New Defense Secretary Admits He Is Not Qualified For The Job

Robert Gates on Capitol Hill on Thursday, told lawmakers, “I would confess I'm no expert on Iraq.”

Later, asked about reaching the right balance between American and Iraqi forces, he told the panel he was “no expert on military matters.”

Committee members pressed Gates, who replaced Donald H. Rumsfeld at the Pentagon, on an exit strategy for the U.S.

“At the outset of the strategy, it's a mistake to talk about an exit strategy,” he said.

Who Makes All The Money?

Phinneas comments on Dr. Walter Block's post on the Mises Blog on Why Be An Economist? To Be Happy, That's Why:

There are really only 3 ways of earning a large amount of money:

1. Finance (i.e., money lending, in all its various forms);

2. Speculation (i.e., buying things that you predict will either appreciate on their own, or will appreciate with a minimum of effort on your part); and

3. Selling a product or service (usually a product, but not always) that you can commodify, unitize and promote with a brand. This can lead to great wealth because doubling your sales of commodified, unitized products requires less than double the amount of work. Efficiencies, I think economists call that.

People think that there is a fourth way, but it's really just an illusion. It's the highly-skilled service-provider option. Lawyers. Doctors. Architects. Commercial artists. Anyone doing highly skilled piece-work.

You might make an upper-middle class income doing these things, if you bust your ass and work twice as hard as everyone else and do nothing else all the time. But the truly successful (in monetary terms) members of these vocations are the ones who figure out a way to commodify and unitize what they do. Like the artist who does more than work on commissions, but creates something that he can replicate (i.e., unitize). Or the lawyer who spends his time schmoozing clients while other (younger) lawyers are back at the office doing all the actual work like a factory. He commodifies his legal services, establishing himself or his firm as the brand.

Who makes all the money -- the fashion designer who sells goods with his name on them in hundreds of stores, or the custom tailor who makes fantastic suits one at a time? The tailor on Saville Row who studied as an apprentice for decades may be a genius and a virtuoso, but his product isn't commodified and unitized, which means that in order to earn twice as much, he has to work twice as much. He has no leverage.

The person who is going to have the greatest impact on promoting libertarian ideals is going to be the one who writes the popular books (or produces movies, or TV shows, or or songs, etc.) that express libertarian ideals. In order to create a broad, social movement, you have to have broad appeal. It's going to be someone who is able to commodify and unitize his message, and then build a brand that sells that message to people far and wide.

Of course, another commentator brings up the alternative three ways to make money:

"The way I heard it, the only three ways to get rich these days are to marry it, inherit it, or steal it.

Sen. Smith: War Effort is "Absurd" and "May...Be Criminal."

In a major speech on the Senate floor, the Oregon senator, Gordon Smith, called for changes in U.S. policy that could include rapid pullouts of U.S. troops from Iraq. He said he would have never voted for the conflict if he had known the intelligence that President Bush gave the American people was inaccurate.

Citing the hundreds of billions of dollars spent and the nearly 3,000 American deaths, Smith said: "I for one am at the end of my rope when it comes to supporting a policy that has our soldiers patrolling the same streets in the same way, being blown up by the same bombs day after day. That is absurd. It may even be criminal. I cannot support that anymore."

Smith added: "So either we clear and hold and build, or let's go home."

Kissinger: Iraq Military Win Impossible

"If you mean by 'military victory' an Iraqi government that can be established and whose writ runs across the whole country, that gets the civil war under control and sectarian violence under control in a time period that the political processes of the democracies will support, I don't believe that is possible," Henry Kissinger told the British Broadcasting Corp.

The Doctrine of Asymmetrical War

The War Nerd provides six myths of modern warfare.

Here are the main counterpoints to understand:

1. Most wars are asymmetrical / irregular.

2. In these wars, the guerrillas / irregulars / insurgents do NOT aim for military victory.

3. You can NOT defeat these groups by killing lots of their members.

In fact, they want you to do that.

4. Hi-tech weaponry is mostly useless in these wars.

5. "Hearts and Minds," meaning propaganda and morale, are more important than military superiority.

6. Most people are not rational, they are TRIBAL: "my gang yay, your gang boo!" It really is that simple. The rest is cosmetics.

Colbert Calls It Quits

Mr. Colbert gets mad over the recent election results and says good bye to America.

Honest Leadership and Open Government?

Impossible. But, there may be a slight hope:

In a little-publicized statement, Rep. Nancy Pelosi (D-Calif.), the House Democratic leader, has promised to change the chamber's rules to reflect the provisions of her not-so-modestly-named Honest Leadership and Open Government Act of 2006 [H.R. 4682]. The months-old measure would, among other things, prohibit House members from accepting gifts and travel from lobbyists or from organizations that employ lobbyists.

Paulson re-activates secretive support team to prevent markets meltdown

Monday view by Ambrose Evans-Pritchard: Paulson re-activates secretive support team to prevent markets meltdown Judging by their body language, the US authorities believe the roaring bull market this autumn is just a suckers' rally before the inevitable storm hits.

Hank Paulson, the market-wise Treasury Secretary who built a $700m fortune at Goldman Sachs, is re-activating the 'plunge protection team' (PPT), a shadowy body with powers to support stock index, currency, and credit futures in a crash.

Otherwise known as the working group on financial markets, it was created by Ronald Reagan to prevent a repeat of the Wall Street meltdown in October 1987.

Mr Paulson says the group had been allowed to languish over the boom years. Henceforth, it will have a command centre at the US Treasury that will track global markets and serve as an operations base in the next crisis.

The top brass will meet every six weeks, combining the heads of Treasury, Federal Reserve, Securities and Exchange Commission (SEC), and key exchanges.

Mr Paulson has asked the team to examine "systemic risk posed by hedge funds and derivatives, and the government's ability to respond to a financial crisis".

"We need to be vigilant and make sure we are thinking through all of the various risks and that we are being very careful here. Do we have enough liquidity in the system?" he said, fretting about the secrecy of the world's 8,000 unregulated hedge funds with $1.3trillion at their disposal.

The PPT was once the stuff of dark legends, its existence long denied. But ex-White House strategist George Stephanopoulos admits openly that it was used to support the markets in the Russia/LTCM crisis under Bill Clinton, and almost certainly again after the 9/11 terrorist attacks.

"They have an informal agreement among major banks to come in and start to buy stock if there appears to be a problem," he said.

"In 1998, there was the Long Term Capital crisis, a global currency crisis. At the guidance of the Fed, all of the banks got together and propped up the currency markets. And they have plans in place to consider that if the stock markets start to fall," he said.

The only question is whether it uses taxpayer money to bail out investors directly, or merely co-ordinates action by Wall Street banks as in 1929. The level of moral hazard is subtly different.

Mr Paulson is not the only one preparing for trouble. Days earlier, the SEC said it aims to slash margin requirements for institutions and hedge funds on stocks, options, and futures to as low as 15pc, down from a range of 25pc to 50pc.

The ostensible reason is to lure back hedge funds from London, but it is odd policy to license extra leverage just as the Dow hits an all-time high and the VIX 'fear' index nears an all-time low – signalling a worrying level of risk appetite. The normal practice across the world is to tighten margins to cool over-heated asset markets.

The move is so odd that conspiracy buffs are already accusing SEC chief Chris Cox of juicing the markets to help stop the implosion of the Bush presidency...

Neocon Mea Culpa

As Iraq slips further into chaos, the war's neoconservative boosters have turned sharply on the Bush administration, charging that their grand designs have been undermined by White House incompetence. In a series of exclusive interviews, Richard Perle, Kenneth Adelman, David Frum, and others play the blame game with shocking frankness. Target No. 1: the president himself.

The Architects of War: Where Are They Now?

President Bush has not fired any of the architects of the Iraq war. In fact, a review of the key planners of the conflict reveals that they have been rewarded – not blamed – for their incompetence.

UK General Dannatt: "Our Presence in Iraq Exacerbates" the "Difficulties We Are Facing Around the World."

The head of the Army is calling for British troops to withdraw from Iraq "soon" or risk catastophic consequences for both Iraq and British society.

In a devastating broadside at Tony Blair's foreign policy, General Sir Richard Dannatt stated explicitly that the continuing presence of British troops "exacerbates the security problems" in Iraq.

Slate Reads Woodward's "State of Denial" So You Don't Have To

Slate's reading guide fast-forwards you straight to the good parts.

Here is a quick look:

Poppy Engaged

Page 1: Though the Bush family maintains that father and son never talk about issues more substantive than fishing, the book starts with the first President Bush calling his old friend Prince Bandar bin Sultan, the longtime Saudi Arabian ambassador to the United States, in the fall of 1997. Bush's son, the governor of Texas, is thinking about running for president and he needs a tutor. Gov. Bush later tells Bandar: "I don't have the foggiest idea about what I think about international, foreign policy."

Prince Bandar, Superhero

Page 76: Bandar could also play rough. The Saudi royal family threatened to cut off diplomatic ties to Bush because they believed that he was too close to Israel and its leader Ariel Sharon. "The Crown Prince will not communicate in any form, type or shape with you," Bandar told Bush. "And Saudi Arabia will take all its political, economic and security decisions based on how it sees its own interest in the region … because it is obvious that the United States has taken a strategic decision adopting Sharon's policy."

Page 288: Bandar helps out in the end. After Bush agrees to tone down rhetoric about the need for reform in Saudi Arabia, he asks if Saudi Arabia can help purchase helicopters for Gen. Pervez Musharraf in Pakistan. Bandar says yes.

Rumsfeld Is Really a Jerk

Page 19: Soon after Rumsfeld takes office, Hugh Shelton, the chairman of the Joint Chiefs of Staff, receives a letter from a retired Navy captain who worked at the Pentagon during Rumsfeld's first tour. "The captain claimed that Rumsfeld could not be trusted, [and] that he despised the uniformed military."

Page 316: In an assessment of post-Iraq planning and execution problems, Rumsfeld's friend compares his "style of operation" to the "Haldeman model," referring to Nixon's White House chief of staff. That's like comparing a woman's skills as a mother to the Joan Crawford model.

Former President Bush and Barbara Bush Worry About George

Page 80: After the 9/11 attacks, the 41^st president called Bandar and asked him to check up on his son. "He's having a bad time, help him out."

Pages 114-15: At the Alfalfa Club dinner in Washington, Barbara Bush reached out to an old family friend, David Boren, the Democratic former senator from Oklahoma. Was an invasion of Iraq a bad idea? Boren said yes. The former first lady reported that her husband was losing sleep over the idea but wouldn't bring it up with his son.

Condi Rice Before 9/11

Pages 49–52: On July 10, 2001, George Tenet and his top terrorism expert, Cofer Black, visited Condi Rice and warned that a major terrorist attack was coming. "It's my sixth sense, but I feel it coming," said Tenet. "This could be the big one." They felt like the then-national security adviser blew them off.

Page 79: "Rice could have gotten through to Bush on the bin Laden threat, but she just didn't get there in time, Tenet thought. He felt he had done his job, laid it on the line very directly about the threat, but Rice had not moved quickly. He felt she wasn't organized and didn't push people as he tried to do at the CIA." Rice has said the July meeting was not as dramatic as Tenet remembers. Woodward quotes Cofer Black: "The only thing we didn't do was pull the trigger to the gun we were holding to her head."

Iraq Plans Baked in the Cake

Page 89: Four months before the bombing started in Iraq, while Bush was still talking about a diplomatic solution to Iraq, George Tenet told one of his CIA colleagues: "You bet your ass. It's not a matter of if. It's a matter of when. This president is going to war. Make plans. We're going." (He did not use any basketball metaphors.)

If They'd Only Listened to George Tenet

Page 90: Tenet told CIA veteran John Brennan that in his gut, he didn't think invading Iraq was the right thing to do. Bush and the others were just really naive, thinking they would just be able to go into Iraq and overturn the government. "This is a mistake," Tenet finally said.

If They'd Only Listened to Col. Steve Peterson

Pages 121-22: During the planning for the Iraq war, Army officer Peterson questioned the conventional wisdom about how Saddam might react. A logical strategy for Saddam might be to run and hide and use the Baathist cell structure to develop an insurgent army that would have weapons and explosives for a prolonged fight until the Americans grew exhausted and lost their political will.

Bush the Clueless

Page 237: David Kay, the chief U.S. weapons inspector, visited the Oval Office to brief the president about the lack of WMD and was "shocked at Bush's lack of inquisitiveness."

Page 221: Jay Garner visited the Oval Office after he began his tour leading the post-conflict reconstruction in Iraq. The president cracked jokes about ass-kissing in Washington to show he knew how the game was played but never applied his insight to the topic of how things were going in Iraq.

Page 260: By October 2003, Woodward writes: "There is little or no evidence that [Bush] engaged in much substantive policy debate at this point in the war cabinet meetings. His role was to express confidence and enthusiasm."

Page 266: In an NSC meeting in October 2003, Bush and Rumsfeld resisted using the word "insurgency" to explain the resistance in Iraq. Rumsfeld got highly semantic with the CIA briefer who used the term. Bush continued to cheerlead and warned that he didn't "want to read in The New York Times that we are facing an insurgency … I don't think we're there yet." That shocked Deputy Secretary of State Armitage, who Woodward explains thought "the giant problem now was the president's state of mind. … Bush was in denial about Iraq."

The Most Devastating One-Paragraph Account of Bush Team Dynamics

Page 241: Robert D. Blackwill, a longtime diplomat brought in to the National Security Council in August 2003, describes one of the first NSC meetings he attended: "Blackwill saw Rice try to intervene and get nowhere. So critical comments and questions—especially about military strategy—never surfaced. Blackwill felt sympathy for Rice. This young woman, he thought, had to deal with three of the titans of national security—Cheney, Rumsfeld and Powell—all of whom had decades of experience, cachet and strong views. The image locked in Blackwill's mind of Rice, dutiful, informed and polite, at one end of the table, and the inexperienced president at the other, legs dancing, while the bulls staked out their ground, almost snorting defiantly, hoofs pawing the table, daring a challenge that never came."

Powell and Armitage Muse About Bush, Cheney, and Rumsfeld

Page 143: In the run-up to the Iraq war, Powell notes that Bush, Cheney, Rumsfeld, and Rice have never seen combat. "You know," Powell says, "the problem with these guys is they've never been in a bar fight."

Pages 325-27: Powell and Armitage talk about the benefit of self-doubt. "If you didn't have it, Powell said, if you didn't get up in the morning wondering if you're doing a good enough job or if you can still hit the long ball you're not worth much." Armitage chimes in: "Not worth a shit."

Kissinger Secretly Advises Bush

Pages 406-09: Not only did the former Nixon secretary of state advise Bush and Cheney, he also offered Bush speechwriter Mike Gerson his famous "salted peanut memo," written during the first year of the Nixon administration. It claimed that withdrawal of troops from Vietnam would be like "salted peanuts to the American public; the more U.S. troops come home, the more will be demanded."

Just How Ugly Is It in Iraq?

Page 471: Charts and graphs from a Joint Chiefs of Staff intelligence assessment from May 2006 paint a grim picture of the ground truth in Iraq. Terrorist attacks were increasing, and the insurgents were gaining even after the Iraqi elections, the formation of a government, and a constitution. "Insurgents and terrorists retain the resources and capabilities to sustain and even increase current level of violence through the next year," says the secret Pentagon assessment sent to the White House. The forecast of a more violent 2007 in Iraq contradicted the repeated optimistic statements of President Bush, including one, two days earlier, when he said the country was at a "turning point" that history would mark as the time "the forces of terror began their long retreat."

Ban The Book About Burning Books

Alton Verm filed a "Request for Reconsideration of Instructional Materials" Thursday with the district regarding "Fahrenheit 451," written by Ray Bradbury and published in 1953. He wants the district to remove the book from the curriculum.

"It's just all kinds of filth," said Alton Verm, adding that he had not read "Fahrenheit 451." "The words don't need to be brought out in class. I want to get the book taken out of the class."

"Fahrenheit 451" is a science fiction piece that poses a warning to society about the preservation and passing on of knowledge as well as asks the question about whether the government should do the thinking for the people, Chris Hines, CISD assistant superintendent for secondary education stated in an e-mail to The Courier. Other themes include conformity vs. individuality, freedom of speech and the consequences of losing it, the importance of remembering and understanding history and technology as help to humans and as hindrances to humans, Hines stated in the e-mail.

The Death Knell for the Bush Iraq Policy?

Although various people inside the intelligence agencies have known this since even before the US even invaded Iraq, a "declassified government intelligence report says the war in Iraq has become a 'cause celebre' for Islamic extremists, breeding deep resentment of the U.S. that is likely to get worse before it gets better."

Update: 3-pages of the 9-pages of key judgments included in the 30-page National Intelligence Estimate, compiled from information collected by 16 spy agencies and assessed by top security analysts, was released by the administration:

Key Judgments

United States-led counterterrorism efforts have seriously damaged the leadership of al-Qaida and disrupted its operations; however, we judge that al-Qaida will continue to pose the greatest threat to the Homeland and US interests abroad by a single terrorist organization. We also assess that the global jihadist movement--which includes al-Qaida, affiliated and independent terrorist groups, and emerging networks and cells--is spreading and adapting to counterterrorism efforts.

* Although we cannot measure the extent of the spread with precision, a large body of all-source reporting indicates that activists identifying themselves as jihadists, although a small percentage of Muslims, are increasing in both number and geographic dispersion.

* If this trend continues, threats to US interests at home and abroad will become more diverse, leading to increasing attacks worldwide.

* Greater pluralism and more responsive political systems in Muslim majority nations would alleviate some of the grievances jihadists exploit. Over time, such progress, together with sustained, multifaceted programs targeting the vulnerabilities of the jihadist movement and continued pressure on al-Qaida, could erode support for the jihadists.

We assess that the global jihadist movement is decentralized, lacks a coherent global strategy, and is becoming more diffuse. New jihadist networks and cells, with anti-American agendas, are increasingly likely to emerge. The confluence of shared purpose and dispersed actors will make it harder to find and undermine jihadist groups.

* We assess that the operational threat from self-radicalized cells will grow in importance to US counterterrorism efforts, particularly abroad but also in the Homeland.

* The jihadists regard Europe as an important venue for attacking Western interests.

Extremist networks inside the extensive Muslim diasporas in Europe facilitate recruitment and staging for urban attacks, as illustrated by the 2004 Madrid and 2005 London bombings.

We assess that the Iraq jihad is shaping a new generation of terrorist leaders and operatives; perceived jihadist success there would inspire more fighters to continue the struggle elsewhere.

* The Iraq conflict has become the 'cause celebre' for jihadists, breeding a deep resentment of US involvement in the Muslim world and cultivating supporters for the global jihadist movement. Should jihadists leaving Iraq perceive themselves, and be perceived, to have failed, we judge fewer fighters will be inspired to carry on the fight.

We assess that the underlying factors fueling the spread of the movement outweigh its vulnerabilities and are likely to do so for the duration of the timeframe of this Estimate.

* Four underlying factors are fueling the spread of the jihadist movement: (1)Entrenched grievances, such as corruption, injustice, and fear of Western domination, leading to anger, humiliation, and a sense of powerlessness; (2) the Iraq 'jihad' (3) the slow pace of real and sustained economic, social, and political reforms in many Muslim majority nations; and (4) pervasive anti-US sentiment among most Muslims--all of which jihadists exploit.

[A few things they neglected to mention:

(5) U.S. occupation of Iraq and 15 years of sanctions since the first Iraq war.
(6) U.S. support of corrupt regimes in the Middle East.
(7) Military aid and support to Israel leading to, most recently, the invasion of Lebanon and the enduring poor conditions in the Palestinian territories.]

Concomitant vulnerabilities in the jihadist movement have emerged that, if fully exposed and exploited, could begin to slow the spread of the movement. They include dependence on the continuation of Muslim-related conflicts, the limited appeal of the jihadists' radical ideology, the emergence of respected voices of moderation, and criticism of the violent tactics employed against mostly Muslim citizens.

* The jihadists' greatest vulnerability is that their ultimate political solution--an ultra-conservative interpretation of sharia-based governance spanning the Muslim world--is unpopular with the vast majority of Muslims. Exposing the religious and political straitjacket that is implied by the jihadists' propaganda would help to divide them from the audiences they seek to persuade.

* Recent condemnations of violence and extremist religious interpretations by a few notable Muslim clerics signal a trend that could facilitate the growth of a constructive alternative to jihadist ideology: peaceful political activism. This also could lead to the consistent and dynamic participation of broader Muslim communities in rejecting violence, reducing the ability of radicals to capitalize on passive community support. In this way, the Muslim mainstream emerges as the most powerful weapon in the war on terror.

* Countering the spread of the jihadist movement will require coordinated multilateral efforts that go well beyond operations to capture or kill terrorist leaders.

If democratic reform efforts in Muslim majority nations progress over the next five years, political participation probably would drive a wedge between intransigent extremists and groups willing to use the political process to achieve their local objectives. Nonetheless, attendant reforms and potentially destabilizing transitions will create new opportunities for jihadists to exploit.

Al-Qa'ida, now merged with Abu Musab al-Zarqawi's network, is exploiting the situation in Iraq to attract new recruits and donors and to maintain its leadership role.

* The loss of key leaders, particularly Usama Bin Ladin, Ayman al-Zawahiri, and al-Zarqawi, in rapid succession, probably would cause the group to fracture into smaller groups. Although like-minded individuals would endeavor to carry on the mission, the loss of these key leaders would exacerbate strains and disagreements.

We assess that the resulting splinter groups would, at least for a time, pose a less serious threat to US interests than does al-Qa'ida.

* Should al-Zarqawi continue to evade capture and scale back attacks against Muslims, we assess he could broaden his popular appeal and present a global threat.

* The increased role of Iraqis in managing the operations of al-Qa'ida in Iraq might lead veteran foreign jihadists to focus their efforts on external operations.

Other affiliated Sunni extremist organizations, such as Jemaah Islamiya, Ansar al- Sunnah, and several North African groups, unless countered, are likely to expand their reach and become more capable of multiple and/or mass-casualty attacks outside their traditional areas of operation.

* We assess that such groups pose less of a danger to the Homeland than does al-Qa'ida but will pose varying degrees of threat to our allies and to US interests abroad. The focus of their attacks is likely to ebb and flow between local regime targets and regional or global ones.

We judge that most jihadist groups--both well-known and newly formed--will use improvised explosive devices and suicide attacks focused primarily on soft targets to implement their asymmetric warfare strategy, and that they will attempt to conduct sustained terrorist attacks in urban environments. Fighters with experience in Iraq are a potential source of leadership for jihadists pursuing these tactics.

* CBRN capabilities will continue to be sought by jihadist groups. While Iran, and to a lesser extent Syria, remain the most active state sponsors of terrorism, many other states will be unable to prevent territory or resources from being exploited by terrorists.

Anti-US and anti-globalization sentiment is on the rise and fueling other radical ideologies. This could prompt some leftist, nationalist, or separatist groups to adopt terrorist methods to attack US interests. The radicalization process is occurring more quickly, more widely, and more anonymously in the Internet age, raising the likelihood of surprise attacks by unknown groups whose members and supporters may be difficult to pinpoint.

* We judge that groups of all stripes will increasingly use the Internet to communicate, propagandize, recruit, train, and obtain logistical and financial support.

What is wrong with the media today?

For the answer, go to Rising-Hegemon and look at Newsweek's cover this week by geographical region.

And the week before.

Softwoods White House Slush Fund Via Canada?

Softwood deal pours $450 million straight into White House, says U.S. lawyer.

So, here we have the government of Canada requiring that Canadian private parties sign over $450 million to an escrow fund slated to be conveyed to the White House. The agreement does not mention Congress, and the Bush administration says that Congress will not be involved in any way with this agreement. The government of Canada thus is making a gift of $450 million to be spent by the president.

The Best Deal Ever Made

In 1976, brothers Ozzie and Dan Silna, co-owners of the long-forgotten ABA team, the Spirits of St. Louis, negotiated a deal that cleared the way for the ABA to merge with the NBA. This deal has paid the Silnas about $168 million and it continues to pay off without ever having to field a team or spend money on stadium leases for the past thirty years.

Part of the Silnas' deal called for them to receive one-seventh of the annual TV revenue from each of the four ABA teams entering the NBA. The deal turned out to be so lucrative that several NBA teams have tried to break it, without success.

"We honor the deal," said Donnie Walsh, the Indiana Pacers' chief executive. "I can't say we haven't met and tried to settle it. But it's the greatest deal known to man. What more can you say?"

The key line in the Silnas' TV contract that makes NBA executives cringe reads: "The right to receive such revenues shall continue for as long as the NBA or its successors continues in its existence."

They expect to earn upward of $24 million annually due to the latest TV contract for NBA games.

Read the whole story at the LA Times.

"Why Liberty Will Win"

Murray Rothbard answered the question of how he avoided succumbing to pessimism in "For a New Liberty" in the section titled "Why Liberty Will Win":

"... libertarianism will win eventually because it and only it is compatible with the nature of man and of the world. Only liberty can achieve man's prosperity, fulfillment, and happiness. In short, libertarianism will win because it is true, because it is the correct policy for mankind, and truth will eventually out.

"The clock cannot be turned back to a preindustrial age. Not only would the masses not permit such a drastic reversal of their expectations for a rising standard of living, but return to an agrarian world would mean the starvation and death of the great bulk of the current population. We are stuck with the industrial age, whether we like it or not.

"But if that is true, then the cause of liberty is secured. For economic science has shown, as we have partially demonstrated in this book, that only freedom and a free market can run an industrial economy. In short, while a free economy and a free society would be desirable and just in a preindustrial world, in an industrial world it is also a vital necessity. For, as Ludwig von Mises and other economists have shown, in an industrial economy statism simply does not work. Hence, given a universal commitment to an industrial world, it will eventually—and a much sooner "eventually" than the simple emergence of truth—become clear that the world will have to adopt freedom and the free market as the requisite for industry to survive and flourish."

Download version or podcast, chapter by chapter, available here.

In 1851, Herbert Spencer Wrote:

Morality knows nothing of geographical boundaries, or distinctions of race. You may put men on opposite sides of a river or a chain of mountains; may else part them by a tract of salt water; may give them, if you like, distinct languages; and may even colour their skins differently; but you cannot change their fundamental relationships. Originating as these do in the facts of man’s constitution, they are unalterable by the accidents of external condition. The moral law is cosmopolite – is no respecter of nationalities: and between men who are the antipodes of each other, either in locality or anything else, there must still exist the same balance of rights as though they were next-door neighbours in all things.

- Herbert Spencer, Social Statics, Part III.

My thanks to Roderick Long at praxeology.net.

Who Backs An Immediate Ceasefire?

The answer at The Belfast Telegraph.

The Instrument Of The Very Influence To Be Avoided

"Against the insidious wiles of foreign influence (I conjure you to believe me, fellow-citizens) the jealousy of a free people ought to be constantly awake, since history and experience prove that foreign influence is one of the most baneful foes of republican government. But that jealousy, to be useful, must be impartial, else it becomes the instrument of the very influence to be avoided, instead of a defense against it. Excessive partiality for one foreign nation and excessive dislike of another cause those whom they actuate to see danger only on one side, and serve to veil and even second the arts of influence on the other. Real patriots who may resist the intrigues of the favorite are liable to become suspected and odious, while its tools and dupes usurp the applause and confidence of the people to surrender their interests."

- Farewell Address by George Washington (1796)

An Open Letter to Sen. Sununu

Dear Sen. Sununu,

I am very concerned with the developments in the middle east. Israel's attacks on innocent civilians and civilian infrastructure in Gaza and Lebanon is very disconcerting. The Daily Star is reporting IDF air strikes against privately owned factories throughout the country.

"The production facilities of at least five companies in key industrial sectors - including the country's largest dairy farm, Liban Lait; a paper mill; a packaging firm and a pharmaceutical plant - have been disabled or completely destroyed."

For the U.S. to sit back and watch this devastation is absolutely unacceptable. These actions are a violation of U.S. law, specifically the U.S. Arms Export Control Act and the U.S. Foreign Assistance Act. The U.S. Arms Export Control Act restricts the use of U.S. weapons to legitimate self-defense and internal policing; U.S. weapons cannot be used to attack civilians in offensive operations. The U.S. Foreign Assistance Act prohibits U.S. aid of any kind to a country with a pattern of gross human rights violations.

The attacks on civilians and civilian infrastructure in Gaza and Lebanon are examples of collective punishment, which are prohibited under the Geneva Conventions.

It is incredible to see IDF bombs landing in the Christian villages and towns and suburbs like Byblos, the port in east Beirut, Zahle, and Hadath.

These attacks have gone above and beyond targeting hizbullah and place the whole region and world in jeopardy.

Israeli warplanes pounded an army barracks east of Beirut in an overnight raid in which 11 troops, including four officers, were killed and 40 injured.

That wasn't a Hizbullah barracks. That was the regular Lebanese army, the one the Israeli's say they would trust to patrol the Lebanese border with Israel, and which they wish would take on Hizbullah. So why are they bombing the Lebanese Army?

It is very important to monitor not only what leaders say, but also what they are actually doing.

I look to you with your knowledge of the region to provide leadership as it seems the president is unwilling to do so. Please do all in your ability to not let this conflict escalate out of control, but bring about a ceasefire and bring cooler heads to the table.

Israel must allow, at the very least, humanitarian relief organizations safe passage while thousands of civilians are trapped in southern Lebanon. A cessation of hostilities in civilian and private infrastructure must be immediate. A ceasefire in all regions must be accomplished soon thereafter and the leaders of both parties must be willing to negotiate for a long-term peace.

We must also accept our responsibility as the bomb casings that the IDF leave behind say "Made in the USA". Congress is directly to blame for supplying Israel with $3 billion dollars in aid annually, and for strongly backing Israeli military tactics.

Do we really want little innocent Israeli girls writing messages on bombs being readied to drop as was photographed recently. Is this what we are teaching children today? Is that America's values? Is this the kind of world we want to bring our children up in and have them continue?

We must be evenhanded, but lawbreakers must be punished on both sides of the conflict or negotiations will never occur and peace will never prevail.

Please view the pictures of the devastation that are available on the internet, but are missing from television here in the U.S. and in Israel. I will not link to them as one must have a very strong stomach.* Suffice it to say they are horrifying. We must stare in the face exactly what our tax dollars are making possible in the middle east. The bombings are not serving any purpose, but to inflame, destroy the innocent, and set Lebanon back another 20 years.

Stability or chaos is the choice every American can make, but some have more influence than others.

I hope we all make the right choice.

*For those interested, a sample is available here, here, here, and here.

Do We Want More Power? (Interesting Juxtaposition)

Tony Snow during today's White House press briefing:

QUESTION: Is this [Supreme Court decision] a setback in terms of the broader goal of this administration to expand executive authority?

SNOW: I don’t think it’s ever been the goal of the administration to expand executive authority. In a time of war, the president has tried to act in a way that meets the needs and obligations of a commander in chief against a dispersed and highly unique kind of enemy.

But we don’t have expand executive power sessions. So nobody thinks in terms of, How do we expand executive power?

Cheney on 12/20/05:

I believe in a strong, robust executive authority. And I think the world we live in demands it…I think you’re right, probably the end of the next administration, you had the nadir of the modern presidency in terms of authority and legitimacy, then a number of limitations that were imposed in the aftermath of Vietnam and Watergate. But I do think that to some extent now, we’ve been able to restore the legitimate authority of the presidency.

Summers Exit Costs Harvard $115 million

Oracle Corp. CEO Larry Ellison has decided not to give Harvard University a planned gift of $115 million, a company spokesman said Tuesday.

Ellison canceled the gift because Lawrence H. Summers stepped down as Harvard's president this month, Oracle spokesman Bob Wynne said. Summers announced his resignation in February, after being embroiled in controversy throughout 2005. Wynne said Ellison began to reconsider his donation when it appeared that Summers would step down.

"It was really Larry Summers' brainchild and once it looked like Larry Summers was leaving, Larry Ellison reconsidered," Wynne said. "It was Larry Ellison and Larry Summers that had initially come up with this notion."

Soccer: Capitalism or Nihilism?

Capitalist Soccer vs. Socialist Football

or,

Nil, Nil: The Nihilism of Soccer

I think the facts of the case rest squarely with Sergei Boukhonine at LRC, and the ignorant Weekly Standard folks are just embarrassing themselves once again.

Q&A with Dahr Jamail on the Coverage of the Iraq War

We are now heating up for mid-term elections that will be taking place in November. A number of people are using this as their platform to aspire to become the next Commander-in-Chief. Hillary Clinton has stated that she is disappointed with Bush's handling of the war. But yet she is still proud to support the war, proud that she voted for it, and she stated that she is also against a timeline for pulling out. Are we beginning to see the formation of a new South Korea being set up in Iraq?

Well, we already have it. We can bypass the word "beginning" because, as we speak, we have a U.S. so-called "boot city" being constructed. I say "so-called" because it is an embassy that's going to house 8,000 government employees. It's an embassy of 21 buildings with a school there. So what kind of embassy would be built for that many people with a first-run movie theater; the largest swimming pool in the country; a vehicle maintenance garage; and when it's complete, it's going to be two-thirds the size of the National Mall in Washington D.C.

That's just the embassy being constructed in Baghdad. Then we have a bare minimum of six of these permanent bases, on up to as many as 14 that are absolutely massive. They're larger than, some of them much larger than, camp Bondsteele, which is in Kosovo, which prior to Iraq was the largest U.S. military installation not on U.S. soil. And the bases in Baghdad are much larger than that.

You have a base like Camp Anaconda for example, in Ballad, just outside of Baghdad, a little bit to the northeast of Baghdad. And this one base by itself has 20,000 soldiers, fewer than 1,000 of whom never leave the base whatsoever. It has 250 of its own aircraft. It has its own first-run movie theaters, swimming pools, a Hertz Rental Car Agency, Popeye's Fried Chicken, a 24-hour Burger King, a Subway sandwich shop, a Starbuck's Coffee outlet. So, this is the type of base being built in Iraq. They are being constructed by Halliburton, Dick Cheney's old company, and this base in particular has so many Kellogg, Brown, and Root employees that they have they're own little apartment area there called "KBR Land."

So that's just one base to give you an idea that the situation is permanent. You are correct to say that rather than troops being withdrawn from Iraq we actually, less than two weeks ago, had 1,500 more troops sent into Iraq from Kuwait. So the troops are going in the wrong direction. I think they would like to see a drawdown in the number of troops down to something like we have in Afghanistan now, but that is a very big number if we talk about drawing down troops vs. a total withdrawal.

This administration -- and I think any Democrat of the ilk of Hillary Clinton or Joe Lieberman or someone like that -- they have absolutely no plans whatsoever of a total withdrawal from Iraq.

Watch Us Spin The News

CNN reports on a telephone poll of 1,001 adult Americans that was conducted June 1-6 by Harris Interactive with a sampling error of plus or minus 3 percentage points.

The headline CNN chose was:

Poll: Clinton gets high 'no' vote for 2008

47 percent of respondents said they would "definitely vote against" Hillary Clinton.

But, these headlines would've fit equally as well:

Poll: Jeb Bush gets highest 'no' vote for 2008

63 percent of respondents said they would "definitely vote against" Jeb Bush (higher than Clinton).

Poll: Al Gore gets high 'no' vote for 2008

48 percent of respondents said they would "definitely vote against" Al Gore (higher than Clinton).

Poll: Kerry gets high 'no' vote for 2008

47 percent of respondents said they would "definitely vote against" John Kerry (equal to Clinton).

On the other side:

Poll: Clinton gets highest 'yes' vote for 2008

22 percent said they would "definitely vote for" Hillary Clinton.

Poll: Giuliani gets high 'yes' vote for 2008

19 percent said they would "definitely vote for" Rudolph Giuliani.

I don't endorse any of these outcomes, but it just goes to show how easy it is to manipulate the results of any poll with a simple headline.

Justice O'Connor, We Miss You

The Supreme Court made it easier Thursday for police to barge into homes and seize evidence without knocking or waiting.

The court, on a 5-4 vote, said judges cannot throw out evidence collected by police who have search warrants but do not properly announce their arrival.

It was a significant rollback of earlier rulings protective of homeowners. Dissenting justices predicted that police will now feel free to ignore previous court rulings requiring officers with search warrants to knock and announce themselves to avoid running afoul of the Constitution's Fourth Amendment ban on unreasonable searches.

Sandra Day O'Connor was still on the bench in January when the case was first argued. She asked: "Is there no policy of protecting the home owner a little bit and the sanctity of the home from this immediate entry?"

What Ever Happened To That $9 Billion?

Follow the Money - If You Can... (via antiwar.com)

Justin Raimondo reports:

Remember that $9 billion that somehow got “lost” in Iraq? Boxes of cash were shipped from the Federal Reserve to Iraq, where a former Coalition Provisional Authority official testified that our guys were playing football with blocks of $100 bills and an investigator described the atmosphere as “a free-fraud zone.” The U.S. government was supposed to follow up on that somewhat dismaying discovery with an audit — but that has now been nixed by President George W. Bush, who recently issued a presidential “finding” that heads off an investigation at the pass:

“Title III of the Act creates an Inspector General (IG) of the CPA. Title III shall be construed in a manner consistent with the President’s constitutional authorities to conduct the Nation’s foreign affairs, to supervise the unitary executive branch, and as Commander in Chief of the Armed Forces. The CPA IG shall refrain from initiating, carrying out, or completing an audit or investigation, or from issuing a subpoena, which requires access to sensitive operation plans, intelligence matters, counterintelligence matters, ongoing criminal investiga-tions by other administrative units of the Department of Defense related to national security, or other matters the disclosure of which would constitute a serious threat to national security.”

A Day in the Life of the DPRK

Web designer Artemy Lebedev (of Optimus Keyboard fame) took a trip to the Democratic People's Republic of Korea and came back with a surplus of surprising photos. Many of them forbidden by authorities (don't miss page 2). It is a photo journal full of evidence of the depravity of communism, dictatorship, and the devastation due to the lack of free market policies. Here is the Russian text.

Laurel and Hardy?

The photo above of White House Press Secretary Tony Snow and Communications Director Daniel Bartlett riding in a military helicopter for their six-minute ride from the Baghdad airport to the U.S. embassy in the Greenzone is the photo that most people saw. But, maybe the photo below gives a more accurate portrayal of their emotional state.

Support The Mises Institute While You Search The Internet

GoodSearch.com will send a percentage of their ad revenue to the Mises Institute every time you use their search engine. You don't have to click on ads. You don't have to pay anything. Just select the Mises Institute and search. You can even track the amount that has been raised.

They calculate that 10,000 supporters, averaging just two searches a day, will raise $73,000 in a year's time.



A Firefox plug-in is available (as well as an IE toolbar).

So search in good faith that it is going to a good cause. What do you have to lose?

How Could We Ever Live Without These Taxes?

The AfRR has a great list of the taxes that have piled up over the last one hundred years:

Federal Income Tax
Federal Unemployment Tax
Workers Compensation Tax
Social Security Tax
Medicare Tax
State Income Tax
State Unemployment Tax
School Tax

Sales Taxes (State and Local)

Real Estate Tax
Property Tax
Building Permit Tax
Well Permit Tax
Septic Permit Tax
Utility Taxes
Severence Tax

Corporate Income Tax
Accounts Receivable Tax
Privilege Tax
Inventory Tax
Food License Tax
Fuel permit tax

Inheritance Tax
Interest Expense
Capital Gains Tax
IRS Penalties
IRS Interest Charges

Liquor Tax
Luxury Taxes

Marriage License Tax
Service Charge Taxes

Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax

Vehicle Sales Tax
Vehicle License Registration Tax
Recreational Vehicle Tax
Trailer registration tax
Road Toll Booth Taxes
Toll Bridge Taxes
Toll Tunnel Taxes
Watercraft registration Tax

Gasoline Tax

Road Usage Taxes (Truckers)

Dog License Tax
Fishing License Tax
Hunting License Tax
Cigarette Tax

Not one of these taxes existed when our nation was the most prosperous on earth. So what happened?

The Absence of Free Speech in Academia

No get-out-of-jail-free cards or promises of remaining friends for academics when discussing a hot political topic...

A Hot Paper Muzzles Harvard

By Eve Fairbanks

Controversial "Jewish lobby" paper raises nary a peep on the cowed campus. By Eve Fairbanks

Did you think there was a controversy in academia over "The Israel Lobby and U.S. Foreign Policy," the paper by Stephen Walt and John Mearsheimer contending that a shadowy "Israel Lobby" — including everyone from the New York Times and Hillary Clinton to Pat Robertson and Paul Wolfowitz — has seized control of American foreign affairs? I did too, but let me tell you: We were wrong.

When professors Walt and Mearsheimer (of Harvard and the University of Chicago, respectively) went public with their paper in the London Review of Books on March 23, it seemed the whole world started screaming. From columnists Richard Cohen and Max Boot to historian Tony Judt and Democratic Rep. Eliot Engel of New York, public figures battled in the pages of the major papers. Accusations of anti-Semitism and divided loyalties flew. The magazine I work for published three articles on the paper in a single week.

Of course, if the paper caused such uproar in the public sphere, you'd think academia (and particularly the John F. Kennedy School of Government at Harvard, where Walt is the academic dean) would be, as the Harvard Crimson put it, the ultimate "field of battle." And as far as conspiratorial rumors and unexplained reversals go, it has been.

The Kennedy School pulled its name off the article, nervous to be associated with the argument that an expansive lobby is undermining American interests on behalf of the Jewish state. Bob Belfer, the fabulously wealthy (and Jewish) oil baron who endowed Walt's chair at the Kennedy School, was hopping mad. Angry donors reportedly threatened to retract gifts. Whispers began that faculty relationships were fraying, and gossip circulated that campus forces were plotting to oust Walt from panels and boards. Harvard had to deny that his decision to step down as dean had anything to do with the paper.

But something else happened at Harvard, something strange. Instead of a roiling debate, most professors not only agreed to disagree but agreed to pretend publicly that there was no disagreement at all. At Harvard and other schools, the Mearsheimer-Walt paper proved simply too hot to handle — and it revealed an academia deeply split yet lamentably afraid to engage itself on one of the hottest political issues of our time. Call it the academic Cold War: distrustful factions rendered timid by the prospect of mutually assured career destruction.

A couple of weeks ago, keeping in mind Henry Kissinger's famous aphorism that academic quarrels are so vicious because the stakes are so small, I began calling around Harvard, expecting to find a major fight flourishing. Spirited exchanges! A divided faculty! Parties canceled! Walt egged!

Instead, most people I spoke to assured me that, at Harvard, there is no controversy. Most everyone, they said, agreed about the paper. But what they all "agreed" on, hilariously, depended on whom I was talking to.

One anecdote illuminated the puzzle. At a faculty meeting, the paper came up, and the department head remarked that she was sure everyone had the same reaction when they read it — approval. One professor piped up: "No, this article is rubbish!" The room became very quiet. Finally, someone changed the subject. Through moments like these, a de facto consensus developed not to discuss the paper at all.

Most professors I reached wouldn't speak on the record about the flap because they didn't want their feelings to become known on campus. Walt ignored my requests for comment. Harvard's Alan Dershowitz, one of just a few professors who have conspicuously denounced the paper, says that when he was scheduled for a BBC face-off with Mearsheimer, the author mysteriously canceled moments before airtime.

Most fishily, one Kennedy School professor who had previously gone public with his opinions clammed up completely, explaining cryptically to me that even chatting off the record about the paper isn't "the right thing for me to do at this time." Another senior Kennedy School professor admitted that he was baffled by the dearth of discussion of the paper. "We debate everything else here," he said.

The closest we've gotten to open academic argument over the paper is an online petition circulated by Juan Cole, a media-hungry professor-blogger at the University of Michigan, condemning the paper's critics for "McCarthyite race-baiting." It has garnered nearly 1,000 professors' signatures.

But even Cole's petition — many signers of which haven't read the paper — exemplifies how, instead of knocking heads over the paper's core argument, it's become acceptable merely to debate drier questions of academic standards. Critics condemn the paper as shoddy scholarship; supporters, such as Cole, insist that the academic world's primary ethic is the right to say whatever you believe.

But make a list of how professors have come out on this divide and you'll find it is an awfully neat proxy for deeper ideological divisions. Those who dislike the U.S. relationship with Israel suddenly find themselves champions of free speech; those supportive of Israel are recast as defenders of high standards of scholarship. It's just that nobody can talk about that schism.

So is this collective campus lip-sealing evidence that Mearsheimer and Walt are right that the Israel Lobby squelches criticism? No, because professors fear taking a stand on either side.

Professors I spoke to offered various reasons they must tiptoe around the paper: That its style was too provocative. That they're skittish after witnessing Harvard President Larry Summers' ouster for making fractious comments. That the long-running PC wars have made them tired of controversy. That it's too "personal."

Most interestingly, they explained that topics related to the Middle East, though they provoke some of the deepest divisions in opinion between faculty members, are just too strewn with ideological landmines for them because academics are supposed to be above dogma — an explanation that also sheds light on why most Middle East studies departments languish in mediocrity and lack influential senior faculty.

And most sadly, professors admitted that academia's notorious office politics — in uniquely volatile combination with all these other reasons — interfere with natural reactions to the paper, resulting in a collective response that one described as "nervous laughter."

"A lot of [my colleagues] were more concerned about the academic politics of it, and where they should come down, in that sense," another Ivy League professor told me, ruefully.

But isn't this all a little bit ironic? Mearsheimer and Walt clearly wrote their paper to be provocative. They took pleasure in breaking a taboo — only to see another one erected around their work. And universities ought to be the centers of debate about ideas, right? "It's perhaps not a great reflection on academia — perhaps we should be more out there," mused Princeton's Andrew Moravcsik, who calls himself an "idealist" about his profession.

Perhaps.

But it seems more likely that academic tempers will continue to boil on the inside, without any release valve.

One observer close to the debate was profusely sorry to request anonymity, explaining that he had opinions concerning the paper but feared professional retaliation no matter what he might say.

"People might debate it if you gave everyone a get-out-of-jail-free card," he said, "and promised that afterward everyone would be friends."

Frank on Mises, Hayek, and Free Markets

On Tuesday, Barney Frank gave a great speech as the House debated the latest Agriculture Appropriations bill:

Mr. Chairman, I am here to confess my reading incomprehension. I have listened to many of my conservative friends talk about the wonders of the free market, of the importance of letting the consumers make their best choices, of keeping government out of economic activity, of the virtues of free trade, but then I look at various agricultural programs like this one. Now, it violates every principle of free market economics known to man and two or three not yet discovered.

So I have been forced to conclude that in all of those great free market texts by Ludwig von Mises, Friedrich Hayek and all the others that there is a footnote that says, by the way, none of this applies to agriculture. Now, it may be written in high German, and that may be why I have not been able to discern it, but there is no greater contrast in America today than between the free enterprise rhetoric of so many conservatives and the statist, subsidized, inflationary, protectionist, anti-consumer agricultural policies, and this is one of them.

Congress Faces Multiple Criminal Probes

"We have an entire generation who imagines their member of Congress in an orange jumpsuit," said Paul Light, a New York University professor of public service, referring to the common prison uniform. "It's like members of Congress don't have any shame."

Congress as Saviour

"Even baby Jesus accepted gifts and I don't believe it corrupted him." - Rep. Drew Saunders, D-Mecklenburg, in support of an amendment to the legislative ethics bill that lowers the monetary threshold on gifts lawmakers may receive from neighbors and state employees.

The Decline and Fall of the Roman Myth?

Were the barbarians more beneficent than the Romans? A couple of Englishmen are trying to convince you that this is so. They state that the only uniquely Roman feature of the Empire was its professional army.

"...The fact that we still think of the Celts, the Huns, the Vandals, the Goths and so on as “barbarians” means that we have all fallen hook, line and sinker for Roman propaganda. We actually owe far more to the so-called “barbarians” than we do to the men in togas..."

Knowing Why Not To Bomb Iran Is Half The Battle

By Martin Van Creveld

One of my teachers, a former chief of Israeli military intelligence, used to say that going to war is not like asking a girl out on a date. It is a very serious decision, to be made on the basis of carefully crafted answers to even more carefully crafted questions.

Some serious questions, then, about whether the United States should bomb Iran's nuclear installations...

Tax Accountant Acquited, IRS Says Taxes Still Due

Happy returns for acquitted tax accountant
Accountant charged with filing false income tax papers for clients, arguing wages are not taxable, acquitted though IRS says taxes are due

A Bay Shore accountant has been acquitted of income-tax evasion charges after he filed returns for 36 clients claiming that salaries cannot be legally taxed.

But don't get ready to go rushing out to your tax preparer next April. While the tactic initially saved the clients $500,000 in taxes, the Internal Revenue Service has since required them to pay tax on their salaries, according to court records.

The acquittal Tuesday by a jury in U.S. District Court in Central Islip was the second time in three months that the government has failed to convict Paul Petrino of charges of aiding and abetting false tax filings from 1999 to 2001. His defense was based on arguments from the tax-protester movement, which questions the validity of the federal income tax laws. Petrino prepared the returns in his home office and most of his clients were from Long Island.

The case was a retrial of the same charges in February that resulted in a hung jury, split 6-6, according to Petrino's attorney, Robert Fink.

The jurors who acquitted Petrino, who faced 61/2 years in prison, were angry that they had to do so, Fink acknowledged after speaking with them yesterday. But he said they accepted his argument that there was "reasonable doubt" that his client was intentionally committing a crime.

He called the verdict a victory for the average man "over the overwhelming power of the federal government, the Justice Department and the Internal Revenue Service."

While acknowledging that they could not immediately think of a situation in which a criminal case based on tax-protester logic has resulted in an acquittal, officials of the Justice Department and the IRS cautioned yesterday that Petrino's case was unusual and that it would probably have no impact on the average citizen's tax filings...

WWI Critics Pardoned 80 Years Too Late

Nearly 80 people convicted of sedition amid the war's anti-German hysteria received the first posthumous pardons in Montana history, including one who was imprisoned merely for calling the conflict a "rich man's war" and mocking food regulations during a time of rationing.

Are Las Vegas Slot Machines More Secure Than Electronic Voting Machines?

You decide.

New Hampshire can stop the coming federal police state

By KARL BEISEL
Another View

The Union Leader

THE NEW HAMPSHIRE Senate will soon vote on what might be the most important bill to protect our freedoms in many years. House Bill 1582, which the House overwhelmingly passed last month, would preclude New Hampshire from participating in the REAL ID Act, a federal law passed last year establishing a de facto national ID card.

The REAL ID Act was passed by Congress in 2005 as a part of a "must-pass" military appropriations bill, though it had nothing whatsoever to do with the military. It requires that all states comply with certain federal requirements in the creation of driver's licenses, and would likely include a microchip containing information such as a digital photo, Social Security number and digital biometric information like the fingerprint or retinal scan of the license holder. It would force the repeal of several important privacy protections currently in New Hampshire law.

If a state doesn't comply with REAL ID, its residents risk being forced to purchase passports just to drive in other states or enter federal facilities. Thus, it reveals itself to be a Soviet-style internal passport.

History has shown that national identification systems are one of the critical pieces of infrastructure needed to foist complete tyranny upon a nation. They are used as the basis for tracking movements, purchases and monitoring activities.

Most Americans have heard of the "no fly" list designed to keep terrorists off of commercial flights. However, most Americans are completely unaware of another list, the "no buy" list, similarly established to prevent terrorists from doing business with any U.S. citizen. The law effectively mandates that every individual involved in any business transaction be checked against the list, called the "Specially Designated Nationals" or SDN, which is published by the Department of the Treasury's Office of Foreign Assets Control (OFAC).

It applies to every purchase, from banking services and automobiles to candy bars at your local convenience store. Failure to comply with this law is a felony. Never heard of it? Most people haven't, including most business owners, and few businesses comply with it today. The federal government doesn't enforce it except on certain big-ticket purchases and on banking services, because even they realize it is impossible to enforce in most situations.

REAL ID would likely change all that. With a quick swipe of a customer's REAL ID card, merchants would be able to check the customer against the federal "no buy" list. Meanwhile, the record of the transaction could be recorded in the REAL ID database and noted by federal law enforcement. It's only a short leap from there to having the federal government record every item and service purchased by every American. Think it will only be used against terrorists? Think again. Powers granted to law enforcement under the Patriot Act, which Americans were assured would only be used against terrorists, are increasingly used to circumvent constitutional protections in common criminal investigations.

Complying with the "no buy" list or future versions of it will effectively require that every person present their REAL ID for every purchase. Conceivably, REAL ID could be used to prevent citizens from buying or selling anything without presenting their card. The tyrannical regimes of Soviet Russia, Nazi Germany, and Bathist Iraq could only have dreamt of such a capability.

Harder to believe still is that this scheme is being cooked up right here in America, and the people of the "Live free or die" state have been cynically targeted as the first guinea pigs for this technology.

The New Hampshire Senate has an opportunity to stop this Orwellian law from taking effect by passing House Bill 1582. Keeping New Hampshire out of this national ID scheme would send Congress a clear message: there will be no police state in New Hampshire.

Karl Beisel of Manchester is on the board of directors of the New Hampshire Liberty Alliance.

Stephen Colbert Blows Up Washington

Figuratively, of course, not literally. Stephen Colbert sent a stealth missile straight into the belly of the beast at the White House Correspondents Dinner in Washington DC on Saturday. The press nor the powerful were impressed but, he certainly acquired the admiration of millions of the people devoid of influence.

Here is the transcript since without C-Span and the internet no one would have even known Colbert spoke at the event:

STEPHEN COLBERT: Thank you, ladies and gentlemen. Before I begin, I've been asked to make an announcement. Whoever parked 14 black bulletproof S.U.V.'s out front, could you please move them? They are blocking in 14 other black bulletproof S.U.V.'s and they need to get out.

Wow. Wow, what an honor. The White House correspondents' dinner. To actually sit here, at the same table with my hero, George W. Bush, to be this close to the man. I feel like I'm dreaming. Somebody pinch me. You know what? I'm a pretty sound sleeper -- that may not be enough. Somebody shoot me in the face. Is he really not here tonight? Dammit. The one guy who could have helped.

By the way, before I get started, if anybody needs anything else at their tables, just speak slowly and clearly into your table numbers. Somebody from the NSA will be right over with a cocktail. Mark Smith, ladies and gentlemen of the press corps, Madame First Lady, Mr. President, my name is Stephen Colbert and tonight it's my privilege to celebrate this president. We're not so different, he and I. We get it. We're not brainiacs on the nerd patrol. We're not members of the factinista. We go straight from the gut, right sir? That's where the truth lies, right down here in the gut. Do you know you have more nerve endings in your gut than you have in your head? You can look it up. I know some of you are going to say "I did look it up, and that's not true." That's 'cause you looked it up in a book.

Next time, look it up in your gut. I did. My gut tells me that's how our nervous system works. Every night on my show, the Colbert Report, I speak straight from the gut, OK? I give people the truth, unfiltered by rational argument. I call it the "No Fact Zone." Fox News, I hold a copyright on that term.

I'm a simple man with a simple mind. I hold a simple set of beliefs that I live by. Number one, I believe in America. I believe it exists. My gut tells me I live there. I feel that it extends from the Atlantic to the Pacific, and I strongly believe it has 50 states. And I cannot wait to see how the Washington Post spins that one tomorrow. I believe in democracy. I believe democracy is our greatest export. At least until China figures out a way to stamp it out of plastic for three cents a unit.

In fact, Ambassador Zhou Wenzhong, welcome. Your great country makes our Happy Meals possible. I said it's a celebration. I believe the government that governs best is the government that governs least. And by these standards, we have set up a fabulous government in Iraq.

I believe in pulling yourself up by your own bootstraps. I believe it is possible -- I saw this guy do it once in Cirque du Soleil. It was magical. And though I am a committed Christian, I believe that everyone has the right to their own religion, be you Hindu, Jewish or Muslim. I believe there are infinite paths to accepting Jesus Christ as your personal savior.

Ladies and gentlemen, I believe it's yogurt. But I refuse to believe it's not butter. Most of all, I believe in this president.

Now, I know there are some polls out there saying this man has a 32% approval rating. But guys like us, we don't pay attention to the polls. We know that polls are just a collection of statistics that reflect what people are thinking in "reality." And reality has a well-known liberal bias.

So, Mr. President, please, pay no attention to the people that say the glass is half full. 32% means the glass -- it's important to set up your jokes properly, sir. Sir, pay no attention to the people who say the glass is half empty, because 32% means it's 2/3 empty. There's still some liquid in that glass is my point, but I wouldn't drink it. The last third is usually backwash. Okay, look, folks, my point is that I don't believe this is a low point in this presidency. I believe it is just a lull before a comeback.

I mean, it's like the movie "Rocky." All right. The president in this case is Rocky Balboa and Apollo Creed is -- everything else in the world. It's the tenth round. He's bloodied. His corner man, Mick, who in this case I guess would be the vice president, he's yelling, "Cut me, Dick, cut me!," and every time he falls everyone says, "Stay down! Stay down!" Does he stay down? No. Like Rocky, he gets back up, and in the end he -- actually, he loses in the first movie.

OK. Doesn't matter. The point is it is the heart-warming story of a man who was repeatedly punched in the face. So don't pay attention to the approval ratings that say 68% of Americans disapprove of the job this man is doing. I ask you this, does that not also logically mean that 68% approve of the job he's not doing? Think about it. I haven't.

I stand by this man. I stand by this man because he stands for things. Not only for things, he stands on things. Things like aircraft carriers and rubble and recently flooded city squares. And that sends a strong message, that no matter what happens to America, she will always rebound -- with the most powerfully staged photo ops in the world.

Now, there may be an energy crisis. This president has a very forward-thinking energy policy. Why do you think he's down on the ranch cutting that brush all the time? He's trying to create an alternative energy source. By 2008 we will have a mesquite-powered car!

And I just like the guy. He's a good joe. Obviously loves his wife, calls her his better half. And polls show America agrees. She's a true lady and a wonderful woman. But I just have one beef, ma'am.

I'm sorry, but this reading initiative. I'm sorry, I've never been a fan of books. I don't trust them. They're all fact, no heart. I mean, they're elitist, telling us what is or isn't true, or what did or didn't happen. Who's Britannica to tell me the Panama Canal was built in 1914? If I want to say it was built in 1941, that's my right as an American! I'm with the president, let history decide what did or did not happen.

The greatest thing about this man is he's steady. You know where he stands. He believes the same thing Wednesday that he believed on Monday, no matter what happened Tuesday. Events can change; this man's beliefs never will. As excited as I am to be here with the president, I am appalled to be surrounded by the liberal media that is destroying America, with the exception of Fox News. Fox News gives you both sides of every story: the president's side, and the vice president's side.

But the rest of you, what are you thinking, reporting on NSA wiretapping or secret prisons in eastern Europe? Those things are secret for a very important reason: they're super-depressing. And if that's your goal, well, misery accomplished. Over the last five years you people were so good -- over tax cuts, WMD intelligence, the effect of global warming. We Americans didn't want to know, and you had the courtesy not to try to find out. Those were good times, as far as we knew.

But, listen, let's review the rules. Here's how it works: the president makes decisions. He's the decider. The press secretary announces those decisions, and you people of the press type those decisions down. Make, announce, type. Just put 'em through a spell check and go home. Get to know your family again. Make love to your wife. Write that novel you got kicking around in your head. You know, the one about the intrepid Washington reporter with the courage to stand up to the administration. You know - fiction!

Because really, what incentive do these people have to answer your questions, after all? I mean, nothing satisfies you. Everybody asks for personnel changes. So the White House has personnel changes. Then you write, "Oh, they're just rearranging the deck chairs on the Titanic." First of all, that is a terrible metaphor. This administration is not sinking. This administration is soaring. If anything, they are rearranging the deck chairs on the Hindenburg!

Now, it's not all bad guys out there. Some are heroes: Christopher Buckley, Jeff Sacks, Ken Burns, Bob Schieffer. They've all been on my show. By the way, Mr. President, thank you for agreeing to be on my show. I was just as shocked as everyone here is, I promise you. How's Tuesday for you? I've got Frank Rich, but we can bump him. And I mean bump him. I know a guy. Say the word.

See who we've got here tonight. General Moseley, Air Force Chief of Staff. General Peter Pace, Chairman of the Joint Chiefs of Staff. They still support Rumsfeld. Right, you guys aren't retired yet, right? Right, they still support Rumsfeld.

Look, by the way, I've got a theory about how to handle these retired generals causing all this trouble: don't let them retire! Come on, we've got a stop-loss program; let's use it on these guys. I've seen Zinni and that crowd on Wolf Blitzer. If you're strong enough to go on one of those pundit shows, you can stand on a bank of computers and order men into battle. Come on.

Jesse Jackson is here, the Reverend. Haven't heard from the Reverend in a little while. I had him on the show. Very interesting and challenging interview. You can ask him anything, but he's going to say what he wants, at the pace that he wants. It's like boxing a glacier. Enjoy that metaphor, by the way, because your grandchildren will have no idea what a glacier is.

Justice Scalia is here. Welcome, sir. May I be the first to say, you look fantastic. How are you? [After each sentence, Colbert makes a hand gesture, an allusion to Scalia's recent use of an obscene Sicilian hand gesture in speaking to a reporter about Scalia's critics. Scalia is seen laughing hysterically.] Just talking some Sicilian with my paisan.

John McCain is here. John McCain, John McCain, what a maverick! Somebody find out what fork he used on his salad, because I guarantee you it wasn't a salad fork. This guy could have used a spoon! There's no predicting him. By the way, Senator McCain, it's so wonderful to see you coming back into the Republican fold. I have a summer house in South Carolina; look me up when you go to speak at Bob Jones University. So glad you've seen the light, sir.

Mayor Nagin! Mayor Nagin is here from New Orleans, the chocolate city! Yeah, give it up. Mayor Nagin, I'd like to welcome you to Washington, D.C., the chocolate city with a marshmallow center. And a graham cracker crust of corruption. It's a Mallomar, I guess is what I'm describing, a seasonal cookie.

Joe Wilson is here, Joe Wilson right down here in front, the most famous husband since Desi Arnaz. And of course he brought along his lovely wife Valerie Plame. Oh, my god! Oh, what have I said? [looks horrified] I am sorry, Mr. President, I meant to say he brought along his lovely wife Joe Wilson's wife. Patrick Fitzgerald is not here tonight? OK. Dodged a bullet.

And, of course, we can't forget the man of the hour, new press secretary, Tony Snow. Secret Service name, "Snow Job." Toughest job. What a hero! Took the second toughest job in government, next to, of course, the ambassador to Iraq.

Got some big shoes to fill, Tony. Big shoes to fill. Scott McClellan could say nothing like nobody else. McClellan, of course, eager to retire. Really felt like he needed to spend more time with Andrew Card's children. Mr. President, I wish you hadn't made the decision so quickly, sir.

I was vying for the job myself. I think I would have made a fabulous press secretary. I have nothing but contempt for these people. I know how to handle these clowns. In fact, sir, I brought along an audition tape and with your indulgence, I'd like to at least give it a shot. So, ladies and gentlemen, my press conference.

[A short film/"audition tape" followed his remarks]

The Struggle Rages On

From Bruce Bartlett via the Mises.org Weblog

On Austrian Economics

Greg Mankiw of Harvard University, and instructor of the famed ec10, recently wrote of his ignorance of Austrian Economics.

Prestopundit responded in the comments section:

...I find it stunning that an economist can be unfamiliar with the economic work of the leading economist of the last 100 years. Here are some of the contributions of Friedrich Hayek which may be unknown to you (explained by some of the leading economists of our age):

Hayek and the Economics of Dispersed and Imperfect Knowledge.

Jan Tinbergen* (Economics, Netherlands School of Economics)

"The key importance of the amount of information available and the frequent lack of relevant information have been dealt with only in the last decades. L. von Mises and F. A. von Hayek can rightly be regarded as pioneers in this connection."

*Nobel Prize winner in Economics.

Douglass North* (Economics, Washington U.)

"Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market. (footnote 4: The original contributions were those of Hayek (1937 and 1945))." (Douglass North, Structure and Change in Economic History, New York: Norton, 1981, p. 36)

*Nobel Prize winner in Economics.

Brian Loasby* (Economics, Sterling)

"Many economists have professed to analyse information; relatively few have considered carefully the problems of knowledge. Among those who have, Hayek is pre-eminent." (Brian Loasby, The Mind and Method of the Economist, London: Edward Elgar, p. 38).

*Loasby is a respected authority on real-world business organization and decision making.

Fritz Machlup* (Economics, Princeton)

"One of the most original and most important ideas advanced by Hayek is the role of the 'division of knowledge' in economic society." (F. Machlup, 1976, p. 36)

*Past President, American Economics Association.

Richard Nelson* (Economics, Yale) & Sidney Winter* (Economics, Yale)

"The dilemma of a socialized system is that the information flow overwhelms a centralized system if it is open to new ideas and data, that closing the system and forcing the plan to work forecloses alternatives and risks unhedged mistakes, and that decentralizing without real markets poses the problems discussed by Hayek. These information problems permeate virtually all economic processes." (Richard Nelson & Sidney Winter, An Evolutionary Theory of Economic Change, Cambridge: Harvard U. Press, 1982, p. 365)

*Nelson & Winter are recognized leaders in the emerging field of evolutionary economics.

Hayek and the Problem of Spontaneous Order.

Jon Elster* (Columbia)

"The investigation of this problem -- How is spontaneous order possible? -- is sometimes referred to as the 'Hayek programme'. (Footnote 7 -- See notably Hayek (1978), vol. 1-3. For comments, see Gray (1986) and Vanberg (1986).) The present analysis differs in two ways from most other attempts to implement the programme. (Footnote 8 -- Attempt to implement the Hayek programme include those of Nozick (1974), Ullman-Margalit (1977), Schotter (1981), Hardin (1982), Axelrod (1984), Sugden (1986) and M. Taylor (1987).)." (John Elster, The Cement of Society: A Study of Social Order, 1989, p. 250)

*Elster is a recognized authority on the explanatory limitations of 'rational choice theory'.

Douglass North* (Washington U., Economics)

"Regarding social order, [Francis] Fukuyama writes, "The systematic study of how order, and thus social capital, can emerge in spontaneous and decentralized fashion is one of the most important intellectual developments of the late twentieth century." He correctly attributes the modern origins of this argument to F.A. Hayek, whose pioneering contributions to cognitive science, the study of cultural evolution, and the dynamics of social change put him in the forefront of the most creative scholars of the 20th century."

*Nobel Prize Winner in Economics

Hayek, Path Dependence and Complexity Theory in Economics.

Brian Arthur* (Economics, Santa Fe Institute)

"Right after we published our first findings [on the implications of path dependence and complexity theory for economics], we started getting letters from all over the country saying, 'You know, all you guys have done is rediscover Austrian economics' .. I admit I wasn't familiar with Hayek and von Mises as the time. But now that I've read them, I can see that this is essentially true."

*Leading economist in the field of path dependence and complexity theory.

Hayek & the Origin of the Intertemporal Equilibrium Construction.

Bruna Ingrao* (Economics, U. of Sassari) & Giorgio Israel* (Mathematics, U. of Rome)

"Hayek made a suggestion that was to be of great importance in the theory's [i.e. General Equilibrium Theory or 'GET'] subsequent history, that the same goods available at two different moments of time should be treated as distinct goods whose relations of exchange were to be examined, although they might, 'technically speaking,' be one and the same product." (Bruna Ingrao & Giorgio Israel, The Invisible Hand: Economic Equilibrium in the History of Science, 1990, p. 232)

"[Hayek] did contribute toward an important conceptual development in his reflections on the problems raised by extending the analysis of equilibrium in time. In a key article of 1928 published in the 'Weltwirtschafliches Archiv,' he observed that it was not possible to ignore the element of time in the simultaneous determination of prices if analysis was to be extended to monetary phenomena. {quotes Hayek} Hayek defined the problem concisely as one of an intertemporal system of prices. {quotes Hayek}." (Bruna Ingrao & Giorgio Israel, The Invisible Hand: Economic Equilibrium in the History of Science, 1990, p. 232)

"[Hayek's] equilibrium theory offered a wealth of suggestions that were to be taken up in the literature of the 1940s and 1950s. The idea of intertemporal equilibrium, which was to be precisely defined in axiomatic terms by Arrow and Debreu, took shape in his writings of the 1920s and 1930s." (Bruna Ingrao & Giorgio Israel, The Invisible Hand: Economic Equilibrium in the History of Science, 1990, p. 233)

*Leading authorities on the history of the development of the equilibrium construction & its explanatory limitations.

Murray Milgate* (Economics, Harvard)

"All of this, of course, establishes Hayek's primacy over Hicks in the origin of the notion of intertemporal equilibrium .. " (Murry Milgate, 1982, p. 22)

*Milgate is widely recognized as a leading member of the Neo-Ricardian school of economics.

Hayek and the Problem of Monetary Economics &The Trade Cycle.

Robert Lucas* (Economics, U. of Chicago)

" .. it is likely that many modern economists would have no difficulty accepting Hayek's statement of the problem [of macroeconomics] as roughly equivalent to their own. Whether or not this is so, I wish .. to argue that it should be so, or that the most rapid progress toward a coherent and useful aggregate economic theory will result from the acceptance of the problem statement as advanced by [Hayek] ..". (Robert Lucas, Jr., "Understanding Business Cycles", in Studies in Business-Cycle Theory, 1981, p. 216. Cambridge: The MIT Press).

*Nobel Prize Winner in Economics.

John Maynard Keynes* (Economics, Cambridge)

"Keynes was shortly to develop his own approach to the general task identified by Hayek [i.e. the task of monetary theory], under the rubric of 'A Monetary Theory of Production' (Keynes, 1973, pp. 381, et seq.)." (A. Cottrell, 1994, p. 199)

"I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart Mill's well-known dictum that 'there cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money,' [when Hayek writes]: "it means also that the task of monetary theory is a much wider one than is commonly assumed; that its task is nothing less than to cover a second time the whole field which is treated by pure theory under the assumption of barter, and to investigate what changes in the conclusions of pure theory are made necessary by the introduction of indirect exchange. The first step towards a solution of this problem is to release monetary theory from the bonds which a too narrow conception of its task has created.'" (John Maynard Keynes, "The Pure Theory of Money: A Reply to Dr. Hayek", Economica, Nov. 1931, pp. 395-396.)

*Leading 20th Century Economist in the English tradition of Marshall, Marx, Malthus, and Mill.

Hayek and Collectivist Economic Planning.

Abram Bergson* (Economics, Harvard)

"It may not be amiss to seen in my calculations of comparative productivity [between entrepreneurial economics and communist economies] verification of a prescient forecast [made by Hayek in 1935 in his essay "The Present State of the Debate".]." (Abram Bergson, "Communist Economic Efficiency Revisited", AEA Papers and Proceedings, Vol. 82, No. 2, May, 1992, p. 30].

*Bergson is a recognized leader in the economics of comparative economic systems.

J. Bradford De Long* (Economics, UC-Berkeley)

"Hayek's adversaries -- Oskar Lange and company -- argued that a market system had to be inferior to a centrally-planned system: at the very least, a centrally-planned economy could set up internal decision-making procedures that would mimic the market, and the central planners could also adjust things to increase social welfare and account for external effects in a way that a market system could never do. Hayek, in response, argued that the functionaries of a central-planning board could never succeed, because they could never create both the incentives and the flexibility for the people-on-the-spot to exercise what Scott calls metis.

Today all economists -- even those who are very hostile to Hayek's other arguments .. agree that Hayek and company hit this particular nail squarely on the head. Looking back at the seventy-year trajectory of Communism, it seems very clear that Hayek .. [is] right: that its principal flaw is its attempt to concentrate knowledge, authority, and decision-making power at the center rather than pushing the power to act, the freedom to do so, and the incentive to act productively out to the periphery where the people-on-the-spot have the local knowledge to act effectively."

*Specialist in 20th century economic history.

Richard Nelson* (Economics, Yale) & Sidney Winter* (Economics, Yale)

"The dilemma of a socialized system is that the information flow overwhelms a centralized system if it is open to new ideas and data, that closing the system and forcing the plan to work forecloses alternatives and risks unhedged mistakes, and that decentralizing without real markets poses the problems discussed by Hayek. These information problems permeate virtually all economic processes." (Richard Nelson & Sidney Winter, An Evolutionary Theory of Economic Change, Cambridge: Harvard U. Press, 1982, p. 365)

*Nelson & Winter are recognized leaders in the emerging field of evolutionary economics.


Kenneth Minogue* (U of London, Political Science)

"If the central contest of the twentieth century has pitted capitalism against socialism, then F. A. Hayek has been its central figure. He helped us to understand why capitalism won by a knockout. It was Hayek who elaborated the basic argument demonstrating that central planning was nothing else but an impoverishing fantasy." (Kenneth Minogue, "Giants Refreshed II: The Escape from Serfdom: Friedrich von Hayek and the Restoration of Liberty". TLS: Times Literary Supplement. Jan 14, 2000, p. 11)

*Minogue is a respected British political scientist.

Hayek and Leading 20th Century Economists.

Ronald Coase* (Economics, U. of Chicago)

"I will be discussing what happened in economics in England, but these were times when, to a very considerable extent, this was what happened in economics. The first episode I will discuss is local, but the economists involved were among the best in the world. In February 1931, Friedrich Hayek gave a series of public lectures entitled 'Prices and Production' at the London School of Economics . . They were undoubtably the most successful set of public lectures given at LSE during my time there, even surpassing the brilliant lectures Jacob Viner gave on international trade theory. The audience, notwithstanding the difficulties of understanding Hayek, was enthralled. What was said seemed to us of great importance and made us see things of which we had previously been unaware. After hearing these lectures, we knew why there was a depression. Most students of economics at LSE and many members of the staff became Hayekians or, at any rate, incorporated elements of Hayek's approach in their own thinking. With the arrogance of youth, I myself expounded the Hayekian analysis to the faculty and students at Columbia University in the fall of 1931." (Ronald Coase, "How Should Economists Choose?", Essays on Economics and Economists, Chicago: U. of Chicago Press, 1994, p. 19).

"In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us." (Ronald Coase, Nobel Memorial Prize Lecture, "The Institutional Structure of Production", Essays on Economics and Economists, Chicago: U. of Chicago Press, 1994, p. 9)

*Nobel Prize Winner in Economics.

Allan Meltzer* (Economics, Carnegie Mellon U.)

"Q. [McCallum] .. are there other economists who have had a really major influence on your thinking? A. [Melzer] Well I mentioned Hayek. There are two ways. One is because of my interest in political economy. The other way is that Hayek was a pioneer in the use of information in economics. One of the papers that Karl and I wrote together that I continue to like was a paper called "The Uses of Money". In that paper we tried to incorporate information and the cost of information to explain why people use money. One of Hayek's most basic ideas is that institutions are a way of reducing uncertainty. Man struggles to find institutional arrangements which on average make life a bit more predictable. Our "Uses of Money" is not so much about money as we conventionally think about it, it's about the idea of a medium of exchange, the function of an institution called the medium of exchange and how the medium of exchange as an institution resolves a part of peoples uncertainty about the future."

*One of the leading "monetarists" in America.

Milton Friedman* (Economics, U. of Chicago)

" .. My interest in public policy and political philosophy was rather casual before I joined the faculty of the University of Chicago. Informal discussions with colleagues and friends stimulated a greater interest, which was reinforced by Friedrich Hayek's powerful book The Road to Serfdom, by my attendance at the first meeting of the Mont Pelerin Society in 1947, and by discussions with Hayek after he joined the university faculty in 1950. In addition, Hayek attracted an exceptionally able group of students who were dedicated to a libertarian ideology. They started a student publication, The New Individualist Review, which was the outstanding libertarian journal of opinion for some years. I served as an adviser to the journal and published a number of articles in it .. ". (Milton & Rose Friedman, Two Lucky People: Memoirs, Chicago: U. of Chicago Press, 1998. p. 333).

*Nobel Prize winner in economics.

Roy Harrod* (Economic, Cambridge)

J. Hicks, "It is not so well known that it [Keynes's and my own move from thinking in terms of price-levels and the rate of interest to thinking in terms of inputs and outputs] is matched by a movement from Hayek to Harrod. I once asked Harrod what had put him on to the construction of his so-call 'dynamic' theory; he said, to my surprise, that it was thinking about Hayek." (J. Hicks, 1982, pp. 340-341)

*Leading figure in the development of 'Keynesian Economics' and 'Dynamic Theory'.

John Hicks* (Economics, Oxford)

".. it was from Hayek that I began ["Equilibrium and the Cycle" (1933), the early beginnings of Hick's influential work on the topics of intertemporal equilibrium, monetary theory, and trade cycle phenomena] ". (John Hicks, Money, Interest and Wages, Cambridge: Harvard U. Press, 1982, p. 28).

"There were four years, 1931-1935, when I was myself a member of [Hayek's] seminar in London; it has left a deep mark on my thinking." (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 97).

"Hayek was making us think of the productive process as a process in time, inputs coming before outputs ..". (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 359).

"I did not begin from Keynes: I began from Pareto, and Hayek (footnote 10: There is evidence for this, in the paper 'Equilibrium and the Cycle') ..". (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 359).

"At the end of the discussions in that seminar [Hayek's L.S.E seminar] .. we were, I believe, on the point of taking what now seems to me to be a decisive step. I was, at least, on the point of taking it myself. There is evidence for that in my Value and Capital, much of the groundwork for which was done before I left London .." (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 97).

"I remember Robbins asking me if I could turn the Hayek model into mathematics .. it began to dawn on me that .. the model must be better specified. It was claimed that, if there were no monetary disturbance, the system would remain in 'equilibrium'. What could such an equilibrium mean? This, as it turned out, was a very deep question; I could do no more, in 1932, than make a start at answering it. I began by looking at what had been said by .. Pareto and Wicksell. Their equilibrium was a static equilibrium, in which neither prices nor outputs were changing .. That, clearly, would not do for Hayek. His 'equilibrium' must be progressive equilibrium, in which real wages, in particular, would be rising, so relative prices could not remain unchange .. The next step in my thinking, was .. equilibrium with perfect foresight. Investment of capital, to yield its fruit in the future, must be based on expectations, of opportunities in the future. When I put this to Hayek, he told me that this was indeed the direction in which he had been thinking. Hayek gave me a copy of a paper on 'intertemporal equilibrium', which he had written some years before his arrival in London; the conditions for a perfect foresight equilibrium were there set out in a very sophisticated manner." (John Hicks, Money, Interest and Wages, Cambridge: Harvard U. Press, 1982, pp. 6-7).

"I can date my own personal 'revolution' rather exactly to May or June 1933. It was like this. It began . . with Hayek. His Prices and Production is one of the influences that can be detected in The Theory of Wages; it could not have been otherwise, for 1931 was a Prices and Production year at the London School of Economics . . I did not in fact find it all easy to fit in whith my own ideas. What started me off in 1933 was an earlier work of Hayek's, his paper on 'Intertemporal Equilibrium', an idea which I found easier to reduce to my preferred (Paretian or Wicksellian) pattern." (John Hicks, The Theory of Wages, 2nd Edition,1963, p. 307)

B. Ingrao & G. Israel, "Hicks elaborated the concept of temporary equilibrium, perhaps the most original contribution of Value and Capital, following the path laid down by Hayek and the Swedish school." (B. Ingrao & G. Israel, 1990, p. 239)

*Nobel Prize winner in economics.

Leonid Hurwicz* (Economics, U. of Minnesota)

"I am in complete sympathy with [Kirzner's] point of departure, namely, the emphasis on the dispersion of information among economic decision-making units (called by him, 'Hayek's knowledge problem') and the consequent problem of transmission of information among those units. Much of my own research work since the 1950s has been focused on issued in welfare economics viewed from an informational perspective. The ideas of Hayek (whose classes at the London School of Economics I attended during the academic year 1938-39) have played a major role in influencing my thinking and have been so acknowledged." (L. Hurwicz, 1984, p. 419)

*Leading developer of the economics of information and incentive compatibility.

John Maynard Keynes* (Economics, Cambridge)

"I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart Mill's well-known dictum that 'there cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money,' [when Hayek writes]: "it means also that the task of monetary theory is a much wider one than is commonly assumed; that its task is nothing less than to cover a second time the whole field which is treated by pure theory under the assumption of barter, and to investigate what changes in the conclusions of pure theory are made necessary by the introduction of indirect exchange. The first step towards a solution of this problem is to release monetary theory from the bonds which a too narrow conception of its task has created.'" (John Maynard Keynes, "The Pure Theory of Money: A Reply to Dr. Hayek", Economica, Nov. 1931, pp. 395-396.)

A. Cottrell, "Keynes was shortly to develop his own approach to the general task identified by Hayek [i.e. the task of monetary theory], under the rubric of `A Monetary Theory of Production' (Keynes, 1973, pp. 381, et seq.)." (A. Cottrell, 1994, p. 199)

*Leading 20th Century Economist in the English tradition of Marshall, Marx, and Mill.

Arnold Plant* (Economics, L.S.E.)

"I can testify from personal experience to the immense stimulus and direction which Hayek's migration to this country [Great Britain] gave to economic research in the 1930s, not only in London and economics faculties throughout the United Kingdom, but also in the international world of scholarship." (Arnold Plant, "A Tribute to Hayek -- the Rational Persuader", Economic Age, Jan.-Feb., 1970)

*Influential teacher of Nobel Prize winner Ronald Coase, among others.

Thomas Sowell* (Hoover Institution)

"If one writing contributed more than any other to the framework in which this work [Sowell's Knowledge and Decisions] developed, it would be an essay entitled 'The Use of Knowledge in Society,' published in the American Economic Review of September 1945, and written by F. A. Hayek . . In this plain and apparently simple essay was a deeply penetrating insight into the way societies function and malfunction, and clues as to why they are so often and so profoundly misunderstood." (Thomas Sowell, Knowledge and Decisions, New York: Basic Books, 1980, p. ix)

*Sowell is a leading historian of economic thought, and an internationally recognized authority on the problems of race, politics, and culture.

Herbert Simon* (Economics & Psychology, Stanford)

"No one has characterized market mechanisms better than Friedrich von Hayek". (Herbert Simon, The Sciences of the Artificial, 2nd Edition, Cambridge: The MIT Press, 1981, p. 41)

*Nobel Prize winner in Economics.

Lawrence Summers* (U.S. Treasury)

"What's the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That's the consensus among economists. That's the Hayek legacy." (Lawrence Summers, quoted in The Commanding Heights: The Battle Between Government and the Marketplace that Is Remaking the Modern World, by Daniel Yergin and Joseph Stanislaw. New York: Simon & Schuster. 1998, pp. 150-151.)

*Lawrence Summers is President of Harvard U. & former Sec. of the U. S. Treasury & former Chief Economist of the World Bank.

Vernon Smith* (Economics, U. of Arizona)

"Hayek, in my view, is the leading economic thinker of the 20th century." (Vernon Smith, "Reflections on Human Action after 50 years", Cato Journal. Vol. 9, No. 2. Fall, 1999).

*Vernon Smith is the winner of the Nobel Prize in economics and the leading experimental economist in the U.S.

Fritz Machlup* (Economics, Princeton)

"One of the most original and most important ideas advanced by Hayek is the role of the 'division of knowledge' in economic society . . [But if] I had to single out the area in which Hayek's contributions were the most fundamental and pathbreaking, I would cast my vote for the theory of capital. As I said before, when I reviewed Hayek's book on The Pure Theory of Capital, it is 'my sincere conviction that this work contains some of the most penetrating thoughts on the subject that have ever been published.' If two achievements may be named, I would add Hayek's contributions to the the theory of economic planning. Most of what has been written on systems analysis, computerized data processing, simulation of market processes, and other techniques of decision-making without the aid of competitive markets, appears shallow and superficial in the light of Hayek's analysis of the 'division of knowledge', its dispersion among masses of people. Information in the minds of millions of people is not available to any central body or any group of decision-makers who have to determine prices, employment, production, and investment but do not have the signals provided by a competitive market mechanism. Most plans for economic reform in the socialist countries seem to be coming closer to the realization that increasing decentralization of decision-making is needed to solve the problems of rational economic planning." (Fritz Machlup, "Hayek's Contribution to Economics", Swedish Journal of Economics, Vol. 76, Dec. 1974.)

*Past President, American Economics Association.

Tom Peters*

"F. A. Hayek [is] arguably the most influential economist of this century."

*Leading American consultant and author on business management and strategy.

The character of Hayek's contribution to economics.

Jon Elster* (Columbia)

"The investigation of this problem -- How is spontaneous order possible? -- is sometimes referred to as the 'Hayek programme'. (Footnote 7 -- See notably Hayek (1978), vol. 1-3. For comments, see Gray (1986) and Vanberg (1986).) The present analysis differs in two ways from most other attempts to implement the programme. (Footnote 8 -- Attempt to implement the Hayek programme include those of Nozick (1974), Ullman-Margalit (1977), Schotter (1981), Hardin (1982), Axelrod (1984), Sugden (1986) and M. Taylor (1987).)" (John Elster, The Cement of Society: A Study of Social Order, 1989, p. 250)

*Elster is a recognized authority on the conceptual limitations of 'rational choice' theorizing.

Bruna Ingrao* (Economics, U. of Sassari) & Giorgio Israel* (Mathematics, U. of Rome)

"[Hayek's] equilibrium theory offered a wealth of suggestions that were to be taken up in the literature of the 1940s and 1950s. The ideas of intertemporal equilibrium, which was to be precisely defined in axiomatic terms by Arrow and Debreu, took shape in his writings of the 1920s and 1930s." (B. Ingrao & G. Israel, 1990, p. 233)

*Leading authorities on the history and limitatations of general equilibrium constructions.

Douglass North* (Economics, Washington U.)

"Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market. (footnote 4: The original contributions were those of Hayek (1937 and 1945))." (Douglass North, Structure and Change in Economic History, New York: Norton, 1981, p. 36)

*Nobel Prize winner in Economics.

Brian Loasby* (Economics, Sterling)

"Many economists have professed to analyse information; relatively few have considered carefully the problems of knowledge. Among those who have, Hayek is pre-eminent." (Brian Loasby, The Mind and Method of the Economist, London: Edward Elgar, p. 38).

*Loasby is a respected authority on real-world business organization and decision making.

Fritz Machlup* (Economics, Princeton)

"One of the most original and most important ideas advanced by Hayek is the role of the 'division of knowledge' in economic society . . [But if] I had to single out the area in which Hayek's contributions were the most fundamental and pathbreaking, I would cast my vote for the theory of capital. As I said before, when I reviewed Hayek's book on The Pure Theory of Capital, it is 'my sincere conviction that this work contains some of the most penetrating thoughts on the subject that have ever been published.' If two achievements may be named, I would add Hayek's contributions to the the theory of economic planning. Most of what has been written on systems analysis, computerized data processing, simulation of market processes, and other techniques of decision-making without the aid of competitive markets, appears shallow and superficial in the light of Hayek's analysis of the 'division of knowledge', its dispersion among masses of people. Information in the minds of millions of people is not available to any central body or any group of decision-makers who have to determine prices, employment, production, and investment but do not have the signals provided by a competitive market mechanism. Most plans for economic reform in the socialist countries seem to be coming closer to the realization that increasing decentralization of decision-making is needed to solve the problems of rational economic planning." (Fritz Machlup, "Hayek's Contribution to Economics", Swedish Journal of Economics, Vol. 76, Dec. 1974.)

*Past President, American Economics Association.

Friedrich Hayek & the Twentieth Century

Robert Skidelsky*

"[Hayek] became [in his later years] the dominant intellectual influence of the last quarter of the twentieth century".

*Skidelsky is the highly regarded biographer of John Maynard Keynes.

Peter Drucker*

"[Hayek's The Fatal Conceit] fully supports the recent characterization of Hayek by the Economist that he is our time's preeminent social philosopher."

*World-recognized analyst of business management practices and socio-economic institutions.

Julian Simon* (Economics, U. of Maryland)

"Friedrich Hayek, who died on March 23, 1992 at age 92, was arguably the greatest social scientist of the twentieth century. By the time of his death, his fundamental way of thought had supplanted the system of John Maynard Keynes -- his chief intellectual rival of the century -- in the battle since the 1930s for the minds of economists and the policies of governments." (Julian Simon, Hayek's Road Comes to an End, April 3, 1992)

*Well known authority on resource & population economics.

Douglass North* (Washington U., Economics)

"Regarding social order, [Francis] Fukuyama writes, "The systematic study of how order, and thus social capital, can emerge in spontaneous and decentralized fashion is one of the most important intellectual developments of the late twentieth century." He correctly attributes the modern origins of this argument to F. A. Hayek, whose pioneering contributions to cognitive science, the study of cultural evolution, and the dynamics of social change put him in the forefront of the most creative scholars of the 20th century."

*Nobel Prize Winner in Economics

Michael Lessnoff* (U. of Glasgow, Politics)

"Friedrich Hayek is the twentieth-century social theorist who, probably more than any other, found himself vindicated by events -- if not wholly, then at least in his central contention. He is also the one who, more than any other, himself exercised a significant political influence." (Michael Lessnoff, Political Philosophers of the Twentieth Century. New York: Blackwell. 1999. p. 146)

*Lessnoff is a specialist in the philosophy of social science & the political philosophy of the 20th century.

Kenneth Minogue* (U of London, Political Science)

"If the central contest of the twentieth century has pitted capitalism against socialism, then F. A. Hayek has been its central figure. He helped us to understand why capitalism won by a knockout. It was Hayek who elaborated the basic argument demonstrating that central planning was nothing else but an impoverishing fantasy." (Kenneth Minogue, "Giants Refreshed II: The Escape from Serfdom: Friedrich von Hayek and the Restoration of Liberty". TLS: Times Literary Supplement. Jan 14, 2000, p. 11)

*Minogue is a respected British political scientist.

Hayek and the International Triumph of the Liberal Order & Idea.

Milton Friedman* (Economics, U. of Chicago)

" . . I think the Adam Smith role was played in this cycle [i.e. the late twentieth century collapse of socialism in which the idea of free-markets succeeded first, and then special events catalyzed a complete change of socio-political policy in countries around the world] by Friedrich Hayek's The Road to Serfdom."

"Over the years, I have again and again asked fellow believers in a free society how they managed to escape the contagion of their collectivist intellectual environment. No name has been mentioned more often as the source of enlightenment and understanding than Friedrich Hayek's . . I, like the others, owe him a great debt . . his powerful mind . . his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society."

*Nobel Prize winner in Economics.

Daniel Yergin* & Joseph Stanislaw*

".. Underlying all this has been a fundamental shift in ideas .. The dramatic redefinition of state and marketplace over the last two decades demonstrates anew the truth of Keynes' axiom about the overwhelming power of ideas. For concepts and notions that were decidedly outside the mainstream have now moved, with some rapidity, to center stage and are reshaping economies in every corner of the world. Even Keynes himself has been done in by his own dictum. During the bombing of London in World War II, he arranged for a transplanted Austrian economist, Friedrich von Hayek, to be temporarily housed in a college at Cambridge University. It was a generous gesture; after all, Keynes was the leading economist of his time, and Hayek, his rather obscure critic. In the postwar years, Keynes' theories of government management of the economy appeared unassailable. But a half century later, it is Keynes who has been toppled and Hayek, the fierce advocate of free markets, who is preeminent ..". (Daniel Yergin & Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace that Is Remaking the Modern World. New York: Simon & Schuster. 1998. pp. 14-15)

*President & Managing Director of Cambridge Energy Research Associates.

Irving Kristol* (editor, The Public Interest)

".. the most intelligent defender of capitalism [in the modern period has been Friedrich Hayek] .. Hayek .. has as fine and as powerful a mind as is to be found anywhere."

"It is in good part because of Professor Hayek's work [on 'social engineering' and 'scientism'], and also because of his profound insights -- most notably in The Constitution of Liberty -- into the connection between a free market, the rule of law, and individual liberty, that you don't hear professors saying today, as they used so glibly to say, that 'we are all socialists now'."

"As a result of the efforts of Hayek .. and the many others who share [his] general outlook, the idea of a centrally planned and centrally administered economy, so popular in the 1930s and early 1940s, has been discredited."

*Kristol is well-known as the intellectual leader of the 'neo-conservatives' in America.

Thomas Sowell* (Hoover Institute)

"The 20th Century looked for many decades as if it were going to be the century of collectivism .. Anyone who would have predicted the reversal of this trend .. would have been considered mad just a dozen years ago. Innumerable factors led to [the reversal of the rise of collectivism], not the least of which was the bitter experience of seeing 'rational planning' degenerate into economic chaos and Utopian dreams turn into police-state nightmares. Still, it takes a vision to beat a vision .. An alternative vision had to become viable before the reversal of the collectivist tide could begin with Margaret Thatcher in Britain and Ronald Reagan in the United States. That vision came from many sources, but if one point in time could mark the beginning of the intellectual turning of the tide which made later political changes possible, it was the publication of The Road to Serfdom by Friedrich A. Hayek ..".

*Sowell is a leading historian of economic thought, and an internationally recognized authority on the problems of race, politics, and culture.

Margaret Thatcher (British Prime Minister, 1979-1990)

".. the most powerful critique of socialist planning and the socialist state which I read at this time [the late 1940's], and to which I have returned so often since [is] F. A. Hayek's The Road to Serfdom." (Margaret Thatcher, The Path to Power, New York: Harper Collins, 1995, p. 50).

"Our inspiration was less Rab Butler's Industrial Charter than books like Colm Brogan's anti-socialist satire, Our New Masters . . and Hayek's powerful Road to Serfdom, dedicated to 'the socialists of all parties'. Such books not only provided crisp, clear analytical arguments against socialism, demonstrating how its economic theories were connected to the then depressing shortages of our daily lives; but by their wonderful mockery of socialist follies, they also gave us the feeling that the other side simply could not win in the end. That is a vital feeling in politics; it eradicates past defeats and builds future victories. It left a permanent mark on my own political character, making me a long-term optimist for free enterprise and liberty ..". (Margaret Thatcher, The Downing Street Years, New York: Harper Collins, 1993, pp. 12-13.)

John Ranelagh writes of Margaret Thatcher's remark at a key Conservative Party meeting in the late 1970's, "Another colleague had also prepared a paper arguing that the middle way was the pragmatic path for the Conservative party to take .. Before he had finished speaking to his paper, the new Party Leader [Margaret Thatcher] reached into her briefcase and took out a book. It was Friedrich von Hayek's The Constitution of Liberty. Interrupting [the speaker], she held the book up for all of us to see. 'This', she said sternly, 'is what we believe', and banged Hayek down on the table." (John Ranelagh, Thatcher's People: An Insider's Account of the Politics, the Power, and the Personalities. London: HarperCollins, 1991.)

"For Dicey, writing in 1885, and for me reading him some seventy years later, the rule of law still had a very English, or at least Anglo-Saxon, feel to it. It was later, through Hayek's masterpieces The Constitution of Liberty and Law, Legislation and Liberty that I really came to think this principle as having wider application." (Margaret Thatcher, The Path to Power, New York: Harper Collins, 1995, pp. 84-85.)

".. all the general propositions favouring freedom I had .. imbibed at my father's knee or acquired by candle-end reading of Burke and Hayek ..". (Margaret Thatcher, The Path to Power, New York: Harper Collins, 1995, p. 604).

".. Adam Smith, the greatest exponent of free enterprise economics till Hayek and Friedman." (Margaret Thatcher, The Downing Street Years, New York: Harper Collins, 1993, p. 618)

Ronald Reagan (U.S President, 1981-1989)

"Rowland Evans: "What philosophical thinkers or writers most influenced your conduct as a leader, as a person?" Ronald Reagan: "Well .. I've always been a voracious reader -- I have read the economic views of von Mises and Hayek, and .. Bastiat .. I know about Cobden and Bright in England -- and the elimination of the corn laws and so forth, the great burst of economy or prosperity for England that followed." (Rowland Evans & Robert Novak, The Reagan Revolution, New York: E. P. Dutton, 1981, p. 229).

"The most important player on Ronald Reagan's economic team is Ronald Reagan. The person most responsible for creating the economic program that came to be known as Reaganomics is Reagan himself. For over twenty years he observed the American economy, read and studied the writings of some of the best economists in the world, including the giants of the free market economy -- Ludwig von Mises, Friedrich Hayek and Milton Friedman -- and he spoke and wrote on the economy, going through the rigorous mental discipline of explaining his thoughts to others. Over the years he made all the key decisions on the economic strategies he finally embraced. He always felt comfortable with his knowledge of the field and he was in command all the way." (Martin Anderson, Revolution, New York: Harcourt Brace Jovanovich, 1988, p. 164.)

George Bush (U.S. President, 1989-1993)

"[Hayek is] one of the great thinkers of our age .. [he] revolutionized the world's intellectual and political life." (Presidential statement, 1991).

Milton Friedman* (Economics, U. of Chicago)

" .. My interest in public policy and political philosophy was rather casual before I joined the faculty of the University of Chicago. Informal discussions with colleagues and friends stimulated a greater interest, which was reinforced by Friedrich Hayek's powerful book The Road to Serfdom, by my attendance at the first meeting of the Mont Pelerin Society in 1947, and by discussions with Hayek after he joined the university faculty in 1950. In addition, Hayek attracted an exceptionally able group of students who were dedicated to a libertarian ideology. They started a student publication, The New Individualist Review, which was the outstanding libertarian journal of opinion for some years. I served as an adviser to the journal and published a number of articles in it .. ". (Milton & Rose Friedman, Two Lucky People: Memoirs, Chicago: U. of Chicago Press, 1998. p. 333).

*Nobel Prize winner in economics.

Hayek and the Revolution in Europe.

Andrzej Walicki* (History, Notre Dame)

"The most interesting among the courageous dissenters of the 1980s were the classical liberals, disciples of F. A. Hayek, from whom they had learned about the crucial importance of economic freedom and about the often-ignored conceptual difference between liberalism and democracy." (Andrzy Walicki, "Liberalism in Poland", Critical Review, Winter, 1988, p. 9.)

*Walicki is formerly of the Institute of Philosophy and Sociology at the Polish Academy of Sciences.

Mart Laar (Prime Minister -- Estonia)

U.S. Representative Dick Armey, "[Estonian Prime Minister] Mart Laar came to my office the other day to recount his country's remarkable transformation. He described a nation of people wh are harder-working, more virtuous -- yes, more virtuous, because the market punishes immorality -- and more hopeful about the future than they've ever been in their history. I asked Mr. Laar where his government got the idea for these reforms. Do you know what he replied? He said, 'We read Milton Friedman and F. A. Hayek'." (Dick Armey, "Address at the Dedication of the Hayek Auditorium", Cato Institution, Washington, D.C., May, 9, 1995.)

Vaclav Klaus (Prime Minister - Czech Republic)

"I was 25 years old and pursuing my doctorate in economics when I was allowed to spend six months of post-graduate studies in Naples, Italy. I read the Western economic textbooks and also the more general work of people like Hayek. By the time I returned to Czechoslovakia, I had an understanding of the principles of the market. In 1968, I was glad at the political liberalism of the Dubcek Prague Spring, but was very critical of the Third Way they pursued in economics." (Vaclav Klaus, "No Third Way Out: Creating a Capitalist Czechoslovakia", Reason, 1990, (June): 28-31).

Milton Friedman* (Hoover Institution)

"There is no figure who had more of an influence, no person had more of an influence on the intellectuals behind the Iron Curtain than Friedrich Hayek. His books were translated and published by the underground and black market editions, read widely, and undoubtedly influenced the climate of opinion that ultimately brought about the collapse of the Soviet Union."

*Nobel Prize Winner in Economics.

Hayek's Influence on 20th Century Political Economy.

Armen Alchian* (Economics, UCLA)

"ALCHIAN: Two things you [Hayek] wrote that had a personal influence on me, after your Prices and Production, were 'Individualism and Economic Order' [sic -- Alchian certainly has in mind Hayek's 'Economics and Knowledge'] and 'The Use of Knowledge in Society.' These I would regard as your two best articles, best in terms of their influence on me.
HAYEK: 'Economics and Knowledge' -- the '37 one -- which is reprinted in the volume, is the one which marks the new look at things in my way.
ALCHIAN: It was new to you, too, then? Was it a change in your own thinking?
HAYEK: Yes, it was really the beginning of my looking at things in a new light . .. I was aware that I was putting down things which were fairly well known in a new form, and perhaps it was the most exciting moment in my career when I saw it [i.e. 'Economics and Knowledge'] in print. ALCHIAN: Well, I'm delighted to hear you say that, because I had that copy typed up to mimeograph for my students in the first course I gave here [i.e. UCLA]. And Allan Wallace . . came through town one day, and I said, 'Allan, I've got a great article!" He looked at it, started to laugh, and said, "I've seen it too; it's just phenomenal!' I'm just delighted to hear you say that it was exciting, because it was to me, too . . that was a very influential article, I must say .. ".

*Alchian is the author of the influential article "Uncertainty, Evolution and Economic Theory", and co-author of the bestselling textbook University Economics.

Ronald Coase* (Economics, U. of Chicago)

"In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us." (Ronald Coase, Nobel Memorial Prize Lecture, "The Institutional Structure of Production", Essays on Economics and Economists, Chicago: U. of Chicago Press, 1994, p. 9)

*Nobel Prize Winner in Economics.

Roy Harrod* (Economic, Cambridge)

John Hicks, "It is not so well known that it [Keynes's and my own move from thinking in terms of price-levels and the rate of interest to thinking in terms of inputs and outputs] is matched by a movement from Hayek to Harrod. I once asked Harrod what had put him on to the construction of his so-call 'dynamic' theory; he said, to my surprise, that it was thinking about Hayek." (J. Hicks, 1982, pp. 340-341)

*Leading figure in the development of 'Keynesian Economics' and 'Dynamic Theory'.

John Hicks* (Economics, Oxford)

"I can date my own personal 'revolution' rather exactly to May or June 1933. It was like this. It began . . with Hayek. His Prices and Production is one of the influences that can be detected in The Theory of Wages; it could not have been otherwise, for 1931 was a Prices and Production year at the London School of Economics . . I did not in fact find it all easy to fit in with my own ideas. What started me off in 1933 was an earlier work of Hayek's, his paper on 'Intertemporal Equilibrium', an idea which I found easier to reduce to my preferred (Paretian or Wicksellian) pattern." (John Hicks, The Theory of Wages, 2nd Edition,1963, p. 307)

".. it was from Hayek that I began [the breakthrough essay "Equilibrium and the Cycle" (1933), the original beginnings of Hick's influential work on the topics of intertemporal equilibrium, monetary theory, and trade cycle phenomena] ". (John Hicks, Money, Interest and Wages, Cambridge: Harvard U. Press, 1982, p. 28).

"There were four years, 1931-1935, when I was myself a member of [Hayek's] seminar in London; it has left a deep mark on my thinking." (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 97).

B. Ingrao & G. Israel, "Hicks elaborated the concept of temporary equilibrium, perhaps the most original contribution of Value and Capital, following the path laid down by Hayek and the Swedish school." (B. Ingrao & G. Israel, 1990, p. 239)

"Hayek was making us think of the productive process as a process in time, inputs coming before outputs ..". (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 359).

"I did not begin from Keynes: I began from Pareto, and Hayek (footnote 10: There is evidence for this, in the paper 'Equilibrium and the Cycle') ..". (John Hicks, Classics and Moderns, New York: Basil Blackwell, 1983, p. 359).

*Nobel Prize Winner in Economics.

Leonid Hurwicz* (Economics, U. of Minnesota)

"I am in complete sympathy with [Kirzner's] point of departure, namely, the emphasis on the dispersion of information among economic decision-making units (called by him, 'Hayek's knowledge problem') and the consequent problem of transmission of information among those units. Much of my own research work since the 1950s has been focused on issued in welfare economics viewed from an informational perspective. The ideas of Hayek (whose classes at the London School of Economics I attended during the academic year 1938-39) have played a major role in influencing my thinking and have been so acknowledged." (L. Hurwicz, 1984, p. 419)

*Leading developer of the economics of information and incentive compatibility.

John Maynard Keynes* (Economics, Cambridge)

"Keynes was shortly to develop his own approach to the general task identified by Hayek [.e.g the task of monetary theory], under the rubric of 'A Monetary Theory of Production' (Keynes, 1973, pp. 381, et seq.)." (A. Cottrell, 1994, p. 199)

"I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart Mill's well-known dictum that 'there cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money,' [when Hayek writes]: "it means also that the task of monetary theory is a much wider one than is commonly assumed; that its task is nothing less than to cover a second time the whole field which is treated by pure theory under the assumption of barter, and to investigate what changes in the conclusions of pure theory are made necessary by the introduction of indirect exchange. The first step towards a solution of this problem is to release monetary theory from the bonds which a too narrow conception of its task has created.'" (John Maynard Keynes, "The Pure Theory of Money: A Reply to Dr. Hayek", Economica, Nov. 1931, pp. 395-396.)

*Leading 20th Century Economist in the English tradition of Marshall, Marx, Malthus, and Mill.

Thomas Sowell* (Hoover Institution)

"If one writing contributed more than any other to the framework in which this work [Sowell's Knowledge and Decisions] developed, it would be an essay entitled 'The Use of Knowledge in Society,' published in the American Economic Review of September 1945, and written by F. A. Hayek . . In this plain and apparently simple essay was a deeply penetrating insight into the way societies function and malfunction, and clues as to why they are so often and so profoundly misunderstood." (Thomas Sowell, Knowledge and Decisions, New York: Basic Books, 1980, p. ix)

*Sowell is a leading historian of economic thought, and an internationally recognized authority on the problems of race, politics, and culture.

Miles Taylor

"During the following decade [of the 1950's] modern economic history took a dramatic swing away from the liberal-left consensus established by the Hammonds, Tawney and the Webbs. The seminal text for this change of direction was the 1954 collection of essays compiled by F. A. Hayek, Capitalism and the Historians . . . ". (Miles Taylor, "The Beginnings of Modern British Social History?" History Workshop Journal. 1997. Vol. 43. Spring: 163)

Arnold Plant* (Economics, L.S.E.)

"I can testify from personal experience to the immense stimulus and direction which Hayek's migration to this country [Great Britain] gave to economic research in the 1930s, not only in London and economics faculties throughout the United Kingdom, but also in the international world of scholarship." (Arnold Plant, "A Tribute to Hayek -- the Rational Persuader", Economic Age, Jan.-Feb., 1970)

*Influential teacher of Nobel Prize winner Ronald Coase, among others.