WEBVTT NOTE Time and Money 1 00:00:00.000 --> 00:00:12.000 The book I'm going to talk about is Time and Money. It looks like this. You can order it at the laissez-faire books. 2 00:00:12.000 --> 00:00:21.000 In fact, I recommend it's about the only place that you should think about buying it because you can buy it at a reasonable price, something like $29.95. 3 00:00:21.000 --> 00:00:27.000 If you buy it from Routledge, you spend $100. I haven't met anyone yet who's actually done that. 4 00:00:27.000 --> 00:00:35.000 and turns out to be one of my disappointments about the book is the pricing that Routledge has. 5 00:00:35.000 --> 00:00:50.000 If you look in the book and there'll be copies lying around during the weekend, you'll see it has a lot of pictures in it, a lot of graphs and about 50 of them, I think. 6 00:00:50.000 --> 00:00:57.000 But I promise you today I'm not going to draw any of the graphs here on Lew's wall. 7 00:00:57.000 --> 00:01:08.000 Instead, I want to do a little bit of storytelling just to explain how I came to write this book and then some reaction to the book's reception. 8 00:01:08.000 --> 00:01:16.000 And in thinking about talking today, I had to decide how far back to go to begin the story. 9 00:01:16.000 --> 00:01:24.000 Hans is Right. It's almost a lifetime project. It begins well before I ever met Hans Hoppe. 10 00:01:24.000 --> 00:01:29.000 How far back to go? And I have to go back a long ways, partly because it took me a long time to write the book. 11 00:01:29.000 --> 00:01:32.000 Once I got started writing it, even that took a long time. 12 00:01:32.000 --> 00:01:40.000 But at the same time, there's a lot of prehistory that I think is relevant here that I want to say at least something about. 13 00:01:40.000 --> 00:01:46.500 And I'll start by fessing up and saying that my early training was in engineering. 14 00:01:46.500 --> 00:01:50.500 My bachelor's degree is in electrical engineering. 15 00:01:50.500 --> 00:01:56.500 And I drew a lot of graphs there too, mostly circuit theory and circuits and so on. 16 00:01:56.500 --> 00:02:03.500 But I developed certain analytical skills in an engineering program. 17 00:02:03.500 --> 00:02:08.500 But somewhere I took a wrong turn and ended up in economics. 18 00:02:08.500 --> 00:02:22.500 The short story is that during my military years, I began reading on my own eras where I thought of being fairly weak and the social studies was certainly prime among them. 19 00:02:22.500 --> 00:02:31.500 So I started reading economics but following my nose and reading those books in economics that I thought seemed right, seemed appealing, 20 00:02:31.500 --> 00:02:36.500 and be on the right track and of course very soon found my way into the Austrian school. 21 00:02:36.500 --> 00:02:46.500 So during my military years I read lots of Mises and I read Rothbard, I read Hayek and a number of others. 22 00:02:46.500 --> 00:02:54.500 And so then coming out of the military I was in the odd circumstance of having background in electrical engineering 23 00:02:54.500 --> 00:02:59.500 and Austrian economics, at least self-taught in Austrian economics. 24 00:02:59.500 --> 00:03:09.500 decided at that point to study economics formally and get at least a master's in economics, 25 00:03:09.500 --> 00:03:15.500 having no idea what mainstream economics was about, because I hadn't followed my nose in that direction at all. 26 00:03:15.500 --> 00:03:21.500 And in fact, most of you who have read Mises and Rothbard, you know there aren't many graphs, 27 00:03:21.500 --> 00:03:24.500 there aren't many equations in those books. 28 00:03:24.500 --> 00:03:31.500 So I enrolled in an economics program at the University of Missouri at Kansas City. 29 00:03:31.500 --> 00:03:34.500 Missouri is my home state. 30 00:03:34.500 --> 00:03:41.500 And was immediately, I guess, caught flat-footed with all of the graphics. 31 00:03:41.500 --> 00:03:46.500 Any of you, a lot of you have taken courses formally at universities, 32 00:03:46.500 --> 00:03:51.500 and you know that economics, both micro and macro, are full of graphs. 33 00:03:51.500 --> 00:04:01.500 and it was awfully difficult for me to see where within those ISLM graphs and aggregate supply, aggregate demand graphs and all the rest, 34 00:04:01.500 --> 00:04:08.500 where within all those were the insights of the Austrian School? They were buried deep. 35 00:04:08.500 --> 00:04:16.500 And I think the turning point in my development here came with some discussion with my brother, of all people, 36 00:04:16.500 --> 00:04:24.500 who's neither an engineer nor an economist, but instead a graphic designer, well that helped, okay. 37 00:04:24.500 --> 00:04:33.500 And I remember explaining to him that the Keynesians is sort of a hard nut to crack because there were all these graphics 38 00:04:33.500 --> 00:04:42.500 and students got a vested interest in these graphics being right or relevant or worthwhile once they had labored hard to actually learn them. 39 00:04:42.500 --> 00:04:50.500 And my brother asked me very innocently, well, couldn't you generate some graphics to illustrate the Austrian point of view? 40 00:04:50.500 --> 00:04:55.500 And he never realized at the time how much work he cost me. 41 00:04:55.500 --> 00:04:59.500 I spent quite a long time doing just that. 42 00:04:59.500 --> 00:05:08.500 Even at that level, working on a master's degree, I produced a paper that was a forerunner to time and money. 43 00:05:08.500 --> 00:05:16.500 but based almost exclusively on the early writings of the Austrians on Mises' Theory of Money and Credit. 44 00:05:16.500 --> 00:05:25.500 But I developed something that I call Austrian Macroeconomics, a graphical exposition, 45 00:05:25.500 --> 00:05:33.500 used it as a term paper at Kansas City, and on the basis of that was actually asked by one of the faculty members 46 00:05:33.500 --> 00:05:39.500 to present that paper at a professional meeting in Chicago that was upcoming. 47 00:05:39.500 --> 00:05:45.500 He had given me a good grade on the paper, but I was convinced he hadn't actually read it. 48 00:05:45.500 --> 00:05:51.500 He was a Marxist and I think he weighed it, you know, as a labor theory of value. 49 00:05:51.500 --> 00:05:57.500 And so I realized that here I was going to present this paper at Chicago, but nobody, 50 00:05:57.500 --> 00:06:02.500 certainly no one who knew anything about Austrian theory, had read it. 51 00:06:02.500 --> 00:06:08.500 Well, that's a risky business. You'd like to have a little feedback before you present a paper, a professional meeting. 52 00:06:08.500 --> 00:06:14.500 And so I sent a copy to Murray Rothbard to see if I could get comments from him. 53 00:06:14.500 --> 00:06:22.500 Well, it turns out that Rothbard was delighted with the paper, not because he loved the graphical analysis, 54 00:06:22.500 --> 00:06:26.500 but he perceived it as a way of beating the opposition at their own game, 55 00:06:26.500 --> 00:06:32.500 of using the graphs like the Keynesians do by telling the Austrian story. 56 00:06:32.500 --> 00:06:36.500 I got a phone call from Joey Rothbard who asked me, 57 00:06:36.500 --> 00:06:39.500 did I plan to be in New York any time soon? 58 00:06:39.500 --> 00:06:44.500 That Murray would like to talk to me if I had any such plans. 59 00:06:44.500 --> 00:06:48.500 Well, I had no such plans, so I said yes. 60 00:06:48.500 --> 00:06:53.500 I'll be there over spring break, which was just upcoming. 61 00:06:53.500 --> 00:07:00.220 And so I went to New York, and this was in March of 73. 62 00:07:00.220 --> 00:07:04.340 We have to go back at least that far, you see, to tell the story. 63 00:07:04.340 --> 00:07:16.820 I went to New York in March of 73 and met with Rothbard, and he invited a number of budding Austrian economists over to his apartment to discuss the graphical paper. 64 00:07:16.820 --> 00:07:27.820 And I'm reminded of this episode, reminded very vividly, just in the last couple of days, because Murray also invited me the next day. 65 00:07:27.820 --> 00:07:33.820 He said that he was going to do a book signing at laissez-faire books. His For a New Liberty had just come out. 66 00:07:33.820 --> 00:07:39.820 And why didn't I stop by laissez-faire bookstore down on Mercer Street in Lower Manhattan? 67 00:07:39.820 --> 00:07:45.820 And I did, at the time he was signing books there. 68 00:07:45.820 --> 00:07:52.820 Well, Jeff Tucker just posted yesterday a photograph, it turns out, that was taken that day at Lasez-Faire Books. 69 00:07:52.820 --> 00:07:58.820 I didn't know any pictures were taken that day, but a photograph where he was trying to identify who's this guy with Murray. 70 00:07:58.820 --> 00:08:06.820 I must have aged that much since 1973 that Jeff couldn't recognize. Who's this guy with Murray? 71 00:08:06.820 --> 00:08:21.820 Well of course it was me, and it's a photograph that's posted now to the laissez-faire books website as one of the photos in their gallery on the occasion of their 30th anniversary, they're showing the early years you see. 72 00:08:21.820 --> 00:08:34.820 So anyhow, it all started back at least that far. This was also a year, 1973 if you know the sort of modern history of the Austrian resurgence, 73 00:08:34.820 --> 00:08:57.820 Just before Austrian economics got off the ground again, 1974 was the, what became famous or notorious, depending on your point of view, Austrian conference at South Royalton, where there were lectures by Rothbard and Kirzner and Lachman, and as a result of my trip to New York, I was invited to that. 74 00:08:57.820 --> 00:09:05.820 and there were several conferences. That one, the next year, there was one at Hartford, Connecticut and the following year one at Windsor Castle in England. 75 00:09:05.820 --> 00:09:17.820 And by the time we got to Windsor Castle, I had rewritten this paper on a graphical exposition of Austrian macroeconomics and presented it at Windsor Castle. 76 00:09:17.820 --> 00:09:21.820 And it was subsequently published as part of the conference volume. 77 00:09:21.820 --> 00:09:38.820 and it was also published as a monograph by the Institute for Humane Studies, it's called Austrian Macroeconomics, very thin volume as you can see, mostly graphs, okay, just a few words between the graphs and that was published in 78. 78 00:09:38.820 --> 00:09:47.820 Now, the reaction to this monograph is pretty easy to tell, the short story is that I got some hate mail because of it. 79 00:09:47.820 --> 00:09:50.820 and Austrian economists actually drawing graphs. 80 00:09:50.820 --> 00:09:53.820 This was viewed as a sacrilege to Mises and so on. 81 00:09:53.820 --> 00:10:03.820 But I got some positive response too, sometimes among engineers who had turned their attention to economics. 82 00:10:03.820 --> 00:10:09.820 Well, it's a long road then between the monograph itself and the book. 83 00:10:09.820 --> 00:10:15.820 But just a number of years ago, well 1992 I think it was, 84 00:10:15.820 --> 00:10:25.220 I was asked by the editors of the Rattling series to write a book-length treatment of Austrian macroeconomics. 85 00:10:25.220 --> 00:10:34.620 The editors are Mario Rizzo at New York University and Larry White, now at the University of Missouri at St. Louis. 86 00:10:34.620 --> 00:10:40.120 So I literally began on this book in 1992. 87 00:10:40.120 --> 00:10:44.920 It was a slow process and it did move forward with fits and starts. 88 00:10:44.920 --> 00:10:52.480 In 1997, I managed to get a sabbatical from Auburn to take some time to work on the book. 89 00:10:52.480 --> 00:11:06.960 But almost at the same time I got the sabbatical, I got an invitation to deliver the Ludwig Loughlin Memorial Lecture in Johannesburg in South Africa in September of that year. 90 00:11:06.960 --> 00:11:23.960 And I decided I would do that and to make the effort pay, I would write a lecture that would also become a chapter of the book and sort of a survey of the Keynesian macroeconomics that shows up as chapter two in time and money. 91 00:11:23.960 --> 00:11:33.960 And while I was at Johannesburg, I was also scheduled to give a talk at the Reserve Bank in Pretoria, the capital of South Africa, 92 00:11:33.960 --> 00:11:41.960 and talk about the American experience with chronically large deficits. 93 00:11:41.960 --> 00:12:03.960 Well, I gave that paper and turned that into a publication that was first published in the South African Journal of Economics but was later turned into Chapter 6 of this book where I deal with the issues of deficit finance from an Austrian point of view. 94 00:12:03.960 --> 00:12:33.960 So, one way or the other, I began piecing together the book, actually the graphical layout itself came to me literally during a class, I was teaching intermediate macroeconomics, and with a number of graphs on the board, and I saw how they fit together, that these things gel together, lining up with one another, axis to axis, so I fit them together on the board to tell the story, 95 00:12:33.960 --> 00:12:36.960 of the Business Cycle Theory. 96 00:12:36.960 --> 00:12:42.960 And from that came the basic graphical model in the book. 97 00:12:42.960 --> 00:12:46.960 I had written a forerunner article in 84 98 00:12:46.960 --> 00:12:49.960 for the Journal of Macroeconomics, 99 00:12:49.960 --> 00:12:52.960 which carried the title Time and Money. 100 00:12:52.960 --> 00:12:55.960 And at that point, the title was a takeoff 101 00:12:55.960 --> 00:13:00.960 on an idea that I got out of Hayek's Pure Theory of Capital, 102 00:13:00.960 --> 00:13:06.260 where Hayek talked about money being something of a loose joint in the system. 103 00:13:06.260 --> 00:13:11.560 It created a loose joint that you wouldn't see in, say, a system of pure barter 104 00:13:11.560 --> 00:13:15.760 because you could trade one thing without immediately getting another. 105 00:13:15.760 --> 00:13:17.960 Money served as the intermediary. 106 00:13:17.960 --> 00:13:21.460 And because of that looseness of a joint, 107 00:13:21.460 --> 00:13:30.860 it made the equilibrating mechanism subject to disequilibrium on an economy-wide basis. 108 00:13:30.860 --> 00:13:38.860 Certainly, if ill-conceived policies were being pursued by the monetary authority. 109 00:13:38.860 --> 00:13:45.860 And Hayek exploited very briefly this idea of money as a loose joint. 110 00:13:45.860 --> 00:13:53.860 That was in his book on capital theory, where the looseness of the joint became particularly significant in a capital-using economy, 111 00:13:53.860 --> 00:14:01.340 where people had to commit themselves to long-term projects well in advance of seeing who and 112 00:14:01.340 --> 00:14:05.860 when people might actually be willing to spend money on the output. 113 00:14:05.860 --> 00:14:13.180 So my title, Time and Money, which was used in that early article, became the title of 114 00:14:13.180 --> 00:14:14.180 the book. 115 00:14:14.180 --> 00:14:19.660 And in truth, in the book itself, there's only two chapters, three and four, that come 116 00:14:19.660 --> 00:14:32.660 I'm directly from that article or that are related to it in any substantive way, but nonetheless I kept the title Time and Money and let the subtitle be maybe a little more informative. 117 00:14:32.660 --> 00:14:42.660 It's called the Macroeconomics of Capital Structure. 118 00:14:42.660 --> 00:14:51.660 If you look at the other chapters in Time and Money and their relationship to these core chapters, Chapter 3 and 4, 119 00:14:51.660 --> 00:14:59.660 what you see is the book turns out to be an exercise in alternative analytical frameworks. 120 00:14:59.660 --> 00:15:05.660 The way I put the Austrian theory together, the Austrian graphics together, 121 00:15:05.660 --> 00:15:11.660 permitted me to create similar graphics to represent the Keynesian system. 122 00:15:11.660 --> 00:15:41.660 and another set of similar graphics to represent monetarism but all with common denominators graphically speaking where it became much easier than in conventional macroeconomics to make the translation from one analytical framework to another so you could put ideas through their paces in either of at least three different frameworks to see what the conclusions gave us and I think this this came in particularly 123 00:15:41.660 --> 00:15:47.660 It was handy and useful when it came to comparing Keynes and Hayek. 124 00:15:47.660 --> 00:15:52.660 If you've read the literature of the 30s, you know that Keynes and Hayek debated. 125 00:15:52.660 --> 00:15:55.660 Well, debate may be not quite the right word. 126 00:15:55.660 --> 00:16:09.660 They had some interchanges in terms of book reviews of one another's books, relatively hostile reviews, and with no resolution. 127 00:16:09.660 --> 00:16:39.660 I think, in so many instances, they were talking past one another, and so one of the things I tried to achieve in this book, and I think I've achieved it, is set up a set of analytics where Keynes and Hayek go head-to-head, okay, where you can see that there's enough of a common core that would be subscribed to by both, that you can see exactly what the two combatants are saying and exactly where they differ and can evaluate the alternative ideas of Keynes and Hayek. 128 00:16:39.660 --> 00:16:53.660 Keynes and Hayek, and as you might guess, Hayek comes out on top, okay, he takes into account some critical facts, at least I think are critical, in terms of capital theory that Keynes simply overlooked. 129 00:16:53.660 --> 00:17:08.660 So I put Keynes and Hayek head to head, and therefore point up in very explicit ways some of the key fallacies in Keynesianism. 130 00:17:08.660 --> 00:17:30.660 Okay, I'd like to turn now just to the question of the reaction to the book and I've got a short list here in terms of what things I'm pleased with and what things I'm surprised about and what things I'm disappointed about, not too much disappointment, and in fact a lot to be pleased about. 131 00:17:30.660 --> 00:17:40.300 The first thing is, there was no hate mail, okay, so I'm already ahead there. 132 00:17:40.300 --> 00:17:47.060 Secondly, the people that have reviewed the book or that have written critiques of it 133 00:17:47.060 --> 00:17:53.380 or whatever seem to see the book for what it is in at least two dimensions that pleases 134 00:17:53.380 --> 00:17:55.740 me very much. 135 00:17:55.740 --> 00:18:02.540 One is they see it as, using my own terminology, capital-based macroeconomics. 136 00:18:02.540 --> 00:18:08.780 They see it as something much more than just the Austrian theory of the business cycle. 137 00:18:08.780 --> 00:18:16.020 Even though the genesis of the book was aimed at creating a device for an exposition of 138 00:18:16.020 --> 00:18:21.740 the Austrian business cycle, it turns out that that same framework was suitable for 139 00:18:21.740 --> 00:18:33.340 For analyzing all sorts of other macro-phenomenon, a phenomenon that the Austrian simply had not analyzed in a systematic way, in the same way that they had analyzed business cycles. 140 00:18:33.340 --> 00:18:50.040 So issues such as reform of the tax system from an income tax to a consumption tax, okay, the analytics, the same analytics that I use for analyzing business cycles can be used to analyze the effects of that. 141 00:18:50.040 --> 00:18:54.160 or the effects of public finance or deficit spending 142 00:18:54.160 --> 00:18:59.160 or the consequences of government spending on infrastructure. 143 00:18:59.520 --> 00:19:04.240 All sorts of issues that claim the attention 144 00:19:04.240 --> 00:19:07.520 of mainstream economists can also get attention 145 00:19:07.520 --> 00:19:10.160 from the Austrians and significantly with the use 146 00:19:10.160 --> 00:19:13.200 of this one single macroeconomic model. 147 00:19:13.200 --> 00:19:15.560 So I was pleased that the book is seen 148 00:19:15.560 --> 00:19:16.720 for what it is in the sense 149 00:19:16.720 --> 00:19:22.720 is a fairly widespread macroeconomic theory and not just a business cycle theory. 150 00:19:22.720 --> 00:19:32.720 And beyond that, I'm pleased that it's seen, again, for what it is, as an exercise in comparative analytical frameworks. 151 00:19:32.720 --> 00:19:42.720 The Keynesians going head-to-head with the Austrians and the monetarists being brought into the picture, too, 152 00:19:42.720 --> 00:19:49.440 to in their own separate chapters near the end of the book because that's what 153 00:19:49.440 --> 00:19:53.720 that's what it's intended to be and in fact what may be one of the most stinging 154 00:19:53.720 --> 00:19:58.480 criticisms one that I'm going to deal with when I answer a lot of paper that 155 00:19:58.480 --> 00:20:06.960 answers some of the criticisms in the quarterly journal one of the authors 156 00:20:06.960 --> 00:20:11.600 said that that I had exposited Keynesianism a little better than I just 157 00:20:11.600 --> 00:20:41.600 and Exposited Austrianism and he went on to suggest that I'd left a chapter out of the Austrian formulation and by that he meant that with the Keynesian system I had developed the Keynesian framework I'd put it through its paces in terms of business cycles and policy recommendations and then I had a separate chapter in the Keynesian section on social reform the kind of reform that Keynes advocated 158 00:20:41.600 --> 00:20:46.600 But in the Austrian chapters, I left out that chapter on social reform, okay. 159 00:20:46.600 --> 00:20:52.600 I had the Austrian framework, I put it through its paces as far as policy recommendations go. 160 00:20:52.600 --> 00:20:56.600 But I didn't include a chapter on social reform. What would the Austrians like to see? 161 00:20:56.600 --> 00:21:01.600 Sort of an overall wholesale reform of the system. 162 00:21:01.600 --> 00:21:10.600 And I did that, I left it out knowingly so because I think that in itself would have required another book-length treatment 163 00:21:10.600 --> 00:21:20.600 and so on, because there's a lot of diversity even within the Austrians about just what the nature of that reform should be. 164 00:21:20.600 --> 00:21:25.600 One thing that pleases me a lot about this book is the response from students. 165 00:21:25.600 --> 00:21:32.600 I began using the book, or at least large parts of it, in teaching upper-level undergraduate macroeconomics. 166 00:21:32.600 --> 00:21:51.600 And what I discover is that the students catch on to this particular layout of the macroeconomic issues much more readily, much more easily than they catch on to the Keynesian or the analytics that they find in the conventional textbooks. So that pleases me. 167 00:21:51.600 --> 00:22:05.600 I've had responses on the basis of the book, partly, and on the basis of some newspaper articles that I've done, from readers. 168 00:22:05.600 --> 00:22:15.600 And what I've detected is that I get a particularly positive response from people who are actually in the real world, as opposed to academics. 169 00:22:15.600 --> 00:22:32.600 and people who are in the world of finance and I'll have emails from somebody that starts out saying, well now, I manage a hedge fund and then he goes on to explain how he uses the model in time and money to do what he does. 170 00:22:32.600 --> 00:22:38.600 I read that with great interest because I have no idea what a manager of a hedge fund does. 171 00:22:38.600 --> 00:22:41.600 I don't understand just what all goes on there. 172 00:22:41.600 --> 00:22:49.600 But I'm pleased to know that these people who find ISLM and aggregate supply, aggregate demand utterly worthless, 173 00:22:49.600 --> 00:22:53.600 find utility in time and money. 174 00:22:53.600 --> 00:23:01.600 I don't know if I want to say please, I'll say amused with one development. 175 00:23:01.600 --> 00:23:16.600 And that is that someone in the International Monetary Fund has written a working paper on the Austrian theory of the business cycle and the insights offered therein. 176 00:23:16.600 --> 00:23:24.600 And a fellow named Stephen Oppers, he advertises himself as, quote, in the European office. 177 00:23:24.600 --> 00:23:29.600 Europe's a big place, he could have pinned it down, but in the European office. 178 00:23:29.600 --> 00:23:37.600 and is posted to the web. If you go into the IMF website, you can find your way to it fairly easily. 179 00:23:37.600 --> 00:23:45.600 He cites time and money fairly prominently and actually, as I read Hoppe's article, 180 00:23:45.600 --> 00:23:53.600 I could tell that his article is, I have to say, virtually a reading digest version of my chapter 3 and chapter 4. 181 00:23:53.600 --> 00:24:02.400 It borrows the particular analytical tools, it borrows the phraseology and the wording and so on. 182 00:24:02.400 --> 00:24:08.400 There's a lot there that's time and money writ small, okay, in a working paper. 183 00:24:08.400 --> 00:24:13.600 I haven't seen the IMF interested in Austrian theory in a long time, okay, 184 00:24:13.600 --> 00:24:21.400 and so it's nice to see interest even in those quarters. 185 00:24:21.400 --> 00:24:29.400 One thing that surprises me about the reaction to the book, and there'll be more about this in the paper than I give on Saturday at this conference, 186 00:24:29.400 --> 00:24:39.400 is a certain reaction from the Austrians themselves about key aspects of the graphical construction. 187 00:24:39.400 --> 00:24:47.400 I've used a very familiar sophomoric production possibilities frontier in order to illustrate some points, 188 00:24:47.400 --> 00:25:06.400 and I'm very explicit about defining that frontier in terms of sustainable levels of output and as soon as you define it that way, that means that the economy can push beyond that frontier, it can be pushed beyond that frontier but not on a sustainable basis. 189 00:25:06.400 --> 00:25:11.400 The economy can be overheated if you want to look at it in terms of the modern vernacular. 190 00:25:11.400 --> 00:25:16.400 It can push beyond the frontier but not on a sustainable basis. 191 00:25:16.400 --> 00:25:27.400 Well, a number of people have reacted to that and insisted that the frontier is some kind of an absolute physical limit, that it never can be surpassed at all, even temporarily. 192 00:25:27.400 --> 00:25:43.400 And that surprises me, because I think the subjectivist insights of the Austrian School suggest that a construction of my sort is much more compatible with Austrian theory than one that's defined in physical terms. 193 00:25:43.400 --> 00:25:51.720 and also with that PPF defined that way it's much more consistent with mainstream 194 00:25:51.720 --> 00:25:56.760 constructions and therefore allows the Austrians to speak much more easily to 195 00:25:56.760 --> 00:26:01.160 the mainstream and show just where the differences are so I'm a little surprised 196 00:26:01.160 --> 00:26:05.720 that that construction is seen as unique to me if there's anything unique it's 197 00:26:05.720 --> 00:26:10.080 only in my being explicit about what that frontier means but if you look in 198 00:26:10.080 --> 00:26:20.080 In the normal textbooks, you can easily read between the lines and see that conventional PPFs are defined in that way too. 199 00:26:20.080 --> 00:26:29.080 Typically, the PPF is defined as being combinations of the output of consumption goods and capital goods that are consistent with full employment. 200 00:26:29.080 --> 00:26:31.080 Well, yeah, that's what it is. 201 00:26:31.080 --> 00:26:34.280 Well, full employment doesn't mean 100% full, okay? 202 00:26:34.280 --> 00:26:40.260 It allows for some slack in the system, some 5% or 6% unemployment. 203 00:26:40.260 --> 00:26:47.060 And certain policies can push that unemployment level down to the 4% range and cause output 204 00:26:47.060 --> 00:26:51.320 to be even higher than the one associated with that PPF. 205 00:26:51.320 --> 00:27:03.400 So even though it's questionable in the view of some Austrians and is criticized on the 206 00:27:03.400 --> 00:27:12.680 basis of the constructions, it's very consistent with the mainstream in that sense. 207 00:27:12.680 --> 00:27:15.880 And finally I'll conclude, I shouldn't be concluding with disappointments should I, but 208 00:27:15.880 --> 00:27:26.880 I will, and maybe to say first that there aren't many disappointments, okay, that I'm basically very pleased with the way things have gone. 209 00:27:26.880 --> 00:27:31.880 Probably my biggest disappointment is that I can't get Raleigh to put the thing in paperback. 210 00:27:31.880 --> 00:27:37.880 I think that there's all sorts of scope for having this book adopted as a textbook. 211 00:27:37.880 --> 00:27:39.880 In fact, some people already have. 212 00:27:39.880 --> 00:27:48.880 I already have. I can name several universities where this book is used as a text, either at the entry level, graduate level, or upper level, undergraduate. 213 00:27:48.880 --> 00:27:59.880 But until it's out in paperback and affordable even from Routledge, there won't be many adoptions and Routledge is resistant to that. 214 00:27:59.880 --> 00:28:07.880 Routledge has a very idiosyncratic marketing strategy which involves not printing books. 215 00:28:07.880 --> 00:28:13.880 So it might mean I chose the wrong publisher. Okay, I'm willing to concede that. 216 00:28:13.880 --> 00:28:21.880 And at this point, there hasn't been much in the way of reviews of the book from the mainstream. 217 00:28:21.880 --> 00:28:27.880 Although that takes time and I'm patient. I think those things might come. 218 00:28:27.880 --> 00:28:35.880 But I will add that there's been many, many more reviews and articles from people within the Austrian School. 219 00:28:35.880 --> 00:28:38.880 and the Austrian School, and that's been very gratifying. 220 00:28:38.880 --> 00:28:46.880 Posted to the Mises website, reviews by David Gordon and reviewed by Richard Ebeling. 221 00:28:46.880 --> 00:28:51.880 And in recent issue of the Journal of Austrian Economics, 222 00:28:51.880 --> 00:29:00.880 a symposium devoted to time and money with several, quite a few papers by Austrians commenting on time and money. 223 00:29:00.880 --> 00:29:05.020 and Money. So, in spite of being disappointed by the lack of mainstream 224 00:29:05.020 --> 00:29:08.840 reviews, I'm very gratified with the kind of reviews that I actually have gotten. 225 00:29:08.840 --> 00:29:12.520 Okay, thank you very much. 226 00:29:12.520 --> 00:29:37.820 Anybody got any burning macroeconomic questions? 227 00:29:37.820 --> 00:29:41.820 We'll turn the floor to Hans.