Posts tagged: mises

End the Fed has posted Chapter 2 of Ron Paul’s glorious new book End the Fed. Here’s a small excerpt:

Most Americans haven’t thought much about the strange entity that controls the nation’s money. They simply accept it as though it has always been there, which is far from the case. Visitors to Washington can see the Fed’s palatial headquarters in Washington, D.C., which opened its doors in 1937. Tourists observe its intimidating appearance and forbidding structure, the monetary parallel to the Supreme Court or the Capitol of the United States.

End the Fed by Ron PaulPeople know that this institution has an important job to do in managing the nation’s money supply, and they hear the head of the Fed testify to Congress, citing complex data, making predictions, and attempting to intimidate anyone who would take issue with them. One would never suspect from their words that there is any mismanagement taking place. The head of the Fed always postures as master of the universe, someone completely knowledgeable and completely in control.

Read the whole chapter here

Why Austrian Economics Matters

Here is a timeless essay for your weekend reading enjoyment. Too many people do not know or understand the concept of Austrian economics. This is sad. We would not be in the economic mess we are today if more people were educated in the Austrian School. From time to time, I will post articles and essays on Austrian economics. The below essay is the first of these posts:

Why Austrian Economics Matters
by Llewellyn H. Rockwell, Jr.

Economics, wrote Joseph Schumpeter, is “a big omnibus which contains many passengers of incommensurable interests and abilities.” That is, economists are an incoherent and ineffectual lot, and their reputation reflects it. Yet it need not be so, for the economist attempts to answer the most profound question regarding the material world.

Pretend you know nothing about the market, and ask yourself this question: how can society’s entire deposit of scarce physical and intellectual resources be assembled so as to minimize cost; make use of the talents of every individual; provide for the needs and tastes of every consumer; encourage technical innovation, creativity, and social development; and do all this in a way that can be sustained?

This question is worthy of scholarly effort, and those who struggle with the answer are surely deserving of respect. The trouble is this: the methods used by much of mainstream economists have little to do with acting people, and so these methods do not yield conclusions that have the ring of truth. This does not have to be the case.

The central questions of economics have concerned the greatest thinkers since ancient Greece. And today, economic thinking is broken into many schools of thought: the Keynesians, the Post Keynesians, the New-Keynesians, the Classicals, the New Classicals (or Rational Expectations School), the Monetarists, the Chicago Public Choicers, the Virginia Public Choicers, the Experimentalists, the Game Theorists, the varying branches of Supply Sideism, and on and on it goes.

The Austrian School

Also part of this mix, but in many ways apart from and above it, is the Austrian School. It is not a field within economics, but an alternative way of looking at the entire science. Whereas other schools rely primarily on idealized mathematical models of the economy, and suggest ways the government can make the world conform, Austrian theory is more realistic and thus more socially scientific.

Austrians view economics as a tool for understanding how people both cooperate and compete in the process of meeting needs, allocating resources, and discovering ways of building a prosperous social order. Austrians view entrepreneurship as a critical force in economic development, private property as essential to an efficient use of resources, and government intervention in the market process as always and everywhere destructive.

The Austrian School is in a major upswing today. In academia, this is due to a backlash against mathematization, the resurgence of verbal logic as a methodological tool, and the search for a theoretically stable tradition in the madhouse of macroeconomic theorizing. In terms of policy, the Austrian School looks more and more attractive, given continuing business-cycle mysteries, the collapse of socialism, the cost and failure of the welfare warfare regulatory state, and public frustration with big government.

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