Another issue that Rothbard didn't foresee is the problem of increasing capital consumption--the promise of old age/disability benefits in the future strongly disincentivizes thrift, while the massive expense associated with current benefits largely comes at the expense whatever pool of private savings does exist.
Such problems weren't so obvious in the 1970s, but empirical data today are absolutely stunning. Since Medicare and Medicaid were enacted in the mid-1960s, the share of national income going towards increasing the stock of capital goods (i.e. net saving) has gone from around 15% down to zero, while the share going towards current transfer payments has gone from around 6% to near 20%, and briefly spiked to 25% during the COVID lockdowns and net government dissavings due to exploding deficits has gone from near zero to around 8% (see https://cdn.mises.org/inline-images/image_271.png for a FRED graph of these data).
Zero means that the stock of capital goods isn't growing, even though the population is still growing. Welfare statism is the actual cause of America's deindustrialization, though neither Republicans nor Democrats dare admit the truth of this.
They most certainly do fit. The drop of net saving to zero percent of national income I referenced in the graph I linked to does in fact mean that the *total* (not just per capita) stock of durable capital goods has stopped growing. That is an empirical fact, not a mere expression of pessimism.
What hasn't stopped growing rapidly is the supply of artificially-manufactured credit (i.e. credit expansion without thrift), which really took off in the early 1970s when the dollar was cut off from gold. The accelerated creation of money and money substitutes out of thin air has greatly raised the net worth of certain segments of society due to money illusion/credit expansion effects and wealth redistribution effects. The prices of durable assets (which are largely debt-financed) have been bid up relative to non-durable goods prices, and the federal government has been able to run gigantic deficits, vastly increasing the quantity of Treasury securities outstanding and financing the greatly increased share of national income devoted to entitlement payments (which I also included in the graph).
Back to immigration, eh? The best way to help the third world's poor is let them immigrate to the first world.
How about reversing that? The best way to help the third world poor is not to let them come to the first world, but to drop first world trade barriers; allow their industrial and farm products to compete on an equal footing. Stop barring their factory output for having "lesser" environmental and labor laws. Their children are working because their society is too poor to support full-time schooling up to age 18; as their society becomes wealthier, they'll be able to afford such luxuries.
And stop nation-to-nation charity, which just fills Swiss bank accounts.
I too believe charity can provide all the help necessary for the truly needy, the low IQ or disabled. But there are no national equivalents. If a nation occupies such crap territory that it can't provide its own food, then they can foot-vote and go elsewhere. That is curable, unlike low IQ or disabilities. Japan is a fine example of a resource-poor country which doesn't let its disabilities keep it poor.
At least pre-Trump, the U.S. was already close to free trade. But the benefits for Third World countries are much smaller than for free migration, because (a) about 80% of the economy is services, which can normally only be traded if you reside in the same country, (b) bad domestic policies in the Third World make export-led growth hard, and (c) Third World countries have poor management, because native talent is scarce and moving to the Third World is unappealing for foreign talent.
I didn't mean just free trade / no tariffs. I meant stop dumping surplus food on them and bankrupting their farmers, stop barring their goods because they don't have the same environmental and labor laws.
Nothing can be done for (a). (b) is entirely their problem. (c) is entirely their problem.
Allowing unbridled immigration might make them better off, but we've seen how so many of them are here for the welfare and bring their own (b) and (c) problems with them. That kind of immigration makes us worse off and ultimately hurts the immigrants too.
All three of your points prove that you can't help people who won't help themselves.
Rothbard didn't (and probably couldn't) say the poor have low IQ; I'm not sure the data was available to him. Regardless, he said the poor *do stupid things*, and in fact that's all that matters.
Another issue that Rothbard didn't foresee is the problem of increasing capital consumption--the promise of old age/disability benefits in the future strongly disincentivizes thrift, while the massive expense associated with current benefits largely comes at the expense whatever pool of private savings does exist.
Such problems weren't so obvious in the 1970s, but empirical data today are absolutely stunning. Since Medicare and Medicaid were enacted in the mid-1960s, the share of national income going towards increasing the stock of capital goods (i.e. net saving) has gone from around 15% down to zero, while the share going towards current transfer payments has gone from around 6% to near 20%, and briefly spiked to 25% during the COVID lockdowns and net government dissavings due to exploding deficits has gone from near zero to around 8% (see https://cdn.mises.org/inline-images/image_271.png for a FRED graph of these data).
Zero means that the stock of capital goods isn't growing, even though the population is still growing. Welfare statism is the actual cause of America's deindustrialization, though neither Republicans nor Democrats dare admit the truth of this.
These pessimistic claims about nation savings don't fit with the fact that average real net worth has skyrocketed since the mid-70s. https://cafehayek.com/2025/10/yet-more-on-american-households-real-net-worth.html
They most certainly do fit. The drop of net saving to zero percent of national income I referenced in the graph I linked to does in fact mean that the *total* (not just per capita) stock of durable capital goods has stopped growing. That is an empirical fact, not a mere expression of pessimism.
What hasn't stopped growing rapidly is the supply of artificially-manufactured credit (i.e. credit expansion without thrift), which really took off in the early 1970s when the dollar was cut off from gold. The accelerated creation of money and money substitutes out of thin air has greatly raised the net worth of certain segments of society due to money illusion/credit expansion effects and wealth redistribution effects. The prices of durable assets (which are largely debt-financed) have been bid up relative to non-durable goods prices, and the federal government has been able to run gigantic deficits, vastly increasing the quantity of Treasury securities outstanding and financing the greatly increased share of national income devoted to entitlement payments (which I also included in the graph).
Back to immigration, eh? The best way to help the third world's poor is let them immigrate to the first world.
How about reversing that? The best way to help the third world poor is not to let them come to the first world, but to drop first world trade barriers; allow their industrial and farm products to compete on an equal footing. Stop barring their factory output for having "lesser" environmental and labor laws. Their children are working because their society is too poor to support full-time schooling up to age 18; as their society becomes wealthier, they'll be able to afford such luxuries.
And stop nation-to-nation charity, which just fills Swiss bank accounts.
I too believe charity can provide all the help necessary for the truly needy, the low IQ or disabled. But there are no national equivalents. If a nation occupies such crap territory that it can't provide its own food, then they can foot-vote and go elsewhere. That is curable, unlike low IQ or disabilities. Japan is a fine example of a resource-poor country which doesn't let its disabilities keep it poor.
At least pre-Trump, the U.S. was already close to free trade. But the benefits for Third World countries are much smaller than for free migration, because (a) about 80% of the economy is services, which can normally only be traded if you reside in the same country, (b) bad domestic policies in the Third World make export-led growth hard, and (c) Third World countries have poor management, because native talent is scarce and moving to the Third World is unappealing for foreign talent.
I didn't mean just free trade / no tariffs. I meant stop dumping surplus food on them and bankrupting their farmers, stop barring their goods because they don't have the same environmental and labor laws.
Nothing can be done for (a). (b) is entirely their problem. (c) is entirely their problem.
Allowing unbridled immigration might make them better off, but we've seen how so many of them are here for the welfare and bring their own (b) and (c) problems with them. That kind of immigration makes us worse off and ultimately hurts the immigrants too.
All three of your points prove that you can't help people who won't help themselves.
Rothbard didn't (and probably couldn't) say the poor have low IQ; I'm not sure the data was available to him. Regardless, he said the poor *do stupid things*, and in fact that's all that matters.
Arthur Jensen had already documented this fact in great detail by this point.