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Austrian School of Economics

Palm oil, Russian fighters and the European Parliament

GIS Statement

GIS statement by Prince Michael of Liechtenstein

Indonesia, the world’s fourth-largest country population-wise, is the world’s largest exporter of palm oil. The value of this export exceeds $12 billion per year, which accounts for some 8 percent of the value of Indonesia’s total exports. Palm oil production and export is a crucial part of the country’s economy. The main importers are India, China, the European Union and Pakistan.

Palm oil is a tropical product and there is concern that too much rainforest is being cleared, especially in the Indonesian archipelago, to free land for palm oil production. Deforestation is a problem. It cannot be stopped, however, by trying to limit the production of palm oil. Sustainable harvest, and proper use and marketing of tropical timber and other products are parts of a better solution. The commercial value of the rainforest to the local population also needs to be recognized, like Alpine forests are. These are key components for an effective approach to stop excessive deforestation.

The problem in Indonesia is not the production of palm oil, but the lack of market incentives for a sustainable, economically and ecologically viable use of the forests. Such incentives make preservation in the population’s interest.

Rain forests are important. A market for tropical products exists. Economies do not respond to sticks, but they work fine with market carrots. The underlying cause, unfortunately, of the tropical deforestation problem is a combination of a short-term view and the lack of property rights. Forestry is a very long-term business. A tree planted today will only be harvested two generations later. Sustainable forestry, with the exception of selected preserve areas, cannot be enforced by putting limits on timber or other products, such as palm oil or coffee. Only property rights, efficient regulation of the use of forests and efficient markets lead to the desired results. This can be achieved in Indonesia and elsewhere.
Against this backdrop, it is rather arrogant for the Western world to try to force developing countries into declaring major parts of their territories as natural preserves that cannot be touched. The United States and Europe cannot be the nannies telling Asian, African and South American countries how to use their national resources. It is naive to believe that this concept can work.

Unintended consequences

Ignoring reason, the European Parliament passed a resolution in April 2017 to promote the reduction of palm oil imports to fight deforestation. It certainly meant well, but the policy is wrongheaded and harmful to Indonesia’s emerging economy.
A long-term, sustainable effect could be achieved by promoting the policies mentioned above and offering access for tropical timber and other products to European markets – at reasonable (not dumping) prices.
It is fascinating how immediately the EU parliamentarians’ “good” intentions triggered a development frustrating the initiative. It happens that Indonesia needs to upgrade its air force with a new generation of fighter planes. Instead of buying American, as in the past, Jakarta is ordering Russian Su-35 fighters and will pay for them with tropical crops, mainly palm oil. This transaction will compensate Indonesia for potential losses in EU markets, and is therefore in its vital interest.
Oops! So, Indonesia will continue exporting palm oil, a necessity for its economy, wellbeing and social stability. Russia secures a needed supply of tropical products, and, additionally, expands the markets for its defense industry. This helps Russia’s economy and its military strength. At the same time, the outcome weakens the effectiveness of the Western sanctions against Russia and underscores the futility of the EU Parliament’s forest preservation policy.
“Feel-good” initiatives should be carefully thought through before implementation, and their effects weighed between the intended and unintended potential consequences.

Read the original article here ->
GIS | Geopolitical Intelligence Services

International Vernon Smith Prize 2017 – Call for Papers!

Vernon Smith Prize 2016 Call for Papers
Does Tolerance become a crime when applied to evil? Vernon Smith Prize 2017.

Call for Papers!

The 10th International Vernon Smith Prize for the Advancement of Austrian Economics is an essay competition sponsored and organized by ECAEF European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein). This years’ topic:

Does Tolerance become a Crime when applied to Evil?

|- First Prize EUR 4,000 -|

|- Second Prize EUR 3,000 -|

|- Third Prize EUR 2,000 -|

Advanced by the ‘ends-independent’ market process, free pluralistic societies developed without a shared hierarchy of particular ends. Once we agree on the rules, we need not agree on the goals as markets enable us to disagree peacefully while we pursue our own way. However, to sustain this kind of ’means- but not ‘ends-connected’ society, we must be willing to tolerate differences with others and we have to recognize that our freedom to achieve our ends comes at the cost of allowing others the same, even if we find those ends distasteful.

Does Tolerance become a Crime when applied to Evil?

ECAEF invites papers on this topic which meet the following requirements:

1: Entries may be submitted by individuals of up to 30 years (in 2017).

2: Entries may not exceed 12 pages; 1.5 spacing; left/right margins no less then 1 inch; full bibliography and a 1/2 page summary (abstract) must be included.

3: Entries must be submitted in English in electronic form (PDF) to and must include an abbreviated CV, featuring DoB, education, and current position.

4: Entries must be received on or before November 11, 2017.

5. It is mandatory that all prize winners participate in the award ceremony in Vaduz Prizes are not transferable and will be awarded on the basis of originality, grasp of subject, and the logical consistence of the argument.

Essays will be judged by an international jury and the winners will be invited to present their papers at a special event in Vaduz, Principality of Liechtenstein, in February, 2018. First Prize €4,000 – Second Prize €3,000 – Third Prize €2,000.

Wiederentdeckte Buchbesprechung von Ludwig von Mises

ecaef_blog_mises 1922

Mit Einleitung von Federico Salazar (Mises Peru Institute)

Im Namen des Staates is not a very well-known book by Ludwig von Mises. The title refers to such famous dicta as “in name of the Father” or “in the name of God”. To cross from God to State seems quite absurd. But it wasn’t for Ferdinand Lasalle, who, more than Marx, was the driving force of German socialism. “The state is God” is a saying attributed to him, but without any precise reference to his works. The attribution is made by Julius Freser (“Was wollen Sie? Der Staat ist Gott!”, in Gustav Mayer, “Lasalleana”, in Archiv für Geschichte des Sozialismus und der Arbeiterbewegung [Archive for the History of Socialism and the Workers Movement], Vol. I, p. 196, edited by Carl Grünberg.
Grünberg was a teacher of Mises’ and also of Kelsen’s at the University of Vienna. Talking to my friend Enrique Ghersi about the non-deciphered relationship between Mises and Kelsen, it seemed important to me to investigate the probable affinities between Kelsen and socialism and, more generally, between legal positivism and statism.
In that connection, it seemed advisable to read “Sozialismus und Staat”, published in 1921, in Grünberg’s Archiv (vol. IX) and “Marx oder Lasalle?” (Archiv, vol. XI). The first one will be re-issued this year in volume 6 of the Works of Kelsen, but the other one won’t. In those days I found an online antiquarian bookshop offering a re-issue of the whole collection of the Archiv for an interesting price. I bought it. A week ago, I started reading the tables of content of each volume and found a triple recension by Mises of books by Cassel, Diehl and Gelesnoff on economic theory (Archiv, vol. X, pp. 89-99).
I didn’t remember such a recension existed, so I looked for references in highly regarded sources such as Bettina Bien Greaves’ Mises: An Annotated Bibliography; Der unbekannte Mises by Kurt R. Leube; Selected Writings of Ludwig von Mises, edited by Richard M. Ebeling, and the biography by Jörg Guido Hülsmann, Mises, The Last Knight of Liberalism. I didn’t find any notice about the recension, so I immediately asked my friend Enrique to help me contact the author of the Unbekannte Mises. The generous answer of Professor Leube allows us to read Mises’s text online, which was hidden until now in the Archive for The History of Socialism and the Workers Movement.

Download ->
Ludwig von Mises: Rezension Cassel, Diehl, Gelesnoff (1922) – PDF

Gottfried-von-Haberler-Conference 2018

Save the Date! The XIV. Gottfried-von-Haberler-Conference will be held on May 25, 2018 in Vaduz, at the University of Liechtenstein, (Principality of Liechtenstein).


Karl Marx:
Born 1818 and Still Going Strong?

Stay tuned for the program of the XIV. Gottfried von Haberler Conference and further information.

II. Jacques Rueff Conference

2nd Jacques Rueff Conference, Monaco
Jacques Rueff (1896-1973) 7th Minister of State of Monaco

“We shall all be the gainers if we can create a world fit for small states to live in.” Friedrich A. von Hayek

November 23, 2017


A Case for Europe’s Small States
in the III. Millennium

The II. International Jacques Rueff Conference is an academic one-day co-operation of CEPROM (Center of Economic Research for Monaco, MC) and ECAEF (European Center of Austrian Economics Foundation, FL).

Academic Director:  Kurt R. Leube, ECAEF
Administrative Director:  Emanuel Falco, CEPROM
Media Contacts: Nicolas Saussier, CEPROM
Conference Date: November 23, 2017
Participation: by invitation only
Location: Musee Oceanographique de Monaco, Principality of Monaco
Conference Languages: English and French; simultaneous translation

Conference Venue:
Opening Dinner at the Hotel Hermitage in the presence of H.S.H. Prince Albert II. for invited guests and speakers only, Nov. 22, 2017. Dinner speaker: Detmar Doering (D)

Conference Program:
09:00-9:30  Registration
09:30-9:45  Welcome by H.S.H. Prince Albert II and H.S.H. Prince Michael of Liechtenstein

Session I:
Historical Reflections and Current Challenges (9:45-12:15)
09:45-10:00  Chair: Detmar Doering (D)

10:00-10:30  ‘Small, Sovereign and Resilient: Lessons from the not-so wild Wild West’ – Terry L. Anderson (USA)
10:30-10:45  Discussion
10:45-11:15  Coffee break
11:15-11:45  ‘Decentralization, Subsidiarity, Secession: States in Knowledge-Based Societies ‘ – Karl Peter Schwarz (A)
11:45-12:00  Discussion

12:00-14:00  Luncheon for speakers and invited guests

Session II:
On the Benefits and Drawbacks for Small States (14:00-15:45)
14:00-14:15  Chair: Peter Fischer (CH)
14:15-14:45  ‘Is Small Still Beautiful? A Swiss Perspective’ – Henrique Schneider (CH)
14:45-15:00  Discussion
15:00-15:30  ‘Limited Places offer Unlimited Thoughts’ – Carlos Gebauer (D)
15:30-15:45  Discussion
15:45-16:15  Coffee break

Session III:
A Case for Small States in the III. Millennium (16:15-18:20)
16:15-16:30  Chair: H.S.H. Prince Michael of Liechtenstein (LI)
16:30-17:00  ‘Reflections on Smallness’ – Antonio Martino (I)
17:00-18:15  Panel discussion: Anderson, Gebauer, Schneider, Schwarz, Martino
18:15-18:20  Farewell Remarks: Kurt R. Leube (A/USA)

18:30-19:30  Farewell Reception at the Palace for speakers and invited guests, hosted by H.S.H. Prince Albert II.