Author Archive for Jeffrey Herbener

ASSC Reminder

ASSCLogoThe tenth annual ASSC is taking shape. Of the nearly twenty accepted proposals, we have a student from Harvard who will rebut criticisms of Austrians and another from Tbilisi, Georgia who will discus free-market health care. With Tom Woods and Nikolay Gertchev as keynote speakers, the conference can’t help but be a sensation. Details follow:

Grove City College will host the tenth annual Austrian Student Scholars Conference, February 7-8, 2014. Open to undergraduates and graduate students in any academic discipline, the ASSC will bring together students from colleges and universities across the country and around the world to present their own research papers written in the tradition of the great Austrian School intellectuals such as Ludwig von Mises, F.A. Hayek, Murray Rothbard, and Hans Sennholz. Accepted papers will be presented in a regular conference format to an audience of students and faculty.

Keynote lectures will be delivered by Drs. Tom Woods and Nikolay Gertchev.

Cash prizes of $1,000, $750, and $500 will be awarded for the top three papers, respectively, as judged by a select panel of Grove City College faculty. Hotel accommodation will be provided to students who travel to the conference and limited stipends are available to cover travel expenses. Students should submit their proposals to present a paper to the director of the conference (jmherbener@gcc.edu) by January 6. To be eligible for the cash prizes, finished papers should be submitted to the director by January 20.

Austrian Student Scholars Conference Feb. 7-8, 2014

Grove City College will host the tenth annual Austrian Student Scholars Conference, February 7-8, 2014. Open to undergraduates and graduate students in any academic discipline, the ASSC will bring together students from colleges and universities across the country and around the world to present their own research papers written in the tradition of the great Austrian School intellectuals such as Ludwig von Mises, F.A. Hayek, Murray Rothbard, and Hans Sennholz. Accepted papers will be presented in a regular conference format to an audience of students and faculty.

Keynote lectures will be delivered by Drs. Tom Woods and Nikolay Gertchev.

Cash prizes of $1,000, $750, and $500 will be awarded for the top three papers, respectively, as judged by a select panel of Grove City College faculty. Hotel accommodation will be provided to students who travel to the conference and limited stipends are available to cover travel expenses. Students should submit their proposals to present a paper to the director of the conference (jmherbener@gcc.edu) by January 1. To be eligible for the cash prizes, finished papers should be submitted to the director by January 15.

Return of the Bank Run

Gary Gorton’s view of bank runs has already filtered down to students. Sam Williams won first prize at the ASSC in February with the paper The Return of the Bank Run: How the Financial Crisis of 2007-2008 was a Next Generation Bank Run

Time to Ditch the Scientific Method

In a speech discussing the future of liberal education, delivered on the occasion of his retirement as Sterling Professor of Classics and History at Yale, Donald Kagan struck a Rothbardian note:  

But hasn’t the scientific method made its way into other disciplines, and can’t its benefits be obtained through them? Where the attempt has been made most seriously, in the social sciences, it has been a failure. It is increasingly obvious that trying to deal with human beings, creatures of independent will and purpose, as if they were objects like atoms, molecules, cells, and tissues, produces unsatisfactory results. The social sciences, far from producing a progressive narrowing of differences and a growing agreement on a common body of knowledge and of principles capable of explanation and prediction, like the natural sciences, has seen each generation undermine the beliefs of its predecessors rather than building on and refining them. What we see is a war of methodologies within and between fields. In fact, the fundamental idea of the whole enterprise, the attempt to remove values from the consideration of human behavior and simply to apply the scientific method, now seems most implausible.

Paul Krugman Explained?

How much of Paul Krugman does this explain?

Austrian Student Scholars Conference, February 15-16, 2013

Grove City College will host the ninth annual Austrian Student Scholars Conference, February 15-16, 2013. Open to undergraduates and graduate students in any academic discipline, the ASSC will bring together students from colleges and universities across the country and around the world to present their own research papers written in the tradition of the great Austrian School intellectuals such as Ludwig von Mises, F.A. Hayek, Murray Rothbard, and Hans Sennholz. Accepted papers will be presented in a regular conference format to an audience of students and faculty.

Keynote lectures will be delivered by Drs. Peter Klein and David Howden.

Cash prizes of $1,000, $750, and $500 will be awarded for the top three papers, respectively, as judged by a select panel of Grove City College faculty. Hotel accommodation will be provided to students who travel to the conference and limited stipends are available to cover travel expenses. Students should submit their proposals to present a paper to the director of the conference (jmherbener@gcc.edu) by January 1. To be eligible for the cash prizes, finished papers should be submitted to the director by January 15.

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.

Mises Institute Estonia

Estonia is home to the latest Mises Institute (mises.ee).

From Paul Vahur, executive director, of Mises Institute Estonia:

We are glad to announce about the creation of Mises Institute Estonia (in Estonian: Misese Instituut). The founders were 10 members of Mises Circle Tallinn which was created in 2009. Mises Institute Estonia is politically independent and funded only by private donations.

The purpose of the Institute is to promote and advance in Estonia the theories of Austrian School of Economics and classical liberal and libertarian political theories. To achieve these goals, the Institute will regularly publish articles on its website Mises.ee, it will also hold conferences, educational courses and lecture. The Institute will publish books popularizing economic science and libertarian political theory.

The Institute will be headed by Paul Vahur. The members of supervisory board are Risto Sverdlik, Urmas Järve and Paul Keres.

Mises Institute Estonia is named after Ludwig von Mises, a renowned Austrian economist whose biggest contribution was to explain the cause of economic crises and why state’s economic intervention is doomed to failure. First Mises Institute was founded in 1982 in USA. Thanks to their great success many other Mises Institutes have been founded in recent years in other countries such as Poland, Brasil, Sweden and Canada.

 

WSJ Bemoans Restoration of Efficient Allocation of Credit

Here are the lamentations.

Taking Most of the Credit

 

At Last, a Memorable Commencement Speech

Even at Grove City College where commencement speeches are not filled with leftist banality, they often enough succumb to the banality of the occasion. But once in a while, a memorable one is delivered.

Walter Williams, who is a member of the college’s board of trustees, gave a positively Rothbardian talk last Saturday. He started out by telling the assembled that he would discuss “fundamental principles” necessary to “preserve the blessings of liberty.” “The first principle of a free society,” he said, “is that each person owns himself.” And “the direct implication of self-ownership is people must own those things they produce.” “The idea of self-ownership” he continued, “is what makes slavery, murder, rape, assault, extortion, theft, and the like immoral acts.” The market economy not only preserves these fundamental rights of property, but brings into being a prosperous middle class and permits the leisure and extended division of labor necessary for civilization. In the market, income is earned by serving others and can be used for genuine charity towards those in need.

Our social problems do not stem from the market, but from the state. “The great problems that confront our nation,’ he said, “have their roots in morality where we’ve asked government to commit immoral and unconstitutional acts.”

The charge he gave to our graduates was “to be moral yourself and to try to sell to our fellow man on the superiority of personal liberty and its main ingredient, limited government.”

If you have suffered through a commencement speech recently, console yourself with his speech.

The Realistic Path

In his Bloomberg View column today, Economists Have a Lot to Learn from the Weather, Mark Buchanan chides economists for clinging to their neoclassical general equilibrium models in the wake of their spectacular failure to track the financial crisis. A theoretical physicist, Buchanan advises economists to follow the example of atmospheric scientists who supplanted equilibrium models with computer simulations using equations of fluid dynamics in the 1950s in their attempts to track atmospheric flows. That “there’s no stable balance, but ceaseless change” in atmospheric flows because of baroclinic instability leads Buchanan to wonder “if a similar mechanism might be driving financial crises and business cycles that typify the economic ‘weather’ we’ve experienced over the centuries.” He laments that “the mental inertia of theoretical economists” prevents them from abandoning their general equilibrium ways “to develop more realistic alternatives.”

Those of us in the causal-realist tradition share Buchanan’s lament and the more cynical among us would entertain the suggestion that more than merely mental inertia lies behind the refusal of neoclassical economists to seriously reconsider their paradigm. But a more realistic account of the economy cannot be found by accelerating down the wrong path. Adopting more sophisticated mathematical techniques to handle the complexities of tracking billions of people interacting through voluntary exchange and a division of labor to better satisfy their preferences misses the fundamental point.

As Ludwig von Mises saw it, the limitations of human knowledge force economists to accept methodological dualism. “Reason and experience show us two separate realms: the external world of physical, chemical, and physiological phenomena and the internal world of thought, feeling, valuation, and purposeful action. No bridge connects—as far as we can see today—these two spheres (Human Action, p. 18).”

Murray Rothbard was more emphatic claiming human beings are fundamentally different than other entities. “Stones, molecules, planets cannot choose their courses; their behavior is strictly and mechanically determined for them. Only human beings possess free will and consciousness: for they are conscious, and they can, and indeed must, choose their course of action. To ignore this primordial fact about the nature of man—to ignore his volition, his free will—is to misconstrue the facts of reality and therefore to be profoundly and radically unscientific (The Logic of Action One, p. 3).”

From either view, the understanding of human action is the one offered by Carl Menger. The human mind integrates all aspects of action into a harmonious system for the satisfaction of its preferences. The mind values ends, perceives the causal connections between means and ends and among consumer and producer goods, imputes value from the ends to the means, anticipates the realization of ends from different courses of action, etc. Since the knowledge, judgments, and foresight of the mind are not constant with respect to the different aspects of action, functional analysis of human action, no matter how sophisticated, is inappropriate. The realistic path to understanding the economy lies in the trail blazed by Menger, Mises, and Rothbard.

Don’t Let This Opportunity Pass You By

According to an NPR story, Insider-Trading Ban Passes Congress, But Some See Missed Opportunity, Senator Charles Grassley was unhappy with the Stop Trading on Congressional Knowledge Act recently passed by Congress because it didn’t go far enough. NPR reports that the Act, passed unanimously by the Senate, gained its political momentum from a 60 Minutes story exposing the double standard of Congress exempting its members from the regulations it imposes on others.

Sen. Grassley thinks an opportunity was missed to include a provision requiring workers in the political intelligence industry to register as lobbyists. But why stop with chicken feed like banning Congress from insider trading, forcing it to pay minimum wages, or even making it conform to the host of other anti-social rules and regulations it imposes on the rest of us. Why not ride the wave of public sentiment against flagrant violations of a basic principle of justice all the way to the shore? Introduce the Stop Congressional Theft Act barring Congress from taxing us, the Stop Congressional Kidnapping Act barring them from conscripting us, or cutting to the chase, the Stop Congressional Legislation Act barring Congress from writing law. Congress, undoubtedly, would think that’s taking justice too far, but as Rothbard might have said (adapting the famous line of Mises), “there cannot be too much justice.”