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Panel: The Significance of Hans-Hermann Hoppe

Sponsored by Steve and Cassandra Torello.

Featuring David Gordon (“Hoppe and German Philosophy”), Mark Thornton (“Hoppe as Textbook Writer”), Stephan Kinsella (“Hoppe on Property Rights”), Thomas DiLorenzo (“Hoppean Political Economy vs. Public Choice”), Jörg Guido Hülsmann (“Hoppe as Mentor”), Joseph Salerno (“Hoppe and the Art of Economic Controversy”), and a response from Hans-Hermann Hoppe.

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 is directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

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Liberty vs. War: A Brief History

[The John Bartel Lecture, presented at the 2012 Mises Institute Supporters Summit: “The Truth About War: A Revisionist Approach.” You can watch a video of this lecture here.]

In his book, Anatomy of the State, Murray Rothbard wrote,

Just as the two basic and mutually exclusive interrelations between men are peaceful cooperation or coercive exploitation, production or predation, so the history of mankind, particularly its economic history, may be considered as a contest between these two principles.1

This contest has been one-sided. In the ancient world, empires dominated political life. Merciless systems of slavery, theft, and war ruled around the world. One exception in a territory surrounded by such empires was the tribes of Israel. Even though warned by God himself of the misery they would suffer if they willingly surrendered the freedom they enjoyed under the decentralized polity of the judges in order to have an earthly king rule over them, they clamored for their own enslavement. It is instructive that the prize the Israelites deemed worth paying so heavy a price to obtain was to have a king to lead them in battle. With Saul as king, Israel no longer enjoyed periods of peace as under the judges, but was constantly at war. As Samuel had warned, Saul took their sons for soldiers, their daughters and male and female servants as slaves, the best of their lands, produce, and flocks and thereby, reduced the Israelites to servitude.2

The Israelites would not be the last people to succumb to the siren song of war. About the importance of war as a device for aggrandizing the power of the state in its contest against liberty, Rothbard wrote,

In war, State power is pushed to its ultimate, and, under the slogans of “defense” and “emergency,” it can impose a tyranny upon the public such as might be openly resisted in time of peace. War thus provides many benefits to a State, and indeed every modern war has brought to the warring peoples a permanent legacy of increased State burdens upon society.3

War not only vastly extends the wealth transfers used by the state to bolster its rule but advances pro-state ideology. Because the state lives parasitically on the production of its hosts, those who benefit from the state’s wealth transfers must always be a minority of the population. The majority must be the victims of the state and, therefore, their acquiescence in predation by the state must be engineered; otherwise that state is finished. The legitimacy of the state must be manufactured and maintained through ideology. From Oriental despotism to American hegemony, the state has never failed to attract, with its power and pelf, those who would fabricate apologia. But their litany of claims — that our rulers are wise and their rule is beneficent, that our rulers protect us from horrible dangers, that our rulers uphold the glorious tradition of our ancestors, that our rulers embody the interests of society, that our rulers are appointed by God, that our rulers bring science and reason to society, and so on — never explain how such claims turn hegemony into voluntary association, murder into defense, kidnapping into voluntary association, and taxation into free-will offering. If the state is the fount from which all social blessings flow, then why do its apologists resort to instilling guilt in the successful and envy in the unsuccessful to strengthen its power?

We see through the lies and sophisms of pro-state ideology because we have accepted the truth advanced by those who champion liberty. Extrapolating from our experience, we can see that anti-state ideology is a necessary condition to establish and maintain liberty. The advantages it has over pro-state ideology are, first, it appeals to the interests of the majority and, second, it is grounded on truth about the nature of human action. While liberty is consistent with human action, the state is founded on a contradiction, namely, that the only way to have an institution to protect our rights is to establish it on the violation of our rights.

The ancient Israelites held to an ideology with many of the features necessary to keep state power at bay, like a higher law to which all men are accountable and a decentralized polity. For a few generations, the kings of Israel were somewhat constrained by the higher law. But the wickedness of the kings who followed them grew, the law was eventually forgotten, and the liberties of the Israelites were extinguished.4

It would take several centuries for the world to witness another spark of liberty. It was ignited under Solon in Athens, and its embers glowed most brightly during the reign of Pericles. But liberty lasted only as long as Pericles and his generation lived. According to Lord Acton, the Athenian system failed to protect minorities and to put the state under the law. The democracy of Athens, in the end, led to class conflict, which tore the system apart. The Peloponnesian War extinguished both Pericles and the embers of Athenian liberty.5

The Stoics in Rome rediscovered the concept of a higher law to which all men are subject. In its highest formulation, at the hands of Cicero, Seneca, and Philo, the Stoics claimed that there is a universal commonwealth of the children of God and his voice should be obeyed. Freedom is found in obeying the natural laws of God. Under a better ideology than the Greeks, the ensuing struggle for liberty lasted far longer in Rome than it did in Athens. But it never achieved in practice the lofty expressions it attained in theory.6 Acton wrote,

Individuals and families, associations and dependencies were so much material that the sovereign power consumed for its own purposes. What the slave was in the hands of his master, the citizen was in the hands of the community. The most sacred obligations vanished before the public advantage. The passengers existed for the sake of the ship.7

At the height of its power, before wars of empire aborted its embryonic liberty and prosperity, Rome encountered the seedbed of liberty in the freemen of Teutonic communities. When their leaders were converted to Christianity, they converted their people. After the fall of Rome, their decentralized polities persisted as the church resisted the centralization of state power, permitting a long incubation period for the birth of liberty.8

Its time arrived in the 10th century, when the Scandinavians turned from aggressive invasions of Europe to peaceful trade. In the next century the Mediterranean was secured for European shipping. Venice and the cities of northern Italy flourished by expanding trade routes and extending the division of labor from the cities into the countryside. The Hanse cities did the same in northern Europe. As Henri Pirenne wrote, Europe became a region of cities built by capital.9

The flowering of commerce in Europe was reinforced by the development of a pro-liberty ideology elevated to previously unforeseen heights by the Christian doctrine of the individual person. God himself took on human nature and lived as a man. Jesus Christ suffered and died to secure the salvation of each individual person. In heaven, God will glorify each person with a spiritual body to live in communion with him and each other. Nations rise and fall, but the individual person will live forevermore.

As Harold Berman has shown, the church recast canon law along lines more favorable to private property and contract in the 11th century. The canon law acted as leaven in the different legal systems both civil and commercial.10Berman wrote,

Perhaps the most distinctive characteristic of the Western legal tradition is the coexistence and competition within the same community of diverse jurisdictions and diverse legal systems. It is this plurality of jurisdictions and legal systems that makes the supremacy of law both necessary and possible.

Legal pluralism originated in the differentiation of the ecclesiastical polity from secular polities. The church declared its freedom from secular control, its exclusive jurisdiction in some matters, and its concurrent jurisdiction in other matters.… Secular law itself was divided into various competing types, including royal law, feudal law, manorial law, urban law, and mercantile law.11

As legal protection of private property was extended, slowly and surely, from the church and merchants to everyone, economic progress was brought to the masses. The little industrial revolution, engendered by the protection of private property and contract, attracted the attention of scholars to explain the working of the burgeoning economy. Jean Buridan and Nicholas Oresme wrote works in the 14th century explaining economic activity with the framework of society as a natural order brought forth by the working of laws that God had built into the nature of things. Natural law also came to form the basis for man-made law in the High Middle Ages. As Berman wrote,

In the formative era of the Western legal tradition, the natural-law theory predominated. It was generally believed that human law derived ultimately from, and was to be tested ultimately by, reason and conscience. According not only to the legal philosophy of the time but also to positive law itself, any positive law, whether enacted or customary, had to conform to natural law, or else it would lack validity as law and could be disregarded. This theory had a basis in Christian theology as well as in Aristotelian philosophy. But it also had a basis in the history of the struggle between ecclesiastical and secular authorities, and in the politics of pluralism.12

When war arose in the context of this Christian pro-liberty ideology, it merely slowed instead of stopped the momentum of liberty. The Hundred Years’ War began to consolidate state power and foster pro-state ideology. The reactionary forces were strong enough to usher in the era of royal absolutism. The rise of the nation-state threatened liberty like nothing had in the West since state power in Rome. As mercantilist writers voiced the pro-state ideology of the 16th and 17th centuries, the late Scholastics countered with pro-liberty views.

The School of Salamanca developed a natural-law view of politics and economics. The founder of the school, Francisco De Vitoria, argued that all persons deserve the same legal protection of their persons and property. As Tom Woods has written,

Vitoria argued that the right to appropriate the things of nature for one’s own use (i.e., the institution of private property) belonged to all men regardless of their paganism or whatever barbarian vices they might possess. The Indians of the New World, by virtue of being men, were therefore equal to the Spaniards in matters of natural rights. They owned their lands by the same principles that the Spaniards own theirs.13

The natural-law view of the Scholastics was taken up by Grotius in his views on international law in the 17th century, and pro-liberty ideology was further refined in the natural-rights view of Locke and Jefferson in the 17th and 18th centuries.

America proved to be fertile ground for the revivification of liberty. State power was unable to constrain the inclinations of people who held a pro-liberty ideology to live with respect for private property and contract in the open territory and decentralized polities of colonial America. Nation-states had to content themselves with limitations on their power given the possibilities their potential victims had to escape their depredations.

During its heyday in the 19th century, classical liberalism showered people with the fruits of liberty, peace, prosperity, and human flourishing. But the pro-liberty ideology refined by the classical liberals was not free from impurities. Its fatal defect was manifest in the centralization of state power through the US Constitution, which fastened the nation-state form on the decentralized polity of the 13 states. As Hans Hoppe has written,

Classical-liberal political philosophy — as personified by Locke and most prominently displayed in Jefferson’s Declaration of Independence — was first and foremost a moral doctrine. Drawing on the philosophy of the Stoics and the late Scholastics, it centered around the notions of self-ownership, original appropriation of nature-given (unowned) resources, property, and contract as universal human rights implied in the nature of man qua rational animal. In the environment of princely and royal rulers, this emphasis on the universality of human rights placed the liberal philosophy naturally in radical opposition to every established government. For a liberal, every man, whether king or peasant, was subject to the same universal and eternal principles of justice, and a government either could derive its justification from a contract between private property owners or it could not be justified at all.14

Tragically, from the true proposition that a liberal social order requires its members to use defensive violence to suppress aggression against person and property, classical liberals invalidly concluded that there must be a monopoly provider of defensive violence. Given their view that the state is essential to a liberal social order, state power retained a foothold from which it would come to overtake liberty once again.

That moment came in 1914. As Rothbard wrote,

More than any other single period, World War I was the critical watershed for the American business system. It was a “war collectivism,” a totally planned economy run largely by big-business interests through the instrumentality of the central government, which served as the model, the precedent, and the inspiration for state corporate capitalism for the remainder of the twentieth century.15

As a prelude to its destruction in the Great War, pro-state ideology had made a frontal attack on liberty in the 19th century. Hunt Tooley has noted the role of ideologies leading up to war in his book, The Western Front.16 As Ralph Raico noted in his review of Tooley’s book,

Tooley deals deftly with the intellectual and cultural currents of prewar Europe. Contributing to the proneness to violence were a bastardized Nietzschianism and the anarchosyndicalism of Georges Sorel, but most of all Social Darwinism — really, just Darwinism — which taught the eternal conflict among the races and tribes of the human as of other species.17

Even in America, pro-state ideology had managed to warp Christian thinking during the Progressive Era from its pro-liberty form. Richard Gamble documents this degeneration in his book, The War for Righteousness.18 As Raico wrote in his review of Gamble’s book,

By the end of the nineteenth century, progressive Protestants, often influenced by the theory of evolution, were preaching the successive remaking of the church, of American society, and finally the whole world. Rejecting old-line Calvinism, they rejected also the Augustinian distinction between the City of God and the City of Man. The City of Man was to be made into the City of God, here on earth, through a commitment to a redefined, socially-activist Christianity.19

The Great War unleashed the collectivist forces of socialism and fascism across the Western world. As Raico has written,

The First World War is the turning point of the twentieth century. Had the war not occurred, the Prussian Hohenzollerns would most probably have remained heads of Germany, with their panoply of subordinate kings and nobility in charge of the lesser German states. Whatever gains Hitler might have scored in the Reichstag elections, could he have erected his totalitarian, exterminationist dictatorship in the midst of this powerful aristocratic superstructure? Highly unlikely. In Russia, Lenin’s few thousand Communist revolutionaries confronted the immense imperial Russian army, the largest in the world. For Lenin to have any chance to succeed, that great army had first to be pulverized, which is what the Germans did. So, a twentieth century without Nazis or Communists. Imagine that. It was the turning point in the history of our American nation, which under the leadership of Woodrow Wilson developed into something radically different from what it had been before.20

Nowhere was the radical transformation more manifest than in law. The legal tapestry of the West, woven over a millennium, was rent asunder in the Great War. Harold Berman wrote,

when the different legal regimes of all these communities — local, regional, national, ethnic, professional, political, intellectual, spiritual, and others — are swallowed up in the law of the nation-state … [that] is, in fact, the greatest danger inherent in contemporary nationalism. The nations of Europe, which originated in their interaction with one another in the context of Western Christendom, became more and more detached from one another in the nineteenth century. With World War I, they broke apart violently and destroyed the common bonds that had previously held them together, however loosely. And in the late twentieth century we still suffer from the nationalist historiography that originated in the nineteenth century and that supported the disintegration of a common Western legal heritage.21

Even in the land where liberty burned most brightly, the war proved a potent force for retrogression. As Rothbard wrote,

Historians have generally treated the economic planning of World War I as an isolated episode dictated by the requirements of the day and having little further significance. But, on the contrary, the war collectivism served as an inspiration and as a model for a mighty army of forces destined to forge the history of twentieth-century America.22

The First World War destroyed the world economy that had been built up during the 19th century under classical liberalism. As Maurice Obstfeld and Alan Taylor have demonstrated in their book, Global Capital Markets: Integration, Crisis, and Growth, the degree of integration of the world economy rose from moderately low in 1860 to moderately high in 1914. The Great War disintegrated the world economy to a level of integration significantly below what it had achieved by 1860. By 1929, the level was as far above that of 1860 as it was below 1860 in 1918. By the end of Second World War (which was a continuation of the First World War) the level of integration was half that of the level of 1860. The level of integration of the world economy has come to surpass that of 1914 only in the 21st century.23 It has taken governments 70 years to accomplish what liberty can do in a matter of days.

The Great War destroyed the classical gold standard and ushered in an era of fiat currencies. Hyperinflations and depressions have been the result. As Steve Hanke and Nicholas Krus have documented, of the 56 episodes of hyperinflation in history, only one occurred before 1920.24 And as George Selgin, William Lapstras, and Lawrence White have shown, the 100 years of Federal Reserve monetary policy have resulted in more economic and financial instability than under the somewhat-less-flawed National Banking System before the Fed.25

The Great War shattered the classical-liberal world and ushered in a century of the rise of the collectivist state. Western civilization, having given birth to liberty and nurtured it, sacrificed its offspring before it had the opportunity to grow to maturity throughout the world. Instead of liberty, American hegemony has spread corporatism to the four corners of the earth.

Like us, our forerunners labored to advance pro-liberty ideology during dark days when liberty had been eclipsed by state power. Their strategy involved building independent institutions. Christopher Dawson, in his book The Crisis of Western Education, has demonstrated that the intellectual movements of the Renaissance and the Enlightenment developed outside the state. Dawson wrote,

In England and the United States the traditional relation of church and school and the medieval system of corporative independence still survived in spite of the attacks of educational and political reformers. The abuses of the old system and the neglect of primary education were certainly no less flagrant in England than they were on the Continent. But the strength of the voluntary principle and the lack of a centralized authoritarian state caused the reforming movement in England to follow and independent course and to create its own organizations and institutions.26

To restore liberty in our age, we must build genuinely private enterprises and independent educational institutions. Through organizations like the Mises Institute, we can do our part in the 21st century in rolling back the tide of the collectivist state built up in the 20th century, as our forerunners did in rolling back royal absolutism in the 18th century. We must not repeat their mistakes. This time our pro-liberty ideology must embrace its logical implications and reject the state, root and branch. Only then can the potential of life, liberty, and property be realized in the flourishing of the entire human race.

  • 1. Murray Rothbard, Anatomy of the State, (Auburn, Ala.: Mises Institute, 2009), p. 53.
  • 2. I Samuel 8.
  • 3. Rothbard, Anatomy of the State, p. 45.
  • 4. I Kings and II Kings.
  • 5. Lord Acton, Essays in the History of Liberty, Vol. 1 (Indianapolis: Liberty Classics, 1985), pp. 12–13.
  • 6. Acton, Essays in the History of Liberty, pp. 24–25.
  • 7. Acton, Essays in the History of Liberty, p. 18.
  • 8. Acton, Essays in the History of Liberty, pp. 30–33.
  • 9. Henri Pirenne, Medieval Cities (Princeton, N.J.: Princeton University Press, 1925); idem., Economic and Social History of Medieval Europe (London: Routledge,1936); and Acton, Essays in the History of Liberty, pp. 35–36.
  • 10. Harold Berman, Law and Revolution (Cambridge, Mass.: Harvard University Press, 1983).
  • 11. Berman, Law and Revolution, p. 10.
  • 12. Berman, Law and Revolution, p. 12.
  • 13. Tom Woods, How the Catholic Church Built Western Civilization (Washington: Regnery Pub., 2005), p. 139.
  • 14. HansHoppe, Democracy, the God that Failed (New Brunswick, N.J.: Transaction Publishers, 2001), p. 225.
  • 15. Murray Rothbard, War Collectivism: Power, Business, and the Intellectual Class in World War 1 (Auburn, Ala.: Mises Institute, 2012), p. 7.
  • 16. Hunt Tooley, The Western Front: Battle Ground and Home Front in the First World War (New York: Palgrave McMillan, 2003).
  • 17. Ralph Raico, Great Wars and Great Leaders: A Libertarian Rebuttal(Auburn, Ala.: Mises Institute, 2010), p. 230.
  • 18. Richard Gamble, The War for Righteousness: Progressive Christianity, the Great War, and the Rise of the Messianic Nation (Wilmington, Del.: ISI Press, 2003).
  • 19. Raico, Great Wars and Great Leaders, p. 193. Italics in original.
  • 20. Raico, Great Wars and Great Leaders, pp. 1–2.
  • 21. Berman, Law and Revolution, p. 17.
  • 22. Rothbard, War Collectivism, pp. 34.
  • 23. Maurice Obstfeld and Alan Taylor, Global Capital Markets: Integration, Crisis, and Growth(Cambridge: Cambridge University Press, 2004).
  • 24. Steve Hanke and Nicholas Krus, “World Hyperinflations,” Cato Working Paper(Washington: Cato Institute, 2012). The exception was in France during the revolution in 1795.
  • 25. George Selgin, William Lastrapes, and Lawrence White, “Has the Fed Been a Failure?” Cato Working Papers (Washington: Cato Institute, 2010).
  • 26. Christopher Dawson, The Crisis of Western Education (Steubenville, Oh.: Franciscan Press, 1989), p. 67.
Forex stock trading

Henry Hazlitt’s Long-Term Economic Thinking: Foundation of Entrepreneurial Excellence

The Henry Hazlitt Memorial Lecture, sponsored by Hunter Lewis. Recorded at the Mises Institute on March 22, 2019. Includes an introduction by Joseph T. Salerno.

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 is directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

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Political Capitalism: How Economic and Political Power is Made and Maintained

The F. A. Hayek Memorial lecture, sponsored by Greg and Joy Morin. Recorded at the Mises Institute on March 23, 2019. Includes an introduction by Joseph T. Salerno.

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 is directed by Joseph Salerno, professor of economics at Pace University and academic vice president of the Mises Institute.

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The High Cost of Mandatory Paid Parental Leave

In the latest episode of conservatism as “progressivism driving the speed limit,” former U.S. Senator Rick Santorum proposed the idea of paid leave at the Conservative Political Action Conference (CPAC).

This idea is starting to manifest itself as a political reality with Senators Mike Lee and Joni Ernst who are introducing the CRADLE Act.

This was loosely inspired by a bill that Senator Marco Rubio introduced last year, which proposed allowing new parents to draw money from Social Security for child-rearing purposes. This represents an addition to the Family and Medical leave act of 1993 which mandates 12 weeks of job-protected unpaid leave for some employees.

How Parental Leave is Factored in Wages

There are two problems with federal intervention in how employers determine leave for employees.

The first problem is the new aspect of government-paid leave created with the CRADLE act: tax-funded leave. Funded leave would be covered by federal programs, which are in turns funded at least partially by payroll taxes. These taxes, imposed on both employer and employee, reduce employees wages, and lessen what an employer can pay. 

If federally-funded leave is paid for with an increase in payroll taxes, this will continue to put downward pressure on employee wages overall. 

At this time, however, few are proposing to raise payroll taxes, and it looks like the payroll-tax status quo will prevail for now. 

Thus, the primary problem with employee leave remains its mandatory nature, whether paid or unpaid. 

Ultimately mandatory paid leave imposes higher costs on both the employers and on employees who do not qualify for — or need — leave time themselves. It is essentially a transfer of income and wealth from non-leave-using employees to leave-using employees. The business owner, of course, is also faced with greater uncertainty and with higher employees costs, which can lead to lower utilization of employees overall. 

How Parental Leave is Factored in Wages

In a true market economy, entrepreneurs are responsible for providing labor opportunities. It is the entrepreneur who pays for the factors of production (labor in this case) beforehand to get finished goods and services in exchange.

At the same time, the entrepreneur must be able to bring about these goods or services at a price lower than what customers are willing to pay. If not, the business will fail.

Wages behave according to this principle. Entrepreneurs only hire employees if the workers are able to produce more than they cost the employer. That is, as with any consumer good, the perceived value of the worker must be higher than the cost. 

Paid parental leave is not a free gift to workers. Mandatory paid leave is ultimately a tax that businesses will have to shoulder and will eventually be absorbed by employer, employees, and customers. When leave is mandated, it forces the employer to make expenditures in addition to the wages he already pays to employees. In turn, the wages employees take home are reduced accordingly.

Uncertainly is a problem as well. In a modern economy,  labor mobility is sizable, and it’s not feasible for most companies — especially smaller businesses — to pay parental leave for an employee who will likely leave within a few months. In turn, an unintended consequence of government-mandated paid leave would be hesitance on the part of employers to hire new workers, which in turn reduces employment across the board. This makes the cost of business much higher and impedes business growth

When government mandates, regulations, and taxes are offered as “solutions,” we continue to perpetuate the cycle of government growth and stifled innovation.

Make Life Affordable Via Deregulation

How about we look at the root problems instead?

In 2018, the Competitive Enterprise Institute reported that the economic effects and regulatory compliance costed the U.S. economy $1.9 trillion dollars. Not to mention the many companies that do not exist due to America’s burdensome regulatory apparatus. Further, when regulations like zoning are in place, it becomes more difficult to acquire quality housing at an affordable price for those who want to start a family. Americans are trapped in a regulatory maze that makes activities cost prohibitive and reduces the standard of living.

On the other hand, capital accumulation – not government programs – is how the standard of living is improved. In The Theory of Money and Credit, Mises recognized this:

There is only one efficacious way toward a rise in real wage rates and an improvement of the standard of living of the wage earners: to increase the per-head quota of capital invested.

It’s ultimately companies and employees who should be the ones negotiating their leave plans. Certain companies pride themselves in their benefits and position themselves accordingly as “family friendly.” In a genuinely liberated economy, company-sponsored leave may soon become a feasible option for companies that want to stand out and attract workers.

Instead of falling for the “feelgood” legislation that our political climate fosters, we should be looking at long-term solutions like dismantling the regulatory state instead.

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A Different View of Venezuela’s Energy Problems

It would be easy to write a story about Venezuela’s energy problems and, in it, focus on the corruption and mismanagement that have taken place. This would make it look like Venezuela’s problems were different from everyone else’s. Taking this approach, it would be easy to argue that the problems wouldn’t have happened, if better leaders had been elected and if those leaders had chosen better policies.

I think that there is far more behind Venezuela’s financial and energy problems than corruption and mismanagement.

As I see the story, Venezuela realized that it had huge oil resources relative to its population, back as early as the 1920s. While these oil resources are substantial, the country misestimated how high a standard of living that these resources could support. To try to work around the issue of setting development goals too high, the country chose the path of distributing the benefits of oil exports in an almost socialistic manner. This socialistic approach, plus increased debt, hid the problem of a standard of living that could not really be supported for many years. Recent problems in Venezuela show that these approaches cannot be permanent solutions. In fact, it seems likely that Venezuela will be one of the first oil-exporting nations to collapse.

How the Subsidy from High-Priced Exported Oil Works 

Oil is a strange resource. The cost of oil production tends to be quite low, especially for oil exporters. The selling price is based on a world oil price that changes from day to day, depending on what some would call “demand.” The difference between the selling price and the cost of extraction can make oil exporters rich. In a sense, this difference might be considered an “energy surplus” that is being distributed to the economies of oil exporters. The greater the energy surplus being distributed, the greater the quantity of goods and services (made with energy products) that can be purchased from outside the country with the hard currency that is made available through the sale of oil.

In fact, the existence of such a profitable resource tends to crowd out development of other, less profitable, enterprises. Thus, Venezuela has tended to be a country whose economy revolves around oil. There is a small amount of agriculture and quite a bit of services, but for the most part, the goods used by the economy must be purchased from outside the country. Furthermore, nearly all of the revenue that is available to purchase these goods comes from the sale of oil exports. Thus, the economy tends to follow the fortune of oil sales.

Figure 1 shows a rough estimate of the benefit that Venezuela’s oil exports have provided in inflation-adjusted US dollars. Based on this approach, the per capita benefit from oil exports seems to have peaked very early, in about 1981.

Figure 1. Venezuela per capita value of oil exports, calculated by multiplying Venezuela’s year-by-year quantity of oil exports by the price in 2017$ of oil, and dividing by estimated population. Both price and quantity determined using BP 2018 Statistical Review of World Energy. Population based on 2017 United Nations middle estimates.

The people of Venezuela did not realize that the amount of benefit that oil exports would provide would start falling very early. Instead, leaders set their sights on living standards that would be affordable if the level of subsidy that the economy could obtain from oil exports were to remain as high as during the 1973 to 1981 period.

Figure 2 shows how much energy the population, on average, consumed over the 1965 to 2017 period. This figure shows that energy consumption per capita rose dramatically between 1973 and 1981. In this way, citizens were able to benefit from the huge rise in per capita oil export revenue, shown in Figure 1.

Figure 2. Energy consumption per capita for Venezuela, based on BP 2018 Statistical Review of World Energy data.

This higher level of energy consumption meant that the economy readjusted in a way that added more goods and services using energy. For example, the economy added paved roads, airports, schools, electricity generating capacity and health care. People came to expect this higher standard of living going forward, even if the level of subsidy that oil exports had been adding was rapidly disappearing.

The way the amounts in Figure 1 “work” is that they depend both on the quantity of oil exported and the market price for that oil. If Venezuela’s oil exports are not rising quickly enough, or if the price of oil is not high enough, the level of oil subsidy fails to rise enough to support the economy. Also, rising population becomes an issue because as population rises, more homes, cars, electricity, streets, and other goods (requiring energy consumption) are needed. Because Venezuela must import practically everything other than oil, it must either (a) export an increasing quantity of oil per year, or (b) get an increasingly high price for the oil it exports, if it wishes to support its rising population at its chosen standard of living.

It became evident very early that Venezuela had set its sights on a living standard that was far higher than it could really support. In the period since 1965, Venezuela’s first debt crisis took place in 1982, as the subsidy suddenly started falling. Later debt crises occurred in 1990, 1995, 1996, 1997, 1998, 2004, and 2017. Clearly, as soon as the per capita subsidy started falling in 1982 (see Figure 1), Venezuela’s economy became very troubled. It could not really support its chosen standard of living.

How could Venezuela hide the problem of an unsupportable living standard for over 35 years?

I see three major ways the insupportable living standard could be hidden:

(a) Pushing the problem off into the future using added debt

Nearly everyone is willing to believe that oil prices will rise as high as is needed to extract oil resources that seem to be available with current technology. Would-be lenders are also willing to believe that oil resources can be extracted as rapidly as needed to support the economy. Given this combination of beliefs, Venezuela has had little difficulty adding more debt, even in periods not long after it has been forced to restructure previous debt.

Recently, the biggest lender to Venezuela has been China. With this arrangement, Venezuela has been able to obtain the economic benefit of part of its oil resources, before the oil has actually been extracted. Unfortunately, this arrangement makes Venezuela more quickly susceptible to the adverse impact of a downturn in oil prices. To make matters worse, the debt to China appears to include a provision that creates a lower repayment level (in oil) if prices rise, but creates a higher repayment level (in oil) if oil prices fall. This provision no doubt looked favorable to Venezuela, back in the time period when it was believed that oil prices could only rise.

As far as I know, Venezuela is the only oil exporting country that has used debt as extensively as it has. Some oil exporters, such as Saudi Arabia, have taken the opposite approach, setting aside reserve funds to use in the event that oil prices fall. Needless to say, Venezuela’s use of debt has tended to make its economy very vulnerable to restructuring or defaults if oil prices fall.

(b) Pursuing economic simplification 

A complex economy is one that is set up, as much as possible, to keep up with growing technology. A significant share of expenditures go both toward making new capital goods and maintaining existing capital goods. There are considerable differences in pay levels, to make certain that those who are providing technical expertise are adequately compensated for their efforts. Business leaders also are adequately compensated for their contributions.

A much simpler economy, which is what most of the Venezuelan leaders have been aiming for, is an economy in which everyone gets a basic level of housing, transportation, and healthcare, but virtually no one gets very much. There is also not much investment in new technology and new capital goods because nearly all of the hard currency being obtained by selling oil exports is being used to purchased imported goods and services to support the basic level of goods and services (such as roads, electricity, education, and food) being provided to the many citizens of the economy. Since the external value of oil exports sets an upper limit on the quantity of goods and services that Venezuela can import, this leaves virtually no capacity to purchase imported goods and services needed to support new capital investment and research.

In Venezuela’s economy, the cost of both oil and electricity have been kept very low–below the cost of production. This helps keep citizens happy, but it also cuts off funds for new investment in these areas. This, too, is part of the simple economy approach.

One disadvantage of a simple economy is that the low wages for engineers and other professionals encourages these professionals to move to other countries, where compensation is more adequate. Another disadvantage of a simple economy is that it encourages bribery, because graft is a way of adjusting the system so that those who “can make things happen” are adequately compensated for their efforts. The simple economy approach also tends to discourage research and investment in new areas, such as natural gas production and improved methods of heavy oil extraction.

A simple economy can be kept operating for a while, but it quickly reaches limits in many ways:

  • The limited skill level of residents who have not emigrated for higher wages elsewhere makes the completion of complex projects, such as new electricity generation facilities, difficult.
  • The inadequate level of oil export revenue puts a limit on the amount of spare parts and other goods needed to maintain the infrastructure, such as electricity transmission.
  • As existing oil wells deplete, little funding (in hard currency needed for imports) is available to make investments in new wells for extraction.
  • Research on new techniques for oil extraction is also inhibited.

(c) Neglect of current systems becomes an increasing issue, as the lack of hard currency revenue from oil exports becomes a bigger issue. 

Venezuela can, in theory, buy what it needs from abroad, but there is a limit to the total amount of goods and services that can be imported, based on the amount of hard currency funds it obtains from selling crude oil. If the price of oil falls, then Venezuela must, in some way, cut back on goods and services that it had previously supplied. One of the least obvious way of doing this is by cutting back on maintenance and repairs.

The recent long electricity outage in Venezuela seems to be at least partially related to neglect of usual maintenance activities. It seems that Venezuela’s state-owned electrical company failed to keep the brush cleared under electric transmission lines leading away from the very major Guri Dam. It now appears that one of the causes of Venezuela’s recent long electricity outage was damage to transmission lines caused by a brush fire within the Guri complex. This could perhaps have been prevented by better maintenance.

Figure 2 shows that energy consumption per capita has been falling, especially since 2011. This would suggest that standards of living have been falling. Needless to say, if Venezuela’s oil exports drop further, a further reduction in standard of living can be expected.

Why Is America Issuing Sanctions Against Venezuela’s Oil Company PDVSA?

On January 28, 2019, the United States imposed sanctions against Venezuela’s state oil company, PDVSA. The reasons given for these sanctions are the following:

  • To hold accountable those responsible for Venezuela’s tragic decline in oil supply
  • To restore democracy
  • To help prevent further diverting of Venezuela’s assets by Maduro, and thereby preserve those assets for the people of Venezuela

These reasons sound good, but I expect that the primary real reason for the sanctions was to try to take Venezuela’s oil production off line and, through this action, force oil prices higher.

World oil prices have been far too low for oil producers since at least 2014.

Figure 3. Historical inflation-adjusted oil prices, based on inflation adjusted Brent-equivalent oil prices shown in BP 2018 Statistical Review of World Energy.

Many people, thinking about the oil price situation from the consumers’ point of view, are completely unaware of the problem that low oil prices can cause for producers. Oil producers may not go out of business immediately because of low oil prices, but eventually the low prices will cause a cutback in investment, and thus production. Countries that have sold some of their oil production in advance, such as Venezuela, are especially vulnerable.

Figure 4. Venezuela’s energy production by type, based on data of BP 2018 Statistical Review of World Energy.

Figure 4 shows that oil production for Venezuela has been dropping for a very long time. Its highest year of production was 1970, the same early high year as for United States’s oil extraction. Natural gas is mostly “associated” gas, which is made available through oil production. Hydroelectric is small in comparison to oil and gas. Hydroelectric production has been generally falling since 2008.

There is a widespread belief among oil executives and politicians that reducing oil production will force oil prices up. I expect to see, at most, a brief spike in oil prices. The major issue is that the world economy is a networked system. Prices for oil and for electricity cannot rise higher than consumers, in the aggregate, can afford. If there is too much wage disparity around the world, the low wages of many workers will tend to hold oil prices down, because these workers cannot afford goods such as smartphones and automobiles made with oil and other energy products. These lower oil prices reflect the fact that the way the economy has been changing in ways that leave less surplus energy to distribute to oil exporters to operate their economies.

The way the networked economy works is determined by the laws of physics, whether we like it or not. As far as I can see, the end of oil extraction comes because oil prices cannot be raised high enough to make extraction profitable. Once oil extraction becomes unprofitable, oil exporting nations will start collapsing. Venezuela is the “canary in the coal mine” in this collapse process, because of the extensive use it has made of debt.

What If Oil Prices Can Be Forced Upward? 

If somehow oil prices could be forced up by reducing Venezuela’s exports to practically zero, this would have a double benefit:

  1. More oil from around the world, including the United States, could be profitably extracted, because oil resources that are more expensive to produce would suddenly become profitable.
  2. Venezuela’s oil could be more profitably extracted.

If prices actually rise, and if the United States remains in control of the situation, the US could theoretically expand Venezuela’s oil production. Venezuela has the largest oil reserves of any country in the world. Its expected cost of production is relatively low, if the exports of oil are not expected to support essentially the whole economy. The cost of pulling the oil out of the ground in Venezuela seems to be about $28 per barrel, if we believe a 2016 estimate by Rystad Energy.

Figure 5. Cost of producing a barrel of oil and gas in 2016. WSJ figure based on Rystead Energy analysis.

The cost of supporting the entire economy with the revenue from oil exports is far higher. Figure 6 shows that back in 2013-2014, the cost of oil, including the subsidies needed to maintain the operation of the rest of the economy, amounted to about $110 per barrel. I would expect that with all of Venezuela’s debt, the real cost might be even higher than this.

Figure 6. Estimate of OPEC break-even oil prices, including tax requirements by parent countries, from Arab Petroleum Investments Corporation.

If the US doesn’t plan to support all of Venezuela’s population with the export revenues from oil extraction, it can theoretically extract the oil more economically than the $110 per barrel price that is needed to support the whole economy. Thus, it could get along with a price closer to $28 per barrel.

Furthermore, the investment capabilities and technical expertise of the United States could, at least in theory, ramp up Venezuela’s oil production, if this is desired at some future date. Similarly, “non-associated” natural gas production could be ramped up, if desired, because this seems to be available, but has been neglected.

I expect that all of this development would be more difficult and expensive than a simple comparison such as this seems to suggest. The ultimate problem is that a whole economy needs to be in place to make the extraction possible. Even if a cursory examination suggests that substantial savings are possible, the cost associated with maintaining necessary support services would make the total cost of energy extraction much higher.


Venezuela seems to be the canary in the coal mine with respect to where oil exporters are headed. Other countries will want to push them out of oil production, so as to try to raise prices for themselves. Debt defaults and lack of availability of debt may also become issues.

One item of interest is the fact that in Venezuela, lack of oil revenues can adversely affect electricity supply. Thus, we should not be surprised if electricity supply fails at about the same time that oil production falls. Even electricity supply provided by hydroelectric plants seems to be at risk.

Another item of interest is how Venezuela’s attempt at even distribution of goods and services, using a somewhat socialistic approach is working out. This approach (which is now being advocated by some political candidates) seems to have some short-term benefits, because it tends to keep the population happy–almost everyone seems to have a minimum standard of living. But, over the long term, this approach leads to the loss of the ability to maintain today’s high-tech economy. This approach doesn’t prevent collapse either, because a lack of investment and expertise eventually causes important parts of the system to stop operating.



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The Place of Economic Calculation in the Economic Theory of Ludwig von Mises


ABSTRACT: In exalting the subjectivity of value, the marginalist revolution posed a fundamental problem for economic theory. Each person chooses how to allocate his means and thereby, economize his actions by rank ordering the value of alternatives. Being interpersonally incomparable, ordinal ranks cannot serve directly to economize means within a division of labor. Neoclassical economists solved this problem by foregoing an explanation of the division of labor grounded in the reality of human persons and instead, constructed formal, mathematical models. F.A. Hayek’s subjectivist response to the neoclassical project was to augment formal, mathematical models with select characteristics of human persons. In contrast, Ludwig von Mises grounded economic theory in the reality of human persons. He demonstrated how voluntary exchange of goods for and against money generate cardinal numbers from ordinal ranks. Actual money prices emerging from actual human choices constitute the necessary condition for economizing resources across the division of labor. Unlike subjective valuations, which cannot be compared interpersonally, and barter exchange ratios which are incommensurate, money prices can be compared. Economic calculations of net income and net worth, furthermore, are a phenomenon of the market economy alone. Mises’s approach not only solved the problem of economizing resources in a division of labor, but provides a robust framework for economic research.

KEYWORDS: economic calculation, subjectivism, economizing, general equilibrium, socialism
JEL CLASSIFICATION: B13, B14, B24, B25, P11, P21, P51

Jeffrey Herbener ([email protected]) is chair of the Department of Economics and Sociology at Grove City College.

Quarterly Journal of Austrian Economics 21, no. 3 (Fall 2018) full issue, click here.

It is probably no exaggeration to say that every important advance in economic theory during the last hundred years was a further step in the consistent application of subjectivism (Hayek, 1955, p. 52).


F.A. Hayek (1955, pp. 52–53) appended the following footnote to his famous maxim concerning subjectivism quoted above:

This is a development which has probably been carried out most consistently by Ludwig von Mises, and I believe that most peculiarities of his view which at first strike many readers as strange and unacceptable trace to the fact that in the consistent development of the subjectivist approach he has for a long time moved ahead of his contemporaries. Probably all the characteristic features of his theories—from his theory of money (so much ahead of the time in 1912) to what he calls his a priorism—his views about mathematical economics in general and the measurement of economic phenomena in particular, and his criticism of planning all follow directly (although, perhaps, not all with the same necessity) from this central position. See particularly his Grundprobleme der Nationalökonomie (1933) and Human Action (1949).

One achievement of the Salerno camp in the second calculation debate was to demonstrate that Hayek, at least, leaves the wrong impression of the relationship between Mises’s work and his own. By referring to “the subjectivist approach,” Hayek seems to imply that his approach and that of Mises are fundamentally the same. Although Hayek admits to some differences in particulars, since Mises’s views, as he puts it, “all follow directly (although, perhaps, not all with the same necessity) from this central position.”

Mises, however, did not accept the subjectivist approach of Friedrich von Wieser, on which Hayek patterned his own framework, but instead worked within the causal-realist approach of Carl Menger and Eugen von Böhm-Bawerk.1 In discussing the two traditions in Austrian economics, Joseph Salerno (1999, p. 37) wrote:

It is important to note that even at this early stage, the Austrian school was deeply divided on a crucial issue of basic theory. On the one hand, Böhm-Bawerk fully absorbed Menger’s causal-realist approach to price theory and endeavored to develop it further and apply it to new areas. Wieser, on the other hand, seized narrowly on Menger’s “subjectivism” as embodied in the principle of marginal utility and, while usefully elaborating some of the implications of this principle, completely ignored the structure of reality-based price theory that Menger had labored to build upon it. Wieser’s purpose was to construct his own peculiar ideal of social welfare based on a state of general equilibrium that he called “natural value,” and to link it through the concept of marginal utility to foundations in human psychology.

With his acceptance of general equilibrium and emphasis on human psychology, Hayek belongs to the Wieserian wing of the Austrian school. Hayek attempted to graft onto the neoclassical general equilibrium conception his own insights into human learning, knowledge, and other “subjectivist” elements. In discussing the main contributions to modern price theory for an entry in The New Palgrave: A Dictionary of Economics in the early 1980s, which remained unpublished at the time, he wrote (Hayek, 1992, pp. 53–54):

Equally important is what may well be regarded as the final formulation of the marginal utility analysis by J.R. Hicks of the marginal utility analysis of value in the concept of the marginal rate of substitution, based on the indifference curve technique introduced by Irving Fisher and F. Y. Edgeworth. This conception of varying rates of substitution or equivalence, wholly independent of any conception of measurable utility, may well be regarded as the ultimate statement of more than half a century’s discussion in the tradition of the Austrian school….

Arguably, Hayek’s claim about Mises leading the advance of subjectivism may not be mistaken per se, however, Mises’s approach to grounding economic theory on a proper subjectivist foundation differed dramatically from that of Wieser and his followers.


In his magnum opus, Human Action, Mises subsumes subjectivist aspects of catallactics within the concept of economic calculation. The book is organized into seven parts containing 39 chapters. He devotes one entire part of the book, part 3, to economic calculation. It contains three chapters. In one of those chapters, Valuation without Calculation, we find Mises’s discussion of the subjectivity of value. He did not offer insights about how the advance of the concept of subjectivity can make the general equilibrium framework more suitable to economic theorizing. Instead Mises focused on two fundamental principles concerning the subjectivity of value.

First, he juxtaposed the ordinal ranking inherent in valuation with cardinal numbers in which the goods being ranked are measured. He did this to demonstrate a principle of economic calculation. He wrote (Mises, 1998, p. 201):

The immediate goal of acting is frequently the acquisition of countable and measurable supplies of tangible things. Then acting man has to choose between countable quantities; he prefers, for example, 15 r to 7 p; but if he had to choose between 15 r and 8 p, he might prefer 8 p…. This is tantamount to the statement that he prefers a to b and b to c…. It certainly does not render reckoning with cardinal numbers possible. It does not open a field for economic calculation and the mental operations based upon such calculation.

Second, he referenced the principle he (Mises, 1998, p. 699) would call in his critique of socialist schemes to provide a method of economic calculation, “the fundamental theorem of modern economics,” namely diminishing marginal utility. His purpose was, again, to make a fundamental point about economic calculation. Mises (1998, p. 206) wrote:

There is no method available to construct a unit of value. Let us remember that two units of a homogeneous supply are necessarily valued differently. The value attached to the nth unit is lower than that attached to the (n–1)th unit.

Mises (1998, p. 206) concluded this line of argument with the following words:

It is a fictitious assumption that an isolated self-sufficient individuals or the general manager of a socialist system, i.e., a system in which there is no market for the means of production, could calculate. There is no way which could lead one from the monetary computation of a market economy to any kind of computation in a nonmarket system.

In the subsection that closes out this section of the book, which Mises titled, “The Theory of Value and Socialism,” Mises (1998, p. 207) wrote the following about subjectivism:

The illusion that a rational order of economic management is possible in a society based on public ownership of the means of production owed its origin to the value theory of the classical economists and its tenacity to the failure of many modern economists to think through consistently to its ultimate conclusion the fundamental theorem of the subjectivist theory.


As noted above, Mises considered the “fundamental theorem of modern economics” diminishing marginal utility, which can be deduced from a person economizing with homogeneous units of a good. Although diminishing marginal utility is accepted by all modern economists, Mises was the first to perceive the implication of its reasoning for making economizing decisions about the use of resources in society and its application to this problem in socialism. Concerning the proposal of mathematical economists to solve the problem of economizing in socialism, Mises (1978, p. 112) wrote:

They failed to see the very first challenge: How can economic action that always consists of preferring and setting aside; that is, of making unequal valuations, be transformed into equal valuations, and the use of equations? Thus the socialist came up with the absurd recommendation of substituting equations of mathematical catallactics, depicting an image from which human action is eliminated for the monetary calculation in the market economy.2

The deficiency in economic theory that needed correcting, according to Mises, was a fallacy economists held concerning economic calculation. Mises (1998, p. 202) wrote:

The elaboration of economic theory is heuristically dependent on the logical processes of reckoning to such an extent that the economists failed to realize the fundamental problem involved in the methods of economic calculation…. They misconstrued economic calculation. They took it for a category of all human action and ignored the fact that it is only a category inherent in acting under special conditions…. But they did not comprehend that money prices are the only vehicle of economic calculation. Thus most of their studies are of little use. Even the writings of the most eminent economists are vitiated to some extent by the fallacies implied in their ideas about economic calculation.

Contrary to Hayek, who thought that general equilibrium theory could be corrected by grafting subjectivist insights onto it, Mises perceived that the deficiency of the general equilibrium construct stemmed from its fallacious treatment of money. He identified two mistakes. First, the general equilibrium construct conceived of a market economy with only direct exchange and concomitantly asserted the neutrality of money. He wrote (Mises, 1998, pp. 203–204):

A serious blunder that owes its origin and its tenacity to a misinterpretation of this imaginary construction [a market with direct exchange] was the assumption that the medium of exchange is a neutral factor only…. This is, of course, what the fable of money’s neutrality implies. The whole theory of catallactics, it was held, can be elaborated under the assumption that there is direct trade only. If this is once achieved, the only thing to be added is the “simple” insertion of money terms into the complex of theorems concerning direct exchange. However, this final completion of the catallactic system was considered of minor importance only. It was not believe that it could alter anything essential in the structure of economic teachings. The main task of economics was the study of indirect exchange.

Only later economists realized that some of the most important and most intricate problems of catallactics are to be found in the field of indirect exchange and that an economic theory which does not pay full regard to them is lamentably defective.

Second, Mises noted a more momentous error drawn from the imaginary construct of a fictitious barter world, namely, that value is objective and can be measured by money.3 He wrote (Mises, 1998, p. 205):

Even Friedrich von Wieser and Irving Fisher took it for granted that there must be something like measurement of value and that economics must be able to indicate and to explain the method by which such measurement is effected. Most of the lesser economists simply maintained that money serves as “a measure of values.”

Mises’s corrective of the deficiencies of general equilibrium theory was based on his integration of money into subjective-value theory. He demonstrated (Mises, 1953) in 1912 how ordinal ranks are transformed into cardinal numbers suitable for economic calculation in a market economy. Buyers and sellers have preferences for a good they intend to exchange relative to money. They exchange to acquire the mutual benefit latent in the reverse ordering of their preferences. Competitive bidding by the buyers and competitive offering by the sellers results in a market-clearing price. As Rothbard (1991, p. 65) recounts it:

In the course of that notable integration of monetary theory and “micro” marginal utility theory, Mises was one of the very first to realize that subjective valuations of the consumer (and of laborers) on the market are purely ordinal, and are in no way measurable. But market prices are cardinal and measurable in terms of money, and market prices bring goods into cardinal comparability and calculation (e.g., a $10 hat is “worth” five times as much as a $2 loaf of bread).

Mises did not fully work out this integration and its implications until the German-language predecessor of his magnum opus, Human Action.4 In that work, he demonstrated that the market economy is the only solution to transforming rank orders of value into cardinal numbers suitable for making economizing decisions in a division of labor. Only three alternatives to the market solution of monetary prices exist, according to Mises.

One is inter-personal value comparisons among the participants in the division of labor. Yet, modern economists all agree that inter-personal comparisons of value are impossible and therefore, this alternative is not entertained by modern economists as a solution to the economizing problem. A second alternative is imputation of value across the division of labor by a single person. Valuation, Mises argued, can be applied only to a self-sufficient economy, i.e., an economy in which a person is the producer of everything he consumes.5 In this case, a single mind can integrate the use of its resources across the entire array of producer goods with which it acts. It does this by imputing the value of lower-order goods to those of higher order. According to Mises, however, a single mind cannot decompose the value of the end achieved into the value of each factor’s contribution. He wrote (Mises, 1998, p. 332):

Valuation as it can be practiced by an isolated actor (Robinson Crusoe or a socialist board of production management) can never result in a determination of such a thing as quotas of value…. It is permissible to declare that, due allowance being made for time preference, the value attached to a product is equal to the value of the total complex of complementary factors of production. But it would be nonsensical to assert that the value attached to a product is equal to the “sum” of the values attached to the various complementary factors of production. One cannot add up values or valuations. One can add up prices expressed in terms of money, but not scales of preference…. The process of value imputation does not result in derivation of the value of the single productive agents from the value of their joint product. It does not bring about results which could serve as elements of economic calculation.

Mises insisted that in making economizing decisions about the use of resources in an extended division of labor, it is necessary to disentangle the contribution of each complementary factor of production used in producing each good. The necessity arises because factors of production are neither perfectly specific to each good nor perfectly non-specific among all goods. Absent either of those extreme conditions, economic calculation cannot be done by knowing only the value of goods of first order and the technical conditions of production of these goods. Which raises the third alternative: using the cardinal numbers of production possibilities as the basis for economic calculation. Although technical consideration allow the decomposition of the physical contribution to output made by each factor, these numbers have no connection to value of the ends attained. Mises wrote (1998, p. 208):

[The fact that] the various means allow for various uses, set man the tasks of allocating them to those employments in which they can render the best service. Here the computation in kind as applied by technology is of no avail. Technology operates with countable and measurable quantities of external things and effects; it knows causal relations between them, but it is foreign to their relevance for human wants and desires…. [Technology] ignores the economic problem: to employ the available means in such a way that no want more urgently felt should remain unsatisfied because the means suitable for its attainment were employed—wasted—for the attainment of a want less urgently felt.

In an extended division of labor, individual factors of production can be shifted from one line of production to another and configured in various combinations with other complementary factors of production in each production process. Therefore, to know whether or not a particular configuration of complementary factors of production will be more economizing for society than another configuration, prices of individual factors of production must exist. Mises (1998, pp. 209–210) wrote:

[The practical man] must know whether what he wants to achieve will be an improvement when compared with the present state of affairs and with the realizable projects which cannot be put into execution if the project he has in mind absorbs the available means. Such comparisons can only be made by the use of money prices…. Where there are no money prices, there are no such things as economic quantities. There are only various quantitative relations between various causes and effects in the external world. There is no means for man to find out what kind of action would best serve his endeavors to remove uneasiness as far as possible.

Mises concluded this line of inquiry by returning to the starting point in Robinson Crusoe, i.e., production in self-sufficiency instead of a division of labor. Crusoe could compare the value of output with the value of the complementary factors used because the possible combinations he can exploit are simple enough for him to impute value adequately for economizing.6 He wrote (Mises, 1998, p. 210):

There is no need to dwell upon the primitive conditions of the household economy of self-sufficient farmers. These people performed only very simple processes of production. For them no calculation was needed, as they could directly compare input and output. If they wanted shirts, they grew hemp, they spun, wove, and sewed. They could, without any calculation, easily make up their minds whether or not the toil and trouble expended were compensated by the product. But for civilized mankind a return to such a life is out of the question.


With his theory of economic calculation in hand, Mises critiqued the schemes of socialists to rationally allocate resources in chapter 26 in Human Action. Both the title of the chapter, “The Impossibility of Economics Calculation under Socialism,” and the summary list of schemes indicate Mises’s emphasis on economic calculation. He wrote (Mises, 1998, pp. 699–700):

The various schemes proposed can be classified in the following way:

1. Calculation in kind is to be substituted for calculation in terms of money….

2. Starting from the ideas of the labor theory of value the labor-hour is recommended as the unit of calculation….

3. The unit is to be a “quantity” of utility….

4. Calculation is to be made possible by the establishment of an artificial quasi-market….

5. Calculation is to be made with the aid of the differential equations of mathematical catallactics….

6. Calculation is to be made superfluous by resorting to the method of trial and error….

All of these socialist schemes, except number 6, are attempts to have economic calculation under socialism. And Mises’s critique of the socialist director using the method of trial and error to make economizing production and investment decisions relies on his views of economic calculation. He argued (Mises, 1998, p. 700) that economizing decisions fall into a category of trial and error in which “the only mark of the correct solution is that it has been reached by the application of a method considered appropriate for the solution of the problem.” His example is solving a multiplication problem. He wrote (Mises, 1998, p. 700):

One may try to guess the correct result by trial and error. But here the method of trial and error is no substitute for the arithmetical process. It would be quite futile if the arithmetical process did not provide a yardstick for discriminating what is incorrect from what is correct.

In the case of economizing decisions, the only way to discover if trial and error has succeeded is by a computation of profit and loss. Mises wrote (1998, p. 701):

The problem of socialist economic calculation is precisely this: that in the absence of market prices for the factors of production, a computation of profit and loss is not feasible.

We may assume that in the socialist commonwealth there is a market for consumers’ goods and that money prices for consumers’ goods are determined on this market…. But the characteristic mark of the socialist system is that the producers’ goods are controlled by one agency only in whose name the director acts, that they are neither bought nor sold, and that there are no prices for them. Thus there cannot be any question of comparing input and output by the methods of arithmetic.

Concerning the socialist scheme for a quasi-market, Mises noted that it represents the triumph of his approach to economics. He wrote (Mises, 1998, p. 702):

It is therefore nothing short of a full acknowledgement of the correctness and irrefutability of the economists’ analysis and devastating critique of the socialists’ plans that the intellectual leaders of socialism are now busy designing schemes for a socialist system in which the market, market prices for the factors of production, and catallactic competition are to be preserved. The overwhelmingly rapid triumph of the demonstration that no economic calculation is possible under a socialist system is without precedent in the history of human thought. The socialist cannot help but admitting their crushing final defeat.

Finally, Mises made it perfectly clear that the defeat of socialism owed nothing to the mathematical economics of general equilibrium. The problem of directing the use of resources in an economizing manner must start with existing conditions, which are not those of equilibrium but have been brought about by both successes and failures of the past. Even if the final equilibrium configuration of resource allocation is known, the economizing problem remains: how to move step-by-step from existing conditions to those of final equilibrium. For the solution to this problem, the mathematical expression of the state of final equilibrium is of no use. Mises wrote (1998, p. 709):

Even if, for the sake of argument, we assume that a miraculous inspiration has enabled the director without economic calculation to solve all problems concerning the most advantageous arrangement of all production activities and that the precise image of the final goal he must aim at is present to his mind, there remain essential problems which cannot be dealt with without economic calculation. For the director’s task is not to begin from the very bottom of civilization and to start economic history from scratch. The elements with the aid of which he must operate are not only natural resources untouched by previous utilization. There are also the capital goods produced in the past and not convertible or not perfectly convertible for new projects. It is precisely in these artifacts… that our wealth is embodied. Their structure, quality, quantity, and location is of primary importance in the choice of all further economic operations…. [The director] must try to take advantage of every piece of the already available capital goods in the best possible way.


Mises’s integration of money into the subjective theory of value did more than put monetary theory on solid ground. It set the entire body of economic theory on the causal-realist foundation laid by Carl Menger. Doing so required a reconstruction of price and production theory. Not merely grafting subjectivist elements onto general equilibrium theory, but rebuilding this theory from the bottom up. No better evidence of the soundness of this approach exists than Mises’s demonstration that central planners cannot allocate resources in an economizing manner in socialism for lack of economic calculation.

Since the second calculation debate made apparent Mises’s achievement in providing a truly general theory of economics, the causal-realist approach has been advancing on several fronts. To mention just a few: business cycle theory has been refined (Salerno, 2012); the theory of entrepreneurship and organizational theory has been developed (Klein, 2010); the theory of cost has been reconsidered (McCaffrey, 2018); the theory of interest has been further considered (Herbener, 2011); and Mises’s concept of entrepreneurial appraisement has been extended (Herbener and Rapp, 2016).

  • 1. On Wieser’s approach, see Bostaph (2003).
  • 2. Quoted in Salerno (1999, p. 58).
  • 3. Mises (1998, pp. 697–699) repeats his indictment of the general-equilibrium framework in chapter 26 in which he criticizes mathematical economists for perpetuating the fallacy that economic calculation was possible in socialism.
  • 4. See Rothbard (1991, p. 65) and Salerno (1999, p. 56).
  • 5. As Mises (1998, p. 210) concedes, valuation is adequate to economizing resources within a family economy or that of a small tribe as well as a single person.
  • 6. All of the combinations of factors of production can be valued by Crusoe through his own experience. Such cannot be done by a single person in a division of labor, especially the extended division of labor in a modern, capitalist economy.
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Mises’s Contribution: International Cantillon Effects

Ludwig von Mises’s contributions stood out against the background we outlined previously in mainstream international economic theory. Mises did not employ an analytical distinction between domestic and international trade, and unlike his contemporary scholars, he did not separate the real and monetary realms of the economy in his analysis. Quite the contrary, his lifelong research program was centered on bridging what he believed to be an artificial theoretical separation. Moreover, Mises also focused on placing entrepreneurship — understood as judgment, or decision-making under uncertainty, a view fully reconcilable with the classical principles of international trade—at the heart of his analysis of international economic phenomena. Albeit scattered throughout his works and weaved into the general economic analysis — thus falling short in terms of systematic and orderly presentation — Mises’s contributions to international economics are nevertheless original, wide-ranging, and eloquent.

Mises began his analysis of the particular aspects of international economics from the fundamental and overarching economic phenomenon of the division of labor. Throughout his works, numerous references were made to the merits of the principle of comparative advantage and the economic benefits of international trade, first explained by Adam Smith and David Ricardo. However, Mises stressed the fact that the adherents of the classical school were mistaken in their belief that the law of comparative costs represented the starting point for a separate theory of value in international trade. In accord with 19th century French liberals, Mises argued that

with regard to the determination of value and of prices there is no difference between domestic and foreign trade. What makes people distinguish between the home market and markets abroad is only a difference in the data, i.e. varying institutional conditions restricting the mobility of factors of production and of products (Mises 1998 [1949], 163).

Consequently, in Human Action, Mises revised the principle of comparative advantage into the law of association, a broader concept that incorporated the more particular law presented by Ricardo. The Misesian law of association indicated that unrestricted production and market exchange take advantage of the more propitious conditions, leading to the specialization of individuals and geographical areas according to their comparatively more suitable characteristics for one branch of production or another. If capital and labor are bound to the national soil, it is goods that move across borders; when capital and labor are free to move between countries,

the tendency inheres to draw labor forces and capital to the locations of the most favorable natural conditions of production without regard to political and national boundaries. [Therefore], unrestricted free trade must lead to a change in the conditions of settlement on the entire surface of the earth: from the countries with less favorable conditions of production capital and labor flow to the countries with more favorable conditions of production” (Mises 1983 [1919], 92).

The analytical coup of Mises’s revised version of the principle of comparative advantage lay primarily in the incorporation of money prices into the analysis of comparative costs, and thus in placing monetary calculation at the heart of understanding cost differences and trade pattern tendencies in international trade. Mises argued that

Monetary calculation… affords us a guide through the oppressive plenitude of economic potentialities. It enables us to extend to all goods of a higher order the judgment of value, which is bound up with and clearly evident in, the case of goods ready for consumption, or at best of production goods of the lowest order. It renders their value capable of computation and thereby gives us the primary basis for all economic operations with goods of a higher order. Without it, all production involving processes stretching well back in time and all the longer roundabout processes of capitalistic production would be groping in the dark” ( Mises 1990 [1920], 14).

This set the foundation for Mises’s overall approach to economic phenomena, both in their domestic and international aspects, which put the concept of money at the heart of the matter. As a result, Mises also explained in detail the causes and consequences of a change in the supply of or the demand for money, and thus gave a complex but operational definition of Cantillon effects, with its manifold aspects concerning prices, production, wealth, and business cycles. Mises wrote:

The essence of monetary theory is the cognition that cash-induced changes in the money relation affect the various prices, wage rates, and interest rates neither at the same time nor to the same extent. If this unevenness were absent, money would be neutral; changes in the money relation would not affect the structure of business, the size and direction of production in the various branches of industry, consumption, and the wealth and income of the various strata of the population. Then the gross market rate of interest too would not be affected either temporarily or lastingly by changes in the sphere of money and circulation credit. The fact that such changes can modify the rate of originary interest is caused by the changes which this unevenness brings about in the wealth and income of various individuals. The fact that, apart from these changes in the rate of originary interest, the gross market rate is temporarily affected is in itself a manifestation of this unevenness (Mises 1998 [1949], 552-3).

As a result of their gradual progress through the economy, from one individual cash balance to another, changes in the money relation thus affect the structure of prices, the structure of production (size and direction of production, and by extension, the size, direction, and composition of trade), the pattern of consumption, and the distribution of income and wealth in an economy. One particularly important instance of these effects is thus the case of the business cycle, when the change in the money relation first takes place on loan markets. In this case, the initial decrease in the gross market interest rates leads primarily to the unsustainable lengthening of the structure of production, which reallocates labor and resources toward the higher order stages of production, but which also revolutionizes prices and redistributes wealth among different groups of the population.

Money occupies in international transactions the same position as all other commodities being exchanged: once a general medium of exchange is selected on the market, barter exchange ratios between the goods imported and exported disappear in a monetary economy, superseded by money prices.

Internationally, therefore, Mises pointed out that “if no other relations than those of barter exist between the inhabitants of two areas, then balances in favor of one party or the other cannot arise” (Mises 1953, 182). Consequently, “the volume of foreign trade is completely dependent upon [money] prices; neither exportation nor importation can occur if there are no differences in prices to make trade profitable” (Mises 1953, 250). By extension, Mises also reached the conclusion that the balance of payments is consequently determined “by the price level and the purchases and sales induced by the price margins” (Mises 1953, 244 ), making money the active element of the balance of payments, and not an accommodating flow of the movement of ‘real’ goods across borders.

By exposing this indelible connection between the demand for money and the demand for goods (sides of the same coin) which drive the equilibration of the international monetary system through changes in individual cash-balances, Mises was able to argue that the separation between the monetary and real economy in the economic analysis was both artificial and pernicious. Throughout the 20th century, Mises remained one of the singular voices to argue that “money without a driving force of its own […] would not be money at all” and that “money is neither neutral nor stable in purchasing power” (Mises 1998 [1949], 415-6).

What happens then with the purchasing power of money, and subsequently with the exchange rate, when there is a change in the demand for or supply of money? Mises based his arguments—and his definition of money non-neutrality, or Cantillon effects—on the insight that any changes in the supply and demand for money cannot run their course through the economy without first and foremost modifying the levels of individual cash-balances. He argued that if individual cash-balances cannot be increased or decreased simultaneously, the purchasing power of money also cannot be altered instantaneously following a change in the money relation. For example, an increase in the supply money is necessarily distributed step-by-step, from one individual money holder to another, spent and re-spent within and across borders “in a sequence of monetary changes” (Salerno 2010, 155) which drive down the purchasing power of the monetary unit. This process goes on until cash balances, the purchasing power array, and the exchange rate between currencies are established, uno acto, at the new levels. Consequently, argued Mises, individual prices never change at the same time and to the same extent following a change in the money supply. The economic and social consequences taking place during this adjustment process represent the Cantillon effects of a monetary expansion.

What are the welfare effects of change in the money supply? According to Mises, such monetary changes will necessarily lead to the redistribution of wealth on a general scale. The reason for these social changes, Mises argued, is twofold: on the one hand, “all economic agents are in a sense dealers” in currency (Mises 1953, 206), such that changes in its value affect the economic position of every individual. On the other hand, he continued,

the economic consequences of variations in the value of money are determined by the nature of their slow progress, from person to person, from class to class, and from country to country. […] The fact that these variations occur one after the other is the sole reason for their remarkable economic effects (Mises 1953, 210; emphasis in the original).

First, only some people will initially have higher cash-balances (the first receivers of the new money); given decreasing marginal utility, they will value each currency unit less, so they will be willing to pay higher prices for the goods they prefer. As “a lower subjective valuation of money [will be] then passed on from person to person” (Mises 1953, 208), individual money prices will rise or fall depending on the path in which the additional money is spent, thus depending on the pattern consumer preferences. This process, which gradually drives the equilibration of the purchasing power array to the new money relation, does not affect commodity prices at the same date and to the same extent, i.e. prices do not change simultaneously or proportionally to the change in the money relation.

As a result, argued Mises, “while the process is under way, some people enjoy the benefit of higher prices for the goods and services they sell, while the prices of the things they buy have not yet risen to the same extent” (Mises 1998 [1949], 409-10). Wealth is thereby necessarily redistributed towards the first receivers of money from those who receive it last, or never, and who have to pay higher prices in the meantime. In other words, Mises defined Cantillon effects as the economic phenomenon in which modifications of the money supply gradually and unevenly percolate through the structure of money prices, and more importantly, modify the distribution of resources and wealth in an economy in the short run and on the long term.

More importantly, this changes are permanent. Each change in the money supply takes a different course through the economy toward establishing the new purchasing power array, such that the process will arbitrarily create winners and losers, i.e. benefitting and affecting different individuals each time, and to different extents. This means that the social changes brought about by monetary changes cannot be undone: the redistribution of wealth caused by an increase in the money supply cannot be offset by a subsequent decrease, or by a concurrent increase in the money demand.

Mises’s contributions represented a serious blow to the theoretical integrity of the classical dichotomy—which he often referred to as the ‘barter fiction’—, and implicitly to that of the money neutrality postulate. First, his analysis showed that once a commodity surfaces as the general medium of exchange in an economy, there no longer exist barter transactions and thus barter prices cannot exist either. All exchange ratios are necessarily money prices. Second, it illuminated the fact that the geographical equalization of the purchasing power of money throughout the world is accomplished as part of the same market process that creates the structure of money prices, and brings about the division of labor, thereby making monetary analysis an integral element of economic analysis. Third, it underscored the insight that money is redistributed among individuals according to their individual preferences for cash holdings in a sequential process of monetary exchanges, dispensing with the classical aggregate approach to monetary matters and proposing a disaggregate, ‘microeconomic’ approach.

For international trade in particular, Mises’s insights showed that money is embedded in the economic phenomenon of cross-border exchange. Money makes economic calculation possible by overcoming the drawbacks of direct and indirect exchange, and allows entrepreneurs to judge and plan transactions and extensive production processes (Mises 1990 [1920]). International movements of goods, services, and factors of production are necessarily guided by monetary calculation, and require above all the use of money and the judgement of the entrepreneurs. As Mises pointed out in Socialism, “in foreign trade, just as in internal trade—there is no difference between them—no rational production could proceed without money reckoning and the formation of prices for the means of production” (Mises 1951, 232). A general medium of exchange begets complex and roundabout division of labor, within and across national borders.

Last but not least, Mises’s contribution showed there is no difference in the effects on the distribution of income and wealth whether the variations in the purchasing power of money occur within a single national economy or within internationally connected market economies, or whether it’s the case of metallic money or fiat money (Mises 1953, 208). Just like in the case of a single national currency, the “interrelated variations in the complex of individual cash balances, incomes and prices” (Salerno 2010, 156 ) drive toward the equilibration of the purchasing power of money internationally as well, in a sequence of monetary changes — and it is these individual, microeconomic changes which constitute the focus point of an analysis of Cantillon effects on a national and global level. In other words, the process which brings the balance of payments to its equilibrium, works in a similar way in the case of a change in the money supply: money will move, internationally, from one money holder to another until the new purchasing power array is established together with the desired level of individual cash-balances. Therefore, the inherent social transformations accompanying all such monetary changes will concurrently take place across borders as well: wealth will be redistributed towards the first receivers of money from the last receivers, as the transfer of wealth is parallel, and of opposite sense, to the inflow of new money in the global economy.

This is Part 2 of a series. See Part 1.

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The Battle of Shiloh, Part 1: I “Would Fight Them If They Were A Million”

Season 3, Episode 49

Following the victories at Forts Henry and Donelson, Grant’s commanding officer still wanted to remove him from command. During this time, he formed a strong friendship with William Tecumseh Sherman. As the Union army was amassing troops at Pittsburg Landing, the Confederate forces in the West were concentrating at Corinth. The Confederates decided that they should take the initiative in the coming battle. 

Chris Calton recounts the controversial history of the Civil War. You may support this podcast financially at Mises.org/SupportHC. Subscribe today at Spotify, Google Play, iTunes, SoundCloud, Stitcher, or via RSS.

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The Lost Fifth Volume of Conceived in Liberty

Murray Rothbard was a genius. One aspect of this was his writing as an American historian. He was every bit as significant a scholar here as he was as an economist and philosopher.

For example, there is his stunning four-volume history of early America from Jamestown to the end of the American Revolutionary War. His brilliance and originality are on display, as he deftly handles a huge amount of research including a vast array of hitherto unknown facts.

Murray is, as always, a power-elite analyst, and looks at family and financial interests of famous men, as well as their motivations and real ideologies. Standard historians shun this as politically incorrect, but in Murray’s hands, it explains so much.

Murray writes, of course, from a libertarian perspective, and also brings to light little-known libertarian writers and activists. History has seldom been this exciting.

But there is one tragic note. Conceived in Liberty was supposed to be a five-volume work, ending with the adoption of the Constitution. And, indeed, Murray wrote the fifth volume, the most revisionist of all. He did it in longhand on legal yellow pads, and used a dictating machine a friend had given him. His wife Joey would use the recording to type the manuscript.

I know that sort of machine, since my father had one. As you spoke into the microphone, it would inscribe clear plastic discs with your recorded words. Murray dictated the entire book, but when he finished it over many days, all the discs were gibberish.

Even experts couldn’t fix the disaster, so Murray — frustrated — put his huge handwritten manuscript aside, to take up other projects. He intended to get back to the fifth volume, but died before he could do so.

Murray left all his papers and books to the Mises Institute, honoring me as his literary executor. But I was never able to decipher his handwriting; not even Joey could do so, nor others I consulted. I hated the situation, but saw no way out of it. Then the young professor and Rothbardian Patrick Newman came upon the manuscript while he was doing other work in the Mises Institute archives, and astoundingly, he was able, with great difficulty, to read Murray’s handwriting.

So you can imagine the celebration that ensued. We were all thrilled with the book. It is compelling, radical, original, brilliant. It revivifies the first four volumes of Conceived in Liberty, and is a delight to read, with a great introduction by Patrick, who also edited Murray’s hitherto unpublished book, The Progressive Era. As you can imagine, we’re very proud of our former student. I can almost hear Murray exclaiming, “Attaboy, Patrick!”

The fifth volume, entitled The New Republic, 1784–1791, charts the course from the freeing of the 13 states from British mercantilism to their shackling with a new American form of it.

For Murray sees the Constitution, not as a document enshrining liberty, but as the charter of a new, powerful, centralized government designed by Madison, Hamilton, and their cohorts in a coup at Philadelphia.

The centralizers convinced the Continental Congress to wage a traditional, centrally planned, hugely expensive war, rather than a volunteer, libertarian guerrilla action. This ensured many evils, from paper money inflation to high taxes, from conscription to price controls and seizure of goods. Ironically, it was the guerrilla leaders who actually won the war, and not General Washington, as Murray demonstrates.

Even the post-war Articles of Confederation mixed centralizing provisions with libertarian ones. The centralizers dishonestly dubbed themselves “Federalists,” and their libertarian opponents “Antifederalists.”

They proved to be effective propagandists in lying to the people of the 13 states, and intimidating their leaders. Eventually the Constitution was ratified by 12 states, with only little Rhode Island refusing. So the central government threatened a trade war, and Rhode Island succumbed.

The Antifederalists, a minority, became strict constructionists to fight for freedom under the Constitution. But virtually all their predictions about future power grabs came true.

To get the Constitution passed, however, the opponents were able to demand a Bill of Rights. But the wily Madison made them as weak as possible, ignoring the stronger protections that the opponents wanted.

The fight for freedom continues to this day, of course, despite our giant warfare, welfare, and police state. As the fifth volume, like the rest of Conceived in Liberty, makes clear, we have an extraordinary American heritage. Heroes, known and unknown, are our inspiration. Villains, too, we must know about.

The fifth volume completes Murray’s great work, lost for decades, yet as relevant as the day he finished it. Regular American historians, ignorant of non-Keynesian economics and biased by statism, are a bane. Won’t you help us publish this corrective? It must be priced for students, sturdily bound, and widely distributed.

Your tax-deductible donation of any amount to the fifth volume will help. Donors of $100 or more will receive a free copy of the book. If you can make a $500 donation, you will be listed in the front of this handsome work as a Donor; $1,000 as a Patron; $5,000 as a Benefactor.  

You’ll love the Foreword by Judge Napolitano and Preface by Tom Woods.

Help us with your generous donation to fill in this gap in American history. Help us honor Murray. Help us teach real history, instead of the usual pap.

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