Good stuff. Learnt a lot. I'm surprised at the amount of free learning content there is on the web. There is no need to go to university, there is so much material. Yet nobody seems to notice it. Sad, sad.
@@newaddress456 theres a reason he wasnt impeached after that fake insurrection. Its literally on video where trump said ''make ur voices known peacefully and patriotically'' but obviously youll never understand.
"If you're the person who first spends the new money, then you're buying all your stuff before prices go up. And so you're getting a great deal, but as prices rise and the money filters through the economy, the people getting the money at the end or don't get it at all are going to be hurt because they're paying higher prices. Their real income is drawn down. ...of course wages and salaries are only adjusted after the fact." - Dr. Mark Thornton (35:35)
I know this was commented 4 years ago lol but I know it from the beginning of a song by Rich Mullins called Sing Your Praise to the Lord. Don’t diss it cause of the title, cause it’s actually really good 😂
@CapoStudios Their issue is that the dollar value also adjusts to the whim of those in authority, like Bernanke. Gold is a commodity that can only adjust due to the economy, which is the reason the austrians like it. They also don't necessarily disagree that if the fiat money were untouchable by government (i.e. via a 'good' government), it would be fine to use. Also, their back-to-gold plan entails letting ppl know well before hand, so they can buy gold, and to allow the market set the rate.
In “Occupying Chairlifts” a simple rule tweak on inheritance ends up changing the direction and purpose of modern human life! Here’s a fair way to transition forward to where we’re rewarded for cooperating and creating instead of competing and conquering. It's something specific we can demand. If this isnt the best answer, at least we’re thinking about what might be. Are we really just this close to having it work right? Oh yeah, it's a Ski movie! “Occupying Chairlifts” on RU-vid!
Actually, they are: the Bohm-Bawerk investment function attributes investment errors solely to the "roundaboutness" of the investment process: essentially meaning that the investor's choice between production goods and manufacturing capital and the multiplicity of investors leads to errors. Monetary creation only amplifies the cycles. You see, Austrian economists never claimed that free markets were immune to (endogenous) business cycles, simply that intervention could only make things worse...
@robzrob I worked for a company that did contracting for government-owned companies, and I can tell you, the contrast between the business-attitude of those at my company versus those at the gov-owned one really is quite stark. At the former its 'do things better, make more money', at the latter, the attitude is that efficiency is irrelevant. They are more concerned with their office-politics and their bureaucratic nonsense.
@hyperreality8 You are correct about how using gold would work, since gold is not unlimited like a fiat currency then the value of the gold would necessarily increase with greater demand. Also without inflation prices would normally drop over time so that you should be able to buy more with your money so it is worth more in that way. There are plenty of intelligent, thoughtful people that follow Austrian economics but apparently attack rat isn't one of them.
34:02 - "And people come up to me and say, 'you know I still don't get it! There seems to be something wrong here!' And I say, there IS something wrong here!! They are ripping us off..." Yes, yes, yes, yes. So, who is ripping us off?? Anyone? Names??
... The problem, is that people today tend to repeat the political doctrine of the Austrian school without understanding the underlying economic theory. Though Austrian economists supported unfettered markets, they didn't naively think that markets were in constant equilibrium, simply that they were spontaneous and non-oppressive and as such prefereable to governments who could only make things worse (in their opinion). Of course, these axioms have themselves been challenged.
2008 and the financial crises was the beginning of the fourth turning. Things are getting worse all the time, and free market ideas are becoming increasingly less popular. Surprisingly, people are looking to the same people and institutions to fix the problems that they caused.
Keynes believed in free markets just like Hayek. The only major difference with the Austrian school of thought is that they didn't think government should have *any* involvement in the markets. Keynes believed that government should spend to shorten the duration of depressions rather than letting the market do that on it's own since it would take a lot longer for markets to correct themselves. Everyone agrees that markets will self-correct. The question is only how long do we want to wait?
I had a huge crush on Milton Friedman and the monetarists when I found the Austrians. I read "America's Great Depression" from Rothbard. I enjoyed the book, but I didn't take it seriously. Like every other book that has ever convinced me I was wrong... it didn't happen the first time I read it. If was fricking Hazlitt and his "Economics in one lesson" book. I read these so I could DEBATE Austrians... because they usually stomped me. No I am one, and I finally understand economics. Yay!
The "best response" to the original problem is the one that survives the most rigorous tests of falsification available. In your view, empiricism may be controversial, but that's how science operates. Empirical testing brings us new technology, medicine, and scientific knowledge. We can argue about its merits philosophically, but in practical terms, most science is accomplished through empiricism.
If you read my first reply closely, I didn't say that B-B wrote the Austrian theory of business cycle, but his investment function is at the heart of Austrian theory and that it explains the root of business cycles if not their intensity. I didn't expand on roundaboutness, because of the limited word count, but to say that it describes how machinery enhances the economy is inaccurate. The choices that investors have to make tend to skew, on the long term, in favour of production capital...
@1000radoja also, during the 19th and 20th century, when the economic growth was the largest in the history of mankind, there was no inflation of the money supply at all. In fact, there was deflation, because money could not yet be printed. The FED was only formed in 1913 and that's also when the trouble started.
Free market is not dead. It is a live and well in Thailand, where I am currently staying, and I've heard plenty of good things about China too. I will visit there soon. I LOVE this intellectual environment I find in Misesmedia. Thank you guys for pushing pure information to us. For free! Thank you very much!
Actually old Soviet era cars are highly collectable because of that. They weren't poorly designed, they were just built with materials of such low quality that you never knew when something would give out.
Yeah I agree with all of that. Only thing is, you wait as long as possible because no human being nor group of human beings can control the economy, or should be able to.
@HildingEU The problem with interest rates is the fed determining what interest rates should be instead of the free market. You need to look at an interest rate just like you look at any other product such as a car or tv. When people save money interest rates go down and when savings are low interest rates go up. Of course this only happens in the free market.When the fed attempts to sway people into consuming instead of saving it creates a HUGE problem, hence the reason there is no recovery yet
Hello Sir, I have one question, I am living in Singapore, how a country like Singapore, with limited land, no money and no natural resources can survive in the 21st century.
I thought about replying, but then I reread your initial post and I decided not to (you know- about Keynes not predicting the 20's and the depression-LOL!)
Austrians... Marginal Utility Theory... Big Win. Almost everything else in economics was learned before this. From 1900- we unlearned about two centuries, putting us on the solid foundation of British Mercantilism. The Austrians added one big piece (an understanding of value) and they refused to throw out Classical Economics. Washington, Jefferson and Adams would definately tip their hats to the Mises crew. Hamilton... not so much.
Creationism isn't scientiic; it's not falsifiable. It therefore has no room in science class. But you're right with regards to the Austrian school of economics. It is useful to have some people who diverge from the mainstream, so that the mainstream can be challenged appropriately. However, a scientist who challenges the mainstream needs to really KNOW what he or she is challenging.
@gothicsolace No issue at all, since borrowers and lenders always factor in the rate of inflation and deflation into their trades. This is called the 'real interest rate'.
Within the community of Austrian economists there is some difference in what they are is legitimate private property. One member of the group is Professor Fred Foldvary, who embraces the position argued by Henry George that claims to the ownership of nature violate the fundamental equal birthright of all persons to the planet. Nature is our commons from which private property (i.e., the wealth we produce with our labor and our capital goods) is derived. All that is required to secure our birthright is to require of anyone who is permitted exclusive control over any part of nature that they contribute to the community the full potential annual rental value of whatever land is held.
Austrians and Libertarians fight other Austrians and Libertarians the most. Thorton is a career politician, his first run being n 1984. He ran again in 1996. His economic views are political views. That has been his true love.
@ssantosk It affects them the same way it affects the US, by increasing supply, you reduce scarcity and the "price" goes down and other currencies around the world become more expensive for you.
@1000radoja yes, the USA has become wealthier. But the first rule of science is: correlation does not equal causation. As I already pointed out, the biggest economic growth in human history took place under a sound currency with no inflation, but rather deflation.
One need not teach every point of view, but the essentials of mainstream economics are crucial before one considers heterodox approaches. Good Austrian economists will know a lot about mainstream economics. With regards to private schools, those schools already exist. There are many private schools across the United States.
350 Years of Economic Theory in 50 Minutes | Mark Thornton Oct-03-2011--Featuring author and scholar Dr. Mark Thornton, this lecture was presented to a group of home school parents and students. INFO-AWARENESS , VIKEN Z KOKOZIAN
Actually, there is. And that's something even Hayek recognized later in his career. You see, that's exactly the problem when you take the political doctrine of the Austrian school without understanding the economic underpinnings. Economic theory aims to be a description of economic choices and processes. The B-B function describes how investors and entrepreneurs make their choices. A political reading of it can emphasise the importance of capital holders and contrast it to Marxist theory...
Actually, according to Bohm-Bawerk, investors prefer investments in production capital which tend to be long term investments because they are more profitable. As more and more investors skew towards production capital, they create a supply crisis (which is what Hayek considered the 1929 crash). In this case, the multiplicity of investors and the time factor are their own distortions. Regarding mises (dot) org, my browser goes blank when I access "community" or foums, I think it's my proxy.
...which is the only thing to do when you're a profit maximizing rational agent (that's why I said it's an economic interpretation). That's the root cause of the business cycle. Of course, the looser credit is, the more intense the fluctuations are. Now I'm just repeating what I've said before, but I hope it makes it clearer.
@ANTIDALLARD Both parties benefit from a free market transaction because if you thought you were getting ripped off you would't complete the transaction. When you buy low, it's because you think you're getting a great deal. When you sell high, it's because someone else thinks they're getting a great deal. If you know *for sure* that a price is going to go down sharply and the public doesn't, then you're stepping into insider trading territory, which may or may not be legal - wikipedia . org
@cst105instructor2838 If your town does not want free trade then it doesn't get it. This way you can always move. I see flaws in that as well but to know what issues affect you in your town makes better sense than something happening in Washington, this includes a completely sound competitive currency. With very limited government, it excludes the few who want to own it.Allow the world Independence..
MrZemme has broken the rulz; Once someone says an item is incontestable, then you may not contest it. that is 3 penalty stokes, one demerit, and double-secret probation!
18:50 i love the fact that once these guys "free education" they want student loan route for others 😢😢😢😢😢😢😢 once they get fredie mae mortgage loans they want to privitise the market 😢😢😢 once they use free healthcare they want privitised expensive healthcare for other 😢😢😢😢😢
I'm not sure why you find the assertion funny - I didn't say Keynes didn't predict the 20s and GD, I said "Keynesian economists" - maybe I should've said "Keynesian thinking". I'm well aware that Keynes' theories weren't out yet in the 20s and early 30s, but Keynesian-style fallacies were already wide-spread. When the crash of 29 happened Hoover used price and wage controls, bailouts and stimulus spending and FDR just expanded these mistakes with the New Deal.
It's an interesting video, and in that way collective decisions would make a little more sense. But imo most questions do not need collective decisions, I value freedom and individual choice far more.
@TheAttackRat "its rarity has NOTHING to do with it!" i said i'd disengage, but i actually owe an apology since i was conflating divisibility with fungibility. Of course the rarer a commodity is, the less divisible it is; hence the gold dust comments, and gold's inability to back large increases in labour and commodities with divisibility being a major concern. they are overselling gold at least 50:1. there is at least 50 times less gold than gold certificates. it's fractional reserve gold
@1000radoja no, I think (know) that during the time money could not simply be created, economies grew faster than they did after the institution of a money printing Central Bank. So after 1913 economies kept growing, but it was despite money creation, not thanks to it.
@dAsterum I get your point and you are right to some degree, but its up to the healthcare how they work. will they support prevention instead of aftercare are there any bonussystems for people who had not a single treatment in some period or payback if you live healthy and acive without smoking, drinking and so on. its important to reward people instead of penalize, its a psychological thing.
There is no philosophical problem. As Popper put it, any scientific problem elicits a variety of responses, which are put through testing for falsification - the best response wins. We're not assuming what we're trying to prove - we're drawing inferences based on what we observe. This is inductive reasoning, after all. Your argument is valid for mathematics, but not for applied fields like economics, in which REAL world data is vital.
My understanding is that the Fed pumped up inflation during the Roaring 20's (that's what caused it). But, during the depression, taxes, spending AND low (lower than real) interest rates created the money FDR spent on the New Deal. New Deal is basically the same as socialism, nothing at all like our government was meant to be... And, it makes us more vulnerable to the problems they try to protect us from. Socialism = Corporatism, with better marketing.
it is 2013 now and the interest rate is still near 0%. at external debt of 17B and GDP 16B, 1% raise of interest will cost 170B, i just do not know how can interest rate increase without hurting economy.
I'm a fan of von Mises and Austrian economics, but of all the Misesmedia videos, this one is disappointing, and should be removed, or at least renamed. It's difficult to know where to begin. For one thing, the title purports to be a global skimming overview of economic theory. It is no such thing, as that would include the names of the greats, plus a bare bones outline of their theories. Perhaps it could be "150 Years of Money Theory" since the earliest date referenced is the Confederate dollar. As for 50 minutes, the talk ends at 40 minutes, and I don't think people's random questions can count as part of a finely crafted compressed overview of economic theory. Or perhaps, "Money theory for home schoolers", then it would be understood that this is just a very basic little taster of money theory, with a nice example game at the beginning, to illustrate the point. The most important aspect of this, how the government creates new money and how it gets released into the marketplace, was spoken too loosely, with a failure to qualify who at each stage, was transferring their part of this new money or debt, and what they received in exchange. I don't think this video, as titled at present, is doing Austrian Economics any favours.
This guy shows a very jaded view of inflation. Yes, things are technically more dollars, wages are also heavily increased, and things like the raising of the minimum wage is in responce to this. The government is simply trying to get a grapple on inflation, and when it fails at that, to compensate in other areas of the market for the reduced power of the doller--resulting in government-mandated wage increases.
No, not kidding at all. Actually, you just reaffirmed my belief that we do live in a world of plenty. In first world countries, even the poorest people seem to have everything. Food, shelter etc., even technological advancements one couldn't even imagine existing 30 yrs ago, like, say, the internet.
@TheAttackRat "they should just make gold coins. not even a gold standard" - before "and we don't need a purely gold standard, it can be any metals. even many." - now glad to see you're no longer adamant on gold. yes of course a currency backed by a basket of commodities is infinitely saner. the trouble with commodities is that we use them. debt free fiat currency, e.g. lincoln's u.s notes is better still. check out the video 'Money masters' on my favourites
@soleeforu Money is just a substitute for what I produce in the exchange of what you produce... The amount of gold is not important... Your goal is not to have much gold but other things that you see as valuable... Gold / money is just temporary kept as wealth... The marked will price gold by how much is available.. If there is a lack of gold, the gold will become more valuable,,, even if you get paid less,, your preserve you purchasing power.
@residentzombie Yes it can not be done in 50 minutes, yet the title is "350 years of economic theory in 50 minutes" :) Maybe the speaker should make up his mind before talking what is he going to talk about, because this was a 50 minute long video on topics: "How to become an Austrian Economist like me" and "I'm correct and you are wrong just because I said so".
I agree. In my view, due to the human nature politics will always retain a part of corruption, that is why the extend of the political power should be minimal, like for example minarchy. The reason the politics are bought is because of the "unlimited" powers, without it the incentive disappear. Make regulations against big corporations and banks, then the farmers will buy the politics or the electronics retails and so on...
And rejecting observation of human behaviour because it's supposedly too complex? Even if that were true(it probaby often is) the irregularities even themselves out.
The mystery is not where the sponsors find these guys but how much it costs to buy an office full of them. The assumption that the audience will be entertained and emotionally aroused by anything at this intellectual level is really a testament to the relentless cynicism of bread and circuses all the way back to the emerors of Rome.
@yoyuepz the fact that I disagree with dr.thornton doenst make me a socialist or a keynesian. but a pure free market economy will never provide such things like human rights, social justice, public order or any other none profit services and history is my attestor. Charles Caleb Colton said: “Corruption is like a ball of snow, once it's set a rolling it must increase.” and this is the real problem of any economy system.
That's my simple prognosis of our government's hold on the economy. I could say so much more, but RU-vid character limits is prohibitng me from doing so.
While history has demonstrated that paper currencies have ended up being worthless, I don't believe history has done the same regarding digital fiat currencies since we are at a unique time in history. Only 1% of the domestic US money supply is actually paper currencies with the remaining 99% being digital fiat money. There is no historical track record that we can look back at to see how or how rapid the decline of a digital fiat currency will happen but one thing is for certain, a paper digital fiat has more functional uses at the end of its life cycle than digital fiat has.
It's normative statements like that which nullify Austrian economics. There are no "destructive consequences" - only the recognition that every action has its costs and benefits. No one disputes that. I support those who practice Austrian economics, but only if they've had training in orthodox and neoclassical economics. You can't break the rules unless you know the rules.
@TheAttackRat u don't internalise anything. "Gold and silver ownership is in the form of stock certificates not physical" - lebiew told u this 3 days ago. On the very same day, I said: "they're overselling gold by at least 50:1 so there isn't anything like as much gold in the world as u imagine". "well people KNOW gold cannot be forged so easily" - As we've been trying to tell u for 3 days: they print off more than 50 gold certificates per item of gold, because nobody takes physical delivery.
Don't give up on the fight against corruption in politics. I think it's a fight we can win. It's too long to explain on a RU-vid comment. You can watch this lecture where these issues are discussed among other things :watch?v=KsnNpcJtwoo It also explains what real democracy is and how it works, something libertarians should take a look at imo. Let me know what you think about it.
@paulallenification No you don't have to print more money at all. Printing more money simply reduces the value of the money currently held. A constant supply of money is perfect, and deflation is in no way a bad thing. No one believes that the steadily dropping price vs quality of computer equipment is a bad thing, but they seem ever so keen (or perhaps 'keyne') to believe that what you are talking about the whole economy, the rules suddenly change.
@TheAttackRat gold as a currency would be dominated and manipulated by whoever sits on the biggest pile of gold. additionally, u have a labour increase where u have a population increase. the amount of gold in the world barely fluctuates and could never inflate or deflate hand in hand with labour/population changes
That's a very vulnerable comment, from many angles. First of all, he's working to reverse the indoctrination put on by public schools. These students have grown up into a society that is completely deprived of Austrian economics, and is a result of the lack of such a solution as the philosophy. The schools they most likely went to are poor standard, a result of gov. indoctrination. You just say what you say because Austrian economics ultimately goes against your interests.
For example, at 32m40s Dr. Thornton is talking about how governments steal the populace when the legalisation of a fiat national currency, allows them to create new money, thereby devaluing existing money that the population owns. But at the same time he talks about the dangers of fractional reserve banking (by the commercial banks). That is pointlessly confusing. You could make fractional reserve banking illegal, and require banks to only loan upto 100% of their real assett reserves, and there would still be the problem of government theft though the inflationary policy of government money creation. I think we all know that banks don't "print money" or hold dollar notes in shoe boxes anymore, so it would have been far more helpful to give a more clear explanation of how this government created money is issued and released into the marketplace. This is explanation at 32m48: "How the Fed does this is 1. They buy government bonds from banks, then 2. They tell the banks: we've got reserves for you, at the Fed" This is so bad. For a start, part 2 is unnecessary, since we all understand that if a bank holds a Government bond for $1m at the Fed, then it is able to disburse $1m in loans, so all he is saying is part 1. Yet that part fails to address any of the serious questions here, and even fails to distinguish between the 3 key parties involved: the Fed, the Government and the Commercial Banks (4 parties if you count the consumers and companies that ultimately take loans from the commercial banks). The points that could have been addressed without the flannel are: a. How does the Government create Bonds and what are they? b. What do the buyers of bonds receive in exchange? c. Is there a difference between a US bond being bought by China, being bought by a US Commercial Bank, and it being bought by the Fed? In fact, was the latter at some point illegal (I've a vague memory that it was)? d. What is the actual migration path of the bond, if we imagine it as a piece of paper, and exactly what is is swapped for?
The number 2 point is that like the citizenry having accounts at various commercial banks, the commercial banks have accounts at the Fed. When the Fed buys up bonds it credits these accounts. This money that is added is part of the monetary base, which is the part of the money supply that is multiplied through fractional reserve banking. Governmental bonds are very much like the bonds that any other person or institution issues. These bonds are perceived to be relatively safe because of the powers of the state to finance its obligations. The seller of the bond receives the 'loan' and the buyer is paid an interest and the principal when the bond matures.
