Archive for March, 2010

What Part of Austrian Economic Theory Don’t You Agree With?

March 25, 2010

Rep. Ron Paul questions Sec. of the Treasury Tim Geithner on economic policy:

The Latest Austrian School Revival

March 23, 2010

By Joseph T. Salerno and Jeffrey A. Tucker prepared for the Austrian Scholars Conference:

When the first Austrian Scholars Conference was held in 1992, we were at the very beginning of the Great Bubble Economy, brought to you by Alan Greenspan and Ben Bernanke and their associates at the Fed. This shiny, bubbly “new economy” has finally gone the way of all bubble economies in history, deflating into stale dishwater and swirling slowly but surely down the recessionary drain. But it has left in its wake something truly amazing, something that never could have been foreseen: a second Austrian revival.

The first Austrian revival blossomed in 1974 as a result of the conjunction of two unique events. In June, a group of 50 Austrian economists and graduate students met in the tiny hamlet of South Royalton, Vermont. (Some participants still swear that the place was haunted, but that is a story for another day.) In October, Friedrich A. Hayek, a protégé of Ludwig von Mises and an eminent economist in his own right, was awarded the Nobel Prize in economics for his pathbreaking theoretical work on money, capital, and business cycles. But despite these events, Austrian economic theory did not leave much of an impression on mainstream economics. Nor did it make inroads into the economic journalism and financial commentary of the day.

Hayek and Murray N. Rothbard, Mises’s preeminent American follower, were relegated to the “soft” areas of economics, like methodology, political economy, and social philosophy. True, some mainstream economists did admit that the Austrians had insightful criticisms of positivist methodology and that they made a provocative, albeit extreme, case against socialism and for the free-market economy. But Austrian economic theory itself was either completely ignored or dismissed out of hand as backward and outmoded. Thus many young Austrians soon abandoned research in technical economic theory altogether and drifted off into methodology and comparative economic systems, where they could at least get a hearing for their views. Unfortunately, the lofty theorists of the mainstream considered these areas the intellectual backwaters of economics, whose inhabitants were mere essayists.

All that has now changed with the sudden implosion of the false prosperity that was built upon more than a decade of low interest rates and fiat-money inflation. Without a landmark conference or the fanfare of another Nobel Prize winner, a second Austrian revival has grown spontaneously out of the failure of mainstream macroeconomists to adequately explain the inflation and bursting of the high-tech and real-estate bubbles. The subsequent collapse and the Fed bailout and virtual nationalization of the entire financial sector also caught the macroeconomists completely unawares, overturning their theory of central banking and monetary-stabilization policy that had been so carefully developed in countless journal articles since the 1980s.

The Austrian School on the Rise

March 23, 2010

Libertarian Forum, October 1974 by Richard Ebeling.

During the week of June 15–22, 1974, the quaint and rustic Vermont village of South Royalton came alive in a way that it probably hasn’t since the Revolutionary War. Under the auspices of the Institute for Humane Studies, 50 professors and students from the United States, Australia, and England gathered for a conference on Austrian economics.

Slightly over 100 years ago, the Austrian School of Economics was founded by Carl Menger. One of the pathfinders to break asunder the myth of the labor theory of value, which had dominated economics from the time of Adam Smith, Menger developed the subjective theory of value. The value of a good, Menger explained, was not determined by the input of labor into the product, but rather the labor was given value by the intensity felt for the product by the individual who would finally consume it. And since individuals valued things differently and by different scales, there was no way to objectively determine value other than relating it back to the individual valuer.

The New York Times on States’ Rights

March 18, 2010

Everything we’ve tried to keep the federal government confined to rational limits has been a failure, an utter, unrelenting failure — so why not try something else?” said Thomas E. Woods Jr., a senior fellow at the Ludwig von Mises Institute, a nonprofit group in Auburn, Ala., that researches what it calls “the scholarship of liberty.”

Mr. Woods, who has a Ph.D. in history, and has written widely on states’ rights and nullification — the argument that says states can sometimes trump or disregard federal law — said he was not sure where the dots between states’ rights and politics connected. But he and others say that whatever it is, something politically powerful is brewing under the statehouse domes.

The Making of the Keynes-Hayek Rap: Economic Theory Meets Popular Culture with John Papola

March 13, 2010

A special guest appearance from Roger Garrison.

Video from the Austrian Scholars Conference:

Seeing Through the Looking-Glass

March 12, 2010

After the news of biometric worker ID’s, indefinite detention, a national DNA database, random chemical swabs of passengers, I am somewhat comforted by the comments in this news/propaganda.

Even the illustrious and perdurable Etienne de la Boetie makes an appearance on 03/11/2010 at 15:41 PM.

A Progressive Student Takes an Economics Class

March 10, 2010

A Biometric ID Card for all American Workers?

March 9, 2010

The ID card plan is one of several steps advocates of an immigration overhaul are taking to address concerns that have defeated similar bills in the past.

The uphill effort to pass a bill is being led by Sens. Chuck Schumer (D., N.Y.) and Lindsey Graham (R., S.C.), who plan to meet with President Barack Obama as soon as this week to update him on their work.

…The biggest objections to the biometric cards may come from privacy advocates, who fear they would become de facto national ID cards that enable the government to track citizens.

“It is fundamentally a massive invasion of people’s privacy,” said Chris Calabrese, legislative counsel for the American Civil Liberties Union. “We’re not only talking about fingerprinting every American, treating ordinary Americans like criminals in order to work. We’re also talking about a card that would quickly spread from work to voting to travel to pretty much every aspect of American life that requires identification.”

…A person familiar with the legislative planning said the biometric data would likely be either fingerprints or a scan of the veins in the top of the hand. It would be required of all workers, including teenagers, but would be phased in, with current workers needing to obtain the card only when they next changed jobs, the person said.

The card requirement also would be phased in among employers, beginning with industries that typically rely on illegal-immigrant labor.

A Meeting of the Minds

March 4, 2010

A curious coordination and quite unusual meeting of the Treasury Secretary, the Vice President as well as the President:

On Thursday morning, Treasury Secretary Geithner will attend the President’s Economic Daily Briefing at the White House.

In the afternoon, Secretary Geithner will meet with the President and the Vice President in the Oval Office.

Later, Secretary Geithner will meet with several members of the Congressional Oversight Panel at Treasury.

What do they have on their minds?

Not a Duck Hunting Trip in 1910 or 2010

March 1, 2010

The Mises Institute presents some of the finest minds in economics at Jekyll Island:

Robert Murphy “Only the Austrians Can Explain Depressions”

Christopher Westley “Why the Fed Got Birthed

Peter G. Klein “Did Keynesian Economics Win the Battle of Ideas?”

Douglas E. French “Failure and Prosperity

Llewellyn H. Rockwell, Jr. “Parallel Lives: Liberty or Power?

Joseph Salerno “The Macroeconomics of the Fed: Mainstream and Austrian

Mark Thornton “What Were They Saying in July 2007?

George Selgin “The Fed’s Dismal Record

Gary North “Heckle and Jekyll: How Murray Rothbard Got the Fed’s Story Right

Thomas Woods “The Source and Workings of the Latest Crisis

Ron Paul “My Battle Against the Fed