We just returned from a weekend in NYC, taking the pulse of the Ron Paul campaign and the intellectual movement that spawned it – Austrian economics. The seeds of this movement were planted by Lew Rockwell 25 years ago when he founded the Ludwig von Mises Institute. Joining Rockwell at the beginning were Ron Paul, Mises’ greatest student – Brooklyn-born Murray Rothbard, and Mises’ widow Margit. Margit gave her blessing to the Institute as long as Rockwell promised to dedicate the rest of his life to the cause.
Through serendipity, I discovered the ideas of the Austrian school 18 years ago after watching Lew Rockwell defend Exxon in the Valdez oil spill on CNN’s “Crossfire.” Not too long after, Forbes ran articles about Rothbard and Friedrich Hayek, another of Mises’s students who received the Nobel Prize in 1974. The Austrian movement has grown exponentially since, reaching the mainstream financial press and either heavily influencing or providing the intellectual anchor for such independent financial thinkers as Jim Grant, Bill Fleckenstein, Paul Kasriel, Fred Hickey, Marc Faber and Fortune’s Peter Eavis.
The Mises Institute has always believed ideas matter and that an intellectual shift must take place before a political shift. In his lunch talk, Ron Paul believed the success of the campaign was a sign the seeds planted over the past 25 years were bearing fruit.
Probably the most obvious takeaway from this weekend was the number of bright young people involved, whether the large number of volunteers in the Paul campaign or those attending the conference.
The Paul campaign is across-the-board anti-state, which explains the cold shoulder he’s gotten from the mainstream media. Online, he is by far the most effective of the Republican candidates. In fact, the online response to the CNBC debate shows him winning in a landslide.
His message has been consistent on three fronts: individual liberty, free markets, and anti-imperialism. The failure in Iraq and encroachments on civil liberties with the passage of the Patriot Act have helped. So has the growth of the internet which opened decentralized information channels. If the credit bubble continues to unwind and the economy worsens, his economic message (anti-Fed, anti-Wall Street, anti-tax, anti-spending) will gain further credibility. Ron Paul is an unusual mix of populism with a sound economic foundation which has the MSM baffled. He is Scrooge while the other candidates play Santa Claus. Incredibly, when he speaks to college students he gets the most applause when criticizing the Fed! Students will even burn dollar bills. Bizarre – a politician who actually knows something about money and banking, and isn’t afraid to talk about it. When critics tell him these issues are too complex for the average person, he responds, “how difficult is it to understand counterfeiting?”
The big story here is the Austrian movement and the dedication of one man – Lew Rockwell – to its revival. As state intervention in the economy fails over the next decade, stock in the Austrian school will only go higher… much higher.