Thursday, February 26, 2015

What Is a Free Market?

That is the question, among others, posed to me by Dan Elmendorf on his radio program A Plain Answer. That program is produced and broadcast on the radio stations in the Redeemer Broadcasting network. In the interview I do discuss the economics and morality of the free market, identify the institutions necessary to support such a market, and the consequences when governments interview via a host of measures. My goal was to introduce listeners with perhaps no formal training in economics to sound analysis. You can see if I succeeded by clicking here.

Saturday, February 21, 2015

Engelhardt on Monetary Independence

This year's Austrian Student Scholars Conference got off to a vigorous start with Lucas Engelhardt's delivery of the Hans Sennholz memorial lecture. Engelhardt drew upon the work of Sennholz himself to make the case for an entire free market in money and banking. He explained what he sees as the problems of our current monetary regime as well as the limitations of various monetary rules that have been proposed by economists such as Milton Friedman, John Taylor, and Scott Sumner.

He then made the case for the benefits and viability of a completely free market for money and banking in which anyone could attempt to produce and circulate money. He explained how such a system could work like the market for any other economic good. He then outlined a few steps that would take us in that direction, such as abolishing legal tender laws, taking government monetary titles off of metallic currency, and allow for freedom in the banking industry. All in all, it was a tremendous beginning to what promises to be an outstanding conference.

Part way through Engelhardt's lecture, it occurred to me that this years ASSC features three generations of Austrian economists. Tonight's Sennholz Lecture was given by a former student of mine. Tomorrow's Ludwig von Mises Memorial Lecture will be delivered by a professor I had in graduate school, Mark Thornton. What a blessing to see how economic truth has been communicated from one generation to the next.

Thursday, February 19, 2015

Austrian Student Scholars Conference 2015

Tomorrow begins this years Austian Student Scholars Conference. We will hear twenty-two papers presented by students from the United States as well as abroad. We will also hear keynote lectures by Dr. Lucas Engelhardt and Dr. Mark Thornton. Admission to all lectures and paper presentations are free and open to the public.  Below is a schedule of events:

Friday, February 20, 2015
5:00-5:30 Registration. HAL Atrium.
5:30-6:30 Dinner. SU Great Room.
7:00-8:00 Hans Sennholz Memorial Lecture. Sticht Lecture Hall.
“A Case for Monetary Independence"                          Dr. Lucas Engelhardt
                                                                                    Assistant Professor of Economics
                                                                                    Kent State University, Stark
Saturday, February 21, 2015
8:30-9:00 Coffee and Pastries. HAL Atrium.
9:00-10:30 Sessions
     Legislating Morality. Chairman: Jeff Herbener. HAL 114.
                Trafficking,” Jon Nelson (Grove City College)
            • “Prohibition,” Brian O’Riordan (Grove City College)
            • “What Has Government Done to Marriage,” Ryan Brown (Grove City College)
                Claire Vetter (Grove City College)
10:45-12:15 Sessions
▪ Liberal Social Order. Chairman: Jeff Herbener. HAL 114.
                Zack Yost (Mercyhurst University)
                Kyle Kreider (Grove City College)
                Bloomington Institutional Analysis,” Chesterton Cobb (Grove City College)
▪ Foundational Issues in Economics. Chairman: Shawn Ritenour. HAL 116.
                Modern Epistemological Theory,” Jake Tinkham (Grove City College)
                Xiaolin Zhang (University of Lethbridge, Canada) 
            • “Science, Probability, and a Theory of Foresight,”
                Davis Bourne (Millsaps College)
            • “Toward a Subjective Theory of Risk,” 
                Daniel Sanchez-Piñol Yulee (King Juan Carlos University, Spain)
12:30-1:30 Lunch. SU Great Room.
2:00-3:30 Sessions
▪ Problems in Macroeconomics. Chairman: Jeff Herbener. HAL 114.
              Karl-Friedrich Israel (University of Angers, France)
              Economic Slump,” Eric Peterman (Grove City College)
• “Capital Mobility and Comparative Advantage,”
             William Casey (Grove City College)
▪ Policy, Ancient and Modern. Chairman: Shawn Ritenour. HAL 116.
                Justin Klazinga (Grove City College)
              Franco Martin Lopez (Universidad Abierta Interamericana, Argentina)
              George Lominadze (Ilia State University, Georgia)
3:45-5:15 Sessions
▪ Great Debates in Economics. Chairman: Jeff Herbener. HAL 114.
                Scott Alford (Grove City College)
              Subjective Theories of Value,” Thomas Cottone (Florida Atlantic University)
                in the Marketplace,” Jared Billings (Grove City College)
▪ Money and Banking. Chairman: Shawn Ritenour. HAL 116.
            • “The Backing of the Currency and Economic Stability,”
                Zack Morrow (Wofford College)
• “Detangling the Fractional Reserve Debate,” Dorian Rahamin (Vienna, Va.)
• “The Euro, Pros and Cons,” Evan Burns (Grove City College)
5:30-6:30 Dinner. SU Great Room.
6:45-7:00 Awarding of the Richard E. Fox Prizes for Best Papers. Sticht Lecture Hall.
7:00-8:00 Ludwig von Mises Memorial Lecture. Sticht Lecture Hall.
“What a Real Free Market in Drugs Looks Like”                           Dr. Mark Thornton

Wednesday, January 14, 2015

Reality Trumps Federal Reserve Rhetoric

An excerpt from my chapter, "The Fed: Reality Trumps Rhetoric" appears today as a daily article at I was honored to be asked to contribute the chapter to a new book, The Fed at One Hundred that provides a critical assessment of our nation's central money making machine. Edited by David Howden and Joseph T. Salerno, the book is an excellent work providing a scholarly evaluation of the Federal Reserve. In my chapter I explore main themes in the rhetoric used by Fed officials, drawing upon speeches from Federal Reserve Chairmen and official Fed publications since its inception. I then hold this rhetoric up to the light of the monetary and economic history of the United States and show that despite claims to be the savior of the global economy,
The history of the Fed has been one of monetary inflation, higher overall prices, diminished purchasing power, economic depressions, and lost decades. In 1913 the state sowed the inflationist wind and for a hundred years we have been reaping the economic whirlwind.

Wednesday, January 7, 2015

Salerno on Rothbard's THE MYSTERY OF BANKING

Here is Joseph Salerno's nice introduction of Murray Rothbard's The Mystery of Banking.

I concur that The Mystery of Banking is an excellent introduction to monetary theory, how fractional reserve banking affects the quantity of money and its purchasing power, and the monetary history of the United States. In fact, if you come to Grove City College to study economics, you will use it as the main text in our Money and Banking course.

Thursday, January 1, 2015


My review of Randall Holcombe's new Advanced Introduction to Austrian Economics has just been published by Libertarian Papers. Holcombe's concise work makes for an excellent way to introduce any friends (or enemies for that matter) who are schooled in the neoclassical economic framework to the more rich, realistic, and therefore relevant economic analysis in the Austrian tradition.

Sunday, November 30, 2014

Dalrymple on the Illusion of European Austerity

This past spring, David Howden, upon looking at European fiscal policy, asked the very reasonable question, "Where's the Austerity?" The answer being nowhere except in the minds of the politicians and the intellectual class that supports them.

Now along comes Theodore Dalyrmple, my favorite conservative commentator, warning of the misuse of the "loaded word" austerity. In so doing he uses an excellent household analogy:
Suppose that, for a number of years, my spending had been larger than my income, so that I had accumulated a large debt. Suppose also that I had nothing to show for my excess expenditure, which has all gone to increase my level of current consumption. Interest payments on my debt now exceed my outlays on such items as food, clothing, and shelter. The bank to whom I owe the money tells me that things cannot continue like this.

I agree that things cannot go on in the same way, and, as a token of my seriousness, I promise that henceforth, I shall not drink my nightly bottle of Meursault but only half a bottle of Chablis. This will reduce my excess expenditure from, say, 6 percent of my annual income to 4 percent. I call this sacrifice of Meursault for Chablis “austerity.” Would anyone take me seriously?
Austerity indeed!