Saturday, February 23, 2008

Christopher Coyne on After War

I want to start this post by apologizing to the audience for not posting in the last two weeks. However, what I have to share this. It is too important to just let it go. On Thursday February 23, 2008, I attended a book signing of, After War written by Christopher Coyne, at the Institute for American Studies (IAS) in Washington, DC. Christopher Coyne’s event was hosted by the Mercatus Center at GMU.

Coyne is alum of George Mason University. He obtained his Master and PhD degrees from GMU. In that respect Coyne and my self have the pleasure of being thought by Professor Peter Boettke. I know that Coyne’s book is set to be one of the greatest of our age, and adding the emotional connection of being a student of GMU, I knew I had to be at the event. Once we (Astrid, Ian, Bret, Triya, Rossy and I) arrived and joined other GMU students at the IAS. The environment was like being at home. GMU was well represented on that event and yet we met other interesting individuals.

Around 7:30pm Christopher Coyne took the podium and the audience went silent. Coyne staged a flawless performance. Coyne’s speech was clear and defined. He exposed his book in three main categories;

The basics of exporting democracy at gunpoint

Somalia and Haiti cases

The democratic enforcement of Afghanistan and Iraq

Solutions and consequences of exporting democracy for the future.

After Coyne’s speech there was a question-answer time period. During this time I encounter interesting how Coyne is willing to enter in the challenge of doing research in the implication of other factors in this topic. Coyne would like to engage in telling people the influence of international organization in the emancipation of democracy. Coyne expressed his interest in studying other countries which have forced or tried others into democracy.

I think that Coyne’s book is a superb piece of literature that should be read by people in the fields of economics, politics, conflict analysis, peace development, global affairs, government, and sociology. Coyne’s book I must say gives the opportunity to others to engage in further research on the topic of exporting democracy.

Wednesday, February 6, 2008

Austrian Knights the Beginning

In the fall of 2007 my friend Ian Dunois (you can find him on his blog Searching for Truth) and I (Jaime Artieda) began a study-discussion-reading group at George Mason University (GMU). Ian and I argued for a while about what we should call our group. Different names came to our minds, but when we came up with Austrian Knights, we knew that was the right choice.

The name Austrian comes from the understanding of Austrian Economics. In the spring of 2007 Dunois and I took a class at GMU called ECON 403 with Professor Geoffrey Lea. I must say that ECON 403 it was a changing experience in my life. The concepts of praxeology, apriorism, subjectivism, and economics all blended, got into my mind creating an exciting curiosity for it.

In the summer of 2007 I attended a summer seminar on Austrian Economics at the Foundation for Economic Education (FEE). Following that seminar, Dunois and I attended the seminar on the same subject at the Ludwig von Mises Institute. Professor Lea referred both (Dunois and I) to the seminars. And by the end of the summer Dunois and I were completely merged into the ideas, methodology, philosophy and believes of freedom, politics, philosophy and economics with an understanding of Austrian Economics.

Thus, Dunois and I came up with the word Knight. We needed a word that would be strong and yet passionate. A Knight’s principal duty is to serve, protect, lead and fight if necessary to preserve his kingdom, in our case freedom. This is a brief background on the name of this blog and also our GMU group.

I shall mention that this blog is a process like the market is. Therefore, all the references to Austrian Economics in this blog may not necessary represent what scholars, publications, and people who/which are better inform on this subject. This blog is a learning process for me; I will do my best to be accurate and precise.

Saturday, February 2, 2008

Brief History of the Austrian School of Economic Thought

The history behind the Austrian School of Economic Thought (known as Austrian Economics) is one of the most interesting stories to tell. Some of you may have never heard about this school. However, Austrian Economics has been part of the academia and our lives for over seven centuries. In this post I will do my best in telling the origin, development, and present of this school; from St. Thomas Aquinas teachings all the way to the influence of Ludwig von Mises.

The setting of the Pre-Austrian movement during the 15th century St. Thomas Aquinas thought at Salamanca University, Spain. His teachings and writings promoted social organization and the understanding of human action. Aquinas’ followers practiced his teachings and believed in the economic law of supply and demand. Furthermore, his disciples understood the importance of cause and effect (Causation), and the subjectivism of economic value. Aquinas’ believes were kept during time his supporters trusted the importance of property rights, trade, and most importantly freedom.

In the years of the Marginal Revolution Richard Cantillon, an economist who understood that the market is a process and it is always evolving. Cantillon was an Irish that established himself in France. In France, Robert Jacques Turgot followed the steps of Cantillon. Turgot published different articles in a variety of topics; some of those subjects cover the value of money, economic choice, and the ranking of individual preferences. This last topic is relevant to appreciate the subjectivism of Austrian Economics. But the French influence in the creation of what is known as the Austrian School of Economics did not end with Turgot. Jean Baptiste SayClaude-Frederic Bastiat developed the ideas of Turgot. However, at this point in history the Pre-Austrian movement decayed in emancipation within scholars. It was time for the British School, this school led to the rise of Marxist doctrine of capitalism exploitation. and

Carl Menger wrote in 1871 a master piece Principles of Economics. Menger is the founding father of the Austrian School. One of the biggest contributions to economics that Carl Menger did was the explanation of Marginal Utility. However, Menger never use that term (marginal utility) to express the idea behind diminishing returns of higher quantities of a good in a determined period of time. The creation of money for Menger was clearly a free market process. It was in the need of people to create money in order to trade goods, and Menger mention that money was not made for consumption but for exchange commodities.

Menger contributions to economics are numberless and in the world of ideas Menger had a tremendous antagonism from different groups. Menger mentioned that economics was a science of human action based on deductive logic. In the battle of ideas Menger was challenged by the German Historical School. The Historical School saw economics as a dismal science and rejected its theory. Menger rose and prevailed over the criticism and planted and seeded that would become into a mainstream of Austrian Economics.

It was Friederich von Wieser who developed Menger’s point of marginal utility. It was precisely Wieser who invented the term “Grenznutzen” German for border-use or commonly known as marginal utility. Wieser and Eugen von Boehm-Bawerk, both Menger’s students, took Austrian Economics to a different level. Boehm-Bawerk reflected on the fact of time preference and used it to explain economic phenomenon such as; value, price, capital and interest. Boehm-Bawerk put together his ideas and in 1884 wrote his book History and Critique of Interest Theories.

In the early 20th century Ludwig von Mises entered to the picture of Austrian Economics and not only that he entered it but he consolidated it as the school that it is in the present. One of Mises important contributions to the school it is the idea of the Austrian Business Cycle. Unlike other explanations of booms and burst within the economy Mises’ explanation is by far more enriching and more precise. Mises is an individual who can be studied for years and years and there will be more of him to learn and understand.

In 1921 Mises wrote his book Socialism. In this book Mises explains in detail how in socialism there is no private property, with no private property there is no exchange of capital goods. When humans are unable of exchange there is not a proper allocation of resources. To Mises socialism is nothing else than chaos and the end of civilization. Furthermore, Mises prolific master piece came out in 1949. During his exile, due to political persecution by the Fascist Government of Germany, in Geneva in World War II Mises wrote “Nationalokonomie” German for Human Action. This work is considered a must for Austrian Economist of all ages because it is the work that defines the Austrian School for once.

A disciple of Mises, Friederich A. Hayek took the teachings of his master (Mises) and brought them to the next level. Hayek wrote extensively on how expansion of credit would create currency crisis. Hayek’s counter part was John Maynard Keynes, British aristocrat who advocated for more government intervention within the market. Hayek and Keynes enjoyed of a battle of ideologies during the second half of the 20th century. In 1974 Hayek received the Nobel Prize in Economics for his contribution on theory of money and economic fluctuations, economics interdependence, social and institutional phenomena.

I hope that you have enjoyed this brief passage on the history of the Austrian School of Economic Thought. This post reflects to the most important years of the creation of this school. It is its history who calls upon brilliant minds to keep the work of St. Aquinas, Turgot, Bastiat, Menger, Boehm-Bawerk, Mises, and Hayek alive.

Note: This post is based on the article wrote by the Ludwig von Mises Institute.