran a live demonstration of that theorem for four straight years.
The famine hit South Hamgyong and North Hamgyong provinces hardest, regions farthest from Pyongyang and lowest in the loyalty hierarchy. People in those provinces ate bark, grass, and rats. Meanwhile, Kim Jong-il imported French cognac and built a personal fleet of Mercedes sedans.
Informal markets, the jangmadang, kept people alive despite being illegal. Farmers quietly sold grain outside state channels. Traders moved food across provincial lines. The state persecuted them for it, but they saved more lives than any foreign aid shipment.
A rationing bureaucracy treated food as a tool of political control. Drought and the Soviet subsidy collapse caused real damage, but the rationing system itself was the killing mechanism. Give the state total command over who eats, and the state will feed its enforcers first and let everyone else die on schedule.
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Eskom killed your power because the ANC spent two decades stuffing the utility with politically connected cadres who couldn't operate a kettle without a instruction manual. Apartheid-era infrastructure didn't collapse under its own age.
The numbers destroy the apartheid-infrastructure excuse. Eskom managed 95% availability on its fleet through the 1990s. By 2022 it was producing stage 6 load-shedding, meaning 6,000 megawatts of capacity offline at any given moment. The plants didn't age that fast, they got wrecked by incompetance and neglect.
Brian Molefe, Matshela Koko, Ben Ngubane: these are actual humans who made actual decisions that stripped maintenance budgets, awarded contracts to Gupta-linked suppliers, and placed loyalty over competence across Eskom's entire technical division. The Zondo Commission documented this in excruciating detail. Directed looting, not systemic drift.
State-owned enterprises destroy capital because their managers face no profit-and-loss discipline. When Eskom bleeds, you pay higher tariffs while Treasury absorbs bailout after bailout, R254 billion in debt relief announced in 2023 alone. No private operator survives that mismanagement. Eskom survives because the government forces you to fund it regardless.
Privatize generation, strip Eskom of its monopoly, and competitive suppliers face actual consequences for keeping you in the dark. Until that happens, cadre deployment keeps the lights off and you keep paying for it. Eskom killed your power because the ANC spent two decades stuffing the utility with politically connected cadres who couldn't operate a kettle without an instruction manual. Apartheid-era infrastructure didn't collapse under its own age.
The numbers destroy the apartheid-infrastructure excuse. Eskom managed 95% availability on its fleet through the 1990s. By 2022 it was producing stage 6 load-shedding, meaning 6,000 megawatts of capacity offline at any given moment. The plants didn't age that fast; they got wrecked by incompetence and neglect.
Brian Molefe, Matshela Koko, Ben Ngubane: these are actual humans who made actual decisions that stripped maintenance budgets, awarded contracts to Gupta-linked suppliers, and placed loyalty over competence across Eskom's entire technical division. The Zondo Commission documented this in excruciating detail. Directed looting, not systemic drift.
State-owned enterprises destroy capital because their managers face no profit-and-loss discipline. When Eskom bleeds, you pay higher tariffs while Treasury absorbs bailout after bailout, R254 billion in debt relief announced in 2023 alone. No private operator survives that mismanagement. Eskom survives because the government forces you to fund it regardless.
Privatize generation, strip Eskom of its monopoly, and competitive suppliers face actual consequences for keeping you in the dark. Until that happens, cadre deployment keeps the lights off, and you keep paying for it.
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Price controls destroy supply. The EU proved it again in 2022 when Brussels capped wholesale electricity and gas prices after the Nord Stream sabotage sent spot prices past 700 euros per megawatt-hour in August.
Generators across Germany, France, and Spain did exactly what any rational producer does when a price ceiling sits below their marginal cost: they cut output or pulled supply off the market entirely. French nuclear operators throttled dispatch. Spanish gas-fired plants ran below capacity. The supply Brussels wanted to guarantee, was chased away.
You paid for this twice. Your electricity bill carried emergency government subsidies funded by debt, and your employer absorbed industrial rationing that cut production schedules through winter 2022-23. BASF curtailed ammonia output at Ludwigshafen. German steel producers ran blast furnaces at reduced rates. That destroyed real economic output, not just spreadsheet entries.
The mechanism is always the same. Prices coordinate information that no committee possesses. When a price spike signals genuine scarcity, producers invest, consumers conserve, and the shortage resolves. Cap the price and you blind every actor in the market simultaneously, guaranteeing the shortage deepens exactly when it hurts most.
Brussels decided that politicians allocating energy through administrative rationing beats producers and consumers responding to real signals. Germany's industrial output contracted 0.4 percent in Q4 2022. The price cap paralyzed the market. Ironically, government intervention to "solve" the crises did more damage than the crises itself, as always.
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The Berlin Senate froze rents for roughly 1.5 million apartments in February 2020, capping them at 2019 levels and threatening landlords with fines up to 500,000 euros for charging more. Politicians sold this as relief for working Berliners getting priced out of their neighborhoods.
What actually happened: developers stopped building. Why pour capital into a city where bureaucrats set your return? New listings on the market dropped by nearly half while listings in Brandenburg, just outside Berlin's jurisdiction, surged. Landlords quietly shifted units to the unregulated short-term market. Supply tightened further.
The Federal Constitutional Court killed the law in April 2021, ruling Berlin lacked jurisdiction over rental law. Rents jumped immediately as landlords collected back-payments they had legally reserved the right to claim all along. Tenants who thought they were protected suddenly faced bills they could not afford.
The Berlin Senate manufactured a crisis inside the crisis it was supposedly fixing. Price controls reduce housing supply, not housing costs. Every euro of rent a landlord cannot legally charge is an investment signal that dies before a single foundation gets poured. You end up with fewer apartments, not cheaper ones, and eventually the law collapses anyway and you absorb the full price shock at once.
These people never learn.
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When socialists take power in a previously functioning market economy, capital flees first. Investment dries up before a single law passes, because entrepreneurs read political signals.
Britain's 1945 Labour government nationalized steel, coal, and rail. Productivity in those sectors fell immediately and required perpetual subsidies funded by taxing the private sector that remained.
You end up paying twice: once through higher taxes, then again through scarcity and degraded services that replace what functioning markets provided cheaply.
The villain is the bureaucrat replacing voluntary exchange with coercion, believing his spreadsheet outperforms the decentralized knowledge of millions of people acting in their own interest. Ludwig von Mises laid out the calculation problem in 1920. Socialist planners cannot rationally allocate resources without genuine market prices. That problem has no solution. Every socialist experiment confirms it.
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The far-left Die Linke party has won the regional election in Berlin.
The leader of Linke in Berlin Elif Eralp celebrates hard tonight.
LINKE: 25.6% (13.4%)
CDU: 18.9% (18.9%)
AfD: 16.1% (+7.0)
Greens: 14.3% (-4.1)
SPD: 12.1% (-6.3)
BSW: 4.7% (+4.7)
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Only 37 years after the wall came down, and they already forgot socialism doesn’t work🤷🏼
The far-left Die Linke party has won the regional election in Berlin.
The leader of Linke in Berlin Elif Eralp celebrates hard tonight.
LINKE: 25.6% (13.4%)
CDU: 18.9% (18.9%)
AfD: 16.1% (+7.0)
Greens: 14.3% (-4.1)
SPD: 12.1% (-6.3)
BSW: 4.7% (+4.7)
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Everything in life is about incentives. From getting up off the couch to go to the bathroom to the most complicated trade deal between countries.
No one acts unless it's in their own best interest.
Let that fundamental concept shape your worldview, and you will understand the world better.
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The greatest artificial intelligence systems in existence today- Claude, Grok, GPT-6, Gemini were built without a single government bureaucrat directing the process. Private capital, competitive pressure, and the profit motive did what no five-year plan ever could: they produced genuinely transformative technology at breathtaking speed.
Now governments want in.
The European Union's AI Act, fully enforced as of August 2026, classifies AI systems by risk tier and mandates compliance costs that smaller competitors simply cannot absorb. Incumbents like Google and Microsoft absorb those costs easily. Startups die. Regulatory capture produces gatekeepers who write the rules to protect their own market position.
The knowledge problem here is severe. Regulators in Washington or Brussels lack the information required to determine which AI architecture is "safe," which training dataset is acceptable, or which capability threshold triggers mandatory oversight. Prices and competition generate that knowledge through trial, error, and consumer feedback. Bureaucrats generate paperwork.
The argument for regulation always sounds reasonable: safety, accountability, preventing harm. Then you watch the FDA's drug approval process kill people through delay, or the FCC's spectrum management strangle wireless innovation for decades before partial deregulation finally unleashed mobile broadband. The pattern repeats without exception.
Private liability law handles genuine harms. If an AI system defrauds you, injures you, or destroys your property, courts and contract law provide remedy. That mechanism already exists. What regulation actually does is socialize risk for large players while pricing smaller competitors out of existence, leaving you with fewer options and higher costs, not a safer world.
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Germany destroyed its own price controls in 1948 and watched an economy resurrect itself inside eighteen months.
Ludwig Erhard did it unilaterally. On June 20, 1948, he abolished the Nazi-era price and wage controls that the Allied occupation forces had maintained, then went on radio to tell Germans what he had done before anyone could stop him. The American occupation authorities were furious. General Lucius Clay demanded an explanation. Erhard told him he had not reformed the controls, he had abolished them.
The results were immediate. Goods reappeared on shop shelves within days. Germans who had been hoarding anything of tangible value started trading again because currency reform and price liberalization made holding marks rational for the first time in years. Industrial output rose 50 percent in the six months following the reform.
The villain in this story is price controls, and the economists and bureaucrats who insist they tame chaos rather than create it. Price controls tell producers to stop producing and tell consumers to hoard. Every time. The postwar German black market proved it: the official economy was starving while the illegal economy fed people. Erhard simply liberated the black market by freeing prices.
You benefit from this history whether you know it or not, because it settled an empirical argument that interventionists have been trying to reopen ever since. Free prices coordinate production without a central planner. Suppress them and you get empty shelves and queues. Germany in 1946 had both. Germany in late 1948 had neither.
The so-called Wirtschaftswunder, the economic miracle, was not miraculous; Erhard applied basic economic logic that Friedrich Hayek had already formalized in 1945 in "The Use of Knowledge in Society." No central authority possesses the dispersed, local, constantly changing information that prices aggregate and transmit. Bureaucrats trying to set correct prices are not just inefficient; they are epistemically incapable of the task. Hayek made the theoretical case, thrn Erhard ran the experiment on a starving nation, and proved it.
West Germany grew at roughly 8 percent annually through the 1950s. East Germany, running Soviet central planning across the same ethnic population with similar prewar industrial infrastructure, stagnated and eventually built a wall to prevent its citizens from leaving. That comparison is about as clean a controlled experiment as political economy ever produces. Same people, same history, radically different institutions.
The lesson: prosperity flows from secure property rights, sound money, and voluntary exchange. Erhard gave West Germans all three in one afternoon.
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The one sector governments left mostly alone delivered forty years of continuous price collapse and it destroyed the central planners' core argument in the process.
A transistor that cost $7.50 in 1961 costs less than a millionth of a cent today. Your 2026 smartphone carries more computing power than a 1990 Cray supercomputer that cost $30 million. Storage, bandwidth, processing speed: every metric deflated while quality exploded. This is what markets do when the state steps back.
Compare that to healthcare, education, and housing, three sectors drowning in subsidies, licensing regimes, and regulatory capture. Prices in all three outpaced inflation every decade since 1980. Government intervention reprices risk, blocks competition, and rewards incumbents for lobbying instead of innovating.
The Federal Reserve spent those same forty years printing money and insisting deflation was catastrophic. Falling prices drive demand, not panic. Intel, Apple, and AMD competed ferociously, drove costs down, and generated trillions in real wealth. Nobody waited to buy a computer because prices might fall next year.
Mises identified capital allocation as the economy's core problem: who decides where resources go? Entrepreneurs decided in tech, taking losses when wrong and profits when right. Bureaucrats decided in healthcare and education, socializing losses and mandating consumption.
You live with the consequences of that distinction every single day, every time you renew your health insurance and watch the premium climb while your phone bill drops.
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I remember how the socialists came for me at school. The teachers probably didn't even know that they were spewing socialist nonsense about poverty and equality and how we should all be equal.
Luckily, my father inoculated me against bullshit at a young age. Fully intent on doing the same for my children.
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Anyone looking at the long-term silver price chart always asks one question: WTF happened in 1980?
The answer is one of the most interesting stories in modern financial history.
Nelson Bunker and William Herbert Hunt accumulated roughly 100 million ounces of silver between 1979 and 1980, driving prices from $6 to $50 per ounce. They believed, correctly, that fiat currency expansion under the Federal Reserve made hard assets the rational hedge. They acted on that belief aggressively and legally.
Washington panicked. Big banks and trading houses simply did not have the silver they sold in the futures market to deliver, and stood to lose an indefinite amount of money. To put it plainly, the Hunt brothers owned most of the physical silver and also owned the futures contracts. To deliver physical silver on the futures date, the firms who sold the futures had to buy it from somewhere, and that somewhere was the Hunt brothers themselves. Checkmate.
Naturally, the Commodity Futures Trading Commission and the Chicago Board of Trade changed the rules mid-game in January 1980, issuing "Silver Rule 7," which restricted new silver futures purchases and forced liquidation of existing positions, forcing the Hunt brothers to sell by law. The exchanges moved the goalposts while the Hunts were already on the field.
Prices collapsed. The Hunts faced margin calls they couldn't meet. On March 27, 1980, silver dropped 50% in a single day, now called "Silver Thursday." The brothers eventually declared bankruptcy in 1988.
The entire apparatus, the CFTC, the Fed, the major banks holding short positions on silver, had direct financial interests in stopping the Hunts. The banks short on silver lobbied the government and got the rules changed in their favor. You never hear that part emphasized.
Property rights mean nothing if regulators can rewrite market rules the moment a private actor threatens well-connected institutions. The Hunt brothers didn't destabilize the monetary system. They exposed how fragile a debt-based system looks when real money starts moving.
H/T to @MiningVisuals for this excellent graphic.
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Paul Volcker inflicted real pain on millions of Americans and was branded a hero for doing it.
The Federal Reserve spent the 1970s printing money to cover political promises. Nixon killed the gold standard in 1971, and every administration after him pressured the Fed to keep rates low. By 1980, CPI inflation hit 13.5 percent. You were watching your savings evaporate in real time.
Volcker became Fed chairman in August 1979 and jacked the federal funds rate to 20 percent by June 1981. Unemployment climbed to 10.8 percent in December 1982. Farmers drove tractors to Washington. Homebuilders mailed two-by-fours to the Fed as a protest. The howling was deafening.
Every critic demanding easier money in 1981 was demanding that you absorb more hidden taxation through continued inflation. The recession came due for a decade of monetary fraud.
Mises identified this mechanism precisely: credit expansion creates artificial booms that require liquidation. The bad investments made during the inflationary 1970s had to clear. Factories, farms, and businesses built on cheap-money illusions needed to fail so real capital could reallocate.
By 1983, inflation sat at 3.2 percent and real growth returned at 4.5 percent. The correction worked because Volcker held the line against enormous political pressure from Congress and the Reagan White House alike. Discipline cost two years of misery. Capitulation would have cost a generation.
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Someone on my timeline said price controls worked during WW2. Consider me triggered.
Price ceilings don't manage markets, they destroy them. In 1946 the US meat market collapsed because of it.
The Office of Price Administration set beef ceiling prices during World War II. Ranchers and meatpackers adapted: some held cattle rather than sell at a loss, others shifted product to black markets, and slaughter volumes dropped. The OPA briefly lifted controls in mid-1946 under pressure. Beef flooded back into stores almost immediately.
Then Congress, drowning in constituent complaints about inflation, reimposed ceilings in August 1946. Slaughter collapsed within weeks. By October 1946, beef virtually disappeared from American grocery store shelves. You could walk into a butcher shop in Chicago or New York and find nothing. Scarcity was manufactured entirely by Washington bureaucrats setting prices below what producers needed to cover costs.
Mises explained the mechanism precisely: a price ceiling creates a shortage, which produces political pressure for rationing and further controls, spiraling into comprehensive economic disorganization. The OPA ran that experiment in real time on the American food supply.
President Truman ended meat controls on November 9, 1946. Beef returned within days. The supply existed the entire time. Ranchers and packers simply refused to sell at confiscatory prices, and they were correct to refuse. Coercive price suppression causes economic destruction, and 1946 proved it at the grocery counter.
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Price ceilings don't manage markets, they destroy them. In 1946 the US meat market collapsed because of it.
The Office of Price Administration set beef ceiling prices during World War II. Ranchers and meatpackers adapted: some held cattle rather than sell at a loss, others shifted product to black markets, and slaughter volumes dropped. The OPA briefly lifted controls in mid-1946 under pressure. Beef flooded back into stores almost immediately.
Then Congress, drowning in constituent complaints about inflation, reimposed ceilings in August 1946. Slaughter collapsed within weeks. By October 1946, beef virtually disappeared from American grocery store shelves. You could walk into a butcher shop in Chicago or New York and find nothing. Scarcity was manufactured entirely by Washington bureaucrats setting prices below what producers needed to cover costs.
Mises explained the mechanism precisely: a price ceiling creates a shortage, which produces political pressure for rationing and further controls, spiraling into comprehensive economic disorganization. The OPA ran that experiment in real time on the American food supply.
President Truman ended meat controls on November 9, 1946. Beef returned within days. The supply existed the entire time. Ranchers and packers simply refused to sell at confiscatory prices, and they were correct to refuse. Coercive price suppression causes economic destruction, and 1946 proved it at the grocery counter.
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Nero debased the Roman currency in 64 AD and lit the fuse on an inflation that burned for two centuries.
He reduced the silver content of the denarius from roughly 90% to 75%, and shaved gold coins down in weight simultaneously. The state needed money to rebuild Rome after the fire, fund military campaigns, and finance imperial vanity projects. Minting debased coin was faster than taxation, and it transferred the cost to every Roman holding savings.
Prices rose. Merchants adapted. Roman price edicts from later emperors confirm what market actors already figured out: more coins chasing the same goods means each coin buys less(something children are able to grasp, but your local government econoists still denies). You held denarii; the imperial treasury held real goods purchased with freshly debased metal.
By the third century, emperors like Gallienus pushed silver content below 5%. Diocletian then issued the Edict on Maximum Prices in 301 AD, threatening death for merchants who charged above his approved rates. Merchants simply stopped selling. Price controls attack the symptom while the debasement continues, producing scarcity as a result.
Every move the Roman state made, modern governments copy: outspend revenue, conjure money from nothing, dismiss the fallout, then prosecute anyone who prices accordingly. Inflation is taxation by deception.
Rome is but one case in a long historical pattern, running across three thousand years. Only one thing has changed: how fast the currency gets destroyed.
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Economics has been hijacked.
They teach you boring, nonsensical bullshit.
Take 5min and learn about real economics, which is interesting and easy to understand.
Learn Austrian Economics in one X post:
1. Humans act. Every choice a person makes traces back to an incentive, a trade-off, a cost weighed against a benefit. Remove the incentive and the action stops. Distort the incentive and the action warps.
Tax income at 90% and watch producers stop producing. Subsidize failure and watch failure multiply. The behavior follows the reward structure, always.
2. Value exists only in the mind of the person choosing. A glass of water is worth nothing to a drowning man and everything to a man dying of thirst. No central authority can calculate this, because it changes with every individual and every circumstance.
Nothing has value in itself, only the degree to which humans choose to value it. Diamonds and even gold only carry value because humans decided they do.
3. Money does not come from a government decree. It emerged spontaneously when traders needed something durable, divisible, and widely accepted to escape the limitations of direct barter. Gold won that competition across centuries and across dozens of independent civilizations because the market, not a ministry, chose it.
Fiat currency is the state hijacking that evolved institution and replacing it with paper backed by nothing but a legal threat. Every central bank on earth operates on this model right now.
4. Wealth does not fall from the sky. A farmer who eats his entire harvest produces nothing next season. The farmer who saves seed, plants it, and specializes in what he grows best accumulates a surplus. That surplus is capital. Capital funds everything that comes after.
Consumption without prior production is just burning down the furniture for warmth. Every welfare state eventually reaches this point.
5. Strip private property rights and production collapses. A farmer will work his own land until midnight. That same farmer, working collective land, stops at noon. The Soviet Union ran this experiment across seventy years and killed tens of millions, proving the point.
When you cannot own the outcome, you do not produce the outcome.
6. Voluntary trade generates wealth from nothing but mutual preference. When you pay twelve dollars for a meal, you value the meal above twelve dollars; the restaurant values twelve dollars above the meal. Both parties walk away wealthier in real terms. No politician, no regulator, no bureaucrat added anything.
Protectionism destroys this. The 2018 US steel tariffs raised steel prices for American manufacturers, killed more jobs in steel-consuming industries than existed in steel production itself, and transferred wealth from productive firms to a protected few.
7. Ludwig von Mises identified inflation as a tax. Every dollar the Federal Reserve creates without corresponding production dilutes every dollar you already hold. The new money flows first to the government and its contractors, who spend it at current prices. By the time it reaches you, prices have already risen.
The US M2 money supply grew from roughly 15 trillion dollars in January 2020 to over 21 trillion by early 2022. Consumer prices followed. Your savings took the loss.
8. Prices carry information. A price spike tells producers to produce more and tells consumers to use less. It coordinates millions of strangers without a single central command. Interfere with that signal and the coordination breaks.
Rent control in New York City is the cleanest example. Cap rents below market and landlords stop maintaining buildings, stop building new ones, and convert units to other uses. The people rent control was supposed to help pay the price through collapsing supply.
9. Interest rates are the price of capital over time. When the Federal Reserve pushed rates to near zero between 2008 and 2022, it told every investor that capital was nearly free. Businesses built projects that only made sense at zero percent. When rates normalized, the projects failed. The 2022 collapse of the US tech sector and the crypto market were not random events. They were the correction of a decade of artificially cheap capital.
The business cycle is not a mystery of capitalism. Central banks manufacture it.
10. Bureaucrats face no profit and loss. A businessman who misallocates capital goes bankrupt. A bureaucrat who misallocates capital writes a report requesting more funding. The feedback loop that disciplines markets simply does not exist inside a government agency.
The US Department of Education has spent over a trillion dollars since 1980. Literacy rates have not improved. No one at the department has been bankrupted by this outcome.
11. Every producer inside a local market holds knowledge that no bureaucrat in a capital city can replicate. A wheat farmer in Kansas tracks soil moisture, futures prices, local equipment costs, his specific buyer relationships, and a hundred other variables simultaneously. That knowledge lives in the price he sets.
Friedrich Hayek called this tacit knowledge in 1945. The Soviet central planners ignored him and spent fifty years proving him correct, producing chronic shortages of goods that private markets coordinate effortlessly. No model, no algorithm, and no committee can compress what millions of independent actors know into a single plan.
12. Every government intervention produces effects you see and effects you don't. You see the road the state builds. You don't see the factory the tax dollars never funded, the job that never existed, the innovation that never happened because capital was extracted at gunpoint and redirected by bureaucrats with no skin in the game.
Take the 2009 Cash for Clunkers program. Congress destroyed 690,000 working cars, handed dealers a short-term spike, and you saw the sales numbers. The used car market was stripped of affordable inventory, pricing working-class buyers out for years afterward.
13. Prices, supply chains, and language itself coordinate millions of strangers without any central planner issuing a single command. That coordination is spontaneous order: complex, functional patterns that emerge from individuals pursuing their own goals under rules they did not collectively design. No committee holds the dispersed local knowledge required to replicate what voluntary exchange produces every second.
Watch how English evolved. No king designed its grammar. Millions of speakers across centuries adopted words and structures that worked, dropped ones that didn't, and produced a language richer than any bureaucrat could have engineered. Central planners who believe they can replicate that process with price controls or production quotas destroy the feedback mechanism that generates the order in the first place.
Thanks for reading this long post! What would you add to this list?
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The DEA's budget hit $3.2 billion in fiscal year 2025, up from $1.5 billion in 2000, and overdose deaths in America topped 100,000 annually for three straight years starting in 2021. The agency grew. The problem grew with it.
This is not coincidence. Every dollar Congress shovels into the DEA makes the black market more profitable, not less. Higher enforcement costs raise the price premium for illegal drugs, which rewards the suppliers ruthless enough to survive the crackdown and drives out the cautious ones. Users pay more at the street level, the cartel earns more per kilogram, and fentanyl replaces heroin because fentanyl is 50 times more potent by weight and infinitely easier to smuggle past checkpoints.
Failure produces more funding, not reform. Congress rewards the agency for proving the problem persists.
The economic logic is simple. Prohibition creates artificial scarcity and hands the entire revenue stream to organizations that operate outside law. The DEA does not suppress that market; it selects for its most violent and adaptive participants.
You fund this through your taxes. The agency takes your money, makes your streets more dangerous, then asks for a raise. Congress writes the check every single time.
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Modern Monetary Theory is a permission slip governments write for themselves.
The core claim MMT makes is that a sovereign currency issuer cannot go broke and therefore faces no real budget constraint, only an inflation constraint. Stephanie Kelton and Warren Mosler built careers on this. Zimbabwe, Argentina, Venezuela, and Weimar Germany ran the same experiment before they published a word.
Prices coordinate billions of decisions simultaneously. When governments print money to fund spending, they corrupt that signal. Every dollar the Federal Reserve creates without a corresponding increase in real output transfers purchasing power away from you to whoever spends the new money first, which is always the government and its contractors.
MMT advocates admit inflation is the constraint, then propose that Congress simply tax the excess money back. They trust the same institution that runs $1.8 trillion+ deficits in a fiscal year to accurately diagnose inflation and surgically remove purchasing power before it destroys your savings.
The calculation problem identified in 1920 is this: central planners lack the price information needed to allocate resources efficiently. MMT does not solve this, it hands a sledgehammer to the institution destroying price signals.
Capital formation requires real saving. You cannot print your way to a higher standard of living, and no journal article changes that constraint. Taking wealth away from productive people and handing it to bureaucrats always ends in more poverty, not less.
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Learn Austrian Economics in one X post:
1. Humans act. Every choice a person makes traces back to an incentive, a trade-off, a cost weighed against a benefit. Remove the incentive and the action stops. Distort the incentive and the action warps.
Tax income at 90% and watch producers stop producing. Subsidize failure and watch failure multiply. The behavior follows the reward structure, always.
2. Value exists only in the mind of the person choosing. A glass of water is worth nothing to a drowning man and everything to a man dying of thirst. No central authority can calculate this, because it changes with every individual and every circumstance.
Nothing has value in itself, only the degree to which humans choose to value it. Diamonds and even gold only carry value because humans decided they do.
3. Money does not come from a government decree. It emerged spontaneously when traders needed something durable, divisible, and widely accepted to escape the limitations of direct barter. Gold won that competition across centuries and across dozens of independent civilizations because the market, not a ministry, chose it.
Fiat currency is the state hijacking that evolved institution and replacing it with paper backed by nothing but a legal threat. Every central bank on earth operates on this model right now.
4. Wealth does not fall from the sky. A farmer who eats his entire harvest produces nothing next season. The farmer who saves seed, plants it, and specializes in what he grows best accumulates a surplus. That surplus is capital. Capital funds everything that comes after.
Consumption without prior production is just burning down the furniture for warmth. Every welfare state eventually reaches this point.
5. Strip private property rights and production collapses. A farmer will work his own land until midnight. That same farmer, working collective land, stops at noon. The Soviet Union ran this experiment across seventy years and killed tens of millions, proving the point.
When you cannot own the outcome, you do not produce the outcome.
6. Voluntary trade generates wealth from nothing but mutual preference. When you pay twelve dollars for a meal, you value the meal above twelve dollars; the restaurant values twelve dollars above the meal. Both parties walk away wealthier in real terms. No politician, no regulator, no bureaucrat added anything.
Protectionism destroys this. The 2018 US steel tariffs raised steel prices for American manufacturers, killed more jobs in steel-consuming industries than existed in steel production itself, and transferred wealth from productive firms to a protected few.
7. Ludwig von Mises identified inflation as a tax. Every dollar the Federal Reserve creates without corresponding production dilutes every dollar you already hold. The new money flows first to the government and its contractors, who spend it at current prices. By the time it reaches you, prices have already risen.
The US M2 money supply grew from roughly 15 trillion dollars in January 2020 to over 21 trillion by early 2022. Consumer prices followed. Your savings took the loss.
8. Prices carry information. A price spike tells producers to produce more and tells consumers to use less. It coordinates millions of strangers without a single central command. Interfere with that signal and the coordination breaks.
Rent control in New York City is the cleanest example. Cap rents below market and landlords stop maintaining buildings, stop building new ones, and convert units to other uses. The people rent control was supposed to help pay the price through collapsing supply.
9. Interest rates are the price of capital over time. When the Federal Reserve pushed rates to near zero between 2008 and 2022, it told every investor that capital was nearly free. Businesses built projects that only made sense at zero percent. When rates normalized, the projects failed. The 2022 collapse of the US tech sector and the crypto market were not random events. They were the correction of a decade of artificially cheap capital.
The business cycle is not a mystery of capitalism. Central banks manufacture it.
10. Bureaucrats face no profit and loss. A businessman who misallocates capital goes bankrupt. A bureaucrat who misallocates capital writes a report requesting more funding. The feedback loop that disciplines markets simply does not exist inside a government agency.
The US Department of Education has spent over a trillion dollars since 1980. Literacy rates have not improved. No one at the department has been bankrupted by this outcome.
11. Every producer inside a local market holds knowledge that no bureaucrat in a capital city can replicate. A wheat farmer in Kansas tracks soil moisture, futures prices, local equipment costs, his specific buyer relationships, and a hundred other variables simultaneously. That knowledge lives in the price he sets.
Friedrich Hayek called this tacit knowledge in 1945. The Soviet central planners ignored him and spent fifty years proving him correct, producing chronic shortages of goods that private markets coordinate effortlessly. No model, no algorithm, and no committee can compress what millions of independent actors know into a single plan.
12. Every government intervention produces effects you see and effects you don't. You see the road the state builds. You don't see the factory the tax dollars never funded, the job that never existed, the innovation that never happened because capital was extracted at gunpoint and redirected by bureaucrats with no skin in the game.
Take the 2009 Cash for Clunkers program. Congress destroyed 690,000 working cars, handed dealers a short-term spike, and you saw the sales numbers. The used car market was stripped of affordable inventory, pricing working-class buyers out for years afterward.
13. Prices, supply chains, and language itself coordinate millions of strangers without any central planner issuing a single command. That coordination is spontaneous order: complex, functional patterns that emerge from individuals pursuing their own goals under rules they did not collectively design. No committee holds the dispersed local knowledge required to replicate what voluntary exchange produces every second.
Watch how English evolved. No king designed its grammar. Millions of speakers across centuries adopted words and structures that worked, dropped ones that didn't, and produced a language richer than any bureaucrat could have engineered. Central planners who believe they can replicate that process with price controls or production quotas destroy the feedback mechanism that generates the order in the first place.
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