Mises and Rothbard warned that credit expansion unbacked by real savings plants the seeds of its own collapse. In their Austrian view, sound money rooted in market discipline is the only safeguard against the cartelization of banking and politics. But the modern order did the opposite: it merged the two (state politics and private banking) into a single machine. The result is an economy that behaves as though empathy were a design flaw.....
Take the mortgage bubble. Banks created trillions in loans to borrowers who could never repay them, sliced those loans into derivatives, sold them to pension funds, and then insured the packages with more derivatives. When the system imploded, the same institutions were rescued with public money while millions lost homes and savings. Not one major executive went to prison.
A genuinely psychopathic person shows three traits: lack of remorse, refusal to accept responsibility, and the ability to rationalize harm. The 2008 rescue ticked all three boxes—but at the institutional, not individual, level.....
.....it’s about recognizing that the very architecture of money has been built to reward the traits of a machine: speed, aggression, and detachment. Unless we redesign that architecture to reward stewardship instead, we will keep mistaking the cunning of greed for intelligence or wisdom.
This is what it means to return from illusion to reality — to build an economy that serves life rather than consumes it.
Sound money, honest credit, and transparent risk are not nostalgic slogans; they are the minimum conditions for sanity in an economy. Until we recover them, we will remain ruled not by men of reason, but by a system that acts—coldly, efficiently, and predictably—like a psychopath.
