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Patrick Barron

Patrick Barron

Patrick Barron is a private consultant to the banking industry. He has taught an introductory course in Austrian economics for several years at the University of Iowa. He has also taught at the Graduate School of Banking at the University of Wisconsin for over twenty-five years, and has delivered many presentations at the European Parliament.

Articles by Patrick Barron

Government as the Ultimate Cause of the Tragedy of the Commons

8 days ago

A good definition of the tragedy of the commons is that “resources that are unowned and/or unownable will be plundered to extinction.” Original Article: “Government as the Ultimate Cause of the Tragedy of the Commons” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.

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A Rights- and Logic-Based Approach to Pandemics

May 3, 2021

We all are too familiar with the approach to pandemics taken by governments at all levels in the US. Original Article: “A Rights- and Logic-Based Approach to Pandemics” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.  

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GDP Hides the Damage from the Covid-19 Lockdowns

April 5, 2021

Government money printing may goose GDP, but It will do nothing to fix the losses that millions have suffered from covid restrictions and lockdowns.  Original Article: “GDP Hides the Damage from the Covid-19 Lockdowns” This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.  

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GDP Hides the Damage from the Covid-19 Lockdowns

March 29, 2021

Do not believe government pronouncements that the economy is rebounding from very minimal damage caused by unprecedented covid-19-inspired closures of businesses. Government will use its favorite statistic of the health of the economy to justify its actions—gross domestic product (GDP). GDP is supposed to represent the total of spending on final goods and services in …

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The World Needs a Gold-Backed Deutsche Mark

February 12, 2021

The seeds of sound-money destruction were sown at the 1944 Bretton Woods Conference, which established that US dollars could be held as central bank reserves and were redeemable for gold by the US Treasury at thirty-five dollars an ounce. This was the so-called gold exchange standard, but only foreign central banks and some multinational organizations, such …

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Covid-19 and the Socialist Calculation Problem

January 16, 2021

Just as central planners cannot know how individuals will value a product or service, so too are central planners unable to calculate or plan for the endless array of risk assessments made by potential victims of covid-19. Original Article: “Covid-19 and the Socialist Calculation Problem” This Audio Mises Wire is generously sponsored by Christopher Condon. …

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Covid-19 and the Socialist Calculation Problem

January 13, 2021

One hundred years ago Ludwig von Mises wrote the definitive exposure of the impossibility of socialism: “Economic Calculation in the Socialist Commonwealth.” In a recent Mises Wire essay—”Socialist Robert Heilbroner’s Confession in 1990: ‘Mises Was Right.'”—Gary North sums up the socialist problem succinctly (his emphasis). But Heilbroner failed to present the central argument that Mises had offered. Mises was not talking about the technical difficulty …

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A Poor Understanding of Monetary Theory Leads to Disastrous Government Policies

August 22, 2020

Austrian school economists know that unsound money has been at the heart of disastrous government policies since time immemorial. The greater the ignorance of money, the greater the monetary debasement in order to fund government’s latest folly. Monetary debasement always ends badly, but end it will. Robert L. Shuettinger and Eamon Butler, cofounder and director …

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China’s Economic Schemes Hurt the Chinese Most of All

February 12, 2020

In his State of the Union Address—February 4, 2020—President Trump outlined his reasons for punishing nations that manipulate their economies in order to achieve some internal policy goal, such as China. The president claimed that such manipulation was unfair and harmful to its trading partners. His main concern is that by manipulating its economy China “steals” …

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Why the US Wants to Lower Germans’ Real Wages

January 3, 2020

On December 20, 2019, President Trump authorized sanctions against companies and individuals who are participating in building Nord Stream Two, a pipeline under the Baltic Sea that will bring Russian natural gas to western Europe, principally Germany. The pipeline is more than 80 percent completed. The sanctions were included in the 2020 National Defense Authorization …

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What a “Hard Brexit” Could Mean for the UK

March 21, 2019

When Britons voted on June 23, 2016 on whether or not to leave the EU there was no discussion of a “hard or soft Brexit”. These terms were invented after Brexit passed by a surprisingly large margin and the mostly anti-Brexit Tory Party government, especially its leadership, decided that it needed to negotiate the terms …

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The Monetary Base Never Returned to “Normal” After the Great Recession

December 22, 2018

There are three money supply statistics that every citizen should understand. They are the monetary base, M1, and M2. The Monetary Base Sometimes called “standard money” or “high powered money”, the monetary base is that monetary unit beyond which there is no further claim. It is composed of two parts: (1) cash, whether located in …

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My letter to the NY Times re: Typical Keynesian Whitewash

August 14, 2018

Dear Sirs:
Fareed Zakaria’s review of the Adam Tooze book Crashed: How a Decade of Financial Crises Changed the World is a typical Keynesian whitewash of a deeply flawed monetary and regulatory system. Like Tooze, Zakaria sees the Federal Reserve Bank as the hero in “saving the financial system” that was going into free fall in 2008. But why was it going into free fall, and was the Fed’s massive, multi-trillion dollar bailout really the answer? To agree with Tooze and Zakaria is to condone monetary counterfeiting pre-2008 and even more monetary counterfeiting thereafter. One of the prime purposes of sound, as opposed to fiat, money is to allocate scarce resources. The Keynesians do not admit that resources are scarce. They equate the medium of exchange, in this case fiat dollars, with real

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My letter to the NY Times re: Typical Keynesian Whitewash

August 14, 2018

Dear Sirs:
Fareed Zakaria’s review of the Adam Tooze book Crashed: How a Decade of Financial Crises Changed the World is a typical Keynesian whitewash of a deeply flawed monetary and regulatory system. Like Tooze, Zakaria sees the Federal Reserve Bank as the hero in “saving the financial system” that was going into free fall in 2008. But why was it going into free fall, and was the Fed’s massive, multi-trillion dollar bailout really the answer? To agree with Tooze and Zakaria is to condone monetary counterfeiting pre-2008 and even more monetary counterfeiting thereafter. One of the prime purposes of sound, as opposed to fiat, money is to allocate scarce resources. The Keynesians do not admit that resources are scarce. They equate the medium of exchange, in this case fiat dollars, with real

Read More »

6 Reasons Why a Trade War with the Chinese Is Pointless

August 8, 2018

Reprinted from Mises.org
In a recent post I explained that China’s manipulations of its own currency hurt only herself and not her trading partners and, therefore, retaliatory tariffs were not warranted and would be self-defeating anyway. China harms herself by causing her own money supply to expand, which destroys capital through malinvestment and causes prices to rise domestically. Retaliatory tariffs cause American goods to rise in price, resulting in a recession and generally lower standard of living. Few economists claim otherwise.
It seems that everyone is in favor of free trade, as long as it is the other guy who must compete with foreign products. When it comes to their own products, the most typical response from American manufacturers begins with the caveat that “although free

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6 Reasons Why a Trade War with the Chinese Is Pointless

July 26, 2018

In a recent post I explained that China’s manipulations of its own currency hurt only herself and not her trading partners and, therefore, retaliatory tariffs were not warranted and would be self-defeating anyway. China harms herself by causing her own money supply to expand, which destroys capital through malinvestment and causes prices to rise domestically. …

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Understanding Economic Theory Is Essential for Understanding the Benefits of Free Trade

June 23, 2018

In a recent post I explained that China’s manipulations of its own currency hurt only herself and not her trading partners and, therefore, retaliatory tariffs were not warranted and would be self-defeating anyway. China harms herself by causing her own money supply to expand, which destroys capital through malinvestment and causes prices to rise domestically. Retaliatory tariffs cause American goods to rise in price, resulting in a recession and general lower standard of living. Few economists claim otherwise.
 
It seems that everyone is in favor of free trade, as long as it is the other guy who must compete with foreign products. When it comes to their own products, the most typical response from American manufacturers begins with the caveat that “although free trade is beneficial most of

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China’s Currency Manipulation Does NOT Harm Its Trading Partners

June 19, 2018

Americans are being told that China’s currency manipulations are causing harm to its trading partners, America being the main victim. Nothing could be further from the truth. China’s currency manipulations certainly cause harm, but to China itself!
No country can cause harm to another by adopting any economic intervention. All economic interventions cause harm only to the country that adopts them. This applies to subsidies of home industries, quotas restricting import volumes, tariffs imposed on imports, and currency manipulations.
A nation typically manipulates its currency by giving more of its own currency in exchange for the currency of other countries. Thus foreign importers can buy more goods per unit of currency exchanged. In other words, if the free market exchange rate between the

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The market provides its own punishment for irrelevant discrimination

May 20, 2018

My letter to the Mercatus Center:
Re: Should hot workers subsidize ugly ones?

Excellent points by Omar Ahmad Al-Ubaydli, but aren’t all forms of irrelevant discrimination self-correcting and self-penalizing? If a company hires only beautiful workers and ignores ugly ones who may be better qualified, won’t this company suffer in the market place? Same with height, etc. If the stockholders of a company accept lower dividends because they like the idea that their company employs lots of beautiful people, so what? They are the ones deciding to accept lower dividends. In other words, let the market work and leave people alone.

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Unilateral Free Trade Would Benefit All UK Citizens

March 21, 2018

From today’s Open Europe news summary:
Removing tariffs post-Brexit could see prices fall up to 1.2%, suggests new study

According to a report by the Institute of Fiscal Studies, UK households could see prices fall by around 0.7-1.2% if the UK were to eliminate tariffs on all goods after Brexit. The report noted, “This compares with the estimated 2% increase in prices that followed the depreciation in Sterling in the wake of the referendum result. This suggests that the scale of ‘quick wins’ from running an independent trade policy is relatively small.” The report also argued that removing tariffs could “be very damaging for some UK industries in the short run.” The director of the IFS, Paul Johnson, said, “If we leave the customs union, we can come to our own trade deals with other

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The EU elite are ignorant of the true meaning and importance of “comparative advantage”

March 15, 2018

From Open Europe news summary of 14 March 2018 (my highlight):
Commenting on Prime Minister Theresa May’s Mansion House speech earlier this month, the EU’s chief Brexit negotiator Michel Barnier called it a “surprising idea” that the UK would be allowed to benefit from convergence with EU rules in some areas while “open[ing] up the possibility of divergence when there is the comparative advantage for it.” He stressed the importance of social and environmental standards to the EU’s regulatory framework, asking, “Does the UK also want to distance itself from this model which they have constructed gradually with us and engage in dumping against us?”
To answer Barnier’s question–emphatically YES! The UK should seek to benefit where it has acomparative advantage. In fact every person on earth

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Mises, Kant, and Welfare Spending

January 25, 2018

Reprinted from Mises.org
Man’s Natural Rights and the Limits of Government
In The Law Frédéric Bastiat presents the irrefutable maxim that man’s rights exist prior to the formation of the state and that, therefore, the collective action of the state cannot conflict with man’s prior rights. According to Bastiat, man can delegate to the state only those powers that he himself already possesses, and man does not have the natural right to force another to give to a charity. Since I cannot coerce you to give to the charity of my choice, neither can government force you to give to the charity of its choice. Yet that is exactly what it does. Let us say that you object that government gives money to a charity that you personally abhor. You would not get very far arguing that you have a right to

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Can an Economy Advance Without Savings?

January 20, 2018

According to Frank Decker, Honorary Associate at the University of Sydney Law School, it certainly can. Not only that, but eschewing savings in favor of “monetisation of assets” will yield better results! I refer to his article in Economic Affairs–Volume 37, Number 3, October 2017–, a publication of the Institute of Economic Affairs, London.
 
Mr. Decker purports to answer the question “Central Bank or Monetary Authority? Three Views on Money and Monetary Reform.” The three views examined are commodity money, state money, and money as a derivative of property. All three views are explained very well, and a beginner to the study of the role of money will learn a lot in a short period of time.
 
Commodity money is the name Decker aptly gives to money backed by gold or some other widely

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Frédéric Bastiat and the Hubble Telescope

January 15, 2018

A few days ago my wife and I watched a fascinating program on PBS. The long running Nova series featured the history and accomplishments of the Hubble Space Telescope. The program was titled Invisible Universe Revealed. This episode was composed of three parts.The first third of the program explained how the astronomers secured funding for the space telescope and successfully built and launched it. Senator William Proxmire, Democrat from Wisconsin, had the space telescope in his sights. From 1975 to 1988 the senator awarded his monthly Golden Fleece Award for egregiously wasteful spending. According to Nova, funding for Hubble was secured when Nancy Roman, Chief Astronomer-to-be, pointed out, apparently to the satisfaction of Congress, that for the cost of a night at

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Bastiat and the Hubble Space Telescope

January 8, 2018

A few days ago my wife and I watched a fascinating program on PBS. The long running Nova series featured the history and accomplishments of the Hubble Space Telescope. The program was titled Invisible Universe Revealed. This episode was composed of three parts.
 
The first third of the program explained how the astronomers secured funding for the space telescope and successfully built and launched it. Senator William Proxmire, Democrat from Wisconsin, had the space telescope in his sights. From 1975 to 1988 the senator awarded his monthly Golden Fleece Award for egregiously wasteful spending. According to Nova, funding for Hubble was secured when Nancy Roman, Chief Astronomer-to-be, pointed out, apparently to the satisfaction of Congress, that for the cost of a night at the movies, every

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The Economic Benefits of Ending the Fraud of Fractional Reserve Banking

December 31, 2017

Fractional reserve banking (FRB) is fraudulent. It should be prosecuted as a crime rather than accepted as normal practice under current banking laws. Any society that respects property rights and the rule of law would not allow it. For those unfamiliar with the term fractional reserve banking or not quite confident of its complete meaning, let’s cover some basics.
 
What Is Fractional Reserve Banking?
 
All financial transactions must be settled ultimately by an exchange of standard money, otherwise known as “reserves”. Reserves in the US are composed of federal reserve notes (good old paper money in your wallet, piggy bank, retailers’ cash register tills, or bank vaults) plus reserve account balances held by banks at their local Federal Reserve Bank that may be exchanged for federal

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El terrible legado de Lyndon Johnson

November 18, 2017

Read this in Español
Recientemente, mi esposa y yo pasamos una mañana en la Biblioteca Presidencial de Lyndon Baines Johnson en Austin, Texas. El daño producido por este matón es incalculable. Su biblioteca nos recuerda el inicio de la tormenta de expansión del gobierno durante el mandato presidencial de Johnson, que duró desde el asesinato de Kennedy en octubre de 1963 a su decisión de no presentarse a un segundo mandato en 1968, algo que se atribuye habitualmente a su fracaso en terminar la guerra en Vietnam.Johnson era un admirador de FDR y estaba decidido a revivir y completar lo que creía que deberían haber sido partes integrantes del New Deal de FDR. Johnson llamó a su programa La Gran Sociedad. Como si no bastara con la ignorancia de las consecuencias de su

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