Economists' Almanac: Thomas Sowell on Social Conflict

 

Thomas Sowell

Wealth, Poverty, and Politics, p. 422

Economists' Almanac

 Mises on the blessings of the production structure in the market division of labor:

To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me.

From Socialism: An Economic and Sociological Analysis, (Indianapolis, IN: LibertyClassics),  p. 31.

HUMAN ACTION Turns 71!

Ludwig von Mises' magnum opus Human Action was published on this date in 1949. Mise once said that it was his reading Carl Menger's Principles of Economics that made him an economist. Well the same thing happened to me when I read Mises' Human Action. I documented the importance that book had on my life as a student in an address I gave at a conference celebrating the publication of the Scholars Edition of Human Action by the Ludwig von Mises Institute. What I said those many years ago are still true today:

It is impossible to calculate the full benefits I have taken from Mises's Human Action. It showed me the truth of economics. It made me want to become an economist. It inspired me to be a scholar, and it set forth the rational case for liberty. It does the same for my students.

I more recently discussed the importance of Human Action, explaining why everyone should read the book on the Human Action Podcast:

 

God providentially used Mises' work to confirm me in my calling as an economist and college professor. For that I continue to be grateful.

The Government Needs to Stop

In my most recent post, I directed the interested reader to a lecture in which I suggest a macroeconomic framework which could form the basis for better economic policy analysis in our present situation.

Here are some wise words from Benjamin Powell who applies the framework of which I speak:

Republicans and Democrats are debating what to include in yet another federal coronavirus relief bill. Meanwhile, the states are in various stages of “opened up” or “locked down,” with state and local politicians regulating the minutiae of our interactions right down to what constitutes a “meal” in order to determine which establishments may serve alcoholic beverages.

The politicians all need to stop. Just stop.

To read the rest click here.

Theory That Allows for Macroeconomic Analysis

Not a day goes by it seems without another call for government spending to aid our failing economy. Policy advice not rooted in sound economic theory is prone to error and when we error in economic policy, it causes real harm to people. Instead of flourishing, we get relative impoverishment.  I have already written on the weaknesses of Keynesian Macro. Robert Murphy has done yeoman work analyzing Modern Monetary Theory.

Here is a lecture I gave at the most recent Mises University. It provides a very broad-brush view of Austrian economics and how it helps us analyze macroeconomic issues and how it differs from Keynesian theory and Modern Monetary Theory: