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The Tragedy of the Euro

2011-07-08T08:23:28Z

192.100.130.239: /* Links */ Full book available.

{{Infobox book
| name = The Tragedy of the Euro
| title_orig =
| translator =
| image = 
| image_caption =
| author = [[Philipp Bagus]] (Foreword by [[Jesús Huerta de Soto]])
| illustrator =
| cover_artist =
| country = [[United States]]
| language =
| series =
| subject = [[Economics]], [[Economic history]]
| genre = [[Non-fiction]]
| publisher = [[Ludwig von Mises Institute]]
| pub_date = 2010
| english_pub_date =
| media_type = Print, Digital
| pages = 142 p.
| isbn = 9781610161183
| oclc = 699513237
| dewey =
| congress =
| preceded_by =
| followed_by =
}}

'''''The Tragedy of the Euro''''' is a book by [[German]] economist [[Philipp Bagus]]. The text explores the [[European Central Bank]] and the economic crisis in the [[European Union]] and its currency the [[Euro]].

In a Faculty Spotlight Interview with the [http://blog.mises.org/14656/faculty-spotlight-interview-philipp-bragus/ Mises Blog], Bagus explained the purpose of this work:

{{quote|We have heard much about the [[Federal Reserve System|Fed]] but no one talks about the ECB. In my new book ''The Tragedy of the Euro'', I answer this question and analyze the workings of the European monetary system and compare it to the Fed's. A decisive distinction is that in the European monetary system several independent governments may [[Inflation|use the printing press]], i.e., the ECB, in order to finance their deficits. This setup contains explosive incentives. … The main message is that in its current form the system is self-destructive, it is a [[Tragedy of the Commons|tragedy of the commons]].}}

==See also==
* [[European sovereign debt crisis (2010–present)]]

==Links==
{{store|http://mises.org/store/Tragedy-of-the-Euro-P10439.aspx}}
* {{mr|6045|Resources page}} with the complete book in PDF and EPUB format
** [http://mises.org/daily/5087 Foreword] by [[Jesús Huerta de Soto]]
** [http://mises.org/daily/5422 Foreword (Slovak edition)] by Juraj Karpis
*** [http://mises.org/media/6056 Audio reading] by Keith Hocker
** [http://mises.org/daily/5003 Excerpt] "Two Visions for Europe"
** [http://mises.org/daily/5331 Excerpt] "The EMU as a Self-Destroying System"

* Articles, essays and reviews
** [[Cobden Centre]] review: [http://www.cobdencentre.org/2011/02/book-review-the-tragedy-of-the-euro-by-philip-bagus/ "The Tragedy of the Euro"] by Andy Duncan, February 2011 (excerpted as Mises Daily [http://mises.org/daily/5079/ here])
** ''[[The Free Market]]'': "Bagus Gets it Right" ([http://mises.org/journals/fm/Feb2011.pdf PDF]) by Patrick Barron, February 2011 (republished as Mises Daily [http://mises.org/daily/4972 here])
** [http://mises.org/daily/4952 "Europe's Tragic Crisis"] by [[David Howden]], January 2011
** [http://mises.org/daily/5225 "The EU Crackup"] by [[Llewellyn H. Rockwell Jr.]], April 2011
** [http://mises.org/daily/4995/ "The Euro Debt Crisis and Economic Theory"] by [[Kel Kelly]], February 2011
** [http://blog.mises.org/15129/ "Bagus Explains the ECB and the Euro"] by [[Jeffrey Tucker]], December 2010
** [http://mises.org/daily/4876 "The Irish Subjugation"] by Philipp Bagus, November 2010
** [http://mises.org/daily/4424 "The Eurozone Stimulus Package and Economic Fundamentals"] by [[Frank Shostak]], May 2010
** [http://mises.org/daily/4091 "The Bailout of Greece and the End of the Euro"] by Philipp Bagus, February 2010
** [http://mises.org/daily/1857 "Is the Euro Forever?"] by by Grant M. Nülle, July 2005

* Other media
** In Studio: [http://mises.org/media/6307/Currency-and-Economic-Collapse "Currency and Economic Collapse"] interview with [[Philipp Bagus]], March 2011 ([http://www.youtube.com/watch?v=F1tv81Asnek YouTube])
** Authors Forum: [http://mises.org/media/5874/ "Tragedy of the Euro & Deep Freeze"] lecture by Philipp Bagus, March 2011 ([http://www.youtube.com/watch?v=tHWFZAvjZZo YouTube])
** Cobden Centre Radio: [http://blog.mises.org/15930/interview-with-bagus/ "Philip Bagus Interview"] March 2011
** "CrossTalk" on [[Russia Today]]: [http://www.youtube.com/watch?v=E3lt0p9Qjjk "Euro DOA?"] interview with Philipp Bagus, June 2011

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[[Category:Literature]]
[[Category:Money]]

Mises Institute

2010-10-18T14:07:45Z

192.100.130.239: /* Mission */ Another Institute in Ecuador.

The Ludwig von Mises Institute is a research center, founded in 1982, that is dedicated to supporting the intellectual tradition, particularly in economic and political theory, represented by [[Ludwig von Mises]] (1881-1973).

==Mission==
The Institute, founded with the blessing of Mises's widow, Margit (1890-1993), who served as chairman, sponsors teaching programs and professional meetings, publishes journals and books, makes available audio and video, offers student assistance, and otherwise provides a wide range of services to uphold the Misesian tradition. The Institute does not consider itself a traditional think tank, as it does not seek to implement public policy. It has no formal affiliation with any political party (including the Libertarian Party), nor does it receive funding from any. The Institute also has a formal policy of not accepting contract work from corporations or other organizations, or accepting government funding.

Its declared mission is to back research and writing in defense of Austrian economics, the market economy, private property, sound money, and peaceful international relations, while opposing government [[intervention]] as economically and socially destructive.<ref name="Institute">FAQ. [http://www.mises.org/about/3467#what "What is the Mises Institute?"], ''[[Mises Institute]]'', referenced 2009-04-27.</ref> It is based in Auburn, Alabama.

There are also several other Institutes with the same name throughout the world, including those in [http://www.vonmisesinstitute-europe.org Belgium], [http://www.mises.se/ Sweden], [http://www.mises.pl/en/ Poland], [http://www.fundacionvonmises.org.ar/ Argentina], [http://www.icumi.info/ Mexico], Russia, [http://www.mises.org.br/ Brazil], [http://www.mises.ec/ Ecuador] and [http://misesromania.org/ Romania]. However, the Institute has no formal ties with any of them.

==History==
The founding of the Ludwig von Mises Institute in 1982, with the aid of Margit von Mises as well as Hayek and [[Henry Hazlitt|Hazlitt]], provided a range of new opportunities for both Rothbard and the Austrian School. Through a steady stream of academic conferences, instructional seminars, books, monographs, newsletters, studies, and even films, Rothbard and the Mises Institute carried the Austrian School forward into the post-socialist age.

The first issue of the Rothbard-edited ''Review of Austrian Economics''<ref name="Review">[http://mises.org/periodical.aspx?Id=5 "Review of Austrian Economics"], ''[[Mises Institute]]'', 1987-1997, referenced 2009-04-29.</ref> appeared in 1987, and became a quarterly in 1998, [[Wikipedia:Quarterly Journal of Austrian Economics|The Quarterly Journal of Austrian Economics]].<ref name="Quarterly">[http://www.mises.org/periodical.aspx?Id=4 "The Quarterly Journal of Austrian Economics"], ''[[Mises Institute]]'', 1998-present, referenced 2009-04-29.</ref> The Mises Institute's instructional summer school has been held every year since 1984. For many of these years, Rothbard presented his research into the history of economic thought. This culminated in his two-volume An Austrian Perspective on the History of Economic Thought, which broadens the history of the discipline to encompass centuries of writing.

Through the Mises Institute's student fellowships, study guides, bibliographies, and conferences, the Austrian School has permeated, at some level, virtually every department of economics and the social sciences in America, and in many foreign countries as well. The annual Austrian Scholars Conference at Auburn University attracts scholars from around the world to discuss, debate, and apply the entire Austrian tradition.

==References==
{{Reflist}}

==External Links==
* [http://www.mises.org/ "The Mises Institute"], homesite
* [[Wikipedia:Mises Institute|Mises Institute]], Wikipedia page
[[Category:Historical]]

Scandinavia

2010-10-15T08:40:58Z

192.100.130.239: Bolded an important term.

{{Stub}}

'''Scandinavia''', historically Scandia, part of northern Europe, is generally held to consist of the two countries of the Scandinavian Peninsula, [[Norway]] and [[Sweden]], with the addition of [[Denmark]]. Some authorities argue for the inclusion of [[Finland]] on geologic and economic grounds and of [[Iceland]] and the [[Wikipedia:Faroe Islands|Faroe Islands]] on the grounds that their inhabitants speak North Germanic (or Scandinavian) languages related to those of Norway and Sweden.

The term '''Norden''' has also come into use to denote Denmark, Finland, Iceland, Norway, and Sweden, a group of countries having affinities with one another and a distinctness from the rest of continental Europe. Among their distinguishing characteristics are thinly populated northern regions, a relative wealth of fish resources, long life expectancies, and high levels of literacy.<ref name="Britannica_Scandinavia">Encyclopædia Britannica. [http://www.britannica.com/EBchecked/topic/526461/Scandinavia "Scandinavia."], Encyclopædia Britannica Online. Referenced 2010-10-08.</ref>

==Scandinavia and the Social State==
Despite of a large welfare state and high taxes, the Scandinavian countries are considered to have strong economies.

{{Main|Scandinavia and the social state}}

==References==
{{Reflist}}

==External links==
* [[Wikipedia:Scandinavia|Scandinavia]] on Wikipedia
[[Category:Countries]]

Anne Robert Jacques Turgot

2010-10-14T13:36:03Z

192.100.130.239: /* External links */ Resource added.

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<blockquote>''"To suppose all consumers to be dupes, and all merchants and manufacturers to be cheats, has the effect of authorizing them to be so, and of degrading all the working members of the community."''</blockquote>

'''Anne-Robert-Jacques Turgot, Baron de Laune''', often referred to as '''Turgot''' (10 May 1727 – 18 March 1781), was a French economist and statesman. Today he is best remembered as an early advocate for economic liberalism.

==External links==
* [http://mises.org/about/3244 Biography of A.R.J. TURGOT (1727-1781) Brief, Lucid, and Brilliant], by Murray N.Rothbard.
* [[Wikipedia:Anne Robert Jacques Turgot, Baron de Laune|Turgot]] on Wikipedia
* [http://www.econlib.org/library/Essays/TurgotBio.html Life and Works of Anne Robert Jacques Turgot] by David M. Hart, with bibliography
* [http://www.turgot.org/ Institut Turgot] (French)
* [http://mises.org/daily/4767 The Brilliance of Turgot] by Murray N. Rothbard, from ''[http://mises.org/resources/3985/Economic-Thought-Before-Adam-Smith-An-Austrian-Perspective-on-the-History-of-Economic-Thought-Volume-I An Austrian Perspective on the History of Economic Thought, vol. 1, Economic Thought Before Adam Smith]''. October 2010
[[Category:Historical]]

United Kingdom

2010-10-12T14:55:19Z

192.100.130.239: /* External links */ Resource added.

{{Stub}}

{{Infobox
|Box title = Country summary
|Row 1 title = Capital
|Row 1 info = London
|Row 2 title = Borders
|Row 2 info = [[Ireland]] 360 km
|Row 3 title = Government type
|Row 3 info = constitutional monarchy and Commonwealth realm
|Row 4 title = Population
|Row 4 info = 61,113,205 (July 2010 est.)<ref name="CIA_GB">CIA - The World Facebook. [https://www.cia.gov/library/publications/the-world-factbook/geos/countrytemplate_uk.html "United Kingdom"], from The World Facebook. Referenced 2010-09-21.</ref>
|Row 5 title = Population growth %
|Row 5 info = 0.28 (2010 est.)<ref name="CIA_GB" />
|Row 6 title = Life expectancy
|Row 6 info = 79.01 years<ref name="CIA_GB" />
|Row 7 title = Unemployment
|Row 7 info = 7.6% (2009 est.)<ref name="CIA_GB" />
|Row 8 title = [[Wikipedia:Index of Economic Freedom|Index of Economic Freedom]]
|Row 8 info = 11<ref name="Heritage_GB">Heritage Foundation. [http://www.heritage.org/Index/Country/UnitedKingdom "United Kingdom"], Economic Freedom Score. A lower ranking is better; but please be careful when comparing between different countries or years. Referenced 2010-09-21.</ref>
|Row 9 title = [[Wikipedia:Corruption Perceptions Index|Corruption Perceptions Index]]
|Row 9 info = 17<ref name="Transparency_GB">Transparency International. [http://www.transparency.org/policy_research/surveys_indices/cpi/2009/cpi_2009_table "United Kingdom"], Corruption Perceptions Index 2009. A lower ranking is better; but please note that the numbers cannot be compared between countries or years due to different methodology. Referenced 2010-09-21.</ref>
|Row 10 title = [[Wikipedia:Doing Business Report|Doing Business ranking]]
|Row 10 info = 5<ref name="Business_GB">Doing Business. [http://www.doingbusiness.org/economyrankings/ "United Kingdom"], Doing Business 2010 (part of The World Bank Group). A lower ranking is better; but please be careful when comparing between different countries or years. Referenced 2010-09-21.</ref>
}}

The '''United Kingdom''' has historically played a leading role in developing parliamentary democracy and in advancing literature and science. At its zenith in the 19th century, the British Empire stretched over one-fourth of the earth's surface. The first half of the 20th century saw the UK's strength seriously depleted in two World Wars and the Irish republic withdraw from the union. The second half witnessed the dismantling of the Empire and the UK rebuilding itself into a modern and prosperous European nation. As one of five permanent members of the UN Security Council, a founding member of NATO, and of the Commonwealth, the UK pursues a global approach to foreign policy. The UK is also an active member of the EU, although it chose to remain outside the Economic and Monetary Union. Devolution and constitutional reform have been significant recent issues in the UK. The Scottish Parliament, the National Assembly for Wales, and the Northern Ireland Assembly were established in 1999, but the latter was suspended until May 2007 due to wrangling over the peace process.<ref name="CIA_GB" />

== Economical characteristics ==
* '''Currency''': Pound sterling (ISO code: GBP)
* Central bank '''[[Wikipedia:Discount rate|discount rate]]''': 0.86% (31 December 2008)<ref name="CIA_GB" />
* Commercial banks '''lending rate''': 4.63% (31 December 2008)<ref name="CIA_GB" />
* '''Stock of money''' ([[Money supply#M1|M1]]): $NA<ref name="CIA_GB" />
* '''Quasi money''' (with M1 makes [[Money supply#M2|M2]]): $NA<ref name="CIA_GB" />

===Statistics===
{| border="1" cellspacing="0" cellpadding="5" style="text-align:center"
| Statistic / Year
! 1999
! 2000
! 2001
! 2002
! 2003
! 2004
! 2005
! 2006
! 2007
! 2008
|-
! [[GDP]] (million USD)<ref name="WorldBank_GDP_GB">World Bank. [http://open.worldbank.org/countries/gb/indicators%5BNY.GDP.MKTP.CD%5D?date=1999:2009 "United Kingdom: GDP"], from World Bank [http://data.worldbank.org/ Data]. Referenced 2010-09-21.</ref>
| 1 502 560
| 1 477 580
| 1 470 890
| 1 612 060
| 1 860 810
| 2 198 090
| 2 280 180
| 2 435 710
| 2 803 460
| 2 674 060
|-
! Govt. debt (% of GDP)<ref name="WorldBank_Debt_GB">World Bank. [http://open.worldbank.org/countries/gb/indicators%5BGC.DOD.TOTL.GD.ZS%5D?date=1999:2009 "United Kingdom: government debt"], from World Bank [http://data.worldbank.org/ Data]. Referenced 2010-09-21.</ref>
| 47.484
| 47.469
| 42.507
| 42.528
| 42.598
| 44.905
| 47.300
| 47.133
| 47.863
| 57.523
|-
! Govt. revenue (% of GDP)<ref name="WorldBank_Revenue_GB">World Bank. [http://open.worldbank.org/countries/gb/indicators%5BGC.REV.XGRT.GD.ZS%5D?date=1999:2009 "United Kingdom: government revenue"], from World Bank [http://data.worldbank.org/ Data]. Referenced 2010-09-21.</ref>
| 36.560
| 37.114
| 37.082
| 35.498
| 35.096
| 35.918
| 36.985
| 37.708
| 37.380
| 38.408
|-
! Govt. expenses (% of GDP)<ref name="WorldBank_Expenses_GB">World Bank. [http://open.worldbank.org/countries/gb/indicators%5BGC.XPN.TOTL.GD.ZS%5D?date=1999:2009 "United Kingdom: government expenses"], from World Bank [http://data.worldbank.org/ Data]. Referenced 2010-09-21.</ref>
| 35.652
| 36.204
| 36.651
| 37.633
| 38.809
| 39.200
| 41.222
| 40.378
| 40.005
| 42.827
|-
! Debt to revenue (years)
| 1.299
| 1.279
| 1.146
| 1.198
| 1.214
| 1.250
| 1.279
| 1.250
| 1.280
| 1.498
|}

==References==
Note: statistical data was rounded. Different sources may use different methodologies for their estimates. Debt to revenue is calculated by dividing the two variables from their original ('unrounded') values. It represents how long it would a government take to repay its entire debt if it used its whole revenue for this purpose.
{{Reflist}}

==External links==
* [[Wikipedia:United Kingdom|United Kingdom]] on Wikipedia
* [http://www.bankofengland.co.uk Central bank] of United Kingdom
* BBC [http://news.bbc.co.uk/1/hi/world/europe/country_profiles/1038758.stm country profile]
* [http://www.cabinetoffice.gov.uk/newsroom/news_releases/2010/101011-green.aspx Sir Philip Green reports findings of his review into Government efficiency] by Cabinet Office Press Office, October, 2010
[[Category:Countries]]

Price controls

2010-04-30T09:02:41Z

192.100.130.239: Expanded reference.

'''Price controls''' are government attempts to fix [[price]]s for commodities and services at a height different from what the unhampered market would have determined.<ref name="Mises_price_controls">Ludwig von Mises. [http://mises.org/humanaction/chap1sec1.asp "1. The Government and the Autonomy of the Market"], Chapter XXX, Interference with the structure of prices, ''[[Human Action]]'' online edition, referenced 2009-09-11.</ref>

Maximum prices are usually set to prevent [[inflation]].

==History==
Over the course of history, governments tried many times to regulate prices in some manner, either to set them directly, or by setting minimum and maximum prices. The policies have a long record of failure.

A particular example was the Ancient Egypt, where the price controls led to the ownership of all land by the state and finally its collapse.<ref name="Schuettinger_Ancient">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapter 1 - Ancient World, p. 9-18, referenced 2009-09-11.</ref>

In the sixteenth century price controls decided the fate of [[Wikipedia:Antwerp|Antwerp]], the most important city of today's Belgium. From [[Wikipedia:Fall of Antwerp (1584–1585)|1584]], it was besieged by Spanish forces led by the [[Wikipedia:Alexander Farnese, Duke of Parma|Duke of Parma]]. The City Fathers of Antwerp fixed maximum prices for food, with severe penalties. As a consequence, no merchant would risk ships to serve this and the city has blockaded itself better than the Duke of Parna could have done. The enforced low prices didn't force anybody to economize, and the city lived in high spirits until all provisions gave out at once. In 1585 the city of Antwerp surrendered.

In the Indian province of [[Wikipedia:Bengal|Bengal]] failed the rice crop in 1770 and a third of the population died, the disaster attributed to the rigid policy of the government, determined to keep the price of grains down. But for at least once in human history, government did learn by experience. In 1866, the province of Bengal was again on the verge of famine. This time the procedure was completely different, as [[Wikipedia:William Wilson Hunter|William Hunter]] relates:
"Far from trying to check speculation, as in 1770, the Government did all in its power to stimulate it . . . . In the earlier famine one could hardly engage in the grain trade without becoming amenable to the law. In 1866 respectable men in vast numbers went into the trade; for the Government, by publishing weekly returns of the rates in every district, rendered the traffic both easy and safe. Everyone knew where to buy grain cheapest and where to sell it dearest and food was accordingly bought from the districts which could best spare it and carried to those which most urgently needed it."<ref name="Schuettinger_Medieval">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapter 3 - From Medieval to Early Modern Times, p. 33-35. See also [http://ebooks.adelaide.edu.au/f/fiske/john/f54u/chapter9.html The Unseen World, and other essays] by John Fiske. Referenced 2010-04-30.</ref>

Price controls did not work even for [[Wikipedia:Nazi Germany|Nazi Germany]], rigidly enforced and highly elaborated. According to [[Wikipedia:Hermann Göring|Hermann Göring]], controlling people's wages and prices - people's work - is not enough, people's lives must be controlled as well. They tried both and failed. The [[Wikipedia:Soviet Union|Soviet Union]] was an example of a mature and long-lived total wage and price control policy in operation. And yet, prices for goods, services and wages covertly increased, and a huge [[black market]] swelled up.<ref name="Schuettinger_Germany_Soviet">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapters 9 and 10 - National Socialist Germany; The Soviet Union, p. 65-80, referenced 2009-09-11.</ref>

{{See also|Forty Centuries of Wage and Price Controls}}
{{See also|History of Money and Banking}}

==Effects==
Price controls rarely succeed even for a short time, and have a long record of failing in the long term, with many adverse consequences. A list of effects (many coming from a former price controller):<ref name="Schuettinger_Price_controls">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapter 19 - The Economic Effects Of Wage and Price Controls, p. 139-145, referenced 2009-08-09.</ref>

* Controls lead to distortions in the market system. Prices inform buyers and sellers of the relative scarcities of all products and encourage them to restore supply and demand. But manipulated prices distort these "signals" and create shortages. Black markets emerge to meet the demand of customers. Firms, that would be profitable otherwise will be pushed out of production or not enter it at all; other firms, that would be unprofitable, survive; impairing rational investment. This encourages calls for more government [[intervention]].
* Controls penalize non-inflationary wage or price increases. For example, wage controls also block increasing wages due to better performance.
* Controls negate the profit principle. It is the profits, that draw investment resources to worthwhile industries and by calling this motive into question, controls undermine the philosophy of the free market and cause dislocations in capital formation and investment.
* Controls are demanded by lobbyists to achieve noneconomic ends. Even with noblest of goals, more controls can be called for using similar reasoning. Why stop at regulating one product or a few?
* Controls create comfortable attitudes. In the market, decisions have to be made, profits rise or fall, firms succeed or go bankrupt, and men are given jobs or laid off. Controls sometimes create the illusion, that these decision do not have to be faced.
* The regulatory body becomes more important than the market. Employers and union leaders, observing that wages and prices can be fixed or increased only by the agreement of some regulatory body, pay more attention to influencing the decisions of that body in their own favor than they do to improving their market performance and the productivity of their labor (see also "[[Wikipedia:Regulatory capture|regulatory capture]]").
* Controls draw attention away from the real causes of inflation, and the need for actual reforms.
* Controls shift the traditional economic powers from consumers to government, labor organizations and businesses.
* Some businesses expecting price controls post "list prices", with a high 'official' price and a large discount. This gives them a chance to raise prices if needed.
* Prices may rise through other means - like reductions of quality and product changes.
* During periods of inflation, prices are rising and workers are claiming higher wages - at the same time, seller are raising their prices to keep up with the costs. There is no right moment, when the prices can be frozen, without causing problems to many businesses as workers.
* Finally, when the controls fail and are removed, any prices, that did not catch up with the real inflation will rapidly rise, creating further economical problems.

'''Price controls influence also employment:'''
* they may increase employment, if the price raises are expected to be dampened
* controls require a number of agencies, commissions, councils and boards to administer, with research and economic experts, executives, planners, members, and supervisors
* reduced profit margins make it less profitable to employ as many people as before (this also impacts any publicly owned companies)
* if businesses are hindered to make the necessary adjustments, then the number of their bankruptcies will rise

'''Other effects:'''
* Price controls inhibit recovery after disasters and hurt precisely the people they are intended to help.<ref name="Caden_disasters">Art Caden. [http://mises.org/story/3025 "Price Controls Create Man-Made Disasters"], posted on Mises Daily on 2008-06-25, referenced 2009-09-11.</ref>
* The costs of queuing, evasion, and black markets often lead governments to impose some form of rationing. Rationing must be watched closely and constantly adjusted to reflect fluctuating supplies and demands and the needs of individual consumers. While solving some of the issues, there is a high risk of corruption.<ref name="Rockoff_controls">Hugh Rockoff. [http://www.econlib.org/library/Enc/PriceControls.html "Price Controls"], The Concise Encyclopedia of Economics, referenced 2009-09-12.</ref>
* Price controls sometimes, paradoxically, raise prices more than no controls.
* A country can't maintain price controls without limiting exports, damaging foreign markets and trade agreements - otherwise, the underpriced goods will be exported.<ref name="Schuettinger_morals">Robert L. Schuettinger and Eamonn F. Butler. "[[Forty Centuries of Wage and Price Controls]]", Chapter 15 - The U.S., Britain and Canada: 1970-78, p. 111-112, referenced 2009-08-09.</ref>

==References==
{{Reflist}}

==External links==
* Wikipedia pages on [[Wikipedia:Price ceiling|price ceiling]] and [[Wikipedia:Price floor|floor]]
* [[Murray N. Rothbard]], [http://mises.org/econsense/ch34.asp "Making Economic Sense"], Chapter 34: "Price Controls are Back!"
* [[Ludwig von Mises]], [http://mises.org/etexts/mises/critique/section5.asp "A Critique of Interventionism"], Theory of price controls
* D.W. MacKenzie, [http://mises.org/story/3790 Maximum Confusion over Minimum Wages], Mises Daily from October 28, 2009
[[Category:Economical Concepts]]

Friedrich Hayek

2010-04-29T15:09:46Z

192.100.130.239: Resource added.

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<blockquote>"A claim for equality of material position can be met only by a government with totalitarian powers." 
F.A.Hayek, ''Law, Legislation, and Liberty''</blockquote>

Friedrich August von Hayek is one of the most eminent of the modern Austrian economists. Student of [[Wikipedia:Friedrich von Wieser|Friedrich von Wieser]], protégé and colleague of [[Ludwig von Mises]], and foremost representative of an outstanding generation of Austrian school theorists, Hayek was very successful in spreading Austrian ideas throughout the English-speaking world. "When the definitive history of economic analysis during the 1930s comes to be written," said [[Wikipedia:John Hicks|John Hicks]] in 1967, "a leading character in the drama (it was quite a drama) will be Professor Hayek. . . . It is hardly remembered that there was a time when the new theories of Hayek were the principal rival of the new theories of Keynes" (Hicks, 1967, p. 203).<ref name="Hicks_Hayek">[[Wikipedia:John Hicks|Hicks, Sir John]]. 1967. ''Critical Essays in Monetary Theory.'' Oxford: Clarendon Press. p.203. Referenced via article source 2009-05-28.</ref> Unfortunately, Hayek's [[Austrian Business Cycle Theory|theory of the business cycle]] was eventually swept aside by the [[Wikipedia:Keynesian revolution|Keynesian revolution]]. His work was again recognized when Hayek received, along with the Swede [[Wikipedia:Gunnar Myrdal|Gunnar Myrdal]], the 1974 [[Wikipedia:Nobel Memorial Prize in Economic Sciences|Nobel Memorial Prize in Economic Science]]. Hayek was a prolific writer over nearly seven decades; his [http://www.press.uchicago.edu/Complete/Series/CWFAH.html Collected Works], currently being published by the [[Wikipedia:University of Chicago Press|University of Chicago Press]] and [[Wikipedia:Routledge|Routledge]], are projected at nineteen volumes.

==Life and Work==
Hayek's life spanned the twentieth century, and he made his home in some of the great intellectual communities of the period.(2) Born Friedrich August von Hayek in 1899 to a distinguished family of Viennese intellectuals,(3) Hayek attended the [[Wikipedia:University of Vienna|University of Vienna]], earning doctorates in 1921 and 1923. Hayek came to the University at age 19 just after [[Wikipedia:World War I|World War I]], when it was one of the three best places in the world to study economics (the others being [[Wikipedia:Stockholm School of Economics|Stockholm]] and [[Wikipedia:University of Cambridge|Cambridge]], England). Though he was enrolled as a law student, his primary interests were economics and psychology, the latter due to the influence of [[Wikipedia:Ernst Mach|Mach's]] theory of perception on Wieser and Wieser's colleague [[Wikipedia:Othmar Spann|Othmar Spann]], and the former stemming from the reformist ideal of [[Wikipedia:Fabian Society|Fabian socialism]] so typical of Hayek's generation.

Like many students of economics then and since, Hayek chose the subject not for its own sake, but because he wanted to improve social conditions--the poverty of postwar Vienna serving as a daily reminder of such a need. [[Socialism]] seemed to provide a solution. Then in 1922 Mises published his ''Die Gemeinwirtschaft'', later translated as [[Wikipedia:Socialism (book)|Socialism]]. "To none of us young men who read the book when it appeared," Hayek recalled, "the world was ever the same again" (Hayek, 1956, p. 133). Socialism, an elaboration of Mises's pioneering article from two years before, argued that [[economic calculation]] requires a market for the means of production; without such a market there is no way to establish the values of those means and, consequently, no way to find their proper uses in production. Mises's devastating attack on central planning converted Hayek to laissez-faire, along with contemporaries like [[Wikipedia:Wilhelm Röpke|Wilhelm Röpke]]<ref name="Röpke">Shawn Ritenour. [http://mises.org/about/3241 "Wilhelm Röpke (1899-1966): Humane Economist"], ''[[Mises Institute]]'', referenced 2009-05-24.</ref>, [[Wikipedia:Lionel Robbins|Lionel Robbins]], and [[Wikipedia:Bertil Ohlin|Bertil Ohlin]].

It was around this time that Hayek began attending Mises's famed Privatseminar. Regular participants, who received no academic credit or other official recognition for their time, included Hayek, [[Wikipedia:Gottfried von Haberler|Gottfried von Haberler]]<ref name="Haberler">[http://mises.org/journals/aen/aen20_1_1.asp "Between Mises and Keynes An Interview with Gottfried von Haberler (1900-1995)"], ''[[The Austrian Economics Newsletter]]'' Spring 2000 Volume 20, Number 1, referenced 2009-04-27.</ref>, [[Wikipedia:Fritz Machlup|Fritz Machlup]]<ref name="Machlup">Mark Thornton. [http://mises.org/about/3237 "Biography of Fritz Machlup (1902-1983)"], ''[[Mises Institute]]'', referenced 2009-05-24.</ref>, [[Wikipedia:Oskar Morgenstern|Oskar Morgenstern]], [[Wikipedia:Paul Rosenstein-Rodan|Paul Rosenstein-Rodan]], Richard von Strigl<ref name="Strigl">Jörg Guido Hülsmann. [http://mises.org/about/3243 "Richard von Strigl (1891-1942)"], ''[[Mises Institute]]'', referenced 2009-04-27.</ref>, Karl Schlesinger, [[Wikipedia:Felix Kaufmann|Felix Kaufmann]], [[Wikipedia:Alfred Schütz|Alfred Schütz]]<ref name="Schutz">Peter Kurrild-Klitgaard. [http://mises.org/journals/qjae/pdf/qjae6_2_2.pdf "The Viennese Connection: Alfred Schutz and the Austrian School"](pdf), ''[[The Quarterly Journal Of Austrian Economics]]'' Vol.6, no.2, referenced 2009-04-27.</ref>, [[Wikipedia:Eric Voegelin|Eric Voegelin]], Karl Menger, Jr., and others not so famous. For several years the Privatseminar was the center of the economics community in Vienna, attracting such visitors as Robbins from London and Howard S. Ellis from Berkeley. Later, Hayek became the first of this group to leave Vienna; most of the others, along with Mises himself, were also gone by the start of World War II.

Mises had done earlier work on monetary and banking theory, successfully applying the Austrian [[marginal utility]] principle to the value of [[money]] and then sketching a theory of industrial fluctuations based on the doctrines of the [[Wikipedia:British Currency School|British Currency School]] and the ideas of the Swedish economist [[Wikipedia:Knut Wicksell|Knut Wicksell]]. Hayek used this as a starting point for his own research on fluctuations, explaining the origin of the business cycle in terms of bank credit expansion and its transmission in terms of [[capital]] [[malinvestment]]s. His work in this area eventually earned him an invitation to lecture at the [[Wikipedia:London School of Economics|London School of Economics and Political Science]] and then to occupy its [[Thomas Tooke|Tooke]] Chair in Economics and Statistics, which he accepted in 1931. There he found himself among a vibrant and exciting group: Robbins, [[Wikipedia:John Hicks|J. R. Hicks]], [[Wikipedia:Arnold Plant|Arnold Plant]], [[Wikipedia:Dennis Robertson|Dennis Robertson]], T. E. Gregory, [[Wikipedia:Abba P. Lerner|Abba Lerner]], [[Wikipedia:Kenneth E. Boulding|Kenneth Boulding]], and [[Wikipedia:G. L. S. Shackle|George Shackle]], to name only the most prominent. Hayek brought his (to them) unfamiliar views,(4) and gradually, the "Austrian" theory of the business cycle became known and accepted. At the L.S.E. Hayek lectured on Mises's [[ABCT|business-cycle theory]], which he was refining and which, until [[Wikipedia:John Maynard Keynes|Keynes's]] [[Wikipedia:The General Theory of Employment, Interest and Money|General Theory]] ([http://www.marxists.org/reference/subject/economics/keynes/general-theory/ text]) came out in 1936, was rapidly gaining adherents in Britain and the U.S. and was becoming the preferred explanation of the Depression.

Hayek and Keynes had sparred in the early 1930s in the pages of the [[Wikipedia:Economic Journal|Economic Journal]], over Keynes's ''Treatise on Money''. As one of Keynes's leading professional adversaries, Hayek was well situated to provide a full refutation of the General Theory. But he never did. Part of the explanation for this no doubt lies with Keynes's personal charm and legendary rhetorical skill, along with Hayek's general reluctance to engage in direct confrontation with his colleagues.(5) Hayek also considered Keynes an ally in the fight against wartime [[inflation]] and did not want to detract from that issue (Hayek, 1994, p. 91). Furthermore, as Hayek later explained, Keynes was constantly changing his theoretical framework, and Hayek saw no point in working out a detailed critique of the General Theory, if Keynes might change his mind again (Hayek, 1963, p. 60; Hayek, 1966, pp. 240-41). Hayek thought a better course would be to produce a fuller elaboration of [[Eugen von Böhm-Bawerk|Böhm-Bawerk]]'s capital theory, and he began to devote his energies to this project. Unfortunately, ''The Pure Theory of Capital'' ([http://mises.org/books/puretheory.pdf pdf]) was not completed until 1941, and by then the Keynesian macro model had become firmly established.(6)

The fortunes of the Austrian school have suffered a dramatic reversal with the next few years. First, the Austrian theory of capital, an integral part of the business-cycle theory, came under attack from the Italian-born Cambridge economist [[Wikipedia:Piero Sraffa|Piero Sraffa]] and the American [[Wikipedia:Frank Knight|Frank Knight]], while the cycle theory itself was forgotten amid the enthusiasm for the ''General Theory''. Second, beginning with Hayek's move to London and continuing until the early 1940s, the Austrian economists left Vienna, for personal and then for political reasons, so that a school ceased to exist there as such.(7) Mises left Vienna in 1934 for Geneva and then New York, where he continued to work in isolation; Hayek remained at the L.S.E. until 1950, when he joined the [[Wikipedia:Committee on Social Thought|Committee on Social Thought]] at the [[Wikipedia:University of Chicago|University of Chicago]]. Other Austrians of Hayek's generation became prominent in the U.S.--[[Wikipedia:Gottfried von Haberler|Gottfried von Haberler]]<ref name="Haberler">[http://mises.org/journals/aen/aen20_1_1.asp "Between Mises and Keynes An Interview with Gottfried von Haberler (1900-1995)"], ''[[The Austrian Economics Newsletter]]'' Spring 2000 Volume 20, Number 1, referenced 2009-04-27.</ref> at Harvard, Fritz Machlup and Oskar Morgenstern at Princeton, Paul Rosenstein-Rodan at MIT--but their work no longer seemed to show distinct traces of the tradition founded by [[Wikipedia:Carl Menger|Carl Menger]].

At Chicago Hayek again found himself among a dazzling group: the economics department, led by Knight, [[Wikipedia:Milton Friedman|Milton Friedman]], and later [[Wikipedia:George Stigler|George Stigler]], was one of the best anywhere, and [[Wikipedia:Aaron Director|Aaron Director]] at the law school soon set up the first law and economics program.(8) But economic theory, in particular its style of reasoning, was rapidly changing; [[Wikipedia:Paul Samuelson|Paul Samuelson]]'s [[Wikipedia:Foundations of Economic Analysis|Foundations]] had appeared in 1947, establishing physics as the science for economics to imitate, and Friedman's 1953 [[Wikipedia:Essays in Positive Economics|essay]] on "positive economics" set a new standard for economic method. In addition, Hayek had ceased to work on economic theory, concentrating instead on psychology, philosophy, and politics, and Austrian economics entered a prolonged eclipse.(9) Important work in the Austrian tradition was done during this period by [[Murray N.Rothbard|Rothbard]] (1956, 1962, 1963a, 1963b), [[Wikipedia:Israel Kirzner|Kirzner]] (1963, 1966, 1973), and [[Wikipedia:Ludwig Lachmann|Lachmann]]
<ref name="Lewin_Lachmann">Peter Lewin. [http://mises.org/about/3236 "Ludwig Lachmann (1906-1990): Life and Work"], ''[[Mises Institute]]'', referenced 2009-05-29.</ref> (1956), but at least publicly, the Austrian tradition lay mostly dormant.

When the 1974 Nobel Prize in economics went to Hayek, interest in the Austrian school was suddenly and unexpectedly revived. While this was not the first event of the so-called "Austrian revival," the memorable [[Wikipedia:Royalton, Vermont|South Royalton]] conference having taken place earlier the same year, the rediscovery of Hayek by the economics profession was nonetheless a decisive event in the renaissance of Austrian economics.(10) Hayek's writings were taught to new generations, and Hayek himself appeared at the early [[Wikipedia:Institute for Humane Studies|Institute for Humane Studies]] conferences in the mid-1970s. He continued to write, producing [[Wikipedia:The Fatal Conceit|The Fatal Conceit]] in 1988, at the age of 89. Hayek died in 1992 in [[Wikipedia:Freiburg im Breisgau|Freiburg]], Germany, where he had lived since leaving [[Wikipedia:Chicago|Chicago]] in 1961.

==References==
Please consult the [http://mises.org/about/3234 original text] by [[Wikipedia:Peter G. Klein|Peter G. Klein]](1) for more references; reprinted with generous permission from the [[Mises Institute]].
{{Reflist}}

==External links==
* [http://www.econlib.org/library/Essays/LtrLbrty/gryHRC3.html Bibliography] from Library of Economics and Liberty
* [http://oll.libertyfund.org/index.php?option=com_content&task=view&id=1234&Itemid=259 Bibliography] from the Online Library of Liberty
* [http://homepage.newschool.edu/het//profiles/hayek.htm Biography and resources] on Hayek
* [http://mises.org/literature.aspx?action=author&ID=126 Online works] at the Mises Institute
* Wikipedia page on [[Wikipedia:Friedrich Hayek|Friedrich Hayek]]
* [http://mises.org/daily/3940 Hayek on Individualism] by Garet Garrett, 1949
* [http://mises.org/daily/4082 Hayek and the Nobel Prize], Libertarian Forum, 1974
* [http://mises.org/journals/rae/pdf/rae9_1_3.pdf Hayek, Business Cycles and Fractional Reserve Banking: Continuing the De-Homogenization Process] (pdf), by Walter Block and Kenneth M. Garschina, 1996
[[Category:Historical]]