Who is Niall Ferguson? He is an insider. Twice. In US and UK circles. He is a historian with a passion for economics. He is outspoken. He has a vision and he is not shy to share it with us through books and articles.
If you are interested you can read his curriculum in Wikipedia Niall. You can also check Niall Ferguson website.
So, why do we say that Niall matters?
Because he is a logical voice inside the circle where powerful people meet and listen. He can induce changes where millions of people cannot.
He is brilliant and quite logic. He makes extensive use of history as a forecasting tool to predict the future, or more precisely, as a kind of pattern recognition system. The main idea - an old one - being that history repeats itself. But not exactly. And Niall knows it.
Because of his capacity to recognize this, he is capable to provide conclusions to people that matter, years in advance. If you are interesting in what the immediate future holds, you will do well by following him.
For example, his article entitled “Europe’s Disaster Is Headed Our Way” is quite accurate.
He is an agent of change; therefore he matters. Today.
However, and there is always a however, tomorrow is quite a different story.
Niall is part of a system that has boundaries. As an insider he is incapable of breaching those boundaries. Sure. He pushes against them. He may even have bruised and bent a few but he cannot escape them.
And that’s his primary limitation. In simple terms, he cannot think outside of the box, however large the box may be.
Niall’s typical thinking can be seen in the article “Today’s Keynesians have Learnt Nothing”. In this article he explores the shortcomings of Keynesian thinking and testing. The short version being that politicians have experimented with Keynesian or near-Keynesian styles of economics for a long time and failed miserably. Therefore, Niall concludes, what is required is a shift in policies from the ones that kill private-sector confidence to the ones that boost it.
Now, allow us to translate:
Keynesians were wrong, are wrong and will continue to be wrong, therefore we need to stop thinking in their terms and have governments who think in different terms.
There is only a minute, tiny, almost microscopic flaw with this argument. It is self-defeating and contradictory:
The main idea being that governments have tried all kinds of economic policies and had failed miserably. Therefore, what we need, is more policies!
This is patently absurd. If the politicians have failed to find solutions for 200 years, why is Niall thinking that current politicians can find them now? Ahh… you see… because now he is providing the “correct” policies. And, of course, Niall is right!
We have to wonder, how many politicians, economists and consultants over those 200 years though the same way? Well, pretty much everyone. And everyone was mistaken.
The truth is that changing policies will not solve our economic problems; only a truly free market will do.
People such as Niall (and today this means almost every politician) base their thinking on two erroneous notions:
- When it comes to economy, independent people are wiser than the markets
- Policies created by people won’t be changed by other people with opposing interests
And this is precisely why Niall does not matter in the long term. His ideas of change are based on his faith in humans, more specifically politicians. This is simply an error of tectonic proportions.
What is required is a system that provides an automatic balance of power between economic rivals. A system that automatically protects property rights. A system where personal initiatives are not dependent upon “political realities” and are not subject to a majority vote. A system such as the Absolute Austro-Libertarian way. Everything else is just an outdated dream and does not matter. Just like Niall.
Note: please see the Glossary if you are unfamiliar with certain words.
