One Big Thing Wrong

The journalist’s skill as an observer can only take him so far, if he is observing with the wrong theory in mind. As Thomas Friedman’s “Theory of Everything” shows, without the distinction between power and market—the very core of the libertarian idea—a theory of everything can easily turn into a theory of nothing.

Spam and the State

If there is a solution, the market will find it long before the politicians will. Spam filters have dramatically diminished the problem relative to what it would otherwise be, and these have been provided solely by the pressures of commerce. The efforts to certify ISPs and police the web for spammers, entirely a private undertaking, are ongoing. The methods that work will last and those that do not will be discarded.

Goodbye Strong Euro

Frank Shostak, in his May 20, 2003 column, said: “Europeans are printing money at a faster pace now than Americans. Given the fact that the effect from changes in money supply operates with a lag, this means that the strong rebound in the excess money growth differential between the EMU and the U.S. raises the likelihood that in the months ahead the U.S. dollar  should strengthen against the Euro.”

Clarification Concerning Austrian Influence

I would just like to clarify one point: My comment about “ignored Austrian economists“ was not meant to convey that this school is not influential among serious academic economists, though I wish it were much more so among this Keynesian bunch.  I was specifically referring to its influence among the political class.  I can think of only one member of Congress - Ron Paul, of course - who has gone on record as subscribing to the Austrian theory of the business cycle.  I suspect most self-described would be c

Further on Phelps

Edmund Phelps’s “False Hopes for the Economy-and False Fears” (WSJ 6/3/03) attempt to undermine the current resurgence of interest in Austrian cycle. He states, “One of the most unreasoning fears, yet pervasive, is the nightmare of interwar Austrian cycle theory: ‘overinvestment’. But in truth, what should be real is the fear of the consequences unsustainable boom and what is blatantly false if Phelps’s characterization of the Austrian cycle theory.

Thornton to Wanniski, re: Phelps

Dear Jude Wanniski:

Thanks for sending out the Wall Street Journal editorial by Professor Phelps. Some good points to be sure, but he presents an incorrect view of the Austrian school’s theory of the business cycle. The Austrian theory is not an overinvestment (i.e. “too much”) theory, it is a malinvestment (i.e.
“wrong ones”). Naturally, his analysis that follows is flawed.

Subscribe to