Dr. Robert W. Malone, The Austrians Saw It Coming, Malone News (May 26, 2026). H/t Steve Berger
The Austrians Saw It Coming
What a century-old school of economics predicted about the pandemic state — and why its vocabulary still fits the record better than anything in mainstream discourse

What follows is not a full treatment of Austrian economics, which fills the many volumes its founders wrote. It is a guided application of a few Austrian ideas to the patterns the pandemic exposed. The goal is to give a coherent vocabulary for what the record establishes, and to show that the patterns are not quirks of the COVID era but expressions of forces the Austrians named decades earlier. The essay builds toward the framework that gives the rest its force: Rothbard’s account of state coercion as the foundation the whole apparatus rests on, and the reason these patterns could be enforced on entire populations.
The Cantillon Effect, Applied
In the early eighteenth century, the Irish-French economist Richard Cantillon observed that newly created money does not enter the economy uniformly. It enters at specific points and flows outward in predictable patterns, benefiting those nearest the point of injection first and most, and those farthest from it last and least. The phenomenon now bears his name. Mises developed it in his analysis of credit expansion. Hayek built it into his business cycle theory. Rothbard pressed it as the central indictment of central banking.
The Cantillon effect is the theoretical name for what the monetary record of 2020 shows. The Federal Reserve’s emergency facilities that year, which expanded the central bank’s balance sheet by approximately $4.5 trillion, did not distribute the new money uniformly across the American population. The money entered through specific channels — the corporate bond markets, the Treasury securities markets, and the financial sector — and flowed outward to the holders of assets nearest those channels.
The result was the largest upward transfer of wealth in modern American history, not as an accident but as the predictable way newly created money moves through an economy. The Austrian framework saw this coming three centuries before it happened.
Discover more from The Property and Freedom Society
Subscribe to get the latest posts sent to your email.


















