Friday, February 21, 2014

A Conversation With Jeff Deist About the Austrian School

Jeff Deist, president of the Mises Institute, recently spoke with The Free Market about his introduction to the Austrian School and his work with Ron Paul.
Mises Institute: How did you become interested in Austrian economics?
Jeff Deist: My journey with Austrian economics and the Mises Institute began in 1992. I was fortunate to have a good friend, Joe Becker, studying in the graduate economics program at University of Nevada, Las Vegas. Joe was a burgeoning Austrian scholar, and of course had chosen the program strictly because Murray Rothbard was on the faculty. At the time a small group of Austro-libertarian students had assembled in Las Vegas to study under Murray. With the addition of Hans Hoppe, UNLV clearly had become the top economics program in the US for graduate students interested in Austrian training. I was able to attend a few of Murray’s course lectures, which not surprisingly (to those familiar with his lifestyle) were held in the evening! Needless to say the lectures were fast-paced and filled with references beyond the mainstream, giving only a hint of Murray’s vast range of knowledge. Encouraged by Joe and his excitement for Rothbard’s teaching, I decided to explore further.
At the time I was already a committed libertarian, but lacked any real intellectual framework to integrate free market economics with ethics, philosophy, law, and political liberty.
Remember that much of what passed for free-market or libertarian thought at the time remained mired in 1980s Reaganite clich├ęs. Supply-side economics was still the focus of the Right, with many otherwise sensible people talking about the Laffer Curve and maximizing tax revenue! Quasi-utilitarian arguments flourished in the economics mainstream, ceding the intellectual high ground in favor of arguments that free markets merely “worked” better. “Law and economics” theories were trendy, with strict liability tort models offered as the supposed remedy to judicial overreach and externalities. Tax cuts and enterprise zones typified the weak-tea fiscal policy ideas coming from the political class, even as Clinton outfoxed the elder Bush by co-opting limited government rhetoric. Of course both Alan Greenspan and the Fed were wildly popular across the political spectrum, with some pundits promising not only an end to poverty (through monetary policy) but an end to history itself. Democracy, so we were told, had triumphed.
Against this backdrop Austrian economics opened up a whole new world for me. It became clear that antipathy toward government and support for free markets was not enough: it was necessary to understand and explain the harm caused by all kinds of government intervention in economic terms, which is to say, human terms. Reading breezy libertarian books and articles could never substitute for more rigorous academic self-study.
MI: Describe how your interest in Austrian economics evolved.
JD: Like so many before me, I began reading the great works of Mises, Hayek, and Hazlitt. These works demolished, point by point, the case for communism and socialism, while warning against the abandonment of the old liberal order. They also effectively predicted the failure of social democracy models that had replaced monarchies in Europe and constitutionalism in America. Once one understood and accepted Austrian teaching regarding the fundamental choice between laissez-faire and statism, the conclusion became clear: there was no “third way.”
Traditional Austrian explanations of capital, interest, and time preference refuted the tired yet sometimes subtle fallacies and class arguments underpinning not only Marx and Keynes, but even most neoclassical schools. The subjective theory of value showed that consumers, not intrinsic material or labor components, determined value. Austrian business cycle theory explained not only particular booms and busts (such as the S&L bust), but also the broader need for commodity money and the inherently destructive effects of central banks. Meanwhile, Austrian methodology taught that markets are not mysterious, anonymous, or inhuman: on the contrary, they simply reflect human action, however imperfect, in economic terms.
Perhaps most importantly, the Austrian School helped me understand the impossibility of socialism as an economic system. By demonstrating the critical need for price signals and profit/loss feedback among business owners, Austrians demolished the entire range of modern arguments for state economic planning.
Reading Murray Rothbard took my Austrian education to another level. He literally laid out the ethics of liberty, explaining the legal and political conclusions necessarily flowing from self-ownership, the natural rights tradition, and the principle of nonaggression. He made the clear case for property rights as the foundation of a free society, applying the same standards to government and private actors. The state, Rothbard argued, is virtually always an aggressor. Only the willing blindness and inertia of individuals in society allow the state to mask this aggression as benevolence, and tax us for the privilege.
Of course Rothbard also produced a staggering array of books and articles on the topics of money and banking, the Great Depression, history, philosophy, law, and anarcho-capitalism, just to name a few. Yet his work was always highly accessible to me as a layperson, and readable in a way earlier Austrians sometimes were not.
In short, Austrian economics provided the exposition and defense of capitalism I had been looking for. Austrianism transcended individual vs. utilitarian arguments, explaining the destructive nature of state intervention for the whole of society. It provided the intellectual and conceptual foundation for a consistent defense of freedom, a foundation that seemed lacking among so many conservatives and libertarians.
MI: How did you end up working with Ron Paul?
JD: In the early 2000s, I joined Ron Paul’s congressional staff in Washington,rdd4 DC. Ron had been involved with the Mises Institute since its founding, and in fact made his initial decision in the 1970s to run for Congress largely based on his interest in the Austrian School. Ron had the opportunity to see Mises speak in 1972, and of course later he became well acquainted with Murray Rothbard and Henry Hazlitt, among others. Lew Rockwell had been an early supporter and confidant, serving as Ron’s first congressional chief of staff.
Many of Ron’s staff at the time already were dedicated Austrians, and at his urging we all attended Mises Institute events in Auburn. All of us shared Ron’s view that his role was to educate people, and the Austrian message played a central part in that mission.
MI: How did this work lead you to the Mises Institute?
JD: became an invaluable resource for us, and we made a concerted effort to add Austrian content to Ron’s speeches, statements, and articles. As a result, C-SPAN viewers sometimes were amazed to hear Ron quoting Mises, Rothbard, Rockwell, or Tom Woods in the middle of otherwise laughably nonintellectual congressional debates! We also developed great relationships with many of the academics associated with the Mises Institute, often inviting them to provide testimony before the monetary policy subcommittee Ron chaired. In many ways the Institute served as the intellectual home for Ron’s congressional office.
Through Ron’s growing popularity, thousands of Americans, especially young Americans, were exposed to the great scholarship of Mises, Hayek, Hazlitt, and Rothbard. Equally important, the Austrian School gave Ron the intellectual ammunition to explain the great calamities of those years: Greenspan’s tech stock bust; the Enron accounting scandal; the terrible folly of a Fed-financed war in Iraq; the enormous malinvestment in the housing market; and ultimately the global crash of 2008/2009. In all of these instances Ron Paul laid down historical markers, using the principles of the Austrian School. For this the world owes him a debt of gratitude.
On a personal level, working for Ron Paul enabled me to develop friendships far and wide with libertarians around the world. It was through Ron that I became acquainted with Lew Rockwell, and it is because of Ron that I now find myself joining the Mises Institute at a time when the Austrian School is growing rapidly. I am deeply humbled and honored to work with the Institute’s staff, donors, and supporters as we take the Austrian vision of a truly free society forward in 2014.


  1. Thanks for the post, Jeff Deist is a genuine and honorable individual; it's always a pleasant and good thing to see how one matures.

    Please consider meeting the new person: the debt serf; he is emerging via diktat money.

    Just as the woolly mammoth was made extinct by a sudden ice age extinction event, liberalism’s investor, is being made extinct, as the dynamos of liberalism, these being creditism, corporatism, and globalism, are winding down.

    Furthermore the investor’s habitat, this being democratic nation states and banks, are being literally obliterated; Benson te writes Thailand hit by a bank run; and he writes Kazakhstan’s devaluation triggers bank runs.

    The nature of personhood is changing, this comes via the extinction of liberalism's investor and his activity of investment choice, and the death of his element of life, that being fiat money and fiat wealth, which came from the credit and flow of nation states and bankers, ... the new person is emerging, ... that being the debt serf, and his economic activity, that being debt servitude, through the creation of diktat money, which becomes his element of life.

    Inasmuch as democratic nation states are crumbling, new regional sovereign authority is rising establishing the debt serf’s habitat, that is a regional gulag of regional economic governance and totalitarian collectivism; the Eurozone is ground zero for this new habitat, with European Voice reporting Eurogroup sends Troika back to Greece. No decision on further financing for Greece until the summer, says Eurogroup chief.

    An inquiring mind asks, who is one going to be?

    No one wants to be a debt serf; but liberalism’s singular dynamo of regionalism, operating within economic fascism, is producing authoritarianism’s person. The economic mastery of the Beast Regime in working in the dynamo of regionalism, will be so effective through the interventionism of iregional fascism operating in public private partnerships, in establishing regional security, stability, and sustainability, that people will be astonished and follow after it, declare it to be all powerful, so much so, that no one can make war against it.

    Under liberalism bankers, corporations, government, entrepreneurs, and citizens acting as investors and clients of democracies were the legislators of economic value and the legislators of economic life that shaped one’s means and one’s ends.

    Under authoritarianism, currency traders, bond vigilantes and appointed leaders working in public private partnerships and in regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends.

    There are two options to authoritarianism’s economic life of debt servitude.

    One can have fiat identity and experience within libertarianism, where an intellectual framework integrates free market economics with philosophy, law, and political liberty, where one has a life experience in the principle of non-aggression, and manifests in ethics such as regard for the person and property of others.

    Or one can have identity as elect, as is presented by the Apostle Paul in Ephesians 1:4, where one has a life experience in the holiness of God, and manifests in virtue, that is admirable qualities, 2 Peter 1:4, such as peace and kindness, as well as ethics, that is regard for the person and property of others, such as not defrauding others.

    Dispensation economics communicates that there is no human action, rather there all thing are of God, and that all economic action, comes through the dispensation, that is the household administration of Jesus Christ, sometimes called the economy of God, for the completion and perfection of every era, epoch, age and time period, as presented by the Apostle Paul in Ephesians 1:10.