Many economists have suggested that the weakening in the US dollar could actually be good for the economy—since a weaker dollar will boost manufacturing production, which in turn will lift employment and all this will set in motion economic growth. Nonsense, says Frank Shostak: the emergence of competitive devaluations is the surest way of destroying the market economy and plunging the world into a period of crisis.
Economic libertarians focus on the fallacy of minimum-wage legislation because the issue serves as a window through which to observe the very soul of a policy world view. It is the pons asinorum of the relationship between economics and politics. If the free market works—meaning the existence of exchange under private property and contract enforcement—then there is no need for such laws.
Remedies for government failure must be radical in nature. Wishing and waiting for an "army" of Mr. Smiths or pre-Beltway Phil Gramm thinkalikes to arrive in Washington D.C. is naïve. Better public-sector outcomes must wait not upon better people but upon a better system that does not permit some to live at others' expense.
In a lumber market where shortages were already appearing, writes Timothy Terrell, the Defense Logistics Agency suddenly ordered more than 20 million square-feet of plywood sheeting for construction in Iraq. Markets for plywood and its substitutes reacted strongly. Prices of oriented strand board (OSB), commonly used in new homes, apartment buildings, and commercial structures, jumped to record highs.
The importance of the Austrian school of economics is nowhere better demonstrated than in the area of monetary theory. It is in this realm that the simplifying assumptions of mainstream economic theory wreak the most havoc. In contrast, the commonsensical, "verbal logic" of the Austrians is entirely adequate to understand the nature of money and its valuation by human actors.
Ludwig von Mises devoted much attention to methodology. Many people interested in Austrian economics turn from his discussions of the a priori and verstehen in bafflement and boredom. "Enough of these philosophical abstractions," they say; "what we want is economics". No greater mistake can be imagined if one wishes to understand Mises's work.
To help explain the complex analytics behind the Austrian Theory of the Business Cycle, an analogy seems to help. Suppose that, in his 8:00 a.m. class, a student was assigned a paper which is due tomorrow. Of course, he has not yet started working on it. In order to finish the paper on time, he decides to pull an "all-nighter."
The attack on a private contract was among the most unsettling aspects of the Grasso affair. He broke no law and only requested that the NYSE Board abide by the terms to which it agreed. His deferred payments over the years amounted to loans to the New York Stock Exchange for which he could reasonably assume to be compensated. Instead, he was demonized by the press, the topic of possible congressional hearings, and forced out of a position he had intended on maintaining for another three years.
In order to publish in mainstream academic journals, must Austrians "water down" or soft pedal our ideas so that they will not seem "too radical"? Murray Rothbard, thankfully, never followed that strategy, but it still did not preclude him from publishing in a number of highly ranked journals. In Rothbard's early years as an economist, his writings for professional journals in the 1950s are some of the most radically and explicitly Austrian that those journals probably ever published.
The consultation of oracles, a practice long thought dead, continues on today in many forms, perhaps in a more subtle and less institutionalized than during antiquity, but powerfully nonetheless. The head of the Fed, writes Christopher Mayer, is a good example.
