As iceberg recently reminded me via email, Murray Rothbard pointed out that inflation can lead to more than rising prices:

All sorts of monstrous situations will occur. Decline in quality, for example. We will find that there will be more air in the Baby Ruth — you can't find the Baby Ruth anymore anyway. There will be less chocolate in the chocolate. There is no way the state can police this, of course. And it's very harmful to the public.

I fleshed out Rothbard's example in "What ever happened to sexy stews?" and gave my own example:

With many goods, quality can vary significantly, not always in easy-to-measure ways. If people are used to paying 25¢ for a Baby Ruth, to use Rothbard's example, then the Baby Ruth company is going to be loath to raise the price to 50¢, even if inflation has doubled all their input costs. What they do instead is cut whatever costs they can to keep the price at a quarter. So maybe they cut the number of peanuts in half, dilute the chocolate with cheaper vegetable oil, and make the candy bar 10% smaller. The product looks the same on the outside, and many people won't notice the difference on the inside. But fans of the Baby Ruth chocolate bar will notice that the quality has fallen.

In my case, it wasn't the falling quality of the candy I noticed, but the ever-crummier toy surprise in a box of Cracker Jack. Grownups would tell me about the whistles and decoder rings their childhood boxes of Cracker Jack had contained. Meanwhile, I watched plastic toys become cardboard-and-plastic toys become pure cardboard crapola.

Now it's happening to the McDonald's "Dollar Menu":

McDonald's Cuts Cheese to Save Dollar Menu

Turns out the cheese in McDonald’s cheeseburgers is actually made with real dairy! The Wall Street Journal reports that the rising cost of cheese has put the franchise’s famed Dollar Menu in jeopardy. Some restaurants are now pushing a double cheeseburger with just one slice of cheese instead of the usual two. At other locations the price has been jacked up to an obscene $1.10. Now McDonald’s executives are considering yanking cheese from it altogether and calling it a double hamburger. But then there’s the price of beef to consider, which is also rising! It’s only a matter of time before the double mime burger – wheat-free bun, some lettuce and a little imagination – is rolled out.

(via Gothamist via iceberg)

I think I'll use Jeffrey Tucker's blog post about Batman: The Dark Knight as an excuse to repost my review of Batman Begins from 3 years ago:

der Fledermaus Mann fängt an

Joe Salerno must be feeling a void after his great summer seminar, June 6-10 [2005] at LvMI.

(I've listened to 9 of the 10 lectures, so far. I'd better finish #10 tonight so I can focus on Tom Woods's summer seminar starting tomorrow.)

Salerno seems to have turned to film reviews, starting with this critique of Batman Begins.

I've just returned from a sold-out matinee.

Salerno says, "This is the best Batman movie yet." I agree.

He says, "Bale's Batman is dark, dangerous, disturbed, dehumanized and vengeful — as he was meant to be." Right on.

He says, "The new menacing-looking, tank-like, car-crunching, building-smashing Batmobile is a better reflection of Batman's spiritual being than the sleek Batmobile of earlier movies." I agree enthusiastically, and I add that it's clearly based on Frank Miller's vision of the revamped Batmobile in the great 1985 graphic novel, The Dark Knight Returns. (My impression is that this movie began as a film adaptation of Miller's follow-up series, Batman: Year One. If so, little of the original remains, but I certainly think Batman Begins is the most "Milleresque" of Hollywood's attempts to tell Bruce Wayne's story. To whatever extent modern audiences can imagine Batman as "dark, dangerous, disturbed, dehumanized and vengeful" instead of the high-camp grinning idiocy of Adam West, we have Frank Miller to thank for it.)

Salerno says, "The slow-paced and meandering build-up in the first half hour or so ultimately pays off handsomely in the movie's climactic scenes, with plenty of action and suspense along the way." While we both enjoyed the movie, my review is the opposite of his: my favorite part of the movie is the "slow-paced and meandering build-up" — the best superhero origin back story I've yet seen on film. Was it only half an hour? Felt more like an hour to me, and I was enjoying all of it. Felt like we didn't even get to see the hero costume for the first half of the film, and for my tastes, the story deteriorated from that point on. Not much. It would still have been the best Batman movie ever, even if they'd started at what I'm calling the downturn. But I definitely preferred the character of Bruce Wayne to the character of Batman.

So why is an Austrian School economist reviewing a superhero movie?

I'll say that before I read Salerno's review (which I saved for after the movie), I was already thinking that this was the most self-consciously economically minded comic book movie I've seen. Some of this economic mindedness is revealed in the standard myths and misunderstandings of economic illiteracy, but there were two points I thought Austrians could readily embrace.

Point #1:

The first one turns out to be something Salerno did not at all embrace, but put into the economically illiterate column of the tally:

The notion that a conspiracy of bad guys can "use economics as a weapon" to cause a depression in Gotham City is ridiculous — unless they have somehow infiltrated the Federal Reserve System.

Well, yes, exactly. Why shouldn't we believe that this is precisely what the bad guys have done?

No, it's not specifically explained that way, but what is both explained and demonstrated is that the bad guys have infiltrated every level of every aspect of Gotham City government. How much sense would it make for them to have kept their hands out of the federal government's mechanisms?

Do I assume that the screenwriters understand that government monetary inflation is responsible for the business cycle? No, I don't assume that. (But if they did understand, they'd be wise to keep the details of their insight out of the script. After all, they're trying to turn a tidy profit, and therefore want the overwhelming population of young Marxoids to buy film tickets and recommend the movie to their young Marxoid friends.)

What I embrace in this detail is the perception that depressions are created! They are not natural, not just an inevitable symptom of market economies. They are artifacts of intervention, and this is what I take to be the point.

The film posits a criminal conspiracy behind a devastating economic depression. That's only half the story — Austrians know that the criminal intervention is a conspiracy of bankers and politicians — but that's already more than I ever expected to get from Hollywood film writers. As Murray Rothbard would say: their suspicions are right, even if they don't have all the details (although when Rothbard said it, he was referring to people's suspicions of bankers — not of criminal secret societies).

Point #2:

"Where does he get those wonderful toys?"

When I was a smart-alec kid, watching James Bond marathons, my smart-alec friends and I would question the logistics of the bad guys' lairs. How did Dr. No arrange for the construction of a secret volcano fortress? Fine, the bad guys had plenty of money from past bad-guy activities, but how did they turn it into so much advanced infrastructure and technology.

What we never questioned was how MI6 managed to do the same. We grew up in an era when most people took for granted that governments had technology more advanced than we had on the private market — and feared that the Soviets' infrastructure and technology were just that much better than MI6 and the CIA's. That was the Cold War mentality, and even those of us who opposed the Cold War often failed to question its most basic assumptions — like the idea that command economies could out-compete free economies.

After the fall of the Soviet Union and the discovery that we'd been lied to for decades by both Left and Right (each for their own reasons) about the strength of the Soviet economy and military, and after finally learning some of the economics behind the reality behind the lies, I now find every adventure movie to come out of the 1960s, 1970s, and even 1980s to be based in the economic misunderstandings of Cold-War thinking. (Even the supposedly somewhat libertarian The Incredibles suffers from this ignorance — though I suppose we can forgive a movie that is consciously playing with an already established superhero tradition. PoMo, donchaknow.)

But how can Batman have such an elaborately constructed Batcave? Well, in this movie, he doesn't. The cave looks like a cave, not like an underground military installation. There are no hydraulic lifts, no supercomputer, absolutely nothing it would take negotiations with teamsters to construct. We even see Bruce Wayne himself rappelling down from the cave ceiling where he's been putting in the lighting. Faithful butler Alfred stands by the small gas-powered generator that provides the electricity.

And how can Batman have such high-tech crime-fighting gadgetry unavailable on the market?

The old answer was the Bruce Wayne is a billionaire — same answer for James Bond's supervillains.

But Batman Begins offers no such pretense. We see Alfred and Bruce Wayne planning how to buy which parts of the costume from which foreign manufacturers, without attracting attention. We learn that the department of the Wayne Corporation originally funded to develop defense technology has been all but shut down, as the new WayneCorp management focuses on government weapons contracts.

Of course Bruce Wayne didn't build the Batmobile! What were you thinking?

Batman's high-tech costume, vehicles, gadgetry — they are products of the market, abandoned with changes in demand. (Though the demand comes from government, not consumers.)

Batman's gadgets are what economists call "sunk costs". They already exist and have already been paid for, whether or not anyone wants or can afford to buy them. They're too expensive to mass-produce, given the lack of demand, but they've already been produced as prototypes.

Batman Begins is not Austrian, not even as much as "The Berlin Batman" (1, 2, 3), but it is by far the most market-oriented superhero movie I'm aware of. Many libertarians celebrated The Incredibles for its Randian individualism and bourgeois family values, and I can join them in much of that, but The Incredibles also showed the private insurance corporation as criminally malicious while giving a complete pass to the secret government agency that enforces the ban on private security (a.k.a. superheroes). I guess libertarians have to take what we can get. But for my money, the more interesting questions are asked by Batman Begins — even if the answers it hints at are sometimes less than satisfactory.

Thanks to this web page and this video (and especially thanks to neural who is my long-suffering and ever-patient Mac guru), there's a new, bigger hard drive in the Mac Mini and my family's blogs and websites are back online on the correct machine, now upgraded to all the most recent software.

Hosting sites on a dying laptop is kind of cool, but it's nice to have everything back where it belongs.

(The local fixit shop told me $60 for a 60GB hard drive and $70 for an hour's labor. I found an 80GB hard drive for $40, and I decided not to charge myself for labor. There are always opportunity costs, but I'm willing to call this a hobby, so it gets filed under consumption rather than capital investment.)

Anyone who tried to read this blog in the past 2 or 3 days either found it down or found it upside down.

Black Bloke left a comment asking, "Why did posts from early 2007 suddenly come up on my RSS Reader?"

Fair question, not least because he'd just left another comment making an interesting point about how "in the context of an empire a nationalist of the ruled people can have a philosophy that is pro-liberty and decentralist, but a nationalist of the ruling people will be entirely the opposite."

He left these comments on my January 2007 post on nationalism: "Le Pen versus Joan of Arc"

Sorry for the absence and subsequent confusion, folks. The hard drive on my web server died, but it died slowly, so I spent a lot of time troubleshooting and attempting to fix via software what ultimately turned out to be a hardware issue. Only when I figured that out did I get a temporary substitute up and running instead, and when I did that, everything came up in "ascending" chronological order: old before new, just the opposite of what everyone is used to. That turned out to be the very weird result of an incompatibility between old blog software and new database — or maybe it was the other way around. Anyway, it was all fixed by updating everything: latest MySQL, latest PHP, and latest WordPress, all running on a defunct powerbook laptop (defunct as a laptop because half the pixels on the monitor are purple! but not defunct, it turns out, as a web server).

We've had terrible, terrible luck with computers in the Marcus household this month. Of the 3 computers in use, all 3 broke in some way: aforementioned purple pixels (corrupt VRAM); aforementioned dead hard drive; and my wife's optical drive stopped working, too. I haven't been elbow deep in technology problems in quite a while. It's fun, if you ignore the time, money, and stress involved.

I posted my seasteading comments to blog.Mises over the weekend. Patri Friedman of the Seasteading Institute left a comment, saying, "Polycentric Order has a nice counter-argument to Rothbard here."

The post at Polycentric Order is written by Kevin K. Biomech, and I think he makes the right points, by which I mean he makes my points — only more thoroughly and less hesitantly.

Last year, I wrote,

… a great piece of silver trivia I'd never heard before:

In 1964, 3 silver dimes could buy you a gallon of gas (about 27¢/gallon); At the current rate of silver, the metal value of 3 silver dimes would be about $3, just enough for a gallon of gas.

I checked the math. Silver was $1.29/ounce in 1964, according to Kitco.com. Today's spot price is $12.93, again, according to Kitco. According to 1960sFlashback.com, gasoline was 30¢/gallon in 1964. And according to MSN, a gallon of gas in Charlottesville today ranges from $2.27 to $2.59/gallon.

So if anything, gasoline has gotten cheaper. At least by the silver standard. By the gold standard ($35.10/ounce in 1964 versus $650/ounce today), we should expect a gallon of gasoline to cost $5.55 in present dollars, so by gold-standard prices, gasoline prices have fallen significantly.…

Today's spot price for silver is $18.20. That would put a gallon of gas at $4.23.

In Charlottesville, gas prices range from $3.71 to $3.92 per gallon.

Just thought I'd offer an update. You can read the rest of last year's post for some background on the nature and history of money, inflation, coinage, etc.

Update: The "Silver Is Money" blog provides this handy chart:

Anthony Gregory just sent me an image that would make an appropriate banner for any libertarian blog:

From today's qotd mailing:

Amerigo Vespucci (1454–1512)

Amerigo Vespucci was born at Fiorenze (Florence, Italy) on this day in 1451. As a youth he read widely, collected and copied maps, and studied briefly under Michelangelo. He became an agent of the Medicis and was dispatched to Spain in 1492. While there he learned of ships and navigation, and made four voyages to the New World, exploring far more of the coast than Columbus, but his first voyage wasn't until 1499. Although he wasn't the first, he was the first to comprehend that this was not the Indies — Columbus died believing he had reached Asia. One German cartographer labeled South America as "America" in Vespucci's honor, and even when he changed his mind the name had stuck…

In honor of the birthday boy, I republish this lowercase liberty classic:

Monday, November 27, 2006 proud to be misnomerian I'm proud to be an American. I won't try to defend that pride: it's based mostly on things I had no responsibility for and no control over, which puts the pride in the same camp as many other collectivist emotions, but I can't pretend I don't feel it just because I think it's irrational. One of the things I'm proud about is that "American" is a contested word — contested by another entire continent (not to mention 2 other nation-states on my own continent). There's something very fitting to me about the label being so over- and underdefined. No one calls me a United Statesian, even though that would be a more accurate description of my official statist citizenship. Another thing I'm proud of about the American label is that it comes from the phenomenal PR genius Amerigo Vespucci — not because he discovered anything, but because his maps and stories promoted curiosity and fantasy about this New World back in the Old World. (And I'm proud to descend from the cultural and economic history of that Old World.) We United Statesians somehow managed to get primary claim to the term "American" even though Amerigo's maps were of SOUTH America. The nerve of us. Meanwhile, the people of the extended gene pool of those the Pilgrims feasted with are called Indians (unless you're politically correct enough to call them "Native Americans," which would make you a sequacious numskull, since the term literally means anyone born in America — wherever that is (as you know, my own favorite term is Amerindividual, but that's not very helpful, since I'm a native-born Amerindividual myself)). They're called Indians because Columbus thought he found them in India. To distinguish them from the real Indians in real India, they came to be called American Indians, which still begs the where-is-America question. Lest we let the Europeans get too smug about this absurd tangle of longstanding misnomers, let me point out that France and England are both named for German tribes (which isn't so much a misnomer as it is a little confusing), Scotland literally means "The Land of the Irish," (and Ireland does not mean the Land of Ire — though it sure sounds like it does), and finally, the name "Spain" comes from the Phoenician word I-Shaphan, meaning "The Island of Hyraxes." Is Spain an island? No. What's a Hyrax, you might ask? Wikipedia tells us that they are any of 4 species of small, thickset, herbivorous mammals living in Africa or the Middle East — but not in Spain. That's like naming my part of the world "the satellite of penguins." I'd love to hear more examples of misnomerian nationalities. posted by bkmarcus on Monday, November 27, 2006 (permalink)

"A map is not the territory it represents, but if correct, it has a similar structure to the territory, which accounts for its usefulness." – Alford Korzybski, 1879–1950

Ian Bernard, host of the internationally syndicated radio show and podcast "Free Talk Live" has produced a free audiobook of Linda and Morris Tannehill's The Market for Liberty (print version available here).

Here is Bernard's introduction to the audiobook:

Government: An Unnecessary Evil

There was once a time when it was widely believed the world was flat and the sun revolved around the earth. Now we know better and most reasonable people have rejected these ideas. Similarly, most people have rejected the once widely accepted idea of slavery, and rightfully so. If you're like most people, your government high school history classes probably taught you that slavery was abolished years ago. Government people wouldn't lie to you, would they?

The book you are about to listen to explodes the myths of government. Its message is simple:

"Government is an unnecessary evil and freedom is the best and most practical way of life."

Spread this idea, and we can change the world. That is why I've taken the time to create this audio book. These days, many people do not have time to read and it would be a shame to allow such a brilliant work to continue to gather dust on the shelves of history.

Morris and Linda Tannehill's iconoclastic The Market for Liberty is one of the most important books of our time. Written originally in 1970, it is even more relevant now as I record it as an audio book at the end of 2007. The Market for Liberty is the antidote to years of government indoctrination, lies, and misinformation.

Unless you already consider yourself a voluntaryist, anarcho-capitalist, or free marketeer, prepare yourself for a major paradigm shift.

Well over a quarter century old, The Market for Liberty stands up well to the test of time. There are only a few places where the book dates itself, like any reference to prices, considering the federal government has substantially inflated the money supply since it was written. There are also a few dated historical references particularly in chapters 15 and 16 as since this book's publishing the Soviet Union has been broken up, the draft has been suspended, Americans are now able to own gold, and the US dollar has no more metal backing.

$18

I hope you enjoy this book as much as I did. Please don't keep it to yourself. Please spread these audio files far and wide.

In the final part of the book, the Tannehills point out that the two variables factoring into how soon a laissez-faire society can be established are, "the rapidity with which the idea of freedom can be spread and how much longer our economy can withstand the effects of governmental meddling." Certainly no one can predict the latter but in this information age, the rapidity factor has been virtually eliminated.

Thanks to the proliferation of the Internet and personal audio players, this brilliant work can finally get the attention it deserves.

Download and listen to this great book now at http://book.freekeene.com/.

Ian Bernard is the host of the internationally syndicated radio show and podcast, Free Talk Live. Send him mail. Comment on the Mises blog.