Category Archive: 6b) Austrian Economics

When advocates of secession in the United States bring up “national divorce,” a common objection we hear is that secession can’t be allowed because it would make some people worse off. For example, we’re told that if, say, a majority of Floridians voted to secede, that still can’t be allowed because there would still be a minority that opposes secession. We especially hear this in the context of so-called red states—where, presumably, a majority of...

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A student goes into a bank. He tells the personal loan banker, “I want to borrow $7,500 per year for the next four or five years.” “That’s at least $30,000 over time,” the banker says. “Personal loans have a 10 percent interest factor.” “For my loan,” says the student, “I need an interest rate close to a home mortgage, like 6 percent. Also, I don’t want to be charged interest for the first four or five years of the loan.” The banker asks, “How long...

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Advocates of Keynesian economics believe the Federal Reserve should pursue policies that will prevent the possible decline of the economy into a liquidity trap. But what is a liquidity trap? Economic activity often is presented in terms of a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and spending by another individual becomes part of the first individual’s earnings. Recessions, by this...

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Every time the United States reaches its debt limit, we read that it is important to reach an agreement to lift it. The narrative is that the debt ceiling must be raised, or the US economy will suffer a severe contraction. There is even an episode of a TV series, “Designated Survivor”, where the character played by Kiefer Sutherland places lifting the debt ceiling as the priority to get the U.S. economy on track. The debt ceiling is viewed as an...

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After the recent midterm election, when it became apparent that Americans would have a divided new Congress, it wasn’t long before the word bipartisan started showing up as an adjective to modify a whole host of legislative proposals and discussions. While in many cases the word has been aspirational rather than descriptive—as in, “the other side should follow our lead in agreeing to this”—it has often also been used as a magic modifier in an...

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Banking is a complicated process for working-class people who fail to comply with anti–money laundering regulations. Know your customer (KYC) requirements mandate prospective clients to provide their source of funding and possible employment history. Such policies make it difficult for working-class entrepreneurs to formalize and access funding. By restricting poorer people to informality, KYC requirements sap the growth potential of small...

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On this episode of Radio Rothbard, Ryan McMaken and Tho Bishop address whether the Ohio train disaster is an example of "capitalism gone amuck". They discuss Murray Rothbard's views on pollution, the secondary consequences of the regulatory state, and the decaying qualities of modern financialization.

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