Video: Panel Discussion on Fractional Reserve Banking

Scholarly discussion about fractional reserve free banking between proponents of free banking and advocates for 100% reserve banking. from the 2013 Summer Austrian Seminar sponsored by Mises Institute Poland.

Hosted by Mateusz Machaj

From L to R: Maciej Bitner, Michał Gamrot,Mateusz Machaj, David Howden, Nikolay Gertchev

Thanks to Mateusz Machaj

Imposing Costs on Russia: How About a Food Embargo?

PutinPresident Obama has threatened to impose costs on Russia for their intervention in Ukraine, but so far, his involvement has been high on rhetoric but low on action. Here’s a proposal that ought to hit Russia where it hurts: impose a food embargo on them.

Americans and Europeans of a certain age can remember the costs they felt due to the OPEC oil embargo of 1973. People need food more than they need energy. Think of how much more we could pressure Russia with a food embargo.

Of course, there would be objections to a food embargo, because it would impose costs and hunger on ordinary Russians, penalizing them for the actions of their political leader. It does sound potentially inhumane.

But, in this case, Putin has beaten us to it, and imposed an embargo of food from the US and EU on his own people!

Putin seems to be saying, if you keep up this pressure on us, we will deprive ourselves of food. Is this really a sensible tactic? Apparently, Putin thinks so, and is threatening not only to deprive Russians of food but also automobiles.

Embargoes have been used against adversaries throughout history. The US has maintained an embargo on Cuba for more than half a century and is pressuring Iran the same way. But it makes little sense for a country to impose an embargo on itself.

If the US and EU had imposed a food embargo on Russia, many would view it as a cruel and inhumane hostile act. For Putin to impose this embargo on his own people appears to be an act of stupidity. No wonder there has been barely any reaction to it in the West.

Putin has heard our empty threats, and appears to be saying that if we won’t follow through and impose costs on Russia, Putin will do it for us.

New Translations of ‘Mises Daily’ Articles

download (4)One from Mises Poland:

Hodowcy bydła a imperium na amerykańskim Zachodzie (orig: “Ranchers and Empire in the American West“)

And four new ones from Mises Hispano:

Los datos son claros: Los mercados libres reducen la pobreza by DW MacKenzie (orig: “The Data Is Clear: Free Markets Reduce Poverty“)

La regla de oro frente al alegato católico contra los mercados libres by Randy England (orig: “The Golden Rule vs. Catholic Case Against Free Markets“)

La Primera Guerra Mundial y el fin del siglo de la burguesía by Ryan McMaken (orig: “World War One and the End of the Bourgeois Century“)

Cuando atacan las industrias subvencionadas por el estado by Dave Albin (orig: “When State-Subsidized Industries Attack“)

VIDEO: Austrian Economics versus Mainstream Economics

Presented at the Ludwig von Mises Institute in Auburn, Alabama, on 24 June 2011.

Six Myths About Money and Inflation

6849Mises Daily Thursday by Patrick Barron:

Politicians and the mainstream media have a lot of faith in the ability of central banks to manipulate, manage, cajole, energize, and tame the global economy. Unfortunately, things are not so easy in actual fact.

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 the anti-ridesharing crusade is to 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.