Free Republic

Investors need to always remember to separate their economic and political ideals from the act of making money in the market. We're reminded of this after seeing Robert Ebeling at Mises deliver the same old radical free markets argument about how we should end the fed: 1) Fed funds rate manipulation leads to a fake price of money in the market, which 2) leads to unsustainable asset bubbles. Thus 3) we should end the fed and let the market show us the real price money. Robert Ebeling from Mises: What is being ignored is the more fundamental question of whether...

There are three things everybody knows when we talk trash: 1.We know we're running out of landfill space; 2.we know we're saving resources and protecting the environment by recycling; and 3.we know no one would recycle if they weren't forced to. Let's look at these three things we think we know. Are they real or are they rubbish? 1. Are We Running Out of Landfill Space? Two events created the perfect garbage storm in the late 1980s. One barge and one bureaucrat created this overhyped myth. The garbage barge was the Mobro 4000. The bureaucrat was J. Winston Porter. The...

Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today. Mises's ideas on business cycles were spelled out in his 1912 tome "Theorie des Geldes und der Umlaufsmittel" ("The Theory of Money and Credit"). Not surprisingly few people noticed, as it was published only in German and wasn't exactly a beach read at that. Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money...

Despite a potentially crippling patent injunction against selling Word that Microsoft is battling on appeal, Microsoft, via a senior lawyer, is nevertheless calling for a global patent system "to make it easier and faster for corporations to enforce their intellectual property rights around the world". Yep--despite the big hit they just took due to i4i's patent, Microsoft is concerned about the "unmanageable backlogs and interminable pendency periods" of national patent systems, which have 3.5 million patents pending. You hear that right--Microsoft things more is "needed to be done to allow corporations to protect their intellectual property." What, do they want...

The Cause of the Disaster: Are governments doing enough to fight this financial and economic crisis? Is it a good thing that central banks have cut interest rates essentially to zero and have increased the base money supply dramatically to support the financial sector? Will depression be prevented if governments across the world run up huge deficits in an attempt to strengthen demand, production, and employment? To answer these questions truthfully, we need to diagnose the causes of the debacle and then formulate the proper way out of it. The diagnosis can be stated in just one sentence: Governments have...

Paul Krugman is an eminent economist, but he here reveals a woefully inadequate understanding of Austrian business-cycle theory. The rudiments of the theory are easy; one might have thought that even a Keynesian could grasp them. According to Mises and Hayek, an expansion in bank credit pushes the money rate of interest below the "natural" rate. People prefer goods in the present to the same goods in the future, a matter obvious to anyone except for a few philosophers. The rate at which people favor the present, in the Austrian view, chiefly determines the rate of interest.

PDF downloads of complete works by Ludwig von Mises, including "Human Action" and "Socialism." A few of the works are in e-book format and can be read online. Interestingly, there is also an MP3 file of Mises speaking at Princeton University in 1958 (the lecture can also be read online at the same site). The audio is not pristine and Mises has a heavy accent, making the file a bit challenging to listen to. The lecture is entitled "Liberty and Property." Download the MP3 at: http://www.mises.org/libprop.asp

One of the cherished dogmas implied in contemporary fashionable doctrines is the belief that tendencies of social evolution, as manifested in the recent past, will prevail in the future too. Study of the past, it is assumed, discloses the shape of things to come. Any attempt to reverse or even to stop a trend is doomed to failure. Man must submit to the irresistible power of historical destiny. To this dogma is added the Hegelian idea of progressive improvement in human conditions. Every later stage of history, Hegel taught, is of necessity a higher and more perfect state than the...

In 1944, Ludwig von Mises published one of his least-known masterworks: Omnipotent Government: The Rise of the Total State and Total War. Drawing on his prewar experience in Vienna, watching the rise of the national socialists in Germany (the Nazis), who would eventually take over his own homeland, he set out to draw parallels between the Russian and German experience with socialism. It was common in those days, as it is in ours, to identify the Communists as leftist and the Nazis as rightists, as if they stood on opposite ends of the ideological spectrum. But Mises knew differently. They...

Last weekend, Harvard University sponsored a conference called (I am not making this up) "The Free Market Mindset: History, Psychology, and Consequences." Its purpose was to try to figure out why, since everyone knows the current crisis amounts to a failure of the market economy, the stupid rubes continue to believe in it. The promotional literature for the conference opened with That Quotation from Alan Greenspan — the one in which he suggested that there was, after all, a "flaw" in the free market he hadn't noticed before. Well, that does it, then! If our Soviet commissar in charge of...

It's raining, pouring, economic fallacies by the hour, followed by a flood of horrible policy that is driving us ever further into economic depression. The regime in charge has really gone nuts, revealing itself as both deeply ignorant and horribly evil. We find ourselves facing the horror of what has always been the Achilles heel of the left wing: its abysmal ignorance of economic science. The ideological tendency has gone from Keynesianism to outright socialism in a matter of a few weeks. And the trajectory seems to be accelerated mainly by the logic of the interventionist cycle: bad policy leads...

"Do You Austrians Have a Better Idea?" Daily Article by Robert P. Murphy | Posted on 2/2/2009 12:00:00 AM A lot of people get annoyed with Austrian economists because they tend to be so dogmatic (we prefer the term consistent) and because they cloak their strictly economic claims with self-righteousness (we prefer the term morality). After a good Austrian bashing of the latest call to steal taxpayer money and waste it on something that will make a given problem worse, the stumped critics will often shout, "Oh yeah? Well do you guys have a better idea?"Now, in truth, someone...

During the collapse of the Soviet Empire, Mikhail Gorbachev promoted the so-called "Third Way" as an alternative to free markets. This new way of governing would be neither capitalist nor communist, but something in between. In a similar vein, President Clinton said in his 1998 State of the Union address, "We have moved past the sterile debate between those who say government is the enemy and those who say government is the answer. My fellow Americans, we have found a Third Way." This Third Way calls for business and government to join hands as "partners." As Clinton told the Economic...

Ask yourself this question: was the housing price bubble, which has burst, caused by (a) a Fed policy of too much liquidity, which caused artificially low interest rates, which in turn caused a great deal of malinvestment, or (b) a Fed policy of too little liquidity which caused high interest rates and a credit-starved economy? If you chose answer b, congratulations, you may have a future as a celebrated author, historian, and Wall Street Journal commentator. Answer b is a theme of a truly ridiculous article by John Steele Gordon in the October 10 issue of the Wall Street Journal...

Madame Speaker, many Americans are hoping the new administration will solve the economic problems we face.  That’s not likely to happen, because the economic advisors to the new President have no more understanding of how to get us out of this mess than previous administrations and Congresses understood how the crisis was brought about in the first place. Except for a rare few, Members of Congress are unaware of Austrian Free Market economics.  For the last 80 years, the legislative, judiciary and executive branches of our government have been totally influenced by Keynesian economics.  If they had had any...

He Made Free Markets Invaluable BY PAUL WHITFIELD INVESTOR'S BUSINESS DAILY Posted 4/30/2008 When the Nazis stormed the apartment in Vienna, he was gone. The man they were looking for was Ludwig von Mises, an economist whose writings enraged them. Fortunately for von Mises, he was out of Austria in March 1938. The Nazis had to settle for grabbing 38 cases of his books and papers.

Diagnosing the Causes of the Crisis ...It is against this background that one may wish to review the US central bank's series of rate cuts, the latest being a big 75-basis-points rate slash on January 22, 2008, which brought the official Fed Funds Target Rate to 3.5%.[1] While the Fed's moves were mostly hailed in public as appropriate measures to help the economy avoid recession, Austrian economists hold a completely different view. According to the Austrian Monetary Theory of the Trade Cycle it is the government-run money-supply monopoly that has not only caused the crisis; the theory also diagnoses that...

Happy Labor Day: We're All Workers! by Edward Hudgins The Atlas Society & Objectivist Center ehudgins@objectivistcenter.org When Congress declared Labor Day a national holiday in 1894 it marked not only a celebration by workers but a division of Americans into groups often seen as opposed to one another. The day grew out of a desire to get governments to force employers to offer certain terms of employment to workers. The first Labor Day parade took place in 1882 in New York and was organized by Peter McGuire who helped found the Federation of Organized Trades and Labor Unions. The "labor"...

On election day, 1976, the Libertarian party presidential ticket of Roger L. MacBride for President and David P. Bergland for Vice President amassed 174,000 votes in thirty-two states throughout the country. The sober Congressional Quarterly was moved to classify the fledgling Libertarian party as the third major political party in America. The remarkable growth rate of this new party may be seen in the fact that it only began in 1971 with a handful of members gathered in a Colorado living room. The following year it fielded a presidential ticket which managed to get on the ballot in two states....

The great economic debate of the twentieth century was between collectivists and free-marketers. In one sense, the free-marketers won: When the Berlin Wall fell in 1989, it was widely acknowledged that Soviet socialism had been a catastrophic, not to say murderous, failure. But in another sense, the debate continues. Democratic capitalism still has not vanquished the idea of collectivism. Far from it. At the beginning of the last century, free markets seemed to be on the ascendancy everywhere. But two events gave collectivism its lease on life. The first was World War I. In addition to the slaughter—and to breeding...

The Pope and the Cause of Freedom by Jeffrey Tucker[Posted October 25, 2001]Ten years ago, Pope John Paul II released Centesimus Annus, an encyclical, at once subtle and sweeping, that addressed the future of the post-communist countries of Europe and the general subjects of freedom, society, and faith. The document represented the fullest embrace that the Catholic Church has given in the modern period to classical liberal ideas, particularly as they apply in the economic sphere. In CA, the Pope argues that socialism failed, not just because it was bad economics, but mainly because it rejected the "truth about ...

The Politically Incorrect Guide to American History. By Thomas E. Woods, Jr. Regnery Publishing, 2004. Xv + 270 pgs. Thomas Woods' superb new book has already achieved fame as the first Austrian-inspired book to be on the New York Times bestseller list in many years. It also delivers much more than it promises. Woods offers his book as a guide to "those who find the standard narrative or the typical textbook unpersuasive or ideologically biased" (p. xiv). This suggests that Woods has principally students in mind as his audience; but many others will benefit from reading the book. Woods displays...

This is Mises's 1927 review of J. M. Keynes, The End of Laissez-Faire, Ideas on the Unification of Private and Social Economy (Munich and Leipzig: Duncker and Humblot, 1926), 40 pages, translated for the first time here (by Joseph Stromberg). It originally appeared as Mises, "Das Ende des Laissez-Faire, Ideen zur Verbindung von Privat- und Gemeinwirtschaft". Zeitschrift für die gesamte Staatswissenschaft. 82(1927) 190-91. A review of a lecture given by John M. Keynes in Berlin. This text reproduces an address given by the English economist John Maynard Keynes on June 23, 1926, at the University of Berlin. It makes a...

A Dichotomy in Two Colors by Christopher Westley [Posted November 19, 2004] Call it the mystery of the red and the blue. After the presidential election, many have noticed the irony of how some of the more conservative, culturally red states seem to receive more in federal spending than they pay in federal taxes. Meanwhile, some of the more liberal, culturally blue states seem to receive less in federal spending than they pay in federal taxes. You’d think the supposedly anti-Washington reds should be blues and the supposedly pro-Washington blues should be reds. After all, the red states seem to...

A recent article of mine on a public sector scandal, this one in Milwaukee, brought several e-mails from friends and strangers telling me that it was read and discussed on WTMJ-AM in that city by its weekday morning host, Charles Sykes. WTMJ is Milwaukee’s highest rated talk station, and while I appreciated the plug, I was not sure if that is the sort of station that friends of liberty need to be associated with. That’s because that station, like so many across the U.S., have adopted the pro-war, pro-Bush nationalist format that dominates AM radio today, robbing it of much...

Maybe Bush is Hitler -------------------------------------------------------------------------------- Posted: January 12, 2004 1:00 a.m. Eastern © 2004 WorldNetDaily.com In 1934, four years before Germany annexed his native Austria in the Anschluss, the economist Ludwig von Mises left Vienna for the safety of Geneva. The great enemy of socialism – his damning critique, "Socialism," was published in 1922 – had seen clearly how the winds were blowing with the rise of the National Socialists. In 1940, he emigrated to the United States, where he warned of the rise of quasi-socialist statism in his 1944 book, "Bureaucracy." Unlike Mises, most people are taken by complete...

The Nation That Lost Its Jobs, But Got Them Back By Gene Callahan [Posted November 20, 2003] Once upon a time, there were two hippies, Jerry and Sarah. Tired of the rat race of modern life, they found a deserted valley in a remote region of the world. They moved there, with their four children. They declared that the area was now the independent kingdom of Lost Valley and seceded from the surrounding nation. Amazingly, it let them go. The family lived a harsh life at the margin of subsistence. Everything that they needed, besides the few tools and amenities...

A growing recognition of the superiority of markets over planning has created an unviable hybrid: the planned market, one created not by property owners but rather by the state and for the state. Planned markets bear a close enough resemblance to the real thing to fool even astute observers who are otherwise friends of genuine market forces. And yet the designed "market" is responsible for a whole range of recent economic failures, such as electricity shortages and blackouts, and will cause more if the idea is taken to areas like predicting terrorism. Let us begin by examining real markets. Their...

<p>The last Labor Day that looked worse in terms of joblessness than 2003's was in '93. We won't know the unemployment rate for August until this Friday, but in July it ran 6.2%, and based on respondents' answers in August on whether jobs were hard to get or plentiful (see chart below), the likely range is 6.2% to 6.4%.</p>

<p> Denmark: A Case Study in Social Democracy By Per Henrik Hansen [Posted July 22, 2003]In a previous article—"Denmark: Potemkin Village"—I documented the downside to Denmark. Despite its reputation as a showcase of political utopia, 40 percent of its adult population live on government transfer income, full-time, all-year. A little more than a third of these people are pensioners and the rest are working age. About one third of the people who actually hold a job work for the government or government-owned companies. The effective tax level is around 70 percent, not the 50 percent that is usually reported (the lower figure...

The Myth of "Exporting Jobs" by William L. Anderson [Posted June 27, 2003] As U.S. trade deficits continue to pile up, and as the economy continues in its slow-growth patterns, a number of economic commentators have been accusing American corporations of causing the trouble by "exporting jobs." Now, given the bounty of economic myths that economists and media pundits seem to foist upon us, one should not be surprised at anything we read in the academic literature or popular press, but the newest set of fallacies that we are hearing is especially insidious. In his path-breaking Principles of Economics, Carl...

The Myth of "Exporting Jobs" by William L. Anderson [Posted June 27, 2003] As U.S. trade deficits continue to pile up, and as the economy continues in its slow-growth patterns, a number of economic commentators have been accusing American corporations of causing the trouble by "exporting jobs." Now, given the bounty of economic myths that economists and media pundits seem to foist upon us, one should not be surprised at anything we read in the academic literature or popular press, but the newest set of fallacies that we are hearing is especially insidious. In his path-breaking Principles of Economics, Carl...

The hard-line (and simultaneously mainstream) left-liberal hash, that has been recycled for four decades, in regard to American interventionism, economic interests, unilateralism, and policy toward totalitarian regimes which threaten national security is simplistic, wracked with loopholes even a five-year-old in his right mind can spot, and wrought from a sentimental/ ad miseracordiam/ ad hominem rather than a rational/analytical basis. As it takes no profundity of thought to discern its wanton and brazen fallacies, it need not even be examined by serious examiners of the moral and economic justifications behind the Iraq War. The aim of this essay shall be to...

Is Capitalism compatible with Democracy? In order to address the issue of capitalism’s compatibility with democracy from the viewpoint of the classical liberal and Marxist perspectives the democratic ideals of both positions must be defined. The classical liberal tradition argues that capitalism is a system of ownership that is an extension of natural rights. Within this tradition, the democratic form of government is seen as the means to defend the natural rights of the individual. Socialists assert that capitalism is inimical to democracy. This assertion is based upon the Theory of Surplus value. After outlining both positions I will explain...