by Pascal Salin
Abstract: In this lecture delivered November 2008 on the occasion of the presentation of the Mises Institute’s Gary G. Schlarbaum Prize for lifetime achievement in the cause of liberty, Professor Salin discusses his discovery of Austrian economics and his involvement in “the world of individual liberty,” and draws various lessons from his intellectual journey. The coherence of Austrian economics appealed to Salin—it is not a patchwork of partial theories, but a logical process of thought founded on realistic assumptions about individual action. Salin also discusses differences between the Chicago and Austrian approaches, and his views about monetary systems.
The financial crisis beginning in late 2008 is not a crisis of capitalism, but of state intervention, caused by the expansionary monetary policy of the Fed. Capitalism is the solution, not the cause. There is no need to create money. There is never any balance of payments problem. What is required is tax systems more friendly to capital accumulation, a decrease in the role of the state, the end of monetary policy and, if possible, the disappearing of central banks and the IMF.