Author Archive for Ryan McMaken

Looking for Introductory Materials on Austrian Business Cycle Theory?

SS466Michael Pollaro, Mark Thornton, and I went looking for some good introductory materials to help newcomers understand Austrian Business Cycle Theory.

Pollaro posted this helpful article over at Forbes, noting:

Indeed, we would say that without ABCT investors are at a competitive disadvantage, for it is only through ABCT that one can truly understand what is underpinning the economies and financial markets of today.

And he links to several resources including this journal article by Joseph Salerno, and this very easy breakdown by John Cochran.

There are many other resources, Mark and I might point you to as well.

For starters, there is Rothbard’s Economic Depressions: Their Cause and Cure, and Richard Ebeling’s collection of essays, including works by Hayek, Mises and Garrison.

Other resources include:

This survey of ABCT on the Mises Wiki.

Manipulating the Interest Rate: a Recipe for Disaster by Thorsten Polleit

Austrian Business Cycle Theory: A Brief Explanation by Dan Mahoney.

And several videos including:

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Why Money Doesn’t Measure Value

gold2Mises Daily Friday by Robert Murphy:

Robert Murphy, contra Real Clear Markets and Forbes, explains why money is not like a ruler and doesn’t measure value.


Patrick Barron: The End of the US Dollar Imperium

Jeff Deist and Patrick Barron address the issue of monetary imperialism. How does the US use the dollar as a weapon of economic and cultural power? How long can it last? What might the unprecedented collapse of a worldwide reserve currency look like? And how do the BRIC nations and Asian central banks fight back?

Patrick Barron is a private consultant in the banking industry. He teaches in the Graduate School of Banking at the University of Wisconsin, Madison, and teaches Austrian economics at the University of Iowa, in Iowa City, where he lives with his wife of 40 years.

Also available at Stitcher and

Public Accommodation and Social Engineering

6936Mises Daily Friday by Nicholas Freiling:

Public accommodation laws that prohibit discrimination render property rights moot and create a legal system designed to force agreement with the state’s official moral code.

No Bubble Here!

Back when I was an economist for a housing agency, I heard about a lot of pricey marketing gimmicks. This is a new one:

Writes Robert Wenzel:

Paging Mark Thornton: The Ultimate Sign of a Chinese Real Estate Bubble?

As part of a marketing campaign by a property developer in Nanjing, China, to entice people to view his apartments, the developer arranged for a group of people to have their lunch inside a glass dining room, suspended by a crane some 66 feet in the air.

Understanding “Quid Pro Quo”

6934Mises Daily Thursday by  Gary Galles:

The term “quid pro quo” has been twisted to now include government handouts and state-mandated exchanges, so long as the value of goods trading hands are deemed to be of “equal value.” True voluntary exchange, on the other hand, is something quite different.

The Index Card of Allowable Opinion

6935Mises Daily Thursday by Tom Woods:

Tom Woods explains the “unacceptable“ opinions behind freedom and free markets.



Check out Tom Woods’s interview about the book on Mises Weekends:

Global Warming Debate Over: We’re Doomed

Annual_Average_Temperature_MapAccording to Guy McPherson, Professor Emeritus of Natural Resources, Ecology, etc., at the University of Arizona, (presumably man-made) climate change is “irreversible” and, basically, we’re all doomed.

As I’ve noted before, anyone who actually values human liberty and progress should welcome declarations of the “irreversible” nature of global warming. After all, if there’s nothing we can do to stop it, then we can just get on with our lives and leave humanity to dealing with environmental problems as they come, which is what homo sapiens have been doing for millennia.

So, McPherson’s pronouncement that it’s irreversible is a real load off. We can stop having the debate about whether or not to crush human economic progress with global regulatory efforts to massively reduce everyone’s standard of living via carbon emission controls (except for the super-wealthy and politically-well connected, of course).

But not so fast.  McPherson has come up with a novel twist on this one. Even though humanity is totally doomed, that doesn’t mean we can now just drop the issue and get back to increasing our standards of living as fast as possible in our last remaining years. Nope, we apparently have a responsibility to destroy ourselves so that other animals can have the planet instead. The method of suicide? We must “terminate industrial civilization.”

Since McPherson considers himself qualified to speak on these matters, I’m going to assume that he is in fact aware that terminating industrial civilization would result in the near-immediate starvation of a large portion of the human race. This no doubt fits into his plan to destroy humanity for the sake of amoebas and elk, but he then implies that he doesn’t understand what the end of industrial civilization means when he declares that, being doomed, our only choice is is to “enjoy and create moments of joy while we are here.”

So which is it? Should we terminate industrial civilization or “create moments of joy,” because those  two propositions are mutually exclusive for the vast majority of humans.

Perhaps McPherson is one of those people who is under the mistaken impression that prior to industrialization, life on earth was some sort of bucolic joy-filled wonderland. Such risible nostalgia for a past that never existed seems to infect many environmentalists. The reality of the good ol’ days of the pre-industrial world, of course, is one of scratching a subsistence out of the ground from dawn until dusk while hoping one isn’t struck down by some plague.

For most people, joy comes from having some free time in relative comfort, and access to modern medical amenities when one falls ill. Without industrial civilization, there’s no modern medicine, little comfort, and certainly no free time to speak of. Where we’re supposed to attain this “joy” is a mystery in McPherson’s vision.

World War I in Our Minds: A Historical View

6933Mises Daily Wednesday by Hunt Tooley:

With 100 years having passed since the start of the First World War, the view of the war among historians and the public has evolved in many ways. Historian Hunt Tooley examines the turning points in how the world sees the Great War

David Gordon: The Life and Times of Murray Rothbard

6932Mises Daily Tuesday with David Gordon:

David Gordon and Jeff Deist discuss Rothbard’s life from an insider’s perspective, his relationship with Mises and the areas where they disagreed, and more.


The Fed’s New Labor-Market Measure

6931Mises Daily Tuesday by Frank Shostak:

The Fed has created a new measure of employment that it says it will use to guide monetary policy. Unfortunately, simply knowing employment trends tells us little about whether or not real wealth is being created in the economy.


Would ‘President Rothbard’ Shut Down Flights to West Africa?

1280px-HFX_Airport_4Last week in The American Spectator, Emily Zanotti noted that the Obama administration refuses to intervene and shut down flights between West Africa and the US: “Yesterday, the White House reiterated that a ban on flights originating in outbreak countries is not on the table.” According to Zanotti, the rationale is that any disturbance of air travel would negatively impact West African economies.

Zanotti is skeptical of this rationale, saying:

…from a libertarian perspective: free markets are better able to pull people out of poverty than free money, and where we don’t allow capitalism to flourish we end up subsidizing with foreign aid. But if we were talking about President Murray Rothbard, I might consider that awfully practical and economically-focused excuse a real thing. But since this might officially be the first time the Obama Administration has talked their way out of something using unfettered capitalism as an excuse, I consider it suspect.

The larger political point is fair enough, but really, would Rothbard ever make such a simple-minded argument as Zanotti suggests? I recognize that she’s just using Rothbard here as a stand-in for any hard-core free-market libertarian, but it’s highly unlikely that Rothbard would argue, “gee, let’s just let any diseased person fly into any airport anywhere because it would be good for the global economy.”

Key to understanding Rothbard on matters like this is that he identified himself as a “radical decentralist.” He did not make simplistic arguments like “free markets will solve all our problems” and leave it at that. Nor did he think that — like some sort of Marxist — that only a full-blown version of his vision could better achieve the ends he proposed. On the contrary, Rothbard knew that even a move in the direction of truly free markets, through radical decentralization, was better than the centralized state that dictates to all local governments and private owners everywhere. Centralization cuts off every possible solution except the few accepted by the “experts” of the centralized state, and thus ensures that , if the one “official” plan fails, that there is no plan B, or way to prevent the problem from spreading throughout the one, giant national jurisdiction.

In other words, the current lack of decentralization prevents local governments, airlines, airports, or even individual states from having any control over movements between states or into airports. Such matters are all dictated by a single source: the federal government. Were a decentralized approach allowed, however, individual states, cities, airlines, and airports would be responsible for their own safety precautions. Moreover, those making the decisions, i.e.,  those in charge of safety in Atlanta and the Atlanta airport (as just an example), would also be personally affected were the precautions to fail.

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Do We Need a Lender of Last Resort?

6928Mises Daily Monday by Nicolás Cachanosky

Efficient banks have many options for lenders and credit when banking crises hit. It’s the inefficient and insolvent banks that must turn to a central bank. But do we really want central banks that reward insolvency and encourage inefficiency?

Tom Woods: Champion of Libertarian Dissent

This weekend Tom Woods joins us to discuss his new book entitled Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion.

Tom Woods is the bestselling author of several books; the creator of Liberty Classroom; host of the Tom Woods show; a frequent speaker at liberty events around the country; a frequent guest on major media, and he’s heading up Ron Paul’s homeschool program. He also holds a history degree from Harvard and a PhD from Columbia, and is a Mises Institute Senior Fellow.

also available at Stitcher and

Tom Woods: Champion of Libertarian Dissent

6930Mises Daily Weekend with Tom Woods:

This weekend Tom Woods joins us to discuss his new book entitled Real Dissent: A Libertarian Sets Fire to the Index Card of Allowable Opinion.


Reading the Road Map to a Police State

6924Mises Daily Weekend by Aaron Tao:

Radley Balko examines the history of government policing, lost rights, and the symbiotic relationship between the police state and the war on drugs.

Attaining Economic Freedom w/ Mises Institute Senior Fellow Mark Thornton

In this interview, Mark Thornton covers some basics about the Austrian School and the current economic situation.

Four Reasons the Bernanke-Yellen Asset-Price Inflation May Be Nearing Its End

6923Mises Daily Friday by Joseph Salerno:

Once interest rates begin to rise — and rise they must, whether as a result of Fed policy or not — the end of the asset price inflation will be at hand. The result will be another financial crisis and accompanying recession.

New Leonard Read Sculpture at the Mises Institute

Board member Dr. Don Printz has donated to the Institute a magnificent bronze bust of libertarian pioneer Leonard E. Read (1898-1983), founder of the Foundation for Economic Education and friend of Ludwig von Mises, Henry Hazlitt, Ron Paul, and Lew Rockwell.


More photos here.

The Connection Between Wealth Disparity and Recessions

Mark Thornton on PressTV:

“In a sense wealth disparities do indicate recessions because they have the same cause as the boom-bust cycle in the economy, that is, when the central bank – the Federal Reserve of the United States – reduces interest rates to very low levels, they cause a boom in the economy which leads to an inevitable bust in the economy,” Thornton, senior fellow at the Ludwig von Mises Institute, told Press TV in a phone interview on Wednesday.

He added, “Low interest rates; easy money, easy credit help people who own capital, so that their wealth increases, but those same real interest rates actually hurt the average worker in the economy and, as a result, the disparities in wealth increase and you get also the  boom-bust cycle.”