The Next Generation of Fed Policymakers

The Next Generation of Fed Policymakers

11/09/2017Mark Thornton

Jay Powell is a continuation of the Yellen years, but he may be a slight improvement over Yellen's complacency as a proponent of endless easy money. Would that there was someone at the Fed with the sensibilities of Paul Volcker...

The Federal Reserve's Next Generation

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Trophy Hunting Saves Endangered Species

3 hours agoRyan McMaken

Legal trophy hunting creates an incentive for entrepreneurs to preserve endangered species since the trophy hunting industry makes these species valuable as  investments. The logic here is so apparent that even TruTV's show "Adam Ruins Everything" — which is hardly a right-wing propaganda rag — has figured it out: 

Adam Ruins Everything - Why Trophy Hunting Can Be Good for Animals

Two years after the killing of the cutely-named Cecil the Lion sparked outrage over trophy killing, the topic has once again been stoked by the Trump administration said it planned to end the ban on the importation into the US of some trophies from hunting. A backlash followed, and now Trump says he's not so sure

This is a topic we've already covered more than once here at The fact remains that when animals have no economic value, there is no incentive to preserve them from total destruction:

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Yellen Announces She Will Leave Fed Next Year

6 hours agoTho Bishop

Today Janet Yellen announced that she will be leave the Fed entirely when Jay Powell is confirmed as the next Federal Reserve Chairman, she had the option of staying on as a governor. It was widely expected that Yellen would stay on, though there was some thought that her ideological similarity with Powell made it possible she could have stayed on the Federal Reserve Board.

This move gives Trump yet another spot to fill at the Fed, which will make five total during his presidency. He filled one of those spots earlier this year when Randal Quarles, a former Bush Treasury official, was confirmed by the Senate. 

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Bovard: Trump Making Thanksgiving Travel Worse

8 hours agoJames Bovard

On the campaign trail last year, Donald Trump derided the Transportation Security Administration as a "total disaster". But his administration is making TSA more intrusive and abusive while its 42,000 screeners remain as incompetent as ever.

New TSA screening guidelines will likely make Thanksgiving travel a disaster for legions of Americans — and the worst is yet to come.

Read the full article at USA Today.

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Mises, Hoppe, and Rothbard: On the Foundations of Liberty

11 hours agoC.Jay Engel

[Reprinted from the site Austro Libertarian.]

The debate over the proper philosophical foundation for economics, ethics, and political theory (which, being focused on the justification for the use of force in society, is a particular application of ethics), are all grounded in the study of knowledge; or, epistemology. This is why the first hundred pages or so of Ludwig von Mises’ treatise Human Action is pure epistemology; a dry subject, but nonetheless imperative. Ideas which are to be argued and defended must have intellectual justification. There is no point in engaging in argumentation if there is no justification for one’s position. When we state that we subscribe to the Austrian School of economics, we are saying that we reject the empirical basis of other schools –whether they be Monetarism, Keynesianism, Marxism, Classicalism, etc. –and we embrace the rationalist or apriori basis of the Austrian School.

To be an Austrian economist is to accept that economic propositions are understood independent of experience and empirical observation. They are facts that must be learned by the employment of the laws of logic and do not depend on all the plethora of data and statistics and number-crunching of the majority of widely accepted economic schools of thought. They cannot be falsified by empirical observation anymore than any logical syllogism can be falsified. No amount of testing and historical analysis can falsify the fact that 1+1=2.

The starting point of the Austrian methodology is that “human beings act purposefully.” From this, more propositions are deduced and derived. Mises was the first to really hone in on this “axiom.” However, Mises and Hoppe justify that starting point in a different way than does Rothbard. Mises and Hoppe, being neo-Kantians, justify it rationalistically; that is, they consider that to deny this proposition is to affirm it. For one cannot deny that humans act purposefully without acting purposefully. Therefore, this axiom is a result of the application of the laws of logic and is dependent on an apriori way of thinking.

In slight distinction with Hoppe and Mises, Rothbard finds his epistemological roots in the empirical tradition of Thomas Aquinas. Thus, he considers the proposition that “human beings act purposefully” to be founded on experience, on observing both one’s self and other humans.


In the realm of political theory and ethics, these three “Austro-libertarian” intellectual giants have a bit more diversity. While Mises did not take libertarian principles as far as Rothbard and Hoppe (to anarcho-capitalism), they can all be seen as members of the libertarian tradition. Mises’ case for a libertarian society was utilitarian. The free-market system, for Mises, is so powerful and beneficial for mankind, that it alone must be demanded as compared to all other systems whether communistic, fascistic, interventionist, and their variations. For the sake of prosperity and human flourishing, only a free society can achieve these ends. Any government promises to act in the place of the free society in pursuit of a better world, can be proven as impossible based on economic theory. And in all his statements about the benefits of the free market and capitalism, Mises was right.

And yet, as Hoppe noted

[Mises] favors life over death, health over sickness, abundance over poverty. And insofar as such ends, in particular the goal of achieving the highest possible standard of living for everyone, are indeed shared by other people, as he assumes they generally are, as an economic scientist Mises recommends that the correct course of action to choose is a policy of laissez faire. And doubtlessly, insofar as economics can say this much, the case for laissez faire is a highly important one. However, what if people do not consider prosperity to be their ultimate goal? As Rothbard points out, economic analysis only establishes that laissez faire will lead to higher standards of living in the long run. In the long run, however, one will be dead. Why then would it not be quite reasonable for a person to argue that while one perfectly agreed with everything economics had to say, one was still more concerned about one’s welfare in the short run and there, clearly for no economist to deny, a privilege or a subsidy would be the nicest thing? Moreover, why should social welfare in the long run be one’s first concern at all? Couldn’t people advocate poverty, either as an ultimate value in itself or as a means of bringing about some other ultimate value such as equality?

In other words, Mises is to be commended by showing the potential of the free market and its results. But why are the results good? Economics does not establish what is right and wrong. Powerful and rich kings and tyrants have no reason to desire the prosperity for many that the capitalistic and free markets produce. Mises however, denied that ethical propositions could be rationally defended. His utilitarianism was the only thing that he was left with.

Rothbard rejected his master’s Utilitarianism. We ought to hold him in high esteem for the simple fact that he had the courage to reject the relativistic solutions of so many in the present age. Mises was certainly not a cultural relativist, and in fact was a defender of Old World mannerisms, behavior, and social respectability, but these things came from his Austrian heritage and not from any justification via pure reason.

In dissenting from utilitarianism, Rothbard sought a transcendent ethic that was binding on all people at all times. Rothbard’s Natural Law libertarianism was built on the normative propositions surrounding the fact that man has ownership in his body and external property. Ownership entails that the owner has the exclusive right to determine the use of the property in question. The nature of this ownership is such that use of the property by a non-owner is ethically wrong. Thus, man is free to use his property in accordance with his desires by virtue of the fact that no one has the moral authority to prevent such use. The implication of this, of course, is that the boundary of man’s use of his own property is the property rights of those in society. Thus, for Rothbard, the property-rights social order was of an ethical nature, not a utilitarian one.

Hoppe however, being a strict apriorist, rejects both Rothbard’s Natural Law empiricism as well as Mises’ utilitarianism. His view is that libertarian theory ought to be defended with the very same methodology as his Austrian theory. This is important. And when he first introduced this idea, it was hotly contested and quite controversial in libertarian circles. If Mises was a Utilitarian and Rothbard a Thomist, Hoppe has made the praxeological case for a private property order.

It is his contention that the goal of political theory to provide norms which prevent conflict. Without the possibility of conflict, there is no need for a political theory. But conflict exists in a world of scarce resources and therefore property assignment rules are to be demanded. In order for one to justify any of these rules, that is, in order to put forth an argument in defense of a political theory, one must presuppose self-ownership. One must assume at the outset that he owns the body through which he (man is spirit, not body) communicates and justifies his position. Thus, Hoppe finds the same logical potential here as in his justification for the economic “Action axiom” described above. For if one seeks to deny that humans have ownership over their bodies, but in engaging in argument in order to deny this they exercise or prove this belief, they would only be contradicting their presuppositions. Thus, for Hoppe, any political theory except the libertarian one is a contradictory theory.

To be clear, this is not a statement of “ought.” It does not purport to explain why it might be wrong for someone to steal or murder, only that those things cannot be rationally justified. He has sought to avoid the is-ought problem of philosophy altogether. No political order can be rationally defended except the Austro-libertarian one without falling into self-contradiction. But, the critic may wonder, why is it bad to contradict oneself? Surely the criminal or politician (but I repeat myself) cares not one wit for the laws of logic. And Hoppe recognizes this critique. His answer however, is that he is only concerned with what can be rationally defended.

The Austro-libertarian property rights theory and the Austrian School economic theory need an epistemological foundation. The great debate is what, exactly, that foundation is. Studying the distinctions within the Austro-Libertarian world is a rewarding and illuminating effort.

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Call for Papers: AERC 2018

11/17/2017Mises Institute

The Austrian Economics Research Conference is the international, interdisciplinary meeting of the Austrian school, bringing together leading scholars doing research in this vibrant and influential intellectual tradition. The conference is hosted by the Mises Institute at its campus in Auburn, Alabama, and directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

Proposals for Papers

Proposals for individual papers, complete paper sessions or symposia, and interactive workshops are encouraged. Papers should be well developed, but at a stage where they can still benefit from the group’s discussion. Preference will be given to recent papers that have not been presented at major conferences. All topics related to Austrian economics, broadly conceived, and related social-science disciplines and business disciplines such as management, strategy, and entrepreneurship are appropriate for the conference. Proposals from junior faculty and PhD students are especially encouraged. The Grant Aldrich Prize of $1,000 will be awarded to the best graduate student paper. Abstracts should be limited to 750 words. All proposals are peer reviewed by the AERC Program Committee. Additional information is here.

Submit your proposal to [email protected] by January 29, 2018. Proposals after the deadline will be considered as space permits. Decisions will be communicated by February 5.

Besides paper sessions and symposia, the conference includes five named keynote lectures and the awarding of three cash prizes: the Lawrence W. Fertig Prize in Austrian Economics, the O.P. Alford III Prize in Political Economy, and the Grant Aldrich Prize for Best Graduate Student Essay.

Student scholarships are available

Register for AERC 2018 today

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Police Priorities: Prosecuting Locals for Rude Bumper Stickers

11/16/2017Ryan McMaken

A county sheriff in Texas has run afoul of the social media mob when he publicly announced on Facebook that he was seeking to press charges against a local resident known for using the F-word on a sign on his vehicle. 

Social media readers responded with the expected protests over freedom of speech when Sheriff Troy Nehls posted a photo of the offending truck and announced the local district attorney "has informed us she would accept Disorderly Conduct charges regarding it." 

Numerous other sites have focused on the First-Amendment implications of the situation. But let's focus here instead on the use of taxpayer-funded resources by a county employee:

In essence, the Sheriff is seeking to make an arrest over what amounts to a rude bumper sticker. 

By announcing that he has met with or called the local prosecutor, and may have charges filed, the sheriff is threatening the owner of the truck with state violence that may include arrest, fines, and perhaps even a short period of imprisonment. 

Given all the effort the Sheriff has gone to, a reasonable person might conclude that there is essentially no crime at all in Fort Bend County. 

However, in spite of the fact that the Sheriff acts like he has nothing better to do, it turns out that Fort Bend County has its share of crime. 

Indeed, according to the FBI's crime statistics, the Fort Bend County in 2016 reported a total of 758 violent crimes. This included 18 homicides, 83 rapes, 141 robberies, 516 aggravated assaults. Property crimes included 269 auto thefts. 

The population of the county is approximately 580,000, which means the homicide rate is around 3.0 per 100,000. That's not an especially high homicide rate by American standards, but it's not an especially low one, either, especially for a high-income suburban area like Fort Bend County. 

In other words, the county has its share of crime, but the Sheriff is more concerned with waging petty battles over bumper stickers with local residents, rather than focus on prosecuting violent criminals, or on recovering stolen property. 

In the past, here at, we've noted how with any organization — including law enforcement agencies — time spent on one activity necessarily reduces the resources spent on other activities. The often-used police claim that police "must enforce all the laws" has always been nonsense since there are limited resources available. 

Thus, there is a real opportunity cost to tracking down people with naughty words on bumper stickers, while there are also 500-odd aggravated assaults per year. 

This should surprise no-one of course, since the Sheriff's department is not subject to any market discipline and is guided more by how well it can lobby the county government for a bigger budget, and how well the Sheriff is at getting votes from the local population. This fracas over a bumper sticker, of course, is likely little more than a political ploy, given that the Sheriff apparently has ambitions for higher office. 

It may be that this publicity pays off well for the Sheriff. Local victims of crime, however, may fare less well. 

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Claudio Grass Interviews Mark Thornton

11/16/2017Mark Thornton

In this new interview, Claudio Grass and I discuss economic bubbles, the European Central bank, and the state of the US dollar. 

Sound Money Sound Society Podcast Interview with Dr. Mark Thornton - November 2017

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Bylund: The Chinese Economic Miracle Is a Sham

11/16/2017Ryan McMaken

From The Observer: 

During a three-and-a-half-hour speech to mark China’s five-year congress in Beijing, President Xi Jinping laid out his vision for the nation’s future. Xi spoke at length about economic concerns troubling Chinese leaders, including problems with medical care, education, employment, and a growing income gap.

President Xi’s speech was by no means negative, though the hints of pessimism were unusual during a weeklong event designed to build confidence in the Chinese Communist Party. His opening remarks came mere weeks after rating agency Standard & Poor’s downgraded China’s credit rating because of rising debts. Chinese officials have slammed the downgrade as a “wrong decision,” but there is evidence to suggest the nation’s economy is not the powerhouse it seems.

I recently spent two weeks visiting China to attend several economic conferences. Aside from its magnificent scenery, what really struck me was the amount of development underway. Massive tower cranes dominate city skylines, and it’s not unusual to hear the clamor of construction at all hours. The country has an endless slate of infrastructure projects, including high-speed railways, bridges, and grand architecture.

It might look like a prosperous economy growing at warp speed, but these projects are not representative of genuine growth. This construction is commonly the result of cronyism in which investors, builders, and other players are “insiders” who profit from politically directed and supported clout.

Despite a flurry of construction, many of these structures are notably desolate. When you stroll through China’s large cities at night, dark skyscrapers tower over the metropolis, with nary a twinkling light from employees working late into the evening. Entire residential areas sit lifeless and lightless, casting an eerie vibe over a seemingly booming city.

Read the full article. 

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The United States Is a Nuclear Dictatorship

11/15/2017Ryan McMaken

Thanks in part to Trump's bombastic and unpredictable style — but more likely due to his lack of friends in Washington — members of Congress have suddenly realized that maybe, just maybe, it's a bad thing that the President of the United States can unilaterally blow up the world. 

And when I say "President of the United States" I don't mean that as a metonym for the US government as in the phrase "Washington today is considering a pact with Mexico." 

No, a single specific individual really does have the ability to make that decision and give that order — unimpeded in any way. 

This fact — which should daily be regarded by all Americans as an excellent illustration of what a farce "constitutional government" is — is now a topic of debate in Washington. It is now being suggested that some of those alleged "checks and balances" we're always being told about might be applied to the most destructive and apocalyptic power enjoyed by a US government agent. 

CNN reports

Congressional lawmakers raised concerns about President Donald Trump's ability to use nuclear weapons during a hearing Capitol Hill Tuesday amid bipartisan anxiety over launch process procedures and indications that the administration has considered the option of a first strike on North Korea.

Members of the Senate foreign affairs committee called into question a decades-old presidential authority to deploy nuclear weapons in what was the first congressional hearing on nuclear authorization in decades.

You read that right. This is the first time Congress has considered the question of a president's nuclear-warmaking prerogatives in decades. Congress, on the other hand, has been quite busy during that time holding hearings about steroid use in sports, and violence on television.

As it stands right now, the president can start a nuclear war all by himself. We're talking about first strike capability here, and not about merely a response to military action by another state.

The LATimes tells us how easy it is: 

All he has to do is call in the military officer who carries the “football,” the bulky briefcase containing the nuclear codes, and work through a brief procedure to transmit launch orders to U.S. Strategic Command...There are really no checks and balances,” said Bruce G. Blair, a former nuclear launch control officer who is now a researcher at Princeton University. “The presidency has become a nuclear monarchy.”

"Nuclear dictatorship" probably better captures the reality of the situation.

Thus, all the president has to do is decide — perhaps based on whatever unreliable information the CIA is feeding him — that now is the time to unleash a nuclear holocaust on, say, North Korea. Once the bombers are flying, or once the missiles are launched, of course, we'll then have to hope that none of them are interpreted as threats to major nuclear powers like China and Russia, both of which are right next door. 

Indeed, it's this unpredictability of how a nuclear strike might get out of hand has long been a limiting factor on the use of the weapons. During the Vietnam War, for example, using nuclear weapons were discussed as a possible alternative to the failed bombing strategy at the time. The problem strategists encountered was the sheer volume of unpredictable consequences that could result from usage. 

The downsides of starting a nuclear conflict are immense, both in terms of global diplomacy, and in terms of actual risk to the American population. 

But even with this reality staring us in the face, Washington is so obsessed with maintaining an aggressive military stance, that it's unwilling to seriously consider any limitation on the President. 

This why we should expect no real changes out of these Congressional hearings. Not surprisingly, Congress has already taken any meaningful change off the table: 

Ultimately, the panel warned against legislative changes to rein in the President's authority to exercise nuclear authority.

"I think hard cases make bad law, and I think if we were to change the decision-making process in some way because of a distrust of this President, I think that would be an unfortunate precedent," said Brian Mckeon, who previously served as Principal Deputy Under Secretary of Defense for Policy during the Obama administration.
This pretty much sums up how Washington's foreign policy works. Limiting the power of the President in any way, we're told "would be an unfortunate precedent." After all, this Trump guy may be a jerk, but all the other Presidents are totally wonderful human beings. We wouldn't want to limit their power to blow up the planet.
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In 1973, Murray Rothbard Predicted Netflix, HBO, Showtime, and Amazon

11/13/2017Ryan McMaken

Mark J. Perry writes this week at AEI:

In 1973 when commercial TV in America was an oligopoly of only three major networks (ABC, CBS and NBC), economist Murray Rothbard, presciently predicted in his book For a New Liberty: The Libertarian Manifesto the eventual rise of pay-TV (Netflix, HBO, Showtime, Amazon, etc.).

Perry then quotes this section (which can be found on page 122 of the PDF): 

Furthermore, if TV channels become free, privately owned, and independent, the big networks will no longer be able to put pressure upon the FCC to outlaw the effective competition of pay-television. It is only because the FCC has outlawed pay-TV that it has not been able to gain a foothold. “Free TV” is, of course, not truly “free”; the programs are paid for by the advertisers, and the consumer pays by covering the advertising costs in the price of the product he buys. One might ask what difference it makes to the consumer whether he pays the advertising costs indirectly or pays directly for each program he buys. The difference is that these are not the same consumers for the same products. The television advertiser, for example, is always interested in a) gaining the widest possible viewing market; and b) in gaining those particular viewers who will be most susceptible to his message.

Hence, the programs will all be geared to the lowest common denominator in the audience, and particularly to those viewers most susceptible to the message; that is, those viewers who do not read newspapers or magazines, so that the message will not duplicate the ads he sees there. As a result, free-TV programs tend to be unimaginative, bland, and uniform. Pay-TV would mean that each program would search for its own market, and many specialized markets for specialized audiences would develop—just as highly lucrative specialized markets have developed in the magazine and book publishing fields. The quality of programs would be higher and the offerings far more diverse. In fact, the menace of potential pay-TV competition must be great for the networks to lobby for years to keep it suppressed. But, of course, in a truly free market, both forms of television, as well as cable-TV and other forms we cannot yet envision, could and would enter the competition.

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