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Jorg Guido Hulsmann



Articles by Jorg Guido Hulsmann

A Protest from France

26 days ago

The lockdowns of the past month have not been conducive to the common good. While they have saved the lives of many people, they have also endangered—and are still endangering—the lives and livelihoods of many others. They have created a new and dangerous political precedent. This Audio Mises Wire is generously sponsored by Christopher Condon. …

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A Protest from France

28 days ago

After WWI, the distinguished British economist Edwin Cannan was asked, somewhat reproachfully, what he did during the terrible war years. He replied: “I protested.” The present article is a similar protest against the current lockdown policies put into place in most countries of the Western world to confront the current coronavirus pandemic. Here in France, where I live …

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What the COVID-19 Crisis Means for Europe and the Eurozone

28 days ago

[An interview with Dr. Hulsmann, originally published in German by Die Freie Welt.]
As a result of the corona crisis, economic life was severely restricted in many countries. How long can the economy take this?
As long as stocks last. In other words: as long as you can allow yourself to live off previous savings. There is no difference between a family and the overall economy in this regard.
The German federal government has passed a bailout fund of around €750 billion to stabilise the economy and save companies from bankruptcy. Can such measures mitigate the economic downturn?
No. Such measures have two very different effects, which only give the brief appearance of a cushion. On the one hand, income and wealth will be massively

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What the COVID-19 Crisis Means for Europe and the Eurozone

April 27, 2020

[An interview with Dr. Hulsmann, originally published in German by Die Freie Welt.] As a result of the corona crisis, economic life was severely restricted in many countries. How long can the economy take this? As long as stocks last. In other words: as long as you can allow yourself to live off previous savings. …

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A Protest From France

April 23, 2020

After WWI, the distinguished British economist, Edwin Cannan was asked, somewhat reproachfully, what he did during the terrible war years. He replied: “I protested.” The present article is a similar protest against the current lockdown policies put into place, in most countries of the western world, to confront the current coronavirus pandemic.
Here in France, where I live and work, President Macron had announced on Thursday, March 12th that all schools and universities would be shut down on the following Monday. On that Monday, then, he appeared on TV again and announced that the entire population would be confined, starting the very next day. The only exceptions would be “necessary” activities, especially medical services,

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Nicholas Oresme and the First Monetary Treatise

August 17, 2019

The practical offshoot of the Austrian theory of money is that the production of money should best be left to the free market. Government interventionism does not improve monetary exchanges; it merely enriches a select few at the expense of all other money users. And on the aesthetic side, the disaster is of course complete: …

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Bastiat’s Legacy in Economics

March 20, 2019

Claude Frédéric Bastiat (1801 — 1850) is one of the greatest economists ever. His role as organizer of the French, and inspiration of the nineteenth- century continental European free-trade movement is not controversial, and all historians recognize him as a great pamphleteer — some even calling him “the most brilliant economic journalist who ever lived.” …

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Ludwig von Mises and the Nature of Money

February 14, 2019

As a true disciple of Carl Menger, Ludwig von Mises began the presentation of his theory of money with an analysis of the nature of money itself. He then went on to deal with the determination of money’s purchasing power and with the impact of what he called Umlaufsmittel (fiduciary media) on the monetary system. …

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Why Austrian Economics Is More Reality-Based than the Neoclassical Approach

February 3, 2019

[Originally published as “Economic Science and Neoclassicism” in the Review of Austrian Economics: Winter 1999] For more than forty years, economists have routinely rejected the postulate that economic theory should be realistic. Ever since Milton Friedman (1953) sketchily outlined a positivistic methodology for economics, most students of our science have come to endorse Friedman’s view …

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Against the Neoliberals

January 9, 2019

The Mont Pèlerin Society had begun as an “ecumenical” undertaking, bringing together purebred liberals of the classical tradition and neoliberals, who endorsed interventionist schemes to one degree or another. From the beginning, Mises had been skeptical about the ecumenical concept, but for the first five or six years his apprehensions seemed unwarranted, even though the …

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The Morality of Fiat Money

January 4, 2019

[Excerpted from chapter 13 of Guido Hülsmann’s The Ethics of Money Production (2008).] 8. Some Spiritual Casualties of Fiat Inflation Fiat inflation constantly reduces the purchasing power of money. To some extent, it is possible for people to protect their savings against this trend, but this requires thorough financial knowledge, the time to constantly supervise …

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The Evolution of Mises’ Monetary Thought

November 20, 2018

In this 32-minute talk, Jörg Guido Hülsmann examines and summarizes Mises’s insights and innovations in understanding money, its origins, and its purposes. Presented at the 2011 Supporters Summit in Vienna, Austria, on 20 September 2011. Includes an introduction by Douglas E. French.

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Why Ludwig von Mises Advocated Nationalism

November 15, 2018

In his criticism of imperialist policies in the service of socialism, labor-unionism, and the socialist war economy Ludwig von Mises could not restate many conventional arguments. He faced an unprecedented task in confronting the claim that imperialism can enhance the welfare of a nation. His pioneering analysis brilliantly confirmed Carl Menger’s insight that methodological individualism is able to analyze even large collective phenomena.
The main thesis in the first chapter of Nation, State, and Economy is that governments are incapable of improving the condition of the nations they rule. The reason is that the origin, emergence, growth, flowering, and decline of nations are subject to natural laws. The operation of these laws

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Why Ludwig von Mises Advocated for Liberal Nationalism Following WWI

November 14, 2018

In his criticism of imperialist policies in the service of socialism, labor-unionism, and the socialist war economy Ludwig von Mises could restate many conventional arguments. He faced an unprecedented task in confronting the claim that imperialism can enhance the welfare of a nation. His pioneering analysis brilliantly confirmed Carl Menger’s insight that methodological individualism is …

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What Causes Moral Hazard?

September 7, 2018

The Free Market 26, no. 4 (April 2008)   A central occupation of economists is to analyze the nature, causes, and effects of incentives—the circumstances that are held to motivate human action. Economists agree on the positive role that “good” incentives play to increase production. They also agree that “perverse” incentives have an opposite impact. …

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Nazis Were Not Marxists

August 31, 2018

The abject practical failure of the Marxist revolutionaries in the post-WWI period had done much harm to their image as the vanguard of social progress.
The explanation for this failure in the writings of Mises, Max Weber, and Boris Brutzkus had led many economists to revise their views about the suitable scope of government within society. But others remained unrepentant advocates of the total state. They merely rejected the specifically egalitarian agenda of the socialists.
The uncontested leader of this group was Werner Sombart, the greatest star among the interwar economists in Germany. Sombart had started his career popularizing Marxism in academic circles with his 1896 book Sozialismus und soziale Bewegung im 19.

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Nazis Were Not Marxists, but They Were Socialists

August 29, 2018

The abject practical failure of the Marxist revolutionaries in the post-WWI period had done much harm to their image as the vanguard of social progress. The explanation for this failure in the writings of Mises, Max Weber, and Boris Brutzkus had led many economists to revise their views about the suitable scope of government within society. …

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The Fallacies of German Socialism in War and Peace

August 22, 2018

Ludwig von Mises’s Nation, State, and Economy is a rationalist-utilitarian analysis of the three manifestations of German imperialism: past German imperialism for the sake of national greatness,economic central planning in World War I (war socialism), which accelerated the introduction of full-blown socialism, andthe blossoming imperialism of the social democrats under the banner of syndicalism and …

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Charity Needs Markets

August 7, 2018

Originally published May 2016. Reprinted from Mises.org
Although it is sometimes imagined that a world based on gift-giving rather than market exchange would be a world without scarcity or want, we are still left with the problem of manufacturing and producing complex goods that require markets to allocate resources.
Moreover, if we remember that the act of gift-giving requires both the giver and the recipient to agree to the exchange, we quickly find that the situation is more complex than we initially thought.
Both Donor and Receiver Must Agree
A gift is an unconditional transfer of an economic good from one person (the donor) to another person (the beneficiary). In the case of a service, the donor agrees to provide the service to the beneficiary, and the latter accepts to receive it as

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Charity Needs Markets

August 2, 2018

[Originally published May 2016]
Although it is sometimes imagined that a world based on gift-giving rather than market exchange would be a world without scarcity or want, we are still left with the problem of manufacturing and producing complex goods that require markets to allocate resources.
Moreover, if we remember that the act of gift-giving requires both the giver and the recipient to agree to the exchange, we quickly find that the situation is more complex than we initially thought.
Both Donor and Receiver Must Agree
A gift is an unconditional transfer of an economic good from one person (the donor) to another person (the beneficiary). In the case of a service, the donor agrees to provide the service to the beneficiary, and

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Who is Ludwig von Mises?

July 26, 2018

In this episode, Guido Hülsmann, author of Mises’s biography The Last Knight of Liberalism, highlights the life and work of Ludwig von Mises (1881–1973), arguably the greatest economist of all time. Very early in his career, Mises was influenced by Carl Menger and Eugen von Böhm-Bawerk to turn away from the Historicist approach and to …

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Charity Needs Markets

July 26, 2018

[Originally published May 2016] Although it is sometimes imagined that a world based on gift-giving rather than market exchange would be a world without scarcity or want, we are still left with the problem of manufacturing and producing complex goods that require markets to allocate resources. Moreover, if we remember that the act of gift-giving …

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Carl Menger vs. Gustav Schmoller and the Socialists of the Chair

March 14, 2018

Excerpted from Mises: The Last Knight of Liberalism . Reprinted from Mises.org
Before Carl Menger, various German economists had criticized the labor theory of value specifically and rejected the doctrine of inherent value in general. Menger’s view that value was subjective (personal, individual) in nature was not exceptional among German authors of the first half of the nineteenth century. Indeed, some of them even knew the principle of marginal subjective value.1 But their insights were merely disconnected observations. None of Menger’s German predecessors recognized the central importance of marginal value and none had produced a unified subjectivist theory.
In the 1860s, two unconnected layers of analysis subsisted in the German textbooks. Their price theories typically featured

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The Valentine Story of Ludwig and Margit von Mises

February 14, 2018

This article is excerpted from chapters 12 and 14 of Mises: The Last Knight of Liberalism. Reprinted from Mises.org
In 1925, Ludwig von Mises, entering his mid-forties, finally met the woman who would become his wife.
Margit Serény had been one of six guests at a dinner party held by Fritz Kaufmann, a young lawyer and member of Mises’s private seminar. It is almost a miracle that Mises won the heart of the lady sitting next to him, for he spent most of the meal discussing economics. On the other hand, his preoccupation gave her the opportunity to observe him. This is how she perceived him:
What impressed me were his beautiful, clear blue eyes, always concentrated on the person to whom he talked, never shifting away. His dark hair, already a little grayish at the sides, was parted, not one

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Psychology vs. Praxeology

January 24, 2018

7 hours agoJörg Guido Hülsmann(Excerpt from chapter 17 of Mises: The Last Knight of Liberalism, pp. 765–67.)Mises’s exposition of economic science differed decisively from all modern authors in that it drew a sharp line between praxeology and psychology. This has remained a defining feature of the works of his disciples.Mises did not contest that the psychological background of a person, his worldview, knowledge, conscious motivations, subconscious urges, and so on have an immediate impact on his behavior. Neither did he ignore the important psychological problems that his friend F.A. Hayek began to stress in those years, in particular, that of knowledge acquisition. Mises’s point was that there were also laws of human behavior that exist in complete independence of

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Equilibrium, Profit and Loss, and Entrepreneurship

January 22, 2018

5 hours agoJörg Guido Hülsmann(Excerpt from chapter 17 of Mises: The Last Knight of Liberalism, pp. 770–73.)It was through the writings of Carl Menger and Eugen von Böhm-Bawerk that Mises had come to understand the market economy as a rational social order in which all factors of production are geared toward the satisfaction of consumer wants. Not only the allocation of the production factors, but also the incomes of the owners of these factors ultimately depended exclusively on their relative contribution to the satisfaction of human wants. All values, all prices, as Frank Fetter had put it, depend on a daily referendum in the market democracy.24But in none of his predecessors did Mises find a satisfactory account of the process through which the structure of

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How Ralph Raico Met Ludwig von Mises

September 29, 2017

Originally published in Mises: The Last Knight of Liberalism. Reprinted from Mises.org
Murray Rothbard was the first in a long line of whiz kids who found a new intellectual home in Human Action and in Mises’s seminars.
Over the next fifteen years it happened with great regularity that highly gifted young men such as George Resch and Paul Cantor suddenly sought admission to the NYU seminar. Some of them even sought admission to Mises’s residence. One day Mises was ready to go out for dinner when the doorbell rang. Two youngsters were standing at the door and offered a subscription to The Freeman magazine. Mises declined the offer, saying he was already on their mailing list. He did not know that this was his first contact with two of his most ardent followers: Ralph Raico and

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