Thursday, September 1, 2011

Austrian Economics, Meet Medieval Hungary

Serendipity sometimes causes seemingly unrelated matters to cross paths, crashing into one another, bringing new insights into the nature of reality. As I explored the City of Richardson's proposed 2011-2012 budget, a YouTube video was recommended to me. It's a lecture by Walter Block from the Mises Institute Media. Independently, I happen to be reading "The Origins of Political Order" by Francis Fukuyama.

I offer two excerpts. I leave as an exercise for the reader to decipher the tracks of the particles released in this collision of economic philosophy and history.

After the jump, the excerpts.

The first is from the lecture by Walter Block. It is titled, "The Fallacies of Public Finance."

"What public finance means is you get money for government to finance its services. That's public finance. What's my take on this? My take on this is you don't need public finance. It's a fallacy to think we need public finance. The only reason we need public finance is because the government, the public, is providing goods and services for us, presumably the goods and services that we are incapable of providing for ourselves through markets. But there are no such things. Anything that the government provides, armies, courts, police, welfare, whatever, any of it, all of it, has always been provided by the free enterprise system. So you don't really need public finance. That's about the end of my lecture."

The second is from the book, "The Origins of Political Order," by Francis Fukuyama. It discusses the history of Hungary in the 15th century.

"Mátyás Hunyadi was driven by military necessity to do what other modernizing, absolutist monarchs of the period were doing. But unlike the kings of France and Spain, he still faced a highly powerful and well-organized noble estate. He was compelled to consult regularly with the diet that elected him. While his military successes forced the nobles to grant him considerable leeway, they resented the increasing tax burden he was imposing on them, as well as the erosion of their influence in decision making. As a result, when Mátyás died in 1490, the nobles took back most of the gains made by the central state in the preceding half century. They were angry at their loss of privileges and eager to restore the status quo ante. The barons placed a weak foreign prince on the throne, starved the Black Army of funds, and then sent it into battle against the Turks, whereupon it was destroyed. The noble estate succeeded in reducing its tax burden by 70-80 percent, at the expense of the country’s ability to defend itself."

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