Photos from the First Night of Mises U

See our Instagram page for more photos.

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Jeff Deist welcomes the students. rsz_dsc02009

Joes Salerno introduces the faculty.

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Tom Woods delivers the introductory lecture.

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Mises University Live Webcast Schedule

muThis schedule will link you directly to each streaming video session as they happen.

Click the lecture titles below at the scheduled times to watch the live webcasts on YouTube.

July 20–26, 2014 • Mises Institute

• All times are central daylight time except where noted.

For the full PDF schedule including non-webcast sessions, click here.

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Philipp Bagus Debates Franz Hörmann on Money

In this audio debate, Philipp Bagus, author of The Tragedy of the Euro, debates Franz Hörmann. Here is
an interview with Hörmann to provide some additional context.

The debate is in German, but Dr. Bagus provided a summary of the debate for us in English:

I explained why competition is good and leads to better and cheaper products; why interest is inherent to human action; why, without prices, economic calculation is impossible; why the market is the best instrument to reduce scarcity and a means of cooperation; why our monetary system is socialist, etc.

Hoermann believes that scarcity is artificially induced by companies, and he thinks that everyone should do what he likes to do and the product of their labors can be transferred to other people who want it. Scarcity would end. No money for exchanges, interest, or prices is needed. He believes that the technology exists now to create the end of scarcity.

Congratulations to Xavier Méra

Xavier Méra, a Rothbard Graduate Seminar alum and former Mises Fellow, emails:

Two weeks ago or so, I successfully defended my PhD dissertation on the “political economy of derivatives markets” at the University of Angers. The jury was a half Austrian, half mainstream one, including a prominent professor in the field from the University of Paris 1 Panthéon-Sorbonne.

I would like to take the occasion to thank the Mises Institute for the support offered through the fellowships which helped me to go through this.

Mises U Starts Tomorrow! Don’t Miss Free Live Streaming of Your Favorite Speakers

Join the Mises Institute as we welcome more than 130 students from all over the world to our Auburn campus! Mises U 2014 is a full week of Austrian scholarship that can’t be found anywhere else on the planet.

Judge Andrew Napolitano, Tom Woods, Walter Block, Bob Murphy, Robert Higgs, Tom DiLorenzo, and many other other scholars are among this week’s faculty.

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Here are just a few highlights:

Tom Woods: Four Things the State is Not.
Walter Block: The Case for Privatization- of Everything.
Judge Andrew Napolitano: The Constitution and the Free Market
Guido Hulsmann: The Cultural Consequences of Fiat Money

The full schedule is here.

Stream the speakers live on YouTube here, or enroll and participate as an online student here.

The Subprime Auto Loan Bubble

A New York Times investigation has revealed another bubble, in this case, subprime loans on used cars. Of course this is not a surprise given the Federal Reserves ultra loose monetary policy and near zero percent interest rates that has forced banks, insurance companies, and just about everyone else to scamper to earn some return on their capital.

Auto loans to people with tarnished credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered subprime — people with credit scores at or below 640.

The explosive growth is being driven by some of the same dynamics that were at work in subprime mortgages. A wave of money is pouring into subprime autos, as the high rates and steady profits of the loans attract investors. Just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are feeding the growth in subprime auto loans by investing in lenders and making money available for loans.

And, like subprime mortgages before the financial crisis, many subprime auto loans are bundled into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds — a process that creates ever-greater demand for loans.

Just another example of the surreptitious damage the Federal Reserve is inflicting on the economy in order to help the Big Banks.

Senator Elizabeth Warren (D-Ma) Defines Today’s Progressivism

Nomination_of_Richard_CordrayWarren reviewed eleven tenets of contemporary progressivism in a July 18 speech before Netroots Nation . She should be commended. Very often progressive politicians prefer to talk about “hope and change” rather than what they really stand for. Her list is not free of exaggerated rhetoric, such as claiming the mantle of “science” for herself. When she talks about supporting fast food workers on picket lines, she doesn’t mention the millions she is collecting from labor unions. But, even so, her account contains some honest and useful information.

1. “We believe that Wall Street needs stronger rules and tougher enforcement, and we’re willing to fight for it.”

2. “We believe in science, and that means that we have a responsibility to protect this Earth.”

3. “We believe that the Internet shouldn’t be rigged to benefit big corporations, and that means real net neutrality.”

4. “We believe that no one should work full-time and still live in poverty, and that means raising the minimum wage.”

5. “We believe that fast-food workers deserve a livable wage, and that means that when they take to the picket line, we are proud to fight alongside them.”

6. “We believe that students are entitled to get an education without being crushed by debt.”

7. “We believe that after a lifetime of work, people are entitled to retire with dignity, and that means protecting Social Security, Medicare, and pensions.”

8. “We believe—I can’t believe I have to say this in 2014—we believe in equal pay for equal work.”

9. “We believe that equal means equal, and that’s true in marriage, it’s true in the workplace, it’s true in all of America.”

10. “We believe that immigration has made this country strong and vibrant, and that means reform.”

11. “And we believe that corporations are not people, that women have a right to their bodies. We will overturn Hobby Lobby and we will fight for it. We will fight for it!”

Here are a few questions for Warren.

1.  Since you are willing to fight for stronger rules and tougher enforcement for Wall Street, are you willing to fight for an end to government bail-outs? How will you end them if Wall Street is operated as a subsidiary of Washington? How will you end them if Washington needs big Wall Street firms to buy its bonds with money created by Washington, since Washington is barred from buying its own bonds directly but can do so indirectly through Wall Street? In general, how will you keep government control from wrecking the internal disciplines of the market, which include loss and bankruptcy as well as profit?

2. How will an increase in the minimum wage help those who can’t get any job because of the minimum wage? How will this help teenagers or other young people get their first job?

One of your favorite presidents, Franklin Roosevelt, intervened to keep wages high during the Great Depression. The result was that those who succeeded in keeping their jobs were even better off than before while millions of others were thrown out of work and had nothing.

3. Hasn’t the federal student loan program driven up the cost of a college education, leaving many students worse off than before it existed?

And why is the federal government borrowing at a low interest rate and then charging the students a much higher rate? How can it be right to make a profit off the students and then apply it to the federal budget under a line called “ deficit reduction.”

4. Since you hold that “equal means equal… in all of America,” why do federal programs discriminate in favor of one group over another? Why, to choose just one of many examples, are non-unionized companies barred from federal construction contracts?

5. If corporations are not people, does that mean the government can not only tell them what to do, but even gag them or tell them what to say?

Having reviewed what Warren believes to be the eleven tenets of contemporary progressivism, what does she think that conservatives and libertarians believe? Here it is: “I got mine. The rest of you are on your own.”

Is this what either conservatives or libertarians teach? Is this what markets teach? They teach us to be selfish? Or do they teach us that we had better put our selfishness aside and tend to the needs of customers and employees first if we want to be successful?

People who run businesses are serving the needs of others. And people who work for the government may be just as selfish as anybody else.

Did Senator Warren describe all the tenets of contemporary progressivism? No, she described the ones she wanted to describe. But it’s helpful to have her eleven.

Jeff Deist and Will Grigg Discuss ‘Police State Keynesianism’

Mises Weekends: Jeff Deist and Will Grigg discuss “police state Keynesianism,” how the once embryonic American police state became overt, how military equipment, personnel, and mindsets increasingly find their way into local law enforcement agencies, and why there are more than 100 SWAT deployments every day in the US.

Stitcher: http://www.stitcher.com/podcast/mises-institute/mises-weekends/episode/34836821

iTunesU: https://itunes.apple.com/us/itunes-u/mises-weekends/id884207568?mt=10

New Audio Articles from ‘Mises Daily’

Be sure to visit the Audio Mises Daily page if you prefer audio versions of the Daily articles. Some recent titles:

Industrial Policy Is Still a Loser by  & 

Jean-Baptiste Say: An Underrated Revolutionary by 

How To Have Law Without Legislation by 

Audio: Mark Thornton on Immigration and the War on Drugs

Here is another interview about his recent article on immigration and the war on drugs. This one is with The Heartland Institute.

Intolerant US Professors Call Out China for Intolerance

91729433_8b0420c6da_oOne of the least tolerant places around is the US university campus, with its speech codes, disdain for dissenting social and cultural opinions, voluntary self-censorship, and slavish devotion to political correctness. “Diversity” is the mantra, but diversity of opinion on economics, history, and politics is generally unacceptable. So, what are US professors worried about? China, of course. The Association of American University Professors recently issued an official statement of concern about Confucius Institutes, Chinese government-affiliated nonprofits that promote Chinese culture on US university campuses such as Stanford, Chicago, Texas A&M, UCLA, Michigan, and many others. “Confucius Institutes function as an arm of the Chinese state and are allowed to ignore academic freedom,” says the AAUP, most of whose members work for state universities or are paid from government grants and other funds. “North American universities permit Confucius Institutes to advance a state agenda in the recruitment and control of academic staff, in the choice of curriculum, and in the restriction of debate.” Perhaps they learned from the CIA, which has many years of experience advancing US state interests in the guise of educational and cultural programs. In any case, the irony of the largely intolerant US professoriate calling out the Chinese for intolerance has been lost on most observers.

The Right Way to View Entrepreneurship

6814Mises Daily Weekend by Peter Klein and Nicolai Foss:

Much of the existing research on entrepreneurship focuses only on start-ups and small business. But entrepreneurship is a much broader topic and entrepreneurs appear everywhere as drivers of greater wealth and economic growth. Peter Klein and Nicolai Foss discuss new ways to study this phenomenon.

Keep Up With the Week’s Events on the Blog, Twitter, and Instagram

We’ll be regularly updating you on upcoming talks and events all week during Mises University beginning Sunday evening. See here for the free live video feeds, and the Twitter feed, and the Instagram feed.

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Mark Thornton on the Scott Horton Show

Mark Thornton discusses his article “How the Drug War Drives Child Migrants to the US Border.”

Audio file, 22 minutes.

The Trouble with Pop Economics

FreakonomicsJohn Lott writes in Barron’s that we should be sceptical of the populist economics trend that’s been prevalent in the past few years. Specifically, Lott criticizes Steven Levitt and Stephen Dubner, authors of Freakonomics, for peddling a kind of “naïve economics” that fascinates readers, but doesn’t hold up to serious scrutiny (rather than “naïve economics,” maybe “economics for the naïve” would be better).

I’ve been working through some similar ideas myself, especially in a new paper criticizing aspects of the pop econ literature. I should point out that these books—including Freakonomics and its many imitators—do have a reasonable goal, namely, to bring the economic point of view to the general public. Now, the fact that economics needs a special literature to explain its ideas to the public is telling, and to some extent an indictment of how the profession has developed (e.g. into an abstract and often excessively technical discipline). Still, as writers like Hazlitt show, it’s a great advantage to be able to communicate economic ideas simply and powerfully. But while in general we should welcome economic writing for non-economists, too often pop econ forgets to stop when descending the ivory tower, and ends up on the intellectual parking sublevel.

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Was Ronald Coase an Austrian?

Ronald H. Coase was one of the few very influential economists of the 20th century, and was awarded the “Nobel Prize” in economics in 1991. He was hardly an Austrian economist. On the contrary, he was a self-declared socialist – at least in his youth. But there is reason to believe he was well aware of Austrian theories while an undergraduate student at LSE in the 1930s (which was when he wrote one of his most influential articles, “The Nature of the Firm” published in 1937). This is when Hayek gave a series of lectures on capital theory and business cycles at LSE, and later the same year was made part of the faculty.

Coase notes in his reflective work that the whole department was affected by Hayek’s lectures and the content of the latter were part of the discussion among faculty and students for months. At the same time, it would be strange to assume that the leading figure in the department – Lionel Robbins, at the time somewhat of a Misesian – had no impact on Coase. We know that Arnold Plant, head-hunted and employed by Robbins (and mentioned as an Austrian in Hülsmann’s Mises biography), was the faculty member that influenced Coase’s thinking most. So there are several obvious “touch points” between Coasean thought and Austrian economics.

But there is more. Coase was obviously well aware of Mises’s argument against socialism, which he refers to in his 1937 article noting that “economists in the West were engaged in a grand debate on the subject of [economic] planning” (Coase, 1988, p. 8). This (and related) statements in Coase’s lauded 1937 article have been quite overlooked by scholars, but they may very well be important. In fact, as I elaborate on in an article in the September 2014 issue of the Journal of the History of Economic Thought, there is good reason to read Coase’s “The Nature of the Firm” as not primarily a treatise on economic organization in general – but a discussion on economic planning intended to support the market socialist argument in the Socialist Calculation Debate.

Coase not only positions his article in the great debate, but refers to Austrian arguments while seemingly relying on insights borrowed from Hayek’s lectures (but misunderstood). This apparent relationship between Coasean thought and the Austrian framework sheds new light on the modern theory of economic organization, which is often based on or even ”starts with” Coase. (The probably most influential theory is Transaction Cost Economics, developed by Oliver E. Williamson but based on Coase’s contributions.)

My article is here: Ronald Coase’s “Nature of the Firm” and the Argument for Economic Planning (2014, gated). An ungated working paper version, Mises Working Paper #0001/14, is here.

Mises U 2014 Begins Monday!

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Mises U 2014 begins Monday!

Judge Andrew Napolitano, Tom Woods, Robert Higgs, and Bob Murphy are among the speakers.

Live streaming is free throughout the week, and if you can’t watch live we will archive speeches on our YouTube page, Mises.org, and iTunesU.

Click here for the lineup and the schedule:
http://mises.org/events/184/Mises-University-2014

The Problem with Right-to-Work Laws

6813Mises Daily Friday by Logan Albright

Many free-market advocates approve of right-to-work laws because they diminish the power of monopolist labor unions. Right-to-work laws, however, prohibit employers from dealing with unions in whatever way the employer chooses, and thus just substitute one government mandate for another.

Regime Uncertainty: Washington’s Attack on Property Rights

1280px-UnitedstatesreportsWithout mentioning it, Michael Boskin provides supports Robert Higgs’s contention the Regime Uncertainty is a, if not the, major contributing factor to the current stagnating economy. Per Higgs, regime uncertainty is a “pervasive lack of confidence among investors in their ability to foresee the extent to which future government actions will alter their private-property rights.” Michael Boskin in “How Washington Whittles Away Property Rights” makes a similar argument. He states what should be obvious, but is too often neglected in Washington and state capitals, “Property rights and the rule of law are essential foundations for a vibrant economy. When they are threatened, or uncertain, the result is inefficiency, rent-seeking, a larger underground economy and capital flight.”

Boskin then provides ample reasons for why worried investors would eliminate, postpone, or reduce investments necessary for recovery and sustained prosperity creating economic growth such as:

1. A Supreme Court decision which “gutted the Constitution’s “public use” restriction on eminent domain (Kelo v. City of New London, 2005), allowing local governments to take the property of some individuals for the benefit of others, especially private developers.”

2. President Obama’s decision to trample “the legal rights of secured Chrysler bondholders to transfer billions of dollars to unions.”

3. EPA wetlands compliance freezing land use.

4. With the “biggest future threat” coming from unfunded entitlements coupled with massive government spending which places the right to “the fruits of one’s labor” at great risk.

5. “Taxes explicitly designed for redistribution—instead of revenue”… .

He then argues, “Ultimately, behind this and other attacks on property rights is the notion that the government owns all income, leaving to you only what it doesn’t demand.”

I argued elsewhere, even before it was apparent that the stagnation would stretch over 5 years, the correct road to a “free and prosperous commonwealth” would include a return to sound money, competitive markets, and the rule of law with a total level of government spending and tax burden that, as suggested by Gwartney, Holcombe, and Lawson (The Scope of Government and the Wealth of Nations) is no more than 15% of GDP.  Mises would most likely go even lower. As Adam Smith put it many years ago in a 1755 paper,

Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about the natural course of things. All governments which thwart this natural course, which force things into another channel or which endeavor to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.

Mises Summer Fellows 2014

We’re very happy to have another great group of international young scholars with us this summer. Mises Fellows are graduate students and faculty who come to the Mises Institute during the summer to spend more time working on research in the field of Austrian economics with our senior faculty.

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This year’s Fellows:
Front Row: Ludvig Levasseur, Matei Apavaloaei, Peter Klein (faculty), Jeff Deist (Mises President)
Second Row: Joseph Salerno (faculty), Audrey Redford, Jingjing Wang, Arkadiusz Sieron
Third Row: Dante Bayona, Kyle Marchini, Peter St. Onge
Back Row: Jonathan Newman, Mark Thornton (faculty)