Friday, April 22, 2016

Payday Loans May Cause Excessive Money Loss, But Don’t Throw the Baby Out With the Bathwater

That is the verdict of

Saturday, April 2, 2016

Jeff Herbener Gives the Mises Lecture

Today my friend and department chair, Jeffrey M. Herbener gives the Ludwig von Mises Memeorial lecture at the Austrian Economics Research Conference. You can watch the live stream of the the lecture below:

Friday, April 1, 2016

Austrian Economics Research Conference

The Austrian Economics Research Conference is in full swing and already the attendees have been treated by keynote lectures by Paul Gottried, David Cowan, and Bruce Yandle.

I was blessed to be part of a History of Economic Thought Session, at which I presented the paper, "Austrian Economics as the Solution for Economic Development Theory." The abstract for the paper is as follows:

Two conflicting theories of economic development developed during the Twentieth Century following the proliferation of Keynesianism. A direct descendent of Keynesian theory, the Harrod-Domar model fueled so-called capital fundamentalism—the doctrine that capital alone was the determinate of economic growth. The Solow growth model and subsequent empirical studies drawing on that model asserted contrarily that capital accumulation was an insignificant contributor to economic expansion, but that technology was the driver of continued prosperity. Both frameworks rely on mathematical models and, hence, suffer from problems of aggregation as well as the serious limitations of rarifying assumptions. Much unproductive debate could have been avoided if economic analysis by Ludwig von Mises and other Austrians had been more fully understood and assimilated into the larger body of economic development literature. Austrian capital theory and Mises’ conception of capital as a tool of economic calculation, not merely an aggregate of homogenous physical goods reveals the important relationship between saving and investment in capital accumulation and wise entrepreneurship within the market division of labor as distinct, yet interrelated engines of prosperity. Such a link also helps to resolve the true relationship between capital and technology as sources of economic progress.

Tomorrow we will be treated to the Mises Memorial lecture given by my friend and Department Chair Jefferey M. Herbener.

Thursday, March 24, 2016

Socialism: Communist, Conservative and Social-Democratic Style

This past Saturday I was again blessed to be a guest on the program A Plain Answer. The show is broadcast on the Redeemer Broadcasting radio network. Dan Elmendorf and I talk about socialism in some of its several varieties. This program is as timely as our current election cycle You can listen to the discussion by clicking here.

Chapter 18 of my book Foundations of Economics: A Christian View is devoted to this subject. In it, I discuss both the economics and ethics of socialism. For those looking for an in-depth investigation into various forms of socialism and its alternative, the free market, I recommend Hans-Hermann Hoppe's A Theory of Socialism and Capitalism.

Monday, February 22, 2016

More Resorces on Cuba

My most recent post featured links to a radio episode and magazine article that briefly mentioned the plight of citizens as it related to nutrition after the Castro Revolution. If you are interested in learning more about the consequences of socialism for cuba I recommend the following:

"Why Havana Had to Die."
This is an article one of my favorite conservative authors, Theodore Dalrymple. The piece is about fourteen years old and still  as prescient as ever. The truth always is.

"Capitalism, Cuba, and Castro: A Report from Recent Travels"

This is a lecture by former Soviet economist Yuri Maltsev, presented at the Austrian Scholars Conference in 2004. He documents the tragic consequences of socialism for Cuba. Unfortunately, all we have is the audio recording, but the content is worth careful attention.

Saturday, February 20, 2016

Socialism Starves the People: Cuba Edition

“What were the three greatest successes of the revolution? Education, health, and defense. What were the three greatest failures? Breakfast, lunch, and dinner.”

                                                 ---Cuban Food Joke

The radio program The Splendid Table recently featured a story about the rediscovery of good food in Cuba. One of the segments featured an interview with writer Tamar Adler whose piece "Why Cuba Is Becoming a Serious Culinary Destination" explains how the gastronomic life of Cubans is beginning to recover from decades of socialism.

You can listen to the segment and read excerpts from Adler's interview by clicking here.

Adler explains how Castro's revolution and regime drove the populace to the brink of starvation. Following the revolution, Cuba's international trade slowed to a crawl. In response to the question of how Cuba's isolation effected Cuba's culinary identity, Adler replied:
Severely. The worst of it really started with the collapse of the Soviet Union in the late '80s and early '90s. Cuba, like the U.S., was a petroleum-dependent, highly industrialized, agricultural society. It lost all of its oil imports when the Soviet Union collapsed, which resulted in just short of starvation nationwide.
In her written article Adler elaborates:
Back before the island’s food markets and restaurants were nationalized in 1959, Cuba’s large upper middle class ate well. Then, private enterprise was forbidden. Food rationing began in 1962 and remains, via the libreta de abastecimiento (supplies booklet), which the journalist Patrick Symmes, who has been reporting on Cuba since the 1990s, has called “the foundational document of Cuban life.” The collapse of the Soviet Union around 1991 marked the beginning of the most artfully euphemized epoch I’ve heard of: Fidel Castro’s Special Period in Peacetime, during which Cuba lost up to 85 percent of its imports and exports. Farms went fallow. Cubans lived on sugar water until dinnertime. Stories abound of dairy cows eaten for meat, of street cats and zoo animals going missing. The weight of an average Cuban decreased by 30 percent 
While the program segment happily focuses on the recovery of the Cuban culinary scene after Fidel Castro's stepping down from power and the subsequent opening of Cuba, it also reminds us of how socialism actually impoverished the people by making their mundane, ordinary lives much more difficult to live. The Cuban socialist episode is another negative example of how socialism hurts the masses, the very set of people it promises to help.

Friday, February 12, 2016

Wilhelm Röpke (1899 - 1966)

"I champion an economic order ruled by free prices and markets...the only economic order compatible with human freedom."
Wilhelm Röpke died on this date fifty years ago. He was an excellent economist thoroughly grounded in a realistic view of human action and who, therefore, continually fought against the dehumanizing effects of Keynesian and mathematical economics. He has also served as one of my intellectual inspirations in his effort to incorporate economics into the broader fabric of general social thought. That he did not always do so successfully is manifest by his failure to square his affection for a "third way" with his conviction that a free market is the best exchange institution for attaining a good society. Nevertheless his work on critique of fascism, socialism, Keynesianism, and price controls, and his free market apologetic is worthy of both honor and study.

As I noted in these excerpts from my "Wilhelm Röpke: A Humane Economist" published in The Great Austrian Economists:

Wilhelm Röpke devoted his scholarly career to combating collectivism in economic, social, and political theory. As a student and proponent of the Austrian School, he contributed to its theoretical structure and political vision, warning of the dangers of political consolidation and underscoring the connection between culture and economic systems. More than any other Austrian of his time, he explored the ethical foundations of a market-based social order. 

He defended the free market from socialist cultural critics by pointing out that social crises and cultural decline are not the product of the free society; one needs to look to state control, political centralization, welfare, and inflation as a primary source of social decay. Röpke influenced the direction of post-war German economic reform, became a leading intellectual force in shaping the post-war American conservative movement, particularly its "fusionist" branch, and has been compared with Mises as an archetype of the individualist thinker. . . .
. . .From his earliest years, Wilhelm Röpke fought collectivist and statist power in every way an intellectual could. His tools included not only economic theory but also a vision of moral goodness rooted in Christian faith. As Hayek said of Röpke: "let me at least emphasize a special gift for which we, his colleagues, admire him particularly--perhaps because it is so rare among scholars: his courage, his moral courage." If are we concerned about fostering societies where people can live more humane lives, Röpke's advances in both Austrian economics and his vision of the good society deserve close attention.