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David Gordon

Articles by David Gordon

Review: Free Market: The History of an Idea

4 days ago

Free Market: The History of an Idea
by Jacob Soll
Basic Books, 2022; viii + 326 pp.
Jacob Soll is a distinguished historian, and Free Market contains much of value, but the book cannot be considered a success, and indeed as it reaches the twentieth century, it becomes a disaster. Even in the parts of the book worth reading, Soll is in the iron grip of a central thesis, one that his historical approach by its nature makes impossible to prove.
In some books, discerning the author’s central argument poses a difficult task, but not in this one: Soll cannot forbear from stating it over and over. The thesis is that, by contrast with free market extremists, who favor a market with little or no government regulation, the state should play a central role, as it in fact

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Democracy without Foundations

13 days ago

In last week’s column, I criticized Jedediah Purdy for the ignorance of economic theory on display in his Two Cheers for Politics. Fortunately, the book contains much of interest, reflecting the author’s wide knowledge of the history of political philosophy. I have to say, though, that the main argument of the book strikes me as utterly unconvincing.
Purdy starts off well. He asks, Why are people living today bound by past political arrangements to which they have not consented? He says that
St. George Tucker, the prominent founding-era jurist, expressed this idea in his edition of Blackstone’s Commentaries:
That mankind have a right to bind themselves by their own voluntary acts can scarcely be questioned; but how far have they a right to enter into engagements

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Review: The Politically Incorrect Guide to Economics

21 days ago

The Politically Incorrect Guide to Economics
by Thomas J. DiLorenzo
Regnery Publishing, 2022; xx + 242 pp.
Like Ludwig von Mises and Murray Rothbard, Tom DiLorenzo is an economist with an extraordinary knowledge of history, and this shows to great advantage in his brilliant new book. In it, he stresses that economists who fail to grasp how the free market works often devise elaborate theories to show “market failures,” but when examined in the light of historical evidence, these theories fall to the ground.
As a prime example of this, Paul Samuelson in his Economics, for decades the most influential university textbook, indicted the market for its failure to conform to the welfare ideal of “perfect competition.” Concerning this, DiLorenzo says:

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Review: Progressive Conservatism: How Republicans Will Become America’s Natural Governing Party

25 days ago

Progressive Conservatism: How Republicans Will Become America’s Natural Governing Party
by F.H. Buckley
Encounter Books, 2022; 254 pp.
Frank Buckley is always a thoughtful and provocative author, but I disagree with what he has to say in Progressive Conservatism more than with other books of his I’ve reviewed, such as his outstanding American Secession and Curiosity (see my review here).
In the present book, he defends a “national conservatism” and is critical of laissez-faire capitalism, though he does not dismiss it entirely. Whether he is correct that the program he favors is the “winning strategy” for the Republican Party I do not presume to say: he knows far more about such things than I do. Despite his rejection of the complete free market, his concrete

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What Is Wrong with the Fed’s Inflationist Policy?

June 11, 2022

The Lords of Easy Money: How the Federal Reserve Broke the American Economy
by Christopher Leonard
Simon and Schuster, 2022
viii + 373 pp.
Christopher Leonard’s book brings to mind the familiar line from Faust: “Two souls, alas! dwell in my breast.” Leonard offers a penetrating criticism of the Fed’s vast expansion of the money supply, which has won for him praise from the noted hard-money advocate and friend of the Mises Institute James Grant. Leonard is a well-known journalist and has engaged in extensive research on the Fed, in particular on the papers of Thomas Hoenig, for many years vice president of the Federal Reserve Bank of Kansas City, and the extensive notes in the book show how assiduous he has been in his research.
Why, then, do I suggest with my

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True Competition versus the Monopolist “Minimal State”

December 31, 2021

According to Ayn Rand’s ethics, the only basis for value is an individual’s survival as a rational being. In order to live as a rational being, you must respect the rights of others as rational beings each aiming at his own survival. As Harry Binswanger, a leading follower of Rand, explains,
The basic political principle of the Objectivist ethics is: no man may initiate the use of physical force against others. No man—or group or society or government—has the right to assume the role of a criminal and initiate the use of physical compulsion against any man. Men have the right to use physical force only in retaliation and only against those who initiate its use. The ethical principle involved is simple and clear cut: it is the difference between murder and

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This Professor Hates the Austrian School. But He Clearly Doesn’t Know Much about It.

December 1, 2021

Capitalism vs. Freedom: The Toll Road to Serfdom
by Rob Larson
Zero Books, 2018, 233 pp.
Rob Larson, who is a professor of economics at Tacoma Community College in Washington, does not agree with Mises, Hayek, Rothbard, and Friedman that the free market promotes freedom and prosperity and that socialism is the “road to serfdom.” That is an understatement, and you won’t find any understatements in this book. To the contrary, the book abounds in wild accusations.
For Larson, the eminent economists just mentioned are more than mistaken: they are criminal deceivers. His principal targets are Friedman and Hayek, but Mises and Rothbard are not spared. He says,
This consistent pattern reveals that a number of quite respected Nobel Prize–winning conservative economists,

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Why There Is No Free Lunch

November 12, 2021

No Free Lunch: Six Economic Lies You’ve Been Taught and Probably Believe
by Caleb S. Fuller
Freiling Publishing, 2021. 110 pp.
Caleb Fuller, an economist who teaches at Grove City College, thinks that many people have a mistaken conception of economics. It is, they think, a dull and dry subject, the “dismal science,” of primary interest to specialists. Fuller disagrees. He says that “economics changed my life” (p. 11; all page references are to the Amazon Kindle edition), and in this wonderful short book, which can be read in an hour or so, he conveys his infectious enthusiasm for it.
What is the reason for his enthusiasm? Fuller says that he can provide readers with “a pair of eyeglasses that can extend our vision beyond where we’re accustomed to looking” (p.

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The Battle over the Free Market

October 30, 2021

Nicholas Wapshott is a British journalist and biographer with a strong interest in economic theory. He says that the Nobel laureate Edmund Phelps is his mentor. One theme in twentieth-century economics dominates his work: the clash between economists who favor the free market and those who support a “mixed economy,” in which the government plays a large role. Wapshott’s earlier book Keynes Hayek shows the way he works. He uses the personal relations between Keynes and Hayek to arouse the reader’s interest in the theoretical controversies at issue, and he follows the same approach in Samuelson Friedman. Keynes and Hayek make frequent appearances in this book as well. Here, though, Wapshott has an advantage over his earlier book. Although Keynes and Hayek knew each

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Why Worrying about Everything Is Bad Foreign Policy

October 10, 2021

The Stupidity of War: American Foreign Policy and the Case for Complacency
by John Mueller
Cambridge University Press, 2021, 332 pp.
The subtitle of John Mueller’s excellent new book suggests that something unusual is in store for the reader. If someone is called complacent, he is hardly being complimented; how then can there be a “case for complacency”? In brief, Mueller thinks that most of the threats and dangers that confront nations are really not that much to worry about, if they are not altogether imaginary. One example will give you a grasp of what he means. Mueller, who teaches political science at Ohio State University and is associated with the Mershon Center for International Security Studies, attracted substantial public attention in his earlier book

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Is Self-Ownership Necessary?

September 22, 2021

Isn’t a principle of nonaggression against others another way of stating the self-ownership principle? “Not necessarily,” says the insightful philosopher Chandran Kukathas.

Original Article: “Is Self-Ownership Necessary?”

Chandran Kukathas is one of the best contemporary political philosophers, and one of the few sympathetic to libertarian views. Unlike Murray Rothbard, he does not consider self-ownership fundamental but instead defends libertarianism from a different standpoint that is skeptical of principles considered apart from their expression in particular societies. In this week’s article, I’d like to look at an extended statement of Kukathas’s position on this issue, his article “Libertarianism without Self-Ownership” (Social Philosophy and Policy,

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Community and Civil Society over State

March 21, 2021

Raghuram Rajan has written a surprising book. Now teaching finance at the University of Chicago, he is an international bureaucrat in good standing, and not a minor one at that; he was chief economist of the International Monetary Fund. Yet far from calling for an increase in “global governance,” as one might expect from someone with his background, he wants to strengthen the local, “proximate,” community.
“If more powers are delegated from the state to the local community level,” he tells us, “a community can shape its own future better, and will have more control over it. Some communities will have a specific ethnic concentration, and community culture will gravitate toward that ethnic group’s culture…. A strong local community could satisfy people’s need to

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Hayek, Friedman, Buchanan: The Villains of “Neoliberalism”

January 9, 2021

In the Ruins of Neoliberalism: The Rise of Antidemocratic Politics in the West
by Wendy Brown
Columbia University Press, 2019
viii + 248 pages
Wendy Brown, a well-known political theorist who teaches at UC Berkeley, does not like Friedrich Hayek very much. She in part blames him and others as well, including Milton Friedman and James Buchanan, for policies that have led to the bad state of the world in general and America in particular today. In the Ruins of Neoliberalism covers other topics, ranging from the case of the Colorado cake maker who refused to create a cake for a same-sex couple to the rise of nihilism about values and Herbert Marcuse’s “repressive desublimation” (not a good thing, I assure you); but I shall concentrate on what she says about Hayek.

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Double Standards, Reparations, and War Crimes

January 7, 2021

Joan Wallach Scott, a historian who is a professor emerita at the Institute for Advanced Study in Princeton, has come up with a most valuable insight. She is decidedly not “one of us,” but her insight makes her sound as if she might be. She says,
the notion of the judgment of history rests on a progressive linear view about the necessary superiority, in every domain, of the future as compared to the past, but also—crucially—about the state as the political embodiment of that future. . .As articulated by Hegel, the “autonomy of the state”  was “the ethical whole itself”—the modern state was at once the fulfillment and the embodiment of the telos of history. (p. xvi)
Scott rejects this position, and she examines the way in which this mistaken view affected two

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Escaping Paternalism

December 9, 2020

Some economists, such as the 2017 Nobel Laureate Richard Thaler and his colleague Cass Sunstein, have proposed an unusual justification for government interference with people’s choices. They do not intend, they say, to override the preferences that people have. They don’t want to tell people what they “should” want, according to an external standard that people don’t accept.
They claim, however, that accepting the actual preferences people have still leaves room for government intervention. How is this possible? Their answer is that people often choose in an irrational way. They make mistakes in reasoning and choose impulsively. People don’t “really” want what they choose irrationally, so government intervention that pushes people to choose rationally is

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The Evil of American Exceptionalism

November 25, 2020

According to Anne Applebaum, those who deny American “exceptionalism,” that is to say, global crusading for “democracy,” are dangerous extremists.
Original Article: “The Evil of American Exceptionalism“.

This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Millian Quinteros.

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Calculating GDP Correctly
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2020 Will Be a Record-Breaking Year for Debt. How Long Can This Last?
The deficit narrowed during July after months of record shortfalls in federal tax revenues. During April, May, and June of this year

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Mises and Moral Relativism

September 29, 2020

I heard several days ago from my friend Larry Beane that people in Walter Block’s seminar who had been reading Theory and History wondered whether Mises is a moral relativist. As I’ll try to show, the answer depends on what you mean by “moral relativist,” but in the way the term is usually understood in contemporary philosophy, he isn’t. I’d like to dedicate this article to the memory of Leo Beane, an outstanding young man of great character and intelligence who was not a moral relativist.
When Mises talks about any question in philosophy, a fundamental rule should be kept in mind. His primary objective is always to defend the free market against any doctrine that can be used to attack it. For example, he criticizes the logical positivists, because their view of

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Monetary Policy Flapping in the Wind

September 19, 2020

Stephanie Kelton’s new book has attracted much attention, and Bob Murphy and Jeff Deist have already reviewed it, with devastating results. Why another review? The policies proposed in the book are so pernicious that further exposure of what she has in store for us is needed, and I have some new points to offer for your consideration. Besides, there are few things I enjoy more than writing a critical review.
Kelton, who teaches economics at Stony Brook University, writes clearly, though I wish she would not so frequently repeat in her endnotes passages from the text. The essence of the book is straightforward: it’s impossible for the United States, and other monetary sovereigns, to run out of money. “Today, we have a purely fiat currency. That means the

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Does the Free Market Corrupt People?

June 21, 2020

The political theorist Michael J. Sandel is a popular teacher at Harvard, and his lectures circulate widely on YouTube and elsewhere. He attracted attention as a serious political theorist with his critical work on John Rawls, Liberalism and the Limits of Justice (1982). As most readers will know, I’m no fan of Rawls, and it’s easy to find poor arguments in his A Theory of Justice. But Sandel totally misunderstands him, and his attack on Rawls fails. From the dubious achievement of his book on Rawls, Sandel has descended to lower depths in his later works. I’d like to discuss some of his criticisms of the free market in one of those books, What Money Can’t Buy (2012). One of the things that money can buy is a copy of What Money Can’t Buy, but I advise against

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Economics in Two Lessons: Why Markets Work So Well, and Why They Can Fail So Badly

May 20, 2020

Economics in Two Lessons: Why Markets Work So Well, and Why They Can Fail So Badly
John Quiggin
Princeton: Princeton University Press, 2019
xii + 390 pp.
Abstract: John Quiggin’s Economics in Two Lessons alleges a failing in Henry Hazlitt’s Economics in One Lesson: the absence of a discussion of market failure. Quiggin’s adherence to the doctrine of neoclassical equilibrium misses an important fact: the absence of a neoclassical equilibrium is not a recession, but the ordinary course of the economy. Economics in Two Lessons reveals a misunderstanding of Austrian business cycle theory, and the second lesson to a large extent consists of casting Hazlitt’s lesson aside.
market process — market failure — economic policy — austrian economics
David Gordon

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Rothbard: The Constitution Was a Coup d’État

February 16, 2020

[Conceived in Liberty: The New Republic, 1784–1791. By Murray N. Rothbard. Edited by Patrick Newman. Mises Institute, 2019. 332 pages.]
We owe Patrick Newman a great debt for his enterprise and editorial skill in bringing to publication the fifth volume, hitherto thought lost, of Murray Rothbard’s Conceived in Liberty. The details of his rescue of the lost manuscript are indeed dramatic, but rather than recount them here, I should like to concentrate on a theme central to the new book.
It is well known that Rothbard took the American Revolution to be mainly libertarian in its inspiration. The libertarian impulses of the Revolution were betrayed by a centralizing coup d’état. As Rothbard puts it:
Basically, urban merchants and artisans, as well as many slaveholding

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Money, Inflation, and Business Cycles: The Cantillon Effect and the Economy

January 21, 2020

Money, Inflation, and Business Cycles: The Cantillon Effect and the Economy
by Arkadiusz Sieroń
Abingdon: Routledge, 2019
x + 162 pp.
Abstract: Austrian economists hold that money matters a great deal in concrete terms in the immediate short run and has permanent long-run effects. Sierońs book investigates the Cantillon effect, which indicates that money is not neutral because inevitabily it is injected unevenly, creating economic distortions. These distortions are important to the long run and the Austrian theory of the business cycle.
Quarterly Journal of Austrian Economics 22 no 3 2019.pdf
inflation    interest rate    central bank    money neutrality    cantillon
Economists agree that money matters, but that agreement stops when it comes to how money matters.

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Luck and Taxes

January 20, 2020

“Luck egalitarianism” is a philosophical fad, and in the past I have had some characteristically unkind things to say about it. I’d like today to discuss a new argument that concerns luck and government.
The economist Robert H. Frank says in Under the Influence,
Because successful people often fail to appreciate the importance of seemingly minor random events in life, they tend to develop an exaggerated sense of entitlement to the enormous material rewards they command in the marketplace. To be sure, most successful people work hard and are highly talented. But at critical junctures, they must also have been lucky. There are plenty of others, after all, who were equally talented and hardworking, yet didn’t earn nearly as much. The problem is that when people think

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Economist: Your Freedom Is Dangerous Because You Might Set a Bad Example

January 14, 2020

Last week I discussed a new argument against paternalism in the important book of Mario Rizzo and Glen Whitman, Escaping Paternalism. Today I’d like to give the other side a chance.
Robert H. Frank is an economist at Cornell University, well-regarded for his work on the emotions and usually anxious to stress the flaws of the free market. In his just-published Under the Influence, he offers, among many other things, a defense of high taxes on cigarettes, and this is what I’m going to talk about today. Frank’s argument, I hope to show, rests on some fundamental confusions.
Frank acknowledges that taxes on cigarettes, like other “sin taxes,” must overcome a powerful objection. Shouldn’t people be able to decide for themselves what goods they wish to consume? Even if

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Why Paternalists Keep Calling Us “Irrational”

January 6, 2020

Some economists, such as the 2017 Nobel Laureate Richard Thaler and his colleague Cass Sunstein, have proposed an unusual justification for government interference with people’s choices. They do not intend, they say, to override the preferences that people have. They don’t want to tell people what they “should” want, according to an external standard that people don’t accept.
They claim, however, that accepting the actual preferences people have still leaves room for government intervention. How is this possible? Their answer is that people often choose in an irrational way. They make mistakes in reasoning and choose impulsively. People don’t “really” want what they choose irrationally, so government intervention that pushes people to choose rationally is

Read More »

Is Greater Productivity a Danger?

January 3, 2020

It is bad enough that opponents of the free market wrongly blame capitalism for environmental pollution, depressions, and wars. Whatever the failings of their causal theories, at least they are focused on undoubtedly bad things. We have really gone beyond the pale, though, when the market is blamed for something good.
Tim Jackson, a professor of sustainable development at the University of Surrey, does just that in his article. “Let’s Be Less Productive,” which appeared in the New York Times on May 26, 2012.
Jackson suggests that greater productivity may have reached its “natural limits.” By productivity he means “the amount of output delivered per hour of work in the economy.” He acknowledges that as work has become more efficient, substantial benefits have

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Failing to Emigrate Does Not Mean You Give Consent to the State

December 24, 2019

Eric Nelson, a Professor Government at Harvard, has published this year a brilliant and imaginative book, The Theology of Liberalism (Harvard University Press, 2019). Nelson, it should be said, is no leftist, despite what you might expect from his Harvard affiliation. To the contrary, he is a conservative and favors, though not to the fullest extent, the free market and private property rights. I hope to address on future occasions his penetrating and original views on the theological roots of “luck egalitarianism” and on libertarian theories of property acquisition and rectification.
For now, though, I propose to consider two arguments that Nelson gives in favor of tacit consent as a basis for political sovereignty. In the first of these arguments, Nelson with

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Yes, Taxation Is Theft

November 17, 2019

Libertarians think that taxation is theft. The government takes away part of your income and property by force. Your payments aren’t voluntary. If you think they are, try to withhold payment and see what happens.
An influential book by Liam Murphy and Thomas Nagel, The Myth of Ownership, tries to show that this view of taxation is wrong. Many people, they say, foolishly resent taxes. By what right does the government take away part of what we own? Isn’t this legalized theft? The government may claim that it needs the funds to provide essential social services: are the poor to be left to starve? But these assertions do not justify its policy of forcible seizure. Isn’t it up to each owner of property to decide what, if anything, he wishes to donate to charity and

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