Liberty Fund

Liberty Fund was founded in 1960 by Pierre F. Goodrich, an Indianapolis lawyer and businessman, to the end that some hopeful contribution may be made to the preservation, restoration, and development of individual liberty through investigation, research, and educational activity.


Great books are the repository of knowledge and experience. Liberty Fund seeks to preserve the wisdom and learning of the ages and to strengthen our understanding and appreciation of individual liberty and responsibility.

For over four decades, Liberty Fund has made available some of the finest books in history, politics, philosophy, law, education, and economics—books of enduring value that have helped to shape ideas and events in man’s quest for liberty, order, and justice.

Featured Book The Rationale of Central Banking

By Vera C. Smith
Foreword by Leland B. Yeager

The Rationale of Central Banking was first published in England in 1936. Vera Smith spent her professional career in a variety of research positions. She wrote articles and books on money, banking, economic development, and the labor market and translated into English books by Wilhelm Röpke, Oskar Morgenstern, and Fritz Machlup.


The Rationale of Central Banking

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These resources are designed to further Liberty Fund’s educational activities. They include classic works in the tradition of limited government, as well as lively current discussions of how classical-liberal principles apply in today’s world.

EconTalk October 16, 2017

Megan McArdle on Internet Shaming and Online Mobs

shaming.jpg Author and journalist Megan McArdle of Bloomberg View talks with EconTalk host Russ Roberts about how the internet has allowed a new kind of shaming via social media and how episodes of bad behavior live on because Google's memory is very, very good. McArdle discusses the implications this new reality has on how we behave at work and how people protect and maintain their reputations in a world where nothing is forgotten and seemingly little is forgiven.


Time: 1:14:32

EconLog October 15, 2017

Hassett on Tax Cuts and Growth, by David Henderson

On October 5, Kevin Hassett, the new chairman of President Trump's Council of Economic Advisers, gave an excellent talk at the Tax Policy Center. The topic was taxes and economic growth. The transcript of the talk is here. The video is here.

In the talk, Kevin gave some estimates of the effects of cuts in marginal personal and corporate income tax rates on growth. Drawing on the literature, he came up with substantial estimates of both.

A few excerpts follow.

First, his own background on this issue:

Perhaps the reason I hold these beliefs is that I started graduate school back in 1984, and was taking Alan Auerbach's public finance class when the 1986 Tax Act was enacted. At the time, I began working on how the 1986 reforms would affect business capital spending. The literature surprisingly found little effects of tax policy on the economy, often suggesting that tax and interest rate variables did not drive capital spending. But Alan and I noticed something funny in the data. Politicians tended to pass Investment Tax Credits in recessions, then let them expire when the recession was over. Thus it appeared that the economy partly drove tax policy, even if to [sic] tax policy also affects the economy.

Law & Liberty October 13, 2017

Chief Crusader of a Crusader State

The question that Julia Ward Howe posed in 1899—“Why should we fear to pass from the Old Testament of our own liberties, to the New Testament of liberty for all the world?”—could serve as an epigraph for Walter McDougall’s scholarship …

Law & Liberty October 12, 2017

How The Roberts Court Will Actually Become the Roberts Court

There is a long established convention of referring to the Supreme Court in a given era by the name of its Chief Justice. Thus, we have the Marshall Court, the Warren Court, and the Rehnquist Court. But this name is

Liberty Review October 15, 2017

Socialized View of Man vs. Rational Choice Theory: What Does Smith’s Sympathy Have to Say?

ELIAS L. KHALIL JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION Abstract: To explain the anomaly of cooperation in finitely repeated games, some economists advance a socialized view of man as an antidote to rational choice theory. This paper confronts these economists insofar as they trace the socialized view to Smith’s theory of sympathy in The Theory of Moral […]

Law & Liberty October 13, 2017

How Progressivism Undermines Deliberative Government

Three U.S. states originally had unicameral legislatures, Pennsylvania, Georgia, and Vermont. Unicameralism didn’t last long in those states. Georgia adopted a second chamber in 1789. Pennsylvania in 1790. Vermont held out a bit longer, adding a second chamber to its

OLL | Quotations March 10, 2014

Herbert Spencer on the prospects for liberty (1882)

Herbert Spencer

OLL November 21, 2011

The Aeneid (Dryden trans.) (Virgil)

Virgil’s Aeneid, trans. John Dryden with Introduction and Notes (New York: P.F. Collier and Son, 1909).

EconLog October 11, 2017

A Protectionist Utopia?, by Contributing Guest

by Pierre Lemieux

If everybody were protected as a producer, nobody would be "protected" as a consumer.

utopia.jpg My previous post argued against the "populist argument" claiming that free trade destroys jobs and thus cannot be beneficial to consumers who have lost their jobs and incomes. The basic answer is that trade does not destroy jobs and, in fact, has little to do with employment.

One could object that this answer does not cover the whole populist argument (as a few commentators did). The broader question may be: Couldn't the individual, who is generally both a producer and a consumer, benefit from price competition on what he buys and, at the same time, get protection against competition in what he produces? Couldn't individuals get both competitive consumer prices and secure jobs against the choices of other consumers (who destroy jobs by switching suppliers)?

The short answer is no. Such a utopian system is impossible. It is impossible for all individuals to simultaneously benefit from price competition as consumers and, as producers, from protection against competition. Price competition requires that firms and workers compete for their markets and their jobs. This competition for the patronage of consumers implies continuous disruption of production. A totally protectionist world cannot enjoy competitive prices because, by definition, people are banned from buying at the lowest prices that can be quoted on the market. If everybody were protected as a producer, nobody would be "protected" as a consumer.

OLL November 21, 2011

The Life and Death of King John (William Shakespeare)

The Complete Works of William Shakespeare (The Oxford Shakespeare), ed. with a glossary by W.J. Craig M.A. (Oxford University Press, 1916).

EconLog October 14, 2017

1967 and 2008: Two botched policies, by Scott Sumner

I've occasionally done blog posts explaining how it's possible to prevent recessions from occurring, even after they have begun. That's because a recession is dated from the point where output starts falling, but it's not considered a recession unless the decline persists for a considerable period of time. This is one reason why economists are so poor at predicting recessions. During the past three recessions, a consensus of economists failed to predict the recession until it was well underway.

It occurred to me that I failed to provide an example of a recession that was prevented after it had already began. Today I will do so.

In 1966 the Fed tightened monetary policy to slow inflation, which had recently been increasing. As a result, industrial production fell by 1.9% between October 1966 and July 1967.

Screen Shot 2017-10-01 at 11.07.45 PM.png
But that's much less than the nearly 8% decline observed during the 1970 recession, which was itself fairly mild. We had no recession in 1967 because the Fed sensed a slowdown, and eased policy in the spring of 1967. Because of this action, unemployment merely nudged up from 3.6% in November 1966 to 4% in October 1967, before renewing its long decline.

Now let's look at industrial production during late 2007 and early 2008:

Screen Shot 2017-10-01 at 11.14.38 PM.png
After peaking in November 2007, industrial production fell by only 2.2% over the next 7 months. Then after June 2008, output fell sharply, and by June 2009 was more than 17.3% below pre-recession levels. June 2008 is considered a recession period whereas July 1967 is not, primarily on the basis of what happened later.

OLL | Images of Liberty April 12, 2016

Biblical Figures

A number of biblical figures are listed on the walls of the religious works are part of the OLL collection. Here we have some etchings of important figures from the Old Testament.

OLL | Liberty Fund Books November 21, 2011

Liberty, Equality, Fraternity (LF ed.) (James Fitzjames Stephen)

Liberty, Equality, FraternityThe Liberty Fund edition of this work. Impugning John Stuart Mill’s famous treatise, On Liberty, Stephen criticized Mill for turning abstract doctrines of the French Revolution into “the creed of a religion.” Only the constraints of morality and law make liberty possible, warned Stephen, and attempts to impose unlimited freedom, material equality, and an indiscriminate love of humanity will lead inevitably to coercion and tyranny.

OLL | Quotations January 16, 2005

Vicesimus Knox tries to persuade an English nobleman that some did not come into the world with "saddles on their backs and bridles in their mouths" and some others like him came "ready booted and spurred to ride the rest to death" (1793)


Liberty Review May 27, 2016

Inference of Trustworthiness from Intuitive Moral Judgments

EVERETT, JIM A. C.; PIZARRO, DAVID A.; CROCKETT, M. J. JOURNAL OF EXPERIMENTAL PSYCHOLOGY: GENERAL,  145.6 (2016):  772-787. Abstract: Moral judgments play a critical role in motivating and enforcing human cooperation, and research on the proximate mechanisms of moral judgments highlights the importance of intuitive, automatic processes in forming such judgments. Intuitive moral judgments often share […]

OLL | Liberty Matters September 2, 2017

Peter Boettke, "Hayek's Epistemic Liberalism" (September, 2017)

Liberty MattersPeter J. Boettke, Professor of Economics and Philosophy at George Mason University, argues that is a common trope to claim that F. A. Hayek experienced a crushing defeat in technical economics during the 1930s.  At the beginning of the decade, Hayek emerged in the British scientific community as a leading economic theorist. Yet by the end of the decade Hayek was supposedly defeated in his debate both with Keynes and with Oskar Lange and Abba Lerner over market socialism. However, this narrative reflects a fundamental misunderstanding of the teachings of economics from the classical to the early neoclassical economists.  Economic life from Adam Smith to J. S. Mill never was treated as taking place in an institutional vacuum.  Instead, law, politics, and social mores all constituted the institutional background against which economic life played out. As Boettke argues in the Lead Essay, Hayek’s epistemic institutionalism, as articulated in the 1930s and 1940s, provided the foundation for his own reconstruction and restatement of liberal political economy as evidenced in The Constitution of Liberty (1960) and Law, Legislation and Liberty (1973-79). Recognizing this aspect of Hayek’s thought is a first step to recognizing his broader contributions to economic science and the art of political economy. Boettke is joined in this discussion by Steven Horwitz, the John H. Schnatter Distinguished Professor of Free Enterprise in the department of economics at Ball State University, Roger Koppl, professor of finance in the Whitman School of Management of Syracuse University, and Adam Martin is a Political Economy Research Fellow at the Free Market Institute and an assistant professor in the department of Agricultural and Applied Economics at Texas Tech University.

OLL September 22, 2017

David M. Hart, “Classical Liberalism and the Problem of Class” (Nov. 2016) (David M. Hart)

Liberty Matters: Classical Liberalism and the Problem of Class (Nov. 2016) (Indianapolis: Liberty Fund, 2016).

OLL | Quotations February 6, 2005

Thomas Hobbes sings a hymn of praise for Reason as "the pace", scientific knowledge is "the way", and the benefit of mankind is "the end" (1651)

Thomas Hobbes