During this depression, the Austrian Theory of the Business Cycle has become the main intellectual competition for the Keynesian “theory” of Reckless Spending Always. In a recent editorial, the Wall Street Journal opined that China is fitting the ATBC pattern of easy credit leading to malinvestments (although the editorial does not use that term, using the misleading “overinvestments” term instead), which then lead to a crisis.

Even though the terminology is not correct, the description of what is happening in China is. Furthermore, as the editorial states, one can hope that the Crony Capitalism model that rewards people politically-connected to the Communist Party at the expense of the laws of economics will be discredited. One can hope, anyway.