One of the most important developments in the history of economic thought was the so-called Marginal Revolution of the early 1870s, in which the older cost (and more specifically, labor) theory of value was overturned by subjective value theory. This was an unambiguous advance in the science of economics, analogous to the superiority of
In a previous article I explained some of the major problems with a cost theory of value. In the current essay I will lay out the basics of the modern subjectivist approach to price theory and show how it is a clear improvement over the cost theory. The Austrian Approach Starts with Individual Preferences Although the “marginalist revolution” of
A recent trip to Santa Monica, California, provided me with a clear explanation of why Californians, despite all their wealth, talent, and resourcefulness, have the energy supply system of a Third World country. Like so many tiny Latin American dictatorships, or the outer provinces of India, Californians can no longer rely on a steady supply of
In The Essential Calhoun ( TEC ), editor Clyde Wilson commented that “it is curious how ignorant contemporary advocates of free markets are of tariff struggles in nineteenth-century America.” There is much truth in this statement, since most advocates of free markets seem to be more interested in pure economic theory than in history.
It would indeed be nice if all the people in the world were happy, well fed, secure in their health and work, loved by those they would like to have love them, and lived long lives which end pleasantly. But that just isn’t going to happen, ever. Still, some people never tire of insisting that it will happen and and insist that those with the legal
Suppose someone defined the game of golf in terms of riding in carts, wearing funny pants and large shirts, and occasionally using the various clubs to beat one’s dog. Would this be fair? Chances are, someone who gave such a definition of the game would probably be on a warpath to disparage it, encourage attacks on it, not to explain its true
Investors Business Daily April 1, 1999 Is This How Tariffs Should Work? Protectionists share a faith that says tariffs protect American workers. If they would only look at the U.S. suit-making business, they could see the ruinous effects of this line of thinking. In the last decade, the domestic tailored- clothing industry lost nearly half its
“The masses are misled by the assertions of the pseudo-experts,” wrote Mises, “that cheap money can make them prosperous at no expense whatever.” The damage that this inflationary fallacy has done to our monetary institutions cannot be over-estimated. In spite of efforts by classical and Austrian economists to refute it, it refuses to die. It has
Hardly a day goes by when I don’t read something crazy on the subject of international trade, from pundits who blame it for America’s economic and social woes, to those who think trade can only thrive in the context of treaties and war. In truth, international trade is nothing more than an extension of the idea of exchange itself: that all people
With gas prices exceeding $2 per gallon, an alarmed American public is prone to believe scary predictions about a future without gas. And so into this hyper-charge environment will step a number of commentators who claim to marshall all the data to show that we must dramatically change our lives. For example: “Civilization as we know it will come
What is the Mises Institute?
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.