 On my topic, I have a half hour to talk about some of my observations of how Austrian economics has affected academia since I was an economics professor for 41 years and recently retired from Loyola University in Maryland and had a lot of experience with it. In my first semester in graduate school, in the fall of 1976, I walked into the PhD-level microeconomics class taught by Richard Wagner and there were two textbooks and dozens of journal articles on the syllabus and one textbook was Milton Friedman's Price Theory book and the other one was this one, Human Action by Ludwig von Mises and that's really what got me hooked on Austrian economics and I thought Professor Wagner was a great professor. He was not the best orator. You had to listen very, very carefully but the substance of what he was saying was far superior I thought to what all the other professors were saying about anything because he was talking about Austrian economics and it created quite a bit of a controversy. This was at Virginia Polytechnic Institute and State University before it became Virginia Tech and they changed the name and the controversy was the mainstream mathematical economists and the game theorists in the department hated the fact that Professor Wagner was using human action and teaching real economics rather than half-baked mathematics and what they did was at the end of every, when the program was set up so that when you finished all your coursework you had to take comprehensive exams and everything, micro, macro, econometrics, two fields of specialization and so in the class on that year, not my class, the class that was taking the comprehensive exams that year, they held them hostage, they held the exams that this was before the internet, they had the paper exams and they held them hostage as negotiating tools to negotiate to get Wagner out of that class among other things and to teach more mainstream sort of mathematics as microeconomics rather than rather than that and that was sort of, those are the battle days. This was 1976 and Tom and others talked about the conference in New Hampshire in 1974 that sort of tried to revive that and so that was my introduction to where Austrian economics stood at the time and around the same time, shortly before that in the New York Times in January 1st, 1974, Paul Samuelson was interviewed and Samuelson wrote the famous textbook Principles of Economics that totally dominated the economics textbook world from 1948 well into the 1980s. He sold over four million copies of that book and almost all the other textbooks were clones of Paul Samuelson's book so his influence was gigantic, humongous and here's what Samuelson said, what motivated economists like himself in the New York Times January 1st, 1974, he said, quote, economists work for the only coin worth having, the applause of their peers. What a jerk, I read that, what an idea, the applause of our peers. I'm sure he didn't mind making the profits of four million book sales either, I'm sure that motivated him to some degree. So he, Samuelson and his ilk dominated education, academic education and economics all that time. One of the things in his book where he portrayed the so-called perfect competition model which is not the model of competition that the Austrians believe in, the Austrians believe competition is a dynamic process of rivalrous, dynamic entrepreneurship, but the so-called perfect competition model that was invented really in around the 1930s had this bizarre set of assumptions of homogeneous products, everybody produces the same thing, everybody charges the same price, there's no advertising because everybody knows everything, perfect knowledge and so forth, nirvana, a perfect world and in his textbook Samuelson said he taught generations of students, well when you think about it the only products that fit into this definition of pure competition are things like cotton and natural gas because they're homogeneous, cotton is cotton, although that's not even true but that's what he said and natural gas is natural gas, although at the time cotton in America, there were price floors on cotton, so cotton was sold at monopolistic prices because of regulation and natural gas of course was sold by government run monopolies and the so-called natural monopolies that were either government owned or government regulated monopolies in the public utilities industries so he gave us his examples of pure competition to monopolistic industries and everything else he said was even worse, even more monopolistic or had some other problem and in need of regulation and of course this is one area where the Austrians really have made tremendous progress in explaining the fallacies of the perfect competition model over the years but that's where it stood in the beginning of the 1940s, 50s, 60s and 70s. Samuelson was also famous for his 1988 edition of his textbook where he said that a quote a socialist economy can thrive and he predicted that by the year 2000 Soviet GDP would exceed the U.S. GDP and of course two years later the Soviet Union didn't even exist as far as that's term so that's what he taught generations of students and he accepted he said this because he accepted as truth statistics put out by the Soviet Union and the CIA to make this projection and he made this sort of ignorant projection with two lines you know here's the one line like this the other line like that and the Soviet line was going to exceed the American trend line of GDP growth over time so he thought and of course that was all debunked very quickly and of course no one explained this why this was a big hoax, Samuelson's projection was a big hoax more than the Austrians and so of course once socialism around the world collapsed in the late 80s early 90s even socialist economists like Robert Heilbrunner who had spent decades promoting socialism basically wrote a big Mia Culpa article in the Atlantic magazine the New Yorker rather New Yorker magazine in I believe it was October 1990 where he said Mises was right Mises was right all along capitalism has defeated socialism although in the same article he says but fellow socialists those are not his words those are my words but he's saying but fellow socialists there is still hope we can still reinvent socialism by regulating capitalism in the name of saving the planet and hence the watermelons were born green on the outside red on the inside and that so that that was that that's been the game plan ever since Robert Heilbrunner announced it in 1990 for the for the socialist world around the same time around 1989 I was invited by Jerry Gundersen to give a talk to the economics faculty at Trinity College and he asked me to talk about socialism the the calculation of a the Mises Hayek ideas on socialism which I did and this is 1989 and this is Trinity is a well-regarded school was then still is now and the looks on the faces of the faculty were like they had all been sucking on lemons when I said that and they they really kind of kind of insultingly lectured me by saying this this debate was over a long time ago Abba Lerner and Oscar Longa won that debate you know the don't don't you know and they they told me all you have to do is calculate the equilibrium conditions of general equilibrium conditions that's all you need to do to prove that socialism can work and this is 1989 since right in the middle of the collapse of socialism this as far as this is concerned and so and so that's but like I said this is what little the mainstream thinking was it was so wedded to these ideas but nobody nobody more than the Austrians and especially through the Mises Institute's efforts has smashed this idea to smithereens in terms of the economics of socialism and so so there you can still you can already see the progress being made of continuing to beat up on Samuelson and he said this about the Fed I call this the immaculate conception theory of the Fed and this was this is what was taught to generations of college students here's Samuelson he says quote the Federal Reserve's goals are steady growth in national output and low unemployment it's sworn enemy is inflation go ahead and laugh go ahead and laugh go ahead and laugh if aggregate demand is excessive so that prices are being bit up the Federal Reserve Board may want to slow down the money supply but then again it may not that's those are my words thereby slowing aggregate demand and output growth if unemployment is high and business languishing the Fed may consider increasing the money supply thereby raising aggregate demand and augmenting output growth in a nutshell this is the function of central banking which is an essential part of macroeconomic management and so it's all it's all very lovingly described the features of my old professor James Buchanan called this the benevolent despot theory of economics assuming the people who run the Fed or any other government agency are benevolent despots you know compare this to what Murray Rothbard once said about the Fed and this is classic Murray Rothbard tongue-in-cheek sarcastic as hell he said the Federal Reserve he's talking about how the Federal Reserve looks at itself he says the Federal Reserve guided by monetary experts independent of the public's lust for inflation how many of you have a lust for inflation you want to pay higher grocery prices more for gasoline and you want to pay double for the next new car you have your lust for inflation lots of the Fed thinks you have a lust for inflation it stands the Fed stands ready at all times to promote the long-term public interest by manning the battlements in an eternal fight against inflation the public in short is in desperate need of absolute control of money by the Federal Reserve to save it from itself and its short-term lusts and temptations so you know thank god for the Fed that that's Murray's sort of sarcastic statement about that and of course as Patrick told us this morning and as all maybe everybody here knows who has done more to discredit the Fed than the Austrian school and particularly the Mises Institute as far as that's concerned there never would have been a Ron Paul revolution had Ron not been able to read the Austrian critiques and educate himself about the Fed and and do just the the best job in the world of articulating these ideas to the general public and causing thousands thousands of college students at what was it the University of Michigan who began spontaneously chanting end the Fed end the Fed that would have never happened had it not been for Austrian scholarship I had a I had a very good student several years ago who was an economics major and he took my American economic history class and he told me he uh he had taken all the classes on money he had taken all the macro classes three of them money in banking mathematical monetary theory class and he came to my class and about two thirds through he said you know I had I took an all I took all these courses and I had no idea that there were actually criticisms of the Fed who would ever thought he didn't know that and I sent him to Mises University and he came twice to Mises University and so he he was straightened out over that now another another Austrian economist Larry White he he published an article in one of the monetary journals several years ago where he found that 75 to 80 percent of all journal articles on monetary economics had an author with a quote Fed affiliation in other words paid in some way by the Fed okay according to Larry White and he quotes Milton Friedman as saying this he says Friedman said quote if you want to advance in the field of monetary research you would be disinclined to criticize the major employer in the field and quote so in other words the Fed pays 75 to 80 percent of everybody who writes in the in the academic journals on monetary theory and so of course you would expect students like my former student to be totally in the clouds and be unaware that there are criticisms of the Fed even after he was taught by three or four PhD professors different aspects of monetary theory in these in these classes and so that that's certainly one area where we've made a big impact and the whole world now people all over the world now read the Austrian literature and Mises.org to understand this another thing I would mention about a piece of good news where we've had an effect is there's this book by our friends Richard Vedder and Lowell Galloway called Out of Work it's a history of unemployment in America and one of the things they concluded in this book and Murray Rothbard really liked this book because they in the in the first chapter of it they explained how it's it's very sort of Austrian in orientation although it's sort of a hybrid they use a lot of econometrics and a lot of sort of mainstream neoclassical theorizing but it's still very solid and the Murray loved this book and they're one of the conclusions was the Great Depression or the New Deal rather made the Great Depression worse deeper and longer lasting now just about seven or eight years ago a real big shot they were mainstream big shot editor of the American Economic Review Leo Hainian a professor at UCLA published an article in the Journal of Political Economy which is one of the top one or two or three academic journals in economics concluding that the New Deal made the Great Depression worse and longer lasting and he doesn't cite out of work he doesn't cite the book Out of Work by Galloway and Vedder at all they're very disappointing like that but the point I'm making here is the mainstream editor of the American Economic Review has come around to the Austrian view and it really is remarkable he basically says what Roosevelt did was to try to cartelize all of industry and all of agriculture to monopolize using government to monopolize and he himself Leo Hainian if he ever taught microeconomics he had to have taught the monopolies restrict production that's the mainstream view and if you restrict production you restrict employment and so you know how can it be that they would not have done this and so it had to be and he apparently never realized that until he came up with this this new model new mathematical model that he used to prove that okay another another area where we made progress is just look at the wonderful bookstore out there and all these books with what I call literary economics explaining the Austrian tradition and I compare that to a story that I told Tom Woods on his radio show nothing long ago when I was in graduate school there was a professor from the Ivy League that came to give a seminar his name was Professor Un spelled NG and he did a had a mathematical model one of these mathematical models where it took three blackboards of mathematics to go through the model and at one point one of my professors Gordon Tullock chimed in and said but Professor Un this is not anything at all like the real hamburger market and Professor Un said I don't care about the real hamburger market I care about my model and and that's how that's how the mainstream thinks there's an article that I brought along with me by Axel Landhoofen who Joe Salerno knows about a well-known macroeconomist from UCLA it's called life among the econ and he writes about the sort of culture of the economics profession and one of the things he says is this is quote part of what there's a different tribes tribes in economics and one's called the math econ that's the tribe he said the math econ make exquisite models finely carved from the bones of a walrus specimens made by their best masters are judged unequaled in both workmanship and raw material by a unanimous iconographic opinion if some of these are useful and even econ testimony is divided on this point it is clear that this is purely coincidental in the motivation for their manufacture then he was on to say whether the math econ know it or not they point out they do obey the ancient Pythagorean principle that philosophy must be pursued in such a way that it's inner secrets are reserved for only learned men trained in math and that's that's how the the mainstream economics profession is and that's why it has become in the 40 years 41 years that I was a professor it became more and more useless and so and so of course and it's no nobody more than the Austrians provides an alternative way of understanding how the economic world works another another point I like to make here is that I call it the card Kruger fraud David card one was awarded the Nobel Prize in economics for a certain methodology he compared New Jersey and Pennsylvania one state raised a minimum wage the other state didn't and he claimed it had no effect on unemployment minimum wage and he won the Nobel Prize for the methodology the methodology of comparing two different states and the reaction and when I read about that I thought well this is odd either the professors of mine and graduate school were doing this kind of research 30 years earlier what what's new about this and not only that it was it not new but the national bureau of economic research got their data got redid the study and they said they concluded that it had crippling flaws and so the guy won a Nobel Prize for a methodology that has crippling flaws okay and so and to quote one more quote by Doug Casey on the use of mathematics in economics he said once the fact of the matter is that everybody should be in everybody should be an economist not just a designated priesthood that have received an arcane and largely irrelevant education focused on mathematics with little to do with how the world actually works it's important to understand how people go about producing consuming and trading with one another how about that who would ever have thought that that should be the purpose of economics well the austrians do there was another revolution in addition to the kanesian revolution in the 20th century and i guess you can call it the perfect competition revolution which i alluded to earlier and this was overturned this was overturned by a lot of efforts that are usually assigned to the chicago school of economics and because the perfect competition model one of the assumptions was that a competitive industry has many firms and so there were for decades there were attacks government attacks on mergers corporate mergers because after all of two companies merge you have fewer firms and so a lot of mergers were disallowed prohibited even though the effects of them in more often than not was nothing worse nothing more severe than economies of scale that allowed them to reduce cost and reduce prices it was a competitive thing and the chicago school for about 20 year period beginning in the 60s pretty much overturned that kind of thinking that the mergers are necessarily monopolistic and the way they did that though was they temporarily adopted the austrian way of thinking about competition as a dynamic rival process and they showed in study after study that the effect of most of these mergers was either they just didn't work out as planned or if they didn't work out as planned the effect was lower costs lower prices in a more more competitive industry you know benefit to consumers but it was it was because they adopted the austrian way of thinking that that they did this and one of my own articles it was in published in the journal economic inquiry and way back in 1988 a co-author jack high and i were able to survey all the economists who wrote anything at all about antitrust and regulation at the time the sherman antitrust act was passed in 1890 it was a small group back then believe it or not we could we could survey the entire economics profession everybody who had a job as an academic economist and there was unanimous opposition to the whole idea of an antitrust law as a matter of principle because they thought it was inherently incompatible with competition okay and it was and always has been that all changed in by in the 1930s though when the new theory the perfect competition theory was adopted by the profession and more and more economists came to embrace antitrust regulation the late george stigler once said the reason for this is that economists came to realize that they could make considerably more than the minimum wage as antitrust consultants but jack high and i argue that no the main reason is they they they got they dropped the austrian understanding of markets of competition and adopted this this phony theory of competition and this this theory by the way led to what harold demps says called the nirvana fallacy in economics which lasted for from it began around the 1930s until it began to be debunked in the last 20 or 30 years by a lot of research inspired by studies basically studies of entrepreneurship i'll just give one example of the famous article by ronald coast he's not not an austrian but for years of lighthouses were given as an example of market failure because it was said that the light from a lighthouse is a public good once it's out there it's impossible to charge any ship that's coming into a harbor for the benefits of the light and so therefore the government must either subsidize lighthouses or run them itself and this was in all the textbooks decades ago or ronald coast did something that a lot of the the harvard mit economists never do he got up out of his swivel chair in his faculty office and looked around outside in other words he went to the library and he studied lighthouses and became an expert in lighthouses and he found that in great britain private entrepreneurs had funded lighthouses for generations because after all it was their cargo that was being shipped across the sea and then they stand and to lose everything because the insurance industry was still in its infancy at the time that this was happening and so that didn't really cover them very adequately so their insurance was they paid they contributed they voluntarily paid for lighthouses okay so entrepreneurship and of course who was known more for studying entrepreneurship and conveying the importance of entrepreneurship than the austrians and so and that's one thing that led to all these theories of market failure and there's a big literature in economics of case after case like this where the so-called failure was fixed even before economists discovered it and decided to call it a failure it was fixed by entrepreneurs like the lighthouse builders in england and elsewhere and so this was uh this was called the nirvana fallacy in economics where you compare the real world with some sort of utopian ideal that could never be achievable and then you declare that the real world fails and of course is in need of perfect politicians and perfect bureaucrats to solve the problem that's the sort of method analysis final thing i'm going to say i have a little note here it says economic witch doctors versus the austrians let's not forget that it was people like mark thorton ron paul and peter schiff who all warned that there was a bubble in the housing market in 08 and that or before 08 2003 ron paul was saying this in in public and then all the economic witch doctors on tv were laughing at them when when they said these things they were right and the witch doctors were wrong as far as that and so after and so after the crash of 08 of course we all know that they were right and we had the pathetic scene of nobel prize-winning economists from the university of chicago writing articles in a wall street journal apologizing to the american public for missing this for for being in the dark about the impending bursting of the real estate bubble and how pathetic and so in conclusion uh in today's universities as far as i see it what's going on is um the last best hope to quote abe lincoln uh lies lies in lies in programs like peter Klein's program at baler on entrepreneurship in a business school and in management that's where economics i think has the best chance to seriously make headway because it's not so politically incorrect and crazy as the rest of the university system and i believe doug casey hit the nail on the head when he said everyone needs to be your own economist and austrian economics is the best avenue to achieve that and the best avenue would be to enroll in the new master's program in austrian economics offered by the mesis institute if you really want to get a really good education and use that for the rest of your life to understand how the economic world works you don't have to get a phd like i did uh although you can you can give it a try maybe we'll have a phd program someday in austrian economics well thank you very much my time is up