Free market fascism in Miscellaneous Topics Posted December 23, 2010 · Edited December 23, 2010 by Rearden_Steel · Report reply Government didn't cause Great Depression. Neither did free market. Humans caused Great Depression. Specifically working class. Market worked very well. Economy was completely restructured by 1933. But there was 25% unemployment. Real free-market solution would be to kill those workers(or let them starve to death). Because they can't adapt fast enough. Humans are obsolete. They can't keep up with progress. Even without minimum wage there was no place for them in economy. Free market economy ensures fastest economic growth. But humans are unnecessary for economy. Machines can completely replace human labor. therefore free market doesn't guarantee that there will always be demand for human workers. Economy simply doesn't need any humans. Austrians believe that Roosevelt was evil, however he was forced to try to save those unnecessary 25% of workers otherwise they would probably destroy system. But Great Depression happened worldwide, many people couldn't find jobs, and capitalists didn't do enough to save them. I believe that's one of major reasons of WWII, technological advancements and capital accumulation lead to millions of workers that economy didn't need and those millions killed each other plus enough capital was destroyed so demand for previously unemployed workers was created again. Wow, So many things wrong in that statement I don't even know were to begin. !. "Government didn't cause Great Depression. Neither did free market. Humans caused Great Depression. Specifically working class. Market worked very well." First to say that the market didn't cause the depression and that humans did is rather funny. Who is exactly is the market then? 2. "Market worked very well. Economy was completely restructured by 1933. But there was 25% unemployment." No, the market was working miserably. In 1929 prices in stocks doubled. The fed rose the interest rates and the market fell by 60%. That's hardly working well. This usually starts a spiral in the economy beginning with one of the following: Deterioration in bank balance sheets/Increased interest rates/stock market decline/Increase in uncertainty. This in turn leads to Adverse selection and moral hazards (Bailouts and government programs) which leads to economic declines which then begins a bank panic then more adverse selection ect... 3. "Economy was completely restructured by 1933. But there was 25% unemployment. Real free-market solution would be to kill those workers(or let them starve to death). Because they can't adapt fast enough. Humans are obsolete. They can't keep up with progress. Even without minimum wage there was no place for them in economy." No. Because of the "economic restructuring" you mention ie the "New Deal" there was actually less capital investment available to industry. The funny thing is that it was the exact opposite of what you describe. There was a huge reduction in capital spending for factories and machinery. This is because the government programs lead to what is called crowding out. When the government expands its expenditures it may discourage or crowd out the private sector in the same market. This excesses in government spending can result in low private-sector borrowing and decrease the amount of private investment. This is largely do to the fact that returns on government debt are typically lower than that of private debt. This results in slower economic growth. When the Federal government's fiscal policy increases spending, it must either create a deficit or create a increase of surplus. In both cases expansionary policy has a direct effect upon the bond market.hen Increased government spending increases the deficit or reduces the surplus the Treasury increase its sells of bonds then it would have otherwise. This causes a shift in the bond supply curve to the right. This creates a rise in the interest rates due to the reduced price in bond this increase in bond interest rate depletes the amount of capital available for private investment. This also creates a demand for dollars thus reducing the supply in the foreign exchange market. The result is a raise in the foreign exchange market. A higher exchange reduces net exports. This results in the change in the aggregate demand curve. Before the government interference real GDP was at equilibrium by the intersection of AD1 and the short-run aggregate supply curve. If there was no negative impact the government expenditures would have shifted outward to AD2. But the increase is offset by the loss of investment and exports. This creates a aggregate demand curve shift to only AD3. In the short-run this leads to a slight increase to GDP to Y2 but also higher price level at P2. 4. "But humans are unnecessary for economy. Machines can completely replace human labor. therefore free market doesn't guarantee that there will always be demand for human workers. Economy simply doesn't need any humans." Incorrect. Humans are the economy. Why would a company produce outside of the demand function? If there is less jobs and revenue then output will decline because of the rise of the LM point will be above equilibrium. In other words they would be producing more goods than what is demanded. This goes back into what economist call the consumption function. Income is an important factor in what determines the amount of goods you will consume. The Consumption function goes as follows: C=a+(MPCxY^D) Where "a" stands for the autonomous consumer expenditure that is independent of of disposable income and MPC is the marginal propensity to consume. This expresses the change in expenditure with that results in an additional dollar to disposable income. This brings us to the aggregate demand function. The aggregate demand function is the vertical sum of the consumption fuction line and planned investment spending. This gives the location of were demand for goods produce lies. If a company produces above the equilibrium line it will be saddled with tons of unsold inventory. So you can see how silly it is to speak of the economy and production independent of humans and demand.