Archive for July 2012

Empty Seats and Empty Minds at the Olympics

The British Olympic organizers restricted ticket purchases, rewarded corporate purchases but not corporate use, imposed price controls on tickets available to the public and state violence against the resulting scalpers (touts) — and are distraught and surprised over the empty seats that characterize so many of the Olympic events so far.  To reduce the embarrassment and sense of scandal, organizers have carted in British troops–dressed in their camo!–to fill seats at gymnastics events, while other easily manipulated, low-time-cost groups on the government’s payroll are also being bussed in to other sparsely-attended venues.

Meanwhile, many thousands willing to pay market prices to attend Olympic events are told to bugger off.

The Olympics are essentially mercantile events in which planning takes place outside of market forces so as to achieve outcomes preferred not by consumers but by states.  (Peter Hitchens argues here that this trend started with the 1936 Olympics in Berlin when Hitler and Goebbels transformed them into “grandiose and torch-lit” spectacles.)  Regardless, the events in London are demonstrating once again what an LSE economist in the 1930s said about economics–that its “curious task” was “to demonstrate to men how little they know about what they imagine they can design.”  Why did Sebastian Coe and his team think they could effect a better outcome than what would result from the price system?  These are practical men, but even Keynes might admit that they are probably slaves of some defunct and incorrect economist.

Available: QJAE vol. 15, no. 2 (Foss, Engelhardt, Davidson, Grimm, Block/Barnett, and Howden)

Volume 15, no. 2 of the Quarterly Journal of Austrian Economics was made available online this week. Articles are:

Nicolai J. Foss, “The Continuing Relevance of Austrian Capital Theory,”

Lucas Engelhardt, “Expansionary Monetary Policy and Decreasing Entrepreneurial Quality,”

Laura Davidson, “Against Monetary Disequilibrium Theory and Fractional Reserve Free Banking,”

Richard C. Grimm, “Fundamental Analysis as a Traditional Austrian Approach to Common Stock Selection,”

Walter E. Block and William Barnett II, “Transitivity and the Money Pump,”

David Howden, Review of Engineering the Financial Crisis: Systemic Risk and the Failure of Regulation, by Jeffrey Friedman and Wladimir Kraus

The Quarterly Journal of Austrian Economics was nominally founded in 1998, but, in terms of its mission and guiding spirit, it is a continuation, in an expanded and improved form, of the first ten volumes of the semi-annual Review of Austrian Economics, whose founding editor was the late Murray N. Rothbard.

The mission now, as it was when it was adopted from Rothbard, is “to promote the development and extension of Austrian economics and to promote the analysis of contemporary issues in the mainstream of economics from an Austrian perspective.”

Submissions and Editorial Board

The Theory of Land Ownership

“It must be added that the theory of land ownership in a free society set forth here, i.e., first ownership by the first user, has nothing in common with another superficially similar theory of land ownership–advanced by J.K. Ingalls and his disciples in the late nineteenth century. Ingalls advocated continuing ownership only for actual occupiers and personal users of the land. This is in contrast to original ownership by the first user.”

–Murray N. Rothbard. Man, Economy, and State with Power and Market

Mises University 2012 Starts Tonight

It’s an amazing event, at which the best minds in the Austrian tradition gather to impart their wisdom on the next generation of eager Austrians.  At 8:00 pm Central, Mark Thornton kicks it all off with a welcome message.  Then at 8:15 Robert Higgs will deliver a talk on Warfare, Welfare, and the State.

To participate online, register for Virtual Mises University!

Introducing Virtual Mises University

Can’t make it to Auburn this year? Sign up for Virtual Mises U. Only $20!

Professor Hoppe on Socialized Health Care

“With the socialization of the health care system through institutions such as Medicaid and Medicare and the regulation of the insurance industry (by restricting an insurer’s right of refusal: to exclude any individual risk as uninsurable, and discriminate freely, according to actuarial methods, between different group risks) a monstrous machinery of wealth and income redistribution at the expense of responsible individuals and low-risk groups in favor of irresponsible actors and high-risk groups has been put in motion.”

–Hans-Hermann Hoppe, Democracy: The God That Failed

New Documentary on the Great Recession

Here is a new crowdfunded documentary on the financial crisis produced by Austrian economist Jesús Huerta de Soto!

The Bubble

Congratulations to Jimmy Morrison who has written and produced The Bubble a film on our view of the financial crisis. The trailer premiered last Friday at Freedom Fest in Las Vegas. The inspiration for the film, Tom Woods, then moderated a panel discussion on the crisis which included David Tice, Peter Schiff, Doug Casey, and Gene Epstein.

The Montaigne Fallacy

“The Leitmotiv [i.e., an often repeated theme] of social philosophy up to the emergence of economics was: The profit of one man is the damage of another; no man profits but by the loss of others.  This is not a philosophy of social cooperation, but of dissociation and social disintegration.  For the sake of expediency, we call this doctrine after its proponent, essayist Michel Eyquem de Montaigne (1533-92).  In the light of this Montaigne fallacy, human intercourse cannot consist in anything but the spoliation of the weaker by the stronger.”

–Ludwig von Mises. Economics as a Bridge for Interhuman Understanding

Austrian Economics and Management Studies

As evidence of the growing interest in Austrian economics within management studies, note these sessions or papers at upcoming meetings of the major academic management societies, the Academy of Management (Boston, August 3-7) and the Strategic Management Society (Prague, October 6-9):

Austrian Economics & Creative Destruction
Facilitator: Peter Klein, University of Missouri
Austrian Economics in Organization Studies: How Austrian Ideas Contribute to Strategy, Entrepreneurship, and Related Areas
Todd Chiles, University of Missouri-Columbia
Sara Soares Traquina Alves Elias, University of Missouri – Columbia
Mark Packard, University of Missouri
Dominant Designs and New Firms
Tianxu Chen, Oakland University
VK Narayanan, Drexel University
Exploring the Effect of Entrepreneurial Autonomy on Managerial Participation in Knowledge Networks
Michael Strenge, University of Freiburg
Olaf Rank, University of Freiburg
Revisiting Market-Level Competition: The Perspective from Low-Cost Entrants
Terence Fan, Singapore Management University
The Slow Death of Old Media: Examining Social Networking and the Competitive Terrain of News
Layla Branicki, University of Warwick
Doreen Agyei, Warwick Business School

Beyond Discovery and Creation: Opportunities in Entrepreneurship Research
Coordinator: Henrik Berglund; Chalmers U. of Technology;
Presenter: William B. Gartner; Clemson U.;
Coordinator: Steffen Korsgaard; Aarhus U.;
Coordinator: Kåre Sven Moberg; Copenhagen Business School;
The aim of the workshop is to inspire discussion and development in relation to the concept of opportunities in entrepreneurship research. Recent years has seen the emergence of numerous diverging views on the nature of opportunities. Reviews have conceptualized the debate as a dichotomous confrontation between two views: discovery and creation. This dichotomous framing has been helpful in bringing out a number of decisive questions and challenges for entrepreneurship research, yet also suffers from serious drawbacks in particular in so far as it overlooks alternative views and exaggerates the internal homogeneity of the discovery and creation views. Also, the two views as presented in reviews do not readily lend themselves to empirical research. In light of this situation, we propose this PDW to inquire into the problems and potentials of using the opportunity concept in entrepreneurship research with a particular view to moving beyond the discovery-creation dichotomy. We expect this to enhance our understanding of opportunities and the entrepreneurial process. To accomplish this, the PDW is organized to ensure interaction and discussion among participants. First, the format and purpose of the workshop will be introduced by the sponsors, including a brief review of relevant research. Thereafter, the participants will break up into smaller groups to discuss a number of more specific issues. The PDW ends with a concluding discussion where the different groups are invited to reporting back the results of their discussions. Read More→