Austrian economics is a scholarly tradition that consists of a body of theory that explains how an economy works. Austrian economists develop theory a priori, meaning explanations are derived logically from sound starting points (i.e., the “action axiom” to Mises). This means the theory is true and can therefore be used to uncover the actual causalities behind observable phenomena. Economics is, therefore, to “Austrians” a framework for understanding what we see.Other traditions in economics rely on data to formulate theory, which means their theory is a set of corroborated hypotheses. They thus make a much weaker claim because the data analyzed are always a selection (a sample, not an entire population), the measures and metrics are not the actual concepts but mere proxies, and the theory

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Present-day Austrian economics suffers from a significant and rather interesting problem: a lack of critics. What I mean by this is not that there are not enough trolls, hecklers, and politically-motivated anti-economists. No, I mean that there are very few, if any, real and knowledgeable critics of Austrian economic theory.The Austrian tradition has had an important and lasting impact on economics over the past century and a half. Much of this was due to fierce scholarly debates either started by Austrians or in which they played a prominent role. Consider Carl Menger’s debate with the German Historical School on method and theory in what came to be known as the Methodenstreit. Or Böhm-Bawerk’s takedown of Marx’s exploitation theory. Or the decades-long debate on the (im)possibility of

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

About two years ago, I had a brief exchange with modern monetary theory (MMT) champion and Stony Brook University professor Stephanie Kelton on Twitter (now X). It resulted in Kelton publicly challenging me, an economist and tenured professor at another large public university, to formulate a critique of her (and MMT’s) “chartalist” view that government currency has value only because it must be used to pay taxes.Kelton summarized her position on Twitter: “Taxes (fees/fines/etc.) allow government to spend its otherwise worthless currency into existence, thereby allowing gov to move the real resources it desires from private to public domain.” I certainly agree on the implicit point that the value of (demand for) government currency must be explained, but I do not agree that taxation is

What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Modern economics is in terrible shape. But economics education appears to be worse still. This becomes clear when discussing basic economics with those who have taken courses in the field. Rather than doing away with economic misunderstandings and outright nonsense, economics education apparently provides students with a pseudoscientific rationale for their illusions.Two such ideas are annoyingly common. One is the view that markets can only work under perfect conditions. The other is that economic growth requires that profits tend toward zero. Yes, they are ridiculous, but they are so commonly held (and believed so strongly) that they suggest a fundamental failure of economics education. Whether or not they are explicitly taught, it is easy to see how an economics education that focuses

Tu ne cede malis, sed contra audentior ito

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Tu ne cede malis, sed contra audentior ito

Website powered by Mises Institute donors

Mises Institute is a tax-exempt 501(c)(3) nonprofit organization. Contributions are tax-deductible to the full extent the law allows. Tax ID# 52-1263436

Tu ne cede malis, sed contra audentior ito

Website powered by Mises Institute donors

Mises Institute is a tax-exempt 501(c)(3) nonprofit organization. Contributions are tax-deductible to the full extent the law allows. Tax ID# 52-1263436

Artificial intelligence (AI) cannot distinguish fact from fiction. It also isn’t creative or can create novel content but repeats, repackages, and reformulates what has already been said (but perhaps in new ways).I am sure someone will disagree with the latter, perhaps pointing to the fact that AI can clearly generate, for example, new songs and lyrics.

In a recent article, we briefly summarized what it is that we today call artificial intelligence (AI). Whereas these technologies are certainly impressive and may even pass the Turing test, they are not beings and have no consciousness.

The artificial intelligence (AI) revolution is here, and it is bound to change the world as we know it—or so proclaims the hype following the release of OpenAI’s ChatGPT version 3.5 in November 2022, which was only the beginning. Indeed, much has happened since then with the release of the much-improved version 4.0, which was integrated into Microsoft’s Bing search engine, and the recent beta release of Google’s Gemini.

Social media tends to be blamed for the overall nastiness of public discourse. Instead of condemning this form of communication, condemn the fuel that feeds this conflagration: democracy.
Original Article: Social Media Should Not Be Blamed for the Consequences of Democracy

So-called social media is frequently maligned for the nastiness it brings, with focus often set on the personal attacks and trolling that tend to haunt potentially reasonable discussions. X (formerly Twitter) is supposedly the worst, on which people engage in endless mudslinging and bullying. However, the other platforms are not better.
The common explanation for the degenerative nature of social media discourse is that the platforms are developed to maximize “engagement,” which prefers emotional outbursts over reflective, rational discourse. Indeed, social media is designed to bring out the very worst in people. They are for-profit psyops that push or nudge people to scream louder and viciously attack each other.
There is some truth to the engagement argument, but the social media problem

To the Chinese reader:
It is safe to say that economics suffers at least as many fallacies and misunderstandings as any other field of study. Had physics suffered the same level of issues, we would not have seen much—if any—of the progress that we have made over the past centuries. Yet, economics—the queen of the social sciences—keeps being misrepresented, if not abused, and we suffer the consequences.
Those consequences are primarily in the form of the “unseen,” or what we would otherwise have gotten, and the “unrealized,” or the possibilities and opportunities that we would have benefited from were it not for our misunderstandings of how the economy works and, therefore, our hubristic attempts to design the economy and determine its outcomes.
However, the economy is not free from

The Austrian (TA): At mises.org, we’ve focused a lot on how monetary policy can increase inequality and impoverishment. But the same could be said of many other non-central-bank interventions in the economy. What are some of these interventions that are making us worse off?
Per Bylund (PB): I think what is important to remember is that any change in the economy implies a shift in the production structure and thus in how resources are used. This includes innovations and entrepreneurship ventures, which outbid other producers and therefore replace other production. While we can use more or less natural resources, we don’t actually add much to the economy—we figure out new ways of doing things and new things to do. This is why it is so important that such changes are directed toward value

While most economists admit that value is subjective, they still err by concentrating on scarcity and choice instead of purposeful action by individuals.
Original Article: The Objective Science of Subjective Value

Practically all schools of contemporary economic thought recognize that value is subjective. Although mainstream economists merely pay lip service to value subjectivity—and, in practice, treat value as objective so that they can analyze so-called utility functions—it is still a core assumption in modern economic thought.
This is very different from classical economics, which typically treated value as objective and determined by production costs. Marxists still subscribe to this anachronistic view by claiming that the objective value of any good is the labor that goes into producing it. However, all other schools of economic thought in existence today are subjectivist and have been since the marginalist revolution in the 1870s.
Many who have not been exposed to proper economic reasoning

Experienced entrepreneurs are Austrians.
Download the slides from this lecture at Mises.org/MU23_PPT_35.
Recorded at the Mises Institute in Auburn, Alabama, on 28 July 2023.

Firms, Managers, and Entrepreneurship | Per Bylund

Video of Firms, Managers, and Entrepreneurship | Per Bylund

Few people understand how destructive regulations are.
Download lecture slides at Mises.org/MU23_PPT_23.
Recorded at the Mises Institute in Auburn, Alabama, on 26 July 2023.

The Unseen Costs of Regulation | Per Bylund

Video of The Unseen Costs of Regulation | Per Bylund

It is no surprise to libertarians that what is in the interest of the government might not be in the interest of people in general. More often than not, the government’s interest is directly at odds with the interests of people in general. The countless wars waged by governments throughout history, for which common people paid ultimately with their lies, bear witness to this fact.
Wars are also waged on the domestic populations that the government supposedly serves and protects. Under the guise of the greater or public good, which always require some sacrifice yet curiously dovetail with the government’s interests, individuals are the means if not the problem. In the words of Pierre-Joseph Proudhon, they’re “watched over, inspected, spied on, directed, legislated at, regulated, docketed,

While F.A. Hayek’s famous 1945 essay effectively critiques the "perfect information" hypothesis, it is an inadequate explanation of the issue of economic calculation.

Original Article: "The Market Process Is Not a Knowledge Problem"

A bedrock of Austrian economics and libertarianism has been free trade. Unfortunately, some people who claim to value liberty no longer value unhampered exchange.

Original Article: "Are Libertarians Abandoning Free Trade?"

Murray N. Rothbard wrote in the February 1971 issue of the Libertarian Forum that “libertarians, if they have any personal philosophy beyond freedom from coercion, are supposed to be at the very least individualists.” Indeed, libertarianism holds high the rights and responsibilities of the sovereign individual: the right to self and to justly acquired property and thus the right not to be coerced or arbitrarily restricted and the responsibility for one’s own actions and the moral duty to respect and honor other individuals’ rights.
Yet libertarianism, or at least a relatively large subset of proponents of libertarianism, has taken a strange collectivist turn in recent years. This is evident in a number of issues, such as free trade, where libertarians used to be in agreement in principle,

Part II: Market, Chapter 5: Production and Entrepreneurship
How to Think about the Economy: A Primer. Narrated by John Quattrucci.

Part I: Economics, Chapter 1: What Economics Is
How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

Dedication to How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

How to Think about the Economy was written to accomplish something big: economic literacy. It is intentionally kept very short to be inviting rather than intimidating. You will gain a life-changing understanding of how the economy works in practically no time.
Narrated by John Quattrucci.
Download the complete audiobook (12 MP3 files) in one ZIP file here. This audiobook is also available on Soundcloud and via RSS.​
Purchase the Audiobook on Audible/Amazon, or paperback at the Mises Store.

Part II: Market, Chapter 7: Economic Calculation
How to Think about the Economy: A Primer. Narrated by John Quattrucci.

Part I: Economics, Chapter 2: Economic Theory
How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

Preface to How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

Part II: Market, Chapter 6: Value, Money, and Price
How to Think about the Economy: A Primer. Narrated by John Quattrucci.

Part III: Intervention, Chapter 8: Monetary Intervention
How to Think about the Economy: A Primer. Narrated by John Quattrucci.

Conclusion: Action and Interaction, How to Think about the Economy: A Primer.
Narrated by John Quattrucci.

Part II: Market, Chapter 4: A Process, Not a Factory
How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

Part III: Intervention, Chapter 9: Regulatory Intervention
How to Think about the Economy: A Primer. Narrated by John Quattrucci.

Part I: Economics, Chapter 3: How to Do Economics
How to Think about the Economy: A Primer. Narrated by  John Quattrucci.

Recorded in Tampa, Florida on February 25, 2023.

[Chapter 4 of Per Bylund’s new book How to Think about the Economy: A Primer.]
To help us understand what is going on in the economy, what is important is not the types and number of goods that sit on store shelves. It is why and how they got there.

Economics is often faulted for being “ideological”—for promoting free markets. This is a misunderstanding. The free market in economics is a model—an analytical tool. It excludes complicating circumstances and influences and allows us to study core economic phenomena on their own so that they are not mistaken for other effects.

[Chapter 2 of Per Bylund’s new book How to Think about the Economy: A Primer.] Like other sciences and fields of study, economics is a body of theory. Theory is a collection of explanations that allows us to understand something. Economic theory allows us to understand how an economy works.

Economics is an exciting field. The economics of old sought to uncover how the world works. It showed, or even proved, that there is a natural order to it. There is structure to the apparent chaos. The economy has something of a life of its own: it has a nature.

The new kid on the economics block is something called modern monetary theory. The name is new, but the "theory" is not. Proponents adamantly claim that it is both new and a theory of economics. To make it appear this way, they dress the ideas in unusual-sounding jargon and use rhetorical tricks.

The Austrian school of economics has been all but left by the wayside in economics (e.g., Backhouse 2000). This fate, shared with all “heterodox” approaches that do not fully comply with mainstream dogma, means Austrian theory is at best discounted by other economists. More often, and typically, it is forgotten and a relic of the past.

Per Bylund, author of The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives has commented extensively here at mises.org, and in a variety of entrepreneurship-focused publications, about the economics of entrepreneursip. Editor Ryan McMaken recently asked Professor Bylund to comment on what challenges entrepreneurs face right now in a rapidly changing legal and economic landscape.

It has been a full century since Mises dropped the economic calculation bomb, but the argument apparently still haunts socialists. It should, since Mises managed to show that a socialist economy is not an economy at all but calculational chaos. Yet it is curious that it does, since most have (incorrectly) concluded that Mises’s argument, after decades of debate, was debunked.

Economics has lost its way and the study has become both impotent and lacking in relevance. It’s easy to see how and why once we recognize that proper economic thinking takes place two steps beyond the apparent. Noneconomists typically take none of these steps, while modern economics has lost the ability to go beyond the first.

A common retort to the claim that in voluntary exchange both parties expect to become better off (or they wouldn’t do it) is that exchanges are seldom, if ever, a matter of horizontal, equal exchange of values. Instead, any such interaction between people is ultimately a matter of their exercising power over one another. The implication, and often explicitly stated conclusion, is that there is no voluntariness, that exploitation is always present, that one party necessarily gains at the other’s expense.

Free market economics is often ignorantly dismissed for being “ideological” rather than scientific. It probably sounds smart to the economically illiterate, but it is decidedly not. It doesn’t mean nearly what most people assume it does. The word “free” in free market economics is not used as a normative value judgment but indicates an economy that is unaffected by exogenous (from the outside) factors.

A common issue with economists and political economists from left to right is that they misunderstand the market economy as simply being a set of production processes. We see this in Lenin’s statement that the Soviet Union should be run like one big factory. We see it in market socialists from Frederic Taylor to Oskar Lange attempting to respond to (and resolve) Mises’s argument that socialist economic calculation is impossible.

Proponents of intellectual property rights often rely on one of two lines of reasoning. The first is based on the misunderstanding that the frequency or volume of innovations determine economic growth. The second is captured by the question, “So if I spend $1 billion on R&D (research and development) to bring a new drug to market, anyone should be able to copy my drug without compensation?”

A recent paper in the Journal of Consumer Psychology (JCP) has started a debate on the accuracy of “loss aversion,” the idea that people are driven by fear of losses more than they are by the potential for gain. Core to behavioral economics, this idea has been rather universally accepted and been part of the awarding of two economics Nobel Prizes, in 2002 to Daniel Kahneman and in 2017 to Richard Thaler.