Summer 2002 — Volume 22, Number 2 Front Cover: Ludwig Von Mises and His Father, Arthur Edler Von Mises

Summer 2002 — Volume 22, Number 2 Front cover: Ludwig von Mises and his father, Arthur Edler von Mises.

THE AUSTRIAN ECONOMICS NEWSLETTER Summer 2002 — Volume 22, Number 2

The Austrian Economics Newsletter is published quarterly by the Ludwig von Mises Institute. Beginning with this issue and continuing Interviews With Six Young Economists in the next, the Austrian Economics Newsletter explores the education, experiences, and intellectual ambitions of a new generation of economists teaching in the Austrian tradition. THE NEW Interviewed in this issue are: • Edward Stringham San Jose State University GENERATION: • Shawn Ritenour Grove City College ART • Peter Calcagno P 1 Wingate University Interviewed in Part 2 (Fall 2002 issue) Interview with Edward Stringham will be: • Christopher Westley AEN: You’ve been coming to Mises Institute conferences since Jacksonville State University your undergraduate days. • William Anderson Frostburg State University STRINGHAM: I was a sophomore at Holy Cross when I • Gregory Dempster saw a debate about the legalization of drugs with one of the Hampden-Sydney College professors in the Economics Department, Walter Block. I was very impressed and signed up for his class for the following semester. I always had a vague interest in the types of ideas he presented in class, but never before did I know it was the subject of systematic study. Block was great. He really got me excited about Austrian economics, libertarianism, and ideas in general. After working on an equities trading desk for part of the year following college, I started at George Mason Univer- sity, where I completed my Ph.D. in economics four years later.

AEN: What was Professor Block’s class like?

STRINGHAM: The first few months were like shock therapy. I sat listening eagerly to everything he said. I was very curious. I had never heard anyone advocate privatizing the roads or privatizing the oceans, but everything seemed to make sense. It really got me thinking. The idea that the market enabled individuals with differing interests to interact peacefully was very appealing. I was in agreement that laissez-faire was a better way to structure society, so I started thinking how far this could EDWARD STRINGHAM be extended. Could all social relations be handled by the market and voluntary interaction? Edward Stringham (B.A. Holy Cross College; Ph.D. George Mason Univer- It was around this time when the police in Worcester were sity) is assistant professor of economics really starting to clamp down on college-age drinking and after at San Jose State University. seeing them harass so many partygoers, I started wondering if the police could be privatized. Businesses typically care about LUDWIG VON MISES INSTITUTE their clientele while bureaucrats do AEN: Then you discovered there away from studying Austrian eco - not, but could this logic be applied was a vast literature on this subject. nomics in graduate school, and try to the police as well? to pretend they are mainstream STRINGHAM: Yes, so I started economists. This advice is given to In class Block had presented the with a few of the major works in libertarians in other disciplines as classical-liberal position on limited anarchist libertarian political phi- well. government and one day I went losophy: Randy Barnett, Bruce into Block’s office and told him I Benson, David Friedman, Hans This scheme advises that it is better was going to write a paper entitled, Hoppe, David Osterfeld, Murray for young free-marketeers to Rothbard, and Lysander Spooner. I attempt to get a job by hiding their had never really spent summer views, or at most being very mod- vacations reading school-related erate in one’s positions. In my books, but Block had told me that opinion, this is terrible advice not ALTHOUGH he envied me for being able to read only from a perspective of personal IT IS NOT all these books for the first time. development but also from a per- Sure enough he was right; it was all spective of personal success. It is IMPOSSIBLE really exciting. Around this time I not clear that the stealth strategy is went to the Mises University so I a good one. Are there any success FOR SOMEONE read the monographs they had sent stories and have these people made me as well. All of these books gave any significant contributions to the TO BE A TOP me a great introduction to Austrian study of markets? economics. MAINSTREAM Top mainstream economists often Upon attending the Mises Insti- like what they do and devote their ECONOMIST tute’s seminar I was surprised to entire lives to their fields of study, meet so many scholars who were so unless someone is that commit- AND A TOP both really knowledgeable and pas- ted to mainstream economics it is sionate. I was amazed. If their goal doubtful one will be able to make AUSTRIAN, was to get people excited about any mark. Many young free-mar- Austrian economics, they did a keteers think they can have it both THIS IS HIGHLY good job. I have had some good ways, but this is questionable. A UNLIKELY professors, but none who were as young student could commit 10 . enthusiastic as the ones I experi- years of his life to becoming a rep- enced that week in Auburn. The utable mainstream economist, but experience really got me thinking by doing so he would be necessar- and later convinced me to go to ily devoting less time to Austrian “Why Libertarians Are Commies.” graduate school. economics. Block was taken aback. I told him, “Libertarians advocate privatiza- AEN: Where your interests in the AEN: The point actually seems tion everywhere else, so why not prospects for full privatization con- obvious: Austrian economics can’t police and courts as well?” Block tinued. advance if people are not studying looked around, closed the door, it and advocating it. and then told me, “There are two STRINGHAM: Sure, and this is as types of libertarians: limited gov- it should be. There are some peo- STRINGHAM: Exactly. Although ernment libertarians and anarchist ple who spend a lot of time pro- it is not impossible for someone to libertarians. I am an anarchist lib- fessing how young Austrians be a top mainstream economist ertarian.” That really piqued my should proceed and how they and a top Austrian, this is highly interest and it was all downhill should lead their careers. They say unlikely. The law of comparative from there. that young Austrians should shy advantage would tell us this would

4 AUSTRIAN ECONOMICS NEWSLETTER LUDWIG VON MISES INSTITUTE

people with my success. I had been repeatedly told by others that I would not be able to get a job if I was an Austrian, and one classical liberal institute at my university even told me I should remove libertarian articles from my C.V. I chose not to take this advice, and when I went on the job market I was explicitly libertarian and explicitly Austrian.

My dissertation did not make moderate free-market propositions that almost no one would deny, but instead made the claim that government is not needed for the enforcement of contracts. This was the polar opposite of the stealth strategy. be non-optimal nonetheless. Aus- work, than be an outcast at a trians should try to be the best Aus- higher-ranked program. My com- AUSTRIANS trians they can be, rather than try- mittee—Peter Boettke, Bryan ing to compete against M.I.T. Caplan, and Todd Zywicki—was SHOULD TRY TO economists at their own game. The very helpful throughout, and I can- failure to do this is the biggest pit- not think of any others who teach BE THE BEST fall of many young people inter- at the Ph.D. level under whom I ested in free markets in general. would rather write a dissertation. AUSTRIANS They compete on margins they are THEY CAN BE bad at and unfortunately they have Boettke was a real asset and the , little success. best dissertation chair I could have RATHER THAN asked for. Being able to engage in I eschewed such a strategy and friendly debates about Austrian eco- TRYING TO decided to be Austrian all the way. nomics and libertarianism with the I went to the graduate school where likes of Boettke, Caplan, and Tyler COMPETE I would have the most opportunity Cowen would not have been possi- to study Austrian economics. ble at a mainstream school. Without AGAINST M.I.T. George Mason University has a the backing of one’s committee it is number of classical liberals and a difficult to find a job, so I recom- ECONOMISTS number of courses that talk about mend that students pick a school Austrian works. This is the strength where their committee members AT THEIR of G.M.U. and hopefully they will will support them and allow them to play it up even more. Ideally there be Austrian. OWN GAME. would be more programs like it, or even better programs that could AEN: You seemed to do very well I ended up receiving the most compete to be more Austrian. on the job market. interview requests in the entire history of the program at G.M.U. I would rather learn from people STRINGHAM: Maybe I lucked Granted Harvard was not knock- who will be supportive of Austrian out. In any case, I surprised a lot of ing at my door, but that was not my

VOLUME 22, NO. 2 — SUMMER 2002 5 LUDWIG VON MISES INSTITUTE target. I had interviews with multi- AEN: You never sensed a handicap ple Top 50 Liberal Arts Colleges, at not being, for example, a special- Top 50 M.B.A. Schools, Top 50 ist in econometrics. ADDITIONAL National Universities, and First Tier Masters Level Universities STRINGHAM: Not in any way. ESOURCES according to the U.S. News rank- Comparing my experience on the R : ings. job market with those who Armentano, Dominick T., Antitrust attempted to be mainstream, it is and Monopoly, (Oakland, At one point I was being recruited clear that being an expert in all of Calif.: Independent Institute, for an Honors Program at a uni- the latest mathematical and econo- 1996). versity with a Top 30 Ranked metric techniques is not a prereq- Benson, Bruce, The Enterprise of Economics Department, though uisite for getting a job. Most Law (San Francisco: Pacific schools seemed much more inter- Research Institute for Public ested in someone who cared about Policy, 1990). ideas, research, and teaching than Garrison, Roger W., Time and someone who begrudgingly was a Money (London: Routledge, sophisticated economist. This is 2001). AM NOT SURE why I think the Austrian School Hazlitt, Henry, Economics in One I could really go a long way with Lesson (San Francisco: Fox & Wilkes, 1996). HOW MANY establishing more Ph.D. programs that are unabashedly Austrian. Menger, Carl, Principles of Economics (South Holland, Ill.: PROFESSORS That is my hope. Libertarian Press, 1994). Mises, Ludwig von, Anti-Capitalis- You don’t sound like you are HAVE BEEN AEN: tic Mentality (South Holland, prepared to cave in at the teaching Ill.: Libertarian Press, 1994). ABLE TO TEACH level either. Mises, Ludwig von, Human Action (Auburn, Ala.: Mises Institute, OUT OF MAN, STRINGHAM: My philosophy is 1998). that a professor who teaches about Mises, Ludwig von, Planning for ECONOMY, AND a subject in which he is interested is Freedom (South Holland, Ill.: TATE BUT I AM a much better teacher. I give my Libertarian Press, 1980). S , courses an Austrian flair and assign Mises, Ludwig von, Ultimate HONORED TO at least one Austrian book. For Foundation of Economic example, when I taught intermedi- Science (Princeton, N.J.: D. Van HAVE HAD THE ate micro I assigned one standard Nostrand, 1962). textbook by a U.C.L.A. economist Rothbard, Murray N., For a New OPPORTUNITY. so the students could learn what Liberty (New York: Collier they would be expected to know. Books, 1978). Then I assigned Power and Market Rothbard, Murray N., Man, by Murray Rothbard. In one class I Economy, and State (Auburn, Ala.: Mises Institute, 2001). used Rothbard’s Man, Economy, and State, which was a great experience. Rothbard, Murray N., Power and Market (Kansas City, Mo.: unfortunately the chair of the I am not sure how many professors Sheed Andrews & McMeel, search became ill and had to hand have been able to teach out of Man, 1977). Economy, and State, but I am hon- the hiring process over to one of Rothbard, Murray N., What Has his colleagues. In the end I happily ored to have had the opportunity. Government Done To Our accepted a job at San Jose State, Money? (Auburn, Ala.: Mises which is looking into building a AEN: What has been the student Institute, 1990). free-market/Austrian program. response?

6 AUSTRIAN ECONOMICS NEWSLETTER LUDWIG VON MISES INSTITUTE

STRINGHAM: Very positive. I in One Lesson by Henry Hazlitt. only way to eliminate the problem had a fellow graduate student tell The book is written with such clar- of cheating. Although this reason- me that I should never use an Aus- ity that I think anyone can learn ing is not as illogical as most justi- trian book in an undergraduate from it. I also like Mises’s essays, fications of government, I would class and that I was doing a dis- “Economic Calculation in the say it overlooks the fact that with service to the students. He and I Socialist Commonwealth,” and the vast majority of social interac- taught the same course at different “Middle-of-the-Road Policy Leads tion external enforcement is simply times and sure enough when the to Socialism.” not an option. Whether we like it teacher evaluations came back my or not, most things cannot be con- teacher evaluations were magni- For those who have a free-market tracted for, and government courts tudes higher than his. leaning but do not yet apply the cannot be relied upon. logic across the board, I recom- Economics is a really interesting mend For a New Liberty by Murray subject and there is no reason it Rothbard. And for the economist needs to be made boring for stu- who has some time to spare I dents. A lot of professors only focus believe Rothbard’s Man, Economy, on the mathematical aspects of eco- and State provides an excellent ECONOMICS nomics because it is easier for them, overview of Austrian economics. but are the students really gaining? On a more advanced level, I like IS A REALLY Here Austrians have an advantage Joe Salerno’s “Mises as a Social over many who were trained in Rationalist” and his “Mises and INTERESTING highly technical economics but Hayek Dehomogenized,” and who cannot explain basic economic Bruce Benson’s Enterprise of Law. SUBJECT AND concepts to undergraduates. THERE IS NO AEN: What is your current intel- Yes, most Austrians would be lectual passion? REASON IT unable to teach graduate nonlinear econometric methods at M.I.T., STRINGHAM: My primary NEEDS TO BE but the vast majority of economists interest, as it has been for the past are not required to use those skills. few years, is using economic theory MADE BORING Because Austrian economics does a to study social interaction without better job at explaining the real government law enforcement. It is FOR STUDENTS. world, we have an advantage over fairly common for people to ques- others in the classroom. We can tion the political process and gov- use economics to inspire students ernment control, but when it like no other school, so the more comes to police and courts, how- good teachers we have the more ever, a lot of otherwise good theo- AEN: There is the usual argument good students we will have. This is rists for some reason believe gov- that complexity requires formaliza- a long-term strategy, but for a ernment to be a deus ex machina tion that only government can pro - school that emphasizes the impor- that solves every problem. All eco- vide. tance of education and the spread- nomic analysis is thrown out the ing of ideas, this is necessary. window. STRINGHAM: And yet this applies to the simplest familial rela- AEN: What books or articles do Why there is this dichotomy, I can- tions, as well as the most sophisti- you find yourself recommending not explain for sure, but I think this cated financial contracts. We see again and again? is an area ripe for research. Many cooperation all the time, even in the people believe that the Prisoners’ most complex matters. For exam- STRINGHAM: For an introduc- Dilemma describes all social inter- ple, when I looked into the history tion I always recommend Economics action and that government is the of stock markets in the seventeenth

VOLUME 22, NO. 2 — SUMMER 2002 7 LUDWIG VON MISES INSTITUTE century, I found that governments simply refused to enforce most contracts, yet the market developed quite sophisticated contracts such as short sales, forward contracts, and options.

This is fairly representative of all social order; order precedes government and only later can government claim to be keeping the peace. Rothbard had a great line about how New Yorkers’ safety depended solely on the peaceful- ness and good will of others. This

absence of external enforcement government proponents imagine, there are incentives for coopera- the state enforces numerous rules WE SHOULD tion. According to this view, gov- that are contrary to economic ernment police and courts are logic. I believe these types of NEVER superfluous at best. applied articles are what are needed to start changing misperceptions ENGAGE IN AEN: This line of thought seems about the benefits of government. STERILE like a good example of applied work. The area of law enforcement has DEBATES been so neglected by the vast STRINGHAM: I would like to majority of economists that I THAT FEW see ever more applied work done believe we have a lot to offer. In within the Austrian theory. I have a this area there are still hundreds of PEOPLE recent paper coauthored with Peter articles waiting to be written, each Boettke that Bryan Caplan favor- of which can add something new. I ably refers to as economic ethnog- CARE ABOUT. think we really have the chance to raphy. In line with Rothbard’s rec- completely obliterate the argu- ommendation that economists ments in favor of socialized law should create as accurate of a enforcement. description of an economy as possi- ble, we gather information from AEN: From a strategic and theo- is not to say that additional safety various sources such as interviews could not be provided by the pri- and the popular press. retical point of view, what do you vate sector, but I do think this is suppose Austrians ought to avoid? pretty descriptive of the world. I think this provides a much richer description of a market than an STRINGHAM: We should never Government does little to respond econometric paper with a few sta- engage in sterile debates that few to a problem until after it has tistics. This paper attempts to show people care about. Although less occurred, so people are really exactly what government rule risky, this type of economics is not unable to depend on any external enforcers actually do. Rather than going to make any significant enforcement at all. Even in the enforcing rules in a way that some advances and will lead others to

8 AUSTRIAN ECONOMICS NEWSLETTER LUDWIG VON MISES INSTITUTE disregard the school as unimpor- no reason economics needs to con- There is a solid generation of Aus- tant. tinually restate the same few argu- trians who are in the middle of their ments over and over, which is back- careers and now there is the poten- Historically if we look at the econ- ward looking and certainly not the tial for many more young Austrians. omists who have caught our atten- way Mises and Rothbard treated At this pace, Austrian economics is tion, it has been those who made economics. destined to become more widely bold conjectures. It is precisely accepted and the focus of more research than ever. those economists whom we find AEN: And no doubt Mises and worthwhile. Without making bold Rothbard would agree with you. Rothbard was practically by him- conjectures it is pretty much point- self and there is only so much one less since no minds will be changed. STRINGHAM: Although I was person can do, but fortunately not fortunate enough to meet today we have more Austrians than I have a difficult time seeing the Murray Rothbard, his life and work ever before so we can start doing marginal value of an additional arti- intrigue me. From his writings one in-depth studies on the ideas cle about knowledge, spontaneous can tell that there were very few Rothbard only had time to men- order, and the market process. Austrian economists in his early tion. Rothbard devoted his life to Each of these articles sounds so days, and although he could have advancing and propagating the similar and even many of their given up and let the ideas fade ideas of liberty and I am thankful authors maintain they are not away, instead he plowed forward. for that. His approach, intellectu- saying anything new, which is He took a long-run view, and now ally and strategically, is a good one why I think many view that as a a few decades later I think his to emulate on the way to winning dead research program. There is efforts are starting to pay off. this battle of ideas. AEN

Interview with Shawn Ritenour at Northwestern, I joined Neil McCaffrey’s Conservative Book AEN: Before starting your Ph.D. Club. Within the next few weeks, I work, you did time at the Depart- received their bulletin advertising ment of Labor. Human Action, that the club called the magnum opus of some Austrian RITENOUR: Yes, and then, as economist named Ludwig von Mises. Lew Rockwell likes to say, I went straight. That was quite an experi- The advertisement featured high ence. I was assigned to train field praise for both the author and the economists to collect data for the book, but I hadn’t heard of either Occupational Wage Surveys. Maybe Mises or Human Action. It seems that’s one reason I have no illusions that it cost around $35.00, which about government economic data. was a lot of money for a college student in 1986, but it counted for two AEN: Did you have Austrian lean- required book purchases. SHAWN RITENOUR ings at the time? I took the advertisement to my eco - Shawn Ritenour (B.A., North- RITENOUR: I became interested nomics professor, Dr. Eric Elder, western College; M.A., Ph.D., in Austrian economics before I even Auburn University) teaches and asked him about the book. He economics at Grove City knew it was a distinct school of had heard of Mises and said that College. thought. When I was a sophomore the National Review had in the past

VOLUME 22, NO. 2 — SUMMER 2002 9 LUDWIG VON MISES INSTITUTE had good things to say about him. I didn’t know at the time that the That shows how far National Review bulk of the profession dismissed has come. He told me to buy it if I Mises out of hand. CALENDAR had the money. I did, and it was one of the most profitable investments I Other books by Mises also were SUMMER WORKSHOP ON have ever made. part of my development. While at ECONOMICS AND the B.L.S. for example, I read Mises’s POLITICAL SCIENCE AEN: But it’s tough going for an Bureaucracy and was astounded to see Fridays, 10:00 A.M. undergraduate. in practice every day the order mask- (see www.mises.org ing chaos that Mises explained. Dur- for detailed schedule) RITENOUR: True, Human Action ing that time I also read Mises’s The is not an introductory text and it Ultimate Foundation of Economic Sci- ROTHBARD GRADUATE SEMINAR: ence and was further convinced that THE ETHICS OF LIBERTY praxeology is the best method for July 28–August 2, 2002 economics.

MISES UNIVERSITY I WAS AWARE I remember being very impressed when in college I read a philo- August 4–10, 2002 THAT NOT sophic trilogy by Francis Schaeffer. I later went on to read Herbert MISES INSTITUTE EVERYONE Schlossberg’s Idols for Destruction 20TH ANNIVERSARY: SHARED THE and Gordon Clark’s A Christian “THE SCHOLARSHIP OF LIBERTY” View of Men and Things, both of October 18–19, 2002 AUSTRIAN which provide a firm Christian critique of modern culture. I AUSTRIAN SCHOLARS PERSPECTIVE, should also mention the writings CONFERENCE 9 of J. Gresham Machen, particularly March 13–15, 2003 AND I FELT Christianity and Liberalism, A Chris- tian View of Man, and his articles on LIKE I WAS social issues. He was a great conservative biblical scholar who was GOING AGAINST also very much pro-liberty and pro-free market, and greatly THE GRAIN. opposed to centralized, state control of education.

AEN: All of this was during col- was a challenge working through lege and grad school. parts of it. I’d pick it up, read some, and then put it down to try and RITENOUR: I was aware that digest it. I also went to the college not everyone shared the Austrian library to see if it had any other perspective, and I certainly felt like I For more information, works by Mises. I remember check- was going against the grain. But I contact the Mises Institute ing out his collection of essays have high regard for all of my pro- 518 West Magnolia Avenue Planning for Freedom. I read fessors at Auburn and they were Auburn, Alabama 36832-4528 through all of them while at college very cordial, obviously bright, knew Phone 334-321-2100 Fax 334-321-2119 and became more convinced than more than I did, and were encour- Email [email protected] ever that Mises was right. How- aging. They also were, by and large, Website www.mises.org ever, I thought that was economics. very friendly to the free market.

10 AUSTRIAN ECONOMICS NEWSLETTER LUDWIG VON MISES INSTITUTE

The Mises Institute was also a course was an issue even when Salerno’s “The Place of Human tremendous help, providing me an Mises wrote The Anti-Capitalistic Action in the Development of Mod- outlet for further study and intel- Mentality, and it continues today. ern Economic Thought,” QJAE, lectual pursuits in the Austrian tra- Someone needs to bring the point vol. 2, no. 1. dition. Being a Mises Fellow while home that the market merely gives at Auburn was like getting another people what they want. It doesn’t AEN: What is your dream project? Ph.D. I received one in profes- “dictate” anything. sional, neo-classical economics, RITENOUR: I’ll be starting it and one in Austrian political econ- AEN: At Grove City, with such a soon: a principles of economics text omy, which included economics, strong market tradition, you prob- from a distinctively Christian per- political philosophy, and ethics. ably enjoy the freedom to use Aus- spective. It seeks to place econom- trian materials in class. ics in the context of the Christian AEN: How should Austrians view of man made in the image of approach grad school? RITENOUR: Certainly. I do every semester. Most like the Aus- RITENOUR: Go in with the atti- trian texts, even if some are more tude that you are going to learn as challenging than those in other much as you can, even if you do not classes. This was also true at South- THERE IS A agree with the main premises of west Baptist University, where I what you are being taught. A good taught before coming to Grove GROWING mainstream program can teach you City. I recall that one of my stu- a lot about price theory. Do not be dents attended a conference where REALIZATION arrogant. Be very respectful of your he met up with some students from professors. Understand that your the University of Virginia who were THAT ECONOMIC goal is to successfully complete envious of him because he was able to study Austrian economics as part SCIENCE IS your degree while at the same time of the main program. learning as much as you can. You’ll HEAVILY rarely have a better opportunity to learn what the profession has to At S.B.U. I was the only economist INFLUENCED offer. in the College of Business, which was very much free-market ori- BY SOCIAL ented. It was great. We were all on , AEN: Now, to your current work. the same wavelength and as I dis- CULTURAL, AND cussed Austrian theory with them, RITENOUR: I would like to do a they were almost always in agree- RELIGIOUS complete analysis of art and cul- ment. Here at Grove City College tural institutions from an Austrian there is already an Austrian tradi- TRENDS. perspective. For instance, it seems tion, so a lot of people here are clear from various reports I’ve read already familiar with Mises and that arts institutions that have been generally approving of the free more economically minded have market. survived the recent economic God, and who can thus think and downturn better than those who This allows me to use high level act purposefully. I also would like seem oblivious to economic law. material. Recently I’ve recom- to do an extended study on the mended Salerno’s “The Develop- issue of art, culture, and the free There is a fairly well developed con- ment of Keynes’s Economics: market. ventional wisdom in academia that From Marshall to Millennialism,” adheres to the notion that the free from the Review of Austrian Eco- It appears that this type of analysis market kills art and culture. This of nomics, vol. 6, no. 1, and also is becoming more popular within

VOLUME 22, NO. 2 — SUMMER 2002 11 LUDWIG VON MISES INSTITUTE economics. There is a growing realization that, in practice, economic science is heavily influenced and Rothbard’s Man, Economy, and by social, cultural, and religious State became essential. However, trends. The field of religion and Menger’s Principles of Economics has economics is starting to make real always been a favorite. Menger put inroads in the profession. Even in so much in that small volume that the history of thought, economic it is still a joy to read 130 years theory was first advanced by later. trained theologians. The Positivists have their own religious ideas, AEN: Richard Ebeling, who was inherited from those who sought to teaching at Hillsdale, must have create a “religion of humanity.” had a big impact.

CALCAGNO: I can honestly say that I am where I am today because of Richard Ebeling. Richard became a mentor and a friend PETER CALCAGNO introducing me to Austrian eco - ECONOMICS nomics and providing me with an Peter Calcagno (B.S., Hillsdale understanding of the importance of IS HEAVILY College; Ph.D., Auburn Univer- economic principles. He helped me sity) teaches economics at Wingate University. in choosing a graduate program BOUND UP and encouraged me to study and understand mainstream theory as WITH Interview with Peter Calcagno well as Austrian theory.

QUESTIONS AEN: Hillsdale seems to have pro- I consider myself very fortunate duced a number of good Austrian because Hillsdale College has a ABOUT faculty over the years. Ludwig von Mises Professor, a Ludwig von Mises Lecture Series, MORALITY, CALCAGNO: It was here that and Mises’s personal library, so this CULTURE my general interest in economics approach was not controversial. , became a specific interest in Aus- Free-market theory is part of the AND FAITH trian economics. In my principles of institution, but I was willing to take . macroeconomics class, the professor the arguments further than most was making arguments against pro- students by espousing not just con- tectionism and regulation in labor servative, but libertarian ideas. markets and several people in the class were in favor of protecting AEN: What factors did you con- labor. I found the professor’s argu- sider when choosing a grad school? Economics is a formal, theoretical ments far more convincing. science. However, because it focuses CALCAGNO: Since there are few on the actions of humans, it is also At first I read several shorter graduate school programs that heavily bound up with questions monographs such as Mises’s Eco- even address Austrian economics, I about morality, culture, and faith. nomic Calculation in the Socialist think students interested in gradu- This is especially true in the area of Commonwealth, Hazlitt’s Economics ate school need to be realistic economic policy. Austrians have in One Lesson, Rothbard’s What Has about these programs. George always been on the cutting edge, so Government Done to Our Money? As Mason University is today the only why not here as well? AEN I studied, Mises’s Human Action Ph.D.-granting institution where

12 AUSTRIAN ECONOMICS NEWSLETTER LUDWIG VON MISES INSTITUTE

of privatization from an Austrian perspective. This project will pro - vide me the opportunity to both teach and do research.

AEN: You have also shown a particular interest in the relationship between politics and economic theory.

CALCAGNO: I do think that Austrians are working toward their own version of public choice and public finance. Tom DiLorenzo and Randy Holcombe have done some very good work in this area. I think the timing is right for it as well. While there has been a good one can formally study Austrian eco- CALCAGNO: I like both, but my HE KEY nomics. The advice that was given to focus has been on teaching from T me by Sanford Ikeda, which I the very beginning. Professors had TO GRAD found valuable, was to seek out a such a major impact on my life graduate program that is known for demonstrating to me the impor- SCHOOL FOR the field of study you are interested tance of liberty, property rights, in pursuing. For me that was history and free markets. I wanted to have AN AUSTRIAN of economic thought, which made that same impact on students. Auburn, which at that time had a IS TO FIND Ph.D. program, an easy choice. Next spring I will be teaching a class on the progress of the transi- WAYS TO The key to grad school for an tion to a market economy in the Austrian is to find ways to incor- Czech Republic. This course will INCORPORATE porate Austrian theory into your incorporate an analysis of the cal- research where you can. Whether culation debate and other Austrian AUSTRIAN an entire dissertation can be Aus- theories. The students and I will trian depends upon the committee, visit Prague at the end of the THEORY INTO but you could certainly incorporate semester to see the changes first Austrian ideas. I would recommend hand. YOUR RESEARCH. that students try to find other like- minded students in their program And this summer I have a research deal written criticizing the main- for support. Graduate students grant to work with a student on the stream public finance literature, who are free-market oriented will privatization of the steel industry the Austrian theory of public be willing to discuss different ideas in Romania. The student is from finance could be better formalized. and can often provide support out- Romania and understands first The heart of it definitely exists in side of the classroom. hand the failure of socialism. He the work of Mises and Rothbard, has become quite interested in but there are issues where state AEN: Would you say that your Austrian economics (there is a governments have intervened in vocation tends toward research or Mises Institute in Bucharest) and our lives that need to be further teaching? so we are researching the progress addressed.

VOLUME 22, NO. 2 — SUMMER 2002 13 LUDWIG VON MISES INSTITUTE

An area that interests me is state and business class reads from Power into the mainstream, they see a government. State governments and Market and Antitrust and small role for an Austrian theory seem to be increasing their roles in Monopoly. today. It’s true in some ways but in our lives just as quickly as the fed- other ways, the profession is still eral government. In particular the My students are fairly receptive to very much behind where Mises was idea of states partnering with busi- the ideas; however, they are not in the 1940s. Mises’s works are ness is one that is ripe for Austrian always willing to take the argu- inspiring for their range and depth, analysis. These issues of privatiza- ment for a free market as far as it especially by comparison to most tion and regulation at the state goes. Many think they are taking economic literature today. level are perfect for applying and the free-market path when they building on Rothbard’s critique of simply argue that government can There is a temptation to hide one’s interventionism. A lot has been improve. Unfortunately, this view Austrianism. Murray Rothbard written on this issue, but not using is the conservative party line today. warned against this. You fall into the tools of Austrian theory. Many students see me as radical, the trap of not telling your profes- and that’s fine. sors in grad school and writing a dissertation that is consistent with I recently had one student in my the mainstream. Then you hide intermediate macroeconomics class being an Austrian when you inter- ask me why the Austrian theory of THERE IS A view for a job. Your plan may be to the business cycle was not more jump out at some point and reveal TEMPTATION widely accepted, especially consid- your shirt with a big “A” on it ering that Hayek had won the telling them you are an Austrian, TO HIDE ONE’S Nobel Prize. I had to explain to but it doesn’t work out that way. him the lag between when a theory AUSTRIANISM. is developed, such as ABCT in the Why? Because you need tenure. So 1920s and 30s, and when a Nobel after you are hired, you continue to MURRAY Prize is awarded. hide your interests. By the time ROTHBARD The work for Nobel Prizes is often you have tenure, you may no pioneering, but in the case of longer be interested, or fear that WARNED Hayek, economics had taken such a you have to keep up with the pub- lication track you have established AGAINST THIS dramatic turn with the Keynesian . revolution that few people knew to be successful in your career. and understood the theory by the AEN: It does seem that it is becom- time he had won. Fortunately, the theory is still with us and I think ing easier for Austrians to get by. AEN: What material do you use in growing in acceptance. class? CALCAGNO: It does. I am not AEN: And yet the profession often sure that we should go running up CALCAGNO: I begin every prin- regards Austrianism as little more and down the halls shouting “I am ciples class I teach with the first than a chapter in the history of an Austrian economist,” but I do two chapters of Hazlitt’s Economics thought. not think we should shy away from in One Lesson. They also are our interests. Given that my main exposed to the calculation debate CALCAGNO: That’s true. The interest is teaching, I have not found and the importance of entrepre- mainstream thinks “once upon a Austrian economics to be a conflict neurship via Mises and Hazlitt. I time” Menger developed the the- and actually found colleagues who just finished teaching intermediate ory of marginal utility and Mises are familiar with and interested in macroeconomics where I used argued that socialism could not Austrian economics. I think the key Roger Garrison’s Time and Money work. But because they believe is to be honest without being as the main text. My government these ideas have been incorporated unduly confrontational. AEN

14 AUSTRIAN ECONOMICS NEWSLETTER