Broken Politics, Broken Economics
[Jeff Deist's comments at the 2016 Mises Supporters Summit in Asheville, North Carolina, September 16.]
Before we hear from Judge Napolitano, I’d like to speak briefly tonight about where we are as a society, and what role the Mises Institute plays, or ought to play, in that society.
Most of the country is caught up in the presidential election, following the latest news about Hillary’s health or Trump’s pronouncements.
But there’s an opportunity here.
Because no matter who wins, millions of people — maybe 40 percent of the country — are going to view the winner as illegitimate and irredeemable.
Millions of Americans think Hillary should be in jail rather than the White House. And millions more view Trump as nothing more than a reactionary leader of the deplorables.
In fact a recent Gallup poll cites that fully one-third of Americans won’t trust the election results anyway — which is to say they don’t trust government to hold an honest election.
So forget any nonsense about “the most important election of our lifetime” in the conventional sense.
Trump vs. Hillary represents something much bigger: what we might call the end of politics, or at least the limits of politics. Americans, and Europeans too, are witnessing the end of the myth of democratic consensus. Democratic voting, so called, doesn’t yield some noble compromise between Left and Right, but only an entrenched political class and its system of patronage.
We know this already — but now millions of ordinary people are waking up to see that our problems — with government debt, with wars, with currencies, with entitlements, with taxes and regulations, with intractable social issues — cannot be solved politically. It’s not necessarily an ideological awakening, but simply a recognition of reality.
There’s simply no political will or political consensus to address these big picture problems. Politics is broken.
There’s something profoundly healthy about witnessing this. The understanding that political solutions don’t exist, that our grade-school view of government is a sham — is a profound opportunity. Angry voters, populism, nationalism, anti-globalism, anti-elitism — these are all symptoms of healthy hostility toward politics. We can turn up our noses at these movements, and dismiss them as anti-intellectual or illiberal. Or we can embrace the opportunity they present.
That opportunity — to make the case for a fully free society, one not organized around politics and the state, is at the heart of the Mises Institute’s mission.
We have never been afraid to make it. Call it Mises’s view of self-determination taken to its ultimate conclusion, call it Rothbardian anarcho-capitalism, call it a private law society, call it whatever you like — the Mises Institute does not, and has never, shied away from advocating pure stateless libertarianism.
And I don’t think that can be said of any other organization in the world, inside or outside the Beltway.
But make no mistake — we are fellow travelers with anyone who wants to reduce or eliminate the role of government on any issue, for any reason.
That means conservatives abandoning the GOP, progressives tired of the cronyist Wall Street machine, anti-Fed populists, homeschoolers, truck drivers, soldiers, stay at home moms, fed-up nonvoters: anyone interested in liberty, even on a single issue.
Not everyone in the world sees the world the way we do — and that’s OK. We’re here to provide a gateway, to spark an interest, to make free resources available and feed that interest.
So as politics collapses, we want the Institute to serve as an intellectual home for anyone interested in a society organized around markets and civil society rather than force: not a utopia, but a society where the great economic, social, and cultural questions of the day are increasingly not determined by politics. We want the Mises Institute to stand as a counterbalance to the dominant political narrative.
But we have another critical mission: saving economics from economists. Because it’s not just politics that is broken. Mainstream economics is equally broken, both as a profession and a field of study.
Its credibility — hopelessly bound up in forecasting and mathematical modeling — is shot. Its reputation is in tatters. It fails to inspire young scholars, while the PhD factories produce data historians who don’t really understand economics at all.
Consider that mainstream economists:
- failed utterly to predict — or understand — the Crash of ’08;
- failed utterly to predict — or understand — the housing crisis;
- don’t understand money as a market commodity, rather than central bank scrip produced at will;
- don’t understand inflation as a monetary phenomenon;
- don’t understand interest rates, but instead view them as a policy tool;
- don’t understand malinvestment, and can’t explain booms and busts;
- don’t understand praxeology — don’t even know the concept — but are absolutely wedded to “proving” their hypotheses using empirical models;
- don’t understand the role of capital markets as a method of allocating resources to their best and highest uses — along with bankruptcy and its role as the liquidating cure;
- don’t understand or know much about the history of economic thought; (In fact, I recently spoke with Professor Ben Powell during our Mises U conference and he confirmed my worst suspicions: it is entirely possible to obtain a PhD in economics today without learning or knowing a single thing about economic history. It’s as though universities kidnap young economists and drop them on an island, with no context and no idea of how they got there.)
- And finally, consider that 300 Ivy League PhD economists in the Eccles Building, employed by the Fed, can’t figure out whether to raise the Fed Funds rate a scant quarter point — as though the fate of the world hangs in the balance.
This is the state of orthodox economics today. This is where the Mises Institute comes in.
The correction is obvious: economics needs a wholesale Austrian counter-revolution, away from neo-liberalism or neo-Keynesism or whatever you want to term a jumbled set of beliefs that always come down to governments or central banks stimulating demand at any cost.
The path forward, as always is education: but it is not limited to academia by any means. On the contrary, none of us can afford to sit on the sidelines.
You’re probably familiar with Mises’s argument, from his chapter in Human Action on the place of economics in learning, against relegating it to academia and esoteric circles. Mises believed everyone had a duty to learn economics. In fact, he thought that the market economy vs. socialism was the overarching issue of our day — just as religious and monarchical absolutism had been in earlier centuries.
Note his populist tone here:
There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon “experts” and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people's domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake.
The call to duty, as Mises saw it, sounded for every intelligent layman. And that’s at the heart of what we do at the Mises Institute: teaching sound economics to people from all walks of life.
Because what exactly is a school, in the 21st century? Well, it’s a place where one learns. But beyond that, “school” is being radically redefined:
- it increasingly takes place in the digital world rather than a brick and mortar building;
- it’s not for young people only;
- there are no administrators or forced curricula;
- there are no irrelevant classes;
- learning takes place at the student’s pace, any time of day, anywhere in the world, and
- students consume as much or as little as suits their needs — for the first time in history, teaching becomes market focused.
By these measures, the Mises Institute is the definition of a modern school. We have students from all walks of life, learning in their own way, on their own time. For some, learning economics might mean obtaining a PhD and devoting their lives to academic work. For others, simply following the Institute’s twitter feed might be all the education they wish to consume. Learning is no longer a one-size-fits-all proposition.
And I’m pleased to say mises.org — the largest and best website in the world for Austrian and libertarian content — is on track to host 5.5 million individuals this year, a big increase even in the face of a political year. And the husband-wife duo of Professors Peter and Sandy Klein have created a new online group of core classes on a new online platform that will make key parts of the Mises U experience available to students around the world.
So from my perspective, we are the economics of the future and the school of the future. Thank you for making it possible.