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6 minutes | Jan 26, 2022
Inflation or Recession? The Fed Faces a Choice.
Contractionary monetary policy may be necessary to slow the rise of inflation, but the recessionary results of this remind us why the Fed's inflationary policy is so dangerous. Original Article: "Inflation or Recession? The Fed Faces a Choice." This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
7 minutes | Jan 26, 2022
Turkey's Economy Is in Big Trouble
Turkey's President Erdoğan faces a series of crises as the lira collapses and the state's central bank steps in to clean up the mess. Original Article: "Turkey's Economy Is in Big Trouble" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
58 minutes | Jan 26, 2022
James Madison's Failed Conquest of Canada
The transformation of Jeffersonians into National Republicans continues under President James Madison. Following the Louisiana Purchase, the new administration sets its eyes on Florida and Canada for new American expansion. The result is the disastrous War of 1812 and the rise of a new central bank. Recommended Reading "The Feds Before the Fed" by Scott Trask — Mises.org/LP6_A "Our Oligarchs Can Thank James Madison" by Ryan McMaken — Mises.org/LP6_B "Why James Madison Hated Democracy" by Ryan McMaken — Mises.org/LP6_C Cronyism: Liberty versus Power in Early America, 1607–1849 by Patrick Newman — Mises.org/LP_Crony To subscribe to the Liberty vs. Power Podcast on your favorite platform, visit Mises.org/LvP.
9 minutes | Jan 25, 2022
Central Planners Don't Know What's Best for You
Flawed as we are and with limited knowledge about the world and ourselves, we might not know what is objectively “best for us long term.” Government planners know even less. Original Article: "Central Planners Don't Know What's Best for You" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
48 minutes | Jan 25, 2022
Henrik Berglund: Entrepreneurship As Design
For entrepreneurs, design is not just lines and shapes and colors and decoration, and it’s not just the look and functioning of a website or a building or another object. It’s a process of advancing from an idea or concept to marketplace realization as a customer-desired new service PR product. In fact, according to Professor Henrik Berglund, entrepreneurship is design. Key Takeaways and Actionable Insights Entrepreneurs advance from idea to implementation via a process of design. How do entrepreneurs exercise judgment? How do they advance from an imagined idea or business concept or anticipated value to implementing their project in the marketplace and making sales to customers? It’s a creative process. Some call the domain design science, although we Austrians would think of it in a more subjective framework as human design. In general terms, design provides the bridge from the internal environment of the firm (its capital, its capacity, its skills, its resources, etc.) to the external world of customers and the marketplace. Design facilitates the fit between the two. It’s a goal-driven process of getting to the right design: a value proposition design that attracts customers, an effective value network design for assembling all the components, a business model designed to deliver the value, and pricing and cost choices that result in profit. The steps in the design process take the form of design artifacts. Design is not abstract. It’s action. The action takes the form of constructing design artifacts: things like sketches and flow chart diagrams and network maps and templated value propositions and business model designs and business plan spreadsheets, prototypes, landing pages and A/B tests. There is a design pathway from more abstract and conceptual to more substantial and closer and closer to a marketable product, service, or business. The artifacts are not arranged in any specific order, but they are characterized by the progress from abstract to functional and detailed. Most importantly, the design artifacts are measurable and testable, so that entrepreneurs can get more and more information about how well the design fits with the real world — customer assessments and feedback, simulations, beta tests and other feedback loops serve to make the design more substantial and the entrepreneur’s level of confidence higher. Experimentation is one kind of design pathway. Professor Berglund described experimentation as a design interaction with an existing real-world situation, where the testing process is to assess how well the entrepreneurial vision works in that world. Is there demand? Will customers find the proposition useful, and will they buy? Through repeated and experimental testing, entrepreneurs measure their way to the best-fit adaptation of their concept to the market. He used as an example of experimentation an early step in the development of Dropbox, in the form of a video that carefully described its function and benefits, and sought feedback from the market in the form of requests to join a beta test. The video was successful in attracting a beta test audience, reassuring the designers of the potential use case. Transformation requires a different kind of design approach. Transformative ideas do not have an existing market — a “real world” — in which to experiment. There is no identifiable demand at the outset. The process is co-creation, with potential users and customers, of a new world or a transformed world. The design path is not the use of carefully constructed measurable artifacts, but of another kind, which Prof Berglund describes as mutable and transformable. He used the example of the iPhone, transforming from the functionality of a phone — with a use case of intermittent 2-way communication events - to the concept of a handheld device with continuous use for a multiplicity of purposes aided by integration with software apps and internet connectivity. The vision was never precise, as it can be with experimentation. Apple outlined a more vague vision of possibilities and soft boundaries, and invited individuals and communities of software developers to join, collaborate, make specialized local contributions, and synthesize a new, emergent system over time. Firms will typically employ a mixture of experimentation and transformation in a portfolio of projects. Experimentation and transformation are “ideal types” of design, not always as clearly differentiated in the real world as they are in theory. Nevertheless, it’s important for entrepreneurs to differentiate between them, and to maintain a portfolio of projects that instantiates both types. Professor Berglund and Chalmers are engaged in a new synthesis of entrepreneurial theory and practice. Prof Berglund observes in a book chapter called "The Artifacts of Entrepreneurial Practice," that entrepreneurship scholarship has not always been very useful or helpful to practicing entrepreneurs. Now this is changing as researchers move closer to "the real time doings and sayings of practitioners involved in entrepreneurship". In the spirit of transformation, there’s a new synthesis of theory and practice that is being co-created. That synthesis is one of our guides at Economics For Business; we hope to gather from business entrepreneurs their evaluations about which elements of theory and research are of most use in practice. Additional Resources "Opportunities as Artifacts and Entrepreneurship as Design" by Henrik Berglund, Marouane Bousfiha, and Yashar Mansoori (PDF): Mises.org/E4B_154_Paper1 "The Artifacts of Entrepreneurial Practice" by Henrik Berglund and Vern L. Glaser (PDF): Mises.org/E4B_154_Paper2 HenrikBerglund.com Chalmers.se
8 minutes | Jan 25, 2022
Japan's Inflation Is Hidden behind Central Bank–Financed Subsidies
Overall, at least 50 percent of the consumer price index in Japan appears to be government controlled, which is reflected in the significant growth of government spending on subsidies. Original Article: "Japan's Inflation Is Hidden behind Central Bank–Financed Subsidies" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
49 minutes | Jan 25, 2022
Murphy vs Weisenthal on Currency Debasement
Bob critiques a Guardian article from an economist favoring price controls, and explains his argument with Joe Weisenthal about the social benefit of saving actual cash. Mentioned in the Episode and Other Links of Interest: Dr. Keith Smith (of the Surgery Center of Oklahoma) contact page.The Guardian article advocating price controls.Murphy Mises.org critique of Weisenthal.Murphy article on the 1920-21 depression.Mises essay calling inflationary war finance “undemocratic.”BMS series on Bohm-Bawerk (1, 2, and 3). For more information, see BobMurphyShow.com. The Bob Murphy Show is also available on Apple Podcasts, Google Podcasts, Stitcher, Spotify, and via RSS.
10 minutes | Jan 24, 2022
True Competition versus the Monopolist "Minimal State"
Suppose some people don't like the services furnished by a "minimal state." Don't these people have the right to establish their own services to compete with the minimal state? Original Article: "True Competition versus the Monopolist 'Minimal State'" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
9 minutes | Jan 24, 2022
How We Will Win
We will win. But how long will it take, and at what price victory? Original Article: "How We Will Win" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
10 minutes | Jan 22, 2022
The Federal Reserve Keeps Buying Mortgages
The Federal Reserve now owns $2.6 trillion in mortgages. That means about 24 percent of all outstanding residential mortgages in this whole big country reside in the central bank. Original Article: "The Federal Reserve Keeps Buying Mortgages" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
54 minutes | Jan 21, 2022
What are the Politics of Inflation?
With the prices of everything rising at historic rates, no issue is shaping politics more right now than inflation. Unfortunately for Americans, Republicans in Washington appear no more serious on the Federal Reserve than the Biden Administration. What lessons can be learned from the past? How might the Biden Administration respond? What can be done on the issue? In this Radio Rothbard, Ryan McMaken and Tho Bishop dive into the politics of inflation. Recommended Reading "How Easy Money Inflated Corporate Profits" by Brendan Brown: Mises.org/RR_65_A "The Economy May Be Finally Peaking, and the Fed Won't Help Matters" by Brendan Brown: Mises.org/RR_65_B "How Asset Price Inflation Is Different from Goods Price Inflation" by Brendan Brown: Mises.org/RR_65_C "Monetary Inflation and Price Inflation" by Robert P. Murphy: Mises.org/RR_65_D "Ending Fiat Money Won't Destroy the State" by Ryan McMaken: Mises.org/RR_65_E Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
11 minutes | Jan 20, 2022
How Easy Money Inflated Corporate Profits
After many months of covid stimulus, there's a bonanza in US pandemic profits. But unlike price inflation, these profits really are likely to be transitory. Original Article: "How Easy Money Inflated Corporate Profits" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
5 minutes | Jan 20, 2022
Real Wages Plummet as Inflation Hits the US Recovery
Friday's jobs report was weak, but the most alarming datapoint is that real wages are plummeting. Original Article: "Real Wages Plummet as Inflation Hits the US Recovery" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
12 minutes | Jan 20, 2022
Ending Fiat Money Won't Destroy the State
When we ask ourselves the question, “Can states survive without fiat currency?” the answer is clearly yes. Original Article: "Ending Fiat Money Won't Destroy the State" This Audio Mises Wire is generously sponsored by Christopher Condon. Narrated by Michael Stack.
65 minutes | Jan 19, 2022
The Louisiana Purchase and the Corruption of the Jeffersonians
The Revolution of 1800 removed the Hamiltonians from power, and in Jefferson's first term, America witnessed a major reduction of federal power. In his second term, however, an offer by French Emperor Napoleon to purchase the Louisiana territory would mark the fall of the Old Republicans. In this episode, Patrick and Tho look at how dreams of conquest in Canada, Spanish Florida, Mexico, and beyond have had tragic consequences for Americans' liberty. Recommended Reading "The Louisiana Purchase: Jefferson's Constitutional Crisis that Risked Dissolving the Union" by Dave Benner — Mises.org/LP5_A "Was Thomas Jefferson a Great President?" by Scott Trask — Mises.org/LP5_B Cronyism: Liberty versus Power in Early America, 1607–1849 by Patrick Newman — Mises.org/LP_Crony To subscribe to the Liberty vs. Power Podcast on your favorite platform, visit Mises.org/LvP.
54 minutes | Jan 18, 2022
Brett Lindell: Designing and Assembling a Breakthrough Business in Construction
Design & Assembly is the second pin (after Imagination) in the Economics For Business GPS system — the toolset to help entrepreneurs navigate their business environment. We talk to Brett Lindell, CEO of Pantheon Holdings (which includes Aegis Exteriors and Fortress Roofing) about his Design & Assembly approach that has helped him build a fast-growing business from scratch in the crowded, competitive, and demanding field of regional house construction. His advice: there are plenty of resources available; if you assemble the right resources to fit a system of assuring and delivering the best customer service, there’s a lot of growth to be harvested, whatever the industry. Key Takeaways and Actionable Insights The entrepreneurial method uses currently available means to create the possibility of new future outcomes. The entrepreneurial method is not to try to control outcomes but to put available resources to use to explore possibilities. Brett Lindell used the method for his business launching pad: Who am I? Experienced as a US Marine, a college student and a corporate executive in learning, planning, doing, and relationship building. What do I know? A lot. How Marine Corps plan complex missions, and how they train inexperienced young people to implement amidst on-the-ground chaos. How the system of a global corporation puts the highly engineered products of a worldwide manufacturing web in the hands of construction site workers equipped with nothing more than hammers to produce sturdy and beautiful houses. How sandy beaches and a good climate attract residents who want to buy homes. Whom do I know? There are companies in the construction industry craving nothing more than simple, reliable good service — which is scarce. There are young people graduating college in my region with limited job prospects who are enthusiastic and highly trainable. Controlled downside: The entrepreneurial method controls downsides, and doesn’t pretend to control outcomes. Brett’s controlled downside was public commitment to starting, with the consequent specter of public shame if he didn’t succeed, knowing he hated the very possibility of shame. Design is the series of steps from idea to a working system. Brett Lindell set out to design and assemble a system of systems to achieve his mission. Geography/Market system: A magnet for homeowners (beaches, ocean, climate, beauty, great place to live) and therefore for developers and builders. Not dominated by cities and so the construction market is highly dispersed. Labor resource system: Young people graduating college in the area face limited employment opportunities combined with high enthusiasm to stay in the area. Organizational system: Integrate geography and labor resources via decentralized command that locates tools and decision-making autonomy in the hands of front-line customer-facing employees. Service system: Basic research (talking to potential customers) revealed that the addressable market is for reliable service: answer the phone when they call, be on time for deliveries and appointments, keep the promises you make. Brett’s system is classic system design of simple rules: employees must (1) tell the truth, (2) pick up the phone when it rings, (3) return all phone calls, (4) customers in all directions — i.e., treat everyone like a customer and serve them as they want to be served whether they’re suppliers, colleagues, or anyone else in the system. (And for Brett, his employees are his most important customers.) Rich knowledge encoding: Brett believes in handbooks — a belief he learned from the Marines. Handbooks encode all the knowledge of the firm on how to follow every process and implement every task. Every employee can thereby benefit from all the accumulated knowledge and experience in the firm, and the handbooks are continuously updated via new experiences and new knowledge. Tech systems: In a relatively low-tech industry, Brett’s firm is a high-tech leader because he is always looking for and evaluating the latest technology for automation, work-reduction, and control. The technology can be in the form of apps or software or hardware, and is especially valuable when it can all be integrated together in end-to-end systems or sub-systems such as inquiry-to-order and order-to-cash. Technology integration for these sub-systems speeds up cash flow, reduces labor costs, and increases transparency, thereby enabling quick fixes and improvements. Brett would rather have too much technology than too little. A plan: While planning can never predict or control the future, it can be an integrating theme for system design. Brett’s plans are a brief and compressed (one page) set of numbers, and those numbers are shorthand for a lot of detail. For example, if Brett’s company is to have the capacity to provide construction components and services for 50 homes in the current year and 500 the next year, then systems of procurement, logistics, sales and marketing, finance and technology must be designed to scale to handle more volume and more complexity without impeding growth. Time, resources, and personnel must be deployed appropriately. Assembly embraces and harnesses the human element of the business system. A system combined with the right people, suitably trained, and equipped, and with the right mindset, produces the right results. When individual employees are oriented to independent problem solving and autonomous goal-driven creativity rather than central planning, the firm can cope with — and, in fact, generate — dynamic change. Brett has injected as much humanity as he possibly can. Seeing his hires get promoted and take leadership and realize personal goals is his greatest reward. He has created a family-friendly firm where people can get home to their kids before they go to bed, and take the family on vacation without worrying about the office or the job site, knowing that the system will manage the absence. He creates jobs and makes people’s lives better. That’s the entrepreneurial society. Additional Resources "Designing and Assembling a System for Entrepreneurial Growth" (PDF): Mises.org/E4B_153_PDF1 "The Entrepreneurial Method" (PDF): Mises.org/E4B_153_PDF2 Reach Brett at email@example.com
45 minutes | Jan 14, 2022
The State of Austrian Economics
To kick off the New Year, Jeff recently had the opportunity to address a Discord channel dedicated to Austrian Economics. His talk focused on the state of economics generally, whether the profession is serving society, how economists failed us throughout the Covid hysteria, and especially the health and relevance of the Austrian school. This is a great survey of the role economics (and economists) should play in society. Also includes questions from the audience, emceed by channel host JW Rich.
49 minutes | Jan 12, 2022
The Jeffersonian Revolution
In this episode of Liberty vs. Power, Patrick and Tho look at the success of the Jeffersonians following the corruption of Hamilton's Federalist Party. With the support of Treasury Secretary Albert Gallatin, the Jeffersonian Administration is able to slash the size of the federal bureaucracy. Unfortunately, the influence of Republican moderates — like James Madison — undermined a true restoration of old republican ideals. Recommended Reading "Jefferson's Philosophy" by Murray Rothbard — Mises.org/LP4_A "Jefferson as President: His Judicial Blunders" by Scott Trask — Mises.org/LP4_B Cronyism: Liberty versus Power in Early America, 1607–1849 by Patrick Newman — Mises.org/LP_Crony To subscribe to the Liberty vs. Power Podcast on your favorite platform, visit Mises.org/LvP.
50 minutes | Jan 12, 2022
Predictions for 2022
In this episode of Radio Rothbard, Ryan and Tho trade predictions for the year ahead. Topics include the importance of internal primaries ahead of next year's mid-terms, predictions on what the Fed will do with rising inflationary pressure, and what comes next from the covid regime. Additional Reading "Americans May Finally Be Losing Confidence in the Woke Military" by Jose Nino: Mises.org/RR_64_A "Could 2022 Bring the Collapse of the Euro?" by Alasdair Macleod: Mises.org/RR_64_B "Will Senate Republicans Endorse Biden-Powell Inflation?" by Tho Bishop: Mises.org/RR_64_C "The Fed Is Hawkish Now? I’ll Believe It When I See It." by Ryan McMaken: Mises.org/RR_64_D Be sure to follow Radio Rothbard at Mises.org/RadioRothbard.
56 minutes | Jan 11, 2022
Laura and Derek Cabrera: Building An Entrepreneurial Business Culture With Systems Thinking
Why do entrepreneurs start businesses in the first place? They have a vision for the future and seek to work with other people to bring it about. Those other people may be colleagues and employees, directors and investors, suppliers, and customers. Organizing this multivalent work is hard. Thinking of your organization as a complex adaptive system yields new understanding and a new approach to organizing that results in improved goal achievement. Laura and Derek Cabrera of Cabrera Research Lab are dedicated to sharing research findings that enhance the capability of any organization to reach business goals. They join the Economics For Business podcast to do some sharing with the E4B community. Key Takeaways and Actionable Insights Systems Thinking resolves the mismatch between the way the real world works and the way firms think it works. World hunger is a wicked problem, yet there is enough food to feed the world. We don’t have the right mental model to account for all the social, economic, political, motivational, and cultural issues that shape the problem. In the same vein, systems thinking in business is about building mental models that better align with the real world. Laura and Derek Cabrera provide an introduction in Systems Thinking Made Simple, and they mentioned some of the important changes in thinking that businesses must embrace to enter the new world of possibilities that systems thinking opens up. The first step is to recognize that LAMO thinking is inappropriate for a VUCA world. The real world is agnostic about human endeavors VUCA WorldLAMO ThinkingThe real world is non-linearbut we think in linear ways.yet we tend to look sat things through a human-centered (anthropocentric) lens.yet we tend to look sat things through a human-centered (anthropocentric) lens.The real world is adaptive and organicyet we tend to think mechanistically and the metaphors we use reference machines (e.g., a universe like clockwork; mind is a computer).The real world is networked and complex with a sprinkling of randomnessyet we think of things in ordered categories and hierarchies. All businesses are complex adaptive systems. We have no choice in the matter. An organization is a living, breathing thing, organic — lots of individuals dynamically making decisions that roll up into the complex system. It’s not a machine. An implication is that business executives and managers can’t operate on outcomes directly (e.g., via business “planning” or business “strategy”). Outcomes are emergent from the system and can be worked on only indirectly. The traditional mental model for business organization is flawed. Laura and Derek capture the traditional mental model for organizational management in the acronym PCCU: Plan, Command, Control, Utilize. Plan: Businesses create plans for the future, often in great detail, with rigorous discipline, and lots of numbers and projections. But the real world is changing too fast, and outlining detailed steps to reach a goal amidst rapid change introduces biases that can occlude opportunities for rapid and profitable adaptation to change. Command: Hierarchical organization designs assume a military metaphor of command. Organizations are much more organic in the real world, tempered by social influence, compliance, resistance, and rebellion. Better to think of then organization as a network and a culture. Control: Management likes to feel like it is in control, but the control paradigm is both unrealistic and unresponsive to organic change. Utilize: The most detrimental organizational construct is the Human Resources department. Treating people like resources to be utilized is unsustainable. People are independent agents in the system who wish to co-evolve to a place where their individual goals and those of the organization are well-aligned. The mental model for how complex adaptive systems work is Simple Rules. The great insight from complex adaptive systems thinking is that organizational behavior isn’t directed by leaders, but driven by followers. What are they following? Simple rules. We can think of an organization as a superorganism. It self-organizes by following simple rules that guide the actions of individual agents in variable contexts. Autonomous agents follow simple rules based on what’s happening locally (that is, around them), the collective dynamics of which lead to the emergence of the complex, system-level behavior we observe: adaptiveness and robustness. The simple rules for successful adaptive organizations are summed up as V-M-C-L. Vision: A seeing thing. Something we all see in the future, where we are headed. Not a tagline, not a statement on a website, not a corporate word salad. A vision is a shared mental model that everyone in the organization can see and articulate and align with. It’s in their hearts and minds. It gets employees excited and connected. Mission: A doing thing. A mission is something that you do repeatedly over and over again to bring about the vision. It directs the work in the organization, with clarity about who does what. It’s clear, concise, easily understood and measurable. Capacity: The organization must have the capacity to do the mission: the energy, the resources, the skills. Capacity is a system of systems all connected and working together, focused on, and directed towards doing the mission. Learning: Learning is critical to expand capacity, reinforce mission and refine vision. It is the adaptive function. Organizations must love learning – seeking unvarnished feedback from the outside world as input into making the changes that are needed for improvement. This means loving reality and being brutally honest about the current state. Learning means improving mental models, and embracing the possibility that your current model is wrong. In their book Flock Not Clock (see Mises.org/E4B_152_Book), where there is a detailed exposition and explanation of V-M-C-L, Laura and Derek cite the example of the app My Fitness Pal. Vision: Healthy living is the new normal Mission: Facilitate and motivate healthy behavior choices Capacity: Build mission-critical systems: design, engineering, R&D, sales, and marketing, etc. Learning: Feedback on whether living healthy is getting easier, whether more people are making healthy choices, whether more people are feeling joyful and powerful as a result. Think of the elements of V-M-C-L as a pyramid you can construct from first principles: Thinking drives Learning, which drives Capacity, which drives Mission, which brings about Vision. The emergent result of V-M-C-L is culture. Laura and Derek talk about training people to think in order to be able to learn. The first step is often unlearning the misleading mental models we’ve been taught to believe. When people start to think about mental models, they can recognize their own and those of others, and make comparisons, make changes, and find common ground. If your mental model about your current situation is real — "brutally honest," as Derek put it — then the chance of changing that situation for the better is good. You’ll be able to identify a path out. Culture can be built around the simple rules of vision, mission, capacity, and learning, by purposely constructing the four mental models of V-M-C-L. There is enormous organizational and economic power in the new understanding of complex adaptive systems and how they work in getting a group of disparate people to work together towards a goal as if they are a single unified organism. Additional Resources Sign up for Laura and Derek’s Vision-Mission Bootcamp: Go.CabreraResearch.org/VMBootcamp Visit Cabrera Research Lab online at CabreraResearch.org and on LinkedIn (Mises.org/E4B_152_LinkedIn). "20-Point V-M-C-L Checklist" (PDF): Mises.org/E4B_152_PDF1 "Constructing the VMCL System" (PDF): Mises.org/E4B_152_PDF2 Flock Not Clock: Align People, Processes and Systems to Achieve Your Vision by Derek and Laura Cabrera: Mises.org/E4B_152_Book
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