Ep. 201 David Howden Applies Austrian Theory to the Financial Markets
David Howden is Chair of the Department of Business and Economics at Saint Louis University’s Madrid campus. He earned his PhD under Jesus Huerta de Soto. Bob asks David about his experiences as a next generation Austrian economist, and in particular his work on financial markets.
Mentioned in the Episode and Other Links of Interest:
- David Howden’s academic page.
- Jesus Huerta de Soto’s book on business cycles.
- Bob’s critique of Fama on bubbles.
- Bob explains his botched inflation prediction.
- Mark Spitznagel’s the Dao of Capital. Nassim Taleb’s The Black Swan. #Commissions Earned (As an Amazon Associate I earn from qualifying purchases.)
- Bob’s article on social function of call and put options.
- Tyler Cowen interview of John Cochrane.
- Help support the Bob Murphy Show.
The audio production for this episode was provided by Podsworth Media.
About the author, Robert
Christian and economist, Chief Economist at infineo, and Senior Fellow with the Mises Institute.
I take from this interview that Dr. Howden’s interest is in predicting or analyzing financial markets.
Okay. Imagine the Roulette table from a James Bond film but one where the width of the landing slot is affected by factors in the economy. The players include investors and economists who bring various skills and knowledge to place their bets.
Ludwig von Mises enters the room and says, “Hey guys the game is rigged! The house has a magnet under the table!” Dr. Howden calls out from the corner “In a few years I’ll be able to tell you where they’ll choose to make the ball land!”
We face such a rigged game in the form of the interventionist state, with plunge protection teams, business closures, restriction and regulation and lastly the fed itself. The arbitrary, political nature and increasing magnitude of these places ever more valuations outside of economic analysis.
As Bastiat would say, we have law perverted. I’d say it’s anti-law: criminal. It seems to me this takes economics out of the game, whereby Howden’s endeavors look like an attempt to profit on predicting the whims of criminal actors.
David may well generate enough interest in this to sustain an academic career. I’d be grateful if he could at least find ways to avoid legitimizing the object of his analysis with the term ‘Law’ while he makes the attempt.