Taking Austrian Economics to the Airwaves!

During my stay at the Mises Institute as a Research Fellow last summer, I was fortunate enough to be able to travel to Montgomery, Alabama with two other representatives of the Mises Institute, to appear on The Joey Clark Radio Hour on News Talk 93.1 FM.

During the hour we touched on a huge variety of topics, including Britain’s failing National Health Service, why it’s still important to read the works of “dead white men”, whether the gold standard really caused the Great Depression, the economics of fantasy football, why the Fed is a scam, what freedom means to us individually, and which Rothbard books we would personally recommend to a beginner.

It was my first ever appearance on the radio, as is painfully obvious from the fact that the simple act of introducing myself on air somehow caused me to trip and fall into confused and aimless rambling. I like to think that it was all uphill from there though, and am happy with how the recording turned out overall.

At the very least I certainly enjoyed appearing on Joey Clark’s programme, and hope that the opportunity to for a repeat appearance will arise again someday.


For more info on the Joey Clark Radio Hour, see their Facebook page: https://www.facebook.com/thejoeyclarkradiohour/

Appearing alongside me were Tho Bishop, the Mises Institute’s Media Coordinator, and my fellow Fellow Joakim Book Jönsson.

For more from Tho Bishop, consider following him on Twitter (https://twitter.com/ThoBishop) and reading his regular topical articles at Mises.org (https://mises.org/profile/tho-bishop-0)

For more from Joakim Book Jönsson, check out his blog ‘Life of an Econ Student’ (http://joakimbook.blogspot.co.uk).


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Yours truly, during the broadcast. 


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After the show. (l-r: Joey Clark, Joakim Book Jönsson, Tho Bishop.)






Mises on why the State shouldn’t ban War Profits

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I was recently reading Ludwig von Mises’ book Interventionism: An Economic Analysis, and came across a particularly well-worded passage on why governments shouldn’t resort to economic central planning in times of war. Specifically, Mises was arguing that it was economically unwise for governments to try to prevent private companies from making profits by supplying the war effort, even though war profiteering is regarded with distaste by almost everybody and banning it would be a very popular policy.

The fact that Mises argued so ably against this policy, and did so in 1940 of all years, is a testament not only to his characteristically brilliant economic insight but also to his extraordinary moral courage and perseverance in pursuing the truth above all other considerations.

Due to the length of the quote, I have decided to share it here rather than on Twitter, which is my usual repository for particularly pithy Mises lines I come across.

“In England, too, the government was concerned primarily with preventing war profiteering, rather than with the procurement of the best possible equipment for the armed forces. For example, the 100 percent war profits tax might be cited. …

The anti-capitalist says, ‘This is precisely the point. Business is unpatriotic. The rest of us are told to leave our families and to give up our jobs; we are placed in the army and have to risk our lives. The capitalists, however, demand their profits even in time of war. They ought to be forced to work unselfishly for the country, if we are forced to fight for it.’ Such arguments shift the problem into the sphere of ethics. This, however, is not a matter of ethics but of expediency.

Those who detest war on moral grounds because they consider the killing and maiming of people as inhumane, should attempt to replace the ideology which leads to war by an ideology which would secure permanent peace. However, if a peaceful nation is attacked and has to defend itself, only one thing counts: the defense must be organized as quickly and as efficiently as possible; the soldiers must be given the best weapons and equipment. This can only be accomplished if the working of the market economy is not interfered with. …

When the capitalist nations in time of war give up the industrial superiority which their economic system provides them, their powers to resist and their chances to win are considerably reduced.

That some incidental consequences of warfare are regarded as unjust can readily be understood. The fact that entrepreneurs get rich on armament production is but one of many unsatisfactory and unjust conditions which war creates. But the soldiers risk their lives and health. That they die unknown and without reward in the front line, while the army leaders and staff remain safe and secure to win glory and to further their careers is ‘unjust’ too. The demand to eliminate war profits is not any more reasonable than the demand that the army leaders, their staff, the surgeons, and the men on the home front should do their work under the privations and dangers to which the fighting soldier is exposed.

It is not the war profits of the entrepreneurs that are objectionable. War itself is objectionable!”    (pp.73-74)

For more information on Mises’ book Interventionism, which stands alongside his better-known books Socialism and Liberalism in his writings comparing different economic systems, follow this link to Mises.org for information about the book’s significance and where to find a copy: https://mises.org/library/interventionism-economic-analysis

My Speech at MisesUK 2018

This past Saturday I delivered a speech at the first ever conference of the recently established Ludwig von Mises Centre for Property and Freedom, UK, held at the Amba Hotel Charing Cross, London.

I spoke on the topic of “What can the UK Mises Centre learn from the US Mises Institute?”, in the hope that some of the strategic principles which have given that institution such success over its 35-year history might make an impression on the nascent MisesUK.

While my speech seemed to be well received, I must admit that I left the conference at the end of the day with sadly little expectation that MisesUK will develop along the lines which I suggested in my speech: namely as an organisation which, like the US Mises Institute, sticks to its core principles and delivers an optimistic, humorous, and forward-looking message of pure Austrian Economics and libertarianism, without being distracted by divisive side issues, or becoming a mere curmudgeons’ caucus which restricts itself to complaining about how terrible the state of the world is at present.

Sadly, many of the other speeches at the event seemed to suggest that the ideological tone of MisesUK will be strongly influenced by the culturally far-right and reactionary fringes of the libertarian movement. Indeed, one of the other speakers who delivered their talk later in the day than mine, and who ranks considerably higher in the organisation than I do, seemed to directly challenge my view of what MisesUK should aim to be. During their speech they went so far as to say “I know there’s at least one person in the audience who won’t agree with this…” while looking at me, before going into a miserable rant about how irrelevant Austro-libertarianism supposedly is in the present day, how naive it is to think that we could have any success by simply offering a pure message of economic truth and a political theory based on universally accepted moral principles, and how we should instead compromise and dilute our own beliefs in order to appeal to the sorts of people who are currently being attracted by the alt-right. Needless to say this sentiment, which ran directly contrary to my own hopes for MisesUK, caused a certain amount of disillusionment in me as I left the conference.

Nevertheless, I live in hope that my present doubts will be proved wrong by the future successes of the UK Mises Centre, and will feel privileged to be associated with it for as long as it follows the path set down 35 years ago by the great US Mises Institute.

Book Review: The Progressive Era by Murray N. Rothbard

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I recently finished reading a great new book published by the Mises Institute, entitled The Progressive Era. This new work is mostly formed of previously unpublished material – 9 previously unpublished chapters and 6 previously published essays, which have been edited together into a cohesive whole  – written by the great ‘Austrian’ economist, historian, and libertarian theorist Murray N. Rothbard. As the title would tend to suggest, the book covers the ‘Progressive’ period of American history (generally dated from the 1890s to the 1920s), during which the relatively laissez-faire politics and economics of 19th century America gave way to the modern corporatist and interventionist state as we know it today.

Rothbard began writing the book in the 1970s during his association with the Cato Institute, but due to a number of reasons – ranging from his other projects to the characteristic way in which his great enthusiasm for the subject matter propelled the book far beyond its initial word limit, and ultimately due to his premature death in 1995 – the book was never completed in his lifetime. Fortunately however, the book’s editor Dr. Patrick Newman (with whom I was a Mises Institute Fellow in Residence in the summer of 2017) was able to unearth the unpublished manuscripts from Rothbard’s voluminous archives and piece this great work back together for publication over 22 years after the author’s death. The result is a brilliant account of this important period of American history, and a towering achievement in its own right, even aside from the significance of its author and the story of its troubled journey to publication.

Typical accounts of the Progressive Era usually paint it as a glorious victory of benevolent government which, in faithful response to the demands of the people, put an end to the dog-eat-dog competition and robber barons of 19th-century capitalism. In light of how naive and simplistic such traditional accounts of the era have been, it is particularly refreshing to hear Rothbard’s revisionist history of the period, particularly given the extraordinary scope and depth of the work.

Rothbard begins his study with an analysis of the rise of the railroads in the 1840s as America’s first big business and extends it through the cartelisation and regulation which characterised the Progressive Era, the collapse of the Third Party System, and ultimately to the ‘fulfillment’ of the new progressive state in World War One and the Great Depression. Far from a benevolent government response to the spontaneous outcries of the people, Rothbard finds that the key policies of the Progressive era can more often be characterised as attempts at cartelisation by big businesses in the pursuit of higher profits. Having failed to successfully cartelise on the relatively free markets of the preceding decades, such big businesses increasingly turned to government in the latter years of the 19th century, to enforce such cartels and impose burdensome regulations on their smaller competitors. This revisionist interpretation is strongly supported by Rothbard’s characteristically details-oriented approach to history writing, making this book an excellent resource for students and researchers, with plenty of pointers to further reading implied by the vast number of figures and events referenced.

Rothbard’s analysis is also set apart from others on the subject by the great weight it gives to religious divisions in US for understanding the Third Party System and its ultimate collapse. Reduced to its absolute essentials, Rothbard’s argument is that postmillennial Pietists (usually Protestants) believed that the Second Advent of Jesus Christ could not occur until a thousand-year Kingdom of God on Earth was established, which they believed required the stamping out of a great number of personal sins, significantly including alcohol. This led the Pietists to favour a much higher degree of state intervention into the economic and personal lives of its subjects, in the pursuit of this lofty and vital goal. The Pietists were consequently much more likely to vote for the statist parties of the time, including the Republicans, the Abolitionists, and the strongly anti-immigrant ‘Know-Nothing’ party. Liturgicals (such as Catholics) conversely believed that the thousand-year Kingdom of God on Earth would occur after the Second Advent of Jesus Christ, causing them to concern themselves more with adhering to religious rituals, keeping an eye out for portents that His coming was near, and so forth. The Liturgicals were therefore less concerned with stamping out personal sin and enforcing holiness, and hence were much more likely to vote for the more laissez-faire Democratic party. While most modern historians are inclined to dismiss such religious considerations in favour of ‘real’ factors, such as economic class, ethnicity, geography and so forth, Rothbard’s case is nevertheless made extremely convincing by his extensive application of demographic and electoral data from the time. Even if you’re inclined to disagree with Rothbard’s conclusions, it is now difficult for me to believe, having read the book, that one’s understanding of the Progressive Era and the Third Party System could be complete without this understanding of the religious factors at play.

In conclusion, I am simply amazed that such strong material was able to go unpublished for so many years, and am grateful to Dr. Patrick Newman and the Mises Institute for their efforts in bringing this masterful book to publication at last. Rothbard’s Progressive Era provides an account of that important time in American history that is both sweepingly broad and deeply details-oriented in a way that will satisfy both serious researchers and interested lay readers.

Furthermore, thanks to the generosity of the Mises Institute’s donors, the book is available for free on their website as a PDF, an ebook, and an audiobook! For more details, see this link: https://mises.org/library/progressive-era-0

If you would like to own a physical copy of the book, you can buy one at this link: https://www.amazon.co.uk/Progressive-Era-Murray-N-Rothbard/dp/1610166744/ref=sr_1_1?ie=UTF8&qid=1516631097&sr=8-1&keywords=rothbard+progressive+era

Finally, if you’re interested to learn more about the book and this period of history before reading, the book’s editor Dr. Patrick Newman gave an excellent talk about the subject at the Mises Institute’s Mises University summer programme last year.

Was Hayek really saying that Free Markets create genius consumers?

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It’s interesting how often the most memorable and thought-provoking parts of a given discussion are to be found in the tangents away from it.

Yesterday I was in a seminar on the history of economic thought in which we were supposed to be discussing Thorstein Veblen and the American Institutionalists, but toward the end of the session we got side-tracked into a discussion of the modern economy’s use of big data and the way companies gather information to provide targeted advertising. The lecturer somehow tied this into Hayek’s famous explanation of how a free price system efficiently conveys information to economic actors, dispersed and local information which could not possibly all be known to an economic central planner, and hence allows for those resources to be economised in a way that more rationally reflects their supply and demand.

Our lecturer, however, seemed to misunderstand the nature of Hayek’s argument and the sort of information to which he was referring. The lecturer sarcastically remarked something to the effect of “Do you think consumers are really well informed about the products they consume, thanks to the free market?” Surely, he seemed to be implying, the fact that most real-world consumers don’t have a full and deep intellectual understanding of every product they consume and where they come from – especially compared to the nefarious producers of those products – proves that Hayek was wrong. Thank goodness our modern understanding of asymmetrical information has superseded Hayek’s naive fantasy of consumers who are automatically kept fully informed by the magic of the market!

This is not only a misinterpretation of Hayek’s conclusions, but a misinterpretation which highlights an incorrect way of even approaching Hayek’s argument to begin with. Therefore I feel it might be worthwhile to briefly clarify what kind of information Hayek was actually talking about, in case anyone else reading this may have fallen prey to the same misunderstanding.

It is certainly true to say that consumers in a relatively free market tend to lack some information about the products they consume. Standing before the bread aisle in a supermarket, most consumers would not be able to tell you off the top of their heads the differences between the different brands of loaves, their ingredients, the companies which made them, and so forth. The same would be true for this sort of information for almost any other product and any other consumer; none of us are omniscient, and Hayek never claimed that a free price system would make us so.

However, this is not the sort of information Hayek was claiming the price system transmits. What the price system does, according to Hayek, is convey the relevant information about the supply and demand for different goods on the market, in a way that allows people to economise those goods as if they did have a conscious, intellectual understanding of those factors, even if they don’t.

To use Hayek’s own famous example, suppose that a major tin mine collapses, making the supply of tin in a given economy even more restricted than it had been before. This information will be reflected by a rise in the price of tin, and this price change will in turn affect the distribution of tin between the different producers who require it. For the producers whose tin-based products are more highly valued by consumers, those consumers will consequently be willing to pay enough for those products that the producers will still be able to sell them at a profit, despite the increased price of the tin the producer needs to buy. For other companies which make tin-based products less highly valued by consumers, those consumers will consequently be less likely to continue buying those products at the increased price, leading those companies to restrict their production of those less highly valued products, hence freeing up tin to be used by the producers of more highly valued products. In this way, the price system has conveyed ‘information’ (the fact that the tin mine has collapsed) to all relevant parties, forcing producers to economise the increasingly scarce tin in a way that sees it being channeled toward the production of the goods most highly valued by consumers.

The critic of Hayek’s theory might object that the price system hasn’t really made anyone more informed about anything, as the above-mentioned consumers and producers wouldn’t necessarily even have to know why the price of tin had risen. But that’s the whole point and the whole beauty of the system! (Indeed, in Hayek’s original argument this was what led him to the conclusion that free markets and free prices would always lead to a more preferable (from the perspective of consumers) distribution of resources than a central planner ever could, as a central planner would have to consciously know such information in order to distribute resources appropriately, whereas economic actors in a free price system are automatically encouraged to do so even without having to consciously grasp why.)

I suppose therefore it is possible, in a certain sense, to criticise Hayek’s preferred system because it does allow consumers to get by despite potentially being ignorant of certain information about the products they consume. An opponent of Adam Smith could likewise lament that, thanks to Smith’s beloved division of labour, many people today are ignorant of how to make bread, a skill which would have been indispensable for survival in previous times. However, rather than sneering at this as evidence of how the division of labour creates consumers who are too stupid to even bake bread, the correct response is to celebrate the fact that many people are now able to enjoy the delicious boon of bread as much as if they did know how to bake it, even if they don’t.

Just as with Smith’s division of labour, so too with Hayek’s division of knowledge. Far from deriding Hayek’s preferred system of free prices because not every consumer under it is perfectly informed about every product they consume, the system should be celebrated for allowing scarce resources to be distributed as if everyone knew all the information concerning their supply and demand, even if they don’t.


Some readers might wonder why I even bothered clarifying such an elementary point about what Hayek was saying. Indeed, as a writer, my own instincts usually tell me to focus on more specific, technical, and arcane points, as my own personal inclination is usually to assume that all of the simple, broad, and sweepingly important things that could be said about economics or libertarianism must already have been said by writers more intelligent and eloquent than I could ever hope to be. However, elementary errors sometimes require elementary responses, and if a lecturer in one of the top economics faculties in the world was capable of misunderstanding what Hayek was saying in this way, hopefully my writing this will have helped clarify the thinking of at least some reader on this topic.

And even if not, I’m still going to publish this post anyway; I have to write about something on this cursed blog, after all.

What would Rothbard do about the Crown Estate? A follow-up to a follow-up…

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Several months ago, during my stay at the Mises Institute this summer, I wrote an article for Mises.org wherein I argued that increases in funding for the Royal Family should not be regarded as an extra burden on the taxpayer, because the Royal Family’s money comes not from tax revenue but from the profits of the land owned by the Queen, known as the Crown Estate. I then highlighted how the historic expansion of the English and then British state over the past 1000 years has eroded the monarch’s control over the Crown Estate and its revenues, with the result being that the Queen now effectively suffers an 85% income tax. This led me to conclude that libertarians should actively support rises in the Royal Family’s funding from this source, as it would represent a heroic rolling back of the state’s encroachment on the Queen’s property rights.

Although that latter sentiment was expressed with my tongue firmly in my cheek, I did follow it up with a more serious-minded post on this blog, in which I explained why I thought that an NAP-adhering legal system in an anarcho-capitalist society, along the lines of what Rothbard described in his great work The Ethics of Liberty, would uphold the Queen’s right to property in the Crown Estate. To briefly summarise my argument, I conceded that most of the Crown Estate lands were probably initially acquired by the Royal family illegitimately, by exercising coercion against their rightful owners. However given that this all took place hundreds of years ago, it would be very difficult to work out who the present-day heirs to those rightful owners are, likely making it impossible to return that property to its present-day rightful owners with any degree of certainty. In the legal system Rothbard describes in The Ethics of Liberty, an NAP-adhering court would therefore declare the Crown Estate to be unowned land, meaning that the person who has been using it most recently should be regarded as having homesteaded it, and therefore should be regarded as the new rightful owner, as per libertarian theory 101. My error came when, in my blog post, rather than carefully thinking through who this ‘person who has been using it most recently’ would be, I instead automatically assumed it must be the Queen, as she is nominally the current owner of the Crown Estate and has been renting it out. Therefore I believed that a Rothbardian legal system would uphold the Queen’s right to property in the Crown Estate, even though the English/British Monarchy initially acquired most of those lands illegitimately.

However, some months later my good friend Chris Calton, who was also a Mises Institute Fellow in Residence in the summer of 2017, wrote me a message to challenge this view. He brought my attention to a passage on pages 66-67 of The Ethics of Liberty, wherein Rothbard addresses this very problem almost directly. Here is that passage:

(For some reason it wouldn’t let me copy and paste the text from my PDF of Rothbard’s book, so instead I’m including screenshots of the page. Hopefully they won’t be too low-resolution to read.

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TL;DR: My interpretation of what a Rothbardian legal system would do in the case of the Crown Lands was correct up until the point where I assumed that the Queen was the person who had been ‘using’ the land most recently, and therefore should be regarded as having homesteaded it. In fact, Rothbard believed that the people currently renting the land and operating their businesses on it/living on it etc. are the people who have been ‘using’ it, and therefore should be regarded as having homesteaded it.

Thanks for correcting me, Chris!

By the way, if any of you aren’t familiar with Chris Calton and his work, I’d heartily encourage you to familiarise yourself with his stuff. Aside from being a brilliant scholar, he regularly writes popular articles for Mises.org, as well as writing and hosting the Mises Institute’s ‘Historical Controversies’ podcast, which is by far and away my favourite podcast of all time! He also has a great YouTube channel where he discusses libertarian and anarchist topics. If you’re at all interested in libertarianism and/or history, you owe it to yourself to check his stuff out!

My First Article in a Print Newspaper

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Last month, I wrote an article for Mises.org, wherein I explained how it was possible that a recent headline-making study could have ranked Britain’s NHS as “the number one health system” despite its many shortcomings, and why I believe the study was misleading.

Happily, my article went somewhat viral, being read around 20,000 times and receiving many hundreds of shares on social media.

Having read my original 1,200-word article, the editor of the comment section at the London-based financial newspaper City A.M. asked me to rewrite it as a 750-word piece for the paper.

I’m pleased to say that that abbreviated version was published as the lead article in City A.M.’s comment section today, making it my first article in a print newspaper.

You can read the article in question here: http://www.cityam.com/270171/nhs-world-class-if-you-ignore-its-woeful-outcomes