Biographies

Delivered as part of the Mises Institute’s Summer Seminar Series.

The Mexican War 1846-48 involved unpaid debts to Americans, a desire for West coast territory, and the issue of Texas whose independence was not recognized by Mexico. The Southern boundary was in dispute also.

The Alien and Sedition Acts of 1798 had criminalized excessive criticism of government.  Jefferson feared it would be used in a partisan way. The Acts violated the Tenth Amendment by encroaching on a state prerogative.

No President should leave a citizen in doubt about his person or property. However, this original comforting view is contrasted with more modern theory of the Presidency in which Wilson held the President to be the “unifying force of the country”. He represents no constituency, but the “whole people”.

Friedman’s book, Monetary History of the United States, tried to show the depression was caused by a deflation of the money supply by the Fed. Rothbard’s America’s Great Depression was published the next year in 1963. Rothbard argued that the Fed was actively inflating the money supply.

Monetary inflation is the key way to bring about economic fascism. Fascism was a spending, borrowing government, militarism, imperialism, and a planned economy. Keynes’ followers came to power in the 60s with the Kennedy administration. Nixon went on to impose wage and price controls.

Prior to Mises there had been nothing written on the theory of monopoly price. Mises felt there could be some limited times of monopoly on the free market, e.g. diamond mines, but Rothbard felt that there could not be monopolies. Both theories developed out of Menger’s original thoughts.

Where the classical economists had gone wrong was to speak of goods as if they were abstract classes. The Austrians noted that their value theory did not talk about concrete units and could not explain how individuals valued goods.

There were reasons for the decline of the Austrian School before its revival and rebirth by Mises and Rothbard. There was an Israel Kirzner view in the 1970s that the Keynesian avalanche had buried Austrian economics in 1936. Then there is a big bang theory of its rebirth in 1974 due to the South Royalton meeting and Hayek receiving the Nobel Prize.

Presented as part of the Mises Institute’s Brown Bag Seminar series on April 28, 2005 in Auburn, Alabama.