 This is Mises Weekends with your host Jeff Deist. Ladies and gentlemen, welcome back. Once again, it's time for Mises Weekends. Very pleased to be joined this weekend with our friend, Gabriel Calzada, visiting us from Guatemala, originally from the Canary Islands near Spain. For those of you who aren't familiar with Gabriel, you should be. He is absolutely a superstar in the Austro-Liberarian world, a little bit of background. He is, of course, president, heads up UFM in Guatemala City, which is a Universidad Francisco Maraquin, which is an unbelievable free market university that serves Central America. He is also a protege and a one-time student of Puerto de Soto, obtaining his PhD in Spain. He is the president of APEE, the Association of Private Enterprise Education. He sits on the board of the Mont Pelerin Society. But for our purposes, most importantly, he's a former fellow here at the Mises Institute and someone who has known Lou Rockwell and many of our staff for a long time. So that said, welcome to Auburn. It's great to see you. Thank you, Jeff. It's so great to be here at the Mises Institute. Well, I want to start off, before we get into UFM, I want to start off by talking about Puerto de Soto, a little bit of man you know very well, and really underappreciated in the Austro-Liberarian. I think his name should be discussed in the same terms as a hapa or a Rothbard in terms of what he's done in this incredible book, Money, Bank, Credit, and Economic Cycles, which as I'm sure you probably recall, Guido Hulsman says is the most important money in banking books since the theory of money and credit by Mises. Yes, I remember that piece by Guido Hulsman. And I also remember that Guido Hulsman said something very interesting about that book. That is, the book is a clear example about what is Austrian public choice theory and how to combine law and how to combine economics in a book making sense and following the Austrian tradition. So I think it's a wonderful book in terms of history. It's amazing what you can learn about history of money reading the book, but also in terms of legal aspects and economic aspects of business cycle and monetary theory. It's wonderful. Right. And the book is very cheap in paperback. It's also available for free in PDF form in our site. So look it up. Do you stay in touch with the Soto and tell us about his influence on you and your own scholarship? Oh, yeah, I stay in touch with him. The way I discovered the Austrian school, thanks to the professors that were criticizing the Austrian school in my college years. And so I started reading. And I thought it was the only person following the Austrian school, like many before the internet. And one day, someone told me, there is this great scholar called Jesus Huerta de Soto, who has an Austrian seminar. I went to the seminar. And since then, I have been collaborating with him. We started, I helped him starting the PhD program in Austrian economics in Madrid. And we have collaborated in many different activities. He's very active. He continues being very active. His program is, well, he receives students from all over the world. And he's doing an amazing job in continuing the Austrian tradition in the Spanish-speaking world, but also outside the Spanish-speaking world with students from America, from all European countries. And many of them applying the theory, not trying to reinvent the wheel, but applying the theory to specific areas. So it's just great what's going on there. Now talk a little bit about the Spanish scholastics and the School of Salmaca and the influence that has on you and has had on the Spanish-speaking libertarian world. I think the Spanish scholastic is a very rich tradition. And it's very important for the Spanish-speaking world because many people, when you tell them about the libertarianism and you start talking about John Locke or even Manger and then Mises, people say, yeah, but this is like, this is foreign to us, right? It's not part of our culture. But when you start talking to them about Juan de Mariana, Diego de Covarrubias, Luis de Molina, Francisco de Vitoria, those are people that they recognize as part of their tradition. In fact, they were writing about against price control in favor of free prices against tax section and against inflation long before the Scottish enlightenment. And this, for many people to see that in their culture, there were those free marketeers defending individual liberty, defending human rights from an individual point of view, private property. This makes them pay attention to the tradition and understand where our ideas come from and route them into the culture. For example, many of the Golden Age writers like Lope de Vega, Quevedo, even Cervantes are related to that tradition. And what they wrote is related to the free market ideas, to the libertarian ideas we could say that were developed by this author. So it's a very important tradition, I think for all free marketeers around the world, but especially important for the Spanish-speaking world. But if you don't know that history, I think it's easy to fall into a Western bias that Latin America today is not very Austrian or libertarian friendly. Let me give you a quote, this is actually from the Templeton Foundation. It says, quote, the Spanish-speaking world lacks classical liberal values. The allure of figures like Shea Guevara and Castro are symptoms of the failure to grasp the intellectual foundations, economic processes and social benefits of individual freedom. Now, you spent a lot of time living and working in Latin America. Do you think that's an overstatement and you think things are more promising than that? I think right now, things are promising in terms of liberty in Latin America. If you see the changes in the last three years, especially people going into the streets in Guatemala against a race of taxes or people going in Brazil against corruption, but also against the big government. This is, these are very good news for liberty in Latin America. And it is true that, what you just read, but I think this is also what a lot of people think about Latin America, the way a lot of people have been imagining or visualizing Latin America. What is going on in Latin America is richer than that. And fortunately, in recent years, it's moving toward more freedom and less government in many countries. And do you think Venezuela is serving as a cautionary tale for some of its neighbors and what's happening there? Most probably. People saw a country like Venezuela being one of the promising and rich countries in the region becoming a complete mess, a disaster because of socialism. And that helps a lot. Unfortunately, a lot of people, a lot of friends are suffering in Venezuela, but I think this has helped a lot in other countries, also to the younger generations when they listen to politicians saying similar things to what they have heard in Venezuela to say, no, no, no, come on, let's be realistic, let's respect prior property. People have in mind this image of Hugo Chavez in the middle of downtown Caracas saying, oh, and who is the owner of that building? Oh, this is a private building, expropriated, confiscated. And people have this in their memory now. And a lot of people know now where this leads to. And I think this has been very unfortunate but helpful in that sense. People in the US who aren't as familiar with UFM as they might be, we'll post a link to it, but it's a very robust, fully private university. You offer degrees in medicine and economics, architecture, business, you name it. This is a very robust and as I say, fully private university. Talk a little bit about, you mentioned off camera that the Guatemalan Constitution institutes a separation of education in state, for example. Yes, and this was not always like that, but in 1985, the founder of UFM, Manuela Yao, the main founder, managed to convince the political elite to include a couple of articles in the Constitution that make universities complete independent from the political power, complete independent from government, from the state. So the universities are not subject to any type of tax action, they don't need to be accredited, whatever the board of directors decides is automatically official titles that they are issuing as if they were accredited and they're completely independent. So you have a lot of competition, you have several very good universities competing and being able to be flexible thanks to that independency. So it's a great place to experiment and to avoid the vicious cycles that in other countries we have seen around higher education. Now, you mentioned that regardless of your major, there's a core of five or six classes on the scholarship of liberty that are required. Yes, exactly. Our core curriculum is on liberty. The university was created because a group of young entrepreneurs discovered after discussing a lot that they didn't understand why Guatemala was poor, they wanted to understand it deeply and they didn't understand it until they found pamphlet by Ludwig von Mises that explained why some countries were poor and other were more developed. And after that, they decided to go deeper into the Austrian ideas. The first, one of the two first buildings, the library is called the Ludwig von Mises Library and they decided very early that the mission of the university was to teach and disseminate the ethical, legal and economic ideas of a society of free and responsible persons. So regardless of what you studied, you have five courses on liberty, the ethics of liberty, economics of liberty. We studied the work of Mises and the work of Hayek. So it's beautiful and interesting to see doctors or architects knowing the Austrian tradition very well. And if you ask them whether these have helped them or not after they finish, they say that this has been very important in their careers. Now you mentioned that the faculty are not judged in the same manner as they are in the United States, for example, you don't have a tenure system and that faculty really need to focus on their teaching. Yes, yeah. We run the university as if it were for-profit organization. It is not, it's a non-profit, but it's completely private as you said. We don't accept public money. And we run it in the way that someone would run his company. Nobody would give a job forever in life. So we don't give tenure. We don't have tenure. We ask every department to produce value. And for that, we have internal prices. So if you want to rent a space, you make a bid. And when you have more demand for a room, the prices are higher. And when you have less demand, the prices are lower. So people decide when to give their lectures or departments decide. And yes, and then we have this core curriculum that put together with the dynamic of the internal markets that we have. And so you have content, libertarian content, free market content. And you have also the structure of the university works as a free market organization. So you have content and structure. You also mentioned that to serve on the board, you have to be an entrepreneur. So you don't have academics as board members, which is very unlike most Western universities. Exactly. In order to be at the board, you need to have experience in running an organization, running an organization that creates value. And for that, from the very beginning, everyone since the university was created, members of the board have to be entrepreneurs. And this makes a huge difference. You see that those people, they have the mission always in their mind. And at the same time, they want to make sure that whatever every dollar that we spend is spent in a productive way toward the mission of the university. Well, and you do some things that are outside of normal university offerings. I want to promote, for example, you recently did produced a MOOC, which is a massive open online course on Don Quixote, which had, I think, about 15,000 people from around the world viewed that. So that's the kind of outside the box thinking. And how can people find your course on Don Quixote? Well, if you go to the UFM website, you will see the discovered Don Quixote. But if you Google it or you go to EDX platform, you will find it. It has been a very successful MOOC, massive online open course where you really learn about Don Quixote literature, history. And at the same time, you learn the connection between Don Quixote de la Mancha and the ideas of the School of Salamanca, the free market ideas of the time. And it's very interesting to see how, for example, Don Quixote horse, Rosinante, the disease that he had, when Cervantes describes the horse, he describes the horse with the disease in the legs, which name, the name of the disease is the same as the name we give to the consequence of inflation. So he's doing a parallel between the problem of inflation and the problem of the horse. And he says that that type of disease, if you allow it to go to expand, since it's at the foundation of the horse, the whole horse will collapse, making a parallelism with society. It's wonderful. It's a wonderful course. Fortunately, people from 131 countries have been following it. And we are very happy to be delivering free market concepts and history through Don Quixote. Another project you described to me is what you call your business cycle observatory, which you mentioned takes Austrian principles and applies some business and finance tools to give real-time data on business cycles. So talk about that. Yeah, the market trends that we internally call it, the business cycle observatory, is the idea was originally to do what Mises and Hayek did in Vienna 80-something years ago, close to 90 years ago. They started this observatory in Vienna. And what they say is, let's take that theory. Let's use some tools, analytical tools, also from the trade and investment theory. And let's look at it and let's follow it. And let's see whether we are close to a problem or we are having a sound expansion or not. And that is what we have been doing. Fortunately, we have been able to produce in Spanish and in English quarterly reports, also some monthly reports and weekly reports. And we are following what is going on in Latin America, in the US, in Europe, and in China using Austrian theory combined with some analytical tools from investment theory. And it has been a lot of fun and also very challenging to have to follow it and to report what is going on and what might come. We don't try to forecast. We try to analyze what is going on right now. But we always obviously have to say, OK, here seems to be a big problem. So be careful because if this continues, so we explain trends. This is what we call market trends, pattern predictions. Well, Gabriel, thank you so much for coming. It's great to see you here live in Auburn. We look forward to new collaborations between the Mises Institute and UFM. Ladies and gentlemen, you have a great Thanksgiving weekend. Subscribe to Mises Weekends via iTunes U, Stitcher, and SoundCloud, or listen on Mises.org and YouTube.