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Jesús Huerta de Soto

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Jesús Huerta de Soto
File:HuertadeSoto.jpgJesús Huerta de Soto
Born (1956-12-23) 23 December 1956 (age 68)
Madrid
NationalitySpain
Academic career
FieldPolitical economics
School or
tradition		Austrian School
InfluencesLudwig von Mises, Carl Menger, Eugen von Böhm-Bawerk, Friedrich Hayek, Murray Rothbard, Israel Kirzner
AwardsKing Juan Carlos International Prize for Economics, Adam Smith Prize, Franz Kuechel Prize for Excellence in Economic Education

Jesús Huerta de Soto Ballester (born 1956) is Professor of applied economics at King Juan Carlos University of Madrid, Spain. He works in the tradition of Mises and Rothbard within the Austrian School.

Education

Huerta de Soto completed a bachelor's degree in economics at Complutense University in 1978; he received a Master of Business Administration in Actuary Mathematics from Stanford University in 1983; and a PhD in Economics and Business in 1992 from Complutense University. Huerta de Soto exchanged letters with Murray N. Rothbard for several years.

Honorary degrees

In 2009 the Universidad Francisco Marroquín awarded Huerta de Soto an honorary doctorate. Two years later, in 2011 he was named Doctor Emeritus of Finance University under the Government of the Russian Federation for his work in economic theory and policy and for seeking cooperation between Spain and the Finance University. He was given a doctor's gown and trencher cap. Huerta de Soto delivered an address in which he said that the Federal Reserve System caused the recent financial crisis and proposed abolition of central banks.

Career

In 1985, Huerta de Soto was hired by Complutense University and taught a course there based on Ludwig von Mises' book, Human Action. In 2000 he became a full professor at Universidad Rey Juan Carlos.

Since 1992 Huerta de Soto has been director of the series, "New Library of Freedom" published by Union Editorial. The series has published Spanish translations of thirty-nine books on Austrian economics and libertarianism. He also is founding director of the journal la revista científica Procesos de Mercado: Revista Europea de Economía Política (Journal of Market Processes: European Journal of Political Economy.)

According to Huerta de Soto's Curriculum Vitae, he was editor of a Spanish language edition of works by Austrian economist Friedrich Hayek, working with the editors of the University of Chicago Press's Collected Works of F.A. Hayek. Seven such volumes were published between 1995 and 2001.

Huerta de Soto is affiliated with the Ludwig von Mises Institute and is on the editorial board of its Quarterly Journal of Austrian Economics He was formerly a Trustee of the Madrid Institute for Advanced Studies (IMDEA) and was a vice-president and Director of the Mont Pelerin Society from 2000 to 2004.

Economic views

This section needs expansion. You can help by adding to it. (May 2013)

General equilibrium theory

According to economist Leland B. Yeager, Huerta de Soto, like Milton Friedman and George Stigler, scorns general equilibrium theory. Quoting the 1992 edition of Huerta de Soto's Socialism, Economic Calculation, and Entrepreneurship, Yeager writes that Huerta de Soto states he "regrets":

...the negative effects that mathematical formalism and the pernicious obsession with analysis based on full information and on equilibrium have had on the development of our science. It is likewise necessary to abandon the functional theory of price determination and replace it with a theory of prices that explains how these are established dynamically as the result of a sequential and evolving process driven by the force of the entrepreneurial function, that is, by the human actions of the actors involved, and not by the intersection of mysterious curves or functions lacking any real existence, since the information necessary to form them does not exist even in the minds of the actors involved.”

Full reserve and fractional reserve banking

Huerta de Soto advocates full-reserve banking, generally supporting the views of Murray Rothbard on the subject.

Economist Larry J. Sechrest wrote about his friend Huerta de Soto’s 2006 book Money, Bank Credit, and Economic Cycles. Sechrest stated that, in this work, Soto attempted to provide "final and decisive proof" that fractional reserve banking is incompatible with private property rights, morality, and a stable economy. Sechrest wrote that, although Soto's 876-page book presents a painstaking investigation of legal theory, banking history, business cycles, and medieval theological doctrine, a great deal of it is irrelevant to the argument which Huerta de Soto attempts to prove. In Sechrest's words, the reader of Soto's book "will repeatedly encounter, along with some careful scholarship, 'straw man' arguments, non-sequiturs, and question-begging." Sechrest rejects Soto's description of fractional-reserve depositaries as “legal aberrations” possessing no legal standing, much like human “monsters” with physical deformities" and Soto's assertion that fractional reserve banking, which he describes as “sin” which must lead to monetary inflation, excessive credit creation, malinvestment, and business cycles. Sechrest questions several of Huerta de Soto’s historical facts and notes that Soto ignores the empirical evidence that bank failures and bank runs might be the result of government restraints, bad loans and consumers shifting their deposits from insolvent to solvent fractional reserve banks; they might not be the inevitable result of fractional reserve per se. Sechrest writes that Huerta de Soto’s descriptions of government cabals interfering with honest banking sheds little light on the nature of banking itself. He concludes his discussion of Soto's work as follows:

Above all, Huerta de Soto refuses to even consider the possibility that banks’ customers may have been quite willing to face some risk exposure in exchange for the benefits of a) the receipt of interest on their deposits and b) having circulating inside money in the form of “payable to the bearer” banknotes (something 100 percent reserve banks are unable to provide, since they must charge security fees on all demand deposits). Instead, he is driven to a heavily conspiratorial interpretation of banking history. In his hands any departure from 100 percent reserve banking is automatically taken to be evidence of malfeasance by bankers, even when there is no clear data on the details of the contractual relations negotiated by depositors.

Gold standard

In a Mises Institute blog post Huerta de Soto contended that the Euro should be considered a "second best to the gold standard" because, like the gold standard, the Euro prevents national governments from active management of the money supply. German economist Andreas Hoffmann examined Huerta de Soto's contention and stated his conclusions in a working paper at the University of Leipzig. Hoffmann noted that Huerta de Soto believes the Euro prevents national central banks from manipulating exchange rates and printing money to pay off government debt, thereby forcing reforms upon member nations with debt and structural problems. He agreed with Huerta de Soto's view that a return to national currencies would be unlikely to hasten "market friendly reforms in the crisis economies." Hoffmann rejects Huerta de Soto's conclusion that the Euro can promote such reforms. Hoffmann writes, "the often discussed move towards fiscal union seems to be even more problematic and risky. Fiscal union might undermine the credibility of the euro area as a whole if, for example, permanent fiscal transfers provide incentives to further delay fiscal consolidation efforts, postpone important (e.g. labor market) reforms and preserve structural distortions."

1929 stock market crash and 1970s stagflation

Huerta de Soto stated in a 2001 talk in Russia that Austrian economists were the only ones who predicted both the stock market crash of 1929 and the stagflation of the 1970s. In a 2008 lecture in London he stated that Austrian economists Ludwig von Mises and Friedrich Hayek were the only ones who predicted stock market crash of 1929 and the Great Depression of the 1930s. He also stated that Austrians predicted the stagflation of the 1970s which followed the 1970s oil crisis.

Chicago School economist Milton Friedman, whose positivist methodology was antithetical to the Austrian approach, foretold the 1970s stagflation in his 1967 Presidential Address to the American Economic Association.

In 2010 Huerta de Soto presented the London School of Economics Hayek Lecture, wherein he stated that "all the financial and economic problems we are struggling with today are the result, in one way or another, of...The Bank Charter Act of 1844" and called for a policy of austerity and various other policies including full-reserve banking and a gold standard. De Soto also appears in Fraude, a video which states that the the causes of the 2008 financial crisis lay in government policy, not in the market.

Reception

Author and former United States representative Ron Paul has cited Huerta de Soto's views about fractional reserve banking as a source of financial instability.

Andre Azevedo Alves and Jose Moreira state that Huerta de Soto is one of the main economists of the Austrian school and that he has written the "most complete and integrated analysis of the theories of banking" of the sixteenth century Jesuit School of Salamanca.

Publications

Books

  • Planes de pensiones privados (in Spanish). Madrid: Editorial San Martin. 1984. p. 294. ISBN 9788471402226. OCLC 11783782. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help)
  • Lecturas de economía política (in Spanish). Madrid: Unión Editorial. 1986–1987. ISBN 9788472092013. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help) 3 volumes: OCLC 434819610, 632702538, 632702507
  • La escuela austríaca: mercado y creatividad empresarial (in Spanish). Madrid: Editorial Síntesis. 2000. p. 203. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help) Series: Historia del pensamiento económico. OCLC 247910035, 45036015, 644714015
  • Estudios de economía política (in Spanish) (2a ed.). Madrid Unión Editorial. 2004. p. 342. ISBN 9788472094086. OCLC 433538594. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help)
  • Nuevos estudios de economía política (in Spanish) (2a ed.). Madrid Unión Editorial. 2007. p. 494. ISBN 9788472094406. OCLC 733682262. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help) Series: Nueva biblioteca de la libertad
  • The Austrian School: Market Order and Entrepreneurial Creativity. Cheltenham (UK); Northampton (MA, USA): E. Elgar. 2008. p. 129. ISBN 9781847207685. OCLC 494726098. Presents an exposition of the main tenets of the Austrian School of Economics. This book also explains the differences between the Austrian and the neoclassical (including the Chicago School) approaches to economics. It covers reviews of the contributions of the main Austrian economists, and analysis of the major objections to Austrian economics. (WorldCat summary)
  • The Theory of Dynamic Efficiency. London: Routledge. 2009. p. 359. ISBN 9780415427692. OCLC 488049275.
  • Peníze, Banky a Hospodářské Krize (in Czech). Prague: ASPI a Liberální institut (ASPI and the Liberal Institute). 2009. p. 865. ISBN 9788073574116. OCLC 320215103. {{cite book}}: Unknown parameter |trans_title= ignored (|trans-title= suggested) (help) (with Martin Froněk)
  • Socialism, Economic Calculation, and Entrepreneurship. Cheltenham (UK); Northampton (MA, USA): E. Elgar. 2010. p. 310. ISBN 9781849800655. OCLC 781201845. (Originally as Socialismo, cálculo económico y función empresarial; part of the New Thinking in Political Economy series by the Institute of Economic Affairs)
  • Dinero, Crédito Bancario y Ciclos Económicos (in Spanish) (5a ed.). Madrid: Unión Editorial. 2011. p. 685. ISBN 9788472095472. OCLC 828532975.

Journals

See also

References

  1. ^ Announcement regarding Jesús Huerta de Soto, Finance University under the Government of the Russian Federation, April 27, 2001.
  2. Jesús Huerta de Soto listing, Faculty of Law and Social Sciences, Universidad Rey Juan Carlos website.
  3. Mises Institute. "Soto Mises Institute Page". vMI. Retrieved 11 June 2013.
  4. Jesús Huerta de Soto website, see Curriculum Vitae, Titulos Academicos.
  5. Jesús Huerta de Soto, In memoriam M.N. Rothbard, (English translation). New Journal, No. 42, December 1995, pp. 98–103. An English version of this paper was published in the Journal des Economists et des Etudes Humaines in Volume 6, Number 1, March 1995, pp. 15-20. Another Spanish version was incorporated as "Introductory Note" to the issue "Spanish Book of Murray N. Rothbard: The Ethics of Liberty", published by Union Editorial, Madrid 1995, pp. 13-17
  6. Honorary Doctoral Degrees listing, Universidad Francisco Marroquín.
  7. ^ An Interview with Jesús Huerta de Soto in The Austrian Economics Newsletter. (Summer 1997; Volume 17, Number 2.)
  8. In 2010 he wrote the preface to the Catalan translation of Mises' Human Action (L' Accio Humana, Ediciones Destino, 2010 ISBN 978-8466411813; OCLC 804943479).
  9. Jesús Huerta de Soto website, see Curriculum Vitae, Actividad Docente Desempeñada.
  10. ^ Jesús Huerta de Soto website, see Curriculum Vitae, Labor Editorial; section includes information on the Compete Works of F.A. Hayek, pp. 1-2; New Library of Liberty, pp. 3-4; Journal of Market Processes, pp. 4-5.
  11. la revista científica Procesos de Mercado: Revista Europea de Economía Política website, accessed May 23, 2013.
  12. Jesús Huerta de Soto edited these volumes of the series F.A. Hayek, Obras Completas (in Spanish), all published by Unión Editorial, Madrid: La Tendencia del Pensamiento Económico: Ensayos, 1995; Las Vicisitudes del Liberalismo: Ensayos sobre Economía Austriaca y el Ideal de la Libertad, 1996; Contra Keynes y Cambridge: Ensayos, Correspondencia, 1996; Hayek sobre Hayek: Un Diálogo Autobiográfico, La Fatal Arrogancia: Los Errores del Socialismo, 1997; Socialismo y Guerra: Ensayos, Documentos y Reseñas, 1998; Ensayos de Teoría Monetaria (two volumes in 2000 and 2001). For more details see Jesús Huerta de Soto website, see Curriculum Vitae, Labor Editorial, A. Compete Works of F.A. Hayek, pp. 1-2.
  13. Editorial Board Listing of Quarterly Journal of Austrian Economics at its website.
  14. ^ Jesús Huerta de Soto website, see Curriculum Vitae, Otros Meritos.
  15. Leland B. Yeager (2011). Is the Market a Test of Truth and Beauty?: Essays in Political Economy. Ludwig von Mises Institute. pp. 13–. ISBN 978-1-61016-421-4. Retrieved 15 June 2013.
  16. Bagus, Philipp (January 1, 2010). "Austrian Business Cycle Theory: Are 100 Percent Reserves Sufficient to Prevent a Business Cycle?" (PDF). Libertarian Papers. 2 (2). Auburn, AL: Ludwig von Mises Institute. Retrieved May 22, 2013. Other Austrians such as ... de Soto (2006) have gone further and advocate a 100 percent reserve banking system ruling out credit expansion altogether.
  17. Rozeff, Michael S. (Spring 20101). "Rothbard on Fractional Reserve Banking: a Critique" (PDF). Independent Review. 14 (4). Oakland, CA: The Independent Institute: 497–512. ISSN 1086-1653. Retrieved May 22, 2013. {{cite journal}}: Check date values in: |date= (help)
  18. Larry Sechrest obituary http://archive.mises.org/8873/larry-sechrest-1946-2008/
  19. Sechrest's text reads: "He does recognize that loans (mutuum contracts) are also legitimate, but at the same time insists that all loans must be for a stated time period. Amazingly, Huerta de Soto declares that loans devoid of such a time stipulation “cannot exist” (pp. 3–4). And yet they do exist. Prepayment options are common today in both mortgage contracts and tuition loans to college students. At a number of points elsewhere in the book, he claims that throughout history the principal, if not the only, reason for bank failures and bank runs has been fractional reserves. Here he ignores two crucial facts: a) bank failures have often been the result of constraining regulations and/or errors in granting loans and b) during bank runs, consumers have often shifted their checkable deposits from an insolvent fractional reserve bank to some other, solvent fractional reserve bank—instead of simply holding greater amounts of cash, either at home or in a safety deposit box. It is precisely this sort of faulty reasoning, born of a plausible premise but impervious to the facts, which will justifiably fail to persuade many economists. Page 2 of cited source. and "There are also some rather far fetched connections that Huerta de Soto is willing to use as “evidence” in his favor. One particularly notable example has to do with his judgment of the operations of Spanish banks during the sixteenth century. Here he depends largely on the work of Carlo M. Cipolla regarding Italian banks of that same time period. Amazingly, Huerta de Soto reassures the reader that the details on Italian banks are “directly applicable” to Spanish banks because of the close economic ties between the two nations." Page 3 of source.
  20. Larry J. Sechrest, Larry J. Sechrest Book “Free Banking: Theory, History, and a Laissez-Faire Model”, Quorum Books, 1993, Larry J. Sechrest Preface to June 2008 edition published by Ludwig Von Mises Institute, pp. 1-3.
  21. Soto, Jesus Huerta de. "An Austrian Defense of the Euro". Mises Institute of Alabama. Retrieved 14 June 2013.
  22. Andreas Hoffmann, The Euro as a Proxy for the Classical Gold Standard? Government Debt Financing and Political Commitment in Historical Perspective, University of Leipzig Institute for Economic Policy Working Paper 119, May 10, 2013.
  23. Jesus Huerta de Soto, The Essense of the Austrian School, Economic Affairs, Volume 29, Issue 2, 42–45, June 2009, Wiley Online Library, DOI: 10.1111/j.1468-0270.2009.01892.x
  24. Krugman, Paul (Feb. 15, 2007). "Who Was Milton Friedman?". New York Review of Books. Retrieved 10 June 2013. {{cite journal}}: Check date values in: |date= (help)
  25. Friedman, Milton (March, 1968). "The Role of Monetary Policy" (PDF). American Economic Review. 58 (1): 1–17. Retrieved 10 June 2013. {{cite journal}}: Check date values in: |date= (help)
  26. Murphy, Robert. "The Chicago School versus the Austrian School". Retrieved 12 June 2013.
  27. Soto, Jesus Huerta de. "Hayke Lecture at LSE". Retrieved 31 May 2013.
  28. "The LSE Hayek Lecture". London: Institute of Economic Affairs. 2010.
  29. fraude. por qué la gran recesión. "Fraude". Union Editorial. Retrieved 13 June 2013.
  30. Paul, Ron (October 1, 2009). "The Money Monopoly: How the Federal Reserve Rips You Off". The American Conservative. American Ideas Institute. Retrieved May 23, 2013 (from HighBeam Research). {{cite journal}}: Check date values in: |accessdate= (help)
  31. Ron Paul, End the Fed, Hachette Digital, Inc., 2009, Chapter, "Origin and Nature of the Fed ISBN 044656818X, ISBN 9780446568180
  32. Andre Azevedo Alves, Jose Moreira, The Salamanca School, from series "Major Conservative and Libertarian Thinkers", Continuum International Publishing Group, 2009, p. 131, ISBN 0826429823, ISBN 9780826429827
  33. Also published in German as: Die österreichische Schule der Nationalökonomie : Markt und unternehmerische Kreativität. Wien: Hayek Institut. 2007. p. 152. ISBN 9783902466037. OCLC 759028166. (trans. from the Spanish by Ingolf Günter Krumm; The international library of Austrian economics series); and in French as: L'école autrichienne : marché et créativité entrepreneuriale. Paris: Institut Charles Coquelin. 2008. p. 157. ISBN 9782915909166. OCLC 690811169. (trans. from the Spanish by Rosine Létinier; part of the Collection Science économique et liberté series)
  34. Reviewed in: Grassl, Wolfgang (March 22, 2010). "Theory of Dynamic Efficiency. (Book review)". Journal of Markets & Morality. Acton Institute for the Study of Religion and Liberty. Retrieved June 14, 2013 from HighBeam Research. This book contains twenty essays, sixteen of which have already appeared elsewhere during the period 1994–2004. ...opics ... include the methodology and history of economics, entrepreneurship, socialism, nationalism, central banks and free banking, ethics, and liberal social thought (in the European sense of the term). {{cite journal}}: Check date values in: |accessdate= (help)
  35. Reviewed in: Hladík, René (July 1, 2010). "Peníze, Banky a Hospodářské Krize". E+M: Ekonomie a Management (in Czech). Technical University Liberec. Retrieved May 23, 2013 (from HighBeam Research). {{cite journal}}: Check date values in: |accessdate= (help); Unknown parameter |trans_title= ignored (|trans-title= suggested) (help)
  36. Reviewed in: "Socialism, economic calculation and entrepreneurship (Book review, brief article)". Reference & Research Book News. Portland, OR: Book News, Inc. November 1, 2010.
  37. Also published in Dutch as: Geld, krediet en crisis. Leuven, Den Haag: Acco. 2011. p. 718. ISBN 9789033480942. OCLC 723961802.; in German as: Geld,Bankkredit und Konjunkturzyklen. Stuttgart: Lucius & Lucius. 2011. p. 624. ISBN 9783828205321. OCLC 731159974.; in Polish as: Pieniądz, kredyt bankowy i cykle koniunkturalne. Warszawa: Instytut Ludwiga von Misesa. 2011. p. 671. ISBN 9788392616054. OCLC 804342687. (with coauthors Grzegorz Łuczkiewicz & Mateusz Machaj); and in French as: Monnaie, crédit bancaire et cycles économiques. Paris: l'Harmattan. 2011. p. 558. ISBN 9782296544512. OCLC 758332334. (trans. from the Spanish by Rosine Létinier; L'Esprit économique. Série Économie formelle.) and Money, bank credit, and economic cycles (in French). Auburn, AL: Ludwig von Mises Institute. 2006. p. 876. OCLC 494633680. (with Melinda A. Stroup, translator) (Reviewed in: Gregg, Samuel (March 22, 2007). "Money, Bank Credit and Economic Cycles (Book Review)". Journal of Markets & Morality. Acton Institute for the Study of Religion and Liberty.

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