“Last Knight” Live Blog 10 -- Ransom

I’ve always viewed Schumpeter as the bogeyman of economics. Not Keynes. Not Samuelson. Not Frank Knight. More than anyone I’ve blamed Schumpeter for making a positivist approach to economics the de facto “scientific” conception of the discipline and for making Walrasian economics the paradigm for how to model economic phenomena “scientifically”. Schumpeter is the Austrian who rejected Menger’s explanatory strategy and embraced Mach’s vision of science. Schumpeter is the Austrian who brought Mach with him to Harvard, and derided “old fashioned” Austrian economists among his grad students.

The End of Ford: It Began in the New Deal

When did the Ford Motor Company begin to lose its way? Garet Garret, writing in what remains the best history of the American car, says that the problems began in the 1930s, during the New Deal, when the labor unions used government to turn the company from consumer service toward union service. Then management lost sight of the original vision of its great founder. Then the founder himself lost his way. All events since that time have consisted mostly in the slow but sure strangulation of a once-great company. The crisis began during the New Deal and has lasted until now, when the only real salvation for the Ford Motor Co. and the American car generally is a complete revolution that government and unions intend to make impossible.

The cost-price doctrine on Böhm-Bawerk and Reisman

Mises and Rothbard created a very strong following of fine scholars and brilliant minds. But critiques are always a feature that a very much alive tradition such as the Austrian School needs to have and use for improvement. And sometimes improvement implies bringing back forgotten doctrines of previous generations. In this case, I am referring to the cost-price doctrine for reproducible goods that Eugen Böhm-Bawerk developed but was dismissed entirely by most Misesians and certainly most Rothbardians.

The Worst Recession in 25 years?

On September 18 the Fed cut its target for the fed funds rate by 50 basis points (0.5 percentage points), from 5.25% to 4.75%. The move surprised many analysts who had been expecting a more modest cut of 25 basis points. For those versed in the Austrian theory of the business cycle, as developed by Ludwig von Mises and elaborated by Friedrich Hayek, the aggressive Fed “stimulus” is ominous indeed. Not only will it pave the way for much higher price inflation than Americans have seen in decades, but it will also exacerbate what could be the worst recession in twenty-five years.

Happy Birthday Leonard Read!

A few days ago, while searching online, I came across a mention that September 26 was Leonard Read’s birthday. I was aware of Read’s work as the founder and long-time leader of the Foundation for Economic Education and a prolific teacher of the love of liberty. I had also read many of his short articles, which are impressive for the clarity with which he presents his wholehearted commitment to liberty and recognizes the consequences of its absence. But I had never sat down to read one of his books in its entirety.

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