Ah, the great health care debate. Will it ever end? Somehow I doubt it, for regardless of whether or not Obama’s quest for universal health care in the United States becomes a reality, I think it is safe to say there will always be a schism on this issue amongst the American population.

According to the latest polling results from Rasmussen Reports, 41% of Americans are in favor of the latest installment of the health care bill while 55% are opposed. In another national poll done by Quinnipac University the results are quite similar, with 53% of Americans polled disapproving of the proposed health care bill in the Senate and 56% of Americans disapproving with Obama’s handling of the health care issue in general. I find these statistics somewhat curious though, since the House has already passed its version of the health care bill and things are looking fairly positive for the Senate bill at this point, considering it just passed by a 60-40 party line vote to overcome the Republican filibuster. I say this is curious because both the House and the Senate are supposed to be comprised of politicians who represent their respective constituents. But how can that be? It seems to me if our representatives were truly voting in line with their constituents, we’d be seeing different results in the House and the Senate, no? Then again, I suppose I’m not considering the fact that this has nothing to do with what the American public’s wants or desires are, and it has everything to do with Republican vs. Democrat and, of course, money. Silly me.

Wait a minute… Health care reform, all about money and politics? Shouldn’t health care reform be about, you know, health care? Surely I must be mistaken. I truly wish I were.

“By standing up to the special interests who prevented reform for decades and who are furiously lobbying against it now, the Senate has moved us closer to reform that makes a tremendous difference for families, for seniors, for businesses, and for the country as a whole,” Obama proclaimed to White House reporters after the vote.

Yes, those pesky lobbyists have really been taken to school by the powers that be, or so the President would have us believe. According to the Center for Responsive Politics, the American Medical Association, AARP, the American Hospital Association and the Pharmaceutical Research & Manufacturers of America are among the top 6 lobbying spenders–and these are just to name a few, and to mention nothing of the non-medical industry lobbyists and insurance companies who have been lobbying on health care reform this year. The Pharmaceutical Research & Manufacturers of America alone have lobbied on over 1,600 pieces of legislation between 1998 and 2005, spending at least $900 million and employing nearly half of all health care lobbyists within that time frame to preserve their interests. CNN’s Jim Acosta reports that the health care industry, this year alone, has spent at least $263 million lobbying Congress, with nearly 6 lobbyists for every one member of Congress, to manipulate health care reform in their favor. As well, some of the most influential health care lobbyists, the American Medical Association and AARP, have both publicly announced their support for Obama’s health care reform, a completely contrary reality to Obama’s own assertion that health care reform is being passed despite the health care lobby.

Call me crazy, but somehow I don’t think these people are spending these hundreds of millions of dollars, and employing multiple thousands of lobbyists only to get stonewalled by Washington’s unwavering stoicism. On the contrary, the Chicago Tribune’s Andrew Zajac reports that David Nexon, a former adviser to Senator Ted Kennedy turned senior executive vice president of the Advanced Medical Technology Association, managed to get the Senate’s health care bill’s tax on medical devices cut in half by the time the bill was unveiled in mid-November. So much for sticking it to the lobbyists, eh Mr. President?

Not to worry, Obama’s universal health care is going to help stimulate a faltering economy, counter the growing cost of health care to all Americans, and ensure that even the most impoverished citizens have access to the health care they need, right?

Not so fast, Mr. President. I’m sure it may surprise many people to learn that the health care industry is already, and has been for some time, the most heavily government-regulated industry in the United States, as is apparent from a 2004 study by the Cato Institute. Unfortunately, examining the connection between government regulation and health care costs is something of a shrouded secret, as there have been very little in-depth looks into such analysis in the past. Perhaps with the volatility of this new health care debate sweeping the nation more attention will be given to the subject, but for now we have very little to go off of aside from the Cato Institute’s admittedly preliminary report. Nevertheless, Christopher J. Cronover does end up giving validity to a certain economic study by Mr. Milton Friedman, a renowned American economist of the 20th century and recipient of the Nobel Memorial Prize in Economics, in his study Input and Output in Medical Care. In this study, Friedman essentially examines an economic theory, the theory of bureaucratic displacement, proposed by a Dr. Max Gammon which says that, in a bureaucratic system, increase in expenditure will be matched by fall in production–in other words, the more government regulation there is, the less efficient the medical care will be. In light of all of this, the most obvious question to me is then, why would we want any more government regulation in the health care industry than we already have? In fact, wouldn’t lessening the government regulation of health care be the more logical path to reform? This question resonates even louder in my mind as I learn of all of the new and expanding bureaucracies both the Senate and House bills will be imposing on the health care industry for regulatory purposes; it looks like we’ll see at least 50 new bureaucracies regardless of which bill takes precedent. Government regulation doesn’t just lead to inefficient output and operation however, it also facilitates a little something called coercion.

What is coercion? Dictionary.com defines coercion as follows: the act of coercing; use of force or intimidation to obtain compliance. So, in other words, coercion seems to be the very antithesis of liberty–one of the fundamental principles that this nation was founded upon. Yet, coercion is one of the very few things our government really seems to excel at, and this fact is reiterated in both the House and Senate health care legislation. There are many forms of coercion throughout the bills which will certainly affect the economy at large, as well as the American consumer, but for the purposes of this discussion I’d like to focus on one form of coercion in particular. In both bills, from the House and the Senate, it is mandated that all Americans have to purchase health insurance. If, for whatever reason, someone does not comply with this mandate, they will be subject to penalties in the form of additional income taxes–the House bill imposes a fine of up to 2.5% of a person’s income while the Senate bill imposes a fine which begins at $95 and rises to $750 as years go on. Since these fines are now basically taxes on income, they are then handled by our best friend the Internal Revenue Service. The IRS then has the power, under the Tax Code (Section 7203 and 7201), to prosecute, fine and even imprison, anyone who does not comply with these new taxes should they choose not to conform to the new mandated health care.

Now, if you’re anything like me, you’re probably wondering how in the world the government can force anyone to purchase anything, health care or otherwise. Surely this type of behavior is completely unconstitutional, right? Well, don’t try raising this question to any of our upstanding representatives, and certainly not the Speaker of the House, Nancy Pelosi. On October 22, at a press conference regarding the health care legislation, CNSNews.com posed this very question to House Speaker Nancy Pelosi.

CNSNews.com: “Madam Speaker, where specifically does the Constitution grant Congress the authority to enact an individual health insurance mandate?”

Pelosi: “Are you serious? Are you serious?”

CNSNews.com: “Yes, yes I am.”

The Speaker then responded by simply shaking her head, ignoring the question and taking a question from another reporter, says CNSNews.com. Nadeam Elshami, Pelosi’s press secretary, then apparently told CNSNews.com the following:

Nadeam Elshami: “You can put this on the record, that is not a serious question. That is not a serious question.”

Interesting. Bear in mind that the Speaker of the House, as a member of Congress, is required by law to take the Oath or Affirmation of Office as follows:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.

For someone who has pledged such an allegiance to the Constitution of the United States, Nancy Pelosi sure doesn’t seem to take it very seriously. Setting aside the fact that her response to an arguably valid question was quite unprofessional and rather rude, it seems to me that she has blatantly disregarded the very oath she is bound to. The Constitution does not grant Congress any such power, plain and simple. Pelosi’s camp likes to cite Article I, Section 8, Clause 3 (the Commerce Clause) of the Constitution as justification for being able to mandate health care, which reads:

[The Congress shall have power] To regulate Commerce with foreign Nations, and among the several States, and with Indian tribes;

Now, it’s important to note that the interpretation of this clause is a subject of much political controversy, both historically and even now, as it is from a specific interpretation of this clause alone that Congress has attained much of its legislative and regulatory power over the years. The Heritage Foundation takes an in-depth look into the history and unconstitutional application of this clause as it relates to health care reform, and even refers to the Congressional Research Service which states:

Despite the breadth of powers that have been exercised under the Commerce Clause, it is unclear whether the clause would provide a solid constitutional foundation for legislation containing a requirement to have health insurance. Whether such a requirement would be constitutional under the Commerce Clause is perhaps the most challenging question posed by such a proposal, as it is a novel issue whether Congress may use this clause to require an individual to purchase a good or a service.

As well, the Congressional Budget Office even admits how unprecedented such a mandate would be:

A mandate requiring all individuals to purchase health insurance would be an unprecedented form of federal action. The government has never required people to buy any good or service as a condition of lawful residence in the United States. An individual mandate would have two features that, in combination, would make it unique. First, it would impose a duty on individuals as members of society. Second, it would require people to purchase a specific service that would be heavily regulated by the federal government.

Regardless of all of this, Speaker Pelosi is content to question the seriousness of a question on the constitutionality of such a mandate, and apparently doesn’t even seem to understand the very Constitution which she swore to support and defend in the first place, let alone the intention of the Framers who drafted it. In addition to all of this talk about mandating Americans to purchase health insurance, I find it rather amusing to recall the words of Obama about the same issue during the democratic presidential debates:

CNN: What is the most important policy difference between you and your opponent [Senator Hillary Clinton]?

Obama: Senator Clinton has a different approach. She believes that we have to force people who don’t have health insurance to buy it, otherwise there will be a lot of people who don’t get it. I don’t see those folks, and I think that it is important for us to recognize that if, in fact, you are going to mandate the purchase of insurance, and it’s not affordable, then there’s going to have to be some enforcement mechanism that the government uses. And they may charge people who already don’t have health care fines, or have to take it out of their pay checks–and that I don’t think is helping those without health insurance; that is a genuine difference.

You don’t have to take my word for it, I’m not making this stuff up. Watch the video. I’ll give our President credit where credit is due, he is an excellent politician (read: liar).

Ok, so health care reform has it’s problems, nothing is perfect after all, but it’s every American’s natural right to have affordable health care, right? Not in my opinion. Don’t get me wrong, I’m not advocating that only the rich should have access to health care and that the poor should just be disregarded and left to suffer and die as a result of their poverty. On the contrary, what I am saying is that every human being has the natural right to seek out, value and exchange health care as they see fit so long as in doing so they do not infringe on the rights, or liberties of others. As well, I believe that in a free-market, absent of government regulation, mandates, coercion and inefficiency health care would become much more affordable and accommodating to both rich and poor. Health care is a good which comes from the efforts or labors of other individuals, and as such it is a property, a commodity of sorts for exchange. Similarly, we do not have rights to the goods which others produce, we do however have the right to seek out exchange for the goods that others produce, should they be willing to exchange those goods for what we have to offer. As such, our ‘right’ to health care is not violated when we cannot afford to exchange for a certain type of health care, but our ‘right’ to health care is violated when we could very well exchange for a certain type of health care but are otherwise prevented from doing so by coercion from an outside source. We touched on the subject of coercion previously, but there’s another facet to coercion via the government, with respect to health care, which I’d like to illustrate now, albeit rather briefly.

It is my contention that the government does not facilitate our ‘right’ to health care as I defined above, but rather the government violates this ‘right’ through coercion, or regulation. That’s quite a bold accusation, you might say, but as we’ve already examined previously, government regulation and involvement seems to be directly related to the rising costs of health care, among other things. Cost of health care is apparently the number one concern for the majority of Americans according to a recent Gallup poll. When Americans were asked what they personally perceived as the biggest problem with health care in the United States and overwhelming 38% responded that the cost was their top concern, followed by a 15% vote for too many being uninsured. In addition, we notice an interesting trend, as shown in the graph below, in the opinions of Americans regarding whether or not it is the government’s responsibility to provide health care to all Americans.

So, if rising costs is the number one concern of Americans with regard to health care, then perhaps this is the core problem we should be addressing–not the subsequent symptom of too many being uninsured. The government doesn’t need to be endowed with the responsibility of providing health care to us, we (along with the free-market) can do that ourselves, if we are allowed to.

What if federal deregulation of the health care industry was Obama’s crusade, rather than expanding regulation? What if insurance companies were left to be able to provide their services to any American, no matter where they lived? What if Americans were allowed to shop around for the best health care for their personal needs, thus commanding competition amongst the health care providers? What if insurance companies were allowed to custom-craft individual policies to satisfy the specific needs of every American or American family? What if insurance companies did not have to collectively pool all of their customers under the same umbrella plan? What if pharmaceutical drugs were allowed to be imported from foreign countries? What if pharmaceutical patent laws did not prevent competition, research and advancement? What if medical devices and goods were not subject to discriminatory taxation? What if people were not penalized for how much money they make or for their personal preference with regard to their own health care? What if doctors and institutions acquired their medical license through competing voluntary accreditation agencies  rather than government bureaucracies? What if our health care laws, legislation and regulations were not influenced by the bank accounts of special-interests? What if the sick or unhealthy were not subsidized (read: encouraged) to be sick or unhealthy? What if freedom were to return to the health care market, to both provider and consumer? What if our liberties and natural rights were protected and facilitated rather than oppressed and violated?

I could go on and on about this topic, providing further historical and empirical evidence to continue making a case against government intervention in the health care industry, but for now this will have to do. Perhaps I’ll post more about this issue as it continues to develop in Washington. In the meantime I’d suggest taking a look at the Ludwig von Mises Institute’s Health Care Reader, a collection of informative and thoughtful articles on the issue of health care from a free-market perspective, if anything I’ve shared with you here has inspired you to think and feel as I do.

Thanks for reading, feel free to comment and stay tuned for more.

Courtesy of Butler Shaffer, a law professor in the Southwestern University School of Law and contributor for the Mises Institute, a humourous yet eye-opening take on Scrooge- Bah Humbug!

Selfishness is A Virtue

http://mises.org/article.aspx?Id=3952

(Article copyrighted by author and the Mises Institute. Scrooge McDuck copyright Disney Corporation)

Season's Greetings!

Happy Holidays ( I personally celebrate Festivus) Everyone, May Liberty Bless Your Will and Grant You Victoria In The New Year!!!!

I have recently been made aware of a rather peculiar development. As history would eventually demonstrate for the unenlightened readers of related works, Distributism, Catholic Social Teaching and the Austrian school of thought are more than strange bedfellows, they are cuddlers.

The confusion was a mere loss in translation. Simple enough, really. If G.K. Chesterton, Hilaire Belloc, Arthur Penty, Fr. Vincent McNacc and the other encyclical purists couldn’t possibly have understood the claims of classical liberal apologists. Certainly, without any room for doubt, they would have embraced the individualist, autonomous, materialistic, and morbidly Utopian world and life view of the so-called libertarians. Certainly, without any doubt.

Lest the reader be unaware of the controversy, many Catholics advocating classical liberalism are making the claim that their view of the political economy is most in harmony with Catholic Social Teaching, and strikingly similar to the concepts held by those historically referred to as Distributivists. Turns out, everyone was wrong to believe that “ChesterBelloc” was an entity at enmity with the principles and ideal society envisioned by men like Ludwig von Mises, Murray Rothbard, Ayn Rand, and Barry Goldwater.

Well, of course there are those few exceptions. Let’s not mind that  wild-eyed Roman Catholic part that believed the teachings of the Church to be foundational and central to their philosophies regarding God, man, salvation history and the political economy. Let’s ignore those passages (or entire books) coming off as radically and vehemently opposed to the economics of the Reformation and the Enlightenment. Let’s even wink at the fact that their political foes were just as demonstrably absolutist in their condemnation of tenets at the radix of Catholic Social Teaching. as the Distributists were in condemning feminism and capitalism.Yes, we must certainly turn a blind eye to these not-so-nonchalant difficulties.

All of this aside, the Austrian School and Distributism appear virtually identical. Which, come to think of it, isn’t saying much. In fact, it only declared the obvious: If Distributism ceases being Distributism and begins embracing classical liberalism in its entirety, there would be little to no room by which to distinguish between the two schools of thought.

Let me grant that I have no doubt that the Austrian Catholic apologists have their ducks in a row, coming prepared for cynics like me. The Achilles heel  of the matter is the libertarians denial of the competency, authority and jurisdiction over the supposedly secular science of the political economy. Say as much gives the power to invoke the right of line-item-veto. Cherry-pick this… toss that… play a little word revision here… and a little historical revisionism there… and there you have it! You now have the Church advocating the very thing She has, in a manner most strange, attacked and even condemned!

Difficulties become all the more peculiar as those entertaining these novel notions turn out being people otherwise deemed traditionalist in their liturgical orientation. Latin Mass Catholics or those advocating the New Liturgical Movement would seem to dominate this school of wonder. So while infiltrating places the likes of both the Mises Institute and Fisheaters.com may seem a difficult task to overcome, these folks feel right at home in either company. A paradox, that great tool and fascination of the Distributists, but certainly not one that would have have crossed their minds, much less crossed from fingers to the typewriter keys.

When all is said and done, regardless of how much the Catholic libertarian may wish to illustrate how their views are not only in harmony with Catholic Social Teaching but also with their age-old enemy Distributism, they cannot but admit that this may only be accomplished with great revision, contortion and selectivity on their part. Still more, they beg the question as to whether or not the two are compatible on the must basic, fundamental level of presupposition. One presupposing the political economy to be a mere science, the other presupposing a humane economy formed to best facilitate the advancement of the social Kingship of Christ. As a dear friend recently put it, Catholic Social Teaching advocates an “Economy of Salvation,” and I add that praxeology just can’t calculate this into its formulations.

All have gone home, the last word has been spoken, the dust will settle to the ground, and the two schools will remain no closer to a ceasefire than when the nonsense first began. And after all of this…

GLEN BURNIE, MD – A few weeks back I had the pleasure of joining Adam Mueller and Jason Talley in a chat with Stefan Molyneux, host of Freedomian Radio (FDR), which bills itself as “The largest and most popular philosophical conversation in the world.” Since that time I’ve been checking out more of the content on FDR, which is how I stumbled upon this gem: Anarchy 101 – a 40min overview of anarcho-capitalism.

Being a self-described voluntaryist/anarcho-capitalist I was interested to hear Molyneux’s perspective and think he did a great job, evident by the fact that I’ll likely incorporate some of his framing/messaging into my conversations with others on the subject. As I told Molyneux in our conversation below, his name/site, along with Free Talk Live and The Mises Institute/Lew Rockwell, was one of the most-often mentioned by hardcore people (those that reject the violence of the State) that we met while on the road – some pretty literal ’street cred.’

Keep it up!

Hermed har jeg fornøjelsen af at kunne præsentere et blogindlæg, der ville være lidt af et plagiat, havde jeg ikke sagt, at der er tale om en oversættelse af en lille bitte tekst af den amerikanske journliast-økonom Henry Hazlitt, som en række borgerlige vil kende som ophavsmanden bag bogen: Economics in one lesson; der er lidt af en klassiker.

Hér er så Hazlitts “Marxisme på ét minut” – skamløst oversat fra den engelske original, der kan findes på Mises Institutes hjemmeside.

Marxismen på ét minut

af Henry Hazlitt – hurtigtoversagt af Nikolaj H. Stenberg

Det marxistiske evengelium efter Karl Marx kan opsummeres i en enkelt sætning: Had den mand, som er bedre stillet end dig selv. Aldrig under nogen omstændigheder må du sige, at årsagens til hans succes skyldes hans egen virksomme indsats; altid skal du sige, at hans succes alene skyldes, at han har kunnet udnytte, snyde og berøve andre mennesker.

Aldrig under nogen omstændigheder må du sige, at du selv er skyd i dine fejltagelser; eller at en hvilken som helst andens fejltagelser skyldes andet end vedkommendes egne fejl – f.eks. hans dovenskab, inkompetence, uheld eller dumhed. Og for altid skal du have mistillid til alle der er uenig med dig, thi de er uærlige.

Marxismens hjerte er fyldt med had, og det er dette had, som giver marxismen kraft. Se bort fra den dialektiske materialisme, den Hegel’ske ramme, den tekniske jargon, den ”videnskabelige” analyse og de millioner af prætentiøse ord og begreber og du vil stadig stå tilbage med denne marxismens kerne: Et nådesløst had og en kold-blodig misundelse til og overfor resten af verden.

Presented by Robert P. Murphy at the “Economics for High School Students” seminar. Recorded at the Mises Institute in Auburn, Alabama; 20 November 2009. Sponsored by Jeremy S. Davis.

Tags:
High School Schooler Austrian Economics Introduction Core Robert P. Bob Murphy Free Market Anarchocapitalist Capitalism Freedom Property Peace Ludwig von Mises Institute Auburn Alabama

Presented by Thomas DiLorenzo at the Mises Circle in Newport Beach, California; 14 November 2009. Sponsored by Louis E. Carabini. Includes an introduction by Douglas E. French.

Tags:
Thomas Tom DiLorenzo Federal Reserve Fed Central Bank History Dollar Currency Ludwig von Mises Institute Circle Newport Beach California Recession Depression Recovery Banking Bubble

Her til morgen var jeg et smut forbi forumet for politisk teori på Mises Institutes hjemmeside og så, at der var gang i en spændende debat om Ludwig von Mises syn på utilitarisme. Der er p.t. kommet en masse citater på bordet; nogle der siger at Mises var utilitarist og andre der siger det modsatte. Det bliver spændende at se, hvor debatten ender.

Recorded at the Mises Institute Supporters Summit, 1 November 2008; Auburn, Alabama. Includes introductions by Lew Rockwell, Burton S. Blumert, and Gary Schlarbaum, and the presentation of the 2008 Schlarbaum Award for Lifetime Achievement in Liberty to Pascal Salin.

Tags : Austrian Monetary Economics Von Mises Institute Gold Standard Sound Money FED Lew Rockwell Librtarian Pascal Salin Schlarbaum Award Ludwig von Mises Institute Austrian Economics Gold Standard Money Freedom Property Peace

A Free-Market Operative in the Bowels of Bureaucracy – Fred Buzzeo – Mises Institute.

A very good analysis of the mind-set of bureaucracies from a free-market bureaucrat.  Buzzeo clears through the muck and paints a sad picture of leftist ideology alive and well in all elements of our government.  Sadly, he brings to the open what we all already know, that government regulates our entire society, every element.  We are already a police state.  With more czars than existed in czarist Russia, and more government agencies policing the actions of “free” Americans than existed in Nazi Germany, we are already far beyond the free society our founding fathers envisioned for us.

Ludwig von Mises explained how government-induced credit expansions led to imbalances in the economy.

By Mark Spitznagel from the WSJ, The Man Who Predicted the Depression,

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 supply, and how this was magnified by government intervention. Left alone, interest rates would adjust such that only the amount of credit would be used as is voluntarily supplied and demanded. But when credit is force-fed beyond that (call it a credit gavage), grotesque things start to happen.

Government-imposed expansion of bank credit distorts our “time preferences,” or our desire for saving versus consumption. Government-imposed interest rates artificially below rates demanded by savers leads to increased borrowing and capital investment beyond what savers will provide. This causes temporarily higher employment, wages and consumption.

Ordinarily, any random spikes in credit would be quickly absorbed by the system—the pricing errors corrected, the half-baked investments liquidated, like a supple tree yielding to the wind and then returning. But when the government holds rates artificially low in order to feed ever higher capital investment in otherwise unsound, unsustainable businesses, it creates the conditions for a crash. Everyone looks smart for a while, but eventually the whole monstrosity collapses under its own weight through a credit contraction or, worse, a banking collapse.

The system is dramatically susceptible to errors, both on the policy side and on the entrepreneurial side. Government expansion of credit takes a system otherwise capable of adjustment and resilience and transforms it into one with tremendous cyclical volatility.

“Theorie des Geldes” did not become the playbook for policy makers. The 1920s were marked by the brave new era of the Federal Reserve system promoting inflationary credit expansion and with it permanent prosperity. The nerve of this Doubting-Thomas, perma-bear, crazy Kraut! Sadly, poor Ludwig was very nearly alone in warning of the collapse to come from this credit expansion. In mid-1929, he stubbornly turned down a lucrative job offer from the Viennese bank Kreditanstalt, much to the annoyance of his fiancée, proclaiming “A great crash is coming, and I don’t want my name in any way connected with it.”

We all know what happened next. Pretty much right out of Mises’s script, overleveraged banks (including Kreditanstalt) collapsed, businesses collapsed, employment collapsed. The brittle tree snapped. Following Mises’s logic, was this a failure of capitalism, or a failure of hubris?

Continue reading…

Who was Ludwig von Mises?

“Economics deals with society’s fundamental problems; it concerns everyone and belongs to all. It is the main and proper study of every citizen.”

Ludwig von Mises, Human Action

One of the most notable economists and social philosophers of the twentieth century, Ludwig von Mises, in the course of a long and highly productive life, developed an integrated, deduct­ive science of economics based on the fundamental axiom that in­dividual human beings act purposively to achieve desired goals. Even though his economic analysis itself was “value-free” — in the sense of being irrelevant to values held by economists — Mises concluded that the only viable economic policy for the human race was a policy of unrestricted laissez-faire, of free markets and the unhampered exercise of the right of private property, with government strictly limited to the defense of person and property within its territorial area.

For Mises was able to demonstrate (a) that the expansion of free markets, the division of labor, and private capital investment is the only possible path to the prosperity and flourishing of the human race; (b) that socialism would be disastrous for a modern economy because the absence of private ownership of land and capital goods prevents any sort of rational pricing, or estimate of costs, and (c) that government intervention, in addition to hampering and crippling the market, would prove counter-productive and cumulative, leading inevitably to socialism unless the entire tissue of interventions was repealed.

Holding these views, and hewing to truth indomitably in the face of a century increasingly devoted to statism and collectivism, Mises became famous for his “intransigence” in insisting on a non-inflationary gold standard and on laissez-faire.

Effectively barred from any paid university post in Austria and later in the United States, Mises pursued his course gallantly. As the chief economic adviser to the Austrian government in the 1920s, Mises was single-handedly able to slow down Austrian inflation; and he developed his own “private seminar” which attracted the out­standing young economists, social scientists, and philosophers throughout Europe. As the founder of the “neo-Austrian School” of economics, Mises’s business cycle theory, which blamed inflation and depressions on inflationary bank credit encouraged by Central Banks, was adopted by most younger economists in England in the early 1930s as the best explanation of the Great Depression.

Having fled the Nazis to the United States, Mises did some of his most important work here. In over two decades of teaching, he inspired an emerging Austrian School in the United States. The year after Mises died in 1973, his most distinguished follower, F.A. Hayek, was awarded the Nobel Prize in economics for his work in elaborat­ing Mises’s business cycle theory during the later 1920s and 1930s.

Mises was born on Sept 29, 1881, in the city of Lemberg (now Lvov) in Galicia, where his father, a Viennese construction engineer working for the Austrian railroads, was then stationed. Both Mises’s father and mother came from prominent Viennese families; his mother’s uncle, Dr Joachim Landau, served as deputy from the Liberal Party in the Austrian Parliament.

Entering the University of Vienna at the turn of the century as a leftist interventionist, the young Mises discovered Principles of Economics by Carl Menger, the founding work of the Austrian School of economics, and was quickly converted to the Austrian emphasis on individual action rather than unrealistic mechanistic equations as the unit of economics analysis, and to the importance of a free-market economy.

Mises became a prominent post-doctoral student in the famous University of Vienna seminar of the great Austrian economist Eugen von Bohm-Bawerk (among whose many accomplishments was the devastating refutation of the Marxian labor theory of value).

The Mises Institute’s coat of arms is that of the Mises family, awarded in 1881 when Ludwig von Mises’s great-grandfather Mayer Rachmiel Mises was ennobled by the Emperor Franz Josef I of Austria. In the upper right-hand quadrant is the staff of Mercury, god of commerce and communication (the Mises family was successful in both; they were merchants and bankers). In the lower left-hand quadrant is a representation of the Ten Commandments. Mayer Rachmiel, as well as his father, presided over various Jewish cultural organizations in Lemberg, the city where Ludwig was born. The red banner displays the Rose of Sharon, which in the litany is one of the names given to the Blessed Mother, as well as the Stars of the Royal House of David, a symbol of the Jewish people. Ludwig’s lifelong motto was from Virgil: tu ne cede malis, sed contra audentior ito. Here is a full view.

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During this period, in his first great work, The Theory of Money and Credit (1912) Mises performed what had been deemed an impossible task: to integrate the theory of money into the general theory of marginal utility and price (what would now be called integrating “macroeconomics” into “microeconomics.”) Since Bohm-Bawerk and his other Austrian colleagues did not accept Mises’s integration and remained without a monetary theory, he was therefore obliged to strike out on his own and found a “neo­-Austrian” school.

In his monetary theory, Mises revived the long forgotten British Currency School principle, prominent until the 1850s, that society does not at all benefit from any increase in the money supply, that increased money and bank credit only causes inflation and business cycles, and that therefore government policy should maintain the equivalent of a 100 percent gold standard.

Mises added to this insight the elements of his business cycle theory: that credit expansion by the banks, in addition to causing inflation, makes depressions inevitable by causing “malinvestment,” i.e. by inducing businessmen to overinvest in “higher orders” of capital goods (machine tools, construction, etc.) and to underinvest in consumer goods.

The problem is that inflationary bank credit, when loaned to business, masquerades as pseudo-savings, and makes businessmen believe that there are more savings available to invest in capital goods production than consumers are genuinely willing to save. Hence, an inflationary boom requires a recession which becomes a painful but necessary process by which the market liquidates unsound investments and reestablishes the investment and production structure that best satisfies consumer preferences and demands.

Mises, and his follower Hayek, developed this cycle theory during the 192Os, on the basis of which Mises was able to warn an unheeding world that the widely trumpeted “New Era” of permanent prosperity of the 192Os was a sham, and that its inevitable result would be bank panic and depression. When Hayek was invited to teach at the London School of Economics in 1931 by an influential former student at Mises’s private seminar, Lionel Robbins, Hayek was able to convert most of the younger English economists to this perspective. On a collision course with John Maynard Keynes and his disciples at Cambridge, Hayek demolished Keynes’s Treatise on Money, but lost the battle and most of his followers to the tidal wave of the Keynesian Revolution that swept the economic world after the publication of Keynes’s General Theory in 1936.

The policy prescriptions for business cycles of Mises-Hayek and of Keynes were diametrically opposed. During a boom period, Mises counseled the immediate end of all bank credit and monetary expansion; and, during a recession, he advised strict laissez-faire, allowing the readjustment forces of the recession to work themselves out as rapidly as possible.

Not only that: for Mises the worst form of intervention would be to prop up prices or wage rates, causing unemployment, to increase the money supply, or to boost government spending in order to stimulate consumption. For Mises, the recession was a problem of under-saving, and over-consumption, and it was therefore important to encourage savings and thrift rather than the opposite, to cut government spending rather than increase it. It is clear that, from 1936 on Mises was totally in opposition to the worldwide fashion in macroeconomic policy.

Socialism-communism had triumphed in Russia and in much of Europe during and after World War I, and Mises was moved to publish his famous article, “Economic Calculation in the Socialist Commonwealth,” (1920) in which he demonstrated that it would be impossible for a socialist planning board to plan a modern economic system; furthermore, no attempt at artificial “markets” would work, since a genuine pricing and costing system requires an exchange of property titles, and therefore private property in the means of production.

Mises developed the article into his book Socialism(1922), a comprehensive philosophical and sociological, as well as economic critique which still stands as the most thorough and devastating demolition of socialism ever written. Mises’s Socialism converted many prominent economists and social philosophers out of socialism, including Hayek, the German Wilhelm Ropke, and the Englishman Lionel Robbins.

In the United States, the publication of the English translation of Socialism in 1936 attracted the admiration of the prominent economic journalist Henry Hazlitt, who reviewed it in the New York Times, and converted one of America’s most prominent and learned Communist fellow-travelers of the period, J.B. Matthews, to a Misesian position and to opposition to all forms of socialism.

Socialists throughout Europe and the United States worried about the problem of economic calculation under socialism for about fifteen years, finally pronouncing the problem solved with the promulgation of the “market socialism” model of the Polish economist Oskar Lange in 1936. Lange returned to Poland after World War II to help plan Polish Communism. The collapse of socialist planning, in Poland and the other Communist countries in 1989, left Establishment economists across the ideological spectrum, all of whom bought the Lange “solution”, mightily embarrassed.

Some prominent socialists, such as Robert Heilbroner, have had the grace to admit publicly that “Mises was right” all along (the phrase “Mises was Right” was the title of a panel at the annual 1990 meeting of the Southern Economic Association at New Orleans).

If socialism was an economic catastrophe, government inter­vention could not work, and would tend to lead inevitably to socialism. Mises elaborated these insights in his Critique of Interventionism (1929), and set forth his political philosophy of laissez-faire liberalism in his Liberalism (1927).

In adition to setting himself against all the political trends of the twentieth century, Mises combated with equal fervor and eloquence what he considered the disastrous dominant philosophical and methodological trends, in economics and other disciplines. These included positivism, relativism, historicism, polylogism” the idea that each race and gender has its own “logic” and there­fore cannot communicate with other groups), and all forms of irrationalism and denial of objective truth. Mises also developed what he considered to be the proper methodology of economic theory–logical deduction from evident axioms, which he labeled “praxeo­logy”, and he leveled trenchant critiques of the growing tendency in economics and other disciplines to replace praxeology and histor­ical understanding by unrealistic mathematical models and statistical manipulations.

Emigrating to the United States in 1940, Mises’s first two books in English were important and influential. His Omnipotent Government (1944) was the first book to challenge the then-standard Marxian view that fascism and Nazism were imposed upon their nations by big business and the “capitalist class.” His Bureaucracy (1944) was a still unsurpassed analysis of why government operation must necessarily be “bureaucratic” and suffer from all the ills of bureaucracy.

Mises’s most monumental achievement was his Human Action (1949), the first comprehensive treatise on economic theory written since the first World War. Here Mises took up the challenge of his own methodology and research program and elaborated an integrated and massive structure of economic theory on his own deductive, “praxeological” principles. Published in an era when economists and governments generally were totally dedicated to statism and Keynesian inflation, Human Action was unread by the economics profession. Finally, in 1957 Mises published his last major work, Theory and History, which, in addition to refutations of Marxism and historicism, set forth the basic differences and functions of theory and of history in economics as well as all the various disciplines of human action.

In the United States as in his native Austria, Mises could not find a paid post in academia. New York University, where he taught from until 1945 until his retirement at the age of 88 in 1969, would only designate him as Visiting Professor, and his salary had to be paid by the conservative-libertarian William Volker Fund until 1962, and after that by a consortium of free-market foundations and businessmen. Despite the unfavorable climate, Mises inspired a growing group of students and admirers, cheer­fully encouraged their scholarship, and himself continued his remarkable productivity.

Mises was also sustained by and worked together with free­-market and libertarian admirers. From its origin in 1946 until his death, Mises was a part-time staff member of the Foundation for Economic Education at Irvington-on-Hudson, New York; and he was in the 1950s an economic advisor to the National Association of Manufacturers (NAM) working with their laissez-faire wing which finally lost out to the tide of “enlightened” statism.

As a free trader and a classical liberal in the tradition of Cobden, Bright, and Spencer, Mises was a libertarian who champ­ioned reason and individual liberty in personal as well as eco­nomic matters. As a rationalist and an opponent of statism in all its forms, Mises would never call himself a “conservative,” but rather a liberal in the nineteenth-century sense.

Indeed, Mises was politically a laissez-faire radical, who denounced tariffs, immigration restrictions, or governmental attempts to enforce morality. On the other hand, Mises was a staunch cultural and sociological conservative, who attacked egalitarianism, strongly denounced political feminism as a facet of socialism. In contrast to many conservative critics of capitalism, Mises held that personal morality and the nuclear family were both essential to, and fostered by, a system of free-market capitalism.

Mises’s influence was remarkable, considering the unpopularity of his epistemological and political views. His students of the 1920s, even those who later became Keynesians, were permanently stamped by a visible Misesian influence. These students included, in addition to Hayek and Robbins, Fritz Machlup, Gottfried von Haberler, Oskar Morgenstern, Alfred Schutz, Hugh Gaitskell, Howard S. Ellis, John Van Sickle, and Erich Voegelin.

In France, General DeGaulle’s major economic and monetary adviser, who helped swing France away from socialism, was Jacques Rueff, an old-friend and admirer of Mises. And part of post-World War II Italy’s shift away from socialism was due to its President Luigi Einaudi, a distinguished economist and long-time friend and free-market colleague of Mises. In the United States, Mises was scarcely as influential. Under less promising academic conditions, his students and admirers included Henry Hazlitt, Lawrence Fertig, Percy Greaves, Jr., Bettina Bien Graeves, Hans F. Sennholz, William H. Peterson, Louis M. Spadaro, Israel M. Kirzner, Ralph Raico, George Reisman, and Murray N. Rothbard. But Mises was able to build a remarkably strong and loyal following among businessmen and other non-academics; his massive and complex Human Action has sold extraordinarily well ever since the year of its original publication.

Since Mises’s death in New York City on October 10, 1973 at the age of 92, Misesian doctrine and influence has experienced a ren­aissance. The following year saw not only Hayek’s Nobel Prize for Misesian cycle theory, but also the first of many Austrian School conferences in the United States. Books by Mises have been reprinted and collections of his articles translated and published. Courses and programs in Austrian Economics have been taught and established throughout the country.

Taking the lead in this revival of Mises and in the study and expansion of Misesian doctrine has been the Ludwig von Mises Institute, founded by Lle­wellyn Rockwell, Jr. in 1982 and headquartered in Auburn, Alabama. The Mises Institute publishes scholarly journals and books, and offers courses in elementary, intermediate and advanced Austrian economics, which attract in­creasing numbers of students and professors. Undoubtedly, the collapse of socialism and the increased attractiveness of the free market have greatly contributed to this upsurge of popularity.

Halloween and its Candy Economy – Jeffrey A. Tucker – Mises Institute.

 A gem from the economists at the Ludwig von Mises Institute.  Taking a fresh look at the economics of Halloween makes for a very good view of the free market at work.

Consumer confidence falls to a 26-year low.

 New home sales fall in September.

 What’s that? You aren’t surprised? Yeah, me neither. But, apparently, these things were surprising to “economists” according to the linked articles.

 Further proof that Wall Street is completely disconnected from reality.

 Further proof that Keynesian economics is flat wrong (bet they weren’t surprised at the Mises Institute).

 Further proof that the sleeping giant is awakening – that the people are not believing what they hear about “green shoots”, “recession is over” and “jobless recovery” from politicians and pundits.

 The basic rules of economics are kind of like the laws of physics. No matter how much some “expert” might agrue otherwise, you cannot get rid of gravity by throwing things up in the air.

Historian Thomas Woods discusses the War of 1812 and the largely unheard of history of the New England secessionist movement, based upon 10th Amendment States’ Rights and the New England states’ (namely Massachusetts’ Daniel Webster’s) opposition to the federal conscription of state militias.  

The word bandied about is “interposition”. The Constitutional notion of the States interposing between the people and the federal government when the latter is seen to trample on the rights of the people…

http://www.tenthamendmentcenter.com/2009/10/23/states-rights-the-unknown-history/

How Being The Slightest Bit Overqualified Can Cost You A Job

by Michael Shedlock

To say the job market is extremely difficult is quite an understatement.

As unemployment rises, the pool of qualified and overqualified applicants for any listed job rises as well. Making things more difficult, is being even slightly overqualified can cost you the job.

To see how and why being overqualified can cost you, please consider $13 an Hour? 500 Sign Up, 1 Wins a Job.

C.R. England, a nationwide trucking company, needed an administrative assistant for its bustling driver training school here. Responsibilities included data entry, assembling paperwork and making copies.

It was a bona-fide opening at a decent wage, making it the rarest of commodities here in northwest Indiana, where steel industry layoffs have helped drive unemployment to about 10 percent.

When Stacey Ross, C. R. England’s head of corporate recruiting, arrived at her desk at the company’s Salt Lake City headquarters the next Monday, she found about 300 applications in the company’s e-mail inbox. And the fax machine had spit out an inch-and-a-half thick stack of résumés before running out of paper. By the time she pulled the posting off Careerbuilder.com later in the day, she guessed nearly 500 people had applied for the $13-an-hour job. “It was just shocking,” she said. “I had never seen anything so big.”

The 34-year-old recruiter decided the fairest approach was simply to start at the beginning, reviewing résumés in the order in which they came in. When she found a desirable candidate, she called to ask a few preliminary questions, before forwarding the name along to Chris Kelsey, the school’s director.

She dropped significantly overqualified candidates right away, reasoning that they would leave when the economy improved. Among them was a former I.B.M. business analyst with 18 years experience; a former director of human resources; and someone with a master’s degree and 12 years at Deloitte & Touche, the accounting firm.

Mr. Kelsey, 33, had just promoted one of his three administrative assistants, who handle the paperwork needed for drivers to hit the road. He needed a replacement quickly.

To make the task easier, he decided they should be even more rigorous in ruling out anyone who appeared even slightly overqualified.

“We like to get the fair and middling talent that will work for the wages and groom them from within,” he said.

In other words, he said, he did not want the former bank branch manager Ms. Ross had sent, or the woman who had once owned a trucking company, or even the former legal secretary.

[It came down to two candidates both invited back for a second interview].

Mr. Kelsey marched through many of his questions again. Then, trying to gauge ability to be assertive among truck drivers, he added a new hypothetical: if she were in the stands at a baseball game and a foul ball came her way, would she stand up to try to catch it, or wait in her seat and hope it fell her way?

The other finalist had said she would wait. But Ms. Block said immediately that she would jump up to grab it.

Mr. Kelsey decided he had found his hire.

When Applying, Use The Company Website

500 applicants came in a day. To have had any chance one needed to be at the top of the stack.

In that regard, those looking for a job should note how it can help to go straight to the company website rather than fax or email a résumé.

The job in question was simply for an administrative assistant. Responsibilities included data entry, assembling paperwork and making copies. Yet look at what the pool of applicants contained.

Applicant Pool

• I.B.M. business analyst with 18 years experience.
• A former director of human resources.
• Someone with a master’s degree and 12 years at Deloitte & Touche, the accounting firm.
• A former bank branch manager.
• A woman who once owned a trucking company.

All of the above were immediately disqualified as being overqualified.

To land a job you have to be the perfect candidate, near the top of the stack of résumés, neither underqualified nor the slightest bit overqualified and you have to be willing to grab at a fly ball (show eagerness to jump at passing opportunities).

It does not get much harder than that, and there will be no feedback to applicants turned away. Indeed they may have received so many résumés they did not even get to yours.

Dumb Down Guessing Game

Will it help to “dumb down” your résumé when applying for something you are clearly overqualified for? In this case the answer was clearly yes. In general, I am not sure.

One now faces a guessing game of what each individual company’s hiring process is. Adding extra marginal  qualifications to a résumé may or may not be the best thing to do.

Being extremely overqualified though, is likely a kiss of death. Yet, I cannot recommend grossly distorting a résumé hoping for a position.

Some candidates are so overqualified and out of work so long (always a negative factor) that they will never work again. Retraining for news skills hardly seems like it can work. The pool of perfectly qualified applicants with practical on the job actual experience is simply too great.

Addendum:

Over 65 And Needing A Job; Interview Tips For Everyone

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Joining host Dennis McCuistion, Thomas E. Woods, Jr. (Ludwig von Mises Institute) and Doug Casey (“The Casey Report”) focus their discussion on the credit crisis, free markets and limited government.

This video was made available by Dr. Woods, and is posted with permission from McCuistion TV (mccuistiontv.com).

Joining host Dennis McCuistion, Thomas E. Woods, Jr. (Ludwig von Mises Institute) and Steve Forbes (President and  CEO, “Forbes Magazine”) comment on the financial crisis, speculation in real estate, and artificial stimulus.

This video was made available by Dr. Woods, and is posted with permission from McCuistion TV (mccuistiontv.com).

Dan O’Connor of the Mises Institute has written a great article about the freedom of the internet and the innovation and creativity that has resulted from the lack of government regulation and the virtual inability to enforce intellectual property “rights” (mainly copyright) on the web.

On the internet, the beautiful aspects of human nature manifest themselves, and we see individuals and companies maximizing their talents and resources for reasons of profit, pleasure, altruism, and mere progress in itself. Given that the government neither inhibits the activities of the internet nor props up or favors any particular actors or individuals, perhaps we are witnessing the closest thing to a free market that man has ever witnessed.

Municipalized Trash: It’s Uncivilized – Jeffrey A. Tucker – Mises Institute.

The Fight for Capitalism Against Impostors – Nicholas Scipione – Mises Institute.

Silverwolf has been exposing his brain neurons to a new set of those black little smudges, arranged in conventionally fixed orders, that the humans call “words”. These words make up back-issues of “The Freeman”, a Libertarian periodical that published from the mid-50s to the early 60s which the Mises Institute has just put online for the public’s perusal. It was incredible to read the criticisms of President Eisenhower, as a born-again New Dealer, and the Republican Party as not an opposite to the Democratic big-government statists, but a collaboration outfit. It reminded one exactly of the criticisms Presidential-candidate Ron Paul made of his own party during the campaign of ‘08. (That’s 2008, for those of you reading this post centuries and millenia from now.) Many were the writers bemoaning the demise of Capitalism before the onslaught of the growing Socialist State, and a few months after Eisenhower’s inauguration, that were already saying that this was just a Truman dressed as General Eisenhower. Many more predicted an inevitable collapse of America now that Socialism has been institutionalized, not only in government, but in the mindset of the masses of Americans. Thoroughly brainwashed, they maintained, the vast majority took without critical thought the axioms of the New Dealers. One finds the exact same mentality today, methinks.

Did those early anti-Statist haters of Communism and Nazism think that it would take 54 years for their prognostications to come true? Methinks not. But now, before our eyes, we are watching the de-rollment of that final descent into the chaos of Socialism, and unfortunately we have a very charismatic President who, knowing he is bright, thinks he is always right, and who has mainly made a living from the public coffers, teaching law and serving in Congress. Unfortunate America probably needs a small businessman as President, as broadly read and charismatic as Obama, but solidly in the tradition of Austrian Economics, amalgamated to the Old Right’s love of the Jeffersonian Bill of Rights and Individualism,  so she can be lead by someone who has had to earn every penny they have through the Free Market, and that after surviving income taxes reaping 25-50% of the fruits of their labor. But college professors at public universities, who know that their bread is buttered by the coercive confiscation of somebody elses wealth, because someone decides that “public universities” are a right and a good, have never had to survive in a Capitalist market from day to day. Once they have tenure, they are on easy street, as long as they show up every day, smile, and don’t get angry at anyone in public. And this, despite centuries of having multitudes of private universities and colleges, who must compete with one another for the fees, and pay their professors according to the quality of their work, depending on how much revenue their lecturing can willingly bring in.  There is no need for “public universities”, because without regulation, private schools will come about when those who have a passion for it, and see a profit in it at the same time, set them up. (However, Silverwolf would agree with Jefferson that their might be a place for government’s trying to non-coercively insure that every citizen of the Republic learn how to read, so that at least they can read the Constitution and Bill of Rights. But nowadays, this could more easily be done through the internet, instead of setting up this abhorrent Behemoth of public schools, that provides welfare jobs to the mostly mediocre teachers and staff, while stifling and boring to death the youth of America as they are brainwashed into group-think, and while taxing local property owners, many retirees living on pensions, outrageously.)

Yes, it’s a shame that this highly read, polished, and charismatic President should have and believe incorrect principles of economics. But the Public University does that to the mind because, if its “raison d’etre” were to be examined, it would have to dissolve itself immediately on the grounds of immorality. Yet it purports to exist based on principles of morality. And here we have the essence of its hypocrisy.

The President really needs to take a weekend off from stewarding America and hit the books, like Hayek’s “Road to Serfdom” or Mises’ “Interventionism”. Perhaps it will hit him what he is doing wrong. But that would necessitate his repudiating the way he made a living for years, before becoming President. Yet without the experience of being a wage slave or a small businessman in America, having to cope with all the problems thrown at you by Big Government that dissipate so much of the life energy of Americans, Silverwolf doesn’t think these books would get through to him. Many who have had their Rights trampled on by racists and group-image perpetuators, seem to forget that immoral economics also violates the Rights of everyone. Rosa Parks and the American small Capitalist have a lot more in common than President Obama seems to realise.

But for those of us sick of the maudlin group-speak of the mainstream media, brainwashing the public 24-hours-a-day through commercials and news reports, the ragings of the writers at “The Freeman” penned 55 years ago, are as fresh as this morning’s forest air, at least to us Libertarian wolves.

Hooooooooooooooooooooooooowwwwwwwww! — Silverwolf