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Mises Institute

The Mises Institute, founded in 1982, teaches the scholarship of Austrian economics, freedom, and peace. The liberal intellectual tradition of Ludwig von Mises (1881-1973) and Murray N. Rothbard (1926-1995) guides us. Accordingly, we seek a profound and radical shift in the intellectual climate: away from statism and toward a private property order.

Articles by Mises Institute

Ludwig von Mises, Sociology, and Metatheory

1 day ago

Quarterly Journal of Austrian Economics 22, no. 2 (Summe 2019) full issue.
ABSTRACT: This paper discusses the epistemological status and potential scope of the discipline of sociology based on the writings of Ludwig von Mises. More specifically, it presents his epistemological distinction between theory and history, and argues that sociology can be integrated in this framework as a historical discipline. As such, it must be a praxeologically guided study of general or specific social phenomena that already occurred or are likely to occur. Additionally, this paper addresses the general insights provided by Mises to questions of interest to the field of sociology—the division of labor and the evolution of society, the social effects of socialism and capitalism, class analysis, and the role

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The Case for Free-Market Liberalism in Africa

1 day ago

Perceived as a by-product imported from the West, liberalism — often known in the English-speaking world as “classical” liberalism — has been rejected as an ideological model to define the political culture and systems of the African continent. It was primarily rejected because liberalism, like its related economic system capitalism, is observed as the system of the oppressor, the European colonizer who seeks to maintain his domination upon the African people by sustaining his order. Second, it was rejected because most African political leaders argued that the emphasis that liberalism puts on the individual, is not compatible with African political culture due to the fact that the collective is valued over the individual. As a result, socio-politically, the majority of African governments

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Por qué un «criptoyuan» no amenaza al dólar

1 day ago

By: Daniel Lacalle
Una criptodivisa de propiedad estatal es, en sí misma, una contradicción en los términos. La razón principal por la que los ciudadanos quieren utilizar criptodivisas u oro es precisamente evitar el monopolio del dinero por parte del gobierno o del banco central.

Para que una moneda sea una reserva mundial de valor, un medio de cambio generalizado y una unidad de medida, hay muchas cosas que deben suceder, pero el primer pilar de una moneda de reserva mundial es la estabilidad y la transparencia.

China no puede perturbar el sistema monetario mundial y destronar al dólar estadounidense cuando tiene uno de los sistemas de control de capital más estrictos del mundo, una falta de separación de poderes y una débil transparencia en su propio sistema financiero.

El dólar

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Why Friedman Is Wrong on the Business Cycle

1 day ago

According to an article in Bloomberg on November 5, 2019, Milton Friedman’s business cycle theory seems to be vindicated.
According to Milton Friedman, strong recoveries are just natural after particularly deep recessions. Like a guitar string, the harder the string is plucked down, the faster it should come back up.
Bigger recessions should lead to faster growth rates during the recoveries, to get the economy back to the pre-recession level of activity. In Friedman’s model, the size of the recession predicts the growth rate in the recovery.1
The Bloomberg article refers to a study by Tara Sinclair that employs advance mathematical techniques that supposedly confirmed Friedman’s hypothesis that in the US bigger recessions are followed by faster recoveries — but not the other way around.

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After Years of Decline, Competition in Banking Finally Grows Again

1 day ago

US Banks are seeing a larger number of new entrants into the industry. Chime, a mobile-only bank, has opened two million online checking accounts and is adding more customers each month than Wells Fargo or Citibank. Firms from outside traditional consumer banking including Square, Goldman Sachs (Marcus), and Robinhood are entering the industry as well. The consulting firm CG42 said in a recent report on the vulnerability of retail banking that it expects the ten largest banks to lose $344 billion in deposits over the next year.
Applications for and approvals of FDIC deposit insurance are at a recent high, with fifteen approvals in 2018 and eight so far this year, shown in the chart below. Despite banking’s 20 year decline in the number of banks, the floodgates are seeming to be open

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A Deeply Flawed History of the Austrian School

2 days ago

The Marginal Revolutionaries: How Austrian Economics Fought the War of Ideasby Janek WassermanYale University Press, 2019xiii+ 354 pages
Janek Wasserman, who teaches history at the University of Alabama, has written a useful but deeply flawed book. Useful, because Wasserman has brought to light substantial archival material on the background of the Austrian school, but deeply flawed on two counts. First, Wasserman is beyond his depth when he writes about theoretical issues. In particular, he does not understand Mises, but his lack of knowledge is apparent elsewhere as well. Second, he obtrudes his political opinions on readers in a way that must generate skepticism about his presentation of his archival research.
Wasserman distinguishes a number of stages in the history of the Austrian

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Why a “Crypto-Yuan” Won’t Threaten the Dollar

2 days ago

By: Daniel Lacalle
A state-owned cryptocurrency is, in itself, a contradiction in terms. The main reason why citizens want to use cryptocurrencies or gold is precisely to avoid the government or central bank monopoly of money.

For a currency to be a world reserve of value, widespread means of exchange and unit of measure, there are many things that need to happen, but the first pillar of a world reserve currency is stability and transparency.

China cannot disrupt the global monetary system and dethrone the US dollar when it has one of the world’s tightest capital control systems, a lack of separation of powers and weak transparency in its own financial system.

The U.S. dollar is the most traded currency in the world, and growing according to the Bank of International Settlement. The

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The FDA Wants to Control Your Stem Cells

2 days ago

There’s an escalating government assault on our stem cells and we should all be very concerned about it.
Most people probably associate stem cells with religious debates over embryos and fetuses. However, we all have stem cells inside of us that many contend can be extracted, processed and re-administered as as medical service. These are called autologous or “personal” stem cells. Current Food and Drug Administration (FDA) guidance, however, essentially classifies our stem cells as “drugs,” thus preventing us from freely using them as we wish.
The FDA magically turned our cells into “drugs” in 2006 by changing one word in 21 CFR 1271, the regulatory framework that governs stem cells. It was an act that occurred without public commentary and conferred an authority upon the FDA that

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19th-Century Americans Didn’t “Support the Troops”

3 days ago

Were an American from the mid-nineteenth century to time-travel to modern America, he’d be truly amazed to find that Americans are often expected to thank soldiers “for your service” and to act as if the military was the doing the taxpayer a favor.
The lionizing of government employees in uniform has become standard fare in the post-9-11 world, with special discounts for members of the military, early boarding on airplanes, and free meals at restaurants.
It’s quite a contrast from the attitude of Americans during the first century of the republic, however.
Of this, the examples are numerous.
For example, in his memoirs, Ulysses S. Grant recounts how he trotted out into the streets of Cincinnati after first receiving his uniform as an officer. According to Grant:

I donned [the uniform] and

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My First Time to East Berlin

3 days ago

This is the 30th anniversary of the fall of the Berlin Wall — one of the most glorious moments in the modern history of freedom. I first passed through that wall while hitchhiking around Europe in the summer of 1977.
After camping in West German woods within mortar range of the Iron Curtain, I headed out at sunrise to catch a ride into East Germany. A quick hitch with an affable French businessman put me on the Autobahn and into West Berlin before noon. Rambling around the city, I met a young Dutch lesbian who was also surveying the scene. Hendrika slightly resembled a wheel of Gouda cheese but she had bright cheeks and mischievous eyes. She and I were both planning to visit East Berlin, and we figured there would be safety in numbers in enemy territory.
We caught up the next morning and

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Los economistas siguen enganchados al mito de que ahorrar es malo para la economía

3 days ago

By: Ryan McMaken
Según los nuevos datos de la Oficina de Análisis Económico de los EE.UU., la tasa de ahorro personal en los EE.UU. en septiembre de 2019 era del 8,3 por ciento. Eso lo sitúa cerca de su nivel más alto de los últimos seis años, y es comparable a la tasa de ahorro que observamos a principios de los años noventa.

De hecho, la tasa de ahorro personal ha aumentado constantemente durante los últimos dieciocho meses. Y eso es algo inusual. Durante al menos los últimos cincuenta años, la tasa de ahorro ha tendido a aumentar cuando a la economía le va mal y a disminuir cuando le va bien.

Lo vimos en lo último de los setenta y principios de los ochenta durante la era de la estanflación y la recesión de 1982. Ciertamente lo vimos en la estela de la crisis financiera de 2008,

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Argentina Votes for More Inflation, Spending, and Economic Instability

3 days ago

Alberto Fernández and Cristina Fernández de Kirchner’s victory on October 27, 2019, has raised many questions about Argentina’s economic future.
But the reversion to the Kirchener regime isn’t as big a change as many presume. Outgoing president Mauricio Macri did not offer much for the country, economically speaking. A typical milquetoast “neoliberal” government, Macri’s administration kept policies such as price controls and big spending in place. There was no real desire to break the government’s chokehold over Argentina’s fragile economy, which many expected Macri to do when he was elected in 2015.
To be fair, the government preceding Macri, which Fernández de Kirchner headed from 2007 to 2015, put Macri in an uncomfortable position. A consummate leftist populist, Fernández de

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The Austrian Theory of Efficiency and the Role of Government

5 days ago

Introduction
Orthodox public goods theory and its corollary — the standard economic justification for government intervention — have both been based on particular definitions of efficiency and optimality. According to the orthodox approach, if a market is not operating “efficiently,” some sort of government intervention to correct the inefficiency may be warranted. But this view of efficiency is derived directly from a neoclassical view of market structures and in particular from the notion of perfect competition.
The point to be emphasized in this paper is that if one starts with a different view of efficiency and market optimality, an entirely different set of conclusions relative to government intervention can be reached. In particular we will examine the approach to economics taken by

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The Cost of Government Is Rising Much Faster than Housing and Healthcare

5 days ago

This year, as it has for several consecutive years now, the Tax Foundation reported that “Americans will collectively spend more on taxes in 2019 than they will on food, clothing, and housing combined.”
That the combined federal, state and local tax bill for the American populace is larger than the amount we spend on essential costs of living like food, clothing and housing certainly is an attention-grabbing snapshot of the federal government leviathan.
But what about the trendline? In other words, is the cost of funding government growing at a faster clip than other costs of living?
Indeed, for decades now, politicians have promised to make items like housing and healthcare more “affordable,” but such efforts seem to have made those problems worse.
What about making government more

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Why Government Should not Fight Deflation

5 days ago

For most experts, deflation is considered bad news since it generates expectations of a decline in prices. As a result, they believe, consumers are likely to postpone their buying of goods at present since they expect to buy these goods at lower prices in the future.
This weakens the overall flow of spending and in turn weakens the economy. Hence, such commentators hold that policies that counter deflation will also counter the slump.
Will Reversing Deflation Prevent a Slump?
If deflation leads to an economic slump, then policies that reverse deflation should be good for the economy. Or so it is held.
Reversing deflation will simply involve introducing policies that support general increases in the prices of goods, i.e., price inflation. With this way of thinking inflation could actually

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Economists Are Still Hooked on the Myth that Saving Is Bad for the Economy

6 days ago

By: Ryan McMaken
According to new data from the US Bureau of Economic Analysis, the personal saving rate in the US in September 2019 was 8.3 percent. That puts it near a six-year high, and comparable to the saving rate we saw during the early 1990s.

Indeed, the personal saving rate has been heading upward steadily for the past eighteen months. And that’s a bit of an unusual thing. For at least the past fifty years, the saving rate has tended to increase when the economy is doing poorly, and decrease when the economy is doing well.

We saw this in the last 1970 and earl eighties during the age of stagflation and the 1982 recession. We certainly saw it in the wake of the 2008 financial crisis, when the saving rate quickly rose from a near-low of 3.8 percent in August 2008, more than

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The Berlin Wall Reminds Us of What Happens After We “Smash Capitalism”

6 days ago

This week marks the thirtieth anniversary of the fall of the Berlin Wall. Decades later, the wall remains a symbol of the violence employed by socialist states, and a reminder that the egalitarian workers’ paradise of East Germany was so hated by its residents that the state had to build a wall to keep residents in.
It is ironic, then, that only a generation later, Americans are becoming increasingly enamored with socialism. According to a recent Gallup poll, 43 percent of Americans say socialism is a “good thing.” It’s unclear how many of those respondents can actually define socialism. Some believe socialism to simply be policies that promote equality. Others define it using the more historically orthodox view: government ownership of the means of production.
There is no doubt, however,

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Locke vs. Cohen vs. Rothbard on Homesteading

6 days ago

Last week in my article The Power of Self-Ownership, I discussed how uncomfortable self-ownership made the great Marxist political philosopher G.A. Cohen. Cohen saw that self-ownership leads to libertarianism, but he rejected libertarianism while he found self-ownership plausible. To save his socialism, he gave up self-ownership, but his reasons for doing so are weak.
If self-ownership survives Cohen’s half-hearted assault, the free market is not yet out of the woods. Cohen has another argument against libertarians, this one directed at Lockean theories of property acquisition. According to the Lockean theory, individual self-owners may, by mixing their labor with unowned land and other natural resources, come to acquire it. (Some people don’t like the phrase “mixing your labor,” but

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4 Reasons Why Socialism Is Becoming More Popular

6 days ago

The newfound openness of large numbers of Americans to socialism is, by now, a well-documented phenomenon. According to a Gallup poll from earlier this year, 43% of Americans now believe that some form of socialism would be good thing, in contrast to 51% who are still against it. A Harris poll found that four in ten Americans prefer socialism to capitalism. The trend is particular apparent in the young: another Gallup poll showed that as recently as 2010, 68% of people between 18 and 29 approved of capitalism, with only 51% approving of socialism, whereas in 2018, while the percentage among this age group favoring socialism was unchanged at 51%, those in favor of capitalism had dropped precipitously to 45%. The same poll showed that among Democrats, the popularity of socialism now

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Ocasio-Cortez is Wrong: We’re Not Working 80-Hour Weeks Now

7 days ago

It has become nearly commonplace for pundits and politicians to claim that Americans are working more than ever before; that they’re working more jobs, and working longer hours — all for a lower income.
During the Democratic debates this summer, for instance, Rep. Tim Ryan of Ohio claimed  “the economic system now force[s] us to have two or three jobs just to get by.” Kamala Harris made similar comments.
These claims echo statements from Elizabeth Warren in Alexandria Ocasio-Cortez. In a July 2018 interview, Ocasio-Cortez insisted “Unemployment is low because everyone has two jobs. Unemployment is low because people are working 60, 70, 80 hours a week and can barely feed their family.” That same month, Warren stated “people” are “working two, three, or four jobs to try to pay the rent

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The Problem of Poverty

7 days ago

[Chapter One of The Conquest of Poverty.]
The history of poverty is almost the history of mankind. The ancient writers have left us few specific accounts of it. They took it for granted. Poverty was the normal lot.The ancient world of Greece and Rome, as modern historians reconstruct it, was a world where houses had no chimneys, and rooms, heated in cold weather by a fire on a hearth or a fire-pan in the center of the room, were filled with smoke whenever a fire was started,and consequently walls, ceiling, and furniture were blackened and more or less covered by soot at all times; where light was supplied by smoky oil lamps which, like the houses in which they were used, had no chimneys; and where eye trouble as a result of all this smoke was general. Greek dwellings had no heat in winter,

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As Gun Owners Look to Nullify Gun Laws, “Sanctuary” Isn’t Just for Immigrants

7 days ago

Since President Donald Trump won in 2016, people were led to believe that the Trump administration would be one of the most pro-gun administrations ever . However, a bump stock ban courtesy of the ATF and the passage of Fix-NICS legislation has disappointed gun owners who believed Trump would make at least some marginal pro-gun reforms. To Trump’s credit, he is reportedly resisting the temptation of pushing “red flag” gun confiscation legislation — for the time being.
Not surprisingly, the real progress has been at lower levels of government, where local activists and policymakers have managed to expand laissez faire on the matter of private self defense. For starters, constitutional carry has had unexpected success in 2019, with states like Oklahoma , South Dakota , and

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Una nota sobre los precios de los activos, la riqueza y la desigualdad

7 days ago

By: George Reisman
Warren y Sanders et al. son engañados por la inflación de la oferta monetaria del Estado al creer que el estancamiento y declive de nuestro sistema económico en las últimas décadas es el resultado de la creciente desigualdad económica.

La verdad es que tanto la aparición de la creciente riqueza de los ricos como la realidad de la disminución de la riqueza real son el resultado de que el Estado vierte dinero nuevo y adicional en los mercados de valores e inmobiliarios, donde el efecto es elevar los precios.

Dado que los ricos poseen muchas más acciones y bienes raíces que la persona promedio, el efecto de este aumento en los precios es que la desigualdad económica parece aumentar. (De alguna manera, no se informa de las bruscas disminuciones de la desigualdad económica

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Austrian Student Scholars Conference, Feb. 21-22, 2020

7 days ago

Grove City College will host the sixteenth annual Austrian Student Scholars Conference, February 21-22, 2020. Open to undergraduates and graduate students in any academic discipline, the ASSC will bring together students from colleges and universities across the country and around the world to present their own research papers written in the tradition of the great Austrian School intellectuals such as Ludwig von Mises, F.A. Hayek, Murray Rothbard, and Hans Sennholz. Accepted papers will be presented in a regular conference format to an audience of students and faculty.
Keynote lectures will be delivered by Drs. T. Hunt Tooley and Christopher Coyne.
Cash prizes of $1,500, $1,000, and $500 will be awarded for the top three papers, respectively, as judged by a select panel of Grove City

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Evidence-Based Economics: What the Doctor Ordered?

8 days ago

Will the randomized control trial bring more clarity and certainty to economic science? Is “evidence-based economics” something to be hailed as a welcome innovation or should it be appraised with a more sober attitude? To examine this topic and discuss the relative place of randomized trials in economics and medicine we have as our guest Peter G. Klein, W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University’s Hankamer School of Business. Professor Klein is also the Carl Menger Research Fellow at the Mises Institute. He obtained his PhD in Economics from the University of California Berkeley, and his BA from the University of North Carolina Chapel Hill.
His field of interest is in the area of the economics of entrepreneurship and business organization. He taught

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A Note on Asset Prices, Wealth, and Inequality

8 days ago

By: George Reisman
Warren and Sanders et al. are misled by the government’s inflation of the money supply into believing that the stagnation and decline of our economic system in recent decades is the result of growing economic inequality.

The truth is that both the appearance of increasing wealth of the rich and the reality of declining actual wealth are the result of the government’s pouring new and additional money into the stock and real estate markets, where the effect is to raise prices.

Since the rich own far more stock and real estate than the average person, the effect of this rise in prices is that economic inequality appears to increase. (Somehow the sharp declines in apparent economic inequality that necessarily accompany market busts, are not reported.)

While the rich

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Austrian Perspectives on Entrepreneurship, Strategy, and Organization de Foss, Klein y McCaffrey, disponible gratuitamente durante tiempo limitado

8 days ago

By: Matthew McCaffrey
Nos complace anunciar un nuevo libro de Nicolai J. Foss, Peter G. Klein y Matthew McCaffrey, Austrian perspectives on Entrepreneurship, Strategy, and Organization, ahora disponible en el Cambridge University Press. Este breve volumen es una introducción concisa al trabajo que se ha realizado en las últimas décadas aplicando y extendiendo las ideas de la economía austriaca en las disciplinas de gestión. Es bien sabido que la economía austriaca sitúa el espíritu emprendedor en el centro de la teoría económica, pero el trabajo austriaco, especialmente las ideas de escritores como Mises, también tiene mucho que ofrecer a los académicos en disciplinas como los estudios de estrategia y organización. El índice traducido es el siguiente:

Introducción
¿Qué es la economía

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The Feds Spend More on National-Debt Interest Than You Think

8 days ago

Recently, the Treasury Department reported a 26% increase in the federal budget deficit with a 2019 deficit of $984 billion. The reported data on the budget can be misleading. You might think that a budget deficit is the amount of spending that exceeds budget revenue, in other words, the amount of borrowing needed to make up for this shortfall. However, in the world of Washington D.C., not all spending is counted as spending and it’s possible for the government to borrow money from itself. Let’s look at the actual Treasury Department budget numbers.
The Treasury reports the Total Public Debt Outstanding of almost $23 trillion, which is the sum of the Intragovernmental Holdings and the Debt Held by the Public.
There is roughly $6 trillion of Intragovernmental Holdings. This is money that

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