The Emergence of a Tradition: Essays in Honor of Jesús Huerta de Soto, Volume I: Money and the Market Process

Description

This book, the first of two volumes, explores the impact of Jesús Huerta de Soto and his role in the modern revival of the Austrian School of Economics. The chapters focusing on monetary economics, business cycle theory, and entrepreneurship, combine established ideas with novel topics to explore the new directions forged by Huerta de Soto’s ideas. This approach presents Huerta de Soto’s influence on modern economics. It also outlines his current research paradigm. This book aims to highlight and build upon the intellectual legacy of Jesús Huerta de Soto through its contribution to the Austrian School of Economics. It will be relevant to students and researchers interested in monetary policy and Austrian economics. Contents List of Contributors List of Figures List of Tables Jesús Huerta de Soto: A Biographical Sketch The Origins of Austrian Economics in the Treaties of the Theologians of Salamanca References Would a Retail Central Bank Digital Currency Achieve Its Intended Purpose? Definition, Purposes, and Characteristics of Retail CBDC Implications for the Conduct of Monetary Policy and the Related Risk Transfer Does Limiting Risk Transfer Hinder the Achievement of CBDC Purposes? Conclusion References The Disinterventionist Spiral Mises’ Theory of Interventionism Two De-interventionist Implications in Mises’ Theory of Interventionism Reform of the Pension System as an Illustration of a De-interventionist Spiral Conclusion References The Spontaneous Issue of Lancashire Bills of Exchange as Money Early Banking in Manchester How the Lancashire Industrialist Understood Money What Happened in Manchester? Why Did These Lancashire Bills Decline? What Lessons Can Be Learned Concerning the Manchester Bill Period? References Jesús Huerta de Soto as Scholar, Teacher, and Academic Entrepreneur: A View from the US References Rehabilitation of the Bankrupt Firm: Property Rights and Entrepreneurship Property Rights in a Bankruptcy Procedure Firms Without Entrepreneurs? References The Place of Money, Bank Credit, and Economic Cycles, in the Austrian Tradition of Economic Treatises A Common Philosophical Background A Systematic Development and Exposition of Economic Principles Which, in Many Instances, Took Place in the Form of Economic Treatises The Use of Natural Language and the Deductive Method The Idea That Economics Should Explain Real Economic Phenomena with Relevance to Real People The Importance Granted to Institutional, Legal, and Historical Analysis A Critical Analysis of Other Economic Theories A Conscious Effort Toward the Creation and Maintenance of a School of Thought Conclusion References Human Behavior and Austrian Economics A Potential Overlap of Behavioral and Austrian Economics Limitations to Human Decision-Making The Influence of Emotions Combining Behavioral and Austrian Economics Parallels? Or Contradictions? Conclusion References The Austrian Theory of Consumption Period Planning: Some Neglected Contributions from the Interwar Period Carl Menger and Periods of Planning Hans Mayer and Consumption Period Planning Guided by “The Law of the Periodic Recurrence of Wants” Paul N. Rosenstein-Rodan and Planning for “The Economic Period” Under Uncertainty Oskar Morgenstern and Multi-consumption Period Planning with Expectations The “End” to the Austrian School in Vienna Hans Mayer’s “Betrayal” of the Austrian School References History and Economic Theorizing Introduction Economics and History A Vision as a Link Economics as a Science of Meaning Hints for a New Synthesis Conclusion References Beyond Public Choice The Public Choice School and Austrian School: A Reflection on the Existing Relationship Between the Two Schools Jesús Huerta de Soto: Beyond Public Choice Conclusion References The Austrian Defense of the Euro in Light of Luigi Einaudi’s Quest for Sound Money Einaudi, the Austrians, and the Quest for Sound Money European Federalism and the Centrality of the Common European Currency Was Einaudi’s Plan Too Good to Be True? Huerta de Soto’s Forgotten Alternative References Economic-Societal Order and Business Order: Efficient Configuration of the Business “Environment” The Interdependence of the Economic and the Societal Orders The Social Dimension, in the Economic Order and in the Economic Processes Conceptualization of Coordination Processes The Societal Economic Order and Business Dynamics Proposals for a Society Economically and Societally Efficient: Business Dynamics References Defining Money Money in a World of Finance Uncertainty, the Root of All Money Conclusion References Investment Under the Theoretical Framework of the Austrian School of Economics Sensible Investing Principles Entrepreneurship and Dynamic Efficiency Uncertainty, Diversification, and Marginal Utility The Current Investment Environment References Financial Markets and the Production of Law Felicitous Cross-Fertilization The Production of Financial Claims The Natural Production of Financial Claims Fiat Finance Fiat Finance Within a Fiat-Money System Financial Markets and Statutory Law Making Conclusion References The Capital Asset Pricing Model: Dead and Kicking What Is the CAPM? CAPM Assumptions The Empirical Critique of the CAPM The Theoretical Critique of CAPM Alternatives to the CAPM The Factors’ Zoo Forward-Looking Alternatives Conclusions: The CAPM Condrum References A Brief Note on Bank Circulation Credit and Time Preference Time Preference and the Originary Interest Rate Bank Circulation Credit Expansion and Time Preference Revaluation of All Values A Case Against Fiat Money References Dynamic Efficiency, Economic Development, and the Ethics of Property Sources of Prosperity Economic Progress as a Process of Dynamic Efficiency The Importance of Institutions Ethics and Economic Prosperity Personal Ethics and Prosperity Conclusion References Puviani on Smith on Taxes Puviani and the Illusione Finanziaria Puviani on Smith on Taxes Puviani’s Socialism Conclusion References Milton Friedman’s Views on Method and Money Reconsidered in Light of the Housing Bubble The Nature and Sources of Friedman’s Method From Mitchellian Method to Monetarist Theory Friedman’s Monetary Theory and Its Critics Prelude: Milton Friedman on Monetary Policy 1981–2001 Milton Friedman on Monetary Policy 2002–2006 Conclusion References Hayek’s Overinvestment Theory and the Stability of the Euro Area Reasons for the European Financial and Debt Crisis The Flawed Institutional Framework of the EMU Overinvestment and Crisis in the Euro Area Negative Side Effects of Monetary Crisis Management Zombification and Low Growth Redistribution Effects and Redistribution Conflicts The Erosion of Trust High Inflation Perceptions and Erosion of Trust in the ECB Political Polarization Outlook References The Two Gresham’s Laws: Parallel Currencies in a Small Country A Different Monetary Rule Gresham’s Laws Fixed and Flexible Exchange Rates Two Monies in Peru: One Legal Tender, the Other de facto Telephone Money in Kenya “Gresham” Dynamic Equilibrium of Two Legal Tender Currencies Conclusion References Dynamic Efficiency in the Process of Desocialization Dynamic Efficiency as a Guiding Principle of Desocialization More Efficiency, More Justice, More Morality References The Greatest Economist Who Ever Lived How I Use Menger in My Classes Example #1: Real Wages vs Goods/Services Example #2: Why Prices Are Determined at the Margin Example #3: Using Tobacco to Demonstrate the Theory of Imputation Introducing a More Complete Macroeconomic Model Menger Provides the Missing Link Between Micro and Macro Four-Stage Macro Model of the Economy Seeking a Complete Macroeconomic Model Kuznet’s Fatal Mistake in National Income Accounting Conclusion References The Entrepreneur and Entrepreneurship: A Practical Framework for Firm Analysis The Entrepreneur The Entrepreneurial Function and the Analytical Model Implications of the Proposed Model The Entrepreneurial Function and the Family Business Conclusion References Well Rooted Lessons, Odd Offshoots, and the Realization that the Fruit Has Not Fallen Far from the Tree References Index