Free Republic

...In December 1958, economist Leonard Read, the founder of the Foundation for Economic Education, published a short essay in FEE's periodical, The Freeman. In the 65 years since its introduction, this masterly work has become the most recognizable element of the Austrian School of economics. "I, Pencil" was conceived as a fanciful anthropomorphism, the genealogy of that most common of household tools, the lead pencil. In those few pages, Leonard Read demonstrated the magic woven by the Invisible Hand of the free market. In the generations since, millions of us have learned to respect how countless different industries, countless people,...

The late great Murray Rothbard gave a series of lectures in 1986 at New York Polytechnic University from his book of the same name, "The American Economy and the End of Laissez-Faire: 1870 to World War II." Fortunately for us, they were recorded by Hans Hermann-Hoppe. (audio 1:47:29)

Coming up, an article by Reuben Ben Abraham of Los Angeles California. A senior member of the New England Alliance for Liberty and Free markets and a brilliant economist in the Austrian school gives us this insight in the superiority of the capitalist system over socialism... The article I am typing now deals with traits that show the superiority of capitalism, inspired by an incident that took place at a McDonalds restaurant one morning that illustrates capitalism. Anyway, this first incident I want to illustrate took place at McDonalds restaurant in Wilshire Boulevard across from Ross Department store and California...

Congratulations go to Forbes columnist John Tamny and editor of Real Clear Markets for producing the "Idiot's Guide to Austrian Economics'. Ironically, that is not exactly what Tamny set out to do. The actual title of Tamny's article is "The Closing Of The Austrian School's Economic Mind". Point by Point Look Tamny: "It’s well known that some Austrians have a major problem with 'fractional reserve banking' whereby banks pay for liabilities (deposits) by virtue of turning those liabilities into assets (interest paying loans). Instead, they borrow money from depositors seeking a return on their savings, and who don’t need access...

JOHN MAYNARD KEYNES and Friedrich Hayek. The names conjure opposing poles of thought about making economic policy: Keynes is often held up as the flag bearer of vigorous government intervention in the markets, while Hayek is regarded as the champion of laissez-faire capitalism. What these men actually thought — about the economy and each other — is more complicated, as Nicholas Wapshott demonstrates in “Keynes Hayek: The Clash That Defined Modern Economics” (W. W. Norton, $28.95). This lively book explores one of the most pressing economic questions of our time: To what extent should government intervene in markets? And in...

In the 1700s, the courtesans of Queen Catherine of Russia gave her tours along the Volga river where she witnessed a happy and thriving bourgeoisie living in clean and prosperous villages. But this was all a show to cover disease, poverty, and misery that lay just behind the facade that had been erected for her benefit. This is the origin of the phrase Potemkin Village, a place where a politically generated appearance covers a less impressive underside. Europe is today filled with Potemkin Villages, none as successful as Denmark. Denmark is often cited as an exemplary country within the EU,...

Right up until that fateful week in September of 2008 when Lehman Brothers, Fannie Mae, Freddie Mac,Merrill Lynch and AIG all imploded, most of the media, government and financial professionals either could not or would not acknowledge the economic disaster that was unfolding before their eyes. Of course now that the horse has escaped these same visionaries have been eager to provide their expertise in locksmithing so as to determine how best to close the barn door. A casual stroll through your local book store leaves one practically assaulted from the sheer volume of explanations and witch hunts. The whole...

U.S. Monetary System Is In Serious Trouble Interest-Rates / US Bonds Sep 11, 2010 - 01:20 PM By: Bob Chapman There is no question the US monetary system is in serious trouble and the situation continues to deteriorate. The smug elitist owners of the system are not getting the desired results and there is great consternation among the players. Since 1913 in running US monetary policy the Fed has had one recession after another and two depressions. The second one is the one we are now in. The Fed’s creation was mainly to end recessions and depressions, something obviously they...

The short story: Activists arrested for open container in a park, August 5th they protest the arrest by attending city council with brown bottles. More arrests in council chambers. August 19th they do it again. This time no arrests. But three anti-Free Keene activists drop by. They question some of the Free Keeners' annoying behavior by being....annoying. Inside-system freedom activist denounces Free Keene activism. All part of the process...

As we start the new year 2010, the establishment politicians, economists and Wall Street are trying to convince themselves that we have turned the corner and economic growth has once again begun. The predictions that conditions are getting back to normal come from those who never saw the crisis coming and don't have the vaguest notion what caused it. Some of them concede that it could be a jobless recovery. That will establish a new definition for a recovery. Official unemployment is at 10% but even the government knows that if everyone is counted, including those individuals that are too...

Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today. Mises's ideas on business cycles were spelled out in his 1912 tome "Theorie des Geldes und der Umlaufsmittel" ("The Theory of Money and Credit"). Not surprisingly few people noticed, as it was published only in German and wasn't exactly a beach read at that. Taking his cue from David Hume and David Ricardo, Mises explained how the banking system was endowed with the singular ability to expand credit and with it the money...

Paul Krugman is an eminent economist, but he here reveals a woefully inadequate understanding of Austrian business-cycle theory. The rudiments of the theory are easy; one might have thought that even a Keynesian could grasp them. According to Mises and Hayek, an expansion in bank credit pushes the money rate of interest below the "natural" rate. People prefer goods in the present to the same goods in the future, a matter obvious to anyone except for a few philosophers. The rate at which people favor the present, in the Austrian view, chiefly determines the rate of interest.

Introduction: The former Global Affairs editor of MONEYWORLD, Richard Maybury is one of the most respected business and economics analysts in America. His articles have appeared in major publications. Books include "Whatever Happened to Penny Candy?" "Whatever Happened to Justice?" and "Evaluating Books: What Would Thomas Jefferson Think of This?" His current interest is "The Coming Great War." His writings have been endorsed by top business leaders, and he is a consultant to investment firms in the U.S. and Europe. He is editor of the newsletter Richard Maybury's U.S. & World Early Warning Report. Daily Bell: We understand that your...

With all the rhetoric about how subprime mortgage lenders have behaved badly and dangerously, few if any well-known writers have pointed out how impossible it becomes to avoid a Fed-induced monetary boom. Instead, pundits dismiss the Austrian Business Cycle, saying that entrepreneurs can easily detect "funny money." After all, hasn't it happened before? The whole entrepreneurial class is, as it were, in the position of a masterbuilder whose task it is to erect a building out of a limited supply of building materials. If this man overestimates the quantity of the available supply, he drafts a plan for the execution...

Scion of America’s greatest Keynesian, James K. Galbraith recently penned one of the most astonishing near misses in recent memory. In the December/January edition of Mother Jones Galbraith accuses free-market economists starting with Adam Smith of being Intelligent Design (ID) hucksters. “Economists… have been Intelligent Designers since the beginning,” Galbraith writes. “Adam Smith was a deist; he believed in a world governed by a benevolent system of natural law… Smith's Creator did not interfere. He simply wrote the laws and left them for events to demonstrate and man to discover.” Galbraith’s analogy is badly forced. But it is forced ultimately...

SYDNEY (AFX) - Federal treasurer Peter Costello is expected to announce Tuesday evening a fiscal 2005 budget surplus of 7-10 bln aud as soaring company profits and a record low umemployment rate boost the government's coffers, economists said. They expect Costello to put his year to June 2006 budget surplus estimate at around 4.5 bln aud. At its mid-year economic review, the Treasury department estimated the budget surplus for the current financial year at 6.2 bln aud, or 0.7 pct of GDP, up from the original forecast of 2.4 bln aud made in last year's May federal budget. While some...

- The only thing that made me gasp this week was that the banks suddenly dumped $22 billion in bonds last week. Kinda weird, but things have been more weird, I think. Of course, the Treasury is still issuing debt with both hands, bringing us to almost $7.9 trillion. The interest on the national debt totaled $321.6 billion in 2004, which works out to an average of 4.1%, and it, and the total debt, will obviously be higher this year. - Nursing a killer hangover and flipping through the TV dial in my boredom, I ended up watching C-SPAN 2,...

Explaining Japan's Recession by Benjamin Powell [Posted December 3, 2002] After decades of "miracle" economic growth since World War II, Japan's economy abruptly faltered in 1990 and has stagnated since. Why? Neither the Keynesian nor Monetarist explanations can provide an account. Only the Austrian theory of the business cycle provides the explanation. An Overview of Japan's Economy 1985–2000 After the September 1985 Plaza Accord, the yen's appreciation hit the export sector hard, reducing economic growth from 4.4 percent in 1985 to 2.9 percent in 1986 (EIU 2001).1 The government attempted to offset the stronger yen by drastically easing monetary policy...