In the foreground is the Keynesian fiction, in which consumption plus investment (plus government spending) equals output. In the background is the Austrian reality, in which a heterogeneous capital stock responds to changes in the interest rate by shifts in the time structure of production. Intervention in credit markets thus creates distortions that generate the business cycle. See Roger Garrison, Austrian Macroeconomics: A Diagrammatical Exposition (Mises Institute, 2010 forthcoming)

Rasmussen reports that 75% of people polled say that the free market is better than government management.

Microsoft is slowly dying as a consumer brand. As recently as five or six years ago, though, left liberals and other anti-business ideologues were still making comments about how Microsoft was a monopoly that was crushing competition in the market place.

[Excerpted from An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith (1995). An MP3 audio file of this article, read by Jeff Riggenbach, is available for download.]

In 1824, the Spitalfields Act of wage control for silk weavers was repealed after being in force for 50 years. The act was essentially a disaster that devastated the industry and the workers.

The governor of the Bank of England actually mentioned the possibility of a Misesian-style reform toward 100% reserve banking, according to the Financial Times. “Or, in an idea that would mean the radical reshaping of the banking system, banks could be forced to match each investment made with funding over an equivalent time period, Mr King said.” Credit to the Cobden Centre for changing the terms of debate here.

The economic and business community constantly attempts to forecast the effects of various economic changes and government policies on corporate profits. But both the cause and effect of increasing profits are other than what most people imagine. It will therefore be helpful to gain a concrete understanding of what profits do and do not represent.1

As many readers already know, last week I launched a campaign to pressure Paul Krugman into debating me. In just the first week, this sophomoric 7-minute YouTube video has generated $35,000 in pledges. At this point, I don’t see how Krugman will ever live this down until he debates me on Austrian versus Keynesian business-cycle theory.