1949

A rich intellectual tradition about to be forgotten.

A lot of wise men compelled to abandon their motherland forever.

Many mocking the now foreigners.

Many treating them as radicals.

Some of the wise men explicitly choosing to deny the old tradition.

Some furtively moving to other fields of research.

A man with the firm conviction of preserving what nobody cares of anymore.

It seems fiction but it's the real-life story of how Human Action was written allowing this way new generations the joy and honor of getting linked to the Austrian School of Economics.

Green policy

A way of spurring tree planting is spending a lot of paper. This will rise tree demand, encouraging suppliers to offer more trees.

Illegal drugs

The one case I have heard of to keep the illegal status of some drugs is the damage on addicts.

However, so far I have never seen junkies in a rally defending the current illegal status of some drugs or fighting for further prohibition on others, say, alcohol or tobacco.

Military lesson from Central America

If you don't have an army you'll never need it. (Costa Rica, Panama)

If you have an army, you will eventually find a use for it. (Currently, Honduras)

A recondite source of money supply

Not only coin minters or check issuers are money suppliers. Every single agent who is in disposition to sell the money he owns adds to the supply of money.

Say's law

If nobody is prepared to buy there can not be sale. Only it is sale where there is purchase.

Keynes could hardly have been more misleading by interpreting Say's law as: "demand is created by supply". (1)

(1) Keynes, Maynard. Preface to the French edition of "The General Theoryof Employment, Interest, and Money". 1939.

Family is not a legal category

Everything which is really meaninful in the family, the mother's affection for his son, the son's respect for his father, the love among brethren, or the spouse's devotion are all values which are not ultimately defensible by compulsory law.

A man can be physically compelled to feed his son but not to love him, to avoid visiting a mistress but not to violate the eight commandment.

The family is based on values, thus can not be defended trough coercion but only through education on values, an education which itself can not be coercively imposed but only voluntarily accepted.

The article 51 of the Constitution of the Republic of Costa Rica accurately (though needlessly) states that the family is a natural element of the society as well as its foundation, however aspires to an utopia when it declares the State as its protector.

To be sure, the one thing the government can do for advancing the wealfare of the institution of the family is to laisser-faire-et-laisser-passer. Everything else is counterproductive.

Family is not a legal category. Therefore it can not be defended through coercion, this is: by government.

Slavery as freedom, under the sacrament of matrimony

Under the sacrament of matrimony, the wife is a property of the husband. This alone would count for common slavery. However, at the very same time the husband is a property of the wife.

Under the sacrament of matrimony, every spouse belongs to itself only through its spouse. The husband is his own owner as far as he belongs to his wife. The wife is the freer the more she belongs to his husband.

Under the sacrament of matrimony, delivering all doesn't mean losing but receiving all.

Under the sacrament of matrimony taking care of the other is taking care of oneself, loving the other is not just like loving oneself but actually loving oneself.

Under the sacrament of matrimony, marriage is the epitome of the Church.

Freedom is daughter of the market

It is not freedom what is a necessary condition for the development of the market. Quite the opposite, is the market order what allows the birth of freedom.

Michael Moore as an equilibrating force of the market

As someone who doesn't understand enough the complexities of the market as to feel himself able to scholarly criticizing it, I can't but feel a deep suspicion of Michael Moore's superficial critiques to the market order.

Nevertheless, I feel obliged to split Moore's criticism to the market system from his complaints to specific companies.

I think that "Moore, The Company Critic" is a way of broadly transmitting information valuable for exchange decisions. In this sense, Moore is a particularly valuable piece in the intricate information complex which we use to call the market.

Teenage motherhood

Currently in Costa Rica there's a policy which looks for teenage mothers to remain in school.

By lowering the oportunity cost of teenage motherhood, this policy is encouraging teenage motherhood.

The more you help a teenage mother, the more you promote teenage motherhood, ceteris paribus.

Costa Rican policy on teenage mothers is a subsidy to irresponsibility.

Oil depletion never to happen

If people don't value oil, they don't extract it, so there's no depletion.

If people value it, they are going to try to buy it. The more the buy, the scarcer it turns. The scarcer it turns, the more expensive it is; so the less demanded it is and the slower it is extracted.

Extraction is going to arrive to a halt before complete depletion occurs.

Mises versus Rothbard on praxeology

From reading and comparing Mises's Human Action and Rothbard's Man, Economy, and State, I conclude that you can learn better praxeology from Mises but more praxeology from Rothbard.

To me, these two books aren't substitute but complementary goods.

Problems are always for free

A situation which an agent wants to be "solved" is always a condition of his environment. Nobody is ever to incur (not even can he) in a cost for something which perceives as creating uneasiness.

Absolutely anything which is perceived as a problem, as something which provokes uneasiness, occurs in itself with no cost to the agent.

It's solution what can be costly.

Systematic failure of expectations

What is fundamentally relevant to answer in praxeology is not how agents form expectations but why expectations can fail systematically.

Since a systematic failure praxeologically analyzable can only occur with respect to the value of money and the interest, an expectations theory is only of avail in monetary theory and in theory of capital.

While a systematic failure of expectations on, say, choice of technology or industry be only viewed as a psychologic or otherwise statistic affair but not liable to praxeologic analysis, this failure is can't be a part of praxeology. By the way, historically people have learnt to avoid this kind of non praxeologic failure of expectations, so these failures tend to be more and more shortlived and innocuous.

The problem with systematic failure of expectations on money value and interest is precisely that the phenomenon is such that experience isn't enough guarantee of protection in the presence of governmental intervention.

Entrepreneur versus worker

The entrepreneur is, by definition, an ultimate decision taker. (1) Entrepreneurial human action is never based on obeying someone else's commands.

A human action undertaken by obeying other agent's command is not entrepreneurial but laboral. This is: labor is a human action commanded by someone else. So understood, labor can't be but social. Robinson Crusoe alone in his island can't be a worker. He'll remain an entrepreneur while not in the company of someone else's who gives him commands.

Human action only can be either entrepreneurial or laboral. The materialistic classification of goods of higher order among capital, labor, and land is an atavism of past political conflicts irrelevant to praxeology.

A command is understood as issuable only by agents and obeyable only by agents.

(1) Compare to Rothbard's Man, Economy, and State, page 64.

Production and valuation as opposed processes

Lower order goods give value to higher order goods used to produce the first ones. Value goes from lower to higher order goods.

The process of production goes all the way back. Higher order goods serve to produce lower order goods. Production goes from higher to lower order goods.

The role of the entrepreneur is guessing a production process which back-matches a process of deriving value. This and only this is what the role of the entrepreneur is all about.

Governments are market institutions

Governments too are institutions which are constrained by this complicated system of incentives, competition, consumer sovereignty, and (summing up) spontaneous order which we usually call the market.

Governmental institution, in its productive activities, depends on the same praxeologic laws which apply to any other firm. A government which sells its products at more expensive prices than other governments or gives less quality in exchange for a given amount of money compared to others will receive less and less resources till it goes, sooner or later, to the bankruptcy; this is, to a situation of revolution in which governmental structure is fundamentally modified.

Governments open to competition (in the form of at least free migration in and out, access to information on the performance of foreign governments, and checks and balances) are more suitable to perform well and finally survive than those trying to impose barriers of entry to competition.

Although usually the epicenter of central planning of society, government is itself a sort of spontaneous ordering and, as such, it evolves in ways which can't be predictable but on the point that they will tend to survive if satisfy consumer sovereignty or disappear otherwise.

So, quoting Mises at length:
"A statesman can succeed only insofar as his plans are adjusted to the climate of opinion of his time, that is to the ideas that have got hold of his fellows' minds. He can become a leader only if he is prepared to guide people along the paths they want to walk and toward the goal they want to attain. A statesman who antagonizes public opinion is doomed to failure. No matter whether he is an autocrat or an officer of a democracy, the politician must give the people what they wish to get, very much as a businessman must supply the customers with the things they wish to acquire." Theory and History, page 187.

Cost-pushing and demand-pulling as monetary phenomena

So called cost-push inflation and demand-pull inflation don't have to be viewed as explanations contrary to the idea that inflation is a strictly monetary phenomenon. Increasing prices through cost-pushing and demand-pulling are indeed present in inflationary episodes and can validly be recognized from a monetary viewpoint. They have, however, to be viewed not only as manifestations or symptoms but as causes of inflation, via either money supply or money demand.

This is true even if you use the monetarist frame. For instance, remember of Friedman (1) setting down wages as a determinant of the velocity of money. According to this, a rise in wages (as in a policy of rising minimum wages) could not necessarily be reflected in unemployment but could rather put pressure on prices. In the extreme case, we would have:

(↑w)L+rK=
(↑v)M=
(↑P)Q

This is: we could have, following the necessary logic consequences of Friedman representation of v, a cost pushing on prices within the equation of exchange (or at least the Friedmanite version of it).

(1) Friedman, Milton. The Quantity Theory of Money−A Restatement. 1956 -University of Chicago Press, 1987-. Page 293. See particularly equation 13.

Gini as an envy coefficient

Gini coefficient of incomes can be interpreted as a measure of envy.

If it's high, people don't ask if there are some lazier and others more diligent. It's bad anyway because some earn more than others.

If it've risen, it doesn't matter if that occurred because some went farewell or the arriving of wealthy people. It' bad anyway because some earn more now than others.

In usual interpretations of the Gini coefficient, it doesn't matter poverty, it doesn't matter effort. The one thing it matters is inequality. And the more inequality there is the worse. What can be that but pure and blatant envy?