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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

End the Shutdown

14 hours ago

The shutdown of the American economy by government decree should end. The lasting and far-reaching harms caused by this authoritarian precedent far outweigh those caused by the COVID-19 virus. The American people—individuals, families, businesses—must decide for themselves how and when to reopen society and return to their daily lives.
Neither the Trump administration nor Congress has the legal authority to shut down American life absent at least baseline due process. As Judge Andrew Napolitano recently wrote, business closures, restrictions on assembly and movement, and quarantines are not constitutionally permissible under some magic “emergency” doctrine. At a minimum, the federal government must show potential imminent harm by specific infected individuals at some form of hearing or

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Even Partial Liberalization Can Save a Nation from Poverty

16 hours ago

China’s rise as a global power has produced an immense number of books, articles, and analyses about what is behind the nation’s economic growth. But it isn’t a great mystery. The remarkable economic surge of China since the 1980s is based on the relatively liberal—relative to his predecessors—economic policies of Deng Xiaoping, who prioritized at least some limited access to property rights as the basis of China’s economic growth.
And while China is certainly not a liberal regime compared to most Western regimes, its limited embrace of markets under Deng freed Chinese entrepreneurship and productivity in a way that had never been experienced before. Indeed, the Chinese experience shows how even the partial liberalization of an economy can bring immense rewards.
Figure 1: Economic

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The Feds Are Suing Oracle for Discrimination, Even Though No One Has Complained

16 hours ago

Three days before Barack Obama left office, his Department of Labor served a complaint against Oracle America, Inc., alleging gross systemic discrimination in both its hiring and pay practices.
Specifically, it claims that Oracle discriminates against non-Asians in hiring for sixty-nine job titles and discriminates against women, Asians, and African Americans in pay for eighty job titles.
Did Oracle Discriminate?
Is it strange that Oracle allegedly discriminates both in favor of and against Asians?
The Office of Federal Contractor Compliance Programs (OFCCP) is at the center of this complaint; it is involved because Oracle is a government contractor. The only points supporting the OFCCP’s claim are statistical analyses.
The complaint mentions exactly zero employee complaints, and it

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Sean Ring: What Successful Entrepreneurs Understand About Iteration

21 hours ago

Hunter Hastings asks Sean Ring, Finlingo Co-founder and CEO, for his number one secret for entrepreneurial success. His answer: Iteration.
Sean offers additional insights, as we’ll see below, but the power of iteration is his number one: doing things over and over, with a view to improving. Always learning, always changing, never getting tired of improving and tinkering, whether it’s with your life path, your self-knowledge, your skills, your code base or your business. You can never predict the future, but you can always monitor your felt uneasiness and take action to relieve it by doing better.
Key Takeaways and Actionable Insights
Sean navigated his lifepath through specialized areas of the financial services industry and through multiple locations around the globe, accumulating

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How The Fed Sows Social Division and Mistrust

21 hours ago

The Federal Reserve’s zero interest rate policy and industry bailouts threaten more than just the fragile economy. The very foundation of the social order risks permanent fracturing under this system of moral hazard.
In Human Action, Ludwig von Mises defined society as “joint action and cooperation in which each participant sees the other partner’s success as a means for the attainment of his own.” Without social trust, there is no society. Private property and the division of labor, the hallmarks of a civilization, arise out of cooperation.
In a strictly economic sense, all the malinvestment and capital destruction the Federal Reserve can muster can be overcome in the medium term. Capital gets restructured. However, in the social realm, bad economic policies can do irreversible harm

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Why the World Has a Dollar Shortage, Despite Massive Fed Action

21 hours ago

How can the Fed launch an “unlimited” monetary stimulus with congress approving a $2 trillion package and the dollar index remain strong? The answer lies in the rising global dollar shortage, and should be a lesson for monetary alchemists around the world.
The $2 trillion stimulus package agreed by Congress is around 10% of GDP and, if we include the Fed borrowing facilities for working capital, it means $6 trillion in liquidity for consumers and firms over the next nine months.
The stimulus package approved by Congress is made up of the next key items: Permanent fiscal transfers to households and firms of almost $5 trillion. Individuals will receive a $1,200 cash payment ($300 billion in total). The loans for small businesses, which become grants if jobs are maintained ($367 billion).

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Oren Cass and the Conservative Critique of Pure Laissez-Faire

1 day ago

Oren Cass is the executive director of American Compass (AmericanCompass.org), a conservative think tank that stresses the importance of family and domestic industry, in opposition to a singleminded devotion to economic efficiency. Cass was previously a senior fellow at the Manhattan Institute for Policy Research, and was the domestic policy director for Mitt Romney’s 2012 presidential campaign. Bob and Oren have a friendly discussion about their disagreements on economic policy.
For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on iTunes, Stitcher, Spotify, and via RSS.
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What If the Fed Did Nothing?

2 days ago

Austrians and Libertarians are well-established critics of central banking in general, and emergency monetary stimulus in particular. There is near universal agreement that Alan Greenspan should not have cut rates following the Dot-Com Bubble, and that Ben Bernanke and Janet Yellen should not have quadrupled the monetary base following the Housing Bubble.1 Yet if you mention this to someone who is not persuaded of our position, you will likely get a response along the lines of, “well, what should they have done instead?”
“Nothing,” you reply.
“Well then wouldn’t things have been even worse?”
It’s this last question that I don’t believe we have answered to great effect. What would the effects have been if Greenspan, Bernanke, and Yellen had simply frozen the monetary base during their

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The Political Management of the Coronavirus Crisis

2 days ago

We may currently be facing the biggest economic crisis of all time, because it is a multifaceted crisis: first, there is the pandemic with its disastrous direct consequences for tourism, the service sector, and trade. Secondly, there is an oil price shock with a geopolitical background. Third, there is a shock caused by supply chain disruption due to heavy reliance on just-in-time production and distant producers. Fourth, there is a crisis of confidence due to differing risk assessments and disagreements about whether Western governments are guilty of negligence or fearmongering to massively restrict civil liberties. Finally, the ultimately inevitable correction of an overstretched “everything bubble” in which the traditional instruments of monetary policy have been exhausted.
We are

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This Is Not a Recession—This Is a Government-Imposed Shutdown of the Private Sector

2 days ago

Economists and Wall Street analysts are using the word recession to describe the looming plunge in output in the US economy. We’ll just make the point early that economists, exhibiting the typical emptiness of their failed science, can’t even agree on the definition of recession.
Undeterred by lacking a definition, the geniuses at Goldman Sachs and elsewhere on Wall Street are unrestrained in predicting the imminent arrival of the condition they can’t describe.
As is always the case, people understand the condition that economists can’t even describe in theory. They understand the lost jobs and wages, the reduction in activity at the businesses where they work. They understand fewer shifts, fewer hours, a smaller paycheck, or layoffs or furloughs, unemployment, and the need to ask the

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The New Euro Stimulus Won’t Save the Greek Economy

4 days ago

With fear of the coronavirus continuing to wreak havoc on every country in the West, almost all governments have taken radical measures for containment of the virus: mandatory quarantines for many, the closing of businesses, and the prohibition of many economic and social activities. I am not going to pretend that I am a medical expert and share my thoughts about how serious the virus really is. I will, however, focus on its economic consequences.
(Two very informative articles on healthcare policies for the virus are “Government Is No Match for the Coronavirus” and “The ‘Bootleggers and Baptists’ of the Coronavirus Crisis.”)
The New Stimulus and QE for the Greek Economy
On Thursday, the European Central Bank (ECB) announced massive new stimulus programs, saying that it could buy up to

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How Governments (and the Fed) Make Life Harder for Young Families

4 days ago

Young people today are delaying starting “adult” life until later and later. The median age of first marriage has climbed to nearly 30, up from the mid-20s a generation ago.
The median age of the first-time homebuyer hit a record 33 in 2019, while the average age for women having a baby climbed to 26.9 in 2018, up from 22.7 in 1980.
Clearly there are plenty of cultural changes that influence such shifts, but we shouldn’t underestimate the added burdens created by government overreach that make it more difficult for young people to settle down and start a family.
College Debt
In higher education, as with healthcare, a system increasingly reliant on third-party payers for the expenses has been a major driver of exploding tuition costs. As summed up in this College Board article “with

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“Cost Cutting” Is Necessary to Expand Real Investment

4 days ago

Some commentators regard cost cutting by companies in order to secure profits as a major threat to the economy. They hold that if everyone tries to cut costs and save more, demand for goods and services from retrenched workers will fall, which in turn will hurt corporate revenues and thus profits. This allegedly sets in motion new layoffs and again eats into revenues and makes profits disappear. The process supposedly continues until there are not enough workers and salaries left to generate sales and profits.
Economists call this the “corporate paradox of thrift.” If everyone tries to cut costs and save more, then eventually no one saves more. Therefore, if every company decides to cut costs, this will ultimately hurt revenues and hence profits. The conclusion, then, is

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Canada Has Abolished Civil Liberties in the Name of “Safety”

4 days ago

To limit the spread of COVID-19 in Canada, “The federal government has advised Canadians to stay at home and limit their contact with others if they have been diagnosed with the virus, exposed to someone who has or if they traveled outside the country within the past 14 days.”
However, on March 21, Patty Hajdu, Canada’s minister of health, promised more draconian measures if people do not accept the government’s recommendations—which means that the government’s recommendations are actually commands, backed by the use of force, which has already begun:

In Quebec City, police arrested a woman Friday who was infected with the virus and who was walking around outside after being mandated to stay indoors. The arrest was the first time Quebec City’s public health director issued an order to

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Human Action Part Four with Dr. Jeffrey Herbener

5 days ago

We dive into Part Four of Human Action with Professor Jeffrey Herbener, Chair of the Economics Department at Grove City College.
This is a fantastic discussion of money and market exchange, with Mises proving timely as ever given the current financial meltdown and crazed response from Washington. Dr. Herbener and Jeff Deist cover catallactics and how imaginary constructs help us understand basic economics; markets as a system of social cooperation; how ordinal preferences find expression in money prices; the structure of production; consumer sovereignty; Mises’s conception of monopoly; and the various media of exchange which complicate what ought to be the market’s provision of commodity money.
Use the code HAPOD for a discount on Human Action from our bookstore: Mises.org/BuyHA.

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Eminent Domain: Are Holdouts Really a Problem?

5 days ago

Eminent domain gives the government the power to take over private property for public use. A popular argument that this interference with private property is needed goes like this: We can’t measure subjective utility, but we can take increases in wealth as a rough proxy for increases in utility. (This assumption is mistaken, but I won’t get into that here.) Suppose, on this assumption, that some public project will add a great deal of wealth to the economy. Unfortunately, someone owns a small parcel of land necessary to get the project underway. Often, a little old lady who refuses to sell her house, preventing a road from being built, is given as an example of the problem.
You might be inclined to dismiss this argument immediately. Wouldn’t it be unfair to the old lady to take away her

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Governments Can’t Fix This Economic Crisis They Caused

5 days ago

Before analyzing the emergency plans that the global economy needs, we must remember that, as in the past, the prudence and responsibility of the civil society and businesses will help us to get out of this crisis .
In the face of an unprecedented crisis, we have to be realistic, responsible and cautious.
This is a supply shock added to a mandatory shutdown of the economy. As such, a serious response must be supply-side driven. It is ludicrous to try to stimulate demand with printed money and public spending in a forced lockdown where any extra demand will not drive supply up, even may drive it down.
A mandatory shutdown due to a supply shock is not solved with government spending or demand-side measures. Printing money and lowering rates help the already indebted and governments with

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The Benefits of a Free Society during Pandemics

5 days ago

In this time of crisis, many exclaim how impressed they are by the “swift and decisive” actions by the Chinese regime. Instead of recognizing the abhorrent disrespect for human life, the Chinese response is put forth as an exemplar for combatting a pandemic.
These hailers conveniently forget the many weeks of silencing and censorship that preceded the brutal shutting down of the city of Wuhan and the whole Hubei province. They also turn a blind eye to the nature of hierarchy and bureaucracy, pretending what is needed to choose proper action is simply power and that access to accurate, reliable information is of little concern.
The calls for a strongman solution are misguided at best, but have been used to paint the picture of freedom as being impotent. As per the strongman delusion,

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Diversification versus Risk

6 days ago

It is widely held that financial asset prices fully reflect all available and relevant information, and that adjustments to new information is virtually instantaneous. This way of thinking which is known as the Efficient Market Hypothesis (EMH) is closely linked with the modern portfolio theory (MPT), which postulates that market participants are at least as good at price forecasting as any model that a financial market scholar can come up with, given the available information.1
It is held that asset prices respond only to the unexpected part of any information, since the expected part is already embedded in prices. According to MPT, the individual investor cannot outsmart the market by trading based on the available information since the available information is already contained in asset

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The Noncrime Known as “Price Gouging”

6 days ago

Thank goodness for the First Amendment and social media! The former has allowed amateur comedians to flourish and share their wares via the latter, mostly in the form of humorous memes. It’s come in handy by providing comic relief as concern about the coronavirus outbreak has swept the land.
I took a stab by offering a quip about the stash of wine bottle corks my wife and I have stockpiled over the last few years. I drew a link between that surplus and the baffling run on, and subsequent shortages of, toilet paper.
The reader can take it from there (depending on my comedic skills), but it offers a good lesson on the practice known as price “gouging.”
After Governor Greg Abbott “issued a statewide disaster declaration” Friday, March 13, Attorney General Ken Paxton reminded the public that

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Daniel Jafari : Life at the Center of the COVID Storm

6 days ago

Anish discusses the COVID19 pandemic with Dr. Daniel Jafari, an emergency physician and surgical critical care specialist working at the North Shore University Hospital in New York. Dr. Jafari speaks to us about watching the pandemic unfold, the problems being wrestled with, the remarkable response, and what’s needed in the coming weeks.
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COVID-19 and the Planners’ Need to Plan

6 days ago

A few days ago, I received an email addressing the ongoing COVID-19 situation from the Wyoming State Bar, of which I am a member. Attached to the email was a thirty-page PDF entitled Wyoming Judicial Branch: Respiratory Disease Pandemic Plan. The stated purpose is as follows:

A pandemic event is distinct from other emergency scenarios such as tornados or floods because of the severity and longevity of a pandemic event. The purpose of this plan is to provide the Wyoming Judicial Branch with local guidelines, procedures, and directions to follow during all phases of a pandemic event.

Why, do you ask, does the judiciary of the most sparsely populated state in the Union need a thirty-page plan related to a virus which, until the day I received the email, had not yet been confirmed to exist

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Why Taiwan Hasn’t Shut Down Its Economy

6 days ago

As the Austrian school of economics demonstrates in the calculation theory of socialism, no central planning body has the capacity to organize society based on coercive mandates. The main reason is that the central planner is unable to obtain all the necessary information to organize society in this way, as information has subjective, creative, dispersed, and tacit qualities. This principle is fully applicable to the containment of a pandemic. Individual responsibility along with transparency of information are crucial to stopping a pandemic. Taiwan makes a very good case for how individualism and voluntary corporation work effectively in resisting the coronavirus pandemic.
Close to the Chinese Mainland, but Relatively Few People Infected
At the moment in Taiwan, the infection has

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Politicians Have Used This Crisis to Remind Us They’re Mostly Wannabe Dictators

6 days ago

The virus has unleashed petite tyrants to haunt their tiny jurisdictions, using the cover of crisis to arrogate powers belonging to the people.
Witness Robert J. Taylor, mayor of Ostrander, Ohio (population: 643 in the 2010 census), who just declared his village to be in a “state of emergency.” Along with this declaration, the self-righteous mayor instructed constituents to get their news from “trusted sources, which may not include social media in many cases.”
In addition, he admonished them to “Also, please look out for your neighbors and the elderly, in particular.”
Sure, petty nonsense from a petty man. But he also added this, “As warranted, additional measures may be taken until the threat from this virus has subsided.”
So, should our equally petty governor adopt enabling acts and

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The Government’s Pandemic Strategy Is a Reckless One

6 days ago

The current coronavirus strategy of most governments is a recipe for a worldwide economic disaster. In many countries, the strategy of confinement and forcing shops to close is a surefire path to large-scale business failures. The cascade of economic and financial repercussions to come is likely to lead to another Great Depression. Italy, for example, already had a 135 percent debt-to-GDP ratio before the crisis. It is hard to imagine how it will be able to borrow more without mutualizing its debt with the rest of the EU—something the northern European countries are still strongly opposed to. The European Central Bank is already printing money like crazy, and if Italy becomes another Greece, the ECB will make it ramp up the printing presses even more.
The media and politicians have taken

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More than Half of All US COVID-19 Deaths Occur in Only Four States

6 days ago

As of March 24, nearly 30 percent of all the COVID-19 deaths in the United States have occurred in New York state. Of the 910 deaths reported so far in the US, 271 happened in New York. Washington State was in second place, with 13 percent of the nation’s COVID-19 deaths. California comes next with 5.6 percent of all deaths, followed by New Jersey, with 4.8 percent.
In fact, more than fifty percent of all COVID-19 deaths in the US have come from just these four states.

The death rates in New York, New Jersey, and Washington are all sizably higher than in the US overall, as well. The number of deaths per 100,000 in population in New York is six times higher than in the US overall:

If we were to remove New York, New Jersey, California, and Washington State from the United States

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The State Has Seized Many New Powers. It Won’t Let Go of Them Easily.

7 days ago

“Restaurants sit empty in Chinatowns. Parents keep children home from school in Toronto. Asian hotels and airlines reel at dramatic drops in bookings. Just as the media recently gave us a new and particularly intimate experience of war, we’re now getting a new and particularly fearsome experience of a public health crisis….It is one of a large number of viruses that suddenly infect the human population….Given what’s happened thus far, the appropriate response is to pursue targeted and aggressive public health measures, while the 99.9% of us not conceivably at risk go on with our lives. This is where China’s shocking cover-up has proven so costly. In any viral outbreak, early identification and containment is essential.” If you think that this is the news from the trenches of the unfolding

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The Use of Knowledge in Entrepreneurship

7 days ago

In a recent episode of the Economics for Entrepreneurs podcast, I interviewed Steve Mariotti, who has spent a lifetime teaching entrepreneurship to kids from difficult and troubled backgrounds in the US, as well as the sons and daughters of parents who lived through the USSR and Vietnamese communist regimes. He portrayed entrepreneurship as an escape from poverty and oppression for these young people, one they embraced with excitement and enthusiasm.
Mariotti found a guiding light for his teaching, and for the young people searching for their pathway out of poverty, in F.A. Hayek’s “The Use of Knowledge in Society.” He cited in particular paragraphs ten and eleven, where Hayek underlines “the importance of the knowledge of the particular circumstances of time and place” and bemoans the

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Fear Makes It Easy for Governments to Expand Power

7 days ago

The coronavirus epidemic has for the past couple of weeks compelled panicked households to flood grocery stores in search of basic goods. Until this past weekend, however, US governments had refrained from using special powers to order forced business closures and curfews.
Autocratic responses to the health crisis, it seemed, were being put in place exclusively by authoritarian governments such as China’s Communist Party, which managed to allegedly contain the spread of the virus through martial law— barricading people in their homes, arresting those who wouldn’t comply with quarantine mandates, and issuing passports to households so that authorities could verify whether individuals leaving their homes had already used up their weekly stroll quotas.
Following an announcement from

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The “Experts” Have No Crystal Ball

7 days ago

On the night of Tuesday, November 8, 2016, and in the wee hours of Wednesday, November 9, 2016, Donald Trump became US president-elect. I am not aware of a single media source that predicted that. Many predicted Hillary Clinton would win. Some stayed out of the fortune-telling game.
The most striking thing was the lack of admission running up to election night that the experts were all making guesses. “Of course they were making guesses, no one has a crystal ball,” the rational observer might say, but petabytes have been dedicated to making the social sciences and all of their guesswork appear like, well, “science.” That means that it’s all very measurable and clear, when it actually isn’t.
Science, on the other hand, is science. Observable details can be used to solidify hypotheses into

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