17 December 2008|
Today we're going to do an economic experiment with music.
You may have heard of Keynesian economics. To summarize, it's a bunch of economic ideas espoused by the British economist John Maynard Keynes that offer more government and consumer spending as the solution to economic slow-downs. Keynes saw saving as a "leakage", particularly during slumps, and thought government needed to borrow, tax, inflate and do anything it could to spend, spend, spend. It should also do anything in its power to "stimulate" consumer spending.
Anyone really interested in studying it from a theoretical standpoint will find ample evidence both from neoclassical economists like Milton Friedman and other Chicago School types, as well as from Austrian School economists like Ludwig von Mises and F.A. Hayek that Keynes' ideas don't hold up.
As for the ideas in practice, I'm not content with the massive record of history that Keynesian policies are a terrible mess. Bush's "stimulus" check and the bailouts as recent examples (and Obama's FDR style public works projects as future examples) aren't enough to put the nail in the coffin. They're too far removed from me. That's why I'm launching, with your help, an experiment to test Keynes' theories.
We all need to go to iTunes and buy the new single from the liberty-loving and funky-fresh band Major Maker. "Funky Lady" is not only a great single (why do they call it a single when it has two songs?), but it will help us test Keynesianism. If we all go out and buy the single (only $1.98!) for ourselves and as gifts for as many people as possible, we can bring the economy back; that is, if Keynes was right. The only way to know is to try.
The good news for you is that even if Keynes turns out to have been wrong and your purchase of "Funky Lady" doesn't make the stock market leap and your home value soar, you still have a great MP3 in your collection. Unlike government attempts to test Keynsianism, you walk away with a valuable asset in the end, even if the experiment fails.
In fact, by the time we see the results and judge whether or not our Keynesian consumption test was a success your new Major Maker MP3 asset may be worth MORE than the $1.98 you spent, due to inflation. Then you could trade or sell "Funky Lady" for a nominal profit. You may want to buy lots of "Funky Lady" singles, just like people buy lots of gold and commodities when inflation is expected; Major Maker songs may become a default currency if the dollar becomes too unstable.
So, everyone go to iTunes, buy Major Makers new single "Funky Lady" and know that you're not only supporting an awesome liberty-loving band, getting some sweet and super hip tunes, but also engaging in a massive empirical test of Keynesian economic theory AND investing in a stable commodity to hedge against monetary inflation.
Who new rocking sweet songs could be so freaking educational.