Who Is Monty Pelerin?

Friedrich Hayek

Ludwig von Mises

“Monty Pelerin” is a pseudonym derived from The Mont Pelerin Society. A pseudonym was adopted for the site when it began because I was teaching college-level courses and didn’t want any political views to taint the classroom.

The image on the left is that of Friedrich Hayek, Nobel laureate in Economics in 1974. He was the founder of the Mont Pelerin Society in 1947. The image on the right is Ludwig von Mises who was Hayek’s mentor and considered the dean of the modern Austrian School of Economics. For background on the Society, see below.

“Monty” retired to Asheville, NC with a corporate and academic background. The corporate experience was in the financial field in several CFO positions. The academic background included college and graduate level teaching for about ten years. AB, MBA and PhD degrees from Duke University, the University of Chicago and Syracuse University in finance and economics provide the academic credentials.

A love of country and concern for its future prompted this website. I have children and grandchildren. They are the ones who will have to live with the mess we have allowed. In some small way, perhaps this effort can have a positive effect on their and others’ futures.

Monty’s other interests are reading, investing, sports and now blogging.

Aims of Site

The site deals with Finance, Economics and Politics. Investment advice is not provided, although thoughts useful to investors might occasionally appear. A feature is a momentum-volatility ETF  rankings  algorithm which selects ETFs expected to outperform the market. These selections are provided as informational tools only. They are not recommendations for trading purposes. The rankings reflect the shifting sands of relative strengths of regions, industry and sectors. To that extent, they may be useful for some readers when they analyze markets.

Many concerns shape the content of this site, but the following three underlie much of my motivation:l

  1. The nonsense that passes for wisdom in both the political and economic arenas is appalling. Thus, many posts show a certain amount of (deserved) disrespect for what masquerades as wisdom. When one is witness to the disintegration of his country and way of life, it is difficult and inappropriate to remain dispassionate.
  2. Inter-generational equity is a concern. Those called Grandfather or Grandmother have personal as well as philosophical concerns.
  3. There are no economic problems, only political ones. Economic problems, left alone, are naturally self-correcting. Political interventions create and worsen economic problems.

I am willing to have a polite exchange on all topics related to the blog. Correspondents are expected to reciprocate. I will make mistakes and expect to be told about them. I apologize in advance for the inevitable errors that will creep into this work and will do so again to specifics.

I have no team in the sense that many of you might. That is, I neither root for or against a political party. Sadly, I see little difference between these Republicans and Democrats.  For that reason I consider myself an equal-opportunity political hater. Politicians today are parasites feeding off the productive. There is no way to reform them. It is the nature of government that must be changed. The way to do so is simple — return to the principles set forth in the Constitution.

Government, in limited form, is necessary and can be good. However, government that grows beyond narrow limits becomes an oppressive State, infringing on liberty and property. Our Founders recognized this danger and designed a Constitution intended to constrain themselves and their successors. Unfortunately, Constitutional restraints have been mostly nullified over the years, leaving politicians and mob rule to decide what is proper. The result is massive growth in government and abuse of power.

Most can probably generally agree on “limited government.” Likely, we differ regarding specifics. My view tends toward the Lockean position whereby government protects citizens and their property. For some, this definition is too narrow. However, once one goes beyond this principle there is no limit that can be imposed.

Our government and most others around the world have evolved into States preying on their citizens. While governments can be good, States are always evil. All succumb to Lord Acton’s law: “Power corrupts and absolute power corrupts absolutely.”

Mont Pelerin Society

As expressed on the official Mont Pelerin Society site (with emphasis added by me):

After World War II, in 1947, when many of the values of Western civilization were imperiled, 36 scholars, mostly economists, with some historians and philosophers, were invited by Professor Friedrich von Hayek to meet at Mont Pelerin, near Montreux, Switzerland, to discuss the state and the possible fate of liberalism (in its classical sense) in thinking and practice.

The group described itself as the Mont Pelerin Society, after the place of the first meeting. It emphasized that it did not intend to create an orthodoxy, to form or align itself with any political party or parties, or to conduct propaganda. Its sole objective was to facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems.

It was in this context that I chose my pseudonym. The writer has no connection with the Society (other than coincidence of philosophy). Nothing said by me should be considered to be representative of the views of the Mont Pelerin Society or any of its members.

Economic Philosophy

My political and economic philosophy rests on maximum freedom. This orientation is based on study and empirics. It is a utilitarian conclusion in that it produces better outcomes (higher standards of living, longer life expectancies, etc.) than the alternatives. But it also works on ethical and moral grounds. This philosophy is beneficial to all, not specific segments of society. Free men and free markets enable individuals to reach whatever limits they were endowed with. Assisting those with limitations are not inconsistent with this philosophy.

This utilitarian approach is apolitical. My father was highly educated and was a Democrat. He was raised that way. He never tried to influence my political beliefs. Indeed, I was likely naive, if not outright ignorant, of politics, until after undergraduate school.

I respect neither party. Other than on a few issues, they are one and the same. And even on the few differing issues, matters of degree rather than substance are what separates them. These differences reflect nuances in marketing strategy more than they do in philosophy. That is why it doesn’t seem to matter who holds power. The outcomes are always the same:

  • Both political parties grow government.
  • Both engage in unnecessary military adventures.
  • Both exploit citizens to feather their own nests.
  • Both pander to voters rather than adhere to principles.
  • Both routinely ignore the Constitution.
  • Both raise taxes.
  • Both expand programs.

I was taught Keynesianism and Monetarism in formal classwork. I know the “Chicago” school well, having taken courses from Milton Friedman, George Stigler, Ronald Coase and Gene Fama, all now Nobel laureates. Despite this exposure, I consider my approach to economics and society “Austrian,” in the tradition of Ludwig von Mises and Friederich Hayek. Chicago and Austrian free market conclusions often match, although their methodologies are vastly different.

The “Chicago” school is “Monetarist,”  not dissimilar in methodology from Keynesian economics. Both are aggregate approaches to macroeconomics. Keynesian economics never made any sense to me, even in my first economics courses but microeconomics always possessed a logical consistency that lured me into the field. Aggregate “economists” still cannot truly reconcile their approach with the microeconomics of individual decision-makers. 

Human beings, not aggregates, make decisions. Economics is about human beings. It is not some physics model where outputs can be manipulated by altering inputs. Economics is the study of human behavior. Pretending that the summation of millions of humans can be analogized to that of a giant machine with only a few variables has created much confusion and harm to this country.

Both the Chicago and Keynesian schools aggregate-based approaches to macroeconomics. Chicago has the redeeming feature of a great tradition in microeconomics. The Austrian school recognizes that economics is a social science and the individual is the key to understanding economic outcomes.  Individuals are the atoms of economics. They are the building blocks upon which understanding begins. Pretending these blocks can be combined in a fashion that produces some simplistic model of the overall economy is scientism at its worst and most dangerous. It is the false science of central planners and dictators.

Aggregation is appropriate and relevant for summary and historical purposes. Aggregates, however, do not act. Aggregated study (traditional macroeconomics) makes sense for statistical or historical purposes, not for any understanding of economics or the economy.