Today, Connor and Brittany are joined by Jeff Deist, the president of the Mises Institute in Auburn, Alabama. They discuss Austrian economics, and why it’s so important to the concept of individual liberty and economic freedom.


Here’s a transcript of our conversation:

Connor: Hey, Brittany.

Brittany: Hi, Connor.

Connor: You know, when I was red-pilled years ago, as they say, I heard all these people talking about Austrian economics, and I couldn’t make heads or tails until I Googled it, of what this thing is called. You know, what Austrian economics is, what it means. Why is it Austrian? Like, why not American economics? I thought we’re an American. And of course, you know, I found out about Lou Rockwell and that led me to the Mises Institute. And so I’m super excited, that we have on today with us, Jeff Deist, who’s the president of the Mises Institute, which teaches and talks about Austrian economics. Jeff, welcome to the program.

Jeff: Thank you for having me, Connor, and Brittany,

Connor: What is Austrian economics? How do you explain that to all the kids in the families out there? Why is it Austrian?

Jeff: Well, that’s a good question. I think we’ll start with, first of all, it’s economics, which in and of itself is sorely lacking, I think in our society today, people don’t much think about or read about or talk about economics, at least from my perspective. So all Austrian economics means is some thinkers, some really smart intellectual people, some economists who happened to either come from Austria themselves during a time when Vienna, Austria was just producing unbelievable intellectual output around the turn of the century, which your younger listeners will know is 1900. so in that period, there were all these great thinkers of all kinds of politics and all kinds of ideologies. And so some very important economists came out of that time period. And then they influenced a bunch more economists, really, across all of Western Europe and across America. So we have this euphemistic term called Austrian economics, which today sort of means a person who has studied some of these earlier thinkers and is mostly in agreement with them. But like I said, at this point, I think it’s just very important that we’re even talking about economics in popular culture and in popular politics because it’s a subject which I think, most of us don’t learn very much about in school.

Brittany: You know, it’s funny, one thing that has always warmed my heart is I’ve gone to what you guys call Mises University, a handful of summers where it’s seven days of basically economic boot camp where you’re learning everything. But one thing I love is all the young people there. You know, I’m not old, but I’m not young, but I’m not the youngest person there. So I’m curious, you know, why do young people care about this? Why are young people giving up seven days of their summer to come and learn about Austrian economics?

Jeff: Well, it’s probably a pretty unique young person who does so, but if you think about the world and the, it’s going, you know, the people who are more willing to do tougher work, harder work, whether that’s intellectual work and reading big, dense complex books, or whether it’s, in any other field, you know, I think the people who are willing to roll up their sleeves and give it a go, especially when you’re young, because trust me, listeners your brain works best right now it doesn’t get any better. So when you’re young is really the time to grapple with some of these concepts. Just like learning a foreign language is easier when you’re young. So I hope, and I’d like to think that, some younger people, high school and college age people in particular are taking a look at the world around them and saying, you know, this sort of seems like something is off. This feels like a little bit of a ripoff. How come, my parents, let’s say, or my grandparents were able to buy a house seemingly far more easily than I can? How come they were able to get married and do X, y, and z and have kids, and only one parent worked, and then they even had a little vacation home up by the lake, but they weren’t really wealthy or anything? They were just kind of average. And so we may not all know how to diagnose what’s wrong with our economy, but I think a lot of people have a sense of unease that something’s wrong, that there’s all this uncertainty, and we hear about what the federal Reserve’s doing, and we hear about what Congress is doing and what the Biden administration are doing. And it all seems to have kind of a desperate feel to it. And so I hope that people are attracted the idea of going to root sources and trying to actually do the hard work of learning what’s underneath all this and building a foundation of their own knowledge. So that’s the goal.

Connor: Jeff, what is the opposite of Austrian economics? Right? So.

Jeff: That’s a good question.

Connor: It’s not just what you guys are standing for, but you’re also standing against something. What is it that you’re opposing? What is it that kind of is the opposite of Austrian economics?

Jeff: I would say the opposite of Austrian economics is what most people call Keynesian economics. And that’s named for John Maynard Keynes, who is a very famous and influential and still influential economist who wrote his big book in the 1930s, which really influenced a lot of university thinking. So the difference between Austrian economics and Keynesian economics is one is focused on production, producing more stuff. In other words, what makes us so wealthy in America and so happy and frankly so comfortable, is that we have lots and lots of goods and services available to us, and they’re available to us at a price we can afford. For the most part, if we’re fortunate enough to make a middle-class living, and that’s because they’re produced in a productive way that smart people have figured out how to bring these goods and services to us at a cost that’s not too high. There was a time when a DVD player was brand new and it was Lay’s technology, and it costs $400 back in 1990, and hardly anybody had one. Well, now everybody has a DVD player if they want one, nobody wants one anymore, but you can go to Walmart and get one for $30. That’s because smart people figured out how to make DVDs and DVD players cheap. So that’s all about production. It’s all about making stuff cheaper. And to make stuff cheaper, you have to save up some money, you have to have some profits or some savings in your personal life, so accumulate more than you spend, and then take that difference, that profit or that savings, and invest it into making stuff or providing services in better and cheaper ways. So that’s sort of the fantasy camp version of how we’d like the economy to work. But when John Maynard Keynes came along in the thirties, and there was a great depression, not just the United States, but across Europe as well, he upended this and said, no, no, no, it’s not all about production, it’s about consumption. We have to get people to buy more stuff. And when the economy is faltering, that’s just because there’s not enough demand for stuff. And so how do we get people to buy more stuff? Well, we make money and credit it, easier to get and cheaper to get. That’s one big lesson of the Keynesian, buy-side or the consumption side model, which is, you know, the goal for a healthy economy is to encourage people to buy and want more stuff. But I think the three of us just talking here right now, we know that we all want more stuff right? We don’t really have to create a desire in people for more stuff. What we have to do is create in them the ability to pay for it and hopefully pay for it without getting into crazy amounts of debt. And so that requires production, which requires productivity. So I would say that these are two very different ways of looking at the world. One is based on debt and spending and consumption, and one is based on savings and profit and accumulation and production. So that’s how I would explain it to people if they asked.

Brittany: So what do you think is the most important principle? If you had to pick one economic principle, and there are so many, for a younger audience to grasp as they’re getting older and they’re coming into the world and they’re gonna get jobs and they’re gonna have to pay for all their bills and all these things. What do you think is the number one most important thing to learn?

Jeff: Well, I think that is simple, but let me just digress very briefly. Let’s say you wanted to learn all about aviation and aerospace technology and how aircraft fly. You would probably want to understand gravity because gravity is the ecosystem in which airplanes operate, and if you don’t overcome gravity, they fall to the ground and people die. If you wanted to be an infectious disease specialist and deal with things like COVID, if you wanted to be an immunologist or a virologist, you would probably wanna learn all about infection, how diseases spread. And you’d probably wanna learn all about herd immunity because those are two very important factors. Two very important baseline concepts in understanding how to be a better doctor. So in economics, the two most important things that you have to understand you have to start with are scarcity and choice. And by scarcity, I mean, there’s always more that we want than we have. As we discussed earlier, and think a very early man, he or she was out there almost naked in the woods somewhere, and what they needed was c you know, bare basics clothing. They needed fire, they needed to go forage food. You know, what they considered their needs or their wants was very different than those of us fortunate enough to have been born in a modern capitalist society. Okay? So they operated within an environment of scarcity. And we do too. The three of us, all of your listeners, we have only so much money available to us. And if we go out and spend it all on something fun and cool, because let’s say we want a really fancy car or something, and God forbid, don’t do this, but God forbid you don’t even pay cash for it, and you end up spending $800 a month in a monthly car payment, and that’s taking up a big chunk of your income, well, you’re gonna have to not buy some other things. Maybe you don’t go out to dinner as much. Maybe you don’t go see that movie you really wanted to see, maybe you don’t, buy, clothes that you want. Whatever it is you’re operating within an environment of scarcity. Even Bill Gates, one of the richest men on earth, you know, there are limits to what he can do in terms of, buying and selling things. So once you understand that we’re all operating in an environment of scarcity, then you begin to understand economics as being all about choice. We have to look around us, and we have some means at our disposal. maybe we’re fortunate enough to have a job, or we have some education or some training that allows us to go out and earn some money. And then we start to say, well, how do I wanna spend that money? Well, I certainly want a place to live, probably for starters. I certainly would like to have some food, and I’d certainly like to probably have a vehicle unless I live in a city with good public transportation. So you start to make these choices, and you do so based on your income or your finances or you know, your particular, situation. So those two things work hand in hand, scarcity, and choice. And from those two realities, we can understand a whole lot about economics in terms of what people do and how they, make decisions. So it sounds really simple, but the implications of it and the applications of it are almost endless.

Connor: Jeff, I’m reminded of a quote, I don’t remember who said it, but it’s something to the effect of, just because you don’t take an interest in politics doesn’t mean that politics won’t take an interest in you. And the idea behind that quote is, you know, a lot of people are like, oh, I don’t care about politics, or, you know, I don’t want to get involved or whatever, but this idea that’s nice, that’s fine. You feel that way, but the political process is going to affect you. And so people who share this quote are often saying like, you need to be aware, you need to pay attention because it does impact you. I feel like that quote can be altered, right? To say, just because you don’t take an interest in economics doesn’t mean that economics won’t take an interest in you. I think one thing that’s very enlightening is I think about myself as a child. I remember buying candy bars for 24 cents. I’d have a quarter, and I’d, you know, even as a teenager, I’d go to Target or, you know, at grocery store, and for a quarter I could buy a candy bar. And today it’s like, you know, 99 cents is the cheapest. You’re gonna find it. Even though kids, may not be interested in economics or families or adults, parents, you know, don’t wanna learn about it doesn’t mean that economics doesn’t take an interest in them. So you’re running the Mises Institute Institute, you guys are doing all these educational programs. What are your thoughts? Like, does everyone need to be aware of this stuff? Is this something that you’re trying to educate them masses about Austrian economics? And if so, why? What are you trying to get people to know or do differently by learning about this stuff?

Jeff: Well, we’re trying to reach intelligent lay audiences. In other words, people who don’t necessarily have a Ph.D. in economics or work as an economist, but people just smart people in other areas of life who want to understand the world around them better. And economics is a big part of that. And, you know, as you said, it’s interested in all of us, just as gravity’s interested in every plane. Now you can fly around and ignore gravity and do a barrel roll or a corkscrew or something, but if you lose lift under the wings, you’re gonna crash. Well, it’s the same thing for an economy. I’m sure a lot of your listeners are aware that especially the two most visible prices to most people are groceries and gas. those two things have been rising in price rapidly, over the past few months. And it’s important to understand. Why is that? Does it have something to do with what Congress did with the all the trillions of spending it did last year in response to COVID? Does it have to do with what the Federal Reserve is doing with attempting to provide a lot of liquidity, which is just a fancy word for more money in credit to banks? does it have something to do with Joe Biden being elected? Does it have something to do with COVID and locking everything down for a year so that supplies of goods and services we want are badly hampered? Well, I think the short answer is it’s a little bit of all of that, and economics ties it all together in a way, that’s far more understandable to people. And so I think it’s important if you want to be somebody who is not susceptible to politicians, in other words, when they make promises, when they start talking about free college or, you know, getting rid of student loans or, universal basic income or free universal healthcare or anything like that, economics gives you a way to understand what they’re saying and cut through it a little bit and make your own judgment.

Brittany: This has been such a pleasure. I know that Connor and I have been huge fans of both yours and the Mises Institute for so long. we will have a link at the bottom of the show notes page to go to I hope all of you too, consider going to Mesis University when you are old enough to, it’s my favorite week of the summer. So Jeff, thank you so much for being here with us.

Jeff: Thanks, Brittany.

Connor: Thanks, Jeff. Well, Brittany, as you said, We’ll link to the Mises Institute and couple their resources, the great organization, especially for the parents to learn more, but also the older kids, the teenagers, the young adults, if they’re interested, in learning more about economics. It’s a fantastic organization. They really help clarify so much of, what’s going on in the world and offering a free market perspective from a really kind of academic and informed perspective. So parents, especially older kids. Make sure you go check ’em out. great episode. Thanks, Brittany. And until next time, we’ll talk to you later.

Brittany: Talk to you later.