Prices

Recorded at Mises University 2003.

Recorded at Mises University 2001.

Many believe that if governments would just issue greater quantities of money then all problems would be solved. In truth that would create unsurmountable problems by lowering the purchasing power of each money unit. Money is the one good that is not made better by increasing its supply.

Microeconomics starts with the basic fact that each person has short term and long term goals, like buying a ham sandwich and graduating from college. People act in the world to accomplish something. Human action is purposive. You employ different means to achieve certain goals.

It is sometimes said that long lines at theaters, sports events, and amusement parks are signs of a market that is not clearing and that prices sho

New Jersey has the dubious distinction of having the worst automobile insurance system in America. It is literally the most expensive, and provides poor service to its customers. Despite these high premiums, many automobile insurance companies have exited this market. In the past ten years, twenty insurers have left New Jersey. D.W. MacKenzie predicts reform won't help either. 

Economists talked blithely of privatizing Iraqi assets, writes Joseph Stromberg, without considering the bureaucratic implications of the method, the motivations of the public authorities, the long and disgraceful history of imposing a pre-set view of what constitutes a free market, and the reality that dividing up assets in a conquered country is probably contrary to international law. There are better ways to bring freedom to the world.

Back when the pegged currency was deemed to provide the only bastion of stability during the Asian crisis, and hence, a stable economy for which to sell American goods, no one cared a whit about establishing a "free market" for the Chinese yuan. While no one is ever safe so long as Congress is in session and 1600 Pennsylvania Avenue is occupied, this administration's policy, more so than any other in recent history, has been "buy here, sell elsewhere."

With gasoline prices rising to their highest levels in years, and then dipping again after Labor Day, it was inevitable that the politicians would come out of the woodwork and demand yet another costly investigation of the U.S. oil industry. The reason is not scheming industry executives or incompetent managers. Politicians and the bureaucrats they empower, on the other hand, have caused major disruptions to oil supplies. Let us count the ways.

There is almost complete unanimity among economists that the most important role of the central bank is to attain price level stability. It is held that price stability promotes economic growth and people's well being by increasing the efficiency of the market mechanism. In fact, Austrians are correct to see that such a policy redistributes resources and generates instability.