In a lumber market where shortages were already appearing, writes Timothy Terrell, the Defense Logistics Agency suddenly ordered more than 20 million square-feet of plywood sheeting for construction in Iraq. Markets for plywood and its substitutes reacted strongly. Prices of oriented strand board (OSB), commonly used in new homes, apartment buildings, and commercial structures, jumped to record highs.
Ludwig von Mises devoted much attention to methodology. Many people interested in Austrian economics turn from his discussions of the a priori and verstehen in bafflement and boredom. "Enough of these philosophical abstractions," they say; "what we want is economics". No greater mistake can be imagined if one wishes to understand Mises's work.
The importance of the Austrian school of economics is nowhere better demonstrated than in the area of monetary theory. It is in this realm that the simplifying assumptions of mainstream economic theory wreak the most havoc. In contrast, the commonsensical, "verbal logic" of the Austrians is entirely adequate to understand the nature of money and its valuation by human actors.
To help explain the complex analytics behind the Austrian Theory of the Business Cycle, an analogy seems to help. Suppose that, in his 8:00 a.m. class, a student was assigned a paper which is due tomorrow. Of course, he has not yet started working on it. In order to finish the paper on time, he decides to pull an "all-nighter."
The attack on a private contract was among the most unsettling aspects of the Grasso affair. He broke no law and only requested that the NYSE Board abide by the terms to which it agreed. His deferred payments over the years amounted to loans to the New York Stock Exchange for which he could reasonably assume to be compensated. Instead, he was demonized by the press, the topic of possible congressional hearings, and forced out of a position he had intended on maintaining for another three years.
In order to publish in mainstream academic journals, must Austrians "water down" or soft pedal our ideas so that they will not seem "too radical"? Murray Rothbard, thankfully, never followed that strategy, but it still did not preclude him from publishing in a number of highly ranked journals. In Rothbard's early years as an economist, his writings for professional journals in the 1950s are some of the most radically and explicitly Austrian that those journals probably ever published.
The case for free trade has been made for hundreds of years, and yet the fight for the right to buy and sell outside the borders is never ending. The situation is complicated by a major confusion that exists among free trade advocates. Many believe that world trade, because it is a good thing, ought to be sanctioned, managed, and otherwise regulated by the government or a coalition of governments.
The consultation of oracles, a practice long thought dead, continues on today in many forms, perhaps in a more subtle and less institutionalized than during antiquity, but powerfully nonetheless. The head of the Fed, writes Christopher Mayer, is a good example.
The judiciary's war on private property continues in Las Vegas. To borrow a line from Rush Limbaugh, the bad guys in the old west used to wear black hats, now they wear black robes.
To listen to mainstream economists, including Wall Street analysts, what destruction Isabel wrought is really a bonanza for the economy. Maybe, if we are really desperate to improve the local economies of our cities and towns, what all of us ought to do is bulldoze our property to the ground. Think of all the jobs that will be created when it becomes necessary to rebuild our houses, workplaces, downtowns, shopping malls and other centers of commerce from scratch.
