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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

Paul Krugman’s One-Man War on Science

5 days ago

When David Card was recently awarded the Nobel Memorial Price in Economic Science (along with two other economists), I figured Paul Krugman would weight in, since Card, along with the late Alan Krueger, authored an economic study almost thirty years ago that allegedly debunked standard economic theory on the effects of a binding minimum wage. Krugman did not disappoint.
As is his M.O., Krugman cherry-picked his information and then went on to claim that the Card-Krueger studies, along with other studies that seemingly disprove how economic theories normally are applied, should “favor a policy move to the left,” at least when it comes to government policies. This is another way of saying that Krugman once again claimed that opportunity cost is irrelevant and probably wrong. No, he did not

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GDP Tells Us Little about the Health of an Economy

5 days ago

The government and the mainstream media’s favorite economic statistic is gross domestic product (GDP). If GDP goes up, then the economy is doing well. If GDP shrinks, then the economy is doing poorly, or so it is assumed. It all seems so simple. But GDP tells us no such thing. The economy may be doing poorly when GDP rises. Likewise, the economy may be doing well when GDP falls. How can this be?
Although the official statistical components that make up GDP are rather complicated, the big picture is that GDP measures predominately consumer spending (for a detailed explanation of GDP’s many components, see Mark Brandly’s “Calculating GDP Correctly”). But consumer spending is not the sole use of money, and it may not be the most important.
Therefore, even in a sound money environment, it is

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The Dangers of “Should Be”

5 days ago

By: Robert Aro
In this world, there exists a multitude of supranational organizations, agencies and committees which, may or may not, work in concert with each other for the purpose of central planning. Countless bureaucrat salaries are funded with the public’s money or debt, paid not to produce goods or services that have a market price; instead the goal is to rearrange society based on the notion that they possess a calculation method or some higher knowledge allowing them to know how society “should be.”

One such planner is Randal K. Quarles. Hardly a household name, he sits on the Board of the Federal Reserve’s Board of Governors, but also is the Chair of the Financial Stability Board (FSB). The FSB has a lengthy mandate including activities such as monitoring and making

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Joe Salerno on Rothbard’s History of Economic Thought

5 days ago

We wrap up our look at Murray Rothbard’s sprawling two volume An Austrian Perspective on the History of Economic Thought with Dr. Joe Salerno, Rothbard’s friend and colleague. This show covers the second volume exclusively, starting with the Frenchman JB Say and working through Ricardo, the British Currency School, John Stuart Mill, and finally Karl Marx. Salerno has penetrating insights about all of these thinkers, from Say’s understanding of production to Ricardo’s erroneous systemization of Adam Smith. He also has great background regarding Mises and the Currency School vs. Banking School debate, on free banking and full reserve banking, and on Mill’s deep misconception of money. The show ends with a thorough look at Rothbard’s treatment of Marx over more than 100 pages: Marx’s sick

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Review: Radical Uncertainty: Decision-Making Beyond the Numbers

5 days ago

Radical Uncertainty: Decision-Making Beyond the NumbersJohn Kay and Mervyn KingNew York: Norton, 2020, xvi + 528 pp.
David Gordon ([email protected]) is a senior fellow at the Mises Institute and editor of the Journal of Libertarian Studies.
Kay and King are not Austrians, but in this important book, they lend aid and comfort to several key points of Austrian economics. Kay teaches economics at Oxford, and King, who was formerly Governor of the Bank of England, teaches at NYU. (King in an earlier book, The End of Alchemy, which I had occasion to review, warns against the dangers of fractional reserve banking, in a way that will delight admirers of Murray Rothbard.)
Austrians hold that the dynamics of the market depend on profit-seeking entrepreneurs. whose judgments of appraisement are of

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The Answer to Suicide Isn’t a Gun Lock

6 days ago

By: Alan Mosley
While enjoying some Saturday afternoon college football, I was treated to about a dozen reruns of a commercial produced by the Department of Veteran Affairs. Let me paint the scene for you:

A lone figure rests upon his pickup truck beside a lone oak upon a ridge in an otherwise rolling green prairie. The sky is a canvas of orange and purple as the sun sets on a peaceful day in the foothills of rural America. Suddenly, the imagery fades to a small silver case: a gun case for a pistol. Notably unloaded, the hands of the otherwise off-screen figure emerge to affix a lock to his sidearm, as even the case and separated magazine wasn’t enough to keep this soldier safe.

But safe from what? The voice over then chimes in:

“A simple lock puts space between the thought and the

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Celebración de la inflación

6 days ago

By: Robert Aro
Según informó Reuters el miércoles:

Sí, la inflación ha vuelto, y probablemente deberías sentirte aliviado, si no directamente feliz.

Parece extraño empezar un artículo de noticias con la frase anterior. Cuando hablan de inflación, se refieren a la subida de precios medida a través de diversos cálculos de inflación. Para una fuente de noticias, supuestamente imparcial, parecen desconocer o ignorar a propósito la pérdida de poder adquisitivo del dólar y la degradación de la moneda. Lo que celebran es un aumento del coste de la vida para todos, que perjudica más a los que están en el nivel más bajo de la escala de ingresos.

Como explica una de las fuentes de noticias más fiables del mundo:

Este es el veredicto de los principales bancos centrales del mundo, que esperan

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History of Science: Whiggism Gone Wild

6 days ago

Excerpted from an edited transcript of “Ideology and Theories of History,” the first in a series of six lectures, given in 1986, on the history of economic thought.
The Whig theory of the history of science is very similar, of course, to the Whig theory of the history itself. The Whig theory of history of science was dominant until the 1960s. (It probably still is dominant in high school textbooks.) It essentially said that science, the growth of knowledge, is an onward-and-upward, step-by-step approach, from the year zero to now.
What are the implications of that? One implication is that you don’t have to read a history of science unless you’re an antiquarian. If you’re a physicist in 1986, there’s no point in reading some physicist from 1930; unless you’re interested in the special

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Don’t Expect Foreign Policy Experts to be Held Accountable for Afghanistan

6 days ago

Until there’s a new foreign policy class informed by an outlook of restraint, no kind of punishment or demotion of those who prosecuted the bungled wars of the past few decades should be expected.
Original Article: “Don’t Expect Foreign Policy Experts to be Held Accountable for Afghanistan”
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
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“Idle Resources” Are Problems Caused by the Central Bank

7 days ago

Resources that are utilized to promote economic prosperity in normal times become underutilized during recessions. Some experts are of the view that what is required are policies which will increase the availability of credit to make greater use of underutilized resources. On this Ludwig von Mises wrote,

Here, they say, are plants and farms whose capacity to produce is either not used at all or not to its full extent. Here are piles of unsalable commodities and hosts of unemployed workers. But here are also masses of people who would be lucky if they only could satisfy their wants more amply. All that is lacking is credit. Additional credit would enable the entrepreneurs to resume or to expand production. The unemployed would find jobs again and could buy the products. This reasoning

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Why Congress Should Default on its Debt

9 days ago

Washington politicos want to keep the debt going up at breakneck speed forever. But the responsible thing to do is refuse another increase to the debt ceiling and force a partial default. Politicians hate that idea because default would make it harder to spend trillions in deficit spending.
Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
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The End of the Abe Administration—The End of Abenomics? Books on Past and Present in the Japanese Political Economy

9 days ago

Jason Morgan ([email protected]) is associate professor at Reitaku University in Kashiwa, Japan.
PRIME MINISTER ABE SHINZ?’S RESIGNATION AND THE END OF AN ERA IN JAPAN
On August 28, 2020, Japanese prime minister Abe Shinz? entered a Tokyo press conference and began speaking. Speculation had been building for weeks that Prime Minister Abe would step down. The rumor was that the health condition, ulcerative colitis, which had cut short his first stint as prime minister in 2007 had worsened again. This turned out to be true. Prime Minister Abe announced at the August press conference that he would be resigning upon the election of his successor, thus bringing to a close one of the most historically and economically momentous administrations in postwar Japanese history.
Prime Minister Abe

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Why Did Google Ads Ban LewRockwell.com?

10 days ago

One thing struck me as especially odd about Google’s ban of LewRockwell.com from its advertising program. This was the claim that articles on this site could “undermine participation or trust in electoral or democratic process.” I suppose what is meant is that the site has published articles that suggest there was substance to President Trump’s claim that the election was stolen from him. If people believe this, they are less likely than they would otherwise be to support the electoral process. Why support a process you regard as rigged?
Is this argument sound? I do not think so. Those who say the presidential election was rigged usually do not want to end elections. Their complaint is that the proper election procedures weren’t followed, e.g., that people were counted as voters who didn’t

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How the Fed’s Easy Money Spurred Today’s Financial Frenzies

10 days ago

Though the effective federal funds rate remains less than 0.1 percent, the reaction of the markets and financial press as the ten-year Treasury yield crossed the 1.5 percent threshold near the start of the month reminds us just how fragile our economy’s underlying monetary framework has become over the past two decades. Regularly at a minimum of at least 4 percent in the postwar period, ten-year Treasury yields haven’t crossed that threshold in over a decade and were in steady decline from 1992 onward.
This persistently loose monetary policy forces even the most risk-averse portfolio managers to take on equity premiums previously outside their comfort zone—see J.P. Morgan’s 2021 Long-Term Capital Market Assumptions report. This is because beyond the speculation cheap money facilitates

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Nord Stream 2: The Value of German-Russian Cooperation

10 days ago

Hopefully, increased interdependence and overlapping interests will help to shape a future of stability in Europe and continue the precious absence of another major war on the continent.
Original Article: “Nord Stream 2: The Value of German-Russian Cooperation”
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
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Inflation Celebration

10 days ago

By: Robert Aro
As reported by Reuters on Wednesday:

Yes, inflation is back, and you should probably be relieved if not outright happy.

It seems strange to start a news article with the above sentence. When they talk of inflation, they’re talking about price increases as measured through various inflation calculations. For a news source, supposedly unbiased, they seem unaware or purposely ignore the loss of dollar purchasing power or currency debasement. What they’re celebrating is an increase in the cost of living for everyone, hurting those at the lowest level of the income bracket the most.

As one of the most trusted news sources in the world explains:

That is the verdict of the world’s top central banks, who hope they have hit the sweetspot where healthy economies see prices

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Review: Austrian Economics in Contemporary Business Applications

10 days ago

Austrian Economics in Contemporary Business Applicationsedited by Hunter HastingsAuburn, Ala.: Mises Institute, 2020, 68 pp.
Fernando D’Andrea ([email protected]) is a Ph.D. student in entrepreneurship at Oklahoma State University.
The six-chapter book Austrian Economics in Contemporary Business Applications promises to follow Mises’s and Rothbard’s lead and translate sound economic ideas for laymen. The book is, up to this point, the highest scholarly achievement of the “Economics for Business” project of the Mises Institute, launched in 2019.
It also aims to communicate opportunities of research and consulting to the Austrian audience. The contributors, all business school professors, show how Austrian ideas—value subjectivity, consumer sovereignty, capital allocation, entrepreneurship,

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¿Necesita la Fed más progresistas?

11 days ago

By: Robert Aro
El Sistema de la Reserva Federal necesitará personas que cubran el hueco dejado por la jubilación de los presidentes regionales de Dallas y Boston, que dimiten tras la revelación pública de sus actividades comerciales. El vicepresidente de la Reserva Federal, Richard Clarida, también está siendo investigado por operaciones de varios millones de dólares. La Fed podría contratar, o ascender, a personas en un futuro no muy lejano.

Si la experiencia pasada es un indicador de los resultados futuros, entonces alguien que no haga demasiadas preguntas, pero que tenga interés en el cambio climático, podría ser un buen candidato. El nombre que sigue apareciendo en los titulares de las noticias parece ser el de la gobernadora de la Fed, Lael Brainard. La CNBC informa:

El aumento de

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Pre-Columbian America Wasn’t Exactly a Paradise of Freedom

11 days ago

The story of European colonization of the Americas is popularly understood as the conquest of American Indians—the end of natives’ control of the land and the beginning of their subjugation. The contingencies of indigenous agency and geopolitics mean that the reality is much messier, as historians have been steadily revealing for decades, but this interpretation still circulates.
One possible reason for its longevity is the still common impression that Indians all roamed freely over the land, lacking a conception of private property and existing in a state of virtual harmony when the first agents of European states made contact in the late fifteenth, sixteenth, and seventeenth centuries. A necessary corollary to this image of precontact native freedom is the implication that these

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Why a Bear Market in Bonds Points to a Weakening Economy

11 days ago

After closing at 0.53 percent in July 2020 the yield on the ten-year US T-bond moved relentlessly higher, closing on Tuesday, September 28, 2021, at 1.55 percent. There is a growing likelihood that the July 2020 figure of 0.53 percent might have been the lowest point.

How should we view this in the context of historical trends in bond yields?
First, it is important to consider the behavioral foundations of bond buying.
As a rule, people assign a higher valuation to present goods versus future goods. This means that present goods are valued at a premium to future goods. This stems from the fact that a lender or investor gives up some benefits at present. Hence, the essence of the phenomenon of interest is the cost that a lender or an investor endures.
An individual who has just enough

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Billionaire Plutocrat Jamie Dimon Wants to Ditch the Debt Ceiling

11 days ago

At a meeting with President Binden and other CEOs last week, JP Morgan Chase CEO Jamie Dimon predicted a global catastrophe if the debt ceiling is not raised.
Dimon was echoing the words—nearly verbatim—of Biden’s Treasury secretary Janet Yellen in using the most extreme language possible, with words such as “complete catastrophe.” Dimon also repeated Yellen’s lie that the US has never defaulted, claiming a default “would be unprecedented.” Dimon then went on to demand that the debt ceiling be abolished altogether so that the US government would no longer be encumbered by inconvenient impediments to endless amounts of federal debt and spending.
This sort of thing, of course, is precisely what we’ve come to expect from billionaires and other captains of the financial sector who have made a

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Critiquing an MMT TED Talk

11 days ago

Bob provides a running refutation of Stephanie Kelton’s recent TED talk on Modern Monetary Theory (MMT).
Mentioned in the Episode and Other Links of Interest:
Stephanie Kelton’s TED Talk
Bob’s review of Kelton’s book explaining MMT
Bob’s article on opting out of Social Security
Kelton’s intro to MMT, The Deficit Myth
Bob’s interview of a founder of MMT, Warren Mosler. Then Bob’s analysis of that episode
Bob’s Mises.org critique of a popular identity (equation) in the MMT literature.
?For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and via RSS.

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How “Cultural Distance” between Societies Can Hamper Economic Prosperity

11 days ago

Cultural disparities between national, linguistic, or cultural groups can prevent the spread of trade and hamper the adoption of useful economic strategies.
Original Article: “How “Cultural Distance” between Societies Can Hamper Economic Prosperity”
This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
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The UK’s National “Crisis”: Age-Adjusted Mortality Is at 2008 Levels

12 days ago

All over the world, populations have been locked up, have become fearful, and none of it can be justified. Looking at the UK, the overall death rate for 2020 is not unprecedented, and some of the increase in the death rate is likely the result of an incomprehensibly bad covid policy.
Sometimes, a dam breaks, and reality intrudes on media and political narratives. Just such a break is the publication of the mortality rate for England and Wales by the UK’s Office for National Statistics (ONS). The report can be found here. The content that is of greatest interest is the total mortality and mortality rates over time. Below is figure 1 from the report. A red line has been added to give a sense of where mortality was in 2020 compared with the past. The figure shows mortality rates with no

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Jay Bhattacharya on Public Health

12 days ago

Our guest is Jay Bhattacharya, Professor of Medicine and Health Policy at Stanford University. Professor Bhattacharya is also research associate at the National Bureau of Economics Research, a senior fellow at the Stanford Institute for Economic Policy Research, and director of the Stanford Center on the Demography of Health and Aging.
Dr. Bhattacharya gained international prominence during the COVID pandemic for his contributions to determining the infection fatality rate of the virus, and for his criticism on broad coercive lockdown policies and vaccine mandates. Along with colleagues Martin Kulldorff and Sunetra Gupta, he wrote the Great Barrington Declaration of focused protection which has garnered 860,000 signatures to date.
SHOW NOTES?

Jay Bhattacharya: Twitter and Stanford page

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What the New Nobel Winners Get Wrong about Economics

12 days ago

This year’s Nobel Prize in economics was awarded to David Card of the University of California, Berkeley, Joshua Angrist of Massachusetts Institute of Technology, and Guido Imbens of Stanford University. The laureates, according to the Nobel Committee have made an important contribution as to how to ascertain cause and effect from observational data.
For instance, how does the imposition of a minimum wage affect employment? In answering these types of questions, economists rely on observational data, but with observational data a fundamental identification problem arises: the underlying cause of any correlation remains unclear.

If we observe that minimum wages and unemployment correlate, is this because a minimum wage causes unemployment? Or because unemployment and lower wage growth at

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Polygamy Is a Problem for Economic Development

13 days ago

Though a rarity in most places, polygamy is pervasive in a batch of countries situated in West and Central Africa, including Burkino Faso (36 percent), Mali (34 percent), and Nigeria (38 percent). Economist James Fenske in a 2011 paper discussing polygamy in Africa provides some shocking statistics: “Of the nearly half a million women included in the data for this study, roughly 40% who first married in 1970 share their husband today, while for women who married in 2005, that number is closer to 15%.” A crucial observation is that the percentage of women in polygamous relationships has declined; however, at 15 percent this figure is still relatively high.
As such the persistence of polygamy in Africa has attracted the attention of economists who argue that polygamy is negatively associated

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Fabrice Testa on Super Entrepreneurship

13 days ago

Entrepreneurship is a method, and it’s also a mindset. Fabrice Testa has written a book that brilliantly integrates the two: he calls the integration “Super Entrepreneurship,” and his book title is therefore Super Entrepreneurship Decoded (Mises.org/E4B_139_Book). He has the appropriate credentials as a proven super-entrepreneur who has created and nurtured numerous great companies (and successfully sold a couple of them).
Fabrice knows the true meaning of the phrase, “The day before something is a breakthrough, it’s a crazy idea”.
Entrepreneurs are animated by their purpose. Super entrepreneurs embrace a massive transformative purpose.
The motivation for entrepreneurs is to help others — to solve problems for others, as we sometimes phrase it. Super entrepreneurs, in Fabrice Testa’s

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