Mises Search

Perhaps the most distinctive feature of the economics of Ludwig von Mises is his insistence on the a priori approach. For Mises, economic “laws” must be logically deduced from antecedent axioms, so that—assuming the initial assumptions are true—the conclusions reached are just as valid as any result in Euclidean geometry. This stands in sharp

The importance of the Austrian school of economics is nowhere better demonstrated than in the area of monetary theory. It is in this realm that the simplifying assumptions of mainstream economic theory wreak the most havoc. In contrast, the commonsensical, “verbal logic” of the Austrians is entirely adequate to understand the nature of money and

In a recent article , I laid out the Misesian approach of praxeology , or the science of human action.  Contrary to the mainstream positivist position, in which all economic theories must lead to falsifiable predictions that can be tested, Ludwig von Mises believed that valid economic theorems must be deducible from the axiom, “Humans act.” Many

[ Originally published November 11, 2003 .] The modern Austrian School of economics, as descended from the authoritative work of Ludwig von Mises, stresses the primacy of consumer preferences in the determination of precisely which kinds of goods will be produced with society’s scarce resources. Mises himself adopted the term (popularized by W.H.

In a  previous article , I explained  Eugen von Böhm-Bawerk’s conception of the “interest problem.” Specifically, why could a capitalist earn an effortless flow of real wealth, year after year, from his fund of capital? To state the problem in an equivalent form, why is it that a capitalist can spend, say, $1,000 on labor and raw materials, in

In a previous article , I outlined Ludwig von Mises’s endorsement of consumer sovereignty . This principle states that, despite the superficial power enjoyed by the capitalists and landowners, the true bosses under capitalism are the consumers. Mises argued that a market economy held daily plebiscites, as it were, in which every penny spent was a

[Originally published December 2003.] The Bush Administration recently announced that it would repeal its controversial steel tariffs, proving that even Republicans will occasionally let market prices do their job. The move of course had nothing to do with a newfound appreciation of David Ricardo: Even the official press releases make it clear

In a previous  article , I criticized Hal Varian’s (orthodox) description of the current state of game theory. You see, there are many games in which there is a unique “Nash equilibrium”—that is, out of all the strategies available to the players, only one set will leave each player happy, given everyone else’s Nash strategy. Because of this, the

In a recent New York Times  op-ed piece, “ Second Thoughts on Free Trade ,” Senator Charles Schumer and economist Paul Craig Roberts argue that the typical arguments for free trade, while perhaps valid in the days of Ricardo, are no longer relevant in today’s economy of multinational corporations and high-speed telecommunications. According to our

The Internet has been abuzz lately with arguments over free trade. This most recent outburst of scholarship was sparked by Sen. Charles Schumer and economist Paul Craig Roberts’ joint article in the New York Times, “Second Thoughts on Free Trade” . In this article, Roberts reiterated his position that “the case for free trade” rests on the