Archive for Uncategorized

Being a State Means Never Having to Pay Your Debts

Flag_map_of_Argentina.svg_Nicolas Cachanosky follows up his Mises Daily article on the legal history of Argentina’s default with a look at the recent effort to blame the default on everyone but the Argentinian government:

Joseph Stiglitz and Martin Guzman have a recent piece at Project Syndicateabout the implications of Argentina’s default, or what they call “Griesafault.” In a nutshell, the piece blames U.S. Judge Griesa (Southern District of New York), rather than Argentine Republic (the debtor), for the default and argues that the court’s ruling “encourages usurious behavior, threatens the functioning of international financial markets, and defies the basic tenets of modern capitalism: insolvent debtors need a fresh start.”

Basically, the contract with the creditors is crystal clear. It does not allow for the Argentine state to weasel out of paying some creditors by striking new deals with some other creditors. It’s as simple as that. Now, I agree with Chris Westley that the Argentine government should just honestly announce that it has no plans to pay anyone back, and to make a clean default. That was a risk the creditors took. Indeed, while Stiglitz and Gusman claim that Griesa’s decision prevents a “fresh start” the only true “fresh start” here for the taxpayers of Argentina is a default.

Anything else is a twisting of a very simple legal contract to favor a relatively-powerful government over the interests of private investors. Argentina wants to get out of paying its debts either way, but if it honestly defaults, there will be a downside to its credit rating. On the other hand,  if it can game the legal system so that it can avoid making good on its debts while still not legally be in default, then that’s so much better. And, of course, that’s what Stiglitz et al want. Endless spending with no consequences, ever.

Ridesharing and Government Efforts to Kill More Jobs

Mises Institute Associated Scholar Jacob Huebert speaks on the war against ridesharing programs and just how damaging they are for ordinary people. For those who are unfamiliar with ridesharing, it is nothing more than private individuals providing rides to people in exchange for money. It’s a free-market taxi service, not to be confused with traditional taxi services which are regulated and controlled by state utilities commissions for the benefit of monopolist taxi corporations. Thanks to smart phone apps, it is now simple and easy for people to arrange rides for themselves using these free-market taxi services using services like Uber. Naturally, state governments, eager to please the army of lobbyists dispatched by taxi companies, have been busy finding ways to outlaw ridesharing. Huebert is speaking specifically of anti-ridesharing efforts in Illinois, but nearly-identical debates on going on not just nationwide, but globally.

Colorado’s Illegal Pot Market Thrives

Not unexpectedly, Colorado’s illegal marijuana market has been reported as thriving. The reasons for this are pretty straightforward. First, it is a new and highly regulated market making it difficult to supply products and keeping legal marijuana prices high. Also, steep taxes on legal marijuana exceeding 30% also are keeping prices high.

Camouflaged amid the legal medicinal and recreational marijuana market, the underground market thrives. Some in law enforcement and on the street say it may be as strong as it’s ever been, so great is the unmet local and visitor demand.

That the black market bustles in the emerging days of legalisation is not unexpected. By some reckonings, it will continue as long as residents of other states look to Colorado – and now Washington state – as the nation’s giant cannabis cookie jar. And, they add, as long as its legal retail competition keeps prices high and is taxed by state and local government at rates surpassing 30%.

Richard Ebeling Discusses Globalization and the Recovery of the Mises Papers in Russia, More

Mises Institutes of the World

Forbes today profiles several Mises Institutes around the world, and features longtime friend of Mises USA,  Helio Beltrão, who is also the founder of Mises Brazil. One of the most important contributions made by other Mises Institutes is the translation of Austrian writings into other languages, including German, Portugese, Spanish, Italian, Polish, Swedish, and Romanian. (Alas, there appears to be no French-language equivalent.) Beltrão has started a Portugese-language journal, pictured here:

Helio Beltrão. Credit: Forbes

Helio Beltrão. Credit: Forbes

The Forbes article itself should raise a few eyebrows, since it contains an aside that implies that Mises himself was just as much a “middle of the road” policy analyst as he was a laissez-faire economist, and could have just as easily spent his days doing policy papers for think tanks, had he been offered a job doing so. While Mises was no anarcho-capitalist, I’m a bit skeptical of this suggestion, and it seems more like inaccurate Mises revisionism, than a fair characterization of what Mises was really about.

Nonetheless, the article offers an interesting look at how Mises USA has spawned a global and international movement.  One of my favorite aspects of the Mises Institute is how much more international it is than other similar organizations. Just a look at the Mises Daily archives shows numerous articles from authors around the world, from Poland, to Argentina, to Germany, and Japan.


Happy Birthday Dr. Ron Paul!

Today’s is Ron Paul’s 79th birthday. I’ve had the pleasure of knowing Dr. Paul for several years, and he is one of the most thoroughly decent, thoughtful, and humane men one could ever hope to meet. And by the way, Ron is exceedingly fit and has the energy of a 35 year old. In his case age really is just a number.
ron carol
Not everyone knows the extent to which Ron helped Lew Rockwell get the Mises Institute started.  In those early days a fundraising letter from Ron on behalf of the Institute raised critical seed money. And over 30 years Ron has never hesitated to support our mission, speaking at countless functions on our behalf. His 2008 and 2012 presidential campaigns introduced thousands of young people to the works of Mises and Rothbard, reinvigorating interest in the Austrian school. Of course Ron’s initial motivation to run for Congress was his interest in Austrian economics, an interest that became a passion after seeing Mises speak publicly in Houston. Dr. Paul later went on to develop professional relationships with both Murray Rothbard and Hans Sennholz.
Happy birthday, Ron.  And thank you for all that you do.

Austrian Capital Theory and ‘Dawn of the Planet of the Apes’

6847Mises Daily Wednesday by Mark Tovey:

If the apes in Dawn of the Planet of the Apes are so smart, why are they hunter-gatherers? Aren’t they smart enough to think of agriculture? They’re probably smart enough, but Austrian capital theory explains why creating a more technologically-advanced society is easier said than done.

The Failure of Fixed Rates

floatingfiatMises Daily Wednesday by Christopher Mayer:

The only thing worse than floating fiat currencies is fixed exchange rates based on fiat money.

Mark Thornton on ‘Butler on Business’ This Week

Mark Thornton discusses recent economic indicators with Alan Butler.

Mark Thornton Talks About His Article “How the Drug War Drives Child Migrants to the US Border”

From Natural News Radio:

Guest Mark Thornton is a Senior Fellow at the Ludwig von Mises Institute. We’ll talk [Mp3 file] about his article, “How the Drug War Drives Child Migrants to the US Border” We’ll also discuss the current economic conditions. Mark Thornton was way ahead of economist predicting the crash of the housing bubble back in 2004.

The Fed and the “Salvador Dali Effect”

6845Mises Daily Tuesday by Dante Bayona:

The Fed and the Treasury are betting on the fact that the dollar will remain the world’s reserve currency forever, and that the US can inflate without consequences indefinitely. The international victims of the scheme, however, are looking for a way out.


New Twitter Account for ‘Quarterly Journal of Austrian Economics’

You’ll receive general updates about new issues of QJAE at our usual Twitter account @Mises, but you can also follow the Twitter account for QJAE that is administered by Assistant Editor Timothy Terrell if you’re interested in a separate stream specifically devoted to QJAE.


Summer 2014 ‘Quarterly Journal of Austrian Economics’ Now Online

qjaeThe Summer issue of QJAE is now available online, featuring new research and book reviews:

Error, Equilibrium, and Equilibration in Austrian Price Theory by GP Manish

The Savings and Loan Debacle Twenty-Five Years Later: A Misesian Re-Examination and Final Closing of the Book by Dale Steinreich

Merger Waves and the Austrian Business Cycle Theory by Jimmy Saravia

The Austrian Paradigm in Environmental Economics: Theory and Practice by Edwin Dolan

What Should Austrian Economists Do? On Dolan on the Austrian Paradigm in Environmental Economics by Art Carden

Comment on Dolan on Austrian Economics and Environmentalism by Walter Block

Review of Welfare and Old Age in Europe and North America, edited by Bernard Harris by Dale Steinreich

Review of The Federal Reserve and the Financial Crisis, by Ben S. Bernanke by David Howden

Review of Gun Control in the Third Reich: Disarming the Jews and “Enemies of the State,” by Stephen P. Halbrook by Audrey Kline


Police Departments are Over-funded: It’s All About Priorities

NYPD_ESU_Soundweapon2_(REP)Based on a reading of reader comments below articles about Ferguson, Missouri, some people seem to be under the impression that the police help people recover stolen property, and that we’ll all appreciate the police if we’re ever a victim of property crime. Everyone who has ever owned a small business or otherwise been burgled, however, knows that when you are a victim of property crime, calling the police is a mere formality in which a police report is filed, and then sent to the insurance company. You will never see your property again, and you know it, but the police report is necessary for insurance purposes. If it weren’t for the insurance side of things, calling the police would be a complete waste of time. (If the thief gets caught (a rare event), it’s generally because someone snitched, and was certainly not due to the sort of investigative police work we see in fictional TV shows about police. But even if this happens, you’re unlikely to get your property back.)

Actually finding your stolen property is a very low-priority affair for the police. There’s nothing in it for them, since there is no connection between successfully protecting private property and the amount of revenue that the police department “earns.” From a budgetary standpoint, it is far more important for the police to simply assert that they protect property to politicians and, to a lesser extent, to voters. Whether they actually do it is immaterial, since those who are victims of crime have virtually zero say over whether or not the police should be rewarded for their services, or lack thereof.

The situation is further complicated by the fact that police departments receive their funding not through voluntary exchange, but through taxation, which is the coercive redistribution of wealth. Rarely are police budgets ever cut, regardless of the quality of service, and should voters or local government ever suggest that the budget might be cut, the police agencies will immediately respond by threatening to cut enforcement, and it is of course implied that enforcement of laws against violent crime will be cut immediately. Never do the police say “well we’ll just have to cut back on shutting down illegal lemonade stands set up by children, or enforcement of lawn-mowing ordinances and no-knock raids against old ladies.” No, it’s always night time patrols for real criminals that go under the ax first. Meanwhile, police departments are so flush with cash that they can dispatch police officers to go threaten children with overdue library books.

In other words, police respond by cutting the most-demanded services first while the least-demanded services never seem to get cut. Naturally, the police would never dream of cutting back on drug enforcement, because that is a major source of revenue for them.

Read More→

Police States and Inner-City Economics

6846Mises Daily Monday by Ryan McMaken:

The recent civil disobedience, rioting, and police brutality in Ferguson, Missouri reminds us of what happens when police states and bad economics are mixed together.

The Intolerance Behind Elizabeth Warren’s 11 Commandments of Progressivism

6841Mises Daily weekend by William Anderson.

Elizabeth Warren has outlined 11 Commandments of Progressivism, but her record and the nature of Progressive economics illustrates that each commandment is based on coercion and the politics of serving certain favored groups while imposing real professional and monetary costs on everyone else.

Econometrics Attacked from the Left

In this interesting article published in Economia (a trade journal for Chartered Accountants), we find a left-progressive argument against math and its overly prominent role in neoclassical economics:


This discontent was born in the post-autistic economics movement, which started in Paris in 2000, and spread to the United States, Australia, and New Zealand. Its adherents’ main complaint was that the mainstream economics taught to students had become a branch of mathematics, disconnected from reality.

The revolt made little progress in the years of the Great Moderation of the 2000s, but was revived following the 2008 crisis. Two important links with the earlier network are US economist James Galbraith, the son of John Kenneth Galbraith, and British economist Ha-Joon Chang, author of the best-selling 23 Things They Don’t Tell You about Capitalism.

In a manifesto published in April, economics students at the University of Manchester advocated an approach “that begins with economic phenomena and then gives students a toolkit to evaluate how well different perspectives can explain it,” rather than with mathematical models based on unreal assumptions. Significantly, Andrew Haldane, executive director for financial stability at the Bank of England, wrote the introduction.

The Manchester students argue that “the mainstream within the discipline (neoclassical theory) has excluded all dissenting opinion, and the crisis is arguably the ultimate price of this exclusion. Alternative approaches such as post-Keynesian, Marxist, and Austrian economics (as well as many others) have been marginalised. The same can be said of the history of the discipline.” As a result, students have little awareness of neoclassical theory’s limits, much less alternatives to it.

Freak Show: Politicians Throw Woman Out of Work Because She Looked Unusual


Credit: Longmont Times-Call

The County Commissioners of Boulder County, Colorado have thrown a woman out of work because they didn’t like the way she looked. According to the local CBS affiliate:

An “ick factor” led to the closure of “The World’s Smallest Woman” exhibit at the Boulder County Fair last week, officials said.

Visitors hoping to see an attraction starring Little Liz, who exhibitors say is the world’s shortest woman at 29 inches, were denied after Boulder County officials shut down the show following two complaints from parents.

The Longmont Times-Call first reported the story. “There was kind of an ‘ick factor’ to it. When I talked to our open space director and one of our county attorneys about it, we had the gut check of ‘This is not the sort of use we want to encourage.’ … We just didn’t feel it was appropriate to a family show,” Carrie Haverfield of the Boulder County Commissioners’ office told the Times-Call.

It’s fairly outrageous that county officials possess the ability to simply declare some people unemployed by fiat. But, that is what happened in Boulder County because, at least according to County officials, two people complained.

The County should have responded: “If you don’t like looking at small women, don’t do it.” But, in a world where it is deemed appropriate for government officials to micromanage every aspect of American life, this is seen as just another day at the County Commissioner’s office.

Little Liz, who might be scratching out a subsistence living in Haiti (where she is from)  if it weren’t for her unique talent, can now report to her relatives back home that the people of Boulder County, Colorado are so intolerant that they demanded the local government shut down her small business.

At 29 inches tall, it’s unknown how many industries Little Liz is qualified to work in, but if she finds that working in a sideshow is the most lucrative line of work for her, she wouldn’t be the first to opt for a career in separating suburban gawkers from their money.

Being a sideshow “freak” has a long and storied history in the United States. Certainly predating the 19th-century, the industry nonetheless first attained a mass market under the entrepreneurial genius P.T. Barnum who turned the sideshow into a nationwide phenomenon for mass consumption with his circus. The sideshow was very profitable and the “unusually-abled” people (performers are of diverse opinion as to whether the word “freak” is pejorative or not) were often paid well. With the rest of the circus, they toured during the warm months, and then wintered in Gibsonton, Florida, where the International Independent Showmen’s Association (and museum) is located today.

Read More→

Mises Weekends: Jeff Deist and Marc Abela Discuss Abenomics and Japan’s Narrowing Horizons

Jeff Deist and Marc Abela discuss the Bank of Japan’s failed twenty-five year program of monetary stimulus, the resulting creation of insolvent zombie banks, and the impossibility of “Abenomics”. You’ll enjoy hearing about Toshio Murata—a Japanese student of Mises in the 1950s—who painstakingly translated Human Action into Japanese, who is still alive today. And, you might be surprised by Marc’s revelations about the Japanese mindset, culture, and disturbingly high suicide rate.

Rothbard on Policing the Streets

800px-EsmadAs a “police officer” dressed  in military fatigues, and armed with military equipment, threw everyone out of a McDonald’s restaurant and arrested journalists for no legitimate reason, I wondered to myself if the owner of the McDonald’s was fine with the police coming in and needlessly using violence against  the restaurant’s own customers. Indeed, had the owner actually wanted everyone out of the store, he or she would have been well within his or her rights to simply close the store. Instead, a scrum of government agents show up and rough up the customers.  (Maybe the owner was fine with this, in which case the owner is not a very smart businessperson.) 

This is part of the larger police tactic we’ve all seen on television in which the police protect no one’s property, but instead wander up and down streets in a phalanx attempting to provoke violence from the protesters. There is no effort made by police to discriminate among anyone at all. Everyone is assumed to be a criminal, and treated accordingly. Obviously, any effort to actually protect the lives and property of citizens, were such a thing allowed to exist by state monopolists,  would look very, very different. 

In his For a New Liberty: The Libertarian Manifesto, Murray Rothbard examines the nature of policing of streets and private establishments and how this would function in a free society:

[From Chapter 11] Abolition of the public sector means, of course, that all pieces of land, all land areas, including streets and roads, would be owned privately, by individuals, corporations, cooperatives, or any other voluntary groupings of individuals and capital. The fact that all streets and land areas would be private would by itself solve many of the seemingly insoluble problems of private operation. What we need to do is to reorient our thinking to consider a world in which all land areas are privately owned. Let us take, for example, police protection. How would police protection be furnished in a totally private economy?Part of the answer becomes evident if we consider a world of totally private land and street ownership. Consider the Times Square area of New York City, a notoriously crime-ridden area where there is little police protection furnished by the city authorities. Every New Yorker knows, in fact, that he lives and walks the streets, and not only Times Square, virtually in a state of “anarchy,” dependent solely on the normal peacefulness and good will of his fellow citizens. Police protection in New York is minimal, a fact dramatically revealed in a recent week-long police strike when, lo and behold!, crime in no way increased from its normal state when the police are supposedly alert and on the job. At any rate, suppose that the Times Square area, including the streets, was privately owned, [p. 202] say by the “Times Square Merchants Association.” The merchants would know full well, of course, that if crime was rampant in their area, if muggings and holdups abounded, then their customers would fade away and would patronize competing areas and neighborhoods. Hence, it would be to the economic interest of the merchants’ association to supply efficient and plentiful police protection, so that customers would be attracted to, rather than repelled from, their neighborhood. Private business, after all, is always trying to attra ct and keep its customers. But what good would be served by attractive store displays and packaging, pleasant lighting and courteous service, if the customers may be robbed or assaulted if they walk through the area?

The merchants’ association, furthermore, would be induced, by their drive for profits and for avoiding losses, to supply not only sufficient police protection but also courteous and pleasant protection. Governmental police have not only no incentive to be efficient or worry about their “customers’” needs; they also live with the ever-present temptation to wield their power of force in a brutal and coercive manner. “Police brutality” is a well-known feature of the police system, and it is held in check only by remote complaints of the harassed citizenry. But if the private merchants’ police should yield to the temptation of brutalizing the merchants’ customers, those customers will quickly disappear and go elsewhere. Hence, the merchants’ association will see to it that its police are courteous as well as plentiful. Read More→