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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

State Legislatures Are Finally Limiting Governors’ Emergency Powers. But only Some of Them.

9 hours ago

Last week, Indiana Governor Eric Holcomb vetoed a bill that would limit gubernatorial authority in declaring emergencies. The bill would allow the General Assembly to call itself into an emergency session, with the idea that the legislature could then vote to end, or otherwise limit, a governor’s emergency powers. Although both the legislature and the governor’s office are controlled by Republicans, the legislature has apparently wearied of the governor’s repeated renewals of the state’s emergency status in the name of managing the effects of the covid-19 virus.
The legislature could still override the veto. In Indiana, an override requires only a majority vote.
If the legislature does so, it won’t be the first state to override a governor’s veto on this front. Last month, the

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Critics Claim Bitcoin Is a Threat to the Environment. They’re Wrong.

15 hours ago

One popular critique of bitcoin is energy cost per transaction. This doesn’t begin to capture bitcoin’s massive energy savings compared to fiat currency.
Bitcoin’s cost per transaction is well known, and often critiqued; one article in Wired magazine called bitcoin “[a] big middle finger to earth’s climate.” This is because bitcoin’s security, redundancy, and architecture are more energy intensive than traditional payments relying on a single point of failure.
Comparing the energy of a single transaction barely scrapes the surface of the dollar’s carbon footprint, which includes the entire financial infrastructure supporting fiat—8.4 percent of GDP in the US alone, slightly behind manufacturing. This includes 80,000 bank branches, 470,000 ATMs in the US alone, and forests of skyscrapers

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The Inverted Yield Curve and Recession

21 hours ago

[This article is part of the Understanding Money Mechanics series, by Robert P. Murphy. The series will be published as a book in 2021.]
The “yield curve” refers to a graph showing the relationship between the maturity length of bonds—such as one month, three months, one year, five years, twenty years, etc.—plotted on the x axis, and the yield (or interest rate) plotted on the y axis.1 In the postwar era, a “normal” yield curve has been upward sloping, meaning that investors typically receive a higher rate of return if they are willing to put their funds into longer-dated bonds. A so-called inverted yield curve occurs when this typical relationship flips, and short-dated bonds have a higher rate of return than long-dated ones.
Investors and financial analysts are very interested in this

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What Exactly Is Neoliberalism, and Is It a Bad Thing?

2 days ago

La verità, vi prego, sul neo-liberismo: Il poco che c’è, il tanto che manca (The truth, please, on neoliberalism)by Alberto MingardiMarsilio, 2019333 pages
There are few things nowadays that ignite more hatred, especially within university campuses, than declaring oneself to be a neoliberal (if the reader is not convinced, he is invited to try it himself and see what happens). Both exponents from the Right and from the Left, in fact, view neoliberalism as the instrumentum regni with which global political leaders and their special interests have tried, especially since the 1980s, to squeeze out the middle class and the poor.1 International institutions such as the European Union, the International Monetary Fund, or the World Bank, according to this popular view, are all part of the same

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Biden’s New Budget Plan Means Trump-Era Mega Spending Will Continue

3 days ago

The reality of federal spending under Donald Trump did much to put to rest the obviously wrong and long-disproved notion that Republicans are the political party of “fiscal responsibility.” With George W. Bush and Ronald Reagan, it was pretty much “full speed ahead” as far as federal spending was concerned. Under George W. Bush, some of the biggest budget-busting years were those during which the Republicans also controlled Congress.
Trump, of course, carried the GOP’s spendthrift tradition far beyond any old levels in dramatic fashion, calling for untrammeled deficit spending, money printing, and a series of multitrillion-dollar bailout and “stimulus” packages.
This time around, there’s little reason to assume the Democrats will depart from the GOP trend. After all, in the past year,

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7 Observations on the Humane Nature of Capitalism

3 days ago

“You are hitting the nail with too many hammers.” I can still remember Bob Clower, my dissertation chairman at the time, saying that to me after reading my most recent work. It was directed at the fact that I had shown problems with a particular competing argument “six ways from Sunday.” That is, It was overkill.
Of course, he didn’t note that his habit of saying, “This is related to that interesting literature. You should go figure it out and tie it in with your work,” just about every time I came by, may have been a contributing factor.
However, shortly thereafter, Clower accepted a job across the country from UCLA, at the University of South Carolina. That triggered a graduate student’s version of hell, or at least purgatory, as I had to recruit a new chairperson for a topic I was quite

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Is Price Gouging a Problem?

3 days ago

By: Lakshya Bharadwaj
Is price-gouging wrong? For many, this practice does not exactly seem to be ethical. So, there is a moral angle here which suggests that raising prices of goods such as toilet paper and bottled water when a hurricane cuts off supply—and forces the market into a shortage—is not the most humane practice.

The economic angle, which is more important for policymaking, views price-gouging as a regular supply-side response to a shock. The economics around this practice suggests that price-gouging is not only reasonable, but it also serves many crucial economic purposes.

Why Price-Ceilings Are Illogical

In free and competitive markets, prices are signals. If you have ever laid eyes upon the supply and demand graph found in Econ 101 textbooks, you understand what I speak

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The 200th Anniversary of a Great American Demolition of Tyranny

3 days ago

This year is the 200th anniversary of the publication of one of the best American books on trade policy by one of the most thoughtful and least appreciated political analysts of the Founding Fathers era.
I ran into John Taylor of Caroline when I was roaming the shelves of the Library of Congress in 1987. A few weeks earlier, I had written a piece that the Wall Street Journal headlined, “U.S. Fair Trade Laws Are Anything But,” in which I pounded the Commerce Department for almost always finding imports guilty of selling at “less than fair value” on the basis of nonsense pulled out of their bureaucratic ears. I scoffed that U.S. “trade laws perpetually inflate domestic prices in order to protect consumers against the one-in-a-million possibility that a foreign company could corner the

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Marx, Abstract Labor, and Absurdity

4 days ago

Many readers will be familiar with Robert Paul Wolff’s In Defense of Anarchism, a brilliant criticism of the state’s authority that arrives at conclusions similar to those of Lysander Spooner. Wolff is probably best known for his work on Kant, but he has published penetrating accounts of Marx and Rawls as well. He thinks that Marx offers an analysis of capitalism that is largely correct, and in a recent series of posts on his blog, The Philosopher’s Stone, he offers a characteristically incisive way of looking at Marx’s labor theory of value. I’ll try to show that, however ingenious it is, Wolff’s interpretation does not rescue Marx from absurdity.
Wolff lets us know his high opinion of Marx’s Das Kapital here:

I have devoted extended periods of time to the study and interpretation of the

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From Christianity to Black Power, Rothbard Offers a Unique View

4 days ago

By: Lipton Matthews
Judged by the sheer quality and volume of his intellectual output, Murray Rothbard was a genius. Though we reflect on the ingenuity of his peculiar intellect – we must never forget that Rothbard was the master of defying stereotypes. Unfortunately, many assume that libertarians are hostile to Christianity, but it was Rothbard who admitted that “The greatest and most creative minds in the history of mankind have been deeply and profoundly religious, most of them Christian.” Rothbard also informed readers that the Spanish Scholastics made a pivotal contribution to economics.

Christianity

Rothbard in several articles and books refuted the uncharitable characterization of late scholasticism as intellectually barren. In his article “New Light on the Prehistory of the

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What Clarence Thomas Gets Wrong about Big Tech

4 days ago

By: Jeff Deist
Supreme Court Justice Clarence Thomas’s recent concurring opinion in the Biden vs. Knight decision sent hopeful tremors across conservative legal circles and drew condemnation from libertarians. Was Thomas finally laying the groundwork for regulation of Big Tech, which conservatives correctly view as both deeply biased against them and actively biased in favor of left-wing causes? 

At first blush, the case primarily concerned First Amendment questions about whether former president Donald Trump (while in office) could block certain individuals or groups from following his Twitter account.1 The Blockees argued that a sitting president should not be able to prevent access to “news” he creates on social media, especially when particular tweets relate to official government

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The Equality Act’s Attack on Religion Is Really about Private Property Rights

4 days ago

With the introduction of the Equality Act, the Democratic Party and its allies continue the now well-established tradition of using “antidiscrimination” and “public accommodation” laws to continue the attack on the private sector and private sector institutions.
Historically these laws, acts, and court rulings—found initially in the Civil Rights Act of 1964—focused largely on regulating hiring and the provision of services at private institutions. These legislative and judicial acts regulate how private owners of restaurants and hotels—and a wide variety of other private establishments—enter into verbal or written contracts with potential employees, clients, and customers.
Initially, these mandates focused on regulating service to religious minorities and what the Canadians call “visible

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Extending AnCap Analysis for Vaccine Passports, Court Rulings, and Desegregation

4 days ago

Using a recent Dave Smith interview of Michael Malice as a springboard, Bob elaborates his understanding of anarcho-capitalist principles to the thorny issues of vaccine passports, court rulings, and desegregation of the Old South.
Mentioned in the Episode and Other Links of Interest:
Part of the Problem episode from February 20, 2021, “They Don’t Care About You” featuring Michael Malice
Bob’s book The Politically Incorrect Guide to Capitalism (featuring his analysis of racism in business)
Bob Murphy Show ep. 176, “A Framework for Analyzing Big Tech Censorship.”
Bob’s essay against mandatory vaccinations
Bob’s Mises U talk, “The Market for Security” (explaining private law enforcement)
Khan Academy page on the Rosa Parks bus boycott
Bob’s critique of an AIER article on private mask

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Trust, Corruption, and the Cultural Foundations of Capitalism

5 days ago

Economists promote free market capitalism as the most advantageous system for human development. Notwithstanding the popularity of their rhetoric, capitalism remains a derisive term in the developing world. Transplanting promarket institutions to developing countries has failed to generate widespread support for capitalism. For capitalism to work in the developing world it must be aided by the right cultural infrastructure.
One obstacle to the growth of capitalism in the developing world is the paucity of trust. Trust makes it easier to do business by lowering transaction costs. When entrepreneurs trust each other, they are likely to collaborate and reap the fruits of innovation. In a trusting environment, businesspeople form lucrative deals before signing a contract, knowing that both

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The Annapolis Convention: The Beginning of the Counterrevolution

5 days ago

[Chapter 12 of Rothbard’s newly edited and released Conceived in Liberty, vol. 5, The New Republic: 1784–1791.]
By 1787, the nationalist forces were in a far stronger position than during the Revolutionary War to make their dreams of central power come true. Now, in addition to the reactionary ideologues and financial oligarchs, public creditors, and disgruntled ex-army officers, other groups, some recruited by the depression of the mid-1780s, were ready to be mobilized into an ultra-conservative constituency. Inefficient urban artisans who wanted a central protective tariff to secure a nationwide market from more efficient British competition; merchants who wanted central navigation acts and other subsidies; western land speculators who wanted to prevent settlers from following the

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VAWA Balkanizes Rights, Cynically Erasing Male Indians

6 days ago

The Violence Against Women Act (VAWA) embodies a political trend that cripples human rights in the guise of crusading for them. This trend is the balkanization, or fragmentation, of rights. Recently passed by the House, VAWA has moved to the Senate, where the trend it represents may well be translated into more law.
Identity politics and its activist branch, social justice, claim to champion oppressed groups. Yet both reverse the process by which oppressed groups have historically claimed their freedom: the universalization of rights. The term “universal rights” means that every human being, simply by being human, possesses the same rights and to the same degree as everyone else. Freedom means every person has an identical and enforceable claim to his or her own body and to peacefully

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Clarifying the Economic Framework for Both Camps in the Bitcoin Debate

6 days ago

Bob helps to clarify the Bitcoin debate. On the one hand, the “no intrinsic value” skeptics are ignoring how Austrians deal with gold, while on the other hand, the “HODL forever” enthusiasts would never allow Bitcoin to become a money.
Mentioned in the Episode and Other Links of Interest:
Bob (and Silas Barta’s) guide to Bitcoin
Bob’s book Contra Krugman
?For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Stitcher, Spotify, and via RSS.
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Rewinding the Mainspring of Human Progress

6 days ago

By: Gary Galles
Henry Grady Weaver worked through many jobs on the way to becoming director of customer research for General Motors, which landed him on the November 14, 1938 Time cover. But virtually no one remembers that. Now he is best known for his short 1947 book, The Mainspring of Human Progress, that the Ludwig von Mises Institute’s website called “the true story of progress for the human race with acute understanding of the fundamental cause: freedom itself,” which led to the fact that now “Several generations count this book as the very one that started an intellectual revolution.”

The book had an interesting background. It draws heavily from Rose Wilder Lane’s 1943 The Discovery of Freedom: Mans’s Struggle Against Authority. It became a very influential book, ranking 67th in a

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Central Banking as an Engine of Corruption

9 days ago

Much has been written about the famous debate between Thomas Jefferson and Alexander Hamilton over the constitutionality of America’s first central bank, the Bank of the United States (BUS). This was where Jefferson, as secretary of state, enunciated his “strict constructionist” view of the Constitution, making his case to President George Washington that since a central bank was not one of the powers specifically delegated by the states to the central government, and since the idea was explicitly rejected by the constitutional convention, a central bank is unconstitutional.
Treasury Secretary Alexander Hamilton notoriously responded by inventing the notion of “implied” as opposed to enumerated powers of the Constitution.
George Washington signed legislation creating the BUS not because of

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Big Debt Plus Rising Interest Rates = Big Danger

10 days ago

If there is anything Wall Street banks crave is relief. Primarily relief from the potential for failure and, next, relief from holding much, if any, equity capital. These banks like their capital tiny and their profits huge. Losses should be socialized. After all, we want the ATMs to keep spitting out cash. 
The SLR will be allowed to expire at the end of this month before most of us knew what it was—”supplementary leverage ratio.”  When covid hit the fan last March, as the WSJ explains, “The ratio measures capital—funds that banks raise from investors, earn through profits and use to absorb losses—as a percentage of loans and other assets. Without the exclusion, Treasurys and deposits count as assets [not equity].” 
No SLR means less leverage and lower profits for the big banks. But, the

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The “Mind Viruses” Creating Social Justice Warriors

10 days ago

The Parasitic Mind: How Infectious Ideas Are Killing Common Senseby Gad Saad. Regnery, 2020xvi + 240 pages
Gaad Saad, a psychologist who specializes in applying evolutionary biology to the study of consumer behavior, has written a book of great value, and moreover, it is a book that required great courage to write. The book is filled with interesting ideas, and I have space here to mention only a few of them.
What most draws me to the book is that Saad has a philosophical turn of mind, and as such, he is concerned with fashionable attempts to deny the existence of objective truth. He says,

The central focus of this book is to explore another set of pathogens that are as dangerous [as biological parasites] to the human condition: parasitic pathogens of the human mind. These are composed of

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The World of Salamanca

10 days ago

The subject of the medieval period highlights the vast gulf that separates scholarly opinion from popular opinion. This is a grave frustration for scholars who have been working to change popular opinion for a hundred years. For most people, the medieval period brings to mind populations living by myths and crazy superstitions such as we might see in a Monty Python skit. Scholarly opinion, however, knows otherwise. The age between the 8th and 16th centuries was a time of amazing advance in every area of knowledge, such as architecture, music, biology, mathematics, astronomy, industry, and — yes — economics.
One might think it would be enough to look at the Burgos Cathedral of St. Mary, begun in 1221 and completed nine years later, to know there is something gravely wrong with the popular

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UBI and the Road to Serfdom

11 days ago

Many people think that a universal basic income (UBI) would be a good substitute for the welfare state. Under this proposal, each person resident in a country would receive a guaranteed income, sufficient to live at a modest level. People would get the money unconditionally. Unlike welfare payments, the UBI would not be lessened if people earned money in addition to the amount it provided, and, because it is not means tested—absolutely everyone gets it, even billionaires—it requires no complex bureaucracy to administer.
The UBI would cost a great deal of money, but its defenders claim that since it is a substitute for the welfare state, we would also save the vast amounts of money now required for financing welfare programs. Further, if our economy continues to grow, at some point the UBI

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Progressivism’s Failures: From Minimum Wages to the Welfare State

11 days ago

As I write, the Democratic Congress is contemplating various measures designed to alleviate poverty levels in the United States. They include: the doubling of the minimum wage; the expansion of child credits. Let’s review both.
The Minimum Wage Hike
Congress intends to raise the federal minimum wage from $7.25 to $15. This makes various assumptions: first, that minimum wage workers themselves are indeed poor. This is wrong: they come from families with a median household income of $66,000; for, their median age is twenty-four years old, and 60 percent are still attending school. Secondly, this policy makes the assumption that it will have no statistically significant impact on unemployment. This is also misguided. The City of Seattle enacted a $13 minimum wage in 2016, resulting in a fall

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Allen Mendenhall—Is Intellectualism Dead?

11 days ago

Allen Mendenhall joins the show to expand last week’s discussion on the intellectual state of America. Are we living in a decidedly anti-intellectual age, or has America always been predisposed toward doers over thinkers? Have Americans simply stopped reading books? Have we lost our ability to think deeply, due to the constant distractions of the digital age? And what does the shift away from any shared baseline cultural knowledge mean for our future? Don’t miss this fascinating but sobering discussion.
Listen to HAPod episode with Dan McCarthy at Mises.org/HAP63
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The Economic Effects of Pandemics: An Austrian Analysis

11 days ago

Traditionally, Austrian theorists have focused with particular interest on the recurrent cycles of boom and recession that affect our economies and on studying the relationship between these cycles and certain characteristic modifications to the structure of capital-goods stages. Without a doubt, the Austrian theory of economic cycles is one of the most significant and sophisticated analytical contributions of the Austrian School. Its members have managed to explain how credit-expansion processes lead to systematic investment errors that result in an unsustainable productive structure. Such processes are advanced and orchestrated by central banks and implemented by the private-banking sector, which operates with a fractional reserve and creates money from nothing in the form of deposits,

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La auditoría anual de la Fed está muy lejos de la transparencia real

11 days ago

By: Robert Aro
La noción de «Auditar a la Fed» ha estado presente durante un tiempo. Técnicamente, la Reserva Federal es auditada. El martes, con poca o ninguna fanfarria ni cobertura mediática, hubo un comunicado de prensa anunciando la finalización de los estados financieros auditados de 2020. Profundizando, cada uno de los 12 bancos de la Reserva recibió su propia auditoría independiente. Pero la más importante es el estado financiero «combinado de los Bancos de la Reserva Federal»; un estado consolidado de todo el Sistema de la Reserva Federal.

La auditoría de la Reserva Federal se rige por las mismas normas que una empresa que cotiza en bolsa. Según el Instituto Americano de Contables Públicos (AICPA por sus siglas en inglés):

La auditoría es el nivel más alto de servicio de

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Lockdowns and Easy Money Bring a Weak Recovery for Europe

12 days ago

If we looked at most investment bank outlook reports for 2021, one of the main consensus themes was a strong conviction on a rapid and robust eurozone recovery. They were wrong.
This week, Capital Economics joined other analysts and downgraded the eurozone growth, highlighting “We now think that the eurozone economy will recover more slowly than we previously anticipated, growing by about 3% this year and 4.5% in 2022. Meanwhile, euro-zone government bond yields seem unlikely to fall much further, and with Treasury yields set to increase significantly, we expect the widening yield gap to cause the euro to weaken against the US dollar.”
This wave of downgrades, which includes the OECD and European Central Bank estimates, comes with the same old and tired upgrade of next year’s expectations,

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The Property-Based Social Order Is Being Destroyed by Central Banks

12 days ago

Readers of the Mises Wire are no doubt familiar with the negative consequences of central banking and the inflationary capacity of fiat currency and how such a system drives malinvestment and leads to boom-bust cycles. Not only does the business cycle lead to the misallocation of resources from their natural ends of the structure of production, but it also drives resources into financialization, rather than the “real” economy. This financialization, which has been taking place since at least the First World War, has served, over time, to structurally undermine the morality of property in the eyes of the general public. As the increased popularity of socialism, at least in rhetorical terms, among the youth indicates this “evaporation” of property may reach a critical mass within the

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How the “Bourgeois Deal” Enriched the World

13 days ago

Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the Worldby Deirdre Nansen McCloskey and Art CardenUniversity of Chicago Press, 2020xvii + 227 pages
McCloskey and Carden endeavor to explain one of the most striking facts of world history. Since about 1800, there has been an enormous increase in the average standard of living throughout the world. Before that date, almost everyone was poor, but things changed with what they call the Great Enrichment. “The Enrichment was really, really ‘great’: three thousand percent per person”(p. xi, emphasis in original). The authors contend “that human liberty—and not the machinery of coercion or investment, or even science by itself—is what made for a Great Enrichment, from 1800 to the present” (p. ii). The book is a “popular

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