Elite Theory And The Theory of Democracy

I-   T H E   R U L I N G   C L A S S

The citizenry of every political society can be divided into two classes: the rulers and the ruled. Moreover, the ruling class is always a numerical minority as compared to the ruled class. This is not merely an empirical regularity, it is inherent in the very concept of a political society; it is an immutable and universal law that holds true for all times and places. This law of human civilization, the law of elites, constitutes the central tenet of Italian school elitism. The law of elites was first elaborated by the eminent political theorist Gaetano Mosca in the 1870s while he was a student under Angelo Messesdagila at the University of Palermo. It was during this time that Mosca stumbled upon a profound insight. Mosca realised that the basic idea underlying the analytical categorisation that Hipppolyte Taine had applied to the Ancien Regime could be generalised and applied to any conceivable political society. Mosca posited that if one studies any polity, be it a monarchy, a republic, a dictatorship, or any political arrangement whatsoever, one inevitably discovers that real power is never held by one person, the king or dictator, nor by the whole populace. Rather, actual power is always wielded by a particular class of people, which is always a small minority as compared with the whole population. 

The Economic Means Versus The Political Means

The great German sociologist Franz Oppenheimer (1864-1943) wrote in his masterpiece "The State" that there exists only two principal ways of acquiring wealth. The first way is to engage in production and to exchange that good for the product of another producer in a mutually beneficial trade. This is the way of production and exchange: The way of the free market. Oppenheimer called this method the "economic means" of obtaining wealth. 

The Epistemological Foundation of Economic Science

One of, if not the most fundamental difference between the Austrian school and the mainstream neoclassical school is the difference of opinion with regard to the essential epistemological character of economic propositions. The Austrian position is that economic propositions constitute a priori knowledge; that is, knowledge derived, not from observational experience, but from a true axiom. Mises has poignantly articulated the Austrian position:

Ludwig von Mises, Libertarianism, and Traditionalism

My first article for the Mallard, Ludwig von Mises, Libertarianism, and Traditionalism, is now available online. In the article, I expound my thesis that Ludwig von Mises held views on cultural issues that would characterise his social thought as typical of traditionalist conservatism. 

Read it here:
https://mallarduk.com/ludwig-von-mises/

The Uses of Money

Money is the economy’s medium of exchange. The great utility of its employment is that it obviates the requirement for a coincidence of wants among the parties to a trade, and it permits the employers of scarce resources--the entrepreneur-producers--to engage in economic calculation and thereby achieve an efficient allocation of resources. 

In all modern economies, money is invariably fiat money; that is, government-issued money that is not backed by a commodity, such as gold or silver. Accordingly, the use-value of money is virtually nil. However, where commodity money is used, money can have significant use-value.

On The Impossibility of Socialism

Over a century ago, in 1920, Ludwig von Mises wrote what is undoubtedly the most important essay in the history of the field of economic science, namely: Economic Calculation in The Socialist Commonwealth. In that essay, Mises utterly destroyed the intellectual foundation of the theory of socialism. Mises definitively demonstrated that socialism is impossible in an advanced economy because of the fundamental deficiencies of calculations in kind.

Until the calculation debate of the 1920s, socialist theorists of the Marxian school had failed to pay any attention to the economic problem of resource allocation in an advanced economic society.

How Prices Are Determined

 

A market price is the exchange ratio between an economic good (or service) and the medium of exchange, viz. money. While the conventional exposition of how supply and demand curves intersect to yield a stable equilibrium market price in order to clear the market is valid, it is necessary to examine the diagram of the intersecting curves from a truly subjectivist perspective.

According to Mises, the "ultimate source of the determination of prices is the value judgments of the consumers."

Capital and Interest: An Introduction to Austrian Capital Theory

In this article, I want to do several things. First, I want to explain what capital goods are and how they enhance the productivity of labour. Secondly, I want to explain the principle of time preference and its role in the determination of market interest rates. And lastly, I want to explain how a general increase in savings shifts the focus of an economy's output from consumer goods to capital goods, thereby increasing the standard of living in society. 

Capital Formation And Economic Growth 

Economic goods are scarce physical objects that can satisfy human wants. Those that directly satisfy wants are called consumer goods, and those that only indirectly satisfy wants (because they contribute to the production of consumer goods) are called producer goods.

The Origin of Money

 

Nearly everyone appreciates how vitally indispensable money as a common medium of exchange is for society. It allows for an extensive division of labour and large-scale production and is a necessary prerequisite for economic calculation. In short, money and civilization are inextricably linked. It is impossible to have civilization without money. 

But how is that money came about? One possible explanation of the historical origin of money

What Economics Is and What It Is Not

"Economics is not about things and tangible material objects; it is about men, their meanings, and actions. Goods, commodities, and wealth and all other notions of conduct are not elements of nature; they are elements of human meaning and conduct. He who wants to deal with them must not look at the external world; he must search for them in the meaning of acting men."

- Ludwig von Mises

In his seminal treatise, Human Action, Ludwig von Mises put forward a definition of economics as the scientific study of human action. Mises conceived of economics as a branch of what he called praxeology, his term for the general, formal science of human action. For Mises, it was of paramount importance that economic reasoning and analysis be predicated on human action and not material commodities and their physical properties.