My Question for the Doomsters: Then What?
By Robert Higgs • Saturday January 23, 2010 8:52 PM PDT • 11 Comments
Although I am reputed to be a cynic, a pessimist, and a bah-humbugger, I am not given to doomsaying in the same way that a growing number of others are. Although I tend to expect, as Thomas Jefferson did, that the natural progress of things will be for liberty to yield and government to gain ground, and for me this will be an unwelcome course of events, I am not much inclined to predict that, especially in the near term, the economy, society, or government will suddenly “break down,” “collapse,” or experience some comparably terrible and complete calamity.
I will admit, however, that some of my friends seem mightily inclined toward such doomsaying. It’s almost as if they can’t wait for the catastrophe to arrive – perhaps because it will demonstrate beyond cavil that the existing order is too corrupt, irrational, and evil to maintain itself. Some people who write or speak along such lines, though, clearly have a vested interest: they are selling something — often precious metals, investment advice, “survival” goods, or “bearish” publications — that they expect to sell more readily to consumers who have acquired a heightened fear of impending economic doom.
Other doomsayers, especially those in the Austro-libertarian camp, may have absorbed their dire expectation from an expression Ludwig von Mises used, “the crack-up boom.” By this term, Mises refers to the penultimate stage of hyperinflation, when each acceleration of the money supply only drives the velocity of expenditure higher as people try to exchange any money they hold for real goods as quickly as possible. The culmination occurs when, as Mises writes in Human Action (p. 427), “The monetary system breaks down; all transactions in the money concerned cease; a panic makes its purchasing power vanish altogether.” Mises was not simply imagining or theorizing about this sort of development, however; he had seen it with his own eyes in Austria and Germany after World War I. And similar crack-ups have occurred in many other places at various times, including the Confederate States of America during the final year or so of the War Between the States.
Austro-libertarians should note, however, that Mises did not argue that a crack-up boom destroys all economic life. Instead, as he immediately explained, “People return either to barter or to the use of another kind of money.” Indeed. Austria, Germany, and the U.S. South did not disappear as a result of their currency’s ruin. Although their people suffered grievously from the destructive effects of hyperinflation, most people found a way to survive, and life went on. Eventually, economic life resumed on a new basis after the adoption of a “reformed” or foreign medium of exchange not subject to such rapid increases in supply. Indeed, some people survived even the recent hyperinflation in Zimbabwe, notwithstanding the Mugabe government’s best efforts to starve most of them.
Not every forecast of economic catastrophe involves hyperinflation, of course. Some breakdowns are expected to grow out of runaway government spending, growing taxation, oppressive regulation, food shortages, fuel shortages, or natural disasters, such as deadly pandemics or lethal changes in the world’s climate. I have yet to encounter a claim that we are all doomed because of an impending beer shortage, but I am a patient man, and I am confident that sooner or later such a scenario will be bruited about.
One aspect that virtually all tales of impending mega-woe have in common is that they end with the catastrophe itself. Bam, crunch, rip, smash, crash: the day of reckoning finally arrives, the dreaded event occurs, and the story ends. Alles ist kaput. Maybe somewhere out there in the woods a few cruelly smirking survivalists remain alive, clutching their beloved firearms and muttering, “I told you so.” If life continues at all, however, it does so only under conditions that leave the survivors solitary, poor, nasty, brutish, and short of all decent goods and services.
I’m not saying that this sort of thing is impossible. We are talking about human beings and their social interrelations, and from such screwball raw materials, virtually any outcome might conceivably be produced. But such scenarios are dreadfully far-fetched. After all, during the time of the Black Death in the fourteenth century, 30-60 percent of the entire population of Europe died, and hundreds of towns simply disappeared after their inhabitants perished or abandoned them in a futile flight from the incomprehensible killer (inadvertently spreading the disease everywhere they went). Yet Europeans did not die out, and indeed European civilization continued to make slow progress over the long haul, even though the disease became endemic (and episodically epidemic) for centuries.
So, supposing that I accept a horrifying forecast as a point of departure for discussion, my general question for the doomsayers of whatever stripe is: Then what? Do they really believe that when the government can’t pay all the pensions and medical bills that it has promised to pay, life will come to an end? Do they believe that when the government defaults on its debt, the economy will cease to function? Do they believe that when the U.S. dollar loses all of its purchasing power, people will not find a new and better medium of exchange for their transactions? And so forth.
One needs to have – and in saying so I feel almost as if I’m having an out-of-body experience – a modicum of faith in people’s common sense, creativity, and will to survive and prosper, even in the face of great difficulties and obstacles. If people could keep society running in the aftermath of the Black Death, they surely can keep it running after the U.S. government defaults on its debt. I am not saying that no suffering will occur. Vast socio-economic adjustments are painful even in the best of circumstances. But people will find a way, life will go on, and eventually some progress will be attained – before governments once again strangle freedom so severely that another calamity occurs. (After all, I cannot imagine that the people who are building the latest Tower of Babel will ever succeed in reaching heaven.)
Years ago, when I lived in Seattle, I sometimes encountered people who seemed terribly worried that because the Northwest’s old-growth trees were being cut, the so-called Northern Spotted Owl (a bird genetically indistinguishable from the abundant spotted owls in the Rockies, yet somehow imbued with a sacred status) was sure to perish. Try as I might, I could not resist the urge to say to them. “Look, suppose you were a Northern Spotted Owl, and the loggers came along and cut down the tree you were occupying. Would you fall down and die, or would you simply fly to the nearest not-so-old-growth tree and go on living as usual?”
I would be pleased if today’s doomsayers felt an obligation to answer a similar question in regard to their own forecasts.
Tags: Disaster Management, Economics, Europe 
Robert,
Leviathan, as you have so aptly described throughout many years in your writings—is analogous to a very large boa constrictor; starting small, growing and doing what snakes of these kind do: squeezing the very life out of human kind or anything else that gets in the way. The American government is one such snake.
Being the “realist” that you are, thinking the way that you do, observing over many, many years the relentless onslaught and degradation of the country you live in, one would surmise the angst and mental toil truly subtracts from the humanness and life spirit.
As I’ve mentioned to you on several occasions, having compared life lived elsewhere for 31-plus years (Monaco, Switzerland, Campione d’Italia, et al.), to the first 45-years lived in the U.S., there is NO comparison! If an individual truly values his of her individual freedom, liberty, financial privacy, personal privacy and REAL private property rights, it “ain’t” gonna happen in America! There’s only One-Way to achieve the above-mentioned attributes: seek a venue that supplies such! They do exist.
One could become mired down and spend the “only life you will ever have,” living in subjugation of the State. Or ... override the tribal inculcation and government controlled schooling of the state and ACT! Leave. Yes, it’s one helluva an adventure to live your life on YOUR terms not that of the State! It can be done. I’m living proof as are a few others.
ONLY leaving—is the answer, seeking the real freedom and liberty that so many people merely dream of and never attain in their lives. There is No other way. Get out of the jurisdiction and if necessary, renounce citizenship from the “modern barbarian state.” So the only question left to resolve is this: How much do you really want freedom, liberty, privacy and private property rights? Therein lays the rub. The “majority” really DOESN’T want to be free. They loathe responsibility! They shall endure the lash of the master and bare the yoke for their entire lives.
Again, the very best to you Robert and those you care about.
C’est la guerre,
Capt. A.
Principaute de Monaco
GMT 1:00 CET
“Anyone who needs to be persuaded to be free, doesn’t deserve to be.” ~ L. Neil Smith
Capt. A. | Jan 24, 2010 | Reply
That was a very sensible post. “He that is without sin among you, let him first cast a stone”. I wouldn’t dare.
The point you make about “vested interests” regarding predicting catastrophes especially caught my attention. Sometimes this vested interest may be very subtle, e.g. involving not money but only human pride and lack of humility.
Also, a crisis like this one encourages many people to predict catastrophes and be very pessimistic. Predicting this kind of events may catch people’s attention much more intensively than predicting that things will start to improve soon. This might be especially relevant for the media.
But, predicting catastrophes does not imply believing that will be the end of the world. Someone may write an article claiming that there will be hyperinflation, giving his reasons and that’s all. But by not dealing with the “then what” question, he does not have to believe that people will die out and life will cease to exist. To some extent, that may be a matter of emphasis, though the ‘then what’ question is quite relevant. But they may take for granted that things will continue to be, though in a different way.
That said, in dealing with the collapse of the dollar or debt default, people would better add a kind of “Then what?” final paragraph.
Angel Martin | Jan 24, 2010 | Reply
The real concern for many people is not so much that there will be a complete economic meltdown and a total collapse of society, but rather that there will be a severe crisis that opportunists will exploit. As you demonstrate in Crisis and Leviathan, that is a very real phenomenon. At issue really is whether we are getting to a tipping point when statists will be able to convince the masses that dictatorship is good for them, or at least better than the alternative.
Recent events give me hope that there is still a solid core of people awake enough to see the danger.
Capt. A does have a very interesting take on things. I, for one, would be interested in his adventures.
Dan Mcl | Jan 24, 2010 | Reply
It is surprising to me the number of non-mentally imbalanced nor paranoid person talking of doom in the past week. Outside of anecdotal observation, I found this article to be very much in proper perspective, and timely to boot.
To Capt. A. – I offer a somewhat humorous comment I also heard this past week: “It’s to the point that US citizens would start voting with their feet, *if* we hadn’t messed up the rest of the world too.”
Art | Jan 25, 2010 | Reply
It might enlightening to observe that in disasters like Haiti or the Indian Ocean that people ‘spontaneously’ create a new order. Such order cannot be predicted, described or planned by anyone in advance. Humans will improvise (make a market) from whatever remains available to them. That is how we have survived for these tens of thousands of years.
I admire your work Mr. Higgs, but this time I think you have lost sight of ‘the big picture’ of human action. Keep up your efforts, I’ll be reading eagerly.
D. Frank Robinson | Jan 25, 2010 | Reply
Ha! After living for 32 years in Europe I can say that I found the “attributes” mentioned by Capt. A. in the USA and not in Europe. I can only explain this difference by assuming that Capt. A. can rely on a comfortable income without the need for a “everyday” job. That’s some kind of living above “normality”. Good for you, Capt. A.! (and good for me, thanks :)
Good article! I think that nature is the ultimate winner. It always balances outcomes no matter what craziness we endeavor. And because we are a part of nature, we might not use it often but we have the survival instinct that will help us overcome whatever risks our stupidity might pose.
Yes, I’ve been often wondering the same thing — then what?
Anton T | Jan 25, 2010 | Reply
For D. Frank Robinson—
It’s late, and I’m tired, so perhaps I missed something. It seems to me that the point you made (not the example you used) in your first paragraph is Dr. Higgs’ point precisely. Eh?
Scott Haley | Jan 25, 2010 | Reply
All true, but for those of us approaching the end of our productive years, looking at economic ruin with the soon to be worthless dollar, “eventually some progress will be attained.” brings up the common adage, “eventually we’ll all be dead.”
The insane spree we are on now will come to an end, but I am afraid that without prudent precautions, many will not survive the interregnum. Most people always survive, but what good does that do the individual caught in circumstances of chaos?
Paul Smith | Jan 26, 2010 | Reply
It’s true that “life does go on”, even after extreme monetary debasement. But I think the point of the doomsayers (people like Peter Schiff, or even Ron Paul to an extent) is that much needless suffering will be caused in the interim.
Sukrit | Jan 26, 2010 | Reply
To Art,
Thanks for your comment. It’s somewhat true that the perception is noteworthy about, “ ... *if* we hadn’t messed up the rest of the world too.” The truth though is different.
I can only say that there are several places worldwide that the American government, no matter how hard “it” tries, it won’t succeed in “messing up” these venues. Once real freedom-seeking people recognize this, especially people of wealth, as with “brain-drain,” capital will seek safety in truly “safe” places. It’s already occurring! There are just too many really tough people that will no longer support the American cause, its government etc., in any form. (Voting with their feet.) You already know this. Most Americans will simply bend over and spread their cheeks, waiting for the continuing “big bamboo,” (the lash and the yoke) just another obeisant sign of tribal inculcation. My, my ... what a sight to behold.
The very best to you Art.
Capt. A.
Principaute de Monaco
GMT +1:00 CET
Capt. A. | Jan 29, 2010 | Reply