The parallel is intentional, the title a provocation: with his book Capital in the Twenty-First Century, Frenchman Thomas Piketty alluded to Karl Marx’s magnum opus Das Kapital. And with it, Piketty struck a nerve. Alongside his co-authors Emmanuel Saez and later Gabriel Zucman, he inspired the “Occupy Wall Street” movement, which mobilized with its slogan “We are the 99%” against an alleged new oligarchy of the rich. The fact that the gap between rich and poor is constantly widening—not only in the USA, but everywhere in the industrialized countries—became a commonplace claim and was no lo ..read more

The burden of proof rule says that it is not those who want to preserve what already exists but those who want to replace it with something new who must offer reasons for its justification. It is typically considered a “conservative” rule. In the 1970s, however, this rule, borrowed from legal terminology, was mainly used by liberals in Germany to justify their opposition to socialist as well as left-wing and social-liberal reform. Less zeitgeisty liberals saw in it that element of a conservatism that was fashionable at the time, and which could justify alliances against the left-wing progres ..read more

Every year for the French national holiday on July 14, the anniversary of the storming of the Bastille, news reports and articles about the French Revolution appear in the media. But what became the image of the Revolution and what the French celebrate on July 14—the storming of the French monarch’s, then almost empty, prison—is merely a symbol of the events of that time that has since become a myth, but by no means the main event of a revolution that not only changed a nation, but stands for the beginning of modern Europe. For unlike the development in Great Britain, which took place on th ..read more

Download this paper as PDF 1. The Monetary Policy Environment for Target Balances Is Changing With inflation remaining high, the European Central Bank (ECB) has been tightening its monetary policy since June 2022. The key interest rate (main refinancing rate) has risen to 4.0%, and the ECB’s balance sheet volume is shrinking. With inflation in the eurozone still at 5.5% (June 2023), further rate hikes are expected. This could also be followed by a normalization of the so-called Target balances: the claims and liabilities of European national banks in relation to the European Central Bank, whic ..read more

1. The Monetary Policy Environment for Target Balances Is Changing With inflation remaining high, the European Central Bank (ECB) has been tightening its monetary policy since June 2022. The key interest rate (main refinancing rate) has risen to 4.0%, and the ECB’s balance sheet volume is shrinking. With inflation in the eurozone still at 5.5% (June 2023), further rate hikes are expected. This could also be followed by a normalization of the so-called Target balances: the claims and liabilities of European national banks in relation to the European Central Bank, which arise from transnational ..read more

Trade creates peace among nations, so wrote Montesquieu, Adam Smith, and Immanuel Kant—indeed all the optimistic enlightenment thinkers. Especially among modern, complex economies, a war of conquest destroys all wealth; thus, trade with such a country always brings more than war. But since February 2022, the trade relations between the West and the East, which had been built up for thirty years, have been going to pieces. Russia struck the blow by declaring war. Destruction, sanctions, and armament costs are now ruining everything in the West and East. Many cultural pessimists—along with Ad ..read more

More and more people are warning about the economic consequences of military support for Ukraine and sanctions against Russia. Europe in particular, they say, would only be cutting its own flesh and putting its prosperity at risk. As is well known, Russia is waging this war in a hybrid manner. Moreover, this war started a long time ago. Just because the West, i.e., NATO, is not fighting back militarily in Ukraine does not mean that we are not at war with Russia. There is no doubt: The costs of military aid to Ukraine and economic bottlenecks resulting from the sanctions against Russia will ..read more

This paper can also be downloaded as a PDF file (Austrian Institute Paper No. 43/2022) Download as Paper (PDF) On July 21, 2022, the European Central Bank (ECB) introduced the so-called “Transmission Protection Instrument” to ensure that the ECB’s monetary policy is transmitted uniformly across the common currency area. Only in this way could the ECB fulfill its mandate of price stability. However, the program, originally announced as an “Anti-Fragmentation Instrument,” which joins other safeguard mechanisms with the acronyms OMT, PEPP, and TLTRO III, can also be seen as a new safety n ..read more

Inflation has risen to 7.5 percent in the euro zone and 8.3 percent in the USA. Such rates would double the cost of living within nine years. The last time inflation rates like these inflicted savers and consumer households was in the early 1970s. At that time, however, bank accounts were still earning 5 percent interest, and World Bank bonds 8 percent. There is none of that today—savings interest rates are artificially depressed by the central banks and are still at zero. The possibility of saving has been banished from people’s minds by vulgar Keynesianism: the theory of stimulation by me ..read more

It is legitimate to point out the danger of an uncontrolled escalation of the Ukraine war. But behind many leftists’ rose-tinted view of Putin lies a stubborn refusal to come to terms with their own ideological delusions. If we do not stop Putin now, not only Ukraine will be destroyed. Then the “jihad against Western liberalism” proclaimed by Putin’s chief ideologist Alexander Dugin in 2015 will also have been successful. Since the Maidan revolution in 2014, Ukrainians have been fighting for their nation’s right to self-determination, and the continuation of their path to the West—to freed ..read more