Back to the Basics

I was doing some mid-winter cleaning and I discovered some reading material under a pile that had been moved into a spare room during a clean up for holiday guests.  In that pile was the November issue of The Freeman.  What a great surprise.  Sheldon Richman does a masterful job editing the magazine, Richard Ebeling writes with such passion and knowledge, David Gordon has a wonderful discussion of the libertarian philosophy of Murray Rothbard, Bob Higgs discusses the war-time origins of the income tax,and David Henderson and Don Boudreaux provide insightful discussions on health care and pharmaceuticals respectively.  That is just in 1 issue.  Wow.  And I haven't even mentioned the absolutely amazing article by Gerald O'Driscoll on how FED monetary policy is responsible for the the sub-prime fiasco.

My economic education at Grove City College included a regular reading of The Freeman.  In fact, Sennholz asked us questions from The Freeman for our exams.  At the time the magazine was published in an almost pocket size format.  I made my first pilgrimage to FEE for extra-credit in Sennholz's class in my sophomore year and returned home with a library that included not only Smith and Bastiat, but Bohm-Bawerk, Mises, Hayek, Rothbard and Kirzner.  My discussions with Bettina Bien Graves during that week started me on a path that changed my life aspirations.  I would return to FEE multiple times over the next few years.  Bettina also recommended that I get involved with the Institute for Humane Studies, which I did.

I still think FEE and IHS are the best way for young people to get introduced to classical liberal political economy and then advanced scholarship in the tradition.  It was undoubtedly true when I was a student in the 1978-1988 period.  Competitors have risen in both the 'market' for the introduction to classical liberalism and for advanced study in philosophy, politics and economics.  Competition is always welcome -- it keeps people on their toes, forces them to always seek new and better ways to do what they are doing, etc.  But sometimes in the process we start to take for granted the core capabilities that the original organization brought to the table.  I think this is especially true in non-profit settings, where fads and fashion are unanchored from profit and loss accounting, and property rights and residual claimants are not quite clearly defined.  In this world, our boredom with reliability is overcome by claims to new and original contributions.

The great economist Frank Knight once warned about the attractiveness of "newness" in intellectual affairs  when he wrote about Keynes's General Theory: "What is new isn't true, and what is true isn't new."  I am not saying that the competitors to FEE and IHS suffered the same fate.  No, a lot of amazing things to advance economic thought and classical liberalism by organizations outside of FEE and IHS.  And different margins of the intellectual world were tackled which FEE and IHS were not designed nor did they have the capabilities to do.  But, I am myopically educational in all these discussions and that no doubt impacts my judgment as well.  In looking at the discarded Freeman I realized how much for granted I have taken the role that FEE and IHS play in educating generations of students.  They both do such a great job and deserve our respect and our support.  We shouldn't demand them to change their core capabilities because our interests change as we grow older.  I cannot imagine a better undergraduate education and experience than the one I received at Grove City College, it would be a disaster if Grove City College decided to be a graduate school and grow 10 times its traditional size.  The school could never do this well, it doesn't have those capabilities either in terms of physical plant, or faculty.  To do it, a massive change of what the college was all about would have to occur.  No, GCC should stay as a small school with traditional values and a secluded residential campus with an undergraduate educational focus.  Do what you do and do it well.  Grove City has done that fantastically for generations of students.  As I tell anyone who will listen, it is the greatest undergraduate school in the world.

Similarly, FEE introduces students to the philosophy of economic freedom, and IHS develops that talent to be sophisticated academics.  FEE gets young economic students to study further the writings of the classical economists (Smith and Bastiat) and the Austrian economists (Bohm-Bawerk and Mises).  FEE is about learning the economic insights of the classics and the Austrians and applying them to the world around us to better understanding the implications of the economic way of thinking and its relevance for understanding current affairs. IHS gets students a little further on in the educational process to revisit Smith and Hume, but also to study Mill, Hayek, Buchanan, Rawls, Nozick, Epstein, Lomasky, V. Smith, North, Coase, and Schmidtz, and learn how to build an academic career that has the potential to be one of impact as a teacher and researcher.

I support fully the efforts of FEE, IHS, and also Liberty Fund (that facilitates an even higher level conversation about liberty) in their educational efforts and at the different levels that they have developed their core capabilities.  High school students and undergraduates; advanced undergraduates and graduate students; and graduate students and faculty (young and old) are all covered in this approach --- as well as businessmen, lawyers, teachers, and citizens.  Educationally, lets continue to do what we do and do it well.  We should respect reliability and the stick-to-it-ness that these organizations have demonstrated since their respective founding.

So don't do what I did and allow yourself to take FEE for granted.  The Freeman should be read regularly and not put on the bottom of a pile to be pushed aside when company is coming over. Instead, put it on your coffee table for those guests to read, put it in your office for your students to pick up, or customers waiting to see you to read. The Freeman is full of wonderful presentations of core principles and insightful discussions of current affairs.  Richard Ebeling, the current head of FEE, is one of the most knowledgeable, passionate, and articulate defenders of the classical liberal tradition that we have ever had the good fortune to have on our side, and Sheldon Richman is one of the great editors in the history of the tradition.   Especially as in-fighting spreads among classical liberals and libertarian organizations, it is important to return to the basics and reaffirm the core mission.  Organizations like FEE, IHS and Liberty Fund in my opinion do the best to stay on mission.  Lets stay on mission.

Comments

[Daniel J. D'Amico]

I've been told that GCC plans to begin a Masters program in Austrian Economics within the next few years. Just thought I'd mention.

[Sheldon Richman]

Thanks, Pete!

[Steven Horwitz]

Let me second Pete's entire post, and especially his remarks about FEE and The Freeman, the latter of which really does fill a marvelous niche in creating a space for discussion of current policy issues, economic history, political and economic theory, and "arguments for freedom" written by a range of journalists and academics and free-lancers for the lay audience. I know of no other publication in the libertarian movement that shoots for a lay audience but has such high-level folks writing about serious intellectual issues.

One of the challenges in being an academic is making our often abstract and complex arguments digestible by non-experts. We have to do it in the context of the classroom all the time, but our audience is limited (and not always there truly of their own volition). The Freeman gives us a chance to "teach" but to an audience of thousands, and who are primed to hear what we have to say.

Obligatory self-promotion: I have three Freeman pieces coming out this spring. One on "Free Market Money and Peace", one on "The Profit Motive" and one on "Economics and Scarcity." I love writing for them and my sabbatical has given me the time to do so.

Having recently read both Brian Doherty's Radicals for Capitalism and Hulsmann's biography of Mises, I was struck by the fact that one of the few things that both agreed on (given their very different interpretations of the last 60 years of libertarianism) was that FEE was the first and perhaps the most important "think tank" in the revival of Austrian economics and libertarianism more generally. I think they are right.

FEE is a precious resource and an institution that still fills an important niche. And it does it very well just the way it is. As Pete says, it's gotta be what it's gotta be.

All I know is that the library and classroom at FEE are two of the few places I think of as "holy." When I walk back into those rooms for the first time each summer, I always take a moment to remember and thank the people who have walked in there before me. I cannot help but be grateful for how courageous people like Read and Mises and others were in sheltering the very dim light of liberty at a time of great darkness. Those rooms humble me like no other; it is an honor to be thought of as worthy of teaching in those spaces. Without FEE, the light of liberty might never have stayed lit.

[Mike]

Three words: THE MISES INSTITUTE!

[Mario Rizzo]

Something's going on. I wish I knew what.

[libertyfirst]

I didn't know this think tank and its publications. It seems interesting.

Anyway, I have a doubt about one of the articles and I'm sorry if I'm a little bit off topic. O'Driscoll writes:

"The best possible monetary policy would maximize the signal-to-noise ratio. Monetary noise comes about when policy changes the value of money."

"In a vibrant market economy with technological innovation and ever-new profit opportunities, the monetary policy that maintains true price stability in consumer goods requires substantial monetary stimulus. That stimulus will have a number of real consequences, including asset bubbles."

The former sentence says price stability is good, the latter that its implementation causes bubbles. Is it ok?

[Steven Horwitz]

I think O'Driscoll's point was that we should NOT want "price stability in consumer goods." When he says "maximize the signal to noise ratio" he does NOT mean price stability, rather he means "monetary equilibrium."

If you keep the money supply equal to the demand to hold it, money exercises no independent influence on the overall level of prices. Instead, that over all price level changes with changes on the "goods" side, i.e., the technological innovation etc that he mentions. Thus, with monetary equilibrium maintained, productivity growth will lead to a gently falling price level as the real cost of goods and services fall due to that productivity increase.

So the former sentence is NOT saying price stability is good because "maximizing the signal-to-noise ratio" does not equal price stability. And the sentence after that refers to "policy" changing the value of money, rather than productivity. So it's okay for prices to rise or fall if it's from the "goods" side but not if it's from the money side.

Hope that helps.

[libertyfirst]

Ok. Thanks for the answer.

[DPrychitko]

Mario -- I said the same thing to myself before getting to your comment!

[Roger Ream]

Pete, Thanks for your kind words about FEE. I started reading FEE literature as a high school student, then attended a seminar following my freshman year in college. That led to 3 years as director of seminars at FEE and the opportunity to work with great Austrians such as the late Hans Sennholz, Israel Kirzner, Henry Hazlitt, and Bettina and Percy Greaves. I am honored to serve on the board of FEE now.

FEE's influence has been worldwide. It is the place where freedom begins, as it serves as the starting point for so many who devote their careers to the ideas of liberty.