Who Is the Greatest Living Economist?

Libertarian Autobiographies, edited by Jo Ann Cavallo and Walter Block, delves into the trials, tribulations, intellectual formation, and accomplishments of 80 libertarians from around the world—in their own words! The following is an amended excerpt from the introduction written by the co-editors:

It is our fervent belief that libertarianism is the last best hope for humankind with regard to economics, liberty, justice, prosperity, peace, and thus even survival (pardon us for hyper-ventilating, but we maintain this is indeed the case). This belief of ours is predicated upon the crucial importance of the non-aggression principle (NAP): proper law should allow all people to engage in whichever acts they prefer, with the one exception being any behavior that violates this precept or any threat thereof. Thus, murder, rape, theft, kidnapping, fraud, and similar evil actions should be prohibited, and virtually everything else should be legally permitted.

But why assemble a collection of autobiographies penned by libertarians? Why not, instead, offer a collection of scholarly articles demonstrating the benefits of liberty? Many of the contributors to this volume have published just that sort of work on numerous occasions. Why not do so one more time? Although people may gain an understanding of this philosophy via rational argument, it cannot be denied that autobiographies, too, are important for the promotion of liberty. The personal touch may reach some people not approachable via any other means. Additionally, we all want to know the libertarian stories of people such as those who appear on these pages. Indeed, we find that libertarians have the most interesting stories to share because they often embrace this philosophy as the result of intense encounters with foundational texts or life-changing experiences.

One of the big “problems” we have with some of the best-known libertarians throughout history—such as John Locke, Lord Acton, Ludwig von Mises, Isabel Paterson, Henry Hazlitt, Friedrich Hayek, and Murray Rothbard—is that they never wrote an autobiography. Of course, if they had, alternative costs being what they are, they would likely not have been able to write other precious publications of theirs. But what about libertarians alive today? Would they be willing to share their stories? We already have the example of two volumes of libertarian autobiographies: Why Liberty: Personal Journeys Toward Peace & Freedom (Cobden Press), with 54 autobiographies edited by Marc Guttman, and I Chose Liberty: Autobiographies of Contemporary Libertarians (Mises Institute), with 82 autobiographies edited by one of the co-editors of this present volume, Walter Block (available as a free pdf at https://mises.org/library/i-chose-liberty-autobiographies-contemporary-libertarians). Both volumes were published over a decade ago, however, in 2010. We wanted to learn more about the lives of contemporary libertarians not covered in these two volumes and of others who have emerged since the time of these publications.

We therefore reached out to a number of influential scholars, activists, professors, journalists, and cultural icons who have worked toward a freer society across the globe, inviting them to write a brief autobiography for this collection. We asked them to articulate, for example, what their lives and thoughts were before they embraced libertarianism; which people, texts, or events most influenced their intellectual formation; what experiences, challenges, tribulations, and achievements they have had as participants or leaders in this movement; and how this philosophy has affected their personal or professional lives.

A volume of autobiographies on the part of libertarians immediately raises the question of precisely what constitutes this political economic philosophy. In our “big-tent” view, it comprises several strands. They all have something in common, such as an appreciation for individual liberty, private property rights, the rule of law, and free enterprise, but there are also discernible differences. That is why if you get ten libertarians in a room and ask them a question, you’ll likely get eleven (or more!) different responses. In this volume, we invited libertarians across the political-philosophical spectrum, including (1) anarcho-capitalism; (2) minimal government libertarianism, or minarchism; (3) constitutionalism; (4) classical liberalism; (5) thick libertarianism. The contributors to this volume range over the five main viewpoints mentioned above, and also fill in the gaps between them. Their essays express different perspectives on many issues even while articulating the same core principles. In fact, it is our desire that their very differences of opinion on some matters will invite readers to think for themselves. What we have sought to present is a sampling of the myriad individual journeys toward libertarianism, however defined.

Although the majority of contributors to the volume live in the United States, we are grateful to the libertarians from around the world who accepted our invitation to share their stories. This volume thus includes voices from Argentina, Austria, Brazil, Bulgaria, Canada, Chile, China, Colombia, Czech Republic, England, Germany, Guatemala, India, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Nigeria, Peru, Poland, Romania, Russia, Scotland, South Africa, Spain, Sweden, and Ukraine. 

It is the hope and expectation of the editors that by bringing together a range of contemporary voices from outside the dominant left–right paradigm, this volume will contribute to the viewpoint diversity that is crucially needed in today’s public discourse. Moreover, these personal and intellectual journeys not only offer compelling insights into their individual authors and the state of the world in our lifetime, but may also serve as an inspiration for the next generation who will feel called upon to make our society a freer one.

N.B. The publisher’s link to the book is: https://link.springer.com/book/10.1007/978-3-031-29608-6. Both the hardcover and the ebook are available for purchase internationally. Get 20% off the printed book or eBook by entering the following coupon code at checkout on link.springer.com: H5DoMQW47RT2HD (valid until Oct 13, 2023). In addition, the MyCopy version (printed ebook) is available at a low cost ($39.99 in the US) to individuals who belong to a university subscribed to SpringerLink. If your university subscribes to SpringerLink, you can also read the book online for free. (If you’re not on a university-sponsored device, a VPN, or the school’s WiFi, you might have to access the book through your university’s library page.)

After not raising rates to fight inflation last week, Federal Reserve Chair Jerome Powell delivered his usual speech and Q & A. He opened with three very peculiar sentences regarding price stability, leading to a few unsettling conclusions.

He starts with:

Price stability is the responsibility of the Federal Reserve.

This statement raises concerns. First, it fails to define what price stability means. Even if Congress had assigned this responsibility to the Fed, it’s not something many would agree with if given the chance. While the approach to achieving this desired state of price stability appears quite absurd, for argument’s sake, let’s consider this statement true.

In Powell’s following sentence he inadvertently shares the dire consequences of giving this responsibility to a central bank, as explained:

Without price stability, the economy does not work for anyone.

This is a rather bold, yet hollow statement. He essentially suggests the economy cannot function without the Fed's intervention.

Examining the history of America reveals that central banking hasn't always been a requirement for prosperity and development. Looking at present-day and historical hyperinflations, it becomes evident central banking is largely culpable in a nation's currency collapse. From what we’ve seen of the Fed, there’s little reason to believe this current iteration of America's central bank is somehow different.

The Austrians have argued for over a century that a currency monopoly or central authority controlling a nation's currency is unnecessary, much like we don't need a czar to regulate the production of shoes, cars, or gold.

To state that the Fed makes the economy work for everyone is simply untrue. It’s clear how bankers who receive bailouts and capitalize off borrowing millions and low interest rates are better off; but the average person on main street who ultimately pays for this market distortion can hardly say the Fed’s policies work in their favor.

The third sentence follows a similar vein as the previous:

In particular, without price stability, we will not achieve a sustained period of strong labor market conditions that benefit all.

This claims that a strong labor market is due to the Fed’s management of price stability. He’s taking credit for something that cannot be verified. It would be useful if, during the Q&A session, a reporter inquired as to how the Fed ascertains what a "strong" labor market is and how market intervention contributes to a stronger labor force. However, questions like this are seldom asked.

Returning to one crucial point: although Powell does not address what he means by price stability, the St. Louis Fed has an article elaborating on it…

Price stability means that inflation remains low and stable over the longer run. When inflation is low and stable, people can hold money without having to worry that high inflation will erode its purchasing power.

In addition to not utilizing the historical definition of inflation, the notion that a gradual reduction in purchasing power could ever be beneficial to society is something everyone should recognize as false.

It's also worth noting Powell’s same three sentences have been used nearly verbatim in speeches in February of this year, as well as August and November of last year. If one were the wagering type, it would be reasonable to bet these three sentences have been reiterated more than four times during Powell's tenure.

The Biden Administration is celebrating the first anniversary of the passage of the Inflation Reduction Act, which allocates trillions of dollars in taxpayer subsidies to industries of their choice. Welcome to five-year plans. 

While guest-lecturing in Moscow one cold March night in 1993, a student asked why western firms didn’t invest more in Russia. I had just finished my PhD Dissertation on the subject of US-Russian joint ventures, so I probably gave a long, boring answer, that ended with an observation that in Russia, it was hard to make plans. One bright student quipped, “We used to have plans. Five-year plans.” And the whole room erupted in laughter. 

When I tell that story in my classes in the US, no one laughs. That’s because the Biden administration has just launched their version of “five-year plans.” They won’t work. I explain the failure of the Soviet socialist five-year plans in the classroom by asking a student who might be wearing a Patrick Mahomes Kansas City Chiefs jersey, “Will Mahomes be with the Chiefs in five years? Will they be in the Super Bowl in five years? Will they still be the Kansas City Chiefs in five years, or will they move to another city?” Students quickly get the idea that five-year plans are dumb because no one knows what jersey will be demanded in five years. Yet, five-year plans require that you make that prediction. 

That statement from former House Speaker Dick Armey should be on the wall of every congressperson in DC. “The reason markets are smart is because they aggregate all the information available from every possible producer and consumer. Markets are where everyone votes. Isn’t that a good way to solve problems? Wasn’t that how the congressional representative was elected? We hear cries continually about “threats to democracy.”  Well, the recent flood of money into narrowly specified industries is a threat to the democratic medium that we call the market. Why should only government elites get to vote? What’s wrong with “one person, one vote?” Because that’s what happens in a market. Here’s how economist Friedrich von Hayek explained it, "The advantage of a free market is that it allows millions of decision-makers to respond individually to freely determined prices, allocating resources - labor, capital, and human ingenuity - in a manner that can't be mimicked by a central plan, however brilliant the central planner." 

When our house was built in 1999, the owner wanted to be “ahead of the curve,” so he ran three physical hard wires to every room: TV, telephone, and internet. We don’t use any of them. The investment was wasted. As the trillions of dollars in funding through the Inflation Reduction Act will be wasted. The Biden administration’s commitment to broadband, the power grid, and electric vehicles will suffer the same fate. No one knows which technology will dominate in the future. 

“Predictions are difficult, especially those about the future,” quipped Danish Physicist Nils Bohr. But that doesn’t seem to slow the economic humanism that’s behind the motivation that encourages governmental bureaucrats to pick winners and losers. Speaking of those Kansas City Chiefs, would any reasonable person suggest that the government put their enormous resources behind ONE of the 32 teams in the NFL? Of course not, that would destroy the league. What do you think providing $28 billion via the Chips Act will do to the semiconductor industry?

When Milton Freidman popularized the phrase, “There is no free lunch,” he was making the point that trillions of dollars forcefully extracted from taxpayers are dollars that could have gone to other investments. Financial folks expect a return on their investment that is equal to, or above the average rate of return. Government subsidies perform well below that expected rate. Thus, every dollar that is committed to a government subsidy - on average - underperforms. That makes all of us poorer. 

Solyndra is a classic example of governmental elites trying to predict the future. The solar panel manufacturer received $535 million in loan guarantees. When it failed, President Obama observed that he didn’t know which technologies would prevail. He’s right, he does not know. But the market does. The half-billion dollars that President Obama flushed down the Solyndra toilet was forcefully extracted from obedient, tax-paying citizens by the use of power. That’s why we should rely on the market. 

When the market works, investors willingly contribute their own assets, by choice. 

So it’s pretty simple: Would you rather have a society operated by power, or by freedom? That’s why it’s called free market capitalism. Another warning from the economist Hayek, “I regard the preservation of free markets, as an essential condition of the very survival of mankind.” Or as Whole Foods founder John Mackey said, “Capitalism is humanity’s greatest invention.” Then, government subsidies are humanity’s worst invention.

The Harmonized Index of Consumer Prices (HICP) consists of 12 subindices, which are weighted according to their shares in total household expenditures. If, for example, food and non-alcoholic beverages (subindex 1) account for 15% of expenditures, they should also be given a weight of 15% in the overall index. In this way, each expenditure category would be given the importance it has for an average household. This is the claim of official statistics. But here, too, as so often, aspiration and reality diverge.

In Germany, the traditionally largest subindex covers housing, water, electricity, gas and other fuels (subindex 4). It has always accounted for more than 21% of the overall index since the mid-1990s. Between 2020 and 2022, the weight had increased to slightly more than 25%. The official statistics thus assumed that German households spend on average around a quarter of their total expenditure on goods of this category. This is too little in the eyes of some critics. Many households spend significantly more on goods of this type. In larger urban areas, households often spend more than a third of their income on rent alone.

There has now been an unexpected change in 2023. The Federal Statistical Offices did not increase the weight of subindex 4, but lowered it from 25.2% in the previous year to 16.5%. No valid justification for this has yet been provided. On the website of the Federal Statistical Offices, there are only empty phrases: "The Corona pandemic, which has been prevalent since 2020, with its restrictions on public life and the resulting consequences, makes it necessary to change the usual procedure for updating the goods weights for the third year in a row as well." (translated with DeepL because AI is really good at translating bureaucratic talk.)

How could one even justify such an implausible adjustment? As a matter of fact, the adjustment means that from now on official statistics will assume that the average German household spends only 16.5% of its total expenditure on housing, water, electricity, gas and other fuels. Whether this assumption is realistic is something everyone can consider for themselves.

What is clear is that the down-weighted subindex 4 has been showing above-average inflation rates for some time now. Between 1996 and 2022, it has risen by 84% overall, but the HICP as a whole has risen by only 59%. Only subindex 2 for alcoholic beverages, tobacco and narcotics has risen even more strongly during this period, by 115%.

During the inflationary phase of last year, prices in subindex 4 rose the most of all. The inflation rate here was 13.9%, more than 5 percentage points above the official average inflation. That the Federal Statistical Offices have now decided to lower the weight of this subindex has one practical effect: the officially measured inflation will be lower. But it measures past reality.