Mises Daily Articles

Home | Mises Library | A Live Blog From Salamanca

A Live Blog From Salamanca

  • 3816.jpg

Tags Free MarketsGlobal EconomyHistory of the Austrian School of Economics

10/30/2009Jeffrey A. Tucker

I'm delighted that the live blog from Salamanca, Spain, has been a popular feature of the Mises blog during the last week. It was my "job" to do this in Salamanca during the Supporter's Summit this year, but it ended up being a joy, and much easier than I expected. I offer links to the full chronicle with some excerpts, going backward in time from the last day to the start.

VI. The Last Evening in Salamanca.

I'm no longer live blogging, judging it tacky to be typing on a laptop in a formal dining room at Archbishop Fonseca College, surrounded by dignitaries from Spain wearing glorious wool capes. So I took notes, and mainly I carry very strong memories of this evening, memories which begin in the courtyard.

It seems like many photographs from Salamanca feature long corridors with vaulted ceilings and intricate carvings, creating fantastic lighting effects and giving the impression that anyone walking here is playing some ominous role in the history of human events. What you can't tell from photos is that such corridors are all over town. It is not just one place. It seems like hundreds of places.

The Fonseca College courtyard is surrounded by two levels of these hallways, with a water well in the middle. I first made my way to the well, where I lifted the heavy cover and looked inside to see that the bottom connects to some kind of water system deep under the city. Then I had a vision of Les Misérables or a 1940s movie classic, and it all became really spooky, so I covered the well up again and continued to observed the idyllic setting.

This was just before the servers brought out a seemingly endless supply of Spanish ham, each piece carefully cut, an earthly delight denied to Americans in the land of the free because our government knows it's not good for us.

We made our way to dinner and entered the magnificent dining hall, a place with paintings everywhere and huge doorways extending to balconies that are still solid after 500+ years. It occurred to me that someone could read aloud the Federal Register in this room and still come across as profound.

Dinner began with a food item that looked like nothing I had ever seen. It turned out to be some pastry-wrapped, cream cheese crab treat laced with beet syrup — a kind of dish no American has ever eaten, which seemed to sum up the overwhelming exotica of the entire experience. All cares are gone. All fear is gone. All worries dissipate. And then you remember the mortality of it all: tomorrow, we leave.

This year's Gary G. Schlarbaum Prize was presented to Jesus Huerta de Soto for his lifetime achievement in the cause of liberty. This award was particularly appropriate for the man who wrote the book that perfectly anticipated the current economic climate, his Money, Bank Credit, and Economic Cycles.

His lecture began with the question, What is Austrian economics? He said that the Austrian School is the economics of the future. It was a surprising way to begin a speech in a venue in which the past seemed so much larger than the present. We needed to be reminded of the Kierkegaardian reality: that the forward march of time is a law of history. [Full entry]

V. The Forbidden Hams of Spain

In the 16th century, if you could transport it out of one country and into another, whatever it was, there was no doubt that it could be consumed. There was free movement of goods and people, and it was the age before planning and passports. Today, we brag about our free trade, our internationalism, and our global outlook, but it is ridiculous. The world is more segmented by national autarkies now than it was 500 years ago.

My particular outrage today concerns the following height of absurdity:

It turns out that Spain has this highly special ham. Actually, there ought to be some other word than "ham," because it is like no ham I've ever had. It is made from something called a black-hoofed pig, which is fed exclusively acorns. The meat is prepared and cured for fully 3 years, and it sells at something like $400 for a leg of the stuff.

In Spain there are special holders for this leg that allow you to cut off super-thin slices as you need them. The flavor and texture is indescribable. It is sweet and succulent and there aren't enough adjectives in the language to explain it.

Of course, I was ready to sell my cow-hide shoes to raise the money to buy one of these hams. But then I had some vague memory that customs has a problem with bringing food in. Well, that's unfortunate of course, but I figured that at least I won't have to throw out my clothes and stick a ham in my bag. I'll just order one when I get back to the land of the free and the home of the brave.

So I thought first I would Google around for a good Spanish ham company. Oh, there's one. But wait! There is no option for shipping to the United States. I went to another company. Same problem. Again and again. What the heck is going on here? [Full Entry]

IV. The Third Morning in Salamanca

The third day of the Salamanca conference gave a fresh start, but I sure had the sense when we gathered for coffee that some folks had been out rather late the night before. In Salamanca, there seems to be a funny habit at work.

You go to dinner between 8 and 9 PM, but you don't eat and run. You stay and stay, and the service reflects that expectation. You stay for dessert. Then you stay for coffee, by which time it is already midnight or later. Then you listen to the cool-jazz group until 2 or later. Finally, you crash and wake at 10 AM. That's my general impression.

Well, I spoke at 9:45 AM, so there were some people arriving just a bit late. It is a decent tradeoff: staying out late in restaurants in Salamanca and then reading the text of the morning's speech later or listening to it on YouTube at some point in the future.

My topic concerned the history of publishing technology: the transition from scribes to movable type as an analogy for the change from physical to digital publishing; and the role of mercantilism in attempting to halt change as the old technology fights to hang on against the inexorable trend.

I loved doing the research on this, reading the works of amazing specialists in publishing history. What I did not expect was that the place where our conference would be held would have huge and glorious examples of scribes' work everywhere, right there for everyone to see. So this ended up being a more poignant topic than I expected.

Since I gave the talk I can hardly live blog it, so let us move on to Francisco Capella, who works at the Juan de Mariana Institute. [Full Entry]

III. The Second Full Day in Salamanca

The schedule of this conference is precisely what one might want in an exotic and historic place such as this: the lectures run until just after noon and then the rest of each day is open for touring and museums and the like. There is so much to see, and wherever you are, you are struck by a sense of awe of the deep roots of the liberal tradition.

The sessions opened today with a lecture by Toby Baxendale, a businessman in London who is very active in the city's academic circles. He began with his own education in economics in a highly mainstream environment, complete with the claim that all the world's problems can be solved by printing more money. He eventually left economics to study law and then went into business.

His topic addressed the thing that is on everyone's mind: the economic crisis. This is applied Austrian economics. He began with a tour of money supply over the last 10 years, with a comparison of what happens graphically when you aggregate all forms of money versus what happens when you distinguish between credit transactions and real money claims. Using the latter measure, one can trace bubbles and crashes based on money creation. The correlations are very tight whether one looks at GDP or retail sales.

Looking backward, we can see that the current crisis is nothing but an extension and exaggeration of the dot-com bubble and bust. While Baxendale anticipated a bust, he in no way expected its severity and extent.

The money pumping gave rise to a new class of entrepreneurs, a class he called pseudoentrepreneurs. These are people whose investments were based entirely on newly created money poured into marginal projects that otherwise wouldn't be pursued. We can see this by introducing the notion of heterogeneity to entrepreneurship as well as capital itself. There are real and imagined entrepreneurs.

Baxendale then turned to the crisis itself, which began in August 2008 with the collapse of Lehman. The whole class of businesspeople in the UK had the sensation of falling off a cliff, and this continued through November of that year.

He spent some time discussing the Iceland meltdown, which hasn't been commented on that much (Mises.org has a great article on this topic). As he was attempting to transact business in Iceland at the time, Baxendale recalled very well his correspondence with the Iceland central bank. He asked whether he could send Euros in a business deal. They wrote back, "No, we are in danger of going bust." He praised the bank for being honest, and keeps the email as a historic memento. [Full Entry]

II. The First Full Day in Salamanca

Doug French introduced the conference, in a room in the St. Esteban Convent in Salamanca, Spain, which just overwhelms you with its history and meaning. Our coffee was served in a hall said to be the place where Columbus actually waited to meet with Queen Isabella to find out the fate of his proposed exploration of the New World.

Our talks today were in the Chapter room where Francisco Vitoria taught and the professors of the 15th and 16th centuries gave papers for each other before their public presentations at the university. One might say that this was the room for the "Mises Circle" of the late Middle Ages. It is filled with paintings and insignias of Spanish scholarly history. Buildings like this immortalize these scholars.

People are here from 21 countries, among which are Romania, the Czech Republic, Brazil, England, Guatemala, France, the Dominican Republic, and Switzerland, and those are just the people I have met. It is a true united nations, but of course we are here to celebrate a time before the nation-state, before passports and nationalism, and before planning and world wars.

There was free movement of goods and people, something we almost can't imagine today, given the current police-state tracking of everyone and everything moving from state to state. It was a time of rising prosperity, and this reality posed many social puzzles that the theologians of the time sought to solve.

The first talk was by Fr. Angel Roncero, who has taught in Spain and Latin America. He spoke directly to the burning issue on many peoples' minds: what does this old history of Christianity have to do with the advocacy of free markets? We tend to ignore this question today because it deals with religion and politics, a potent mix. But it is a fact that economic science began within the milieu of Catholicism in the 15th and 16th centuries.

Fr. Roncero described the Gospels as a book of liberation, one in favor of freedom of the individual and completely at odds with the modern planning project. He established the setting by discussing the world of the late Scholastics, and the pressing issues that the explosion of technology in the 15th century created.

The advance of monetary exchange, the discovery of the New World, the accumulation of capital, and the rise of a new merchant and middle class all combined to create an atmosphere of discovery. What they discovered was the science of economics: supply and demand, the source of economic value, and the practical and moral urgency of freedom. Liberalism in economics followed from the rise of liberalism generally in art and science. [Full Entry]

I. Rothbard's Dream in Salamanca

It's 2009, 14 years after Murray N. Rothbard died. One of the last plans that he had talked about with Jesus Huerta de Soto was an international conference in Salamanca, Spain, the birthplace of economics.

Gabriel Calzada, head of the Juan de Mariana Institute in Spain, pushed for this conference to happen this year, the 400th anniversary of Mariana's treatise on money. And here we are today, preparing for a slew of papers on the topic of the School of Salamanca as the originator of economic theory and the precursor to the Austrian tradition.

The setup so far has been marvelous. One almost can't take it all in. Too much history. Too much tradition. I come from a country where the Alamo is considered old. This place, in contrast, is where one discovers the very roots of modernity.

Gabriel gave a short talk about the origin of this conference, what it means, and how Rothbard's dream is being carried out here. Recall that the most extensive treatment of the Salamanca School appeared in his last book, the History of Economic Thought (2 volumes that were unaffordable when published but are now absurdly affordable).

Somehow I sense Rothbard's presence everywhere, and also Mariana, Vitoria, Medina, and legions of other amazing thinkers who studied and theorized and cobbled together the very discipline of economics as a science. I stood in the plaza where they walked and talked.

In terms of the long line of history, economics is a new science, as Mises said. But being here, you realize that the battle for freedom is steeped in history, and it is exactly as Rothbard said: the state versus the market, in every generation and in every place. In the end, nothing has changed.

But thank goodness for them. Without the liberals, the state might have strangled it all long ago. We stand in a long line. [Full Entry]

Footnote: The Cape in Spain

There is a scene in Lawrence of Arabia in which Lawrence is presented with the white garb of an Arab sheik, following his amazing rescue of a man during a long trek through the desert. He puts it on, finds a private spot, and practices walking, running, bowing, and playing the part. It is the viewer's first signal of consummated love between this Englishman and his new, adopted culture.

So it was for me, the last night in Spain. A gentleman attending the final event, Carlos Siemens, wore his formal Spanish cape for the evening. Striking doesn't quite describe it. It was beautiful without being pretentious, elegant to the point of making one gasp, but not put-on in the slightest. It was even inevitable, as much a part of the living landscape in this country as ham and maracas.

Carlos explained its history deep in Spanish roots: how it used to have a hood until the king wore one without, how the navy wool of the one Carlos wore is a bit less formal than the traditional black, but is still worn only for gala occasions.

The red, cotton-velvet inner lining shows when worn open, because there are no buttons to keep it closed. Even the top collar, which is sized by neck, is never fastened but retains buttons that reflect the local tradition, usually in silver.

There are special ways of handling the cape. When you throw it over your shoulder, you grab it from the inside and turn it just a bit so that when it rests on the other shoulder, a flash of red can be seen. When you escort someone, you throw the whole of one side into the bend of your arm, so that your arm can be taken. When you sit, you gather up the entire cloth to the lower back and drop it again once you are seated.

"And yes, they are available for women too."

The garb is not only beautiful; it is also functional, because it is light enough to be worn on a gently cool evening, but when one throws a side over the shoulder it completely blocks the wind so that it protects against the most bitter cold. Carlos taught me all these things.

The site of the world's most famous maker of Spanish capes offers a list of famous personalities who have worn them, including Picasso, Buñuel, Rudolph Valentino, Plácido Domingo, Alfred Kraus, Andrés Segovia, Ernest Hemingway, Gary Cooper, Marcelo Mastronianni, Catherine Deneuve, and Federico Fellini.

I stood and marveled that I was seeing one in real life. And then Carlos very generously took off his cape and put it around me, and with it the long history and deep culture of Spain. I imagined that it all fit perfectly, garb not only to be worn on the outside but one that penetrates to the heart and soul. And then that feeling that Lawrence had overcame me, and I momentarily imagined that I had been adopted as a son by Spain herself.

The question remains for Americans, just how viable is this within our borders? As with most men's clothing, the key is casual confidence — not feeling as if "I'm wearing a crazy cape!" but rather "this is what I wear to stay warm." It strikes me that it can be done, without much trouble at all, especially in black tie and dinner wear.

From what I can tell from the Sensena site, a cape runs a bit more than $1,000, which strikes me as low given the quality of wool and the exotic beauty of this item. This is what you pay for a suit at Brooks Brothers to make yourself look like a politician. At least when you wear this cape, no one will suspect that you are that!

And yes, they are available for women too.

I asked Hans Hoppe what he thought. He laughed and held tightly to his Loden coat. And yet the Austrian School is a large one, an international one, a way of thinking that stretches far back into the past and far into the future. There is surely room for diversity here.

Perhaps the seasoned antistatist can wear this cape as a symbol, and not only of the roots of the Austrian School. Think of the state as the bull, and the cape wearer as the matador.

Shield icon interview