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Editor’s Note: The North American Free Trade Agreement (NAFTA) was approved by Congress 20 years ago this month. Rothbard’s essay on NAFTA, reprinted below, is available in the collection Making Economic Sense. For some people, it seems, all you have to do to convince them of the free enterprise nature of something is to label it “market,” and so we have the spawning of such grotesque creatures as “market socialists” or “market liberals.” The word “freedom,” of course, is also a grabber, and so another way to gain adherents in an age that exalts rhetoric over substance is simply...

Commenting on this post, Rick Monihan sensibly asks: If I am interested in buying GMO-free food (I’m not – I’ve eaten plenty but have friends who care deeply about it), shouldn’t there be a requirement telling people whether a food is or isn’t GMO-free? No. I believe that there is no justification for such a requirement. An important reason why I oppose such a requirement is that there are no non-arbitrary criteria to guide even the best-intentioned government in determining which sorts of information-disclosure to mandate and which not to mandate. The best practical rule is to allow competition among...

Two years ago, a few days after the victory of Cristina Fernandez de Kirchner in Argentina’s presidential election, the government decided to impose a new system of foreign exchange controls that the press called “the cepo.” Initially started as an effort to crack down on tax evasion, it became clear later that the new measures were part of another exchange-market intervention by the central bank. In a system of flexible exchange rates, the central bank limits its activities to controlling the money supply. Therefore, the price of foreign currency acts only as an indicator of the correctness or incorrectness of...

After studying and teaching Keynesian economics for 30 years, I conclude that the “sophisticated” Keynes­ians really do believe in magic and fairy dust. Lots of fairy dust. It may seem odd that this Aus­trian economist refers to fairies, but I got the term from Paul Krugman. According to Krugman, too many people place false hopes in what he calls the “Confidence Fairy,” a creature created as a retort to economist Robert Higgs’s concept of “regime uncertainty.” Higgs coined that expression in a 1997 paper on the Great Depression in which he claimed that uncertainty caused by the policies of Franklin...

Still unnoticed by a large part of the population is that we have been living through a period of relative impoverishment. Money has been squandered in welfare spending, bailing out banks or even — as in Europe — of fellow governments. But many people still do not feel the pain. However, malinvestments have destroyed an immense amount of real wealth. Government spending for welfare programs and military ventures has caused increasing public debts and deficits in the Western world. These debts will never be paid back in real terms. The welfare-warfare state is the biggest malinvestment today. It does not...

Ivory is valuable and this leads to poaching (which is another way of saying ‘seeking more supplies of rare ivory’).So…The US government had decided to reduce the global supply of ivory by destroying six tonnes of the stuff. “These stockpiles of ivory fuel the demand,” said Dan Ashe, director of the US Fish and Wildlife Service, “We need to crush the stores of ivory worldwide.” And when supply is reduced, what happens to prices and therefore the motive to secure new supplies? Surely if they wanted to reduce the incentive to poach ivory, rather than crushing their stockpile, they should...

On 15 November 1923 decisive steps were taken to end the nightmare of hyperinflation in the Weimar Republic: The Reichsbank, the German central bank, stopped monetizing government debt, and a new means of exchange, the Rentenmark, was issued next to the Papermark (in German: Papiermark). These measures succeeded in halting hyperinflation, but the purchasing power of the Papermark was completely ruined. To understand how and why this could happen, one has to take a look at the time shortly before the outbreak of World War I. Since 1871, the mark had been the official money in the Deutsches Reich. With...

Conventional wisdom holds that America’s transition from a manufacturing to a service-based economy is nearly complete. Mining and making stuff are out; surgery and software development are in. The U.S. has entered a post-industrial era. Not so fast, says Vaclav Smil. In his new book, Made in the U.S.A.: The Rise and Retreat of American Manufacturing, Smil argues persuasively that manufacturing matters as much in the current century as it did in the last—and that a revitalized manufacturing sector is vital for restoring growth, jobs, and American social dynamism. Technology creates efficiency, Smil writes. But, as he shows, efficiency confuses...

This was on the White House web site at 5:30 EST today, October 29, 2013. Look at the second to last paragraph. You can click to enlarge.  In case you can't read it, here is just that paragraph full size I am as cynical as one possibly can be about politics and this even amazes me.

A Rochester-based company that makes firearms, ammunition and tactical equipment is relocating its headquarters in Dorchester County, South Carolina officials announced Monday. The state Department of Commerce said that the $2.7 million investment by American Tactical Imports, currently located on Airpark Drive, would mean more than 100 new jobs for the Summerville area.

America’s long-standing protectionist farm policies protect inefficient domestic sugar beet growers from more efficient foreign competition, which have driven up average wholesale sugar prices in the US to twice the world price: 29 cents per pound on average in the US vs. 14.6 cents in the world market since 1982 (see chart above, data here). And as a result, US manufacturers of products with high sugar content have increasingly moved their production overseas to avoid America’s artificially high sugar prices and take advantage of the lower world price for their main input.Predictably, our protectionist trade and agricultural policies reap generous...

China is now overtly pushing for the US dollar to be replaced as the world’s reserve currency.Xinhua, China’s official press agency on Sunday ran an op-ed article which kicked off as follows: As U.S. politicians of both political parties are still shuffling back and forth between the White House and the Capitol Hill without striking a viable deal to bring normality to the body politic they brag about, it is perhaps a good time for the befuddled world to start considering building a de-Americanized world. China does have a broad strategy to prepare for this event. She is encouraging the...

Good news from Mark Skousen: Important Announcement and some good news: It looks like government may be starting to adopt my new macro model, based on my concept of Gross Domestic Expenditures (GDE), rather than the old GDP, which is what gives the false impression that consumption, rather than production and investing, is what makes the difference in the economy. Skousen has long argued that standards measures in the income and product account provide a very misleading picture of actual economic activity – a picture not consistent with a structure of production understanding of the economy.In Skousen words: Here’s why...

<p>University of Michigan Survey Research Center surveys consumers monthly. The Index of Consumer Expectations is one of two indexes compiled from consumer answers to these questions. One of the routine questions posed relates to expected inflation for next year and for 5 to 10 years from now. Judging by the average response to this question recent consumers clearly do not believe that the Fed either is aiming at or is capable of hitting its announced inflation target of 2 percent. For one year out, the index of inflation expectations has averaged 3.2 percent over the past year and 3.1 over the past 5 years. Consumer expectations of long-term inflation are roughly the same, averaging 2.9 percent over the past year and 3.0 percent over the past 5 years.</p>

There is a joke that the difference between American arrogance and British arrogance is the British think they run the world, whereas the Americans think they are the world.Well just last week I started doing some business with a European bank… a quite mainstream one I might add… and discovered something remarkable. I had to sign a series of statements that I did not do business in the USA, had no assets in the USA and was not a US citizen or resident. Only then would they do business with me. Indeed I had to sign more papers regarding this...

Fed Chairman Ben Bernanke’s term as chairman of the Fed expires at the end of the year and President Obama has quite ungraciously indicated his intent to replace him, remarking that he had, “already stayed a lot longer than he wanted or he was supposed to.” Despite what Mort Zukerman has argued in his column titled “Mistreating Ben Bernanke, the Man Who Saved the Economy,” policy under Bernanke has not been good, to say the least. Policy before the crisis expanded created credit, kept rates too low for too long, generating a second, but this time catastrophic, boom-bust cycle. Since...

When Professor Friedman Opened Pandora’s Box: Open Market Operations At the end of the day, Friedman jettisoned the gold standard for a remarkable statist reason. Just as Keynes had been, he was afflicted with the economist’s ambition to prescribe the route to higher national income and prosperity and the intervention tools and recipes that would deliver it. The only difference was that Keynes was originally and primarily a fiscalist, whereas Friedman had seized upon open market operations by the central bank as the route to optimum aggregate demand and national income. There were massive and multiple ironies in that...

Who Says the Market Cannot Supply Its Own Money? By Joseph Salerno Tuesday, June 25th, 2013 I just arrived back from lecturing at the week-long Free State Project’s Tenth Annual Porcupine Freedom Festival, a huge gathering of libertarians of all stripes from all over the U.S. in the beautiful White Mountains of New Hampshire. As you can see by browsing the schedule, the festival was chock full of educational and social events as well as commercial activities of the “grey market” (and perhaps  darker) variety. Many of the vendors accepted an array of payments media. I was particularly struck by...

End of QE? – I don’t buy it By Detlev Schlichter, on 22 June 13 A new meme is spreading in financial markets: the Fed is about to turn off the monetary spigot. US Printmaster General Ben Bernanke announced that he might start reducing the monthly debt monetization program, called ‘quantitative easing’ (QE), as early as the autumn of 2013, and maybe stop it entirely by the middle of next year. He reassured markets that the Fed would keep the key policy rate (the Fed Funds rate) at near zero all the way into 2015. Still, the end of QE...