[From Chapter 6, “The Realm of Entrepreneurship in the Market: Capital Theory, Production, and Change” in The Next Generation of Austrian Economics: Essays in Honor of Joseph T. Salerno . ] Modern economic theory tends to treat production, the process of generating valued consumption in a market, as a function carried out within firms and so out
We all know that Alexandria Ocasio-Cortez is dominating the political news with her demands for socializing the economy. Bob Murphy has explained that her Green New Deal “makes no sense on economic grounds” and even for Keynesians it “ would be nonsensical to implement such a program today.” Given the inanity of the Green New Deal, I would like to
There is a widespread assumption that interest rates represent the cost of borrowing money. In the narrow sense that it is a rate paid by a borrower, this is true. Monetary policy planners enquire no further. Central bankers then posit that if you reduce the cost of borrowing, that is to say the interest rate, demand for credit increases, and the
Institutionalism is used to ridicule the classical economists because they started with “Crusoe economics.” In the beginning a fisherman got the idea that he could catch more fish one day than he needed and then he could have some leisure time to manufacture fishing nets. These nets and saved fish are “capital goods”; I don’t call them “capital.”
If one reads the headlines you might think that since the yield curve has inverted, the economy is in a recession, Trump will be swept from office and then the Progressives’ goals are right around the corner. Not so fast! While much of that may still happen, we are not there yet. While some on the Left (see Bill Maher ) may be openly hoping for
One’s own bookcase provides the perfect illustration of time preference, which is the greater value of possession over non possession. There will be books bought on a whim which just clutter a bookshelf and have no value. Next time there’s a clear-out, they are destined for the charity shop: there’s no difference in time value, being worthless to
Mainstream thinking considers the central bank a key factor in the determination of interest rates. By setting short-term interest rates, the central bank, it is argued, can influence the entire interest rate structure by creating expectations about the future course of its interest rate policy . In this way of thinking, the long-term rate is an
[Editor’s note: In this selection, Bastiat explains the role of capital in building wealth, and why it is moral and proper that owners of capital ought to collect interest on the capital they lend out. Excerpt from chapter 5, “Capital and Interest,” in The Bastiat Collection (Auburn, AL: Mises Institute, 2011), pp. 147–58. ] 3. What Is Capital?
[Del Capítulo 6, « The Realm of Entrepreneurship in the Market: Capital Theory, Production, and Change » en The Next Generation of Austrian Economics: Essays in Honor of Joseph T. Salerno .] La teoría económica moderna tiende a tratar la producción, el proceso de generar un consumo valioso en un mercado, como una función que se lleva a cabo dentro
Todos sabemos que Alexandria Ocasio-Cortez está dominando las noticias políticas con sus demandas para socializar la economía. Bob Murphy ha explicado que su New Deal Verde «no tiene sentido por razones económicas» e incluso para los keynesianos « sería absurdo implementar un programa de este tipo hoy en día ». Dada la locura del New Deal Verde,
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The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.