From the “Preface to the English Edition” of “The Theory of Money and Credit” by Ludwig von Mises: “All proposals that aim to do away with the consequences of perverse economic and financial policy, merely by reforming the monetary and banking system, are fundamentally misconceived. Money is nothing but a medium of exchange and it completely fulfills its function when the exchange of goods and services is carried on more easily with its help than would be possible by means of barter. Attempts to carry out economic reforms from the monetary side can never amount to anything but an artificial stimulation of economic activity by an expansion of the circulation, and this, as must constantly be emphasized, must necessarily lead to crisis and depression. Recurring economic crises are nothing but the consequence of attempts, despite all the teachings of experience and all the warnings of the economists, to stimulate economic activity by means of additional credit.

Mathematicians of the day.

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Acceleration of the Jacobi iterative method by factors exceeding 100 using scheduled relaxation by Xiang Yang and Rajat Mittal

“Acceleration of the Jacobi iterative method by factors exceeding 100 using scheduled relaxation” is the title of an interesting paper that describes a substantial improvement of the classical Jacobi method for solving linear systems of equations.


We present a methodology that accelerates the classical Jacobi iterative method by factors exceeding 100 when applied to the finite-difference approximation of elliptic equations on large grids. The method is based on a schedule of over- and under-relaxations that preserves the essential simplicity of the Jacobi method. Mathematical conditions that maximize the convergence rate are derived and optimal schemes are identified. The convergence rate predicted from the analysis is validated via numerical experiments. The substantial acceleration of the Jacobi method enabled by the current method has the potential to significantly accelerate large-scale simulations in computational mechanics, as well as other arenas where elliptic equations are prominent.

A preprint of the paper can be found here (pdf file).

It will be interesting to note how long it takes for this method to be incorporated into numerical methods libraries.

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Ancel Keys Had A Tiny One by Tom Naughton

In Good Calories, Bad Calories, Gary Taubes covered aspects of the outrageous scientific fraud perpetrated by Ancel Keys to promote his anti-fat crusade. Tom Naughton dug up an old paper that illustrates in even more detail the enormity of the Keys’ fraud.

Yup, and I can prove it:  Ancel Keys had a tiny dataset — but that didn’t stop him from leaping to big conclusions.  Nina Teicholz wrote about Keys’ problematic data in the terrific book The Big Fat Surprise, and I just came across an old paper that backs her up.

The paper appeared in a 1989 edition of The American Journal of Clinical Nutrition and was (of course) based on Keys’ famous Seven Countries study.  You’ll recall that Keys supposedly recorded what people in seven countries ate and then followed their health outcomes for several years.

Here’s a description of the study’s design from the paper:

During the base-line survey 13,000 men, aged 40- 59 y, were medically examined. Information on diet was collected in random samples from each cohort by use of the record method.  Detailed data on food consumption patterns have been published only for 9 of the 16 cohorts. Therefore, the food intake data were coded once again into a standardized form by one person. Then the foods were summarized in a limited number of food groups. The average daily consumption per person of these food groups was calculated for each cohort.

So Keys had food records, although that coding and summarizing part sounds a little fishy.  Then he followed the health of 13,000 men so he could find associations between diet and heart disease.  So we can assume he had dietary records for all 13,000 of them, right?

Uh … no.  That wouldn’t be the case.

The poster-boys for his hypothesis about dietary fat and heart disease were the men from the Greek island of Crete.  They supposedly ate the diet Keys recommended:  low-fat, olive oil instead of saturated animal fats and all that, you see.  Keys tracked more than 300 middle-aged men from Crete as part of his study population, and lo and behold, few of them suffered heart attacks.  Hypothesis supported, case closed.

So guess how many of those 300-plus men were actually surveyed about their eating habits?  Go on, guess.  I’ll wait …

The rest of the article can be read here.

Note that although Keys was guilty of scientific fraud, it was only when the federal government got involved in diet and nutrition that adverse consequences became problematic. This shoddy story of interventionism is told in detail by Taubes.

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Added Online Library of Liberty to Links

I added Online Library of Liberty to links under Free Books.

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A Brief History of Progressivism by Andrew Syrios

A Brief History of Progressivism” is a succinct account of the ugly history of progressivism.

Progressives have a way with words that is truly impressive. Perhaps it started when they stole the word liberal from libertarians and since has snowballed out of control. From “social justice” to “pro-choice” (except with light bulbs) to various “isms” to describe their opponents, progressives are experts at such linguistic feats. And while conservatives and even libertarians unfortunately use many trite phrases in place of an argument as well, progressives are the all-time champions. The best proof of this is the term progressive and their excessive use of it when referring to everything they support as being progressive and everything they oppose as more or less reactionary. This simple dichotomy is a pleasant fiction for those who like their politics boiled down to the most unsophisticated, partisan blather. However, the idea of progress coming on some gradient between reactionary conservative or libertarian and progressive liberal is blatantly fallacious.

Abortion-advocate and progressive hero Margaret Sanger even gave a speech at one of the KKK’s rallies.

Margaret Sanger was also an avowed supporter of eugenics, as were many other progressives of the time (something modern day progressives seem less enthusiastic about). As Steven Pinker observed,

Contrary to the popular belief spread by the radical scientists, eugenics for much of the twentieth century was a favorite cause of the left, not the right. It was championed by many progressives, liberals, and socialists, including Theodore Roosevelt, H.G. Wells, Emma Goldman, George Bernard Shaw, Harold Laski, John Maynard Keynes, Sidney and Beatrice Webb, Margaret Sanger and the Marxist biologists J.B.S. Haldane and Hermann Muller. It’s not hard to see why the sides lined up this way. Conservative Catholics and Bible Belt Protestants hated eugenics because it was an attempt by intellectual and scientific elites to play God. Progressives loved eugenics because it was on the side of reform rather than the status quo, activism rather than laissez-faire, and social responsibility rather than selfishness.[3]

It’s almost absurd that conservatives and libertarians get blamed for eugenics, even if it’s typically in a roundabout way through the muddled and all but apocryphal term of “Social Darwinism.” After all, why would conservatives, who are often skeptical of evolution, support a “science” based on evolution? And why would libertarians support government trying to regulate people biologically when they oppose the government trying to regulate lemonade stands. Given that, it is unsurprising that the Catholic conservative G.K. Chesterton wrote Eugenics and Other Evils. And the great libertarian economist Ludwig von Mises complained about socialist meddling in that “… [a man] becomes a pawn in the hands of the supreme social engineer. Even his freedom to rear progeny will be taken away by eugenics.”[4]

The entire article can be read here.

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A Weekly Dose of Hazlitt: The stock-Market Boom: Whodunit?

The stock-Market Boom: Whodunit?” is the title of Henry Hazlitt’s Newsweek column from March 28, 1955. We see that inflation fueled stock market booms are not a recent phenomena.

The present Senate investigation of the stock market
reminds me of one of those whodunits in which it is
discovered at the end that the crime was after all committed
not by the suspects who were grilled but by the
detective in charge of the investigation.

The recent extraordinary rise in the stock market
is of course in large part due to the present earnings
of corporations, and to confidence in the outlook for
business. This confidence is in part the result of the less
hostile attitude toward business taken by the present
Administration as compared with its immediate predecessors.
But a good deal of the stock-market rise of
the last eighteen months has been due to the existence
of money-and-credit inflation, as well as to the belief
that this inflation will continue.

The government increased the money-and-credit
supply in 1954 by about $10 billion through cheapmoney
policies. The long-run overall figures speak
for themselves. At the end of 1939, the country’s total
money supply (as measured by total bank deposits and
currency outside of banks) was $64.7 billion. At the
end of 1953 it was $205.7 billion; at the end of 1954,
$214.5 billion.

Spokesmen for the Eisenhower Administration
have argued that there was no inflation in 1954 because
wholesale commodity prices stood at an index number
in January 1955 of only 110.2, compared with 110.9 in
January 1954, while the cost of living in December 1954
stood at only 114.3 compared with 114.9 in December
1953. There are even those who contend, in the face of
an increase of more than $24 billion in the money-andcredit
supply between the end of 1951 and the end of
last year, that there was a “deflation” in that three-year
period, because wholesale commodity prices dropped
from an average index of 114.8 in 1951 to 110.3 this
February. Continue reading

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Edward Snowden Interview

From “Edward Snowden interview – the edited transcript“.

Why he did not go straight to Ecuador rather than Hong Kong

So this is the thing that nobody realises. They think there was some masterplan to get out safely and avoid all consequences. That’s what Hong Kong was all about. But it wasn’t. The purpose of my mission was to get the information to journalists. Once I had, that I was done.

That’s why I was so peaceful afterwards, because it didn’t matter what happened … Going to Ecuador and getting asylum there, that would have been great … And that would have just been a bonus. The fact that I’ve ended up so secure is entirely by accident. And as you said, it probably shouldn’t have happened. If we have anybody to thank, it’s the state department. The whole key is, the state department’s the one who put me in Russia.’

The relationship between the NSA and telecom and internet companies

Unusually hidden even from people who worked for these agencies are the details of the financial arrangements between [the] government and the telecommunication service providers. And we have to ask ourselves, why is that? Why are their details of how they’re being paid to collaborate with [the] government protected at a much greater level than for example the names of human agents operating undercover, embedded with terrorist groups?

So the way Prism [the program that deals with the relationship between the NSA and the internet companies] works is agencies are provided with direct access to the contents of the server at these private companies. That doesn’t mean the companies can, or the intelligence agencies can, let themselves in. What it means is Facebook is allowing the government to get copies of your Facebook messages, your Skype conversations, your Gmail mailboxes, things like that.

It distinguishes it from where the government is creating its own access – so called upstream operations – where they sort of tap the backbones where these communications cross and they try to take them in transit. Instead they go to the company and they say: “You’re going to give us this. You’re going to give us that. You’re going to give us that.” And the company gives them all of this information in a cooperative relationship.

If Facebook is going to hand over all of your messages, all of your wall posts, all of your private photos, all of your private details from their server the government has no need to intercept all of the communications that constitute those private records.


I think it’s unfortunate that we see in a number of states – and this is particularly well represented in western Europe – [that] the priorities of governments seem to be very distinct from the desires of the public. I think it’s unfortunate when, for example, in Germany evidence has revealed that the NSA is spying on millions of German citizens … and that’s not a scandal. But when Angela Merkel’s cell phone is listened [in] on and she herself is made a victim, suddenly it changes relations.

We shouldn’t elevate senior officials. We shouldn’t elevate leaders above the average citizen because, really, who is it that they’re working for? You know the public interest is the national interest. You know the priorities of the NSA should not take precedence over the needs of the German population.

The Boston marathon bombing

Despite the fact that the communications of everybody in America were currently being intercepted, they didn’t catch the Boston bombers, despite the fact that the Russian intelligence service specifically warned the FBI that these individuals were known to be associated with Islamic terror groups.

We didn’t actually fully investigate them, we just made a cursory visit and went back to all of our keyboards looking at everybody’s emails and text messages.

The question of the Boston bombings is not what kind of mass surveillance do we put the whole of society under to prevent every possible perceivable crime that might happen in future, the question is why didn’t we follow up when … we were specifically warned about these individuals, and they then later turned out to be a real threat. What we have learned in case studies of terrorism over the last decade … is that almost every terrorist act that is uncovered, almost everyone who’s convicted, successfully prosecuted, put in jail, every plot that is disrupted, is not a product of mass surveillance, it’s not a product of the kind of indiscriminate surveillance we see today. They’re all products of targeted surveillance, traditional surveillance, the kind of boots on the ground, investigate and learn, done by real investigators interviewing real people and following specifically justified leads that occurred as a process of investigation. No single terrorist act, including the Boston bombs, was ever caught as a result of mass surveillance in the United States. And those numbers are similar around the world as I understand it.

It seems reasonable to expect when we have clear evidence that these programs are ineffective, we should take resources out of ineffective mass surveillance programs and re-allocate them toward the sort of traditional targeted surveillance that’s been shown to be effective for hundreds of years.

The entire transcript can be read here.

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Political Economy Quote of the Week for 20140721

“Since the State necessarily lives by the compulsory confiscation of private capital, and since its expansion necessarily involves ever-greater incursions on private individuals and private enterprise…the state is profoundly and inherently anti-capitalist.” – Murray Rothbard

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