<제로페이, 공권력을 이용한 소비자 부담페이, 국가가 결제시장 통제하려는 사회주의 발상>
<중기부와 서울시가> 요즘 제로페이 엄청 생색내며 크게 홍보하는데 결국은 소비자가 그 비용을 모두 부담하게 되는 또 다른 실패한 정책이 될 가능성이 높아 보입니다. 왜 혈세로 민간기업들이 할 역할을 정부가 하겠다고 나섭니까? 도대체 어디에서 새로운 부가가치가 창출되거나 효율적 절감이 일어나겠습니까? 왜 자꾸 심판이 무리해서 공을 차려고 합니까? 시장의 경쟁원리와 자원배분원리가 왜곡될 뿐입니다. 문재인 정권과 여당 관계자들…최저임금 올리라며 안되니 혈세로 메워주더니 공유경제로 택시산업 구조조정 위기에 처하자 월급제 도입하자며 혈세로 메우려 하질 않나, 여기저기 평준화, 공공화해서 혈세로 메우고 이제는 급기야 신용결제 수단마저 정부가 직접 하려 하네요. 근데 이게 공짜입니까? 공짜가 될 수 있습니까? 아예 공산주의 선언을 하지 그러세요?
지금 결제방법의 과도기에 있습니다. 스마트폰을 중심으로 결제시스템이 진화하는 건 당연한 추세겠지요. 그렇다면 그 속에서 경쟁이 일어나야 합니다. 하지만 정부가 이미 가격을(수수료 제로) 결정하고 시장에 끼어들었습니다. 새로운 결제수단을 가진 사업자들이 수수료 경쟁을 해 보지도 못하고 정부의 정책에 따라야 하는 상황이 되어버린 것이지요. 그렇다면 소상공인과 국민들은 제로페이를 통해 모두 만족하는 결과가 도출될까요? 결국 사업자들에게 억지로 받아낸 수수료 제로에 대한 손해는 소상공인과 국민들에게 모두 전가될 것이 뻔합니다. 결과적으로 정부가 시장을 파괴하고 있습니다.
① <중기부는> 중간자 없는 결제시스템을 통해 수수료를 제로로 만들겠다는 제로페이가 기존 1~2개의 중간자만 있던 것을 5~8개로 늘려놓고 더 많은 새로운 중간자를 만들어 놨습니다. 중간자가 많아졌다는 것은 결국 중간자 수수료가 발생할 것이며 그로 인해 부담은 결국 소상공인과 국민(세금)이 제공하게 될 것입니다. 개발비용, QR코스 설치비용, 유지관리비용, SPC유지비용, 은행 수수료/ 카드 수수료 제로로 인한 손해 비용, 등을 전부 세금으로 채울 수밖에 없는 구조로 되기 때문에 결국 소상공인과 국민들이 부담하게 됩니다. 누가 우리 세금으로 이런 정책을 하라고 허락했습니까? (발췌)
결국 문 정권은 비핵화가 목적이 아니라 종전선언이 목적이었던 것 같습니다.
정의용 실장은 정완용이 되려 합니까? 민족해방(NL) 운동권들하고 어울려 지내더니 세뇌되신 건지 아니면 원래 그랬습니까? 비핵화하면 종전선언하겠다더니 이제는 비핵화 안되도 종전선언하자는 걸 보니 결국 문 정권의 목적은 비핵화가 아니라 종전선언이었습니다.
북핵은 원래 '불법'이라서 비핵화해야 하는 건 당연한 것이고, 한반도의 정전협정 체제의 종결이나 종전선언 같은 문제는 비핵화와는 논리적으로 별개입니다. 그런데도 문재인 정권은 비핵화되면 종전선언해야 한다고 떠들어대며, 스스로 비핵화 협상 국면에 북한이 주장해온 종전선언을 이슈로 올려버렸습니다. 뭐, 북한을 비핵화 협상테이블에 끌어들이기 위한 궁여지책일 거라 이해하고 다들 넘어갔지만 실은 대단히 석연치 않았지요…
6·25 침략전쟁의 종전을 선언하려면 사실 북한이 침략전쟁을 일으킨 책임과 그 전쟁당시 북한군이나 부역자들이 자행한 민간인 학살 등을 조사하고 그에 따른 배상 등 뒷수습이 따라야 하는 법인데 그런 얘기는 일언반구도 없이 종전선언을 하겠다는 걸 보고는 도대체 이들의 조국이 어디인가 하는 의문을 품지 않을 수 없었습니다. 만일 그런 책임과 배상을 물을 것도 아닌데 왜 종전선언에 집착하는 것일까요? 설마하니 그간 북한이 주장해온 미군철수 등을 염두에 둔 것은 아닌지 정부의 해명에도 불구하고 국민들은 의심해 왔고, 그럼에도 북핵으로 안보균형이 깨진 상태를 극복해야 하므로 일단 비핵화 진행되는 걸 보자며 그 의심에 대한 판단을 유보해 왔지요.
그런데 비핵화가 전혀 진전되지 않는 상태에서 비핵화와 상관없이 종전선언을 검토해야 한다는 주장을 하는 걸 보니 그 의심이 더욱 확실해집니다. 결국 문 정권은 비핵화가 목적이 아니라 종전선언이 목적이었던 것 같습니다. (발췌)
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매티스 사임을 계기로 본 트럼프의 對韓 인식
김영남(조갑제닷컴)
콘 경제위원장은 한국이 엄청난 비용을 미국에 부담하고 있다며 대통령을 설득하려 했다. 그는 한국과의 무역협정은 미국의 경제에도 이익이라며 “미국은 세계에서 가장 훌륭한 TV를 245 달러에 사온다. 미국 사람들이 TV에는 돈을 덜 쓰고 미국에서 나온 다른 제품들에 돈을 더 쓰고 있다는 뜻”이라고 거듭 강조했다. 그는 주한미군을 철수하면 항공모함 등으로 대체해야 하는데 그럴 경우 전세계는 더욱 불안해 할 것이고 비용도 10배나 더 들 것이라고 덧붙였다.
트럼프 대통령은 2만 8000명의 주한미군을 위해 35억 달러가 든다고 강조하며 이들이 왜 그곳에 있는지 모르겠으니 철수시키도록 하자고 했다. 그러자 콘 위원장은 “그렇다면 대통령 각하가 잠을 푹 잘 수 있기 위해서는 그 지역에 무엇이 배치될 필요가 있다고 생각하십니까”라고 묻자 트럼프 대통령은 “나는 그런 것 필요 없다. 그리고 나는 아기처럼 잘 잔다”고 답했다. (발췌)
---> 그동안 일부 우파 인사들은 미국이 한국의 민주주의를 위해 무엇인가를 해줄 거라고 믿었었는데, 그게 모두 환상이었다는 게 위의 글로 드러난다. 지금 좌파 독재를 끝내는 길은 우파들이 머리를 짜내어 투쟁하는 것 외에는 방법이 없다. 미국은 문죄인 정부의 레짐 체인지 따위를 전혀 고려하지 않고 있다.
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미국 일리노이 주. 전문용어로 Shelf cloud 또는 아치구름/ 출처 일베
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중국이 또 다시 양적 완화라는 바보 짓을 하려고 한다. 불황
이라며 시장에 돈을 푸는 짓은 언 발에 오줌 누기와 똑같다.
점점 상황이 악화된다는 것이다. 중국 경제도 위기와 파탄으
로 나아가고 있다. 케인즈의 망령이 세계의 하늘을 배회하고
있다.
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베네수엘라 먹을 게 없음.
수퍼도 다 털어서 진짜 생존자체가 위험에 처함.
여자들은 콜롬비아로 건너가 머리카락도 팔고
모유도 팔고 몸도 팔아 밥값 마련.
머리카락은 10불-30불 가격이고
매춘은 7불 밖에 못받음.
(한줄요약) 공짜 복지 공약하는 대선후보 매번 당선시켜 망한 나라. There is no free lunch.
[출처] 베네수엘라 여자 몸값
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동토의땅 북한에서 자유를찾아 남한으로 탈북한
이제는 대한민국 태극기집회 애국자이신 이애란박사님의 어록입니다.
"사회주의는 자본주의가 있어야 존재할수있다.
사회주의는 자본주의를 뜯어먹어야 살수있다.
사회주의들끼리 있으면 자기들끼리 뜯다가 멸망한다."
김일성은 북한의 능력있는 사람들이 평생 이루어놓은
공장이나 지주농장을 모두 빼앗아 국유화해서
그야말로 무식한 공산당 사회주의로 골고루 잘 나눠 먹었습니다.
이밥에 소고기국으로 ---
그러나 세월이 흘러 나누어먹기만하고 빼앗은 공장은
낡아빠져 부서지고 농장은 황폐해져 생산량이 줄고 적폐인
지주들도 공장주도다 남쪽으로 피난갔으니---
이제는 나누어 먹을것이 부족하여 배급이 없어지고 여기저기서 불평불만들이
많아지니까 선량한국민들의 불평을 막기위하여 국민들을 억지로 반동분자로 몰아
불평하는 사람들은 아오지탄광으로 보내고 요덕수용소도 만들어 보냈겠지요.
김정일 김정은 시대에는 이제 북한은 많은 땅이 저주의땅 집단 수용소로 변하였습니다.
그들끼리 나발불던 무상복지 공산당 사회주의는 이제 할수없이 그들의 원수인 자본주의
외국 국가들의 적십자에 손을벌려 빌어먹고 있지요.
내가 지금 얘기한것은 그냥 상식적인 이야기 입니다.
물론 여러분도 다 아는 이야기인데 나는 왜 자꾸 걱정이 되나요?
능력있는 분들이 평생 열심히 노력하고 피땀흘려 이루어놓은 자본주의공장 지주농장 다 빼앗아 산적같이
나누어먹는 무식한 무상복지 공산당 사회주의는 좋아하면 부작용으로 아오지탄광 요덕수용소가 생깁니다.
[출처] 사회주의는 자본주의를 뜯어먹어야 살수있다.
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화요비(Hwayobi) - 바보 live / the Pub
화요비 - 그대의 향기 Live
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심리학자가 우리에게 '지능'에 대해 설교하는 건, 합창대원이
편취(騙取)를, 거북이가 비상을, 수녀가 은행 터는 법을 가르
치는 것과 같다.
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1미터 뛰기를 하면 다리를 튼튼하게 하지만, 100 미터에서
뛰어내리면 죽는다. 스케일이 중요하다.
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기회의 평가는 과대평가되었다.
기회의 평등을 주장하는 것은 루드빅 폰 미제스가 기본적인 사회 현상이라고 부른 “분업”에 반대하는 것이다.
인간은 재능이나 처지가 일정하지도 평등하지도 않다. 따라서 우리 앞에 높인 생산의 기회들은 언제나 불평등하다. 기회의 평등을 주장하는 것은, 인간의 불평등하고 불균등한 자연적 상황을 강제적으로 변화시키라는 요구와도 같다.
"Equality of Opportunity" Is Overrated
Ryan Griggs
It’s become quite fashionable for members of the so-called Intellectual Dark Web (IDW) like Dave Rubin, Ben Shapiro, and Jordan Peterson to decry equality of outcome as a thinly veiled guise for tyranny and oppression. However, in pleading against the doctrine of equality of outcome, these digital intellectuals inevitably defend the insidious doctrine of equality of opportunity.
What?! How could you be against equality of opportunity! Isn’t America the land of the free?! Isn’t equality of opportunity the literal meaning of freedom?
No.
In fact, to stand for equality of opportunity is to stand against what economist Ludwig von Mises called “the fundamental social phenomenon:” the division of labor.
The division of labor is the product of a naturally occurring social regularity, what Mises called “the Ricardian Law of Association” (158). The law of association is based on the English economist David Ricardo’s insight that for any two countries A and B where A is more efficient than B in producing both goods p and q, both countries are better off if both countries specialize in producing exclusively that in which each is relatively more efficient. Mises writes:
“Ricardo was fully aware of the fact that his law of comparative cost, which he expounded mainly in order to deal with a special problem of international trade, is a particular instance of the more universal law of association.
If A is in such a way more efficient than B that he needs for the production of 1 unit of the commodity p 3 hours compared with B’s 5, and for the production of 1 unit of q 2 hours compared with B’s 4, then both will gain if A confines himself to producing q and leaves B to produce p. If each of them gives 60 hours to producing p and 60 hours to producing q, the result of A’s labor is 20 p + 30 q; of B’s, 12 p + 15 q; and for both together, 32 p + 45 q. If however, A confines himself to producing q alone, he produces 60 q in 120 hours, while B, if he confines himself to producing p, produces in the same time 24 p. The result of their activities is then 24 p + 60 q, which, as p has for A a substitution ratio of 3/2 q and for B one of 5/4 q, signifies a larger output than 32 p + 45 q. Therefore it is manifest that the division of labor brings advantages to all who take part in it. Collaboration of the more talented, more able, and more industrious with the less talented, less able, and less industrious results in benefit for both . The gains derived from the division of labor are always mutual” (emphasis added).
Put differently, even though country (or individual A) can produce p and q faster than B, it still makes sense for A and B to specialize. Where Mises uses the language “substitution ratio” to explain why, you can also think in terms of what economists call opportunity cost. What Mises is showing in his example is that the opportunity cost to produce p is lower for B than it is for A.
This is the essence of the law of association. It’s the corner-stone of the division of labor. Furthermore, it isn’t just that we can all prosper in terms of greater total production despite the uneven, unequal distribution of talents and opportunities. It’s because of our differences that specialization within the division of labor according to the law of association that everyone is better off cooperating and trading.
To protest against equality of opportunity is to contest what Mises calls the natural conditions determining man’s life and effort. Mises states clearly, these “natural facts are: First, the innate inequality of men with regard to their ability to perform various kinds of labor. Second: the unequal distribution of the nature-given, nonhuman opportunities of production on the surface of the earth”
We are unevenly, unequally distributed in nature. Therefore, the productive opportunities confronting us are always unequal. To call for equality of opportunity is just as much a plea for the tyrannical, forceful transformation of man’s uneven, unequal natural situation as the call for equality of outcome is a plea for the tyrannical, forceful redistribution of wealth.
As a matter of fact, man is inherently unequal in both opportunity and outcome. In contrast to the presumptions of the far-left and other economic illiterates, mankind’s inequality is the active ingredient in progressive, prosperous social transformation. That is, this inequality can be harnessed to make everyone better off. Mises writes, “If the earth’s surface were such that the physical conditions of production were the same at every point and if one man were as equal to all other men as is a circle to another with the same diameter in Euclidean geometry, division of labor would not offer any advantages for acting man” (emphasis added).
A close reader might object: “Mises is talking about nonhuman opportunities, things like geography and natural resources. Equality of opportunity is about equality of human opportunity!”
But this, too, misses the mark. First, consider the logistical impossibility of offering equal opportunity to every human task. Is the shop-owner expected to offer his available cashier position to every person equally, i.e. at the same time and in equally intelligible language across the planet?
Second, equality for so-called human opportunity would amount to an outright elimination of the essence of property ownership — that is, the right to determine not only what to do with one’s property, but the right to decide how to determine what to do with it! Suppose for the purpose of efficiency, or of mere arbitrary whim (or of whatever reason he chooses!), the shop-owner decides only to advertise his open cashier’s position to college-age students who live within five miles of his storefront. What “solution” would the tyrannical marchers for equality of opportunity recommend in order to remedy this supposed injustice?
The plea for equality of opportunity is a bourgeois virtue signal against the much-maligned boogieman of discrimination. My egalitarian friends fail to realize that the menace of equality does not quietly confine itself to modern racial and ethnic sensibilities. To the contrary, it bleeds throughout the culture whereby, in time, the mere acknowledgement of the biological differences between male and female constitutes an act of discriminatory “hate speech.” Paradoxically, free speech activists who apologize for equality of opportunity in order to justify their distaste of equality of outcome risk their own primary cause.
Fortunately, no affirmation of equality of outcome nor of opportunity is necessary to defend a free, collaborative, prosperous society. Economics, and economics alone, demonstrates otherwise. Mises writes,
“Neither history nor ethnology nor any other branch of knowledge can provide a description of the evolution which has from the packs and flocks of mankind’s nonhuman ancestors to the primitive, yet already high differentiated, societal groups about which information is provided in excavations, in the most ancient documents of history, and in the reports of explorers and travelers who have met savage tribes. The task which science is faced in respect of the origins of society can only consist in the demonstration of those factors which can and must result in association and its progressive intensification. Praxeology solves the problem. If and as far as labor under the division of labor is more productive than isolated labor, and if and as far as man is able to realize this fact, human action itself tends toward cooperation and association; man becomes a social being not in sacrificing his own concerns for the sake of a mythical Moloch, society, but in aiming at an improvement in his own welfare. Experience teaches that this condition – higher productivity achieved under the division of labor – is present because its cause – the inborn inequality of men and the inequality in the geographical distribution of the natural factors of production – is real. Thus we are in a position to comprehend the course of social evolution ”
Advocates of a peaceful and prosperous society, or of free speech — as appears to be the unifying mission of the IDW — need not protest the uneven, unequal nature of mankind. Rather, they need only turn to economics to see that inequality is the nexus conjoining man’s natural condition of antagonistic poverty to collaborative prosperity.
Ryan Griggs is a business consultant.
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드소토: 오스트리아 학설을 종합한 학자
Jesús Huerta de Soto: The Synthesizer of the Austrian School
William Hongsong Wang
[Originally printed in the journal Procesos de Mercado: Revista Europea de Economía Política 14, no. 2 (Autumn 2017).]
1. Personal Life and Career
1.1 Early Life
Prof. Jesús Huerta de Soto Ballester is one of the leading Austrian School economists in the contemporary era. On December 23, 1956, Huerta de Soto was born in a devout Catholic and business family in Madrid, Spain. As early as 1928, his grandfather Jesús Huerta Peña started running an insurance company called “ESPAÑA S.A”. In 1954, Jesús Huerta Ballester, father of Huerta de Soto, began running this enterprise with Huerta Peña. After two generations of painstaking efforts, the business reached a considerable size and strength and grew into one of the most important companies in the insurance industry in Spain. The growing business environment and classical liberalism played a significant role in shaping Huerta de Soto, and led him to become an insightful Austrian School economist. In 1972, 15-year-old Huerta de Soto read Milton Friedman’s Capitalism and Freedom from the book collection of the library of his libertarian father's library.1 This is the first libertarian book that Huerta de Soto read. Some time later, by chance, Huerta de Soto also read Ludwig von Mises’ Human Action at the age of 16.2 After that, he became a convinced libertarian. In the autumn of 1973, with the help of his father Huerta Ballester and other passionate scholars, Huerta de Soto started to participate in the seminars of Austrian Economics that took place every Thursday in Madrid. The participation in these seminars provided Huerta de Soto a unique and excellent opportunity to explore the thoughts of the Austrian School and the errors of Keynesian Economics and the Chicago School.3
Huerta de Soto soon showed his interest and talent in law and economics, and the relatively well-off family made the young Huerta de Soto fully devoted to his academic research. He obtained his bachelor degrees in both law and economics from Complutense University of Madrid (UCM) in 1978, and one year later he began working as an assistant professor of Political Economy at the Faculty of Law of the UCM. With a recommendation letter from Prof. F. A. Hayek4 and the support of his family, Huerta de Soto went to study at Stanford University from which he obtained his MBA in 1983. During this period he deepened his knowledge on Austrian Economics, especially on the capital theory and on the theory of the market process. During his studies in the USA, with the help of his friends from the Institute of Humane Studies, Huerta de Soto met Murray Rothbard, one of the best students of Ludwig von Mises. Together they discussed the most controversial and exciting topics in economics.5 When remembering this story, Huerta de Soto said that knowing Rothbard was “possibly the greatest intellectual experience.”6
1.2. Academic Career and Contributions to Liberty
When Huerta de Soto finished his studies at Stanford, he went back to Spain. Once back in Spain his thesis Private Pension Planning;7 was awarded King Juan Carlos International Prize of Economy. His thesis discussed how to articulate a private pension system and its relative advantage compared to that of the government. One year later, based on his thesis,8 he obtained his Ph.D. degree in law from the Complutense University, and his doctoral thesis Private Pension Planning was published. During his tenure in the law faculty of Complutense University, Huerta de Soto continued studying economics and shorty after was awarded his Ph.D. degree in economics. In 1992, based on his economics thesis, The Controversy over Socialist Economic Calculation,9 and other academic works, the 36-year-old Huerta de Soto published his famous book Socialism, Economic Calculation and Entrepreneurship,10 which demonstrates the impossibility of socialism. The historical and academic background of the debate on the economic calculation problem of socialism of the 1920’s between the Austrian School and the Neoclassical School, served as a starting point. Huerta de Soto’s book11 soon became the Austrian School reference book for the study of the socialist economic calculation problem. In his book he systematically and comprehensively discusses the impossibility of socialism from the perspective of entrepreneurship and the nature of socialism.
The 1990s was one of the peaks of Huerta de Soto’s academic career. In 1998, his other great book, Money, Bank Credit, and Economic Cycles12 (a systematic analysis of business cycles and free banking theory) was published. Dr. Jörg Hülsmann believes that this book was “the first Misesian treatise on money and banking to appear since [the] publication”13 of Mises’s original work Theory of Money and Bank Credit14 in 1912, and is “the most comprehensive analysis of fractional-reserve banking and of business cycles in print,”15 and considers that “[a]ll serious students of these subject matters will have to become acquainted with it.”16
Professor Huerta de Soto makes every effort to cultivate younger generations of Austrian School scholars. In 2000, he became a full-time professor of Political Economy at Rey Juan Carlos University in Madrid (URJC),17 continuing his systematic teaching of Austrian School Economics which he began in the 1980s at Complutense University. Prof. Huerta de Soto currently also serves as a doctoral director. In 2004, Huerta de Soto founded the journal Procesos de Mercado,18 which is the first contemporary Austrian Economics’ academic journal in Spain. Austrian economists all around the world, especially the Spanish speaking young scholars, enthusiastically submit their articles to this journal, regarding it as a good place to improve their academic research and to communicate with other researchers.
During Huerta de Soto’s academic and teaching career, he inherited the life insurance company that his grandfather and father had operated for many years, and gradually he has become a fruitful and steady entrepreneur. In 2005, after 51-years working for the company, Huerta de Soto’s father Jesús Huerta Ballester retired and became the Honorary President of the Company.19 The management of the company was then transferred to Huerta de Soto.
That same year, with the assistance of Huerta de Soto, Spain established its first libertarian-economic institute, Instituto Juan de Mariana, building a bridge between the Spanish speaking countries and libertarians all around the world. The Instituto Juan de Mariana has been heavily influencing on the Spanish speaking libertarians.
In pro of the new generations of Austrian School economists, in September 2007 Huerta de Soto founded the Official Master in Economics of the Austrian School20 at the Rey Juan Carlos University in Madrid, and started working as its director and coordinator. This program is the world’s first master program on the Austrian School of Economics. Since then, Huerta de Soto has been cultivating young Austrian scholars and students from undergraduate to doctoral students all-around the world at Rey Juan Carlos University. Every Thursday night Professor Huerta de Soto’s economics seminar takes place. Libertarians and Austrian scholars from all around the world, as well as influential people in the areas of politics and business, from both Spain and Europe, attend his seminars and courses. The participants enjoy his passionate and unique style when giving his lectures. He has inspired some of his students at URJC to become Austrian scholars, including the professors of the Master in Economics of the Austrian School, such as Miguel Ángel Alonso Neira, Philipp Bagus, Juan Ramón Rallo, and others. Young students can also choose these professors as directors of their master and Ph.D. theses. Other students have become entrepreneurs, and others are contributing in many ways to the libertarian movement.21
Professor Huerta de Soto has also contributed to the global libertarianism movement by donating his publications and his collections of Austrian School works. In Spain, he has given thousands of books to the Instituto Juan de Mariana, Students for Liberty (SFL) and other research institutions and movements related to the Austrian School and libertarianism. Many young Spanish people, who have become libertarians and followers of the Austrian School by reading Huerta de Soto and by listening to his speeches, are devoting themselves to the libertarian movement as Austrian scholars, journalists, editors, and entrepreneurs. Now, every year, thousands of young Spanish people participate in SFL activities through conferences, meetings, and dinners. The books of the Austrian School of Economics have also appeared in leading libraries and bookstores in Spain because of the effort of Professor Huerta de Soto and his disciples. His followers continue to express their views through media and academic journals, extending the influence of the Austrian School and libertarianism to the public and to academia. The idea of libertarianism and market economy is becoming more and more of a concern within the Spanish people, especially the younger elite.
As Spanish is also one of the main languages in Latin America, these libertarian activities supported by Professor Huerta de Soto have also been introduced into that region through donations of books, correspondences, online courses and other means. A variety of research institutions, student movements, conferences and other activities on the Austrian School and libertarianism continue to flourish in Latin America. In Guatemala, the great disciples of Huerta de Soto, represented by Gabriel Calzada, are teaching Austrian School Economics at the libertarian university, Francisco Marroquín University (UFM).22 The UFM has become one of the roots of the Austrian tradition in Latin America, and has started researching with George Mason University, the Mises Institute, the Cato Institute, the Foundation of Economic Education (FEE) and other prestigious libertarian educational institutions and think tanks. Even in the dictatorship of the Communist Cuba, by the efforts of Professor Huerta de Soto and other liberty fighters, the real economic knowledge and classical liberal ideas have gradually broken through the ideological fence.23 Some Cubans expressed their desire to know more about the essence of communism, capitalism and the Austrian School Economics, and Huerta de Soto generously sent the related books as gifts.24 After reading the books, these Cubans were enlightened by the impossibility of the socialist economic calculation and the need of building a true free society in Cuba.25
Professor Huerta de Soto’s enthusiasm in academia and libertarianism has changed the fate of countless people, especially many young students. Both the perseverance of Huerta de Soto and his disciples’ academic research are particularly noteworthy in the expansion of libertarianism in Spain and Latin America. Huerta de Soto not only pursues his personal success in business and the development of his own academic knowledge, but also the benefit of all people around the world, especially the young generations, who seek to understand and construct a free society through their creativity and entrepreneurship.
In 2009, Huerta de Soto’s third scholarly work The Theory of Dynamic Efficiency26 was published, which developed the definition of dynamic efficiency in economic science. His books and papers have been translated into at least 21 languages and have been published all around the world. In the next section, Huerta de Soto’s academic contributions will be reviewed.
We consider that Huerta de Soto has made three great theoretical contributions: the systemic understanding of the theory of the impossibility of socialism, the theory of bank credit and economic cycles, and the theory of dynamic efficiency. Based on Mises27 (the thoughts of entrepreneurship, the critics of socialism and the understandings of the methodological and theoretical problems of Neoclassical Economics), Rothbard28 (the theories of natural law in banking issues), and Hayek29 (the theory of the social evolutionary process and spontaneous order), he has become a worldwide reference on the Austrian School of Economics. With his deep understanding of both Austrian Economics and Neoclassical Economics, Huerta de Soto has innovatively outlined the systematic and comprehensive theories of the Austrian School. His greatest academic challenge has been inheriting the Austrian traditions and at the same time breaking new academic ground for the future; which are vital for the development of the Austrian School and are particularly important for young scholars to have a comprehensive understanding of the economic science.
Huerta de Soto is also significantly contributing to the development of the Austrian School in China, by helping young Chinese scholars to study Austrian Economics. Because of his support and invitations, at least six young Chinese libertarians30 have come to study under his direction in the Master in Economics of the Austrian School since 2012. Three of them continued their Ph.D. research in economics deepening their knowledge on the Austrian School. Additionally, with the help of Professor Huerta de Soto, a series of works on the Austrian School have been published in China, including his book The Austrian School31 and his three-other major academic books: Socialism, Economic Calculation and Entrepreneurship; Money, Bank Credit, and Economic Cycles; and The Theory of Dynamic Efficiency. He also maintains regular communication with the Chinese Austrian scholars, following the development of the Austrian School in China, and providing help and guidance to the Chinese scholars. Huerta de Soto’s theories on socialism, free-banking, and dynamic efficiency are being widely disseminated among Chinese libertarians, and are becoming the focus of study, analysis and discussion of the Austrian School in China. With the guidance and help of Professor Huerta de Soto, more and more articles from the Chinese scholars on the application and extension of his theories have been published in China and abroad. On behalf of the Chinese scholars studying Huerta de Soto’s academic works, we are very grateful for his selflessness and generosity. In this way, Professor Huerta de Soto’s ten recommendations for young students are spurring us forward:
1. Be enthusiastic. Enthusiasm is the inner psychic energy that moves us to act to achieve our goals. What do we do when we don’t feel enthusiasm? Act as if we are enthusiasts, and we will be enthusiastic.
2. To persevere.
3. Always act the best you can. Put the principles before the seemingly useful or practical.
4. Never worry about anything. Worrying means you are wasting time.
5. Learning languages (English). Learning English is as important as academic study.
6. Being aware of what is happening in the world.
7. Properly balance professional, family and cultural goals. The family side includes family and friends and the cultural side includes physical and spiritual culture (art, travel, history, etc.).
8. Be a good entrepreneur.
9. Have a critical spirit. Ludwig von Mises said, “Tu ne cede malis sed contra audentior ito.” (Do not give in to evil, but proceed ever more boldly against it).
10. Having an excellent, serious and ethical behavior in all areas in our lives. If we ever act badly we must recognize the error, try to solve the damage caused by it and go ahead with all the advice we have learned.32
For decades, Huerta de Soto has devoted significant effort to academia, business, and the libertarian movement in Spain and in the international society. His modest, professional and serious attitudes towards the thoughts of economic schools, his hard work in the insurance industry, his care and guidance to students, his deep love of freedom, and his selfless, sincere and enthusiastic contribution to liberty has already become a milestone in the history of the Austrian School and libertarian movement, inspiring the revival of the Austrian school and classical-liberalism. In the next section, we will focus on the main academic achievements of Professor Huerta de Soto.
2. Theoretical Contributions of Huerta de Soto
2.1. Theory of the Impossibility of Socialism
One of Huerta de Soto’s greatest academic contributions is his theory on socialism. He redefines socialism by introducing the concept of entrepreneurship, and makes a synthesis of the economic calculation problem of socialism based on the previous Austrian scholars. He also contributes to the theory of different types of socialism and the theory of impossibility of computerized central planning.
2.1.1. Entrepreneurship and Why Socialism is Impossible
In Human Action, Mises defined entrepreneurship in a broader sense as “acting man exclusively seen from the aspect of the uncertainty inherent in every action,”33 which means that the entrepreneur has to take the risk of uncertainty in the future as a result of his entrepreneurial decision. Mises also believed that entrepreneurship is the driving force of the whole market system. He said,
"[I]t is impossible to eliminate the entrepreneur from the picture of a market economy. … In eliminating the entrepreneur one eliminates the driving force of the whole market system."34
Inheriting Mises’ definition of entrepreneur, Huerta de Soto creates two related definitions on entrepreneurship, in the broad and the strict sense. The broad sense is equal to human action. He argues that by bearing uncertainty, “[E]ntrepreneurship actually coincides with human action. In this respect, it could be said that any person who acts to modify the present and achieve his objectives in the future exercises entrepreneurship.”35 And human action is “any deliberate behavior or conduct”; “In acting, all men seek to accomplish certain ends which they have discovered are important to them.”36 Based on Israel Kirzner’s strict definition of entrepreneurship as the function of alertness,37 Huerta de Soto defines that being an entrepreneur means trying to find a profitable market opportunity and the information for this end through a dynamic market process; thus entrepreneurship “consists basically of discovering and perceiving (prehendo) opportunities to achieve an end, or to gain a profit, and acting accordingly to take advantage of these opportunities which arise in the environment.”38
As Huerta de Soto points out, “[i]t is impossible to grasp the concept of socialism without a prior understanding of the essence of entrepreneurship.”39 Based on the analysis of entrepreneurship, Huerta de Soto defines the characteristics of information as subjective, creative, tacit, practical, and dispersed.40 He further defines socialism as “any system of institutional aggression on the free exercise of entrepreneurship,”41 and aggression or coercion by means of “all physical violence or threats of physical violence which another person or group of people initiates and employs against the actor.”42
Huerta de Soto also systematically reviews the historic debate between the Austrian School, represented by Ludwig von Mises, and the Neoclassical Economics represented by Oskar Lange.43 In the great debate on the economic calculation problem, Mises and other Austrian School Economists demonstrated that it is impossible for any coercive social institution to make economic calculation. Huerta de Soto concludes why socialism is impossible, as an intellectual error, it is impossible to coordinate “social behaviors via a system of institutional coercion against free human interaction.”44 He argues that if there is no freedom to practice entrepreneurship, and if the decision is made arbitrarily and coercively, the subjective information necessary for rational economic calculation cannot be created, nor “is it possible for economic agents to learn to discipline their behavior in terms of the needs and circumstances of [other social coordination].”45
2.1.2 Different Types of Socialism
Huerta de Soto also connects the theoretical definition of socialism with its various types in real world.46 Not only does he mention the typical and well-known Soviet-type socialism (“real socialism”47), democratic socialism,48 social engineering,49 and syndicalist socialism,50 but also the conservative or “right-wing” socialism51 and Christian or solidarity-based socialism,52 which are usually ignored by the conservatives in western countries. He argues that conservative or “right-wing” socialism is “institutional aggression … employed to maintain the social status quo and the privileges certain people or groups of people enjoy”;53 thus, he sharply criticizes that “conservatism is an obscurantist doctrine which completely overlooks the manner in which social processes driven by entrepreneurship function, and specifically, the problem of the ineradicable ignorance which envelops all leaders.”54 Further, Huerta de Soto also points out that some spiritual socialists, like Christian socialists, are in favor of “systematic, institutional use of coercion to modify”55 the “immoral” or “unjust” results of human action. He argues that the development of our civilization relies on the social process of human interaction in which many people are far away from knowing each other, and thus pursuing morally superior goals per se is immoral.56
2.1.3. Computer and Central Planning
Another contribution of Prof. Huerta de Soto’s theory of socialism is the theory of the impossibility of computerized central planning. One common fallacy related to computer science is that many people believe that as the technology of computers develops so fast, one day computers can completely receive, create and transmit all the information, making it possible for central planners to deal with the information problem. On the contrary, Huerta de Soto clearly illustrates that though computers can help people manage information better, as information is “practical, dispersed, and tacit,”57 individuals would entrepreneurially generate “progressively deeper and more detailed”58 information by their entrepreneurship, making it harder for central planners to handle more informatio.59 Huerta de Soto illustrates that it is not only the development of computer science that makes it more difficult for central planners to deal with information, but the nature of computers, as manmade machines, “will never be capable of acting or exercising entrepreneurship,”60 and “will never be able to create new practical information from nothing, to discover and seize new profit opportunities unnoticed up to that point.”61 The reason why computers cannot act as a human being to deal with information is that the information itself is “entrepreneurially discovered or created” by acting men;62 thus computers can “only be used to manage articulated, formalized, and objective information.”63 Huerta de Soto, therefore, distinguishes two related but different concepts, knowledge (subjectively created by human being) and data (objectively stored by computers), successfully refuting the fallacy that computer science can make socialist calculation possible.
2.2. Theory of Bank Credit and Economic Cycles
The second great and original theoretical contribution of Huerta de Soto is his theory on bank credit and economic cycles, especially the theory of free-banking laws, the clear demonstration of the business cycle, the theory of distortion on entrepreneurs created by fractional-reserve banking, the application of the theory of the impossibility of socialism in the banking system, the critiques on fractional-reserve free-banking, and his policy suggestions on banking reform.
The study of monetary theory not only involves the content of political economics but also various other subjects such as law, ethics, and mathematical statistics. Huerta de Soto has a thorough grasp of the above subjects, achieving mastery through a comprehensive study of monetary issues.
2.2.1. The Distinction between Loan Contracts and Deposit Contracts in both Economics and Law
Huerta de Soto starts by reviewing how Roman law defined banking credit,64 and points out that it is necessary to clarify two different types of financial contracts, loan contracts and deposit contracts, which are often confused by the modern banking system. For the loan contracts, Huerta de Soto defines two sub-classifications. The first is the loan of use, “in which case only the use of the lent item is transferred and the borrower is obliged to return it once it has been used,”65 and the second is the loan for consumption, “where the property of the lent item is transferred.”66 No matter what the specific classifications of loan contracts are, both “entail the transfer of the availability of the good, which shifts from the lender to the borrower for the duration of the term.”67 In the perspective of economics in deposit contracts,68 exchanging present goods for future goods is not allowed, as goods should always be available for the depositor. However, in the loan contracts, the situation is the contrary — there is always a transfer of availability from the lender to the borrower.69 After the above theoretical demonstrations, Huerta de Soto provides an amazing historical review of how bankers and politicians violated the legal principles of both loan contracts and deposit contracts from ancient Greece and Rome through the 20th century, especially how the violations happened in Europe.70 Thus, we can conclude that, “throughout history central banks have emerged not as a result of the spontaneous, evolutionary free-market process, but as a consequence of deliberate government intervention in the banking sector.”71
2.2.2. The Demonstration of Business Cycles
Huerta de Soto demonstrates two types of economic cycles, the cycles in voluntary saving or in the free banking system,72 and the cycles triggered correspond to credit expansion of the central banking system.73 The latter, which the current government central-banking system, can cause more severe and systematic problems than the cycles in voluntary saving and the free-banking system. Based on Austrian Capital Theory,74 Huerta de Soto demonstrates the stages of the business cycle which are created by central banking. In the first place, though entrepreneurs have made incorrect market decisions, the central bank still creates more credit and grants it to entrepreneurs, causing a decrease in the interest rate. As more credit has been invested in the market, the prices of capital goods and the prices in the stock market will rise, and productive structures will also be lengthened artificially. This leads to more workers being hired in capital-good fields because of the artificial growth in productive structures. As the money in the market and the production of capital goods seems to be promising, the wages of workers will also rise; the “[m]onetary demand for consumer goods begins to grow.”75 Then the Ricardo Effect occurs and “capital equipment is replaced by workers.”76 The collapse of the boom emerges: the demand decreases, while costs, interest rate and prices all rise, marking the start of the depression. Capital-good sectors suffer heavily from accounting losses, and more workers will be fired in capital-goods industries. At this stage, entrepreneurs find that they have made many poor investments, and liquidate the erroneous investment projects. Some enterprises will go bankrupt and suspend their payments due to the malinvestment plans. As entrepreneurs are not able to repay their credits, banks will also face bankruptcy, thereby squeezing their credit to avoid more mistakes. The crisis makes the productive structures shorter and the economy gradually enters recovery, and the increase in voluntary saving can recover.
2.2.3. The Theory of Distortion on Entrepreneurs caused by Fractional-reserve
Huerta de Soto points out how artificial credit expansion distorts entrepreneurship in a fractional-reserve banking system. He states, “While the expansion lasts, people’s capacity for work is pushed to the limit and their entrepreneurial spirit becomes corrupted,”77 and they focus on short-term goals based on the credit expansion instead of long-term goals and frugality. This also discourages entrepreneurship of the “society’s youngest, most innovative and dynamic generations.”78 And as businessmen, intellectuals and other economic agents and social elites take it for granted that the artificial credit expansion and the boom and recession are natural economic phenomena, government will support more pro-credit-expansion policy to meet the satisfaction of the above popular opinions. Thus, credit expansion has become an “old story [that] repeats itself.”79
2.2.4. The Application of the Theory of the Impossibility of Socialism to the Banking System
Huerta de Soto also applies his theory of the impossibility of socialism to the Austrian Business Cycle Theory. First, he demonstrates that the central banking system is against traditional monetary legal principles, causing social discoordination. Through central banking, entrepreneurs will be misled by inaccurate information and by the privileges authorized by the state. Some entrepreneurs would even irresponsibly make their decision of investment due to the cheap artificial credit.80 As Huerta de Soto points out, even if we suppose that the decision makers of central banks are not corrupted to give privileges to some bankers (we have to admit that it rarely happens as the decision making of the central banking system is based on coercion of political power), central banking still faces the problem of not being able to create and carry out sufficient information for serving the financial system.81 Huerta de Soto says,
"[T]he central bank is obliged to make an unceasing effort to collect an extremely vast quantity of statistical information on the banking business. … For such information is not only extraordinarily profuse; but what is more important, it is also subjective, dynamic, constantly changing, and particularly difficult to obtain in the financial sector. Hence it is painfully obvious that the central bank cannot possibly acquire all the information it would need to act in a coordinated manner, and its inability to do so is one more illustration of the theorem of the impossibility of socialism, in this case applied to the financial realm."82
2.2.5. The Critiques on the Fractional-reserve Free-banking Theory
According to Huerta de Soto, the fractional-reserve free-banking theory (FFT) has six fallacies. The first fallacy is that it assumes that the demand for money in fiduciary media is exogenous to the fractional-reserve free-banking system (FFS).83 In fact, it is the credit expansion per se in FFS that causes the demand of fiduciary media, distorting the productive structure and causing the economic boom and the recession.84 Thus, the demand for money in fiduciary media is an endogenous variable in FFS. The fundamental error, which FFT makes, “lies in a failure to reflect that public demand for credit depends precisely on banks’ inclination to lend.”85 The second fallacy of FFT is the monetary equilibrium formula of the FFT’s equilibrium theory. Like Neoclassical monetary theory, the FFT also uses equilibrium formula; however, the monetary equilibrium formula can only deal with the last stage of the social and production process. On the contrary, the Austrian methodology says that there is always a dynamic entrepreneurial process and tendency86 to reach equilibrium in monetary issues, but that the equilibrium is never actually reached.87 New credit issuers will make errors as they have to face the uncertainty of the new demand for credit; thus, the equilibrium theory and formula of FFT are false.88 The third fallacy of FFT is that it ignores the microeconomic effects but over analyzes the macroeconomic effects triggered by FFS.89 Huerta de Soto points out that FFT focuses on analyzing the equation of exchange of the general price level, as monetarists or Keynesians do.90 But as price and production structures have been distorted, the newly issued credit will never be immediately and directly sent to the people who value and prefer them more in a fractional-reserve system, making the equation of exchange impossible.91 The fourth fallacy of FFT is the confusion between the concept of saving and the demand for money. FFT claims that money balance is equal to “savings”. However, Huerta de Soto illustrates that there are only three ways in which economic agents can employ their money: spending on consumer goods and services, spending on investments, and holding them (hoarding)92 as cash balances or fiduciary media.93 Thus, savings (investment) and money balance are two different concepts and “a rise in the balance of fiduciary media may very well depend on a drop in investment spending, … which makes it possible to increase final monetary expenditure on consumer goods and services.”94 “Under these circumstances an individual’s savings would drop, while his balance of fiduciary media would rise.”95 Additionally, FFT confuses note or depositing bank issues with financial assets. Financial assets can be issued as loans for consumption and investment, but a bank note or money is a present good different from financial assets.96 Having a cash balance “says nothing about the proportions in which the economic agent wishes to consume and invest”. The fifth fallacy of FFT is that it per se doesn’t match empirical evidence. Huerta de Soto points out how FFS has caused economic booms and busts in at least two countries; in Scotland from the 18th to the 19th century and in Chile after the middle 19th century.97 The sixth fallacy of FFT is that it excludes legal considerations. In fact, the legal considerations are as important as economics to understand the banking system.98 Furthermore, FFT even confuses the difference between the two different contracts in the traditional legal principles. Huerta de Soto also points out that FFS can not only cause economic recessions, but also result in externality problems,99 as FFS disrupts the public order and harms third parties’ property rights.100
2.2.6. Policy Suggestions on the Reform of the Banking System
Three policy suggestions on the banking system are made by Huerta de Soto. The first proposal is “complete freedom of choice in currency.”101 He argues that currency choice is also an evolutionary process according to the monetary regression theorem.102 The free-banking currency reform can be practiced more easily103 if people themselves, who have specific and first-hand information, decide which kind of currency units they prefer and want to adopt.104 With currencies having been chosen spontaneously by people in a long human history as gold, silver, etc.,105 it is not reasonable to artificially and constructively106 adopt a new monetary unit.107 Besides, Huerta de Soto also argues that any new currency, like electronic currency, should match the traditional legal principles, that do not allow the systematic economic cycle and recession. Under legal principles, the current currency could be retroacted to the early money accepted spontaneously and evolutionarily, like gold and silver.108 His second proposal is to establish a free-banking system with 100% deposit, which can avoid economic discoordination caused by the fractional-reserve system.109 According to subjective value theory, individuals know their best monetary preference; thus, in the free-banking reform, people can make better choices between different types of banks than the state.110 In addition, private banks should be reformed completely into free institutions without any state intervention.111 His third proposal is “the obligation of all agents in a free-banking system to observe traditional legal rules and principles, particularly a 100-percent reserve requirement on demand deposits.”112 He argues that only following the traditional legal principles of deposit contracts can we avoid economic discoordination caused by FFS.
2.3. Theory of Dynamic Efficiency
The third great theoretical contribution of Huerta de Soto is his theory of dynamic efficiency. Not only does he review the initial definition of efficiency in history, pointing out the wrong and static definition made by Neoclassical Economics (influenced by mechanical physics), but he also provides the dynamic definition of efficiency from an economic science perspective. Additionally, Huerta de Soto originally contributes to the theory with the relationship between dynamic efficiency and ethics, and he also calls for more academic studies in the approach of dynamic efficiency.
2.3.1. The Review of the Original Definition of Efficiency in History
Huerta de Soto reviews the original definition of efficiency in history, covering both the static and dynamic parts. In ancient Greece, Xenophon defined static efficiency as “the sound management of the available (or ‘given’) resources, to prevent them from being wasted.”113 Xenophon also defined dynamic efficiency as “the effort to increase one’s goods by way of entrepreneurial creativity; that is, by trade and speculation, more than the effort to avoid wasting the resources already in one’s power.”114
2.3.2. The Wrong and Static Definition of Efficiency by Neoclassical Economists Influenced by Mechanical Physics
As Huerta de Soto points out, Neoclassical Economics has only developed the definition of efficiency in the static part, but not in the dynamic part. He illustrates that Neoclassical Economists use the same methodology as mechanical physics, replacing “the concept of energy with that of utility”115 and applying “the same principles of conservation, maximization of the result and minimization of waste” to economics.116 Thus, this static definition of efficiency of Neoclassical Economics excludes the real and creative part in human action through which human beings are pursuing efficiency. Huerta de Soto criticizes that “the influence of mechanical physics eradicated the creative, speculative dimension which belonged to the idea of economic efficiency from its very origins, and all that remained was the reductionist, static aspect, which focuses exclusively on minimizing the waste of (known or given) economic resources.”117 Huerta de Soto also criticizes that instead of accepting the dynamic aspect of efficiency present in the human action, welfare economics only understands efficiency118 in a static sense influenced by mechanical physics. He says,
“[T]hese standards focus solely on one of the two aspects of economic efficiency, namely the static aspect, which entails the presumption both that resources are given and constant, and that the fundamental economic challenge is to avoid wasting them. Furthermore, when, for example, a company, social institution or entire economic system is to be judged, such criteria completely ignore its Dynamic Efficiency, understood as its capacity to foster entrepreneurial creativity as well as coordination; in other words, the entrepreneurial capacity to seek, discover, and overcome different social maladjustments.”119
2.3.3. The Dynamic Definition of Efficiency in Economics
After the profound rediscovery of the original definition of dynamic efficiency in history and after analyzing the fallacies of the static definition of efficiency in Neoclassical Economics, Huerta de Soto goes on to define what is the correct definition of dynamic efficiency as an economic concept: creativity and coordination driven by human beings’ entrepreneurship.120 From this dynamic perspective of efficiency, we can understand more deeply and clearly how human beings work efficiently: not only preventing the waste of the ‘given’ sources but using entrepreneurship to create and coordinate means to realize their goals. Huerta de Soto points out that “the truly important goal is not so much to prevent the waste of certain means considered known and ‘given’ (the prime objective from the viewpoint of static efficiency) as to continually discover and create new ends and means, and thus to foster coordination while accepting that in any entrepreneurial process new maladjustments will always appear and hence a certain amount of waste is inevitable and inherent in any market economy.”121 He also points out that as the ways to prevent waste can be discovered by entrepreneurial creation and discovery, the dynamic perspective of economic efficiency also incorporates the static concept of efficiency in economics. He says,
“[F]or the same entrepreneurial force which propels dynamic efficiency through the creation and discovery of new profit opportunities is precisely the one which achieves the highest degree of static efficiency humanly possible at each moment by coordinating pre-existing maladjustments.”122
2.3.4. Dynamic Efficiency and Ethics
Huerta de Soto’s other great and original contribution is the connection made between the ethics of property rights and dynamic efficiency. The ethics of property rights and dynamic efficiency have not been put in connection by many economists, or others simply believe that the connection between ethics and economics has been already stated in welfare economics: productions can be transferred into social welfare if we find out the “optimum optimorum”123 in the condition of given and static sources. Huerta de Soto points out that the ethics of property rights is both the necessary and sufficient condition for dynamic efficiency. This is the necessary condition because obviously if people cannot own the products that they have created for themselves, they no longer have the incentive to seek for profitable opportunities. He states,
“[B]ecause to impede the private ownership of the fruits of each human action is to remove the most powerful incentive to create and discover profit opportunities as well as the fundamental source of creativity and coordination that propels the system’s dynamic efficiency.”124
The reason why the ethics of property rights is also the sufficient condition of dynamic efficiency is that, if property rights can be respected or protected, entrepreneurs can continually create and coordinate resources that are needed in production. Huerta de Soto further argues, “[g]iven the vital drive which characterizes all human beings, an environment of freedom in which they are not coerced and in which their private property is respected constitutes a sufficient condition for the development of the entrepreneurial process of creativity and coordination which marks dynamic efficiency.”125
Based on Hayek’s theory of spontaneous order,126 Huerta de Soto also points out that some existing institutions have already been maintaining and enhancing the entrepreneurial creativity and coordination throughout history, arguing that “certain social institutions carry major significance in transmitting and encouraging the observance of these personal moral principles which, by their very nature, cannot be imposed by force but are nevertheless of vital importance to the dynamic efficiency of society.”127 As a devout Catholic, he also emphasizes the function of religion in the promotion of dynamic efficiency. He argues that by practicing sexual morality through religion or some traditions, people would have a better self-discipline, which is “of crucial importance to the successful working of the social process of creativity and coordination, and to its fostering dynamic efficiency in society as well as possible.”128 He says,
“Religion plays an important role in the life of an economy. It transmits from generation to generation certain patterns of behavior and moral traditions that are essential for the rule of law, which makes economic exchange possible. For example, if contracts are not kept, society can fall apart. Religion, not the state, is the primary means for imparting to us a sense of our obligations to keep our promises and to respect the property of others.”129
2.3.5. Call for More Studies on Dynamic Efficiency
As Huerta de Soto points out, there are many fields that could be enriched by the dynamic-efficiency approach: taxation theory; the theory of regulation, interventionism and antitrust legislation; the economic theory of development; macroeconomics and monetary theory; the economic analysis of law, legal regulations and social institutions,130 etc. In The Theory of Dynamic Efficiency, Huerta de Soto has used the theory of dynamic efficiency to analyze socialism, to develop the theory of free market environmentalism, the theory of liberal nationalism, the libertarian theory of free immigration, the theory of crisis and reform of social security, the critical note on fractional-reserve free-banking, the ethics of capitalism, and the strategy to implement free market reforms. These profound, abundant and original theoretical contributions provide us with an excellent foundation and clues for further studies both in theoretical and applied parts of economics. Especially for the younger generation of economists, who should continue investigating on the concept of dynamic efficiency.
3. Conclusion
We have reviewed the biography of Prof. Jesús Huerta de Soto, a successful entrepreneur, a profound Austrian School economist, and a tireless fighter for liberty. We also reviewed his original and significant academic contributions to the theory of socialism and entrepreneurship, the theory of bank credit and economic cycles, and the theory of dynamic efficiency. What we as young scholars should learn from Prof. Huerta de Soto, is how to be as entrepreneurial as we can in our research and to be as passionate as possible in our engagement with the ideas of liberty, helping us contribute to the scientific research and attracting more and more people to the philosophy of libertarianism.131
1. Huerta de Soto (2016).
2. Huerta de Soto (2010a).
3. Huerta de Soto (2015), pp. 11
4. Ibid, pp. 11.
5. Ibid, pp. 11.
6. Translated from Ibid, pp. 11. The original text in Spanish is “posible la gran experiencia intelectual”.
7. Ibid, pp. 12. The original title of the thesis in Spanish is Planes de pensiones privados.
8. Huerta de Soto (2017).
9. Ibid. The original title of the thesis in Spanish is La polémica sobre el cálculo económico socialista.
10. The title of the book in Spanish is Socialismo, cálculo económico y función empresarial. See Huerta de Soto (1992).
11. Huerta de Soto (2010b).
12. Huerta de Soto (2006).
13. Hülsmann (2000), pp. 86.
14. Mises (2013).
15. Hülsmann (2000), pp. 88.
16. Ibid.
17. Huerta de Soto (2017). See http://www.jesushuertadesoto.com/curriculum-vitae-en/teaching-activities.
18. Ibid. See http://www.jesushuertadesoto.com/curriculum-vitae-en/other-achievements.
19. España, S.A. (2012).
20. The title of the master’s program in Spanish is: Master Oficial en Economía de la Escuela Austríaca. See its official web page: https://www.urjc.es/universidad/facultades/facultad-de-ciencias-de-la-comuni-cacion/909-economia-de-la-escuela-austriaca.
21. One example of Huerta de Soto’s outstanding students in the libertarianism movement is Dr. Wolf von Laer, who is the current CEO of Students for Liberty, and received his master degree in Economics from the Austrian School at Rey Juan Carlos University.
22. The name of the university in Spanish is Universidad Francisco Marroquín.
23. Constanza Huerta de Soto, personal communication in Students for Liberty Madrid’s activities, October 8, 2016.
24. Ibid.
25. Ibid.
26. Huerta de Soto (2009).
27. Mises (1998).
28. Rothbard (1998), pp. 3-26.
29. Hayek (1988).
30. The young Chinese libertarians who have come to Madrid to study with Professor Huerta de Soto, since 2012, are the following (in order of the time they arrived in Spain): William Wang, Yang Zhou, Jason Li, Tyler Xiong, Chao Pan and Isla He. After reading and watching the materials of Austrian Economics online, a young gentleman, Alan Bi, who had just graduated with a bachelor’s degree of trade at the Complutense University, joined the Chinese libertarian group in 2015, and is now organizing the weekly seminars of Austrian Economics for Chinese students in Madrid inspired by what Huerta de Soto and other Austrian scholars have done.
31. Huerta de Soto (2010c).
32. González (2011).
33. Mises (1998), pp. 254.
34. Mises (1998), pp. 248.
35. Huerta de Soto (2010b), pp. 15.
36. Ibid, pp. 16.
37. Huerta de Soto comments on what Kirzner has contributed to the concept of entrepreneurship. He says, “Kirzner holds that the exercise of entrepreneurship entails a special alertness; that is, a constant vigilance, which permits a person to discover and grasp what goes on around him”. See Ibid, pp. 16. For more about Kirzner’s theories of entrepreneurship, see Kirzner (1973, 1979, 1985).
38. Ibid, pp. 19.
39. Huerta de Soto (2010b), pp. 15.
40. Ibid, pp. 10.
41. Ibid, pp. 49.
42. Ibid, pp. 49.
43. For more details about the background and arguments on the economic calculation debate between Austrian School and Neoclassical Economics, see Ibid, pp. 99-172 (Chapter 4 to Chapter 6).
44. Ibid, pp. 254.
45. Ibid, pp. 254.
46. Prof. Huerta de Soto’s accurate illustrations of different types of socialism in the real world provide our Chinese scholars with a good tip to expound upon another two typical types of socialism: authoritarian socialism (威權社會主義) and Chi-nese socialism (中國特色社會主義). Both types of the socialism believe that a political dictatorship, irrespective of whether it is a political party or a personal dictatorship, would be good for the civilization that it rules. Chinese Socialism, which is mainly applied in the ruling communist countries like Mainland China or Vietnam, is more aimed to maintaining the dictators’ coercive power and benefit through dis-inter-vened entrepreneurial activities. However, Chinese socialism does not dynamically see the market process as the best way to coordinate the needs of different individ-uals, but rather, statically sees it as a stratagem to maintain the political power and economic benefit of the crony elites. Under Chinese socialism, the entrepreneurship of individuals is limited to commercial activities. One could think that with regard to the conditions for exchange, individuals can’t blame political coercion. The truth is that the political coercion of Chinese socialism also extends to commercial activi-ties, by violating property rights and creating discoordination and distortion for individuals in the exercise of their entrepreneurship.
47. Ibid, pp. 77-78.
48. Ibid, pp. 78-79.
49. Ibid, pp. 80-82.
50. Ibid, pp. 83.
51. Ibid, pp. 79-80.
52. Ibid, pp. 82-83.
53. Ibid, pp. 79.
54. Ibid, pp. 80.
55. Ibid, pp. 82.
56. Ibid, pp. 82-83.
57. Ibid, pp. 59.
58. Ibid, pp. 59.
59. Ibid, pp. 59.
60. Ibid, pp. 59.
61. Ibid, pp. 59.
62. Ibid, pp. 60.
63. Ibid, pp. 60.
64. Huerta de Soto (2006), pp. 1-36.
65. Ibid, pp. 1.
66. Ibid, pp. 1.
67. Ibid, pp. 4.
68. For more cases of 100 percent gold dollars, see Rothbard (2001). Though we do not agree with Rozeff’s view on being against 100 percent reserve, his argument of whether if it is proper to call an institution that cannot issue loans but only keeps deposits a bank, should also be discussed. He said, “[a] proper bank would … hold all deposits intact and become a 100 percent reserve-storage or safety-deposit bank, although to call such a business a bank under these conditions is something of a misnomer because such a so-called bank makes no loans.” See Rozeff (2010), pp. 497.
69. Ibid, pp. 15.
70. Ibid, pp. 37 to 114.
71. Ibid, pp. 647.
72. Ibid, pp. 313-346.
73. Ibid, pp. 347-384.
74. For more information about Austrian Capital Theory, see Böhm-Bawerk (1890), Garrison (1990) and Kirzner (1996).
75. Huerta de Soto (2006), pp. 506.
76. Ibid, pp. 506.
77. Ibid, pp. 457.
78. Ibid, pp. 458.
79. Mises (1998), pp. 578.
80. Huerta de Soto (2006), pp. 651.
81. Ibid, pp. 656 to 657.
82. Ibid, pp. 656 to 657.
83. Ibid, pp. 679.
84. Ibid, pp. 681.
85. Ibid, pp. 683.
86. Ibid, pp. 685.
87. Ibid, pp. 685.
88. Ibid, pp. 685 to 686.
89. Ibid, pp. 688.
90. Ibid, pp. 689.
91. Ibid, pp. 689.
92. Murray Rothbard also gives a specific explanation on hoarding. For more information about hoarding see Rothbard (2016).
93. Huerta de Soto (2006), pp. 695.
94. Ibid, pp. 695.
95. Ibid, pp. 695.
96. Ibid, pp. 696.
97. Huerta de Soto points out that, before the establishment of the fractional-reserve free-banking system in 1853, the financial sectors were stable in Chile, and there was no systematic economic recession, see Ibid, pp. 704.
98. Ibid, pp. 706.
99. Huerta de Soto (2006) does not use the word externality in his demonstration of the harm of fractional-reserve free-banking system to the third party and to public order, but we think that using the word externality would make his claim stronger and more clearly demonstrate that the issuance of credit through a fractional reserve system (even a free-banking one) also invades the monetary property rights of the third party.
According to Huerta de Soto’s theory of the harm of a fractional-reserve free-bank-ing system on the third party, Rozeff’s argument for supporting a fractional-reserve free-banking system is false. Rozeff claimes that “[p]eople themselves [have the rights to] decide what kinds of property rights they want and find acceptable in bank accounts”. According to the legal principles in monetary contracts presented by Huerta de Soto, one does not have the right to decide anything that is a violation of another individual’s property (i.e., the value of the third party’s currency). For more about Rozeff’s false arguments, see Rozeff (2010), pp. 498.
100. Ibid, pp. 707-708.
101. Ibid, pp. 736.
102. Huerta de Soto says “[w]e should also remember Mises’ monetary regression theorem, according to which the price or purchasing power of money is determined by its supply and demand, which is in turn determined not by its purchasing power today, but by the knowledge the actor formed on its purchasing power yesterday. At the same time, the purchasing power of money yesterday was determined by the demand for money which developed based on the knowledge of its purchasing power the day before yesterday. We could trace this pattern back to the moment when, for the first time in history, people began to demand a certain good as a medium of exchange.” See footnote 35 on Ibid, pp. 737-738.
Mises also explained the regression theorem, stating, “[t]he theory of the value of money as such can trace back the objective exchange value of money only to that point where it ceases to be the value of money and becomes merely the value of a commodity. … If in this way we continually go farther and farther back we must eventually arrive at a point where we no longer find any component in the objective exchange value of money that arises from valuations based on the function of money as a common medium of exchange; where the value of money is nothing other than the value of an object that is useful in some other way than as money… Before it was usual to acquire goods in the market, not for personal consumption, but simply in order to exchange them again for the goods that were really wanted, each individual commodity was only accredited with that value given by the subjective valuations based on its direct utility.” See Mises (2013), pp. 120.
In applying Mises’ regression theorem to digital coins, Tucker (2014) believes that Bitcoin matches the regression theorem, as its original value of use is based on the payment network.
More about monetary regression theorem, see Mises Wiki (2016).
103. Ibid, pp. 739.
104. Ibid, pp. 737.
105. Ibid, pp. 739. Here we must emphasize, that many people who declare that Huerta de Soto only prefers gold as monetary unit, misunderstand and have perhaps not read his claim seriously. Huerta de Soto has never stated that gold is the only monetary unit which we should accept, on the contrary, his point is that any monetary unit which has been spontaneously accepted throughout history, like gold or silver, can be used as a valid substitute for current monetary currencies. In footnote 37 on Ibid, pp. 739-74, Huerta de Soto expresses his understanding of the function of silver as a unit of currency in human history. He says, “[s]ilver could also be considered a secondary, parallel metallic standard which, if economic agents should wish, could coexist with gold at the fluctuating exchange rate determined by the market. Furthermore we must recognize that the decline in the use of silver as money was accelerated when nineteenth-century governments established fixed exchange rates between gold and silver which artificially undervalued the latter.”
106. See footnote 36 of Ibid, pp. 738.
107. Ibid, pp. 739.
108. See footnote 35 of Ibid, pp 738.
109. Ibid, pp. 740.
110. Ibid, pp. 740.
111. Ibid, pp. 740.
112. Ibid, pp. 742.
113. Huerta de Soto (2009), pp. 2
114. Ibid, pp. 3.
115. Ibid, pp. 4.
116. Ibid, pp. 4.
117. Ibid, pp. 4.
118. For more information about welfare economics, see Feldman (1991) and Rothbard (1977).
119. Huerta de Soto (2009), Ibid, pp. 8.
120. See part 2, Theory of Impossibility of Socialism in this thesis.
121. Ibid, pp. 10-11.
122. Ibid, pp 11.
123. Ibid, pp 10.
124. Ibid, pp 21.
125. Ibid, pp. 21.
126. For Hayek’s theories of the relationship between spontaneous order and tradition, see Hayek (1988), pp. 66-88.
127. Ibid, pp. 22.
128. Ibid, pp. 22-23.
129. Ibid, pp. 274-75.
130. Ibid, pp. 28 to 29.
131. Tyler Xiong provided thoughtful suggestions on the structures of this article and his help is greatly appreciated.
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