So is this new denial really true? Did no Austrian economist or Austrian pundit predict hyperinflation?
Of course, when confronted with the evidence that a number of them did indeed predict this, Austrians will quickly slip into the no true Scotsman fallacy, fallacy of equivocation, or the moving the goalposts fallacy.
Often the argument will run like this:
Austrian: No Austrian predicted hyperinflation!Of course, the argument may hinge on the meaning of “predict.” The ordinary dictionary definition of “predict” is to “announce something as an event that will occur in the future” or “say that something will happen”: this could mean either that
Critic: But person x – an Austrian – predicted hyperinflation.
Austrian: But person x is not a genuine Austrian! [no true Scotsman fallacy].
Critic: But person x supports Austrian economics and uses it in economic analysis and self-identifies as an Austrian.
Austrian: But he is still not a genuine Austrian economist with a degree in Austrian economics! [fallacy of equivocation].
Critic: Well, person y is recognised as an Austrian economist with a degree in that field under another prominent Austrian economist and he predicted hyperinflation too.
Austrian: but person y did not predict hyperinflation as 100% certain, he only said it might happen! [fallacy of equivocation and moving the goalposts fallacy].
(1) the person says the event absolutely will happen with a 100% certainty (in a given time frame), or (more probably)These are the meaningful senses of the word “predict,” but, as it happens, we have evidence that Austrians predicted hyperinflation in both senses.
(2) the prediction that something will happen (in a given time frame) is probable or highly probable and contingent on given conditions (if x and y continue to occur, then z will result).
We need only look at these examples:
(1) Marc Faber predicted that hyperinflation in the US was 100% certain in 2009So from (1) to (5) above we have predictions of hyperinflation as a 100% certainty (Faber in no. 1), to hyperinflation (apparently) as a serious probability (no. 2, no. 4 and no. 5) to hyperinflation at least a serious possibility (3).
Mark Faber is a Swiss investor, publisher of the Gloom Boom & Doom Report, and director of Marc Faber Ltd (an investment advisor and fund manager).
But it is clear from this that Faber does not dispute that he uses the Austrian School of thought in economics analysis.
But there he is on the record predicting that hyperinflation was 100% certain, and he said the same thing here in this interview published on May 27, 2009.
Of course the absurd thing is that Faber gave no time period for his prediction in the video (was it supposed to be within 1 year? 2? 3? 6? 10? 50? 100?), and one need hardly point to how absurd it is for anyone to claim that he is predicting something, but then spectacularly fail to give a time period to limit the prediction and allow it to be tested.
Nevertheless, the context would suggest that Faber was thinking of a short to medium time frame, perhaps 10 years at the most. As of this day, his prediction has failed.
And we should note that in the same video, Peter Schiff made a conditional, probabilistic prediction of hyperinflation too.
(2) Peter Schiff in 2008
In this interview from April 21, 2008:“[sc. Interviewer]: What is your long-term, 20 year outlook on the health and durability of the American economy as a whole? Will the combination of new regulations, welfare liabilities and inflationary pressure create a prolonged recession similar to what Japan has undergone since the early ’90s?In the full interview, Schiff explicitly states that he supports Austrian economics (he says: “Austrian economics is economics, period!”). Although Schiff’s time frame was in the context of a 20 year period, what is interesting here is that this was before the turn to QE in about December 2008: already around April 2008 Schiff was predicting hyperinflation in a probabilistic sense.
Peter [Schiff]: I am not sure. The road ahead will be filled with many potholes and include some important forks. Since I do not for sure which ones we will follow, I prefer to invest abroad until our path is more certain. As it stands now, we are headed to a hyperinflationary depression. I hope we will choose a different path before we actually get there.”
Tim Swanson, “Interview with Peter Schiff,” Mises Economics Blog, April 21, 2008.
Still more interesting evidence is that Peter Schiff’s Euro Pacific Capital newsletter in its April 2009 issue contained an article by James Turk who predicted that hyperinflation in the US was “imminent.” Did Schiff agree with this article? If so, we have evidence that Schiff thought hyperinflation was highly probable in the short term, not just in a 20 year time frame.
And we have already noted that Peter Schiff made a conditional, probabilistic prediction of hyperinflation too in 2009 in the video above.
(3) Doug French in 2009
In this Mises Daily article:“So instead of allowing the market to provide a healthy cleansing deflation, the Fed, the Treasury, and bank regulators are fighting valiantly to keep the fractional-reserve-bubble machine operating, with the ultimate result likely to be inflation and possibly hyperinflation.Doug French is clearly an Austrian economist (he received a master’s degree under Murray N. Rothbard at the University of Nevada).
Doug French, “Store ’em If You Got ’em,” Mises Daily, August 17, 2009.
Even though his statement about hyperinflation is far less strident and only a possibility, one must question how he could have mentioned it as a serious possibility without at the same time thinking it was at least probable.
(4) Gary North in 2012
Gary North raises hyperinflation as one of two possibilities, presumably both of which he thought were probable:“The Federal Reserve and its allies — virtually the entire intellectual class — use this fear to maintain its position as the quasi-public bureaucracy in charge of America’s money. It lured the nation into the lobster trap of debt — debt undergirded by Federal Reserve fiat money and congressional deficits — and the country cannot see a way to get out on a pain-free basis. There is no pain-free escape, as we will find over the next two decades: hyperinflation or the Great Deflationary Default or both.North is clearly a strong supporter of Austrian economics.
The government’s debt and the monetary inflation cannot go on indefinitely. Either the dollar dies or else the debt is repudiated. Maybe both.”
Gary North, “How to End the Fed, and How Not To,” Mises Daily, September 10, 2012.
(5) Ron Paul in 2011
Details in this article here. In an interview from 2011, Paul predicts the collapse of the US dollar and hyperinflation, presumably in a probabilistic sense.
Nobody can doubt Paul’s credentials as a supporter and advocate of Austrian economics:“Paul is a proponent of Austrian School economics; he has authored six books on the subject, and displays pictures of Austrian School economists Friedrich Hayek, Murray Rothbard, and Ludwig von Mises (as well as of Grover Cleveland) on his office wall.”
The idea that Austrians never predicted hyperinflation in any sense is outrageous, mendacious and contemptible rewriting of history.