Advanced Topics in Liberty

Economic Crisis and Freedom

Conference for Professionals  - September 9-11, 2011

This conference proposes to examine the spiraling effects of government intervention in the economy. Through a myriad of policies that have led to severe economic crises, government intervention has, in turn, exacted a heavy price in terms of individual freedoms. Governments continue to abuse their powers by requesting even more extraordinary powers which later are not relinquished. Although governments have intervened in economic matters for centuries, this position has only been widely acknowledged by economists and students of politics following the events of the 1930s. Of course, as recent events in the mortgage and financial industries have confirmed, the role of government in causing and deepening financial failures has not abated. Indeed, crises almost always accelerate government growth and the related consequences of regulation and interference with political and economic liberties.

The goal of this conference is to consider the theoretical debate about the causes and solutions to economic crisis. The topics to be addressed include a historical account of economic crises in the world, the consequences of such crises, and a review of case studies which demonstrate how crises can affect individual liberties and the role of government.

Discussion Leader - Professor Bradley Hobbs, Florida Gulf Coast University

Session I - History of Crises

Chancellor, Edward. Devil Take the Hindmost: A History of Financial Speculation. New York: Plume, 2000. Chapter 1, “‘This Bubble World’: The Origins of Financial Speculation” (pages 3–29).

Kindleberger, Charles P. Manias, Panics, and Crashes: A History of Financial Crises (Fourth Edition). New York: John Wiley & Sons, Inc., 2000. Selections from Chapter 1, “Financial Crisis: A Hardy Perennial” (pages 1–4 through the first full paragraph) and Chapter 2, “Anatomy of a Typical Crisis” (pages 13–22).

Session II - Crisis and the State

von Mises, Ludwig. Socialism: An Economic and Sociological Analysis.  Indianapolis: Liberty Fund, Inc., 1981. Part IV, Chapter 31, “Economic Democracy” (pages 399–406) and Chapter 32, “Capitalist Ethics” (pages 406–409).

Buchanan, James and Richard E. Wagner. The Collected Works of James M. Buchanan, Volume 8: Democracy in Deficit, The Political Legacy of Lord Keynes. Indianapolis: Liberty Fund, Inc., 2000. Chapter 4, “The Spread of the New Gospel” (pages 38–55).

Session III - The Consequences of Economic Crises

Higgs, Robert. Crisis and Leviathan: Critical Episodes in the Growth of American Government. New York: Oxford University Press, 1987. Chapter 4, “Crisis, Bigger Government, and Ideological Change: Toward an Understanding of the Ratchet” (pages 57–74).

Higgs, Robert. “The Ongoing Growth of Government in the Economically Advanced Countries, Working Paper #48.” Montpelerin Society, Chattanooga, TN, October 3, 2003. (13 pages).

Session IV - Maintaining Liberty in the Face of Crises

Hayek, Friedrich A. “The Use of Knowledge in Society.” The American Economic Review 35, no. 4 (September 1945): 519–530.

Smith, Vernon L. “Experimental Economics: Induced Value Theory.” American Economic Review 66, no. 2 (May 1976): 274–279.

Knight, Frank H. Risk, Uncertainty and Profit. Washington, D.C.: Beard Books, 2002. Part III, Chapter 7, “The Meaning of Risk and Uncertainty” (pages 197–232).

Session V - Institutional Reform

Darden, Keith A. Economic Liberalism and Its Rivals: The Formation of International Institutions among the Post-Soviet States. Cambridge: Cambridge University Press, 2009. Selections from Chapter 1, “A Natural Experiment” (pages 3–18).

Kling, Arnold. Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy. Lanham: Rowman & Littlefield Publishers, Inc., 2010. Chapter 3, “Mechanisms for Decentralizing Power” (pages 87–112).

Session VI - Case Study: The Great Depression

Powell, Jim. FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression. New York: Crown Publishing Group, 2003, 2004. Chapter 2, “What Caused the Great Depression?” (pages 27–37).

Friedman, Milton and Anna Schwarz. A Monetary History of the United States, 1867-1960. Princeton: Princeton University Press, 1963. selections from Chapter 7, “The Great Contraction, 1929–33” (pages 299–332).

Rothbard, Murray N. America’s Great Depression. Mises Institute, 2000 Chapter 8, “The Depression Begins: President Hoover Takes Command.”