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These clips are posted here with a single intention - to underscore the principles inherent in being a good "head of a household" or a good "host, proprietor". Something that is also implied in Serbian word "domaćin", which means exactly "head of the household" or "one who manages a household". Which is, in the end, the very meaning of the Greek root of the word "economy" -- οἰκονόμος ("one who manages a household").

This implies all the basic good principles that would make a household strong and healthy. They would also stand in a country's economy, regardless of the fact that, as they say, the two are as different as a speed boat and an ocean liner. Prudence, awareness of one's fragile position in the world, full knowledge that the food and other necessities as well as luxuries have to be produced, earned, or in other way acquired with effort and sweat. That we don't just get them for free from other people, and when we do, then they are the product of others' effort and should be considered a present, not a right. That we cannot consume more than we produce, that we have to produce first, then consume, that the resources at our disposal are limited and should be allocated with care and diligence, and that any breach of these principles, when allowed, should be considered an exception and handled prudently.

In these videos, there are some very good examples and explanations of how ignoring the mentioned principles ultimately leads to crisis, personal or, as we can witness today, even on a global scale. We, who have lived in socialist countries, have experienced severe national crises for the very same reasons.

I am not implying however that Austrian School (as represented by Peter Schiff or Ron Paul), or liberal economy, and especially not today's political systems in the West are sole, or even firm keepers of these principles, as many do say. I also do not intend to say that socialism has no such prudent, sustainable principles (although I do think that socialism as we know it from practice, did have a systemic inclination for ignoring them). In fact, having seen the same kind of amazing corruption of governments and capital both in socialist and capitalist countries throughout the world, I think the terms “capitalism” and “socialism” and the polarity between them have become anachronistic and do not represent reality well anymore. After all, these principles have been in existence long before these terms were coined and popularized in 18th and 19th century.

Instead, I just want to emphasize the practical elements that I think do indeed make a "household" good and healthy. And the main reason to do that, is because there is so much of the opposite behavior today in the world, so much imprudency, recklessness, arrogance, especially in the past ten years. The world is dealing with the monumental "credit crisis" - that means we were all buying and spending money that we didn't have. Not only governments, but everyone. Seems as if everyone was after "free lunch", to get "something for nothing", and "more of it".

Let me also emphasize one point about liberal capitalism, the system in which these videos originated. More precisely, I refer to “real capitalism”, as opposed to today’s “capitalist” systems throughout the world. “Real capitalism” is distinguished by many prominent, albeit non-mainstream figures as the system based on the work of Adam Smith, Carl Menger, Ludwig Von Mises, the experience of the 19th century and so on, which is not the same, and is even often contrary to today's political systems in the West that are considered to be “non-free”, with significant elements of “socialism”.

And in this I refer mostly to Ayn Rand who, by her own words, attempted to produce an underlying philosophy for capitalism.

On one hand, as mentioned, I respect and find very natural many ideas, standpoints and practical explanations expressed in “real capitalism”, such as numerous ones in the posted videos below, or many excellent descriptions of a corrupt environment in Rand`s “Atlas Shrugged”.

On the other hand, I find a significant issue with any attempt to place capitalism or material economy in general, at the root of human action, life and the world around us. That is, these ideas and concepts are practical, useful, honest, natural, but exactly within the context of material economy; they do not explain the purpose or the source of the world around us and the position of man and material world within it. And any such attempt in fact turns it into a destructive outlook instead of constructive.

Basic axioms in the liberal capitalism are all focused on the man’s well being in this world and production of material goods. The essential questions of “why”, “where is the source”, “what is the purpose” are not really being asked. There is no real, living God in capitalism. It is assumed that we need to deal with the world as we see it, and that the goal is to fare good in our lives. Key concepts and tools, whose source is not contemplated in depth, are taken to be freedom and reason. Anything beyond that is not considered as an essential question.

So, capitalism (particularly Ayn Rand's capitalism) is a "this word's" affair. It is a closed system, where everything begins with the necessities of life on Earth, and ends when they end. Everything else, including God is just part of the "necessities". Consequently, the highest authority is man, and the most virtuous activity is production. Not surprisingly then (although odd on first read) that we see in “Atlas Shrugged” children playing on a scrap yard and indignantly consider their activity to be “adventurous exploration of the world”.

While “non material” production is recognized just as important as “material”, and while ideas are considered to be the beginning of every activity and every result, they are simply considered choices on Earth, “earthly fruits” we get to pick or not in our lives, just like the material goods are. And all the consequences of actions and ideas are considered significant only in this life. The realm of ideas and spirituality is just the “capacity” of productive life on Earth. Thus, the production is considered "sacred", and “producer” (whether strictly material or not) is “god”. In that sense, ideas and spiritual matters are considered inherently materialistic, i.e. "of this world".

It is just as if we had lively paintings of beautiful nature that really lighten up our house and make us inspired in doing chores, but we never give but a though that those mountains exist in reality somewhere, let alone venture to go out into the mountains. We remain content with “using” them indirectly to improve the “affairs” and the atmosphere in the house. Such “nature” is also then our possession, being on a picture, which we utilize to our ends.

It is not then surprising that such philosophy yields, for example, the Ayn Rand’s "Virtue of Selfishness". It is understandable. There is simply no other possibility for a world without God, the world in which man is god, than to value our human capacities the most. Whether it is "virtue" of selfishness, or "virtue" of social happiness, it all begins and ends with man. And the “best man”, the most “free and capable producer” is “god”, and allowed to set absolutes. And, again, it is only natural that in “Atlas Shrugged”, the main character at the end of the book kills a guard out of sheer principle, simply because the guard is indecisive about “the true virtues”. Of course, what else can happen, because, to paraphrase Dostoyevsky, where there is no real, living God, we are gods ourselves, and everything is permissible.

But man is not God. Man simply cannot create, produce and give what he doesn't have. A small child cannot be a caring head of a household or a CEO when he doesn't have the means - material, psychological, spiritual.

Saying that the man has the means to be god, is simply and obviously not true. Saying that he does, but hasn't developed them yet, and we just need the time, is irresponsible and careless (when not intentional) speculation. Saying that it doesn't matter, and that, by the running evidence, he is still god in the nature, is arrogant and an attempt to take away which is not man’s to take.


Peter Schiff Mortgage Bankers Conference Speech (Nov 2006)

watch (1:12:41)

Peter Schiff - an excellent overview of what was coming at the time. An interesting audience, mortgage bankers - one of them asked sarcastically at the end "So things being so bad as you say, should I just slit my wrists now?"

Peter Schiff - Why the Meltdown Should Have Surprised No One (March 2009)

watch (1:16:27)

Great speech with a number of excellent examples from his experience.

Ron Paul: Federal Reserve is the Culprit! (Feb 2009)

watch (05:07)

An excellent speech, very pointed and succint pointing clearly to the relations between the Fed, repsonsibility, inflation, emipres, freedom.

Money as debt

watch (47:00) | download (130 Mb)

Very good cartoon documentary explaining some, generally little considered, albeit obvious and rather disturbing facts about current credit based financial systems and economies. Note that regarding history of paper money, the author focused on medieval safekeeping practice, which although important is not the only historical and practical root of fiat money. Another key consideration is certainly Adam Smith`s Real Bills Doctrine, particularly the clearing role of "Bills of Exchange", used too in Middle Ages, at city fairs, as well as in 19-th century trade. This is well elaborated by prof. Antal Fekete (among other prominent writers on the subject) in a number of articles. The clearing role of bills of exchange is constructive and positive role, it shows how "fiat money" can be used in a positive manner, contrary to the destructive nature of today`s credit markets based on fiat.

Irwin Schiff: How An Economy Grows And Why It Doesnʼt

read (pdf) | download (5 Mb)

A small, comic book formatted, simple and easy to understand overview of the most important aspects of the economy. It's basic economy from the perspective of liberal capitalism, founded on Adam Smith's works. An excellent introduction to basic principles, clarifies in very practical terms many well known issues from inflation to corruption, price dynamics, price controls and so on.

The only issue with this topic in general is that this perspective of Adam Smith's capitalism is always, and in many variations, set as the foundation of everything, yet excluding God from the picture entirely (or in any noteworthy sense). I don't think the idea of capitalism assuming such a role (underlying all "human action") can be taken seriously at all.

However as a practical and responsible approach to managing economy (in the greek meaning of the word - "managing a household"), it is an indispensable perspective and extremely valuable body of knowledge. If politicians and economists today looked at things more from perspective described in this book, and less from the perspective of short term gains, we would not only have better economies, but would have better understanding of the world around us and our position in it.

My personal credit crisis (Edmund L. Andrews, New York Times)

read (html)

An excellent and candid personal story on how easily the personal financial crisis can develop and how the environment in the past years have helped that to happen to multitute of otherwise prudent, middle class folks.