How people acted yesterday is no absolute assurance of how they will act today or tomorrow or a year from now. There is in the realm of human action no empirical constants. This fact forever precludes the use of the methods of the empirical sciences.
Astonishingly, Krugman flippantly asserts that the Austrian Cycle Theory speaks of either a shift of workers from investment to consumption during a crisis or the recession is the consequence of expansion. Nowhere is this found in the Austrian tradition.
[Statism] is the deep-seated belief in a benevolent and far more efficient authority flying in the face of free markets and personal responsibility. The statist and utilitarian are united in their view that government planning, decision-making, and emphasizing collective happiness are morally superior to individualism and its relationship with private property.
In the absence of market prices and profits, the socialist planning board has no means by which to rationally allocate scarce resources to the satisfaction of urgent wants. It has no idea what to produce and in what quantities and qualities. The result is utter chaos and invariably human tragedy and disaster.
Following in the footsteps of our southern neighbour, Canada seems destined for increasing polarization. Perhaps the sentiments of those most marginalized will lead them to believe that the only way forward is secession, like many in the U.S. now do.
The price system in the market economy efficiently allocates scarce resources. It is far easier for politicians and bureaucrats to devise “free lunch” solutions than to get out of the way and allow the market to solve economic problems. If the market were allowed to function, higher rental prices would signal to builders an increased demand for housing. Building more units pushes the prices back down. This is simple supply and demand economics.
