The Meaning of Ludwig von Mises | Murray N. Rothbard

A lecture presented by Murray N. Rothbard. Recorded on July 27, 1985. Location of where lecture presented is unknown.

Source: The Meaning of Ludwig von Mises | Murray N. Rothbard – YouTube

http://www.readroathbard.com/the-meaning-of-ludwig-von-mises-murray-n-rothbard

TRANSCRIPT

00:03
yeah this truck will be on the medium
00:06
eases mean what meaning what did he
00:08
accomplish what sort of a person was a
00:09
and I guess meaning of his life first of
00:14
all I I guess I shouldn’t something I
00:15
usually when I start or start off
00:17
talking about what’s being economics my
00:19
first statement really don’t have to
00:20
make it as company name i’ll make it
00:22
anyway if mainly that there’s nothing
00:24
really nothing to do with austria i’m
00:25
not an expert on economics of Wall
00:27
Street I know nothing about their
00:28
banking system or what’s going on there
00:30
so right it’s called the Austrian school
00:33
because it began in Austria and we had a
00:36
university of vienna and emanated from
00:39
there so that when out the point for a
00:43
long time there were no Austrians in
00:44
Austria so to speak and there there are
00:45
some I think now more or less fellow
00:47
travelers at least but so schools of
00:51
thought are labeled by places where they
00:53
originated and incubated and so forth
00:57
the the Austrian school was started in
01:02
1870s but calm anger most people know
01:05
here the and is built on a completely
01:09
different tradition from the dominant
01:10
British tradition which most people from
01:13
a new weapon Smith Ricardo classical
01:15
school tradition the focus of the
01:20
British tradition was always on
01:23
aggregates groups and other fallacious
01:28
incites the classes the focus of the
01:33
continental school of thought starting
01:35
with the scholastics and working on in
01:37
Spanish conflicts and on transit Lee for
01:40
centuries was worth individuals starting
01:42
an individual and that tradition was
01:45
more or less swamped and Lee in the
01:47
Smith Ricardo dominance it turns out now
01:52
by the way which wasn’t really swamped
01:53
Hill Johnson until John Stuart Mill we
01:55
established record on 1848 and so that
02:00
but Mills tremendous influence in
02:03
English British economics other or any
02:06
other schools of force or swallow it up
02:08
the
02:11
the Classical School will put their
02:13
president going over this rate break
02:14
very quickly the Classical School for
02:16
example claim the value is determined by
02:19
cost of production some inherent and Lee
02:21
in the product and by doing this of
02:24
course they could not have to leave out
02:27
explanations of the values of goods
02:29
which are not reproducible such as
02:30
Rembrandt paintings other words
02:33
Rembrandt we’re embodied a certain
02:35
number of labor hours we don’t know we
02:37
don’t know what don’t really know how
02:39
many labor hours and body but remember
02:40
has kinase that’s it so the value of a
02:43
Rembrandt obviously fluctuating over
02:44
time is real it’ll do in a number of
02:46
labor hours put in by Rembrandt so that
02:49
sort of explanation those sort of goods
02:51
have to be left out and the had to deal
02:58
with because it are reproducible and the
03:01
emphasis I’m convinced now on the
03:03
quantity of Labor our is labor theory of
03:05
value which course is again a British
03:06
products myths and Ricardo but the
03:09
emphasis on that I think it’s pretty
03:10
well this is fairly speculum I think
03:13
pretty well established it really comes
03:16
in from from Scottish Calvinism in which
03:18
adam smith is imbued and the Calvinist
03:23
being a uniquely anything believing that
03:27
the value labourers only if not only
03:30
necessary but also a good in itself and
03:32
that so the emphasis on labor as it
03:35
going to self seeps into the value
03:37
Theory the of course we know about the
03:41
value of paradox which is which Smith
03:43
Ricardo couldn’t solve namely how come
03:45
the diamond and diamonds of water and
03:47
one-handed what if example is a very
03:50
useful good and yet it’s very cheap
03:52
those days was virtually free and
03:55
diamonds are is a mere fripperies my
03:57
fight with Smith he won’t almost says it
03:59
done is a useless good Calvin this
04:01
position and yet I yet of course are
04:04
very expensive and so here we have an
04:06
alleged paradox that the use of value of
04:08
bread or water as much greater than the
04:11
use value of diamonds and yet they’re
04:12
much cheaper on the market therefore we
04:14
can’t explain it therefore we have to
04:15
toss out use value as any kind of
04:17
explanation of economic crisis
04:22
oddly enough Smith solve the very same
04:24
paradox that he couldn’t solve in the
04:26
wealth of nations he solved 20 years
04:27
earlier in his lectures and a pretty
04:30
good explanation the usual exploration
04:32
taken from school and I scholastics
04:33
through the Scottish enlightenment and
04:36
it’s still not quite comprehensible why
04:38
he didn’t he didn’t include this in
04:39
whopper nationwide ‘only he couldn’t
04:41
solve it by the town of the wealth of
04:42
the nation it couldn’t be the lectures
04:44
were previous publication you couldn’t
04:45
say I refer you back to my previous book
04:47
because election burnt published until
04:49
the 20th century so at any rate the in
04:53
addition another another problem of
04:55
classical economics with a use emphasis
04:57
on aggregates Ricardo’s major worries
05:01
major problem with how do our classes of
05:04
income how incomes how they can
05:06
distributed between various classes I
05:07
mean workers capitalist and landlords
05:10
and so the focus that is who gets what
05:13
share of a pie and of course it’s very
05:15
easy from that arrived at class struggle
05:17
view of the over here the economy
05:19
whatever one group doesn’t get only one
05:22
group gets more the other group
05:22
automatically has to get less so this
05:27
this eye thing led very quickly to both
05:29
marks and Henry George both wings of
05:31
record ians and both I think pretty good
05:33
record Ian so if you start with that
05:34
kind of assumption in other words of you
05:37
if you want if you interested in any
05:38
sense injustice and you’re a Cardian you
05:40
might wind up pretty quickly either a
05:42
georgia store a Marxist or both and a
05:47
long where that comes to split between
05:48
production and distribution somehow
05:49
productions well it was a production or
05:51
at here was a distribution or out they
05:52
are they’re not really in contact and
05:54
therefore you can muck around with the
05:56
production of distribution and not
05:57
influence production and finally about a
06:01
couple more problems of classical school
06:03
and when it’s spent too much time on it
06:05
one is the emphasis almost completely on
06:08
long-run equilibrium which is really a
06:11
tendency and yet is elevated to an
06:14
existing always existing force in long
06:18
run equilibrium is perfect certain basis
06:20
there’s ever any change is obviously
06:21
going to be certainty perfect
06:23
competition perfect knowledge of the
06:25
present future no profits and losses and
06:27
so forth so on so the emphasis gets to
06:30
be much mostly on that and still is even
06:33
even today
06:35
and finally the severe split between the
06:37
macro on the microspheres which of
06:38
course we’re all too familiar with now
06:40
there is the money sphere where things
06:43
are going on with money in general
06:44
prices and as the microsphere was
06:46
supplying the man and never the twain
06:48
meets the to hermetically sealed the
06:51
visions of life and if you both of you
06:54
have taken a micro course you learn
06:57
about supplying to Manolis good thing
06:58
that makes makes a fair amount of sense
07:00
then you have to macro all of a sudden
07:01
all these things drop out you’re dealing
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with what statistics with no connection
07:06
really between the two of them I think
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it starts with Ricardo’s legacy Denny
07:10
right the Austrian starting 1871 saw me
07:14
with mingoris principle of economics
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begins the Austrian school building on
07:20
the Continental tradition building on
07:22
the French tradition some German and
07:26
style and and as a as in that tradition
07:29
little bit related to jb say I’m say
07:32
also in France basing their basing their
07:36
analysis on the individual method
07:40
logical individualism piece of a call
07:41
will call it each individual’s actions
07:44
and how you build off the individual
07:46
actions at or into a general analysis
07:48
from that you can say she can see fairly
07:51
readily the purpose of production is
07:52
consumption that’s something the end
07:54
result in goal of action of the market
07:58
and also that the value the value of
08:00
products whether they be Rembrandt’s or
08:02
steel bars or automobiles or bubblegum
08:07
the value of all products are conferred
08:09
upon a product by consumers by consumer
08:11
valuation by choices of consumers are
08:14
not inherent in the product is those
08:16
thing in me which has 20 you goals okay
08:19
I can work for I can work for many years
08:24
on some product and come up by that
08:26
nobody will buy it and the number of my
08:28
hour is involved in as doesn’t mean damn
08:30
thing to the result so the end of a
08:33
various individuals various consumers on
08:35
the market with their value scale for
08:38
their subjective evaluations confer
08:40
daily only wants to confer value upon
08:42
any product and since in other this
08:45
press release to the value paradox it’s
08:47
things are
08:48
on the market a specific units in other
08:50
words we don’t we don’t value all the
08:51
bread on the world on the market value
08:53
one speak one loaf of Wonder Bread how
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much I’m willing to pay for one loaf of
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Wonder I’m not talking about how much
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would we but I’d be willing to pay or
09:00
all of us be willing to pay for the
09:01
entire bread in the universe but it’s
09:04
not just the start it’s a no it’s not a
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real world option and so since all all
09:10
action on the market deals with units
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units of labor units of goods units or a
09:14
product that this margin or marching to
09:18
the utility of each margin margin
09:20
utility to probably determines the value
09:22
on the market of course the value of
09:25
paradox has been solved the diamond read
09:28
on the order of paradox namely if the
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angel Gabriel came down to moral saying
09:32
is Gabriel interrupted old television
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sets tomorrow the people of Earth listen
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that sort of thing and said you’ll now
09:38
confronted with a choice mankind is off
09:40
privilege with a choice now from now on
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either all the bread on the world
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forever and ever you have to give up one
09:47
of the two old bread on the world
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forever and ever all diamonds the world
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forever and ever if we walk in front of
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us that sort of choice we probably
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choose bread however when I confront of
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that choice so in the in the real world
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it says not more loaves of bread around
10:00
so there are carats of diamonds since
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the supply so much greater the value of
10:06
each even unit of bread is much lower so
10:10
as I say this is really saw about
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scholastic scholastics in Italy and
10:15
Spain and without the marginal emphasis
10:18
but almost everything else was in
10:19
containing their solution with again
10:25
with methodological individualism you
10:26
solve a distribution question instead of
10:28
worrying about labor as a whole and
10:30
profits or capitalist as a whole and and
10:33
landlords as a whole how much are they
10:35
getting it talk about each individual
10:37
unit and then the problem of psalm it
10:40
turns out that the tendency is for each
10:42
unit of every factor to get its marginal
10:45
value product and so the marginal
10:46
productivity theory of the Austrian
10:48
school then comes in to undercut more or
10:52
less phony problems which which other
10:53
schools have been engaged in the so
10:58
there’s no split between production
10:59
distribution what you get on the market
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but your way
11:02
rate or review price of your capital
11:04
good or whatever is that are your rent
11:06
of your machine or rent of your land is
11:08
determined by the product marginal value
11:10
of productivity how much it’s yeah
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that’s where how much how much other
11:15
people think it’s worth on the market
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how much it’s purchasers think it’s
11:17
worth and that’s determined by how much
11:19
they think don’t get in from from
11:22
product from the factor so each factor
11:24
then tends to get its marginal product
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again the bum barbaric mangers great
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pupil organ from barbaric softly
11:33
interest problem which should not been
11:35
really solved until then there are
11:37
certain hints of a solution before that
11:38
but not really copper rivet until
11:42
momento barber the poor scholastics
11:44
couldn’t figure out why what justifies
11:47
alone on a pure loan if you’ll risk loss
11:50
alone more or less risk loans and they
11:52
can understand wrist and it’s the profit
11:54
and wrist understand opportunity cost I
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couldn’t figure out why people should
11:57
get interest on pure alone if I only
12:00
trying look loan you a hundred dollars
12:02
for a year why should I get ten bucks
12:03
back in additional 100 what’s the
12:05
justification when I couldn’t figure it
12:06
out there prod much they said must be
12:08
sin and this this attribution of send to
12:13
interest poison the whole scholastica
12:15
nomics and then on because then they
12:17
have this as realistic p a very very
12:19
shrewd capitalist or analyst of the
12:22
market they realized they outlawed
12:23
interest the whole economy going down
12:25
the drain they have to find all sorts of
12:27
ways of getting around opportunity cost
12:28
profit for gone that sort of thing but
12:31
they never really solve this riskless
12:33
interest question and bum Barbara comes
12:37
up with solutions is a time preference
12:38
this is the fact that people prefer as
12:41
as it is really gets back again the
12:43
individual on the market individual in
12:44
the world everybody prefers achieving
12:46
their wants earlier than later and since
12:49
you prefer getting your butt you want
12:50
earlier than later it seems the
12:51
president good is always worth more than
12:53
a future good and this premium is then
12:55
worked out on the marketplace and the
12:57
premium is the rate of interest that is
12:58
the basic interest rate so this is the
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this was a great solutions also solve
13:02
the Marxian problem how come capital
13:04
earns an extra profit an extra interest
13:06
rate above the cost of the capital
13:08
unless the answer and boom bah-bah worse
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this after the capital structure also
13:13
integrates time as a capital theory camp
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still haven’t got back to bombard rakyat
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by the way I’m gonna see this might seem
13:19
like old half o contra fights of 1870
13:23
modern economic theory still considers
13:26
capital of the homogeneous a lump and
13:28
that’s it you add capital and some sort
13:30
of ingenious way to the others factors
13:33
capital takes time and therefore it’s a
13:35
structures a lattice work and this of
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course is as I say spell upon Mubarak
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and the knowledge has been lost this by
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the way is an important point of thing
13:45
in history of thought in general history
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economics or philosophic store or even
13:49
maybe even the hard sciences of mainly
13:52
knowledge gets lost since we tend to
13:55
think of the history of science is one
13:57
great march onward an upper and a light
13:58
so that everybody in any given point of
14:01
time let’s say 1920 knows much more than
14:04
anyone knows everything everybody guy in
14:06
1910 did plus more plus 10 years more
14:09
great progress it really doesn’t work
14:12
that way and often we lose knowledge so
14:14
the fellow 1920 knows less than the guy
14:15
1910 and suddenly we’ve lost a lot of
14:18
knowledge so that the current textbook
14:20
does not incorporate all the knowledge
14:22
of the past throwing out all the chaff
14:23
sometimes the baby gets thrown out with
14:25
a bath water and similarly capital one
14:27
of the things of course is capital
14:28
theory I’m really thrown out and mostly
14:32
economic still thinks of capital as one
14:34
day homogeneous lump and not as a slice
14:36
of lattice work as a structure a time
14:38
structure ok at any rate the this by the
14:43
way and also again an Austrian economics
14:45
this is I think through true in general
14:47
is that equilibrium is a tendency and
14:50
not another custom reality so the world
14:53
the market is always moving toward
14:54
equilibrium never quite gets there
14:55
because the data keeps changing so even
14:58
though the long-run profits and losses
15:00
disappear since change is always taking
15:02
place the long run never quite to get
15:04
quite gets reached I like to think of it
15:06
as the economy I like the thing the
15:08
economy is a dog chasing mechanical
15:10
rabbit the rabbit always changes
15:12
direction a dog keeps changing direction
15:13
trying to follow ever never kept quest
15:15
that never eats the rabbit so so
15:19
equilibrium becomes an important form of
15:22
the tool of analysis of tendency but not
15:24
an actual living situation there for you
15:26
always have intrapreneurial profits and
15:28
losses for example
15:29
since it once again mar taken economics
15:33
can’t really handle a question
15:34
entrepreneurship profits and loss you
15:36
look through textbooks and
15:38
microeconomics never see the word
15:40
prophet very rarely in there this is all
15:42
disappears because everything is always
15:44
automatically in general equilibrium
15:45
everything is a static state hey right
15:50
so then Austrian approach to toss all
15:51
right out you start with a real world he
15:53
analyzed the individual acting the real
15:55
world therefore since the real world of
15:56
the world of uncertainty you’re
15:58
constantly a situation and action takes
16:00
place food time so therefore you always
16:03
have profits and losses you can
16:04
understand the intrapreneur the
16:06
capitalist enterpreneurs rule income is
16:09
a two-part income one rate of prom a
16:13
time preference rate of lending mothers
16:15
are spending money now and then waiting
16:17
for the return return on type reverence
16:20
or the turn on waiting whichever we want
16:21
to put it and to profits and losses for
16:24
successful entrepreneurship they’re
16:26
being good entrepreneur you get profits
16:27
being lousy enterpreneur you suffer
16:29
losses alright so then I must I would
16:33
also mention Frank Federer my favorite
16:35
economists who worked out a whole time
16:37
preference there in time market theory
16:39
and great detail and from 1990 13 period
16:42
billing for some bon viveur a’kin and
16:45
purifying Mumbai barracks doctrine
16:48
alright this brings us the Me’s this my
16:50
topic today puts my water in here okay
16:55
Mike sorry okay Jesus was a brilliant
17:01
young student and I’m barbaric stainless
17:03
seminar manga had dropped out of
17:04
teaching by this time get water oh oh
17:09
thank you just require human action okay
17:17
I said I’m a low-tech persons are high
17:21
too high tech for me I hear meeses was
17:29
student bumble bear explain the seminar
17:31
University Vienna and the Austrians
17:34
already arrived at the correct theory of
17:36
value distribution and so forth so on
17:38
handling of equilibrium in the preneur
17:40
ship they not yet however gotten to the
17:43
macro they hadn’t got another theory of
17:44
money then they hadn’t healed the
17:45
micromax micro split and so on his first
17:49
work as great first work kameez his very
17:51
first work and economics the theory
17:52
money credit came at 1912 I’m leaving
17:55
out his unpub has untranslated theory of
17:57
history feudalism in Austria she say
17:59
serfdom doctoral dissertation on the
18:02
emancipation of the serfs an ostrich
18:04
I’ve not read has not been translated
18:06
I’m read but I don’t think Malika nomics
18:08
try seconds understand anyway his first
18:11
great work with theory money and credit
18:12
1912 would she healed on Michael macros
18:15
but he integrated the theory of utility
18:17
and theory of value theory margin
18:19
utility into the to explaining money and
18:22
money price / prices and money they’re
18:23
magnificent achievement it was out of
18:25
course hey love for spot it was became
18:27
very popular in the continent he told me
18:30
that the other people in bham bham rex
18:32
some are cleaning bomb bobert rejected
18:33
as being too radical radical the sense
18:36
of course means an innovative change and
18:39
and violating the whatever the greats
18:43
the basic i guess the basic split of
18:47
micro and macro they wouldn’t put in
18:48
those terms that and so he explained the
18:52
value of money as a purchasing power of
18:55
money as just like all other goods
18:57
determined by supply and demand is a
18:59
great achievement this had been done by
19:01
the scholastics again he’s really going
19:02
back probably unknown unknowingly and
19:05
building and getting as much more
19:06
detailed scholastics were post nature’s
19:08
and philosophy and on economics so uh
19:12
any show that just as with any other
19:15
product the supply of something
19:17
increases that lowers its value its
19:19
marginal unit arjun utility soul
19:22
emphasis upon the supply money increases
19:23
it lowers the value of the money unit
19:25
and purchasing power terms and vice
19:27
versa and increases the man for money
19:28
raises its value
19:30
and the man from money is the money the
19:32
demand to hold money in cash balances so
19:36
right away we anticipate Roberts and I
19:37
think much about other Robertson arms
19:38
again being much more aggregate of amis
19:40
this always always focusing on the
19:42
individual and building up from there
19:43
very much like candle on but much not
19:46
much building on Catalans analysis the
19:49
early 18th century so and again using
19:54
the Ricardian site which I think wasn’t
19:55
important inside unlike the one
19:57
difference between goods and other and
19:58
money and other goods the one big
20:00
differences it’s the same in the sense
20:01
that the values were determine the same
20:03
way by supplying a man the difference is
20:06
you don’t need more money other words
20:08
you have a greater supply of goods it’s
20:10
socially useful so to speak other things
20:13
being equal an increase in supply of
20:15
consumer goods benefits people and
20:17
increases Y of capital goods benefits
20:19
people could increase consumer goods
20:20
later on so but goods it but regular
20:23
goods and services that increase in
20:24
supply is beneficial increases my money
20:27
however benefits is not is not socially
20:29
even officials pointless because all it
20:31
does is dilute the value the
20:33
effectiveness of each dollar each money
20:35
unit the music is it’s worth less than
20:38
purchasing power so once money gets
20:40
established on the market as a commodity
20:43
gets establish of money you don’t need
20:45
any more of it any any amount a supplies
20:47
optimal so this of course tosses out all
20:52
the inflation estar gyea ments we’ve
20:53
heard from centuries and for schooler
20:55
hearing you need money need more money
20:56
when population grows need more money to
20:59
the world more complex the more money is
21:01
more oil around whatever whatever they
21:02
the arguments are all this is a lot of
21:04
nonsense the Me’s I see in perspective
21:08
so more money inflates and lowers the
21:11
value of each unit okay that’s another
21:13
thing he points out Mises does that
21:15
money does not act the famous Friedman
21:18
helicopter effect map manners no split
21:20
between micro and macro I mean so that
21:22
when the supply of money increases money
21:24
can never be neutral on the market even
21:26
though that’s not socially beneficial
21:27
increase in supply it messes things up
21:29
it doesn’t just increase the price level
21:32
is as most anonymous will now say
21:34
increasingly spike increasing the price
21:35
level yes indeed but also does other
21:37
things it also messes up the production
21:39
structure it messes up the relationship
21:41
between capital goods of consumer the
21:43
create
21:43
mal investments needs to put it there by
21:46
setting the stage for inevitable
21:47
recession recession and functions as a
21:50
way of liquidating a necessary and
21:53
painful the necessary way of liquidating
21:55
the unsound investments of the
21:56
inflationary boom period so what Mises
21:59
was getting out without even realizing
22:00
and money and credit is getting at a
22:01
theory of the business cycle she then
22:03
develops in the 1920s if I get to that
22:06
and distance in a second another point
22:10
the Mises does he we established the
22:12
so-called currency principle which at
22:14
least on the continent had died out and
22:18
the fact that the money increase in my
22:20
supply causes deficits and balance of
22:22
payments causes inflation etc and brings
22:26
back the idea of a bit of a beneficial
22:28
aspect of the one hundred percent gold
22:31
banking 1% reserve banking many of this
22:35
gets picked up later by other economists
22:37
without referring to me sasur billion
22:39
and sort of watching things up along the
22:42
way the he also shows something which is
22:45
very important which many Austrians
22:48
still don’t understand today for this to
22:50
this day I’ve gotten were talking about
22:51
the loss of knowledge of whatever not
22:53
gaining knowledge in this case the money
22:56
money comes out of the market this is
22:58
the Menger analysis money money arises
23:00
as a marketable commodity under border
23:02
and leases adding a fact that has to
23:05
arise out of border in other words money
23:07
a money commodity has to originate as a
23:09
valuable commodity non non monetary
23:12
terms of the word has to be valuable
23:14
before it gets to be money otherwise
23:16
nobody would originally buy it so it has
23:20
to be has to be ganas gold or a Cowrie
23:23
shell or a son so salt I mean it’s been
23:25
dozens of monies and all originated on
23:28
does not money cannot originate either
23:29
as a social either as a social contract
23:31
everybody gets together you know 2,000
23:33
people go together okay let’s make such
23:34
and such money does not originate that
23:36
way can I cannot originate by state fire
23:38
has originated as a useful marketable
23:40
commodity if you go back and lease on
23:43
the Grand Ole wonderful old money and
23:44
banking textbooks back in a gold
23:46
standard period the first chapter always
23:47
deals with that why is something such as
23:49
such the chosens money they don’t talk
23:51
about meez as regression theorem buddy
23:53
shows that has to arise this way but you
23:54
say well as these are because this c’mon
23:57
I gold and silver was it was rare and
23:59
valuable and and stable and easily
24:01
recognizable he’s fat the affordable and
24:04
carry around when the governor’s trying
24:05
to trying to find you you can sneak out
24:07
of the country with it it pockets full
24:09
of things like that all the valuable
24:11
aspects of the money commodity this is
24:13
why the market chose it so um we still
24:18
have people for even Austrians right now
24:19
so fooling around the idea how can we
24:21
what money can we create without
24:23
breaking it recognizing the fact that
24:24
money has to begin as a valuable
24:25
commodity of some sort has to begin as a
24:28
valuable on the market can’t be newly
24:30
created uh also Mesa showed as an almost
24:34
in passing a very important part of
24:36
theory money this is all theory money
24:38
credit know that he showed that marginal
24:41
utility cannot be measured he was the
24:42
first person that he pointed out
24:43
following France chula great check
24:46
economists and barbaric student margin
24:51
utility has to be ordinal cannot be
24:52
measurable no knows this you can’t use
24:54
the concept of measurement for a subject
24:56
internal subjective phenomena psychic
24:59
phenomenon and of course if utility
25:01
can’t be measured we don’t find out
25:04
later Austrians the course can’t be
25:06
measured either since the costs are
25:07
subjective an Austrian should say that’s
25:09
an a right and therefore you can’t use
25:11
cost-benefit analysis for social
25:13
projects you can’t say it’s not really
25:16
legitimate say the government should
25:16
build that dam or shouldn’t build that
25:18
dam because you adebola course and iPad
25:21
up all the benefits you find out the
25:22
benefits slightly exceed the cost or
25:24
vice versa nobody knows what the
25:25
benefits are no one knows what the costs
25:26
are since the whole internally
25:28
subjective each person uh as I say the
25:32
business cycle theory meeses really
25:33
starts in theory money credit okay then
25:37
he develops that in 1920s to get to the
25:38
business cycle theory a little bit
25:39
further really begins with two questions
25:43
which any business cycle theory should
25:45
answer one is how come there’s a cluster
25:48
of unsung unsound forecast businessmen
25:51
are good forecasters I will not go so
25:52
far as the rational expectations people
25:54
say this is my always forecasts
25:56
everything correctly they know the
25:57
future with deep insight like some kind
25:59
of clairvoyant but they are pretty good
26:02
I mean they’re in business because there
26:03
have been good for casters in the past
26:05
therefore they generally pretty darn
26:06
good on within the present how come they
26:08
will made us big mistake other words
26:09
outcome
26:10
a certain crisis periods 1929 obviously
26:13
go in the previous periods how can they
26:15
certainly try to be lousy forecasters
26:17
they bid up costs way beyond their
26:19
selling prices they get to their product
26:21
plus an important question it’s usually
26:24
not even answer even asked by most
26:25
business cycle theorists and secondly
26:28
well how come capital goes all ways
26:29
fluctuate more than consumer goods in
26:31
other words and every business cycle its
26:35
capital goods rise have a goes prices
26:38
rise faster they boom oil and
26:40
consumerism they collapse much more
26:41
during the Depression for example 1929
26:43
depression capital goods was great much
26:46
greater Bloomington capital doesn’t work
26:48
at Sumer goods then comes the big crash
26:50
capital goods prices and employment fell
26:52
tremendously in consumer goods prices
26:54
you know just apply slight amount so
26:57
those are the two questions which we
26:58
just really begins with and then he
27:01
formulates his great business cycle
27:02
theory the basis of several integrating
27:04
several insights the currency school in
27:06
sight for example he thought I know he’s
27:07
the only one who’s ever said that means
27:10
is that Ricardian the famous Ricardian
27:12
theory of our human recording theory of
27:14
international monetary relations
27:16
monetary payment is really a business
27:18
cycle theory in addition to be
27:19
international trip money theory but was
27:21
worth saying is the banks increased
27:24
money supply in one country okay
27:26
therefore prices go up there for gold
27:29
flows out and therefore as a deficit
27:32
balance of payments go flow down there
27:33
for banks have to contract and causes a
27:35
recession this is a one and a simple but
27:37
important model of a business cycle a
27:39
boom-bust situation soumise it begins
27:42
with that he also integrates that with
27:43
Vic sells natural interest rate and loan
27:46
interest rate theory plus bon viveur
27:48
exterior capital structure and winds up
27:50
those great business cycle theory which
27:52
should be again this summer very quickly
27:54
is that the bank’s increases supply
27:57
money in credit they do it by usually by
28:00
lending money to businessmen this causes
28:02
business vent to it lowers the rate of
28:04
interest below the free market rate the
28:07
rate of which voluntary savings so to
28:09
speak with that effect of the market no
28:13
was below the time preference rate it
28:15
then business mal then led to expand our
28:19
investment beyond but they wouldn’t and
28:21
capital goods beyond what they would
28:22
ordinarily is
28:24
malinvestment the camera over investment
28:26
of capital goes under investment on
28:27
consumer goods says they were hard
28:29
brought one misstep on over investment
28:31
in campbell goes under investment
28:32
consumer goes nowhere it’s messing up
28:33
the production structure and then when
28:37
the interest when I money supply stops
28:39
expanding mango this is revealed and the
28:41
only the forecasting turns out they
28:43
piccoli badly because capital goods
28:45
industry in other words the bankruptcies
28:46
on unemployment account book of
28:48
industries so that labor Atlanta capital
28:52
can shift back consumer goes where they
28:53
originally were first place this is the
28:57
rest in other words the inflationary
28:58
credit requires a recession once it’s
29:01
inflationary credit gets underway one
29:04
question about this which meets his ass
29:05
in human action he says well how come
29:08
this de seem like very short process may
29:11
expand credit because over inflation
29:14
wages and st. capital goods industries
29:16
workers then spend the money and then
29:17
the whole thing there’s too little
29:18
savings to buy the new investments why
29:20
doesn’t the capital wasn’t a boom last
29:22
only by a couple of months why is it
29:24
lasts many several years and the reason
29:26
is Mises points that is where the bank’s
29:29
keep expanded credit to be one step
29:30
ahead of retribution in other words in
29:33
this case is constantly expanding credit
29:35
system so the business doesn’t don’t
29:37
have a liquidity shortage nor so that
29:39
they can keep refinancing their capital
29:42
and keep expanding their biking being
29:45
one step ahead a recession soon as done
29:46
as the interest of the expansion of
29:48
credit significantly slows down or stops
29:51
the whole thing in recession and comes
29:53
on like a thunderclap aah this question
29:57
we would ask now I guess is with our
29:59
national expectations people how come
30:01
businessmen don’t realize us and stop
30:03
doing it in other words why don’t they
30:06
study Austrian economics understand that
30:08
inflationary boom causes over-investment
30:10
therefore not over invest and the answer
30:12
is this that doesn’t work that simply an
30:13
answer is it’s not irrational to
30:15
over-invest so long as the boom
30:17
continues I know a case for example of a
30:19
lovable one of the first Austrian
30:21
businessmen converse the Austrian theory
30:23
bill mullendore on the early days of
30:25
libertarian movement free market move in
30:27
1940s he was the president of Southern
30:29
California Edison Company some
30:31
Commonwealth Edison I that’s cool and he
30:33
takes this the horny says don’t expand
30:35
he’s how’s business been this 1946 don’t
30:37
expand
30:37
it’s gonna be recessions inevitable and
30:40
the other thing is a crackpot of course
30:41
they do expand the thing is he lost
30:42
money that sort of me he lost money for
30:45
southern Commonwealth Edison with this
30:46
kind of policy because even though he’s
30:49
right in the long run on meantime it’s
30:51
rational keep expanding in other words
30:53
which the businessman is it was to try
30:54
to figure out how long was then continue
30:56
this boom and if a boom will continue
30:58
for 20 years you have to keep expanding
30:59
for 20 years you can’t fight the thing
31:01
on your own so to speak so this is why
31:04
it’s not irrational over-invest it’s
31:06
rational over vessel always the
31:07
government the banking system keeps
31:08
creating the boom the inflationary she’s
31:12
me boom and train you try the x
31:14
forecasting has a question that’s not
31:15
not of GNP models hourican a metric
31:17
miles trying to figure out what the
31:18
jerks and government gonna do let’s
31:20
think that’s the real point the ok the I
31:28
think that’s enough of a business cycle
31:30
theory Lisa’s developed the tortoise
31:33
views in the his private seminar the
31:35
part my commerce he never had a
31:36
government job who’s beat out as
31:39
government job and University of Vienna
31:41
he didn’t heating up to you follows the
31:44
top post their the chair mercian Vienna
31:48
so he had a pre modded sent post which
31:50
is an unpaid teaching post however
31:51
that’s pretty prestigious in Europe not
31:53
very prestigious here so are you the pre
31:58
much dode set in vienna and he he is a
32:03
regular job as a department conversant
32:05
in austria and he has private seminar in
32:09
his office the department commerce in
32:10
Vienna for all these people all the big
32:12
shots came all the brilliant young
32:13
intellectuals and economists in europe
32:15
at end of the seminar and more or less
32:17
converted lisa me converted I just list
32:19
a few of them course hi Aquino Fritz ma
32:22
Club harbor Lord Robbins Eric vogelin
32:25
the famous political theorist Alfred
32:27
shoots a future Prime Minister Gaitskell
32:29
Labour Party Prime Minister of England
32:31
was like hero tameez SE anti particle
32:33
and then the early 30s I think it was
32:35
and perhaps a kept of knowing all the
32:38
weight of the socialist doctrine and
32:40
then a right one thing that meets his
32:42
dead father why I think should be
32:43
pointed out he did not some younger
32:46
Austrians doing i did not artificially
32:48
separate theory from practice in other
32:50
words he did not
32:51
I’d say we have if your economist and a
32:53
scholar you can’t have any and he and do
32:54
with politics it’s somehow evil have any
32:57
any public policy connection he’s almost
33:00
single-handedly i would say virtually
33:02
single-handed the austrian inflation
33:04
1920s from becoming a hyperinflation he
33:07
was ranked at cern of course it will go
33:08
the austrian crone I guess others would
33:10
go the way of the German mark and by
33:12
constant pressure on the Austrian
33:14
government prevented that man she got a
33:16
currency reform and a prevention I me
33:18
all out hyperinflation is as very sweet
33:21
moving notes and recollections when she
33:23
wrote her are fleeing the Nazis 1940 his
33:26
autobiographical know teehee precise and
33:29
maybe maybe it was maybe should have
33:30
done it maybe he’d been better to have a
33:33
runaway inflation but any right I think
33:34
it’s pretty clear all of his life means
33:37
the not fail to pursue the truth and
33:40
whichever way were ever led ok the and
33:47
he warned by the way of the Great
33:48
Depression he said it would be great
33:49
depression with 12 spring when this
33:51
inflationary boom stops in this and
33:54
doing that he set himself against the
33:56
dominant American doctrines Irving
33:58
Fisher the pre Friedman night professor
34:02
at Yale who claimed everything is going
34:04
great because the Fed was keeping the
34:05
price level constant if the price levels
34:07
constant is not the zone inflation airy
34:09
problem to worry about and Liza’s kept
34:11
saying it’s not true because if you have
34:12
any kind of inflationary bank credit you
34:13
will create price levels not the key
34:15
saying the problem is that production is
34:17
being distorted relative to its free
34:19
market position and interest rate to
34:21
distort it so with meeses production
34:26
turning out to be correct at least in
34:27
that sense it’s his people got more
34:30
interest in these SE and doctrine after
34:31
the crash 1929 uh honey time during the
34:37
1920s a very productive decade from
34:38
eases there’s of course the rise of
34:41
socialism and fate
34:42
revolution in Europe and beezus shortly
34:47
after world war one gave me the decisive
34:49
contribution on hold socialism debate
34:50
now everybody rely even socialists I
34:53
think realize I’ve always realized
34:54
there’s a big incentive problem under
34:56
socialism instead of problems often the
34:58
summed up as who will take out the
34:59
garbage a socialist society every
35:02
everybody is equal everybody is free
35:04
free labor
35:05
I guess equally com who’s gonna take out
35:06
the garbage or who’s in the developed
35:08
Siberia that’s another interesting
35:09
question there’s Siberia right assuming
35:11
it needs to be developed it’s off there
35:13
and how long go on somewhere who’s in a
35:16
schlep out there and build it up okay so
35:19
now the socialist answer this question
35:21
well we will create a new socialist man
35:23
but people will be transformed by
35:25
education or brainwashing and put it
35:27
that way okay 21 it’s sort of a
35:30
collective in any way they want to okay
35:31
anyway a collective once send me to
35:33
Siberia yes yes right or something or
35:36
make me miss I love the garbage if its
35:37
socialist garbage so now and we know
35:42
pretty well now that socially a set of
35:43
problem has not been sawn won’t be
35:44
solved but assigned Lemmy’s is dead in
35:47
this great article 19 20 is that
35:50
assuming well let’s assume that’s the
35:52
problem is so let’s assume everybody now
35:54
loves the collective everybody’s been
35:55
successfully brainwashed he doesn’t even
35:57
turn brainwashing course everybody wants
35:59
to love serviço like what are they
36:01
gonna do how they gonna serve a
36:02
collective Mises point was even if you
36:05
saw the incentive problem so you can’t
36:07
solve a calculation problem namely
36:08
nobody knows what to do how many people
36:10
who sends a Siberia what should they do
36:12
there how many machine somebody mind she
36:14
liked uncle surely bill there how many
36:18
people should be signed a garbage how
36:19
many people a road building who knows
36:20
there’s no without a price system that
36:22
means two points it points out that
36:25
primary private ownership of the means
36:26
of production without there for real
36:29
price system resources there’s no way
36:31
anybody can figure out what to do who to
36:32
do it what techniques to use or anything
36:34
well let’s see without a runner and that
36:37
was his great point as economic
36:40
calculation under socialism or con 1920
36:42
which he expanded the famous book called
36:44
socialism 1922 and socials began of
36:49
course to trying to answer this knows a
36:50
social is much more theoretically and
36:51
client they are now now the I don’t
36:54
think anybody wants to even consider
36:55
this kind of at least in the West I
36:56
think they do in the east they’re very
36:58
worried about would calculate and so
37:02
they said yes I will pretend there is a
37:03
market of the famous longest solution
37:05
which I grew up on in Colombia long to
37:09
solve all that because I just pretend as
37:10
a market and try make you make managers
37:13
act as if their profit making it also
37:15
making enterpreneurs because meez is
37:17
required that he really applied
37:18
that first articles from concern is that
37:20
you can’t really do that because your
37:23
sis is no private property you can’t
37:24
take entrepreneurial loss those there’s
37:26
no such thing as saying go pretending
37:27
that you’re making losses or profits
37:29
you’re not playing Monopoly yay this is
37:31
a real world out there as a big
37:33
difference there’s no way which they can
37:35
calculate is overall price system and I
37:37
think after all is the interesting
37:38
enough the communist countries that ever
37:40
have never installed a long yet system
37:42
either they never even try to do it the
37:44
thing which solves the problem in the
37:46
socialist countries mostly the black
37:48
market which is rampant and in some
37:50
cases like in Hungary Yugoslavia black
37:52
more because more less taken over they
37:54
legalized it most in the census so that
37:56
sense they’ve given up and one of my
38:01
favorite star just one of my favorite
38:02
anecdotes and I started teaching
38:03
Brooklyn poly 1966-67 Lee I talked her
38:08
power of atomic systems that I didn’t
38:09
like me then let me teach it after that
38:11
any right that’s what a woman went for I
38:13
spent most the time talking hi great the
38:15
market is how lousy government planning
38:17
is and finally got it there was a
38:19
exchange professor from Hungary
38:21
distinguish he cannot make a story and I
38:22
said I said well bring him into the side
38:25
the other yeah give the other case the
38:26
other side of the point to the side of
38:28
the view here and he came in and the
38:31
kids that were pretty left wing nut say
38:32
hey this is great now we got the other
38:33
side of the story nice not the whole
38:34
time talking the whole class talking
38:36
about great the market is how lousy
38:37
planning is saying hungry has gone far
38:39
enough yet the toilet free market they
38:42
left boggle why did you imagine uh uh
38:45
all right then the I think now that’s
38:47
the sort of a standing joke and
38:49
economist circles if there any kind of
38:51
world congress of economists they the
38:54
how many his country economist talk
38:56
about how great the market isn’t he was
38:57
Western any comments on by the rate the
38:59
planning is and I think Western comments
39:00
of sort of hybrid or phone apps soft
39:02
often either some extent in recent years
39:05
so in addition of this basis doing all
39:08
this in the 20s working on as business
39:09
cycle theory he’s working on his his
39:12
critique of socialism addition and he
39:15
comes out with patikim intervention as
39:16
I’m showing the government dimension ISM
39:18
interventionism doesn’t work either
39:19
price controllers and work beat
39:21
shortages taxes cripple saving and
39:23
investment protection isn’t a
39:25
destructive it so far and so on then he
39:27
said well interventionism then is
39:29
cumulative in other words Crete
39:31
government intervenes in a problem try
39:32
to solve it it doesn’t solve it
39:34
anesthetic least three or four more
39:35
problems then it’s then it’s confronted
39:38
us for this choice either we repeal the
39:41
first intervention and give up or we
39:42
expand on in front of conquer these
39:44
other three or four problems which of
39:45
course they always do it’s Lisa
39:47
socialism and you wind up socialism
39:49
can’t calculate you wind up in woody
39:50
come on impossible situation so result
39:54
interventionism is unstable it’s it
39:57
either leads back leads back to lazy a
39:59
pharaoh framework Iran to socialism
40:00
since social account calculi have to
40:02
wind up a laissez-faire as meeses
40:04
political conclusion Tammy’s is of
40:09
course older in the 20th century
40:10
moldering is ton of growing growing
40:13
statism and collectivism and
40:15
protectionism everything else corporate
40:17
liberalism communism socialism fascism
40:18
all that Jesus stands all of his life as
40:21
an uncompromising champion of
40:23
laissez-faire liberalism and heedless of
40:27
the fact that everybody’s zeitgeist is
40:30
turning against the doesn’t I did not
40:31
heal us attacking it anyway continuing
40:33
on regardless of any opposition um in
40:39
addition of that he’s a zealot problem
40:41
for me as efficient stay doesn’t grow
40:42
and communism socialism status and
40:44
protections all that corporate
40:45
corporatism is also growing up unsound
40:48
methodologies are undercutting economics
40:50
Oh economics only gonna make theory
40:53
basically two twin enemy so to speak
40:56
institutional ism and positive was
40:57
positive of course has become dominant
40:59
least until recent recent years
41:03
positivist model treating economics like
41:05
physics all sizes of human actually have
41:07
to be in order to be a size have been
41:08
like physics I’ve be tested I have to be
41:10
mathematics etc have to be quantitative
41:13
you have to predict and men are
41:17
therefore treated as stones and atoms
41:19
and predict their patterns and so forth
41:21
and so on so Mises rises up against us
41:23
and says this is the correct there’s a
41:26
fundamental radical difference between
41:27
stones and atoms on the one hand and
41:29
people on the other namely people make
41:30
choices people think they’ve
41:31
consciousness and they act they have
41:33
purposes and goals like to try to
41:35
achieve them Adams don’t act and I’m
41:37
going to make choices Adam don’t think
41:39
and accept this is a key point of course
41:41
it’s setting yourself on this path these
41:44
is what
41:44
against the dominant methodology of
41:46
Social Sciences in 20th century
41:48
increasingly dominant and lisa says that
41:51
that economics is built up economic
41:54
theories bowl up on the logical
41:55
implication of people act and happen to
41:57
make choices people there are people and
41:59
I make they have values and make choices
42:00
and so he then sets forth this
42:05
methodology which he later called proxy
42:07
ology in his gran problema their
42:09
national economy foundations of
42:10
economics in 1933 and continues to set
42:15
forth the true relationship between
42:17
theory and history and his great book
42:18
fearing history I think of these so much
42:20
i recommend everybody is almost unknown
42:22
on unfit noted even among modern
42:24
Austrian economists and pointing out
42:28
exactly why there is can be a theory it
42:31
has to be a theory and it’s not based on
42:33
mathematical atoms or whatever it’s
42:35
based on the fact that people act the
42:38
heat rail institutional isn’t by the way
42:40
she seems to be rising up among some
42:41
younger Austrian he turned that anti
42:43
economics and i think is perfectly
42:45
accurate this of course goes back to the
42:47
german historical school doctrines of li
42:49
the stuff smaller on the and the
42:53
university of berlin the as if he hadn’t
42:58
accomplished enough after having set
42:59
forth the correct methodology of
43:01
economics proxy ology then decides he’s
43:03
going he’s of his greek create a
43:04
doctrine based on this methodology too
43:06
many methodologies spend their time just
43:08
talking about methodology what economics
43:09
should or shouldn’t be doing he said ok
43:11
I’ll do it I will now create an atomic
43:13
structure based on them on the correct
43:15
methodology and he did it and his great
43:17
work national economy 1940 which was
43:20
published in Germany in World War two in
43:23
in during World War Two and therefore
43:26
totally forgotten and then was
43:29
reinstated and expanded the human action
43:32
1949 the United States was originally
43:33
original version came out on and Europe
43:36
1940 in the meantime while this is
43:39
happening mazes absolute his leading
43:43
followers and his leading following
43:45
business cycle theory and capital theory
43:47
and socialism theory fa hayek moves to
43:51
London School of Economics 1931 knees
43:53
Vienna comes through to London and one
43:56
thing we have to realize the bath you
43:57
know was
43:58
by this time anyway even though
43:59
everybody every scholar has passed the
44:02
PhD the language test for PhD in German
44:04
and French nobody really knows the
44:06
foreign language let’s face it and know
44:09
he’s foreign language say nobody but
44:11
very few and so very few people rather
44:14
than me zhesan worry all the other
44:15
Austrians in German menger wasn’t
44:19
translate until after world war two when
44:21
Bart was luckily but and me sis was
44:24
until a toll in the 30 so they didn’t
44:26
get red in England oh the United States
44:28
and when hiya comes to the London School
44:31
of Economics it starts his lectures it
44:34
was a fantastic eye-opener to the
44:36
English economist cuz they were confused
44:38
was great depression of hit was 1931
44:39
what’s the explanation for it and higher
44:42
comes with a cap rate business cycle
44:43
theory Mises expands on it and
44:45
immediately converts the whole gang a
44:47
little people which very famous names in
44:49
economics Hicks kaldor the learner
44:55
beverage sir william beveridge only see
44:57
what became austrians for about three or
44:58
four glorious years and started writing
45:01
in the Austrian Hayek and Mises Hayek
45:04
tradition when Kayne’s comes along when
45:09
Casey general theory comes along night
45:10
and by the way those days United States
45:12
economics unites states are sort of like
45:13
a farm club of England Marshall is the
45:16
big dominant figure American economics
45:19
and law died out there were no real
45:20
theorists much during the whole interwar
45:22
period economics mostly institutional
45:24
lists therefore talking about how I was
45:26
either market is a more or less that’s
45:28
about it and so if really cannot make
45:31
thinking going on in the United States
45:34
and then when when so we’ve sort of
45:36
follow along tale after England and so
45:38
when the most when when the younger
45:39
economist thing on became Austrians the
45:42
American economist began to become
45:43
Austria the first the leading but he
45:45
wasn’t he didn’t understand it very much
45:46
but leading semi Austrian a site to none
45:48
other than Alan Hansen for about four
45:50
glorious years 45 aureus years plus a
45:53
few others theory about how theories got
45:56
to get accepted and rejected in
45:59
economics there was no patient
46:00
refutation of Austrian as in by the
46:01
Keynesian they didn’t sit down the
46:02
journals and refute them so on a lot of
46:04
nonsense almost never happens that way
46:05
anyway certainly do not have of Akane’s
46:07
ians it just wasn’t like a fantastic
46:10
change of fashion it’s like
46:11
Rock succeeding swing ok that’s it I’m
46:14
everybody starts talking about but quit
46:16
any preference the consumption function
46:17
and we’ll diagram the Keynesian cross
46:19
and nobody nobody refutes the Austrian
46:21
here we just forgot about it like this
46:23
Donnelly Orwellian memory hole and most
46:26
of the high Achaeans converted for
46:27
Keynesianism and I machal open and and
46:32
most of all these 46 and all these
46:34
people and learn and learner in England
46:36
except of course all converted and even
46:38
Mises his former students convert at
46:40
least partially so if you look at math
46:41
club and harbor on these people even
46:43
when they work AZ is there were more
46:44
moderate than the other people but she
46:46
can say for my effectiveness a buck and
46:49
we wind up only with Hayek left after
46:50
having converted most of bright young
46:52
English economist by the end of the 30
46:54
is only Hayek left is not occasion and
46:59
again a hayek unfortunate maiden admits
47:02
now he made a grave tactical error when
47:03
cases treatise on money came out which
47:06
supposed to be his great masterpiece
47:07
1931 I guess Hayek refuted a magnificent
47:11
to par bring long to part devastating
47:13
two-part journal Oregon economica which
47:15
really wiped the floor with it and
47:16
kingsland said okay it’s back to the
47:17
drawing board and obviously this thing
47:20
doesn’t works he comes out with a
47:21
general theory and 36 and high expects
47:23
from sub locket I do the same thing with
47:25
this thing it’s no better probably worse
47:26
than the pre isn’t money why waste my
47:28
time Monica’s Cannes will change his
47:29
mind a couple years anyway that was of
47:31
course famous last words and rest is
47:34
history so so any gal make theory that
47:38
we have announced a sweep of
47:39
keynesianism washing out even memory of
47:42
Austrian business cycles very much less
47:44
I say not refuting instantly wiping out
47:47
the memory of it and then meeses flees
47:49
from the Nazis 1940 it really so like a
47:52
movie thing one step ahead of Nazis
47:55
coming to France he escapes from I fear
47:58
was Spain and Portugal comes to New York
48:00
in World War two well his life in ruins
48:04
and he races marvelously moving notes
48:07
and recollections in that period and
48:09
he’s racing to spare the end of
48:11
civilization and and the he also says
48:14
there I think because I remember that
48:16
Mayor withdrew from economics and
48:18
bombard rock he claims committed suicide
48:19
because of them
48:21
one because the onset of world on the
48:22
wreckage the great civilization she
48:26
comes here Pinellas in his 60s by this
48:28
time writing in a new language in a
48:32
world where he couldn’t get an academic
48:34
post he neither could hire can have
48:37
States either now he’ll have a situation
48:39
every every Marxist and semi Marxist
48:42
refugee coming from Europe is
48:43
immediately hailed the red carpet his
48:45
role lap gets top positions and academic
48:48
posting has dice and me sis gets he’s
48:52
being supported by the when you book are
48:54
fun that time which is a small unknown
48:56
but glorious little conservative
48:58
libertarian institution have the funct
49:00
various obscure reasons and they find it
49:05
find again the university post the only
49:06
thing they can get them as NYU graduate
49:08
school business administration a
49:09
non-paid post those a salary you have to
49:13
come from outside forces then leave fee
49:15
and I guess the volcra fun later see
49:17
another consortium a businessman same
49:20
thing happened in Chicago and I’m with
49:21
Hayek able get him a post University of
49:23
Chicago slightly slightly higher in the
49:25
Academic Ranking NYU School business
49:27
however again they wouldn’t pay high x
49:30
first of all the Economics Department
49:31
Chicago rejected him and he then got a
49:34
he got he got a post in the news a new
49:36
department Chicago whole committee on
49:37
social for that’s the distance okay and
49:40
so interdisciplinary committee on social
49:41
thought but as salary was paid for by
49:43
William vulgar fun again and I’m by
49:45
consortium neither Mises know how I ever
49:47
got any paid post in the United States
49:49
an absolute disgrace I can’t conceive
49:52
anything more monstrous blotter academia
49:55
than this right on the so-called is
49:56
motion academic freedom and all rest of
49:58
the garbage I guess why Dan to it this
50:01
is what happened okay so uh in this
50:05
situation jesus never complained I have
50:07
the joy of subpoenas similar about 10
50:11
years and why you never complained
50:13
always very cheerful he was surrounded
50:14
by students who were bunch of clocks
50:16
let’s let’s put a frankly most of them
50:19
there were the most things there cuz I
50:21
know he was an easy a he didn’t
50:22
understand thing about American marking
50:23
since grading system that’s a what’s be
50:25
okay they said give us a has been a
50:28
professor that sort of thing so it’s
50:30
and except for the fact that there were
50:34
some people who were murdered by Mises
50:36
and so group were drawn to him and one
50:39
of the conditions of his getting post
50:40
there will be opened up being audited by
50:42
other people I myself other you know
50:43
youngmee’s Essien’s coming in and sure
50:46
it was so that was the that was a saving
50:48
grace of it he never complains always
50:50
tossing out research projects for people
50:51
which almost never would taken up you
50:53
know and it was just a great experience
50:57
listening to I can see why it was great
50:58
teacher as well as a great economist it
51:00
was just trying always to stimulate
51:03
productivity in anybody around him and
51:05
one of the great comments I think more
51:06
of was cometh he made it she liked to
51:08
make students report very shy his great
51:11
professor he’s a young clocks here when
51:13
we know so us when they have an hour
51:16
lecture and i have opened a question
51:18
nobody want to say anything he said look
51:20
don’t be afraid to speak up he said
51:21
because whatever you say whatever it is
51:23
however idiotic it is some eminent
51:25
economists already said it of course was
51:28
true so this is and see so he
51:35
recommended to recreate the atmosphere
51:37
this leads us Christ the famous circle
51:39
of radio an economist in the 1920s and
51:43
Vienna and human action he comes out
51:46
human action 1940 and has his grated she
51:48
crying and crowning achievement well I
51:50
was up but see he was up at fee at the
51:51
time i was up at fee and i asked well
51:54
what say said Lisa’s coming out of the
51:56
book i didn’t i didn’t know Lisa to the
51:57
Thomas they said he’s coming out a new
51:59
book this is 449 so what’s it about it
52:01
they stay said everything and sure
52:04
enough that’s what it was um I just want
52:08
to tell a couple great stories he
52:10
telling who’s a great source of
52:11
anecdotes about words like living in
52:12
pre-world War one Vienna must been
52:15
magnificent more of us except for the
52:16
lack of air conditioning it’s not
52:17
perfect and he talked about these great
52:22
anecdotes was aptly told an anecdote of
52:24
just tell you two of them one is this
52:27
a government of Bella couldn’t
52:29
took over in Hungary 1919 46 short on
52:32
glorious months I things about six
52:34
months Karl Polanyi the famous economic
52:37
historian later I got a big post of
52:39
Columbia from my dad paid post calm
52:42
polite yeah
52:43
yeah Cobb palani was Hunger the Baloch
52:46
own government’s negotiator for trade
52:48
agreement with Austria and Jesus was the
52:50
Yoshi ater for Austria and they woke her
52:53
along with Vienna so both of us knew
52:54
that the government’s not gonna last
52:55
more a couple of months how long he
52:57
wanted to stay in Vienna anyone go back
52:58
to Budapest the harem Budapest they just
53:01
did show some walk around the streets of
53:03
Vienna talk about was life in general
53:05
whatever it was a very pleasant sure
53:07
enough they waited out before about
53:08
government and Pilates high was saved
53:13
another charming story I think more
53:15
opposite the Mises general doctrine is
53:17
he’s walking along the streets of Vienna
53:19
do a lot of walking even I walk in
53:21
Vienna which is hardly walk anywhere was
53:23
a moralist city walk in there walking
53:25
along the streets of Vienna with he’s
53:26
worked with his friend Max schaller was
53:28
a big big shot German idealist economist
53:31
and she are denouncing logical
53:32
positivism which then of course is big
53:34
in Vienna starred in Vienna and schaller
53:36
says tell me tell me what is there on
53:39
this climb at the vienna what is they on
53:40
this place that weeds these logical
53:41
positivists what’s there on a climate
53:44
and these are the typical shraga says
53:45
what he says after all after all max the
53:48
end of the city of about three million
53:49
people I guess I’m about three million
53:50
people and it only was less than twelve
53:53
rajagopal this one can’t be the climate
53:56
the so in this in this situation where
54:02
the trend of the times against them
54:04
politically metha logically economically
54:07
he never gave up constantly great
54:10
fighting spirit and doing all the great
54:12
sets of charm and even sweetness never
54:16
made any personal attack that i know of
54:17
i guess anybody and continue Donna this
54:21
is more of us tremendous productivity
54:23
until he virtually until he died the age
54:25
of 92 in 1973 the here in 1974 the year
54:33
after he died the way i got the nobel
54:34
prize in economics it was a fantastic
54:37
thunderclap and economics profession was
54:38
this guy got a Nobel Prize was he and
54:41
when the find out who he was a some of
54:43
them had to go back and read something
54:44
and that seemed to have sparked an
54:46
Austrian Renaissance and economics
54:49
profession and he got it by the way not
54:52
for his later work kayak but furs
54:54
specifically for his knees SE and
54:56
business cycle
54:56
a capital theory in a Viking 20s and
54:58
early 30s and middle tenn mid 30s and
55:02
since then has been an Austrian
55:03
revivalists unfortunately he didn’t live
55:05
to see it the oh yes I guess that’s
55:12
Billy wife to say I think that’s I think
55:14
this it’s a so more of us come as the
55:17
person who’s are just a marvelous
55:18
marvelous person every white button as
55:20
of me Cheever and economic zone general
55:22
thought in general and as a person as an
55:24
exemplar for anybody following after him
55:28
and I think I think there’s still a
55:31
tremendous outpouring of affection for
55:33
meeses among all ranks of life in the
55:36
United States even even this time more
55:38

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