The Future of Austrian Economics

0:00In order to, but since the last, the first Mises University was last summer about this time and since the, since that, since that event, we've had a, we've gone through cataclysmic changes in the world and the, what we've seen I think in this last part of last year and continuing this year is the most exciting event in the 20th century, certainly in my lifetime I think in the 20th century, namely the total revolutionary collapse of socialism dash communism. And it was just fantastic, and that's part of the case for optimism about the future, excuse me, is the fact that something happened which nobody predicted would happen in any sort, at least at that time, in that sort of way, is that we had a totalitarian monolith.

0:54One friend of mine claimed about two, three years ago that communism has succeeded in brainwashing all the people, all their subjects. They created a new socialist man, the man that they were trying to achieve, and therefore everything was hopeless. And typical of this person is he's not exactly a very good prophet. And shortly after his article was written came the beginnings of the whole collapse of communism. And one of the great things about it, in addition to the fact that it shows that the spirit of freedom cannot be wiped out in mankind, is that it shows the power of ideas. It's very difficult. We tend to get pessimistic sometimes. Some people do, some laggards, some of the faint of heart, because here we're pouring forth ideas, and Mises, for example, I'll get to that in a minute, that all his life was fighting for freedom and opposed to tyranny and socialism.

1:50And you think, well, how can ideas affect history? And we're locked in, you know, we only know about the public choice trap. The public choicers who tend to be free market people are trapped in this extremely gloomy pessimistic world outlook. Namely that special privileges, of course, as we all know, special privileges out shaft us 24 hours a day. They're constantly working for lobbying and special privileges and monopoly contracts and all that and the rest of us, the consumers, the average person, is not interested in any one particular focus like the sugar market or the grain market or whatever, 24 hours a day and therefore the consumer is, quote, rationally ignorant, and uncaring about these particular fields and areas and therefore it's inevitable the special privileges always went out and tyranny and statism went out and that's it. There's no hope.

2:46And every person, since every person is only interested in the narrow, short-run economic interests, there's no way of getting out of this trap. George Stiegler, for example, the distinguished dean of Chicago School of Economics, one of the two deans at least, the view is that ideas have no influence on history whatsoever. It's as if everybody's writing in sort of a vacuum or writing for each other, other professors. And there's no point to any of this as far as affecting history goes. And coming from the story of economic thought is kind of a depressing picture. So why are you doing all this if none of this has any impact? So what we find out here, a dramatic example of the exact opposite. In other words, here is the communist system, totally locked in, an alleged monolith, special privileges of nomenclatura, totally dominant, everybody had to work for the state, of the State, everybody's lives were organized by the state and commanded by the state, and therefore it seemed to be no hope.

3:49And obviously something, and here's a situation with people like Ludwig von Mises, for example, Etienne Labollet, T. David Yuma, Ludwig von Mises, always kept insisting that in the long run ideas are the things that count, it's not short run economic interests, it's the The ideas held by the public that determine historical events, that no government, however much force they command, however much instruments of terror they use on the population, no government can last any length of time unless the public supports it. The majority of the public endorse it, one way or the other, for whatever reason. And this seemed to be outmoded in the days of totalitarianism, the days when the government has all these red instruments of torture and high technology at their command. How can the average person resist this? And, you know, we've all read Orwell's 1984, of course, it's a very gloomy picture.

4:40Everything is shot, everything is finished. The totalitarian elite will win out. will win out. And then at the beginning of all this process, Ludwig von Mises in 1920 wrote his famous article on economic calculation of socialist commonwealth, the beginning of this whole monstrous collectivist process in the 20th century, and he said, it's not going to work. In other words, in addition to the moral ideas, the moral failures of socialism and all the other political, philosophical failures and sociological failures, it ain't going to work. Impossible, as he put it, and cannot plan a modern industrial system. It's going to fall apart. It can't calculate. And this was allegedly rebutted. The socialists, by the way, in those days took this very seriously.

5:29This was the first time that they'd come to their attention as a problem other than the incentive problem. You know about the incentive problem. Everybody acknowledged that from the very beginning of socialism, even before socialism. The Great Socialist Experiment of the Soviet Union was established. The center problem is if everybody is equal and if everybody takes according to his needs and gives according to his ability, who's going to take out the garbage? Who's going to do the dirty work? What's going to happen? And the answer, basically, if you think of the socialists, was we will create, socialism will create a new socialist man, which will be cheerful and robotic and dedicating his whole life to the service of the state apparatus. And essentially Mises said, look, even setting out aside whether or not you can do that, even having a bunch of robots which are shiffly rushing to obey the commands of the state, what will the state be able to tell them? What will the state tell them to do?

6:23How will they be able to plan and calculate where some production should be established, and what processes should be used, and what combinations, and so forth? And he said they can't do it because there's no free market on the means of production. There's no genuine market which establishes a genuine price system, and therefore they won't know their cost, they won't know if they're doing well or badly, and the whole thing will fall apart. The socialists taking this very seriously try to refute it. We had about 20 years or 15 years of debate back and forth, especially in Europe where Mises, of course, was published. The conclusion, which was accepted by every right thinking economist by the late thirties, was that's okay, we can have a market socialism, make them total managers to play, play market, so forth and so on. This was generally accepted by the establishment. And everybody sat back, well that, phew, that problem was disposed of, they don't have to worry anymore, socialism is okay, we just have this artificial market, so-called market.

7:20And Mises kept refuted that and Human Action, but the economic establishment, so to speak, determines that the whole problem was over, don't worry about it, socialism can do it. Well, here we are, and by the end, one of his last articles in his life, Oscar Longa, a monstrous little article called The Computer and the Market, really refuted his whole approach. He had said in his economic theory of socialism, we don't have to worry, socialism doesn't have to worry about calculation, we just have a phony market, we have trial and error. and we can do it very easily and then he's in 1963 just before 65 I guess just before he died he said we don't have to worry now if I was writing my answer to Mises and Hayek today I'd simply say look we have a computer, a great new institution, a great new mechanism which will plan everything in two seconds and the effect is better than the market and I don't have to worry about it and then he passed on. At any rate we now find in Eastern Europe and Soviet Union

8:20fantastic demonstration of vindication of Mises' whole approach. The whole thing collapsed. It turns out socialism is indeed impossible. And popping up from this rubble, we find a whole enormous, unbelievable to all of us, enormous outcropping and outpouring of Misesians and Hayekians all over Eastern Europe and the Soviet Union. And one of the physical embodiments of that, of course, was here this week, the wonderful Yuri Maltsev, I'm sure you've all met. And here he is, he's now honored in the Soviet Union as a prophet, and they want him back, come back and help us plan and so forth. Of course, Yuri's too shrewd for that.

9:09One of the most moving examples of both the Mises Institute and this unbelievable desocialization occurred this spring, April or May, when the Mises Institute put on a desocialization conference in Washington and it was like a people's international. We had a discussion of socialist planning in Eastern Europe. Yuri talked about the Soviet Union and Hans Hoppe talked about Germany. And we had a great guy who was a Polish-American, emigrated from Poland in the early 80s, talking about the Polish planning. And we also had a top economist from Lithuania.

9:58This is very moving, one of the most moving experiences I've ever had, because everybody thought the Russian tax would be moving in in about, you know, any day. And we had a Lithuanian economic delegation, not worried, seemingly not worried about the tax at all. What they want to do, how do you privatize? How do you get to total privatization, total free market? How do you do it? Interesting question. It's a question, of course, that orthodox economists have never thought about, because they never thought it would happen. and all these millions of dollars that have been poured into anti-communist think tanks over the last 40 years, 45 years or so, figuring out about missile weights and throw weights and who should bomb who's missile first and where and so forth. The whole thing seems to be, right now you're looking back at it, it seems to be like a 16, looking back at the 16th century and the whole world has changed in one year.

10:50And the whole Thruway thing looks like a fantastic waste of resources poured into this stuff. And in the midst of all this anti-communist research, nobody, as far as I know, none of these think tanks, none of these anti-communist foundations or whatever, nobody ever sat down and thought, well, what would happen if the Russians suddenly read Human Action or read Milton Friedman or something and came to Western economists and said, okay, here's the key, do something about it, we surrender. Right? Communism is finished. What do we do next? And none of these guys ever thought about it. Because for one thing they thought, they never absorbed the lesson of Ludwig von Mises. They never absorbed the fact that socialism can't work. Eventually it is going to collapse. Eventually they are going to surrender one way or the other. They're going to ask, what are we going to do?

11:35And they had no answer for it after 45 years of anti-communist scholarship. And, well, what happened, the Lithuania economist, a whole delegation, I think, headed by vice premier, they were going around the United States, the East Coast, trying to find out, what do we do? And other think tanks, I might add, what they did was they showed them the great offices, the walkie-talkies and the plush carpets. They were, of course, very impressed with Lithuania, but they weren't interested in knowledge. knowledge. They knew that the West was a great technological shape. How did we apply that here? And only the Mises Institute, a great ideological entrepreneurship of Jeff Tucker, immediately whipped together an impromptu one-day conference of a whole bunch of economists lecturing to these Lithuanians on different economic topics. And they loved it. This is knowledge. This is what we came for. We didn't come to admire plush offices. We knew all about that.

12:34When I was at this Mises Institute conference a few weeks later, the first delegation, I'd say it was one of the most moving experiences in my life because all these people talked about the different aspects of Eastern Europe and the Lithuanian gentleman who thought he couldn't speak English well enough, obviously he did, but he was hesitant about speaking English to the group, he spoke in Russian and Yuri stood next to him translating into English. Marvelous, because he was the Lithuanian-Russian people's pre-market solidarity. while soviet tanks were threatening to march in, and one thing a Lithuanian economist said, he said, well, it was a wonderful thing over here today because Professor Samuelson at MIT told us we should have a central bank.

13:23The first thing we should do is establish a central bank in Lithuania, and we did that. Now we find out today we should repeal the central bank. So, he's a beautiful example of an influence of ideas on history, and he said that one thing I should say is that the, I was going to remark before, that the whole implosion, the whole revolutionary implosion in Eastern Europe showed us that we were going to do it, that we were going to do it, that we were going to do it. in Eastern Europe shows the powerful influence of ideas, because they simply said, we ain't very much to you, we're not going to obey orders anymore. It was like non-violent mass civil disobedience on a fantastic scale.

14:12And so here we have, as I say, nobody could predict the exact form of this, but here it was like a domino effect. One country topples, communism topples, and the rest of them topple. The, and the form it took was once it's, well for example in Romania it was a dramatic example because the troops were shooting in, the Ceausescu troops were shooting into the square and these people, they didn't flee, they just stood there and they said, you know, the heck with it, we'd rather dive and live under communism anymore and that was it. At that point the soldiers turned their guns on the officers and the whole thing and we had a point where Ceausescu issued orders and This is the great libertarian's dream, that the guys on the top ordering and butchering millions of people, all of a sudden they issue orders and everybody says, nuts to you.

15:03We ain't listening no more. It's impossible, I think, not to be optimistic when we see this. We have a lot of things to gripe about here. We have a lot of monstrous trends at work in the United States. When we see what happened with the undertotalitarianism, when people just said, how about that, we quit, and they're looking for free market solutions, and the Misesians, Hayekians popping up, it's a magnificent experience. It's something we should never forget. If we ever tend to be pessimistic about trends in the United States, we should realize what happened in Eastern Europe in 1989, 1990. So, in looking at this, and looking at the victory of freedom in Eastern Europe, I'm not saying all problems are solved, this is an unbelievable and fantastic thing which you should always remember, ideas in the long run can trump interests, can trump economic interests.

15:58Looking back at Mises being the originator of this, of the knowledge that socialism is I think we should look back on Mises' life and what happened in the events in Austrian economics to see, to gauge the future. We have to look at what's been happening in the recent, immediate past. As I said, after collectivism was being established, socialism was being established in the world, in Europe, Mises wrote this article. In addition to that, he was discriminated against. He couldn't get a university post, an Austria-paid university post. He got an unpaid post, prestigious but unpaid which meant of course he had to find work elsewhere largely because he was opposed to socialism and collectivism and there were only two kinds of economists or social scientists who received paid university posts in Austria at the time either Marxists or fascists or corporatists, that's it, they were the only respectable That was the wave of the future And the laissez-faire was reactionary, neanderthal, and part of the 19th century, which was being displaced by the great progressive new century, the 20th century.

17:08So in addition to that, the second thing which disqualified Mises from a paid university post was that he was uncompromising. He was a great guy. I mean, he's sometimes been accused of being personally abrasive. I never saw it. Those of us who studied under him in the United States. He was unbelievably sweet. He was constantly urging people, finding research projects for people to do, which he usually didn't do, of course, but always coming up with ideas and always being unfailingly courteous and unfailingly and non-bitter about what had happened to him. And so here he was, but he refused to compromise one iota. In other words, he didn't bend with the wind, with intellectual winds, which all too often happens in the world, we all know.

17:53He didn't say, well, let's try to work within the system and say, stateism is okay, but you should have a little bit of tinkering here and there, like a little currency reform or a little wage reform or something like that. He was absolutely uncompromising and kept developing his ideas and his great works. And in the meantime, not having a paid university post, he had a full-time post as economist, chief economist for the Chamber of Commerce, for Commerce, which in Austria was a quasi, a government agency, which where businessmen elected representatives of this chamber and they would have a staff and they would advise the government. But as a result, Mises became the major economic advisor, although his advice wasn't listened to very much. He was tremendously respected. So he almost single-handed, he and a couple of friends of his were essentially single-handedly He stopped the Austrian inflation, which is rampant, as well as the German after World War I, stopped it from a runaway inflation, he stopped it at about 1200% or whatever, instead of becoming, as in Germany, one quadrillion marks to the dollar.

18:57It was only 1200 Austrian shillings or whatever, fennel eggs, whatever the currency unit was to the dollar. Later in his memoirs, which was written in the midst of his flight from Europe in 1940, he said, now he's looking back on it, he wishes that he hadn't fought it, because it was hopeless in the long run anyway, because it just lengthened the time of the inflation, just slowed it down, and the result was the banking crash and collapse in 1931. But, as a matter of fact, one of the very sweetest things, one of the most charming and moving passages in this book, he said he's always been accused of being too uncompromising. If only he had waffled, he might have been more influential. And looking back on it, he said, no, no, I wasn't hardcore enough. I wasn't uncompromising enough. Looking back on it, I should have been tougher. The Council of the United States is a refugee. Again, it gets no paid academic post in the United States, despite its tremendous creativity and unbelievable every addition.

19:55At a time when every Marxist, semi-Marxist, social-democrat, Menshevik, Trotskyite, whatever, Bukharinite refugee got top academic posts, were fed and welcomed at top universities. Fortunately at that time we had, well he got a small foundation grant in New York, penniless, small foundation grant to work on two great books which came out a couple of years. Mises is by the way the sort of person that got a grant in the two years there was a book and something many of us try to emulate and two great books, bureaucracy still a magnificent book explaining the difference between working as a profit operation, private profit and loss operation and government operation, which has to be bureaucratic as he said, and non-profit organization. I'll get back to that in a minute because there's a whole The whole uncharted area, which Austrian economists haven't dealt with and nobody else has dealt with, really, is of the economics of non-profit organizations.

20:57How do they work? Is it possible for them to be efficient? And Mises pioneered in that. And also his book Omnipotent Government, which at the time was extremely important and influential because he was the first one to show, in those days the ruling doctrine here, promulgated by a Marxist refugee from Europe, Germany, was that Nazism was simply the last final stage of Evil Capitalism. The capitalists turned to the Nazis to crush the rising proletariat. And that's the basic explanation of Nazism. And what Mises pointed out was, this is ridiculous, what Nazism really is, is national socialism. It's a form of socialism and collectivism in the German nation. After that, it was really adrift. And what happened was there was a small group of, there was a foundation, a small group of conservative and libertarian and Business Men, who banded together, and actually the William Volcker Fund, which is the head of this, William Volcker Fund is an unsung forgotten institution, which really was like the candle in the catacombs or whatever,

22:00it preserved, maintained and fostered, all during the 1950s and early 60s, late 40s and early 60s, libertarian and conservative scholars. That was a period after realizing there ain't no such thing as free market economists or social scientists or anything. Everybody was either, in the ruling fashion, was either a communist or communist fellow traveler or you're a social democrat. That's it. That was the only, that was the range of debate. Are you a social democrat or are you a commie? Being a free market person was being some sort of 19th century reactionary fascist neanderthal. So, Harold Luna, the head of the Volcker Fund, was searching around for, his first task he felt was to find a paid university post in the United States for Mises and Hayek.

22:46Hayek was in England. Hayek had posts in England. Mises had no position at all. The result of which, of this detailed search, was he couldn't find a paid university post for either of them, interestingly enough. And, in other words, this replicates Mises' experience in Austria in us. And Mises, the best he could do for Hayek was the University of Chicago economics department rejected Hayek as being reactionary in the end, or whatever. I don't remember, but they found an unpaid post form in the Committee of Social Thought in Chicago, which is a highly prestigious graduate department, but the problem with that is, if you graduate with a PhD in social thought, where do you teach? There are no departments of social thought in any place. So it's very difficult to get a teaching position, do anything with it. Usually they're not about history departments, but it's kind of difficult, you're not certified historian, which as we all know is very difficult in any field to break through the crust.

23:43So, but Hayek has an unpaid post. In other words, the Volcker Fund paid for his salary, Hayek's salary, and Mises, the Volcker Fund paid for his salary as a visiting professor at NYU and the Graduate School Business Administration. But the major influence that Mises had was a private seminar which he gave every week in the Department of Commerce offices, Office, Chamber of Commerce Offices, and was a magnet for all the top students in Europe, all the top young social scientists and economists and philosophers in Europe, and even the United States and England, came to this because this was a great center of research from the early 1920s until 1934. And he tried to replicate this with us in the United States, and unfortunately, I felt very sorry about it because the caliber of the students there was not exactly up to Vienna Paul, put it very kindly, he was totally uncomplaining. He was pressed on and did his very best to stimulate, as I said, research in students.

24:40And this was a period from 19, when he was here from the mid-40s until he died in 1973, it was sort of like, as I said, a candle in the darkness. There were very few Austrians, very few free market people, even when the free market became more respectable, there were almost no Austrians. and he pressed on extraordinarily productive and extraordinarily cheerful in this whole process. When he died in 1973, just coincidentally, the next year, that was the year 7374 of the great collapse of Keynesianism of Keynesianism, because that was the first year when the process of so-called stagflation or inflationary recession became evident.

25:29It happened before a little bit, but it wasn't evident. All of a sudden, 73, 74 is an inflation, 13, 14% inflation, so-called double-digit inflation. And at the same time, it was a big recession with unemployment and bankruptcy and all the rest of it. What are you supposed to do about this? Keynesian doctrine, of course, is very simple. I mean, the equations are complicated, but the practical conclusion is very simple. The government is the great macro-steering wheel, whatever. The economic system is wonderful in the micro sense, but in the macro sense it's totally without an anchor, without a rudder. It needs a great helmsman, namely, of course, the government, provided the government is steered by Keynesian economists. That's, of course, a key. And looking at the controls and the indicators and statistics, if the Keynesian economist finds that there's a recession and prices are falling and all that, you pump in spending, usually of course meaning increasing government budgets.

26:24If you find there's a boom and there's prices going up and so forth and inflation, then you take out spending, almost always of course by increasing taxes, never by cutting the government budget, by the way, this is part of the Orwellian memory hole of the original and Keynesianism. So you increase taxes by sopping up, quote, excess purchasing power. In other words, we have the excess purchasing power after the government has already inflated the money supply. We've all gotten it. Then we become excessive and they have to sop it away again. There's sort of a one-two punch to the economy, to the people. So here we have a situation, however, where two things are happening at once. Inflation, prices are going up, and yet there's also recession. What are you supposed to do? You can't pump in spending and you take it out. You can't do both at the same time. Despite all the equations and computer or whatever, you can't pump in spending and take it out at the same time.

27:13So they were finished. I mean, especially Keynesians have been dead from the neck up since 1974. It doesn't mean they quit. Nobody ever quits. It's one of Rothbard's laws of sociological laws. I have a whole bunch of them, which have evolved over the years. And one of them is nobody quits. It's not an apodictic law like praxeology. And once in a while somebody does quit. This is a good empirical generalization of high predictive value. So it's coherent and it has great predictive value. Anyway, so they hang in there, they find the best they can, they pump in a little bit of spending, take out a little bit of spending, hope that something works. In this situation, in this real collapse of Keynesian, I mean, Keynesian theory had a lot of weaknesses before, ever since Modigliani's first equations, It became evident that it assumes that wage rates are fixed downward, which nobody really realized before, but a practical political collapse is much more important than, unfortunately, in real life than a theoretical collapse.

28:12So with this political collapse, Keynes, as I say, was really bankrupt, and this begins to dissolve a ruling hegemonic paradigm and people looking around for other answers. Answers. The next year, Hayek gets the Nobel Prize, and one of the interesting, in tandem of course with the left-wing socialist Gunnar Myrdal, not to make it too, you know, too terrible and reactionary. Now the interesting thing, this is a big chock-a-roo to the economics profession, and one thing I want to stress here, I don't want to disillusion any young students here, but economists are almost all obsessed with the Nobel Prize, I mean there's betting pools every, in the in the early fall, who's going to get it this year, and there's all sorts of stuff going on. Everybody's very interested in the Nobel Prize and who's getting it.

28:59Before Hayek, as I remember, all the recipients, almost without exception, were mathematical Keynesians, Keynesian econometric types, and all of a sudden Hayek gets it. Who the hell is Hayek? Nobody had ever heard of him. You see, one of the things about the economics profession, they're not exactly steep in their own history. If something is written 10 years ago and nobody knows about it, because it becomes, it's part of the model of physics. If economics is a hard science like physics, which all these people hope and think it is, then, you know, physicists don't read 1930s physics unless they're antiquarians, which is what Einstein did or something. Basically, you read the latest journal articles, the latest textbooks, and that's it. You don't worry about what some bozo thought 20 years ago. And so trying to make this the paradigm in economics results in tremendous loss of knowledge on the part of most economists.

29:49So who's Hayek? How did this guy get the Nobel Prize? Who is he? And then it becomes a resurgence because people look back, they want to find out what did he say to earn him the Nobel Prize? And by then, well, this is interesting, I've never heard of this. So with this research, unfortunately, some of us conspiracy theorists, this is of course a totally unproved hypothesis, it's been cherished by many. I don't necessarily hold it, but some of my friends do, is that the point is that Hayek got his Nobel Prize not for this later stuff, not for evolution and the rule of law, that sort of thing. He got it for his Misesian business cycle theory, which he had expounded and elaborated in the late 1920s and early 1930s. That's what he got it for, explicitly. So the conspiracy hypothesis is that they waited for Mises to die before they gave Hayek a Nobel Prize, because Hayek, Mises died in 1973, Hayek gets it in 1974, and they would never give a Nobel Prize to a monster like Mises, so they waited for Mises to die for giving it to Hayek.

30:49It was much more of a compromiser. If you read the Constitution of Liberty, for example, there's pro-planning stuff, pro-status stuff all over it. So, at that point, this sort of sparked a regeneration and revival of Austrian economics. It might not be a total causal connection, but it certainly is an impressive coincidence that the first Austrian seminar since old Austria occurred, a conference, a week-long conference occurred in Royals in Vermont in the summer of 1974. All the younger, whatever Austrians there were, were gathered together. It was a wonderful thing because we all met each other for the first time, mostly. And Austrianism was fantastic, it's just like saying the catacombs, and Austrianism flourished, of course it was a shame that Mises didn't live to see this, and after fighting with all his life for these ideas, and then we had annual conferences for several years after that, it was a big flourishing movement, and Austrianism was becoming known and widely, people were interested in England and the United States,

31:57and then something happens, light suddenly goes out, see the history of thought and history in general is not an onward and upward into the light, it's a series of glitches, it's sort of like a, I wouldn't say a business cycle, but ups and downs, a zigzag effect, so suddenly there was a big zag after this impressive zig of the late 70s, something happened and the Austrian, younger Austrians at the time started saying, well, troubled Mises says he's too dogmatic, too uncompromising, too extreme, How do you get respectable in the mainstream of economics, keep pushing these ideas that nobody really likes and we should really try to become respectable, we should drop all the stuff about praxeology and laissez-faire and talk about market, market process, whatever, and the dread name Mises begins to slip out of sight.

32:50And this is of course really replicating in death what Mises had suffered in his life except this time it was essentially a stab in the back by people who called themselves Misesians who understood the situation and then basically sold out, if you look at it very bluntly, sold out for potential respectability funds, mainstream publications, tenure and all the rest of it. Well, in this rather dire situation, and it's not an accident, by the way, that the funding sources, almost a single funding source for this whole revived Austrian movement in the late 70s, which is flourishing fairly nicely, was one person, one billionaire, and the billionaire had a paradigm shift in his head, and all the other acolytes, so to speak, or fundees of the billionaire, suddenly, coincidentally shifted with it, into this idea of, and we began to hear, as I say, not only Mises was too extreme and too dogmatic, you know, talk about him, we began to talk about synthesis with Marxists, this has been the latest development since like 1980 or so. It's important for Austrians to really understand the great contributions of Marxists,

34:03Marx and Lenin and so forth, and we should have a continuing dialogue, and I'm sure you're able to appreciate this and fight for the Soviet Union to come to the United States or Austria to find out, hey, we should have a synthesis with Marxists, right, let's join in, or a synthesis with nihilism, and there's no truth, how do we know anything is true, all sort of fashionable, philosophic guff, Marxo-Freudian nihilist guff from the continent, and this became, it was becoming the ruling paradigm because the Mayor, funder was in favor of it, basically, I don't want to have a simplistic mono-causal analysis here, but that's the way it looks to me. In this situation, in this pretty grim and depressing situation where Austrianism has really collapsed, Austrianism, as I said in the first last week, is really Misesianism.

34:52In this situation, one person decided to do something about it, and this person is Lew Rockwell, who is responsible for everything we have today. What Lew had been, see Lew, all these other people, the Austro-Marxists, whoever you want to call them, were moving to Washington. I like Washington. I thought this is where the power is. This is where you can get goodies and respectability. Lew had spent a lot of time in Washington, hated it, wanted to get out, both spiritually and physically. and he decided that he wanted to found the Mises Institute, which was a dream of his life and he decided this is the time to do it and he wanted to revive the Misesian paradigm and the name of Mises and all the rest of it and he went to the four-step billionaire and he thought it was the Misesian and he said, well, I want to found the Mises Institute and he was ordered not to do it. Kind of an interesting point here, how could he be ordered since he was an employee of this person?

35:58In order not to do it, you can't do it. Of course, Lew, if you know Lew at all, doesn't accept these kind of orders very neatly. So Lew went ahead with no donations, no endowment, no pledges, no big daddy billionaire, nothing. Just an idea and tremendous energy and organizational genius, entrepreneurial genius of the highest order. And as a result, we have all this today. We have a fantastic Mises Institute, and we have just to run down some of the things the Mises Institute is doing, because I think it's important. It publishes a quarterly, oh, by the way, in addition to the, it publishes an annual journal, the Review of Austrian Economics, which is now going semi-annual, by the way.

36:46I'm happy to report, it's, and by the way, the Austrian Journal was boycotted by these aforesaid ex-Austrians, organized the boycott, which happily was not successful, and the, it has, it publishes a quarterly Austrian economics newsletter, which is sort of like a quarterly discussion magazine in Austrian economics. published in the monthly free market, which is marvelous for application of Austrianism in general and extremely successful. And it publishes books which are getting even more, we're going to be even more books in the future, talking about the future of Austrian economics. Kluwer Publishers, which have taken over the review of Austrian economics, are extremely excited about the future of Austrian economics, about Mises Institute and the future of Austrian economics.

37:37Not because they're ideological buddies, I don't know what they are or not, but I see it as a great marketing, great prospect of the future. And publishers are very astute in this, and they're particularly quite astute. I mean, they found, for example, Hans Hoppe's Theory of Capitalism and Socialism, which they published. They were amazed to see, under Mises Institute's auspices, they were amazed to see he was a bestseller, an academic bestseller, being translated in many languages. So this is deeply moved, the Clure people. So the, so we, and we have, we have, we're going to have three books a year, I think, which Clure wants to publish, Austrian type books, Mises Institute books. We have all sorts of books we publish on our own, pamphlets, monographs, and conferences we've been putting together for a long time and building up to the present one.

38:28Also special conferences like the desocialization conference I mentioned last year, conferences on Keynes, on Marx, on the Federal Reserve system, and all these conferences are going into books. In other words, we believe in the contrast of many other institutions. There's another institution which I won't mention which believes that every conference is an end in itself. You've got a conference, everybody should go home and nothing should be published out of it. And we believe quite the opposite. Every conference should build on previous conferences.

39:26Each professor teaches to the whole plenary group, and each one teaches three times or four times or whatever. Well, this seemed to work pretty well, so everybody sort of fell into this mold. And what Lew realized a couple of years ago, Lew Rockwell realized a couple of years ago, this is limited. In other words, you've got, you only have four professors, you only have a certain amount of students, everybody gets the same thing. Why not have a university concept? Why not have it so you can have a lot more professors? Professor, and we had a lot more of the thing is more professors are coming into the movement. So you have a lot more people growing up into it, first starting as students and then ending up as professors like Mark Thornton. So why should we have these people also give and be here and also give their own particular expertise?

40:11In other words, have courses like a real university, okay? And then we always had a problem in the old days in Austrian courses in the summer. Somebody would teach Austrian economics and the level was always bad. In other words, there'd be all sorts of people there from high school students, the businessmen, the graduate students, the young professors, and everybody was always griping about the level because some people thought it was too tough, other people thought it was too easy. How do you get the level? It was okay when they were teaching political philosophy or history because everybody was more or less the same level. What do you do about economics? And so, we got the idea, you separate it. You have elementary courses, you have intermediate courses, advanced courses, and you tailor each course to the needs of a particular student. And we wound up with the Mises University concept, which is a blockbuster, it's an unbelievable example of creative and ideological entrepreneurship and innovation in this field, which is a field which is not really recognized as a field, but should be.

41:06So we had, and last year was a fantastic success and everybody loved it, and this year even more so, each year is better than the preceding one. In this case, the Whig Theory of History seems to work. So, and the only thing I don't like about it, in a sense, is that it's like a real university. You don't see that if you want to talk to people, you want to talk to my friends or whatever, oh, sorry, I have to go off to the next class. That's inevitable as the university takes over, so to speak. So, and we have more faculty, more students and different segregation, so to speak, by quality and depth of courses. As a result, people can come back year after year because they can take more advanced courses In addition to that, we have, by the way, I should say that there's an unexplored field, I think I mentioned Mises' bureaucracy, unexplored field of economics and non-profit organizations.

42:03It's almost not been worked on. People are interested in what can they work on in Austrian economics. Here's an area. How do you calculate? It's easy to see how you calculate a profit-making institution, profit and loss. How do you calculate efficiency? How do you make sure that you don't have a bloated organization? It's very difficult. And unfortunately, many audiological organizations, whether libertarian or other, tend to become bureaucratic. They tend to be overweighted with dead wood, overstaffed, underproduced, underproductive. The quality tends to go down. The emphasis tends to be on show rather than content. And what Lew has done as part of his entrepreneurial magnificence, I think, what he's done is, is to have an organization here which has the highest marginal productivity of any organization in the country, or more than none, a non-profit organization in the country.

42:54In other words, fantastic output. Every person here has a very tight ship. I mean, the staff is about, I don't know, one-third of any comparable organization. Each person is dedicated, extremely competent, and works very hard. And as you probably all know this week. So, and the result of this is the growth of the Mises Institute, both in content and quality and in quantity and in influence. Essentially we've beaten the Austro-Nialists and the Austro-Marxists, I mean, they're out of the picture, they've had it, and doing it against tremendous odds, in a sense, against the odds of a billionaire opposition, in a sense it's very much like Mises conquering in the long run over the odds that he faced. And one interesting thing also about Mises' strategy and general strategy and outlook, we wanted to form a graduate school in economics, I forget now it was the 1950s or 60s, somewhere around those dark ages.

43:52And Mises was going to be the president of this graduate school, it was going to be called the American School of Economics. And he insisted, us younger people were on the board of trustees because they wanted Mises kept saying, don't forget, as you're doing this high theory and scholarship, don't forget to have continuing lectures of the businessmen and the general public. At the time, I didn't really understand that, but why does he keep making this point? But I understand it very well now, especially since Joseph Salerno was pioneered and lookingivided back over the Mises-Hayek differences between Mises and Hayek on the economics of socialism and also on the economic, on the general, on the rational versus the irrational view of exchange and specialization.

44:41The point that Mises was really making was that since he believed that people do change history, that ideas do change history, that people are conscious actors and their decisions really determine events, it's very important for everyone, not just scholars, not just to philosophers and economists. It's important for everyone, all the general public, businessmen in the public, to understand the importance of the free market, to understand that crippling the free market is death, in literal sense. It leads directly to the terrible situation in Eastern Europe from which they finally got rid of, getting rid of. So it's very important not just to get the high-flung journal articles, it's also and equally important to spread the basic truths of free market and laissez-faire and the evils of collectivism and interventionism spread that to the general public and the business.

45:29And that was the point. It wasn't just sort of a peculiar whim on the part of Mises. It was rooted in his general strategic theories, the theory of life and the importance of reason and ideas on historical events. The interesting thing about Mises is the more I read him and go back and read the stuff, the greater it looks. So looking into the future and looking into what are the prospects for Austrian economics, I think it's inherent in the current situation. Obviously it's not determined by, but certainly we get great leads to what we can expect in the future. namely, I mean, just look at the fact that in Eastern Europe, the economists of Soviet Russia and Eastern Europe, Mises and Hayek are revered figures.

46:21Nobody reveres Keynes and Galbraith out there. They had it with socialism and statism. They're just trying to figure out how to get to what we've been advocating all this time. And if that's true in a system where human nature is supposedly transformed, obviously it wasn't, it should be also true, of course, in the West and in the United States. and we haven't gotten to the socialist stage yet and with the growth of the power of ideas I really think in the long run truth wins out of course this could be a very long too long run for us to worry about but I think it's winning out right now in the short run, in a medium run, if you want to put it that way and we have with the growth of the influence of Austrianism and Mises Institute and the prospects look terrific.

47:10Continuing Growth as I said in Quantity and Quality and I think one of the lessons of looking back on the Mises himself and the Mises Institute itself is not to cave in, not to think you're going to be going to, don't sell your soul for mess of pottage so to speak, because that's what you're going to get, mess of pottage, if that, what happens is that in the long run, which is not very long, these compromises and caving in simply don't work, don't work pragmatically. I think we're going to win. Vinceremos. Thank you.