The Enron story provides what academics call "teaching moments," that is, opportunities to explain how economic theory can explain the outcome of state involvement in market processes. Interventionism often results in failures such as Enron's, and lessons learned by studying it may help avoid similar problems in the future.
"The myth of Lincoln cannot stand up under scrutiny," says Thomas DiLorenzo, "and after all these years, the word is finally getting out." Mises.org interviews DiLorenzo on his new book and its thesis that Lincoln's legacy was not freedom but the consolidated state. The book's high sales are as notable as the explosive controversy that has erupted about his thesis.
According to the Keynesian magic formula, writes Frank Shostak, government spending is all that is needed to make a society prosperous. Even today this position has prominent defenders, such as Joseph Stiglitz. If this view were correct, however, poverty in the world would have been eliminated a long time ago.
In a recent article, New York Times writer Paul Krugman puts out a clever analysis of state demographics. He alleges that the pro-Bush states have more crime, divorce, single moms and net-tax eaters than the pro-Gore states. Krugman's analytic knife, however, doesn’t cut deeply enough to get to the truth of the matter.
In this previously unpublished piece, Murray Rothbard argues that the the silliest of demagogues are a great servant of reason, even when mostly in the wrong.
In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of econometrics and econometric model-building, therefore, is an attempt to fabricate a laboratory where controlled experiments can be conducted.
The free market is not a panacea. It does not eliminate old age, and it won't guarantee you a date for Saturday night. Private enterprise is fully capable of awful screw-ups. But both theory and practice indicate that its screw-ups are less pervasive and more easily corrected than those of government enterprises, including regulatory ones.
Mainstream economists are especially critical of Austrians for their lack of desire to incorporate mathematics in general, and multivariable calculus in particular, into their economic analysis. The criticism goes something like this: It does not matter whether or not mathematics is the most appropriate tool to describe economic human action. What matters is that most economists do use math, it has passed the "market test," and, therefore, it is the correct tool to use.
While it is morally reprehensible to hate, in a true free market the freedom of citizens to associate with whom they wish must be upheld and private property rights must be enforced. There should be neither forced association nor forced disassociation. This is the social foundation of the free-market economy.
Typical Ph.D. economics student may be able to tell you lots about Kuhn-Tucker conditions, Hamiltonians, optimal control theory, undetermined coefficients, differential equations, and the like. They may speak fluently the language of mathematics and speak of sophisticated programs in GAUSS, SAS, and STATA. They may look at you with a curious bewilderment, however, upon the mention of Adam Smith. Perhaps you know of him.
