First, if you shut off as much as possible all access to natural light, and thereby create a need for artificial light, what industry in France will not ultimately be encouraged?

If France consumes more tallow, there will have to be more cattle and sheep, and, consequently, we shall see an increase in cleared fields, meat, wool, leather, and especially manure, the basis of all agricultural wealth.

If France consumes more oil, we shall see an expansion in the cultivation of the poppy, the olive, and rapeseed. These rich yet soil-exhausting plants will come at just the right time to enable us to put to profitable use the increased fertility that the breeding of cattle will impart to the land.

If Cyprus or Greece or Spain or Portugal (or better yet, all of them en bloc) decided to quit the euro and revert to drachmas and pesetas, they would need to block bank accounts, impose currency and capital controls, and default on some of all of their foreign debts, which would be re-denominated in the new local currency. There would be lawsuits up the gazork, but the IMF and ECB would have to step in to limit the broader damage even if they disapproved.

The state—the organization of the political means—is the institution that allows an idle, unproductive class of parasites to live at the expense of ordinary, working people, whose means are industrious activity and consensual exchange in the marketplace.

Raising taxes on the private sector while government continues to gorge itself on tax-and-spend policies does not bring prosperity. Businesses undergo austerity by way of the recession-induced reduction in demand for their goods and services, yet the public sector doesn’t feel the need to tighten its own belt commensurately. Increasing the public burden upon the private sector only compounds what is already a harsh business environment. This is what most European nations have tried as their “austerity” programs, and they continue to suffer because of it.

On the other hand, the proper form of austerity closes a fiscal gap by reducing the burden of the state upon the already struggling private sector and cutting spending; this does bring prosperity.

Which brings us to an interesting observation. Monopoly, purely and simply as monopoly, is neither a bad nor a good thing. If someone's the lowest cost producer and can supply total demand then why the heck not leave it as a monopoly? The difficulty comes if someone attempts to exercise those monopoly powers, to gouge consumers in some manner. And for many to most monopolies the exercise of such power leads to competition and the breaking of that monopoly power.

If Britain really wants sustained economic growth, it needs to radically improve the conditions for innovation. But this requires a cultural change as well as government allowing it to take place. The eminent economist and historian Deirdre McCloskey describes this as the dignity and liberty for innovation: a willingness to embrace and celebrate the creative destruction of new products and processes supplanting the old. Modernity was born when Britain went from condemning Shakespeare's Shylock in the Merchant of Venice, to honouring James Watt with a statue in Westminster Abbey. But we are in danger of falling back into the ancient distaste for commerce and innovation. As Allister Heath rightly pointed out in his address to the ASI Christmas Party, we must combat the emerging politics of envy and redistribution, and embrace the optimistic impulse of innovation.

At any rate, we need not choose between forms of monopoly, because we can have competition if we want it. All we need do is keep government out of all economic activity. Monopoly is not a market phenomenon, but rather the product of government privilege, which, like all government activity, is rooted in force. And we all know who has a comparative advantage in procuring favors from government. Hint: It’s not average working people.

Another benefit, which grows out of the first, is that the market facilitates constructive interaction with strangers and hence promotes peace across broad geographical areas, even globally. What deeper compliment could one pay a social system? A money-based division of labor brings people together for mutual advantage, expanding the array of goods and fostering goodwill among individuals who might otherwise view one another with fear and suspicion. Instead of fighting or hiding from one another, they are producing valuable things for exchange and relating to one another as equals, and the resulting cultural cross-fertilization has untold beneficent consequences.

In the end Mises and Hayek were vindicated in no less grand a forum than the world political stage. By the 1980s it was obvious that living standards of citizens in communist countries were far below those of citizens of countries which had retained (more or less) the free-exchange system. The increased internal unrest in the Soviet Union and its suzerainties became increasingly hard to ignore. The collapse and formal dissolution of the Soviet Union in December 1991 demonstrated once and for all the contradictions inherent in nonmarket allocation schemes. Only market-guided resource use—the system of free exchange—could lead to widespread material abundance. Any attempt to suppress this system, however well-intentioned, was doomed to bring about nothing but lower standards of living.

I am glad you are sitting down as you see these words, gentle reader, otherwise you would topple right over as I did when first encountered them, while mistakenly standing up on my two feet. The economic benefits of the Apple iPhone 5 do not come from its merits, merely from the fact that the introduction of this item embodies obsolescence? My goodness gracious. If this were true, then wouldn’t it be even better if the rate of capital destruction were even greater? And wouldn’t it help the economy even more if this devastation were not confined to communication implements like the Apple iPhone 5 but ranged widely over the economy, poisoning everything in its path including housing, factories, pipelines, mines, etc. In the extreme, we might as well just bomb our capital, buildings, etc., so that we are left with no food, no clothing, no shelter, no anything. Think of all the aggregate demand we would have then!

As riots accompany new austerity measures in Greece and Spain, the euro is plunged into uncertainty again. Sanguine observers might predict that there will be three such crises in the next year, and that there will be three emergency summits held, and three announcements of new measures to deal with the problem. On each occasion markets will respond favourably for a very short time, then gloom and uncertainty will return. Those same observers might predict a further three such sequences in the following year, and three more in the year after that. And so on.

Remember, though, that economics teaches us that an action is always taken by someone for something. There are no disembodied costs, benefits, and values. In a world of scarcity, John believes saving rain forests is more important than saving the whales. Mary believes the opposite. If we are to get past disagreements on esthetics–essentially differences of opinion–that can turn into violent conflict, we need to find some way to settle our differences peacefully, some way to transform them into value-creating interactions.

Imperfect though it may be, the free market has so far been the most effective method we know of for doing that.

So yet more borrowing does not seem a particularly safe source of money to boost public-sector employment and wages. Nor is inflation. We have had too much of that too. A rising cost of living means that people's savings and pensions do not buy as much. And rising prices also confuse businesspeople about what is actually profitable: they cannot see the 'signal' of where the real demand is from the 'noise' of prices rising all around. That gave us the financial crisis: when everything seems to be booming, people make some pretty crass bets.

In other words, the dismantling of the welfare-warfare sectors would restore the situation that existed before the government imposed its 50 percent, 60 percent, and 70 percent tax on people’s income to fund the welfare-warfare state. Everyone would now, once again, be free to keep everything he earned and decide what to do with it. No longer would he have half or more of his money taken from him.

Moreover, the people in the public sector—the ones dependent on the welfare and warfare dole would now be in the private sector, which means that they would be producing goods and services that raise people’s standard of living rather than living off the dead weight of tax collections.

Now quite how much of what we can see in the unemployment and GDP figures comes from this effect is another matter. But do understand the basic point. What even The Guardian calls a "truly catastrophic performance" is what the various greens and Greens are urging upon us as our future lifestyle. They want to lower labour productivity. They insist that it must happen.

They really are campaigning that we must all work harder in order to have less.

This is neither happenstance nor coincidence: this is enemy action.

Now suppose a pencil-maker claims she is entitled to or deserves the wealth she obtains through business. (To simplify things, imagine she is a lone artisan pencil-maker, rather than a factory owner.) Read’s “I, Pencil” does not refute her. Sure, that businessperson cannot build the pencil from scratch. But the market does not reward her for building the pencil from scratch. It’s not as if the market mistakenly behaves as if she created the pencil ex nihilo. Rather, the market will tend to pay her her marginal contribution or marginal product. We can still debate whether she deserves or is entitled to her marginal product. Yet, it’s not as though the market just pays her everything and fails to pay all of the other people she relied upon to make the pencil. Rather, the market tends to pays everyone their marginal product.

Start with the mother of all market manipulations - quantitative easing by the Bank of England. Running the printing presses to buy up UK government gilts has slashed interest rates across the board, royally screwing honest savers, prudent investors and pensioners. Those absurdly low interest rates allow the government to escape more aggressive cost controls and steer precious capital towards mis-priced investments. Have any Committee members sent emails to anyone about this market manipulation?

Modern international bankers form a class of thieves the likes of which the world has never before seen. Or, indeed, imagined. The scandal over Libor—short for London interbank offered rate—has resulted in a huge fine for Barclays Bank and threatens to ensnare some of the world’s top financers. It reveals that behind the world’s financial edifice lies a reeking cesspool of unprecedented corruption. The modern-day robber barons pillage with a destructive abandon totally unfettered by law or conscience and on a scale that is almost impossible to comprehend.

In an ideal world, think tanks and commentators would work to persuade the public of the advantages of both of these policies, clearing a pathway that politicians could walk upon. In this real world, however, there is little chance of the electorate ever being persuaded to vote for reduced benefits. It is just possible that the public could be shown that they, too, would gain from tax cuts on enterprise, and agree to support it, but only to a limited extent, and with measures far more timid that those needed to generate vigorous growth.

It is far more likely that governments will just muddle along, incurring great unpopularity for trivial cuts to entitlements, and making trivial tax cuts with one hand while increasing taxes elsewhere with the other.

This is a pity, because these twin tracks to recovery could utterly transform Britain, and do it very rapidly, too.

The only way that Greece and Spain and the other €uro-Med countries will get back in the game is to have competitive currencies. Within the €uro, their exports and their labour markets can never recover competitiveness. So the message for George is this: he €uro is the problem, not the solution. It is a universal bankruptcy machine. Any plan that fails to dismantle the €uro will fail to achieve recovery.

So long as competition is free, people respond to unequal exchange by seeking more equal terms. And so long as no barriers to market entry exist, prices above the cost of production (including the disutility of labor) provide an incentive to enter the market at a lower price. So as Franz Oppenheimer argued, the market always tends toward an equilibrium at which goods exchange at a ratio that reflects the subjective disutilities of the producers.

This is the natural tendency, obtaining so long as the actors in a market are equal and power doesn’t enter into the equation. The only way to sell goods and services at prices greater than the production cost and subjective disutility entailed in producing them, in the long run, is through the use of force to suppress competition from cheaper providers.

In sum, the government’s monetary and fiscal authorities are currently engaged in the expropriation of private wealth on a vast scale. Entire classes of investors—especially people who saved during their working years and expected to live on interest earnings on their accumulated capital during their retirement years—are being steadily wiped out. Astonishingly, this de facto robbery is being committed by a government that misses no opportunity to shed crocodile tears over how single-mindedly it seeks to protect the weak and helpless among us.

But you heard it everywhere — the US government is opposed to nasty, dastardly monopolies. Just another lie the government tells us. But at least there is some justice in the world: the USPS is bust, bankrupt, unable to pay its bills. And given its unaccommodating service to some of us, this isn’t very surprising

As they say in bad gangster movies, we can do this the easy way, or we can do it the hard way. The (relatively) easy way would be to sit down and plan for an orderly break-up of the euro, thinking through the implications for European banks.

The hard way is to sit around in denial until the markets force a chaotic break-up -- which could be sooner rather than later. Merkel perhaps has no longer than this week to sort it. And I don't think she will

Imagine, just imagine, if the oozers were no longer among us. Imagine if those, that maliciously damage our economy, had got the come-uppance they deserve, and had drowned in their own foul ooze. Can you see what would happen? With the oozers gone, productive people would be able to unleash themselves. Good people would receive at last, in a free market without coercion, the rewards they deserve. And this would give them the incentive to build on their talents, to develop their skills, to produce yet more. Prosperity would breed prosperity. Progress would breed progress. And, by the miraculous phenomenon which economists call “trickle-down”, opportunities would come even to the very poorest.

THE micro effects of the macro-economic decisions are being felt disproportionately in the most sensitive parts.

In short, we are hurting out here - again.

No matter how well we have done what we were told to do, how proud we are to have pulled together, the punches keep coming.

The carbon tax is the last straw. Enough is enough.

Governments can produce more money but they cannot produce more wealth because they cannot produce more stuff. They can produce money by diluting their currency through either the printing press or devaluation, in each case they reduce the value of each unit of currency in circulation; they do not, however, change the substance of their national economy. The substance is dictated by the production and exchange of stuff. Currently the government of Greece can produce neither money nor stuff. It cannot turn on the printing press and it cannot devalue because it is tied into the ludicrous Euro, yet it is spending far more on non-productive governmental activity than the Greek nation's output of stuff can sustain.

I cannot help thinking that pushing one-sided equations at their people and arguing tooth and nail that the equations in question have only one side is the root of current public disquiet in Spain and Greece. There is every sign that the people demonstrating against plans to trim government spending really believe there is only one side to the equation. In a way this should not be surprising, both countries had long periods of socialist government in which the allure of the magic money tree was all pervading - no need to worry, the government will pay for it, the government has a bottomless pit of money because it just plucks some more from the magic money tree. We should be more worried about this reason for mass demonstration than we would have to be were demonstrators complaining about overspending in the past.

We shouldn't fuss about whether GDP is up or down this quarter or the next, it really doesn't matter. What matters is that money is used wisely because the unwise use of money eventually results in retrenchment if not bankruptcy. A decade of it being used unwisely can thrust GDP into the stratosphere but that tells us nothing about the health of the economy. GDP was never higher than before the recent recession started yet the economy (to be more accurate the government's finances) was in a complete mess. That recession has not yet ended.

The agenda of both Bush and Obama was to prop up rent-inflated asset values, as a source of aggregate demand, and to inflate the dollars of investment and hours of labor required to produce a given unit of use-value. But the only way out, in the long run, is just the opposite: Eliminate the portion of the price of goods and services that results from artificial scarcity rents, so that the average person can live comfortably with a shorter work week.

In the short run, Keynesianism is the only way to prevent the collapse of state capitalism. But in the long run, state capitalism is unsustainable. The only way out is to go beyond state capitalism.

In the end, we’ve got to find some way off the hamster wheel.

Which is why, in the long term it's all microeconomics. The plain old basics: incentives, prices, flexibility, rule of law and so on. Whatever macro tells us, the secrets of long term economic growth are still rooted in micro.

A better view is that people do not need jobs. What they need is earnings. There is a difference. Getting up every morning to make someone like Alan Sugar even richer is almost as corrupting as drawing unemployment benefit. And, while his behaviour on television shows him as a sadistic bully, Mr Sugar may be a better boss than Richard Branson, who seems to add hypocrisy to nastiness. Some people who work as salaried employees earn rather well. Even so, they are often cogs in private machines, and what I have said about state employment applies with similar force to private employment. Most employees, however, do not earn very well, and their conditions of service are generally unpleasant.

Rather than shepherding them into employment, it would be better to allow the poor to shift for themselves. I do not suppose that this means an end to the wage system. Many people are sheep by nature, and would starve if there were no one to employ them. But most are not sheep. Certainly, no one should be prevented from trying to replace or at least supplement paid employment by selling whatever goods or services he can supply. The modes of self-employment I have in mind may not make people rich, but will make them reasonably independent.

In fact, the market is the most just vehicle for redistributing wealth because it’s based on voluntary choices, not the coercive action employed by the state. In the marketplace, consumers are ultimately sovereign. Through their buying decisions, they decide which businesses are going to stay in business and which ones are not. If a business fails to satisfy consumers, it will lose market share and possibly go out of business. New, upstart businesses have the opportunity to become wealthy by providing goods and services that consumers want.

The core fallacy is the assumption that there is only so much work to be done in the world. Sometimes called the "lump of labor" fallacy, this economic view holds that the peoples of the world only require a limited amount of labor in their behalf. When this amount is surpassed, there will be no more work to be done, and hence there will be no more jobs for the workers.

For those who hold this view, limiting the productivity of the eager young workers is of overriding importance. For if these workers work too hard, they will ruin things for everyone. By "hogging up" the limited amount of existing work, they leave too little for everyone else. It is as if the amount of work that can be done resembles a pie of a fixed size. If some people take more than their share, everyone else will suffer with less.

We are living at the dawn of the freelance world, as more and more people find themselves working as consultants, contract workers or freelancers. This change in the way we work is as profound as the shift that occurred during the industrial revolution.