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Two Lectures On The History Of Austrian Economics

Tyler Durden's picture


When it comes to the types of people in this world, there are those who say that the only way to fix the current economic catastrophe is to keep doing more of the same that got us in this condition in the first place (these are the people who say mean regression is irrelevant, and 10 men and women in an economic room can overturn the laws of math, nature, physics, and everything else and determine what is best for 7 billion people), and then there is everyone else. The former are called Keynesians. The latter are not. Only those in the former camp don't see the lunacy of their fundamental premise, a good example of which is the following. Luckily, the world is nearing the tipping point when the camp of the former, which for the simple reason that it allowed the few to steal from the many under the guise that it is for the benefit of all, is about to be overrun, hopefully peacefully and amicable but not necessarily, and the camp of the latter finally has its day in the sun. Naturally, when that happens the status quo loses, as the entire educational and employment paradigm is one which idolizes the former and ridicules the latter even though the former has now proven beyond a shadow of a doubt it is a miserable failure (ref: $20+ trillion excess debt overhang which will, without doubt, lead to a global debt repudiation or restructuring, with some components of "odious debt"). So for all those still confused what some of the core premises of the ascendent "latter" are, below we present two one-hour lectures by Israel Kirzner. We urge readers to set aside two hours, which otherwise would be devoted to watching rubbish on TV or waiting in line for In N Out burger, and watch the two lectures below. Because, contrary to what the voodoo shamans of failure will tell you, there is a way out. It is a very painful way, but it does exist. The alternative is an assured and complete systemic collapse once the can kicking finally fails. 

Part 1:

Part 2:

h/t ZH_Crown


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Sat, 12/31/2011 - 18:07 | 2023988 GeneMarchbanks
GeneMarchbanks's picture

Economics in One Lesson! Bitchezz!!1! 2012!!!!!!!

Seriously though, Mayans say China crash hard, S&P to 600.

Sat, 12/31/2011 - 18:12 | 2023993 Manthong
Manthong's picture

S&P 600?  

I guess somebody's got to play the optimist.

Sat, 12/31/2011 - 19:32 | 2024051 Matevski
Matevski's picture

"We urge readers to set aside two hours, which otherwise would be devoted to watching rubbish on TV or waiting in line for In N Out burger, and watch the two lectures below."


You forgot the porno though..

Sat, 12/31/2011 - 22:12 | 2024209 kill switch
kill switch's picture

OT,,The moron of choice just signed the Detention bill with serious reservations,,,even the dull plebs on HUFFINGTON POST are all outraged.....view the posts...we are fucked all the way!!!!! By the way signed on NEW YEARS EVE when all the fucktards are bloto and coundn't care less.. like the income tax in 1913 DEC23rd With serious reservations OBAMA IS FUCKED ROM PAUL 2012

Sun, 01/01/2012 - 10:21 | 2024519 youLilQuantFuker
youLilQuantFuker's picture


RP for sure.

Sat, 12/31/2011 - 22:30 | 2024224 SAT 800
SAT 800's picture

The thing about porno tho, is that it gets more and more interesting, and I get really, really, interested in the video. And then, I'm not interested at all. So now I can watch the economics videos; so it all works out.

Sun, 01/01/2012 - 01:09 | 2024347 Mauibrad
Mauibrad's picture

Hey Tyler, can you give us the Cliff Notes, what's the solution?

Sun, 01/01/2012 - 05:22 | 2024432 bank guy in Brussels
bank guy in Brussels's picture

Solution is minimal government, the 'libertarian ideal' ... like Afghanistan or Somalia, not much government in those places. Lowest taxes in the world. 'Freedom'.

Sun, 01/01/2012 - 06:12 | 2024449 UP Forester
UP Forester's picture

Uh, Sprout, there's no gov't in Somalia and corrupt gov't in Afghaniland.


Go back to giving handjobs to the generals.  You're dismissed.

Sun, 01/01/2012 - 13:47 | 2024739 LowProfile
LowProfile's picture

And Somlia proves that no government is better than corrupt government.

Sun, 01/01/2012 - 16:58 | 2025134 babkjl
babkjl's picture

More people should read Better off Stateless.  It's very grim, but yes, still better than a corrupt government.

Sun, 01/01/2012 - 13:47 | 2024736 Zero Govt
Zero Govt's picture

Bank Guy in Brussels - Afghanistan was doing better before the democratic Govt of the US piled in like a bull in a china shop (same in Veitnam, Bosnia and same in Iraq). What has Govt-less Somalia got to learn from the US Govt who have 3 illegal foreign wars on the go (all miserable failures) and since 9/11 has turned on its people and treated them all like potential terrorists???

Democratic Govt is the dumbest most corrupt institutiion ever devised. It never gets anything right on any issue (ever). Govt is not only a failure mechanism par excellence but the most destructive force in society

Liberty (no Govt, no Laws) would free society of the most expensive mistake in history

Sun, 01/01/2012 - 15:19 | 2024950 economics1996
economics1996's picture

Shrink the size of the federal government to 18% of the GDP or less.  11% is preferable.

Sun, 01/01/2012 - 15:36 | 2024983 Withdrawn Sanction
Withdrawn Sanction's picture

Shrink the size of the federal government to 18% of the GDP or less. 11% is preferable.

While I agree w/your basic premise, I'd suggest even 11% is too large...Hell, even God only requests a tithe.

Moreover, the 20% or so no. one so frequently sees batted about is based on the "G" component in the ntl income and product accounts. It does not account for such govt activities as transfer payments (robbing Peter to pay Paul), the cost and burden of regulation (which themselves are often redundant or conflicting), not to mention the general inconvenience of having a bunch of ne'r do well busybodies try to run everyone elses' lives for them.

Get off my back, G.

Sun, 01/01/2012 - 16:04 | 2025048 economics1996
economics1996's picture

Well national defense is about 3% to 6% of the GDP, courts, as much as I hate the EPA I would prefer one set of environmental regulations, FBI, CIA, interstate highways, about 11%, just a guess.

The main thing is to restrict the federal governments purse.

Sun, 01/01/2012 - 15:16 | 2024941 economics1996
economics1996's picture

Watch Dan Mitchell videos, they are 5 minutes long.

Sun, 01/01/2012 - 14:19 | 2024804 I did it by Occident
I did it by Occident's picture

I wish we had In N OUt on the East Coast.  :(

Sat, 12/31/2011 - 21:09 | 2024127 Republi-Ken
Republi-Ken's picture



Why are we all ignoring what the "Trickle Down Free Lunch Tax Cuts" Did to USA?



Sun, 01/01/2012 - 03:09 | 2024402 spiral_eyes
spiral_eyes's picture


The year the bond bubble bursts? 

Sun, 01/01/2012 - 16:06 | 2025052 economics1996
economics1996's picture

Everyone on this board knows this.

Sun, 01/01/2012 - 09:54 | 2024503 ISEEIT
ISEEIT's picture

Hey genius, not specifically looking to defend repubs, but no spending is approved except by congress which was overwhelmingly DEMONRAT from 79 to 95. To bad they weren't the party of no, eh?

Nice try though.

Sun, 01/01/2012 - 12:18 | 2024622 dvduval
dvduval's picture

Wrong, Reagan had 6 years of a Republican controlled Senate.

Sun, 01/01/2012 - 12:36 | 2024639 ISEEIT
ISEEIT's picture

Not wrong genius. Takes BOTH houses to pass legislation. Look at the house dimwit and then go cry about those nasty teaparty repugs who are screwing up your boy's ability to 'fix' the economy. You goddamn braindead fucks were crying about the fucking deficit during the entire bush regime and now you same bitches demand that we make it bigger?

Get outa my face moron.

Sun, 01/01/2012 - 13:58 | 2024762 TheSilverJournal
TheSilverJournal's picture

The economy doesn't grow by taking resources out of the economy and giving it to government to waste. Clinton was helped by the false growth that Greenspan created by destroying the dollar.

Sun, 01/01/2012 - 15:37 | 2024987 economics1996
economics1996's picture

Clinton's secret was he reduced the size of the federal government’s consumption of the GDP from 22.1% to 18.2%.  It’s that simple.

Sun, 01/01/2012 - 16:11 | 2025065 TheSilverJournal
TheSilverJournal's picture

Clinton's secret is that Greenspan lowered rates for him which artificially grew GDP. It's that simple.

Now, the dollar is about to pay the ultimate price for Greenspan's mistake.

Sun, 01/01/2012 - 16:47 | 2025120 economics1996
economics1996's picture

Not true.  1993 the Fed funds rate was 3.02%.  2000 it was raised to 6.24% to pop the NASDAQ bubble.  2001 lowered to 3.89% to "fight" the 9-11/NASDAQ bubble recession.  2003/04 lowered to 1.15% AFTER the recovery in 2002 from the 2001 recession.

If you were to make a argument you would argue Greenspan did the right under Clinton and totally fucked Bush over with his 1% bull shit in 2003/04.

Sun, 01/01/2012 - 17:33 | 2025170 TheSilverJournal
TheSilverJournal's picture


Sun, 01/01/2012 - 17:32 | 2025187 TheSilverJournal
TheSilverJournal's picture

Good points. Can I pin it on Clinton greatly expanding government backed housing which provided an artificial stimulus to the economy?

Today, the government is backing over 95% of all newly issued mortgages.

Edit: Sorry, I reread that. Aren't you just making my point because Clinton's bubble was popped after he left office with the popping of the Nasdaq bubble?

Sun, 01/01/2012 - 15:35 | 2024980 economics1996
economics1996's picture

Republicans are Keynesians’, Democrats are Keynesians’, and?

Sat, 12/31/2011 - 18:26 | 2024010 clymer
clymer's picture

I realize that it's totally irrelevant, but that is one hell of a lump on that dudes head.

Sat, 12/31/2011 - 20:27 | 2024096 smlbizman
smlbizman's picture

speaking of irrelevant.....check the prices of silver on ebay....mind boggling...avg. of 11. to 15. over activity is also strong....ase's 40's...

Sat, 12/31/2011 - 21:04 | 2024124 Calmyourself
Calmyourself's picture

ASE's at $46...   WTF, decoupling? They cannot have this planned that well, can they?  Am I witness to a giant FU from the PTB, or just some fools on ebay who really want an ASE?

Sat, 12/31/2011 - 21:18 | 2024135 Dagny Taggart
Dagny Taggart's picture

APMEX has silver eagles for $32.13... the price has only decoupled  >this<  much.

Sat, 12/31/2011 - 21:52 | 2024187 smlbizman
smlbizman's picture

see thats the buy 1 ase at apmex with shp and handling is expensive....also people just dont know how and were to buy,...what an arbitrage between apmex and ebay...

Sat, 12/31/2011 - 22:58 | 2024246 kill switch
kill switch's picture

OT,,The moron of choice just signed the Detention bill with serious reservations,,,even the dull plebs on HUFFINGTON POST are all outraged.....view the posts...we are fucked all the way!!!!! By the way signed on NEW YEARS EVE when all the fucktards are bloto and coundn't care less.. like the income tax in 1913 DEC23rd With serious reservations OBAMA IS FUCKED ROM PAUL 2012




Sat, 12/31/2011 - 23:45 | 2024281 DumFarmer
DumFarmer's picture

Fuck apmex monex is far cheaper for same coin. Were top notch when I delt with them. 30.32 for silver eagles min 100 oz small shipping on that

Sun, 01/01/2012 - 14:47 | 2024874 jm
jm's picture

Why would you buy at such a premium?  Dealers are laughing all the way to the bank.  Decoupling = suckers.

Sun, 01/01/2012 - 11:50 | 2024576 GMadScientist
GMadScientist's picture

Maybe something with more numismatic value than just the silver content...e,g, proofs or other perfect 70s?

Sat, 12/31/2011 - 18:27 | 2024012 falun bong
falun bong's picture

ZH is the best blog ever. happy New Year from Sydney!

Sat, 12/31/2011 - 18:39 | 2024018 jm
jm's picture

Keynes gets a bad wrap around here.  I read his Treatise on Probability over the holiday and it was terrific.  Anticipated Knight and covers some good stuff given he didn't know jack about measure theory.

The point is that Keynes was a pragmatic thinker, able to formulate problems well and come up with solutions based on context.  Because he was good at forming problems, he owned his competition that couldn't formulate probelms well.  This is ultimately why Hayek became a sociologist and left the economics profession in my view: he couldn't formulate tractable problems. 

I don't think he would approve of the current policies.  He was operating in a world where governments had room to sell debt and did not deadbeat themsleves as they are doing now.  He would be one of the first to anticipate the interest rate risk in Europe.  In fact, his plans for White Russia were sound money tied to the pound sterling and minimal governemnt with balanced budgets.   

Sat, 12/31/2011 - 19:27 | 2024047 aminorex
aminorex's picture

"He was operating in a world where governments had room to sell debt"

The UK had a massive debt/GDP ratio post WW1.  Keynes didn't seem much cowed by it. One might easily ask on which side his toast was buttered.


Unrelated:  Kicking the can down the road is a widely used analogy, but in the current case the can is more like a snowball, bigger with each turning.

Sat, 12/31/2011 - 20:13 | 2024084 Schmuck Raker
Schmuck Raker's picture

You are right - "....more like a snowball, bigger with each turning" is a much better analogy with the added benefit of helping visualize the inevitable point when the snowball becomes to big to move. Then you're left with a giant lump of snow in your yard that's the last pile to melt come spring.

Sun, 01/01/2012 - 13:42 | 2024731 ISEEIT
ISEEIT's picture

Yep. And being pushed UPHILL by fewer and fewer.  The end of the story begins when THEY (we) cannot or will not continue pushing. Call it (label it) anything you want but the fact is that we are at the point where the "snowball"  begins rolling downhill.

Krugman should just come out of the closet and begin selling prayer books and 'prosperity' water. It really has become that sad.


Sun, 01/01/2012 - 14:32 | 2024836 jm
jm's picture

His toast was butter by the system and not utter collapse, just as ours is.  Sad that so many people can't see this.

Pray tell, what was the debt of Britannia then?  I don't now, but thought it was relatively low compared to today.


Sun, 01/01/2012 - 15:46 | 2024998 economics1996
economics1996's picture

Keynes failed to understand the basic relationship between consumption, interest rates, capital users of resources, and consumers use of resources.  

In other words Keynes was more of an alchemist compared to a 20th century chemist.  

Keynes became popular because he was able to tie his theories in with Simon Kuznets GDP formula, Y + C + I + G + NX, and give the federal governments of the world a green light to spend as well as provide academic cover for the theft of the central banks via inflation.

Next time read Rothbard.

Sat, 12/31/2011 - 20:19 | 2024075 Variance Doc
Variance Doc's picture


Keynes formulation of probability has many problems; just like his version of economics. 

Basically he advocated the notion of credible or logical probability.  That is, a logical probability is a rational measure of the conviction implicit in the given information such that if a person does not agree with it, that person is wrong.  This thinking has a long history BEFORE Keynes rehashed it; no new thought process as you claim.

In a nutshell, there is only one and only one opinion justified by any body of evidence, so that probability is an objective logical relationship between an event A and body of evidence B.

This line of thought has been *severly* criticized by REAL mathematicians (not economists - we know how their shit stinks), such as Savage (1972).  If you read more of his (Keynes) later work, you will see that he actually backs away from the notion of logical probability.

Now, just to show how wrong this viewpoint is, you may want to ask yourself this question:  Has there been any satisfactory theory or method for the evaluation of logical probabilities?  The answer is NO!

As long as school is in session, pay VERY close attention to what Dr. Kirzner stated about Hayek in the very beginning of the video: the notion of subjectivism.

Now is there a probability framework that is subjective?  YES, it is called Bayesian probability/statistics.  Has there been any satisfactory theory or method for the evaluation of subjective probabilities?  YES, it's called Bayesian probability/statistics.  Though I have not seen it, I'll bet the Austrian school and the Bayesian framework would go hand-in-hand.

So much for that idiot Keynes….

Stop masturbating over Keynes and his wrong notions, both in probability and economics, and pick up a real book in probability (de Finetti, 1937) and learn the proper way to think.

Note that measure theory is NOT NEEDED to make probability logically operational!!!!

Sat, 12/31/2011 - 20:37 | 2024099 AssFire
AssFire's picture

Is there a bigger insult than to be called a "Keynesian"??

I am an Engineer but took my economics classes college of business thinking I would get more from the non-engineered version. I was amazed with the lack of understanding the mathematics involved; they did not even understand what they were teaching.. I would bust out laughing listening to their explanations.

Party of welfare, warfare... or Vote Ron Paul

Sun, 01/01/2012 - 02:19 | 2024388 Libertarian777
Libertarian777's picture

Nicolas Taleb covers this well in his books (Black Swan and Fooled by Randomness).

Basically he says academics tried to apply mathematics (formulae) to a psychological/behavioural subject (economics), then proceeded to call people who didn't understand the 'math', 'ignorant'. on top of that they truly believe the formulae / functions they have are all encompassing, and when they get hit across the side of the head, they suffer cognitive dissonance, and refuse to believe the model was wrong from inception, instead blaming the data.


Sun, 01/01/2012 - 02:24 | 2024389 TruthInSunshine
TruthInSunshine's picture

Speaking of Taleb, this is incredible stuff & required reading for anyone with a significant interest in economic, financial, investment models, etc.:

Blowing Up
Sun, 01/01/2012 - 08:54 | 2024485 Optimusprime
Optimusprime's picture

Thanks for this.  Great article.  But "Igon value"?  Does he mean "eigen"?

Sun, 01/01/2012 - 15:56 | 2025020 economics1996
economics1996's picture

Models can work for a few years at best.  If you revise the model every year, most years you will not embarrass yourself.

Austrians reject models because they realize that things do in fact change and in the long run models are useless. 

Sun, 01/01/2012 - 18:06 | 2025240 I did it by Occident
I did it by Occident's picture

Yeah, being an engineer I took the econ courses too just because it seemed interesting at the time.  Math was a cakewalk.  But seeing that many economic reality is inherently non-linear, it did seem the theories were a bit too tidy.  I liken it to the Navier-Stokes equations for fluid dynamics.  non-linear and thus not analytically solvable for any but the most simple initial conditions.  It seems economists apply the theories but project an oversimplified conclusions based on their theory.  So as with any non-linear system, I would expect the occasional blow up. 

Sun, 01/01/2012 - 05:25 | 2024433 bank guy in Brussels
bank guy in Brussels's picture

First they came for the Keynesians

And I said nothing, because I was not a Keynesian ...

Sun, 01/01/2012 - 15:53 | 2025012 economics1996
economics1996's picture

Thats why I minored in math.

Sat, 12/31/2011 - 21:35 | 2024163 LawsofPhysics
LawsofPhysics's picture

LOL! Like the laws of Nature care about any of this man made bullshit, very funny. Talk about wasting time.

Sun, 01/01/2012 - 14:50 | 2024834 jm
jm's picture

Read chapter 3 of said treatise.  He understood risk-neutral probability better than you do.  Probability can be viewed as an extension of Aristotelian logic- the shades of grey between the certain refuge of 0 and 1.  There are also situations where a narrow definition of probability cannot be established with anything resembling tolerance factors.  Like the probability of an earthquake in San Diego tomorrow during the commute, as important as this is given the San Andreas fault line. 

Please correct my view at this point.  I am interested in what could be wrong here.

Bayesian statistics, while useful in a narrow sense, requires assumptions to lend precision beyond the assumption of a uniform prior.  And BTW, de Finetti used functionals.  You should know what this means.

Admittedly, I didn't watch the videos, so I can't speak to the content of Ysrael's clinic.  And I don't have the inclination to argue with your ALL-CAPS OF FURY beyond this point.


Sun, 01/01/2012 - 15:52 | 2025010 economics1996
economics1996's picture

Keynes ripped off John Law (France 1715-20, inflationist), Simon Kuznets (GDP 1934), and Richard Kahn (multiplier 1931) for a lot of his crap.

Sat, 12/31/2011 - 20:07 | 2024078 Rynak
Rynak's picture

I wouldn't call anyone, that ignores the currect PRACTICAL behaviour of governments, "pragmatic".

If anything, keyness was an idealist, who based his considerations on theory alone, ignoring the agenda and behaviour of current govs and elite-class.

I have done the same in quite a few threads, argueing that some of the most hated tools in place now, could actually be used in a very useful way. Contrary to keynes however, i never cast any doubt, on my arguments being purely theoretical, and that they would in the current setup just result in exactly the abuse that exists now. Fuck, recently i outrightly argued, that no tool, and no model will solve the current issues, simply because no matter what great tool you have, it will do shit in the hands of a corrupted and unchecked being.

Sun, 01/01/2012 - 14:38 | 2024851 jm
jm's picture

Perhaps Keynes would have tried here and now what he tried then.  But he was a good currency trader by hard-wron experience and probably would have tried something different when it didn't work.  This is pragmatism, IMHO.

We are all the children of Keynes, and I'm not even an economist:  liquidity trap, flow of funds, etc.  Every student of economics learns Keynes if only to kick his dead butt.


Sat, 12/31/2011 - 20:45 | 2024109 nmewn
nmewn's picture

Well jm, I appreciate your taking an unpopular stance. Its never easy, I

However, Keynes' theories have been roundly debunked & criticized here for valid reasons. What springs to my mind instantly is the 70's stagflation of rising unemployment along with rising prices with government fiscal policy doing precisely what Keynes advocated. They did follow his "book".

The two could not simultaneously happen under his General Theory. Yet it happened.

Which gave rise to the "new Keynesian's" meaning, people like Krugman. In my view, an attempt to salvage the reputations of what are called whackademics so heavilly invested in statism. Now we have it again...rising unemployment & rising prices. Same problem, same model, same result, different time.

I've often wondered what would happen to a people who discovered everything they have ever been taught or known was premised on a lie.

We're getting closer to the answer ;-)

Sun, 01/01/2012 - 11:12 | 2024548 oldmanagain
oldmanagain's picture

nmewn, your history is not true.  The culprit was Nixon and his cohorts. Absolutely nothing to do with Keynesian theory or implementation.  They were nuts.  Price controls??  Fake budgets??  Government takeovers??  Lack of respect or obedience to law?

Sun, 01/01/2012 - 13:28 | 2024714 nmewn
nmewn's picture

My history is true.

Keynesian economic theory has been the dominate school of thought for the better part of a century. There is no getting around it.

And what better time to change the descriptions of credit, social order, debt, medium of exchange within all economies than while everyones attention is focused on world war?

I guess rolling everything off on Nixon is as good a fade job as anything else, he did remove us from the gold standard afterall...but who "coined" the phrase long before Nixon did this, that money itself, was a "barbarous relic"?

"...was it not I, when many of to-day's iconoclasts were still worshippers of the Calf, who wrote that 'Gold is a barbarous relic'?  Am I so faithless, so forgetful, so senile that, at the very moment of the triumph of these ideas when, with gathering momentum, Governments, parliaments, banks, the Press, the public, and even economists, have at last accepted the new doctrines, I go off to help forge new chains to hold us fast in the old dungeon?  I trust, my Lords, that you will not believe it." Keynes-May 23 1944 in the House of Lords

Sun, 01/01/2012 - 11:23 | 2024554 richard in norway
richard in norway's picture

krugman is not a keynesian, he was invited to talk at the the keynesian confrence at cambrigde, his first words were "i dont know what im doing here, im not a keynesian" but that didnt matter because there were no other keynesians there either. all of them were neo classical economists of various shades. unlike keynes these people belive that creit creation does not matter because it all nets out. if the keynesians had been in charge there would have been no credit bubble.

Sun, 01/01/2012 - 11:26 | 2024556 richard in norway
richard in norway's picture

read steve keen 

Sun, 01/01/2012 - 13:30 | 2024717 nmewn
nmewn's picture

I don't trust anything Krugman says one way or the other.

He's an accomplished liar.

Sun, 01/01/2012 - 17:08 | 2025147 Mary Wilbur
Mary Wilbur's picture

He worked for Enron. That says it all as far as I'm concerned.


Sun, 01/01/2012 - 11:32 | 2024562 GMadScientist
GMadScientist's picture

Fail. You've confused the actions of monetarists with Keynes' (notably different) theory as Austrians are wont to do in their never-ending hatchet job.

Show us where Keyne's advocated deficit spending during growth. for the purposes of military conquest (the real cost-push of 70s inflation). ...we'll wait.

"Keynes would be completely unsurprised by today's events; he would have spent the previous decade warning of the existential danger posed by the mania for financial deregulation."

"Bruce Caldwell quotes Hayek as saying that if he could have dinner with anyone it would be with Keynes and Schumpeter."


Sun, 01/01/2012 - 13:48 | 2024740 nmewn
nmewn's picture

I've confused nothing.

Friedman (if thats who you are referring to as a monetarist) was not a fan of the Federal Reserve system. He understood he had to work under the constraints of the political system imposing it.

"Show us where Keyne's advocated deficit spending during growth. for the purposes of military conquest (the real cost-push of 70s inflation). ...we'll wait."

Its like asking someone to show them where a theory stops and reality begins. His theory always relied on the state did it not? Its basic fundamental flaw, its core weakness, is exactly what you point to and yet refuse to see yourself.

Sun, 01/01/2012 - 16:11 | 2025064 GMadScientist
GMadScientist's picture

Ah... a "no rules is better" afficionado. Proud, self-reliant, oblivious to the need for traffic lights...or contract law.

A dubiously worthy political philosophy that unfortunately falls apart when faced with any challenge of pragmatic application; we do not have the luxury of "better angels of our nature", I'm afraid.

Best of luck with your Ron Paul "Anarchy in the US" rally.

Sun, 01/01/2012 - 19:01 | 2025327 nmewn
nmewn's picture

"Ah... a "no rules is better" afficionado. Proud, self-reliant, oblivious to the need for traffic lights...or contract law."

lol...who said anything about traffic lights and contract law?

But I will say this, just because we have traffic lights, I am against the individual states & municipalities entering into contracts with corporations and installing traffic light cams on them to plunder the publics purse.

Its like a modern day "state sponsored" highwayman really.

"A dubiously worthy political philosophy that unfortunately falls apart when faced with any challenge of pragmatic application; we do not have the luxury of "better angels of our nature", I'm afraid."

Our "better angels", under the thinly veiled guise of public safety, do not stick up motorists at traffic lights...virtually or otherwise, that should make you feel better and give you some insight on me.

"Best of luck with your Ron Paul "Anarchy in the US" rally."

I have never claimed to be an anarchist or a Ron Paul supporter. So you obviously have me confused with someone else.

I have said I would vote for Paul under one circumstance and one circumstance only. And I don't believe you have given me any reason to repeat what that circumstance might be.

But you did manage to dodge every rebuttal I've left here on the topic at hand ;-)


Sun, 01/01/2012 - 11:03 | 2024539 oldmanagain
oldmanagain's picture

JM Thanks.  The propaganda about so called Austrian "econ" is has gone bonkers. Leaving some "cave" man, fight club, garbage.  Even more so, the attack on Keynes has misrepresented an empirical look at econ.

Sun, 01/01/2012 - 11:45 | 2024571 GMadScientist
GMadScientist's picture

Well put. I've learned from Hazlitt, Keynes, Schumpeter, Fischer, and Steve Keen.

Sun, 01/01/2012 - 18:36 | 2025298 Dr. Acula
Dr. Acula's picture

Why bother learning from Keynes.

Why bother learning "2+2=5" when it is known that "2+2=4".

"Keynes' General Theory is here riddled chapter by chapter, line by line, with due account taken of the latest theoretical developments. The complete refutation of a vast network of fallacy can only be accomplished by someone thoroughly grounded in a sound positive theory. Henry Hazlitt has that groundwork." -

Sat, 12/31/2011 - 18:42 | 2024021 gwar5
gwar5's picture

Dismal: The S&P is now at the same level as it was in 1999 -- but it's much worse than that for investors because you've lost 36% in USD value (plus fees,  commissions, and the faux capital gains). And the 36% we have lost includes losses across the board on most things held that are denominated in USD.


And the US national debt has also more than doubled in that time, with no end in sight.  So look for more of this financial repression, but even more overt this time, as the means for dealing with the US and global insolvency. It'll be the new normal forever, like a Financial HIV, a new pestilence upon the human race.









Sat, 12/31/2011 - 20:36 | 2024103 AssFire
AssFire's picture

You left a lot of space for a horrible picture there...Might I suggest Detroit?

Sun, 01/01/2012 - 12:09 | 2024608 GMadScientist
GMadScientist's picture

I'm sure we can scrounge up $16T from the > $40T cushions of the top 20% somehow.


Sun, 01/01/2012 - 14:19 | 2024807 nmewn
nmewn's picture

You could confiscate the Fortune 400's wealth (as of 2010 its 1.3 trillion) and it would still be less than what King Barry is asking for in the deficit spending increase now.

Of course once thats vaporized he's kinda outta luck and still a few dollars

Sun, 01/01/2012 - 17:31 | 2025184 GMadScientist
GMadScientist's picture

That'd certainly be less difficult than repossessing the corporate assets and accumulated cash spread through artificially low tax countries the world over.

But thanks for using only the top .000125% to make an "apples to apples" comparison.


Sun, 01/01/2012 - 18:31 | 2025266 Dr. Acula
Dr. Acula's picture

>artificially low tax countries

To GMadScientist, being victimized by theft is normal and the absence of theft is "artificial" and weird.

This guy has some kind of statist Stockholm Syndrome.


Mon, 01/02/2012 - 07:45 | 2026172 nmewn
nmewn's picture

Seems so.

Completely captured and loving it. Asking everyone else to try it. Orwellian times we live in Doc.

Sat, 12/31/2011 - 18:49 | 2024025 Snakeeyes
Snakeeyes's picture

Great lectures. This was all predicted by Hayek and we are living in the aftermath of an Austrian Credit Bubble.

The Austrian Credit Bubble Aftermath - Numbness To Government Stimulus

Sat, 12/31/2011 - 19:17 | 2024027 Market Efficien...
Market Efficiency Romantic's picture

Considering pseudo-sciences such as economics a similarly flawed successor of religion as provider of docmatic worldview guidance (analogically theological), ZH is to the economic doctrine what DaVinci was to the Christian doctrine. Glad to be around the source of enlightenment.

Thanks so much for all the insights, dots connected to Tyler(s) and all the other contributors and a happy new year from the dying continent.

Sat, 12/31/2011 - 19:19 | 2024042 dumpster
dumpster's picture

three things to waste time


in and out burgers


Spending two hours watching Kirzner

additional time wasters ..

 expecting the powers that be to watch Kirzner

politicians could care crap  .. so do not waste time voting

why waste time just invade kill, and plunder


Sat, 12/31/2011 - 20:41 | 2024106 Sardonicus
Sardonicus's picture

Funny.  This guy got busted something we will carry in our wallets soon.

Don't know what is stupider.  Expecting to get away with it or actually expecting the cash drawer to have change.


Sat, 12/31/2011 - 21:27 | 2024148 High Plains Drifter
High Plains Drifter's picture

i guess the thing at kinko doesn't work anymore about the going over there late at night and printing up some extra cash.....

Sun, 01/01/2012 - 00:43 | 2024332 StychoKiller
StychoKiller's picture

Only one question, who'z picture was on the $Million FRN??

Sat, 12/31/2011 - 21:07 | 2024125 High Plains Drifter
High Plains Drifter's picture

israel kirzner?     he looks like corzine............naw...........

Sat, 12/31/2011 - 21:07 | 2024126 ISEEIT
ISEEIT's picture

Thanks Tylers. I'm having a happy new years posting a link to this truth all over the keynesian universe.

Just doin' my part! That way when I am forced to shotgun a Keynesian in search of that which does not in the real world belong to him, I can at least find solace in the fact that they were provided the opportunity to repent.

Sat, 12/31/2011 - 21:13 | 2024130 High Plains Drifter
High Plains Drifter's picture

just curious. but do any of you ever have problems with youtube and slow buffering etc?  i think they are going to let it die and then start charging etc.........

Sun, 01/01/2012 - 01:59 | 2024381 delacroix
delacroix's picture

youtube, has been putting advertisements, on most of the popular videos.  I was thinking IPO

Sat, 12/31/2011 - 21:15 | 2024132 lunaticfringe
lunaticfringe's picture

Our politicians are cowards and pieces of shit. They will never save the country in lieu of themselves. They don't have a spine between all of them. I hope that history records the corruption of our private central bank, it's members, and its bought and paid for politician shills when this mother melts down. Greedy thieves, all of them. I'd like to see them outfitted with "long necks."

Sat, 12/31/2011 - 21:34 | 2024159 San Diego Gold Bug
San Diego Gold Bug's picture

2012  P hyzz must be bought.  Pack em, stack em and rack em.  Thanks for the heads up on and  Saved me some money this year.

Happy New Year!!

Sat, 12/31/2011 - 21:36 | 2024165 High Plains Drifter
High Plains Drifter's picture

just think about if this country had followed the monetary outlines of the constitution, what would this country be like today?   there would never had been any wars because we could not have afforded them.  there would be no illegal immigration because there would be no jobs for them here. the country would be much cleaner albeit smaller. money carried by most people would be probably silver coins.  the country would probably be much more agricultural in nature. since most people would not have had much extra money,  industry would have expanded much slower and the need for excess unneeded goods would have been much less etc. the population would be much smaller......


can we ever get away from fiat at this stage?   

Sat, 12/31/2011 - 21:50 | 2024184 holdbuysell
holdbuysell's picture


Jim Rickards on King World News thinks that QE Forever (nominal GDP targeting) is coming as early as May.

Sun, 01/01/2012 - 06:28 | 2024451 onebir
onebir's picture

He stopped calling it 'notional GDP targetting' then? ;-)

Sun, 01/01/2012 - 00:04 | 2024307 Yen Cross
Yen Cross's picture

 Austrian Econ:  You pay me bitch!!!< or we go DoJ on Ya!

Sun, 01/01/2012 - 00:48 | 2024336 killedbyshortvol
killedbyshortvol's picture

Economic growth is STILL constrained by physical resources, WTF?

Sun, 01/01/2012 - 01:54 | 2024379 Yen Cross
Yen Cross's picture

 Gumby & Pokey, say Hello.

Sun, 01/01/2012 - 02:03 | 2024384 baldski
baldski's picture

So, Pray tell all you Austrians, can you name one country today that follows their dogma?

Sun, 01/01/2012 - 04:06 | 2024420 AustriAnnie
AustriAnnie's picture

How well are most of the countires in the world doing right now?    

That is not a coincidence.

Sun, 01/01/2012 - 17:34 | 2025190 GMadScientist
GMadScientist's picture

Nor is that sound logic.

You really are an Austrian!

Sun, 01/01/2012 - 05:26 | 2024435 quark288
quark288's picture

Great lecture, thanks a lot for sharing... I call the so called mainstream economists as failed physists, not smart enough to make the cut in cutting edge physics.. They started using those tools in social science subject like economics... It only shows their inferior complex.

Sun, 01/01/2012 - 07:11 | 2024462 tony bonn
tony bonn's picture

"The former are called Keynesians. "

there are keynesians among them but the dominant force today is monetarism - the hand maiden of keynesianism and the cause of all depressions...

Sun, 01/01/2012 - 08:34 | 2024476 Peter K
Peter K's picture

Actaully the dominant force are the Marxists.

But they can't call themselves Marxists cause no one would take themselves seriously. So they call themselves Keynsians or more precisesly neo keynsians. The reason that they call themselves neo is that "Keynsianism" was thoroughly DEBUNKED by the Chicago monetarists (Friedman, Stigler et al)as far back as the late '30 and early '40s. As far as the nominal Marxists are concerned, nobody took them seriously since the Russian winter of 1918.

Now how do the monetarists fit into the picture? Here's how. The Chicago school as the monetarists are known has been proven correct. A good case in point is the non-existant hyper inflation that has been brought on by the QE's. Yes. They are the antithesis to the Marxists. But there work is dominant and this is the root cause of the mistaken notion that they are somehow related to the Marxists.

So now back to the "neo Keynsians" or a more correct label would be crypto Marxists. Their version of economics has more in common with a psuedo religious belief than with anything having to do with the social sciences. A good example of this is the famous Krugman invasion from Mars to get the economy out of the Obama disaster. These folks and their forefathers have been trying to get Marxism right. They have been trying to get to their final desitnation just like Marx himself spelled out, i.e. via socialism. But the closest they could come was the Hitlerian/Bismarkian model. And if you look at ObamaCare, it is just that, ex uniforms. 

And that's the way it is:)



Sun, 01/01/2012 - 10:04 | 2024508 ISEEIT
ISEEIT's picture

Well said Peter, although I would submit that the label they assign themselves today is 'progressive'. Keynesian theory is merely one of the many many doctrines within the cult of progressivism.

Sun, 01/01/2012 - 17:50 | 2025201 linrom
linrom's picture

Most people don't understand how Keynesian economic theory worked when it was actually put into practice, that is, governments spent money to provide employment and hence stimulate the economy by running deficits that were paid for by high taxation of the RICH. This policy allowed for rapid growth of middle class and low income disparity which reduced the need for DEBT . In the current economic system, all benefits of running deficits go to the corporate/banking oligarchy with the taxpayers on the hook for all of it. The oligarchs PAY NO TAXES, This combined with inequitable income distribution led DEBT to spiral out of control in the PRIVATE and PUBLIC sectors. The current status quo is not Keynesian nor neo-Keynesian, it's a Monetarist predatory system that benefits corporate/banking tycoons who benefit from financial schemes involving equity and capital markets made by printing and lending of worthless money and 'making debt peons out of the public.

Mon, 01/02/2012 - 09:44 | 2026268 Peter K
Peter K's picture

Most people don't understand how Keynesian economic theory worked when it was actually put into practice, that is, governments spent money to provide employment and hence stimulate the economy by running deficits that were paid for by high taxation of the RICH. This policy allowed for rapid growth of middle class and low income disparity which reduced the need for DEBT .

If the above were to be correct, then Cuba and North Korea would be the most prosperous countries on the face of the earth:)

Sun, 01/01/2012 - 09:05 | 2024487 Catullus
Catullus's picture

I can never get over how if we just let a few banks go under in 2007 and 2008, we'd have emerged from this nightmare in late 2008/early 2009. This has been an ongoing crisis for 4 straight years. They just didn't want the government bond bubble to pop. It's their precious. They were never going to allow that gravy train to stop.

What's worse is that if you asked most Americans if they'd prefer a debt default over paying higher taxes for the same terrible government "services", you get a pretty definitive answer that most people don't care if the government defaults.

Sun, 01/01/2012 - 10:14 | 2024515 Quinvarius
Quinvarius's picture

I like the slow economics news days where basic principles and themes can be addressed.  There is no time to get grounded when the US goverment is busy wrecking the planet while CNBC is talking nonsense on a market day.

Sun, 01/01/2012 - 12:01 | 2024592 tony bonn
tony bonn's picture

if you have not watched the lectures you have missed a grand treat....your soul will be that much impoverished without them...

Sun, 01/01/2012 - 14:07 | 2024783 ThirdCoastSurfer
ThirdCoastSurfer's picture

I am Mr. Keynesian sitting in the shortstop position at Adam Smith's blackjack table. 

The table has long since gone cold but the house and the player in the anchor seat have continued to back my play. The dealer continues to hint that the table is due to be expanded for even better odds of play but will not give any details, only wryly smiling requesting "patients", but in a way that doesn't ring true. 

I am a card counter with perfect knowledge of the odds but find myself approaching a $16 trillion debt to the house.  

On 3 occasions I was able to remain at the table by placing a substantial bet at the proper time, but have since slipped back as the other players at the table continue to misplay their hands, especially the atrocious player at first base who continues to listen to the entourage. 

The house is willing to allow the game to continue until someone leaves the table -at which time all debts will come due. 

It's not how this will end, but when?

Happy 2012!

Here's hoping that it's not decided until the cows come home!

Sun, 01/01/2012 - 17:03 | 2025142 Mary Wilbur
Mary Wilbur's picture

Thanks for posting the lectures of Prof. Kizner. This was all new to me. I took notes.

Sun, 01/01/2012 - 21:15 | 2025572 kelpie-capital
kelpie-capital's picture

The Austrian School has a real appeal for me due to it's sensible, hard money roots. However over Xmas I was reading about "Balance Sheet Recessions" and I have been blown away by the simplicity of this theory.


here is my write up on the theory and the seminal book on the matter. This seems to me like the only template that matters for the next few years.

Mon, 01/02/2012 - 05:00 | 2026095 AustrianEconomist
AustrianEconomist's picture

Europe and the US are going through a deleveraging period which will most likely lead to a balance sheet recession such as Japan did during the "Lost Decades". Economic theory hybridization is needed in order to implement a stable international monetary system that is not just based on leverage but on growth of real GDP, meaning the production of real goods, rather from financial gambling with derivatives.

Check out the latest from the Capital Research Institute (CRI):

Deleveraging - A Balance Sheet Recession

Mon, 01/02/2012 - 18:26 | 2027142 T-Bond
T-Bond's picture

Kudos to ZH for posting this. I learned a lot!

Tue, 01/03/2012 - 09:00 | 2028267 Monk
Monk's picture

Austrian economics is nonsense, no different from other schools that deal with a system that is essentially made up of numbers representing debt.


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