Author Archive for Ryan McMaken

Congratulations to All Who Passed the Mises U Exams

At the end of Mises University, many students chose to take the optional — and highly rigorous — Mises University examinations for cash awards.  64 students took the written exam, and 30 of those passed to go on and take the oral exam.

The first-place prize of $2,500, made possible by Douglas E. French, was awarded to Kyle Marchini.

The second-place prize of $1,500, made possible by Mrs. Joele Eddy and the late Dr. George Eddy, was awarded to Matei Apavaloaei.

The third-place prize of $750, made possible by Mrs. Joele Eddy and the late Dr. George Eddy, awarded to Edgar Duarte Aguilar.

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Passed Oral Examination with Honors:

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Argentina Is Now In Default, But There Is Life After Default

1280px-Elecciones_en_Argentina_-_Cristina_y_Néstor_Kirchner_26102007_-_3The Wall Street Journal declares it a done deal.

Nicolás Cachanosky explains the road that got us here.

Forbes claims that “everyone lost” because of the default, but that’s debatable.

Chris Westley points out the advantages of an Argentinian default, while Peter Klein explains how default here in the USA may be a good thing as well.

For even more, see Joe Salerno’s “Myths and Lessons of the Argentine ‘Currency Crisis’” from February.

When High Taxes Lead to Revolution

6824Mises Daily Thursday by Peter St. Onge:

Sun-Tzu believed that societies are in deep trouble when wars and other government efforts exhaust the wealth of those who pay the bills. But the lack of revolutions, even in highly-taxed societies points to the possibility that many are willing to tolerate rather high taxation rates.

Jim Grant: “The Federal Reserve Has So Little Self-Awareness…”

…it un-ironically wonders aloud who’s been suppressing volatility and compressing yields. “Who could it be who’s been doing that?” Grant asks.

Grant notes there are some investment opportunities in Russia and then says “One form of investment that is almost as thoroughly hated as Russia is gold and gold mining shares.” He then explains that gold “is a sound inoculation against the harebrained doctrine of modern central bankers,” and important when dealing with “the likely crackup” of modern monetary arrangements.

July’s ‘The Free Market’ Is Here!

fm_july_coverThe July issue of The Free Market is now available online, with a new essay on money from Joe Salerno and an interview with Randy Holcombe about his new economics textbook.

Salerno explores some misconceptions about money and the new “gold standard” proposed by Steve Forbes:

In other words Forbes’s “stable and flexible” gold standard would facilitate and camouflage an inflationary expansion of the money supply that would, according to Austrians, distort capital markets and lead to asset bubbles. The motto of our current gold-price fixers seems to be: “We want sound money—and plenty of it.”

And Holcombe discusses his new textbook on Austrian economics designed for mainstream economics classes:

Economics students, including undergraduates, are groups I am targeting with the book. The book is not an introductory economics text from an Austrian perspective, and assumes that the reader already knows some economics. But even a student who has only taken an introductory economics course will have enough background to understand what is in the book. The idea was to write a book for people who already know some economics, but are not familiar with the Austrian School. There are lots of people with some background in economics who have heard of the Austrian School, but don’t have a good idea about what distinguishes the Austrian School from mainstream economics, or from other schools of thought.

July’s issue will also give you the latest on our new series of audio interviews, Mark Thornton’s debate at Oxford, plus the latest from our alumni and scholars.

 

Mises University 2014

The faculty and students of Mises U 2014 (many more photos here and here and here):

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Huerta de Soto on the Spanish Scholastics in Chinese

I earlier linked to this talk at the Segovia Cathedral by Jesús Huerta de Soto about the Spanish Scholastics. Now, it has been subtitled  in Chinese (presumably Mandarin) by Tyler Xiong Yue with the assistance of Mises Institute 2014 Summer Fellow Jingjing Wang. Click here for the video.  

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Will the State Save Us From Ebola?

ebolaThe Drudge Report and other media outlets have  done their best to create a panic over the spread of Ebola in western Africa. It’s a safe bet that, if it hasn’t happened already, some devoted interventionists will point to disease epidemics as proof of the indispensable role of states in halting the spread of the disease.  While television and movies have trained people to believe that one person on an airplane can start off a virulent epidemic, the reality appears to be rather different. Ebola is transmitted through direct contact with blood and bodily fluids. Moreover, debilitating Ebola symptoms show up quickly, before the infected can unknowingly  infect large numbers of others, and the conditions in western Africa, where Ebola is most successful, could hardly be more unlike those in Europe and North America where, thanks to relatively free markets, there is easy access to clean water and health care services.

Not surprisingly, we also find that the governments of region where Ebola thrives have paved the way themselves for the spread of the disease, with endless wars and the destruction of capital:

As Dionne notes, all three countries have poor health infrastructure, due in part to years of civil war in Liberia and Sierra Leone. Liberia has just .014 doctors per 1,000 people, and a common joke is that JFK Medical Center, Monrovia’s main hospital, has long had the unflattering nickname “Just For Killing.”

In addition, we can be sure that if any political stability is achieved in Liberia or Sierra Leone, that the local regime would loot any moderately successful private health-care operation. The lack of restrained political systems and private property all but ensure a lack of access to the very things that making disease prevention successful.

Global epidemics have occurred before and the track record of states have not been exemplary.

Perhaps the textbook illustration of this  is the influenza epidemic of 1918. Not only did the First World War generate conditions more favorable to the spread of the disease (by destroying the infrastructure of hygiene, quality food, and good health in general) but the governments of the time ensured worldwide transmission by crowding infected WWI troops with the uninfected, and then shipping them on boats to various cities.

Government incompetence is most certainly not confined to the days of yore, of course. In recent years, there’s been news of another flu epidemic every few years. Predictably, the federal plans for mass inoculations go awry, and the feds then intervene to hamper the production of resources for flu avoidance and treatment. Christopher Westley describes the usual scenario: Read More→

Video: Joseph Salerno Explains Gold Standards: True and False


Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 25 July 2014.

WSJ: “What Really Drove the Children North”

Fuerza_del_Estado_MichoacánOn July 14, Mark Thornton’s Mises Daily article explored how Drug War violence in Central America was a major factor in creating the child refugee crisis on the southern US border. On July 20, The Wall Street Journal published “What Really Drove the Children North” which contended that “Our appetite for drugs caused the violence that made life unbearable in much of Central America.”

Those skeptical of this thesis claimed that the theory does not explain why the refugee crisis is a new issue. In typical nationalistic fashion, many right-wing commentators assumed that Central America has always been pretty much the same, and that it’s all their fault anyway. The WSJ article addresses such claims directly:

[Marine Corps. General John Kelly] has spent time studying the issue and is speaking up. Conservatives may not like his conclusions, in which the U.S. bears significant responsibility, but it is hard to accuse a four-star of a “blame America first” attitude.

To make the “Obama did it” hypothesis work, it is necessary to defeat the claim that the migrants are fleeing intolerable violence. This has given rise to the oft-repeated line that “those countries” have always been very violent.

That is patently untrue. Central America is significantly more dangerous than it was before it became a magnet for rich and powerful drug capos. Back in the early 1990s, drugs from South America flowed through the Caribbean to the U.S.

But when a U.S. interdiction strategy in the Caribbean raised costs, trafficking shifted to land routes up the Central American isthmus and through Mexico. With Mexican President Felipe Calderón’s war on the cartels, launched in 2007, the underworld gradually slithered toward the poorer, weaker neighboring countries. Venezuela, under Hugo Chávez, began facilitating the movement of cocaine from producing countries in the Andes to the U.S., also via Central America.

In a July 8 essay in the Military Times headlined “Central America Drug War a Dire Threat to U.S. National Security,” Gen. Kelly explains that he has spent 19 months “observing the transnational organized crime networks” in the region. His conclusion: “Drug cartels and associated street gang activity in Honduras, El Salvador and Guatemala, which respectively have the world’s number one, four and five highest homicide rates, have left near-broken societies in their wake.” He notes that while he works on this problem throughout the region, these three countries, also known as the Northern Triangle, are “far and away the worst off.”

With a homicide rate of 90 per 100,000 in Honduras, and 40 per 100,000 in Guatemala, life in the region is decidedly rougher than “declared combat zones” like Afghanistan and the Democratic Republic of Congo, where the general says the rate is 28 per 100,000.

How did the region become a killing field? His diagnosis is that big profits from the illicit drug trade have been used to corrupt public institutions in these fragile democracies, thereby destroying the rule of law. In a “culture of impunity” the state loses its legitimacy and sovereignty is undermined. Criminals have the financial power to overwhelm the law “due to the insatiable U.S. demand for drugs, particularly cocaine, heroin and now methamphetamines, all produced in Latin America and smuggled into the U.S.”

So, there is any easy explanation for “why now.” US policy caused drug war violence to shift from the Caribbean to Central America, greatly increasing violence during the 1990s, and culminating in the present crisis.  For many Americans, however, who can’t tell the difference between Guatemala and Chile, and who are committed to the perpetuation of stereotypes about foreigners, such facts are no doubt difficult to comprehend, and not worth repeating. Nonetheless, the whole affair is an excellent case study in unintended consequences and the futility of government prohibitions.

Tom Woods: The Role of Austrian Economics in the Liberty Movement

The opening lecture of the 2014 Mises University. Archived from the live broadcast from the Mises Institute in Auburn, Alabama, on 20 July 2014.

Shinzo Abe Got His Butter, Now Wants Guns

220px-Robert_Zoellick_meets_Shinzo_Abe_2006-01-23The guns and butter model is used by economists to contrast the costs of spending resources on domestic-economy amenities (butter) or on foreign policy and war (guns). Every government knows, however, that if it plays its cards right, this need not be one or the other. Indeed, the United States with its central banks and its high worker productivity has perfected the art of spending endless amounts of taxpayer money on both guns and butter. Another name for this is the “warfare-welfare state” in which some interest groups (such as low-income voters, agricultural interests, and Social-Security recipients) are bought off with lots of domestic spending, while other interest groups (nationalistic voters and weapons manufacturers and states with lots of military bases) are bought with endless spending on the military. This is an especially flawless model if you have a central bank like the Fed that can just keep the free money coming with seemingly no end in sight.

China has exploiting this model to the fullest in recent years, and now Japan, after years of focusing on free butter, has decided to spend more on the guns.

Shinzo Abe, the author of Abenomics (see here for a detailed takedown of Abenomics) has committed his government to numerous rounds of fiscal and monetary stimulus, plus tax increases that funnel plenty of money to his political supporters.

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Video: Robert Higgs on the FDA and Consumer Welfare

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 23 July 2014.

Full Photo Album for Mises U 2014

We’re still adding photos there, but you can see what’s been added so far at our Picasa page for Mises U 2014.

How Government Uses “Efficiency” as an Excuse to Steal

6818Mises Daily Thursday by Gary Galles:

Only individuals can determine what is efficient for themselves, and they will only engage in voluntary exchange when they believe it is the efficient thing to do. Some economists, and most governments, prefer to use other standards of efficiency such as “potential compensation” which leads to government mischief.

Highlights from Tuesday at Mises U

Tuesday was another full day of lectures and talks at Mises University. for photos, see here and here. We’ve added 8 more lectures from Tuesday in mp3 format to the Mises U 2014 archives, including:

The Anarcho-Pacifism of Leo Tolstoy by 

The Economics of Fractional Reserve Banking by 

The Place of Finance and Financial Markets in a Free Society by 

Careers for Austrians by 

Monopoly, Competition, and Antitrust by 

Product Regulation by 

Calculation and Socialism by 

Entrepreneurship by 

Tuesday at Mises U, Afternoon Lectures

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Photos from Tuesday at Mises U (Lunch and Morning Lectures)

 

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How to Start Reforming the Federal Reserve Right Now

6817Mises Daily Wednesday by Brendan Brown:

All too many of the reforms being proposed for the central bank are just more of the same central planning. Real reform of the Fed begins with setting interest rates free, the abolition of deposit insurance, and ending the Fed’s position as lender of last resort.

Polish Translations of Mises Daily articles at Instytut Misesa

scotThe good people at the Polish Mises Institute (Instytut Misesa) inform me that my recent article on Scottish secession has been translated into Polish.

There are numerous other translations there as well, such as this one, a QJAE article by Thomas DiLorenzo.