By Andy Duncan
Is the Financial Times going all Austrian on us? The overall trend in global societal time preferences has been declining for thousands of years, as civilisation has grown and spread, particularly from ancient and classical Greece, which had writing, money, robust law, and best of all, an enduring tradition of freedom. But since the coming of fiat money, particularly from the inception in 1913 of the Federal Reserve, widespread money printing has caused huge time preference spikes, in our something-for-nothing society. With socialism being the religion of high time preferences and civilisational decay, to my mind the two are absolutely linked. For the FT to spot this is quite the revelation!
Here’s a quote from their recent article, which is outside their usual pay wall:
“The 2008 crash itself didn’t destroy wealth, but rather revealed how much wealth had already been destroyed by poor decisions taken in the boom. This underscored the truism that the worst of investments are often taken in the best of times.”
Remarkable. Of course, Mises was writing similar statements to this in 1912, before the birth of the Fed, in his epic master work, The Theory of Money and Credit:
It’s only taken a hundred and seven years for the FT to catch up!