Recorded at the Mises Institute in Auburn, Alabama, on 17 July 2019. Mises University is the world's leading instructional program in the Austrian school of economics. Mises.org/MU19
Thomas DiLorenzo has recently been named the new president of the Mises Institute. Congratulations Mr. DiLorenzo on your new position and for a job well done.
Karl William Kapp's critique destroyed both classical economics and the (neo)liberal Mont Pelerin Society's ideology. Price signals are ghost-farts in a Gogol story.
Every single democrat needs to listen to this. How they can continue to think that government can do it better, despite a century of evidence that says otherwise, baffles me.
They fundementally don't understand basic definitions and economic concepts. They THINK the past 100 years is evidence of the FREE MARKET failing. Despite it not being free at all during that time.
I found this lecture to be hilarious, you just cannot believe how insane and divorced from common sense positions certain intellectuals gravitate towards to
@Jonathan Schattke I think I agree but the statement still seems off to me. If the government causes the failure, that's a failure of government, not the market, so calling it a market failure seems inaccurate because it diverts the blame away from where it rightly belongs.
Just an aside, the nuclear arsenal uses floppy disks, because floppy disks can't be hacked. This seeming government failure is actually a well-thought-out tactic.
@@brookvalley907 Is this another fable? Why do you think floppy disks can't be hacked or are more resilient against hacking than more modern storage devices?
Just going to leave a fair warning to all the academic economist out there. If you have not been introduced to Austrian Economics before, although this lecture does uphold a tenant of the Austrian School (advocating for free market), the organizing party, Mises Institute, is a think tank that is heavily aligned with right wing American politics. Not dismissing any part of this lecture at all, but if you are using this video as a guide to your paper/thesis, I would advice you to also look up criticisms on the previously mentioned tenant, as there is no shortage of examples on non-self correcting market failure.
Read Karl William Kapp's work on social costs. Sabastian Berger has a great book, downloadable as pdf. *The social costs of neoliberalism : essays on the economics of K. William Kapp* -Book by Sebastian Berger
Here’s a heretical comment.I invented a few products and manufactured,marketed,sold and have remained very profitable for 36 years.I ship to 16 countries but my primary markets are the US and Canada.I have a number of direct competitors,the market has changed any number of times and we’ve adapted to remain competitive and profitable.All of this was accomplished without one course in economics,price theory,or the helpful hand of government,in fact I’ve survived in spite of the FDA,EPA,or the wisdom of government intervention or Noble laureates like Paul Krugman. My biggest complaint about economics and economic theory is that it is used by government to micromanage the economy. I’m sure economist mean well, but in the hands of a bureaucrat it becomes a cudgel to enforce some pet theory they know nothing about..
The Lighthouse Story (17:00) Mr. DiLorenzo Says, “I’m not going to tell you the whole story here”. This is for good reason. There are some critical blows to this lighthouse example. In fact, had he continued, he would’ve shown just how reliable modern economic theory is by its ability to predict. Even without an actual historical study as Mr. DiLorenzo correctly points out, it’s an assumption based on theory that it was a public good was in fact, correct. Two studies, Van Zandt (1993) and Bertrand (2006), found on Wikipedia led to the published studies text. Both studies say, that after a historical analysis of the privately-owned lighthouses in England. The lighthouses that generated revenue by volunteer payments didn’t last much longer that a year on average due to the Free Rider Problem. However, the obvious need for the lighthouses didn’t go away. How was this fixed? The English government provided subsidies to privately-owned lighthouses to keep them in operation for many generations. This must be what he meant by “privately funded” right? Private citizens paying port taxes to fund the light houses? He conveniently leaves that part out. Then, despite the subsidies, those privately held light houses became predatory with price gouging and rent seeking and as a result, they were eventually nationalized. Conclusion: Lighthouses were indeed market failures and a public good. Mr. DiLorenzo knows that the condescending tone towards intellectually honest economists who view economics as a science and they “don’t bother to pick up books” plays well to his audience, the far right. The entire goal here is to pay Mr. DiLorenzo to spread these misconceptions and debunked hypothesis’s as fact to cast doubt and muddy the water in the public debate so the rich oligarchs of the U.S. (that pay his mortgage) can trick you with this pseudo-science that will only help them extract more wealth from the economy. Side note: Using the word "reality" as many times as you do is an instant red flag that its likely not based in reality. Similar to the excessive use of " this fact"
I applaud this. I’m a libertarian but I’m not a hardcore follower of Austrian economics. Bad economics should be debunked regardless of which side spews it for their agenda.
Strange critique regarding lighthouses. Surely an Austrian economist using a praxeological approach would run into the same problem? Using deductions from action axioms does not require any knowledge of how lighthouses operate in reality. In fact most critiques of Austrian economics are along these lines, that there is no way to know whether the theory, despite being logically sound, has any bearing on reality.
Plenty of socialists believe markets work well for a wide range of things (center for a stateless society agrees for example). The power of private contracts are interesting (beekeeper association) kind of like the power of union contracts with an employer or tenant contracts with a landlord. It seems like open and free group negotiation between parties is an important thing to facilitate agreement and understanding.
Austrian Economics uses theory only went convenient. They'll ignore things like sticky prices, sticky wages, and the animal spirit and revert back to theory, but when discussing things like the free rider problem, all of a sudden, they have a problem with theory.
It’s like the “interpersonal comparisons” stuff. They use it when saying that the government is bad but claim that you can’t make interpersonal comparisons when it’s the most clear cut example. Libertarians need to stop associating with this type of bad economics.
@collectivism always works The basic difference is we don't have another interest besides the working class. Ours is a movement and a party of worker bolsheviks. Why not move to Montgomery and then you can call it the Cradle of the Confederacy school. After all it being Austrian brings in the birthplace of Adolf Hitler.
