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Carl Menger

Austrian School
Carl Menger, founder of the Austrian School
Born	(1840-02-28)February 28, 1840 Nowy SÄ…cz in Austrian Galicia
Died	February 26, 1921(1921-02-26) (aged 80) Vienna, Austria
Nationality	Austrian
Field	Economics
Influences	Étienne Bonnot de Condillac Adam Smith Franz Brentano
Influenced	Eugen von Böhm-Bawerk Friedrich von Wieser Ludwig von Mises Friedrich von Hayek Murray Rothbard Austrian School of Economics
Contributions	Marginal utility

Carl Menger (February 28, 1840 – February 26, 1921) was the founder of the Austrian School of economics, famous for contributing to the development of the theory of marginal utility, which contested the cost-of-production theories of value, developed by the classical economists such as Adam Smith and David Ricardo.

Biography[link]

Menger was born in Nowy Sącz in Austrian Galicia, now in Poland. He was the son of a wealthy family of minor nobility; his father, Anton, was a lawyer. His mother, Caroline, was the daughter of a wealthy Bohemian merchant. He had two brothers, Anton and Max, both prominent as lawyers. After attending Gymnasium he studied law at the Universities of Prague and Vienna and later received a doctorate in jurisprudence from the Jagiellonian University in Kraków. In the 1860s Menger left school and enjoyed a stint as a journalist reporting and analyzing market news, first at the Lemberger Zeitung in Lwów, Ukraine and later at the Wiener Zeitung in Vienna.

During the course of his newspaper work he noticed a discrepancy between what the classical economics he was taught in school said about price determination and what real world market participants believed. In 1867 Menger began a study of political economy which culminated in 1871 with the publication of his Principles of Economics (Grundsätze der Volkswirtschaftslehre), thus becoming the father of the Austrian School of economic thought. It was in this work that he challenged classical cost-based theories of value with his theory of marginality - that price is determined at the margin.

In 1872 Menger was enrolled into the law faculty at the University of Vienna and spent the next several years teaching finance and political economy both in seminars and lectures to a growing number of students. In 1873 he received the university's chair of economic theory at the very young age of 33.

In 1876 Menger began tutoring Archduke Rudolf von Habsburg, the Crown Prince of Austria in political economy and statistics. For three years Menger accompanied the prince in his travels, first through continental Europe and then later through the British Isles.^[1] He is also thought to have assisted the crown prince in the composition of a pamphlet, published anonymously in 1878, which was highly critical of the higher Austrian aristocracy. His association with the prince would last until Rudolf's suicide in 1889 (see the Mayerling Affair).

In 1878 Rudolf's father, Emperor Franz Josef, appointed Menger to the chair of political economy at Vienna. The title of Hofrat was conferred on him, and he was appointed to the Austrian Herrenhaus in 1900.

Ensconced in his professorship he set about refining and defending the positions he took and methods he utilized in Principles, the result of which was the 1883 publication of Investigations into the Method of the Social Sciences with Special Reference to Economics (Untersuchungen über die Methode der Socialwissenschaften und der politischen Oekonomie insbesondere). The book caused a firestorm of debate, during which members of the Historical school of economics began to derisively call Menger and his students the "Austrian School" to emphasize their departure from mainstream economic thought in Germany – the term was specifically used in an unfavorable review by Gustav von Schmoller. In 1884 Menger responded with the pamphlet The Errors of Historicism in German Economics and launched the infamous Methodenstreit, or methodological debate, between the Historical School and the Austrian School. During this time Menger began to attract like-minded disciples who would go on to make their own mark on the field of economics, most notably Eugen von Böhm-Bawerk, and Friedrich von Wieser.

In the late 1880s Menger was appointed to head a commission to reform the Austrian monetary system. Over the course of the next decade he authored a plethora of articles which would revolutionize monetary theory, including "The Theory of Capital" (1888) and "Money" (1892).^[2] Largely due to his pessimism about the state of German scholarship, Menger resigned his professorship in 1903 to concentrate on study.

Economics[link]

Menger used his “subjective theory of value� to arrive at one of the most powerful insights in economics: both sides gain from exchange. Unlike William Jevons, Menger did not believe that goods provide “utils,� or units of utility. Rather, he wrote, goods are valuable because they serve various uses whose importance differs. Menger also came up with an explanation of how money develops that is still accepted today. If people barter, he pointed out, then they can rarely get what they want in one or two transactions. If they have lamps and want chairs, for example, they will not necessarily be able to trade lamps for chairs but may instead have to make a few intermediate trades. This is a hassle. But people notice that the hassle is much less when they trade what they have for some good that is widely accepted, and then use this good to buy what they want. The good that is widely accepted eventually becomes money.^[3]

References[link]

External links[link]

• Biography of Carl Menger The Founder of the Austrian School by Joseph T. Salerno
• Biography of Carl Menger The Concise Encyclopedia of Economics: Library of Economics and Liberty
• The Epistemological Import of Carl Menger's Theory of the Origin of Money Ludwig von Mises in Human Action on Menger's Theory of the Origins of Money
• Profile on Carl Menger at the History of Economic Thought Website
• Principles of Economics, online version provided by the Ludwig von Mises Institute.
• Grundsätze der Volkswirtschaftslehre (Principles of Economics)
• Principles of Economics (PDF Spanish)
• On the Origin of Money (English Translation), online version provided by the Monadnock Press

Peter Schiff

Austrian School
Born	(1963-03-23) March 23, 1963 (age 49)
Nationality	United States
Field	Financial Economics
Alma mater	U.C. Berkeley (B.B.A.), 1987[1]
Opposed	John Maynard Keynes,[2] Alan Greenspan,[3][4][5] Ben Bernanke,[6][7][8] Paul Krugman,[9] Christopher Dodd,[10] Barack Obama,[11]
Influences	Irwin Schiff, Ludwig von Mises, F.A. Hayek, Murray Rothbard

Peter David Schiff (pronounced /ˈʃɪf/; born March 23, 1963) is an American businessman, investment broker, author and financial commentator. Schiff is CEO and chief global strategist^[1] of Euro Pacific Capital Inc., a broker-dealer based in Westport, Connecticut^[12] and CEO of Euro Pacific Precious Metals, LLC, a gold and silver dealer based in New York City.^[13]

Schiff frequently appears as a guest on financial television and is often quoted in major financial publications. He is host of The Peter Schiff Show, a radio show broadcast on terrestrial and internet radio. He is a frequent guest on internet radio^[14][15][16] as well as the host of the former podcast Wall Street Unspun.^[14][17] In 2010 Schiff ran as a candidate in the Republican primary for the United States Senate seat from Connecticut.^[18]

Schiff is known for his bearish views on the dollar and dollar denominated assets, while bullish on investment in tangible assets as well as foreign stocks and currencies.

Early life and education[link]

Peter Schiff was born and raised in New Haven, Connecticut. His father, Irwin Schiff, is a prominent figure in the U.S. tax protester movement, currently serving a 13-year sentence for tax evasion.^[19] Peter Schiff attended Beverly Hills High School in California,^[20] and graduated from the University of California, Berkeley in 1987 with a Bachelor's degree in finance and accounting.^[1]

Financial career[link]

Schiff began his career as a financial consultant at a Shearson Lehman Brothers brokerage.^[1] In 1996 Schiff and a partner acquired a small brokerage firm that had been founded in 1980, reincorporated it in California and renamed it Euro Pacific Capital.^[21][22] The company today has more than 15,000 clients^{[citation needed]} and six offices nationwide, with its headquarters in Westport, Connecticut.^[12][21][23]

According to a 2005 article in The Advocate of Stamford, Connecticut Schiff relocated the firm to Darien, Connecticut to find brokers "who think like him". The New York Metropolitan Area, Schiff says, has the biggest concentration of brokers in the country, making it easier to recruit employees.^[24] The company has offices in Newport Beach, California as well as in Scottsdale, Arizona, Palm Beach, Florida, Los Angeles and New York City. Euro Pacific Capital also holds the exclusive rights to broker some Perth Mint gold products in the United States.^[25]

Economic forecasts[link]

Peter Schiff voices strong support for the Austrian School of economic thought, first introduced to him by his father.^{[26][27][28][29]}

2002–2008[link]

In his 2007 book Crash Proof, Schiff wrote that United States economic policies were fundamentally unsound, and predicted that the United States dollar would lose much of its value.^[3] Schiff believed that the imbalance between the amount of goods the U.S. consumed and what it produced would eventually lead to problems for the U.S. economy.^[30][31] As a remedy Schiff favored increased personal savings and production which he said would stimulate economic growth.^[32] Schiff cited the U.S.'s low personal savings rate as one of the causes of its transformation from the world's largest creditor nation in the 1970s to the largest debtor nation in the year 2000.^[33] Schiff attributed the low savings rate to higher inflation and the artificially low interest rates set by the Federal Reserve.^[34]

In a May 2002 interview with Southland Today, Schiff predicted that the economic downturn triggered by the bursting of the dot-com stock market bubble, an event that he had also forecast well in advance, would lead to a bear market likely to last "another 5 to 10 years."^[35][36] Later that year, following a 30% decline in the Dow Jones, Schiff reversed his call, and became bullish on U.S. stocks in nominal terms. However, he remained bearish in gold terms. In November 2002, as Schiff predicted, US stock indexes began a nominal bull market uptrend that held steady for five years,^[37] until reversing course in 2008, when they began a decline to less than half of their peak 2008 values,^[38] followed in 2009 by the Dow climbing 61% from its low point over the following year.^[39] However, priced in gold, U.S. stocks remained in a bear market the entire time. In May of 2002, the date of the Southland Today interview,^[40] the Dow Jones was worth over 34 ounces of gold. By 2011 the Dow fell below 6 ounces of gold, a nine-year decline of over 80%, in line with Schiff’s 2002 forecast.^[41]

In an August 2006 interview he said: "The United States economy is like the Titanic and I am here with the lifeboat trying to get people to leave the ship... I see a real financial crisis coming for the United States."^[42] On December 31, 2006 in debate on Fox News, Schiff forecast that "what's going to happen in 2007" is that "real estate prices are going to come crashing back down to Earth".^[42]

As part of these exchanges on Fox News and his repeated appearances on financial news network CNBC, Schiff had mentioned factors such as speculators and "the absence of lending standards" which are now seen by many^[43][44] to indeed be contributing factors to the housing crisis which began in 2007. On December 13, 2007 in a Bloomberg interview on the show Open Exchange, Schiff further added that he felt that the crisis would extend to the credit card lending industry.^[45] Following this observation, it was soon reported on December 23, 2007 by the Associated Press that "The value of credit card accounts at least 30 days late jumped 26 percent to $17.3 billion in October from a year earlier at 17 large credit card trusts examined by the AP... At the same time, defaults -- when lenders essentially give up hope of ever being repaid and write off the debt -- rose 18 percent to almost $961 million in October, according to filings made by the trusts with the Securities and Exchange Commission."^[46]

Since 2007, Schiff has stated many times that if the government doesn't change course there will be hyperinflation in the US.^[3] Schiff is one of a minority of economists credited with accurately predicting the financial crisis of 2007–2010 while "nearly all [macroeconomists] failed to foresee the recession despite plenty of warning signs".^[47][48] In his book Crash Proof, he described several aspects of the U.S. economy that would lead to a recession.^[3]

A YouTube video entitled "Peter Schiff was right" became popular in late 2008 and 2009.^[49][50] The video consists of a compilation of clips of his many appearances on various financial news programs from networks including CNBC, Fox News, MSNBC and Bloomberg, most of which took place from 2005 to 2007. In the video segments Schiff explains the fundamental problems he saw with the United States economy at that time. Schiff's warnings of a coming economic collapse earned him the moniker "Dr. Doom."^[22][51][52]

2009–present[link]

Despite predictions regarding the housing bubble and automotive industry difficulties coming to fruition, as early as 2009 Schiff was receiving criticism due to the performance of some of his client's accounts in 2008, as well as controversies over the predictions themselves. In January 2009, economic blogger and investment adviser Michael Shedlock reported, "I have talked with many who claim they have invested with Schiff and are down anywhere from 40% to 70% in 2008."^[53] Later that week an article appeared in the Wall Street Journal reporting that Schiff's broker-dealer firm, Euro Pacific Capital Inc., "advised its clients to bet that the dollar would weaken significantly and that foreign stocks would outpace their U.S. peers" and that instead, the dollar advanced against most currencies, "magnifying the losses from foreign stocks Mr. Schiff steered his investors into."^[54]

The Director of Communications at Schiff's investment firm responded to the original Shedlock piece by saying, "While it is true, that our accounts have suffered badly in 2008, a fact that we have never disputed or ran from, [Shedlock's] estimates for the size of our typical client losses are exaggerated and unfair."^[55][56] Schiff personally responded to Shedlock's criticism by saying, "to examine the effectiveness of my investment strategy immediately following a major correction by looking only at those accounts who adopted the strategy at the previous peak is unfair and distortive" and called Shedlock's blog entry "nothing more than an overt advertisement (and a highly deceptive one at that) to use my popularity to advance his career," adding that losses were felt mostly by recent clients and not by others.^[57]

Schiff responded similarly to criticisms made by Wade Slome of Sidoxia Capital Management, LLC. in a September 2009 blog entry entitled, "The Emperor Schiff Has No Clothes."^[36] Schiff stated not only were the losses suffered by his clients in 2008 highly exaggerated, but also that most of those losses have already been recouped, stating that many who were down then are now up, and most long-term clients were never down at all, but merely temporarily lost some of the profits they had earned over the years.^[36]

The January 2009 Wall Street Journal article discussed the value of Schiff's predictions, and stated how deficiencies "made mincemeat of investors who took his advice in 2008."^[54] In an interview the following week Schiff likened himself to billionaire investor Warren Buffett, saying they were both "buy and hold" long-term investors. Contrasting his negative press he compared claims about accounts managed under Schiff's firm to the stock market value of Buffett's company, saying: "His approach is you buy stocks and you never sell them—you hope to never sell them—and Berkshire Hathaway is down 40% in the last thirteen months; I don't see the Wall Street Journal saying 'Warren Buffett made mincemeat out of his clients.'"^[58] The Wall Street Journal also published a letter written by Schiff in response to his critics saying: "My central investing premise, a weakening dollar and safety in gold, commodities and foreign stocks, didn't materialize in 2008. But all the ingredients were (and remain) present for those movements to occur. Over the past year, market reactions that I didn't foresee—massive global deleveraging, a knee-jerk 'flight to quality' into U.S. Treasuries and a sharp counter trend rally in the U.S. dollar—have kept the scenario from playing out."^[59]

In a November 2009 videoblog, Schiff said that five stocks he picked for Fortune Magazine in January 2009 had gained a total of 360%.^[60][61]

In a March 2009 speech Schiff said that it would be impossible for the U.S. debt to China to be repaid unless the U.S. dollar's value is substantially diluted through inflation. In September 2009 Schiff said that "I would not be surprised to see [gold] at $5,000 over the next several years" and that the 2009 stock market rally was a "bear market rally".^[62]

According to economist Paul Krugman, Schiff's Austrian approach to economics led him to incorrectly predict hyperinflation in the United States.^[63]

Political career[link]

Schiff was an economic adviser to Ron Paul's 2008 presidential campaign. In support of Paul's economic revitalization plan, he said: "We need a plan that stimulates savings and production, not more of the reckless borrowing and consumption that got us into this mess in the first place. Ron Paul's plan is the only one that amounts to a step in the right direction. If you want meaningful change—for the better that is—Ron Paul is the only candidate capable of delivering it."^[64]

In 2008, Schiff also endorsed Murray Sabrin for the U.S. Senate seat in New Jersey.^[65]

In an interview in February 2009, Schiff's position was summarized as a nonpartisan critique of American policymakers, comparing former presidents George W. Bush to Herbert Hoover and President Barack Obama to former president Franklin D. Roosevelt, with neither of the more recent incumbents comparing favorably to the earlier ones.^[66]

Schiff supports the reduction of government economic regulation, and is concerned that President Obama's administration may increase such regulation.^[67] Schiff says that the economic crisis of the late-2000s provides an opportunity to transition from borrowing and spending, to saving and producing. He is critical of the U.S. government's efforts to "ease the pain" with economic stimulus packages and bailouts. According to Schiff, the U.S. government's approach of replacing "legitimate savings with a printing press" could result in hyperinflation.^[68]

2010 U.S. Senate campaign[link]

In December 2008, Connecticut citizens created a website encouraging Schiff to campaign against the incumbent Senator Christopher Dodd.^[69][70] Approximately 5,000 people made campaign contributions using the web site.^[69] On February 21, 2009, a moneybomb raised over $20,000 for Schiff's campaign.^[71] In a May 2009 video blog, Schiff said that he was seriously considering a run for the senate and when questioned by a Washington Post reporter, he said the chance of him entering politics was "better than 50-50".^[72] In June 2009 Schiff commissioned a poll of likely voters which indicated that he trailed Dodd in popularity by four percentage points.^[73] On July 9, 2009, Schiff launched an exploratory committee and an official campaign website.^[69] He began accepting donations in an attempt to see if "people who really believe in freedom, liberty, sound money and the constitution are prepared to support that with an actual political contribution or to volunteer their services and work on this campaign." He received over 10,000 donations and many e-mails from around the world.^[69]

After giving some hints on The Daily Show^[74] Schiff officially announced his candidacy for the Republican nomination on September 17, 2009, during the MSNBC Morning Joe show.^[18][75][76] By October 2009 Schiff had received more than 10,000 telephone calls and letters^[69] and raised over $1,960,000 (USD) in campaign contributions.

At the May 2010 Republican convention, Linda McMahon received the most delegate votes but not enough to prevent an August primary election. U.S. Rep. Rob Simmons received more than the required 15 percent of the total votes necessary to force the primary. Schiff then collected the signatures necessary to earn a position on the August 2010 GOP primary ballot, submitting at least 400 signatures over the state requirement.

In July 2010, Schiff's campaign received endorsements from Steve Forbes and Ron Paul.^[77][78]

In the Republican primary, held on August 10, 2010, Schiff lost the nomination to Linda McMahon.^[79] McMahon collected 49% of the vote, with Simmons on 28% and Schiff 23%.^[80]

Ultimately, the election was won by the Democratic Party primary winner, Richard Blumenthal.^[81]

Broadcasting[link]

From 2005 to 2010 Schiff hosted a weekly podcast named Wall Street Unspun. In October 2010 Schiff began hosting a new radio show named The Peter Schiff Show. The show is broadcast weekdays from 10am-noon ET on internet and terrestrial radio. The show has featured guests such as Ron Paul, Rand Paul, Niall Ferguson, Dennis Kucinich, Rick Santelli, and others.^[82]

Books[link]

Peter Schiff is the author of six books published by John Wiley & Sons. His book, Crash Proof 2.0, appeared on both the New York Times and Wall Street Journal bestseller lists.

• Crash Proof: How to Profit From the Coming Economic Collapse, February 2007, ISBN 978-0-470-04360-8 1
• The Little Book of Bull Moves in Bear Markets: How to Keep your Portfolio Up When the Market is Down, 2008, ISBN 978-0-470-38378-0 2
• Crash Proof 2.0: How to Profit From the Economic Collapse, 2nd Edition, September 2009, ISBN 978-0-470-47453-2 3
• The Little Book of Bull Moves, Updated and Expanded: How to Keep Your Portfolio Up When the Market Is Up, Down, Or Sideways, 2010, ISBN 0-470-64399-4 4
• How an Economy Grows and Why it Crashes, 2010, ISBN 978-0-470-52670-5 5
• The Real Crash: America's Coming Bankruptcy---How to Save Yourself and Your Country, 2012, ISBN 978-1-250-00447-5

References[link]

External links[link]

Wikimedia Commons has media related to: Peter Schiff

Wikiquote has a collection of quotations related to: Peter Schiff

• Euro Pacific Capital US Brokerage Firm Website
• Euro Pacific Precious Metals Coin Company Website
• Schiff for Senate Official Campaign Website
• Peter Schiff Online, Official book site for Peter Schiff
• Peter Schiff radio, Schiff's daily radio show
• Peter Schiff's Official YouTube channel

Peter Morici

Nationality	United States
Institution	University of Maryland
Field	Macroeconomics
Alma mater	State University of New York at Albany (PhD) (1984)

Peter Morici is an American macroeconomist and Professor of International Business at the R.H. Smith School of Business at the University of Maryland, College Park. He is a graduate of SUNY Albany in New York State where he received his Ph.D in Economics in 1974.^[1][2]

Career[link]

From 1974 to 1976, Morici taught at Augsburg College in Minneapolis. In 1976, he joined the Federal Energy Administration. In 1978 he moved to the National Planning Association in Washington where he was elected a Vice President in 1983. He joined the University of Maine as a Professor of Economics in 1988 and was Director of its Canadian-American Center from 1990 to 1993. He also served as chief economist at the U.S. International Trade Commission.

Morici is the author of 18 books.

Morici signed to serve as a pitchman for Kyocera.^[3]

Personal Life[link]

Morici is noted for wearing bow ties.

Selected publications[link]

• Reconciling Trade and the Environment in the World Trade Organization
• Labor Standards in the Global Trading System
• Antitrust in the Global Trading System: Reconciling U.S., Japanese and EU Approaches
• Setting U.S. Goals for WTO Negotiations
• The Trade Deficit: Where Does It Come from and What Does It Do
• Free Trade in the Americas: An Architecture for Hemispheric Integration
• Trade Talks with Mexico: A Time for Realism
• Making Free Trade Work: The Canada-U.S. Agreement
• Reassessing American Competitiveness

References[link]

External links[link]

• University of Maryland Profile
• Peter Morici at TheStreet.com
• USCC Profile

Part of the Taxation in the United States series
Tax protest in the United States
History
Arguments
Constitutional Â· 16th Amendment Statutory Â· Administrative Â· Conspiracy
People
Robert Clarkson Â· Vivien Kellems Irwin Schiff Â· William J. Benson Wayne C. Bentson Â· Tom Cryer Richard Michael Simkanin
Related topics
America: Freedom to Fascism The Law that Never Was Cheek v. United States Titles of Nobility Amendment Tax noncompliance Tax resistance Christian Patriot movement Posse Comitatus
v t e

Irwin A. Schiff (born in February 24, 1928) is a prominent figure in the United States tax protester movement. Schiff is known for writing and promoting literature that claims the United States income tax is applied incorrectly. He has lost several civil cases against the federal government and has a record of multiple convictions for various federal tax crimes. Schiff is serving a 13-plus year sentence for tax crimes (with his location listed as the Terre Haute Federal Correctional Institution). His projected release date is October 7, 2016.^[1] Schiff is the father of stockbroker and former United States Senate candidate Peter Schiff.

Background[link]

In 1950, Schiff graduated from the University of Connecticut with a Bachelor of Science degree in accounting and economics.^[2]

After college, Schiff was in the insurance brokerage business in Connecticut. In connection with his business, he was involved in a tax shelter in which he became the victim of a Ponzi scheme in which he lost his money and the money of his clients.^[3] In 1968 he testified^[4] before the Senate Committee on Banking and Currency in opposition to the removal of gold backing from Federal Reserve Notes. In 1976, he published a book entitled The Biggest Con: How the Government is Fleecing You.^[4] Schiff was a candidate for the Libertarian Party presidential nomination in 1996, and he participated in a Libertarian Party debate in Washington on July 5, 1996.^[5]

Schiff has a web site named "PayNoIncomeTax.com", which has previously offered his various books for sale. He is featured in Hollywood producer Aaron Russo's 2006 film America: Freedom To Fascism.

Arguments raised by Schiff[link]

Among the arguments raised over the years by Schiff are:

1. that no statutory deficiency in Federal income tax can exist until an assessment has been made;
2. that no tax assessment can be made unless a tax return has been voluntarily filed;
3. that the Internal Revenue Service, in enforcing the income tax, seeks to impose a tax not authorized by the taxing clauses of the United States Constitution;
4. that the United States Tax Court has no jurisdiction over Schiff; and
5. that the United States Tax Court is not a court.

These arguments were ruled invalid in Schiff v. Commissioner.^[6] Another argument made by Schiff on his web site is: "On the [Form] 1040 itself [...] you report 'zero' income regardless of how much you received in: wages, commissions, interest, alimony, capital gains or from operating a business. For tax purposes, 'income' only means corporate 'profit.' Therefore, no individual receives anything that is reportable as 'income.'"^[7] This argument has been rejected by the lower courts, as well as the United States courts of appeal. See Cameron v. Internal Revenue Serv.;^[8] Stoewer v. Commissioner;^[9]Reinhart v. United States;^[10]Fink v. Commissioner;^[11]Flathers v. Commissioner;^[12]Schroeder v. Commissioner;^[13]Sherwood v. Commissioner;^[14] and Ho v. Commissioner.^[15]

Convictions for 1974 and 1975 tax years[link]

Schiff had filed Federal income tax returns through the tax year 1973. For years 1974 and 1975, however, he refused to disclose his income. Instead, he sent unsigned^[2] 1040 forms to the Internal Revenue Service with the title ("U.S. Individual Income Tax Return") changed to read "U.S. Individual Income Confession." Instead of disclosing income, he included assertions of various constitutional rights on the forms, claiming essentially that under the Fourth, Fifth, Sixth, Seventh, Eighth, Ninth, Tenth, and Thirteenth Amendments he would not be an "involuntary serf" of the U.S. government. Schiff contended that because Federal Reserve notes were not backed by gold, they were not “income� for purposes of the Federal income tax.^[4]

Schiff began conducting seminars on Federal income taxes in 1977. On April 12, 1978, Schiff appeared on the NBC television program The Tomorrow Show with host Tom Snyder, arguing his views on Federal income taxes. Six days after his appearance on The Tomorrow Show, Schiff was charged with willful failure to file tax returns for the years 1974 and 1975.^[16] The modified, unsigned 1974 and 1975 forms—with no income information on them—were deemed by the Internal Revenue Service not to be valid Federal income tax returns under 26 U.S.C. Â§ 6012. During the resulting trial, a videotape of the television program was shown to the jury. Schiff was convicted on both counts, and appealed his conviction to the United States Court of Appeals for the Second Circuit.^[4]

At the Court of Appeals, the admission of the videotape was ruled unduly prejudicial, the conviction was overturned, and the case was remanded for a new trial. He was convicted a second time for failure to file, and that conviction was affirmed.^[17]

Convictions for 1980 through 1982 tax years[link]

In October 1985 Schiff was convicted of tax evasion^[18] with respect to his personal income taxes for years 1980, 1981 and 1982, and willful failure to file^[16] a corporate tax return for Irwin A. Schiff, Inc. (a company for which he served as president), and that conviction was affirmed the following year.^[19] Schiff was released from the Federal prison system in June 1993. Despite having spent four years in the system, he continued his tax protest related activities.

Civil tax problems for tax years 1979 through 1985[link]

In June 2004, a Federal court ruled that Schiff was liable for over $2 million in taxes, penalties and interest for the years 1979 through 1985. In that case, Schiff's attorney had filed a brief claiming a diminished capacity defense, contending that Schiff had been diagnosed with a chronic, severe delusional disorder relating to his beliefs about the federal income tax system. This was characterized by some opponents of Schiff's beliefs as a claim that those beliefs were the product of a delusion, or even insanity, and that Schiff had willingly allowed his defense counsel to raise such an argument.

Schiff responded to these claims, stating that the diminished capacity defense was an attempt to prevent the Judge from rendering a summary judgment and instead allow a jury trial. Schiff also asserted that this was different from an insanity defense.^[20] Schiff, in his statement on the matter, asserted that the judge erred in not putting this question to the jury, and insisted that "(1) no one is required to pay income taxes; (2) the entire federal judiciary is involved in a monumental, criminal conspiracy to collect income taxes in violation of law." As of November 2006, Schiff continued to state on his internet web site that the U.S. Federal income tax was repealed in the 1950s, and that U.S. officials were engaged in a conspiracy: "Since the income tax was repealed in 1954 when Congress adopted the 1954 Code, it is clear that for 50 years federal judges in conspiracy with U. S. Department of Injustice prosecutors have been illegally and criminally prosecuting people for crimes that do not exist in connection with a tax that nobody owes."^[21]

[edit] Case regarding The Federal Mafia

The Federal Mafia is a book written in prison^[22] by Schiff. In the book, Schiff contended that the income tax system and Internal Revenue Service were illegal. On August 9, 2004, the Ninth Circuit Court of Appeals upheld an injunction issued by a U.S. District Court in Nevada under 26 U.S.C. Â§ 7408 against Irwin Schiff and associates Cynthia Neun and Lawrence Cohen, against the sale of this book by those persons.^[23] This prohibition does not extend to other sellers of the book. The court rejected Schiff's contention on appeal that the First Amendment protects sales of the book, as the court found that the information it contains is fraudulent.^[24]

Schiff, Neun and Cohen are currently barred under the preliminary injunction from selling or advertising material advocating nonpayment of tax, preparing a tax return for others, and from otherwise providing assistance or encouragement to others in violating tax law. Schiff and his associates are additionally required to provide a copy of the injunction to each of their customers, to post it on their website, and to provide the government with a customer list.^[25]

Schiff and his associates have responded by giving the book for free on their website.^[26]

Convictions for 1997 through 2002 tax years[link]

On October 24, 2005, Schiff was convicted in the U.S. District Court in Las Vegas, Nevada,^[27] on multiple counts of filing false tax returns for the years 1997 through 2002,^[28] aiding and assisting in the preparation of false tax returns filed by other taxpayers,^[29] conspiring to defraud the United States,^[30] and income tax evasion,^[31][32] and he is again serving jail time.^[33] Schiff responded with numerous complaints about the trial process, including a claim that Judge Kent Dawson did not allow Schiff to present evidence at his trial.^[34]

Despite Schiff's age (approximately 78 years old), on February 24, 2006, Schiff was sentenced to 151 months (12 years and 7 months) in prison and was ordered to pay over $4.2 million in restitution to the Internal Revenue Service; Schiff was also sentenced to 12 additional months for contempt of court. On December 26, 2007, the United States Court of Appeals for the Ninth Circuit affirmed Schiff's convictions except for the criminal contempt convictions. The Court vacated the contempt convictions due to the failure of the trial court judge to file contempt orders under rule 42(b) of the Federal Rules of Criminal Procedure. The Court of Appeals indicated that the trial judge could file the appropriate paperwork and re-sentence Schiff on the contempt convictions.^[35] On September 5, 2008, the trial judge re-sentenced Schiff to eleven months in prison in connection with the contempt of court, effectively lowering Schiff's overall original sentence by one month.^[36]

One of Schiff's co-defendants, Lawrence Cohen, was sentenced on February 3, 2006 to 33 months in prison and was ordered to pay $480,000 in restitution. On December 26, 2007, the United States Court of Appeals for the Ninth Circuit reversed Cohen's conviction due to the failure of the trial court to allow testimony from a psychiatrist regarding Cohen's mental state. The Court of Appeals remanded the Cohen case for a possible re-trial.^[37] On June 16, 2009, Cohen pleaded guilty to aiding and assisting in the filing of a false tax return.^[38] However, Cohen died on August 6, 2009, and his case was therefore dismissed.^[39]

On February 23, 2006, Cynthia Neun, another co-defendant, was sentenced to 68 months in prison and was ordered to pay over $1.1 million in restitution. Neun's conviction was affirmed by the United States Court of Appeals for the Ninth Circuit.^[40] According to the prosecutor's office, Neun sold materials encouraging people not to pay taxes, prepared false tax returns, and represented hundreds of taxpayers in dealings with the IRS where she promoted Schiff's arguments. She is required to submit to three years of supervision following her release, which occurred on December 28, 2010.^[41]

In this last case Schiff's attorneys again asked that the court consider the claim that Schiff has a mental disorder relating to his beliefs about taxes.^[42] According to the prosecutor's office the evidence at trial showed that Schiff had attempted to evade the payment of over $2 million in taxes from 1979 through 1985, and that he had used offshore bank accounts using multiple tax identification numbers and had attempted to hide assets in connection with his tax protester related activity.

Convictions of Schiff's followers[link]

Other individuals who have been convicted of federal tax crimes after following Irwin Schiff include Warren J. Burdett,^[43] Christopher and Pamela Harrison;^[44] Scott D. Haynes^[45] Kenneth Heath;^[46] Joseph Letscher,^[47] David Middleton,^[48] Robert L. Mosel;^[49] James C. Payne,^[50] David G. Pflum;^[51] and Steven A. Swan.^[52]

Publications[link]

Books written by Schiff include the following:

• Federal Mafia: How It Illegally Imposes and Unlawfully Collects Income Taxes (1992) ISBN 0-930374-09-6
• The Great Income Tax Hoax: Why You Can Immediately Stop Paying This Illegally Enforced Tax (1985) ISBN 0-930374-05-3
• How an Economy Grows and Why It Doesn't (1985) ISBN 0-930374-06-1
• The Social Security Swindle: How Anyone Can Drop Out (1984) ISBN 0-930374-04-5
• How Anyone Can Stop Paying Income Taxes (1982) ISBN 0-930374-03-7
• The Kingdom of Moltz (1980) ISBN 0-930374-02-9
• The Biggest Con: How the Government Is Fleecing You (1977) ISBN 0-930374-01-0

See also[link]

• Peter Schiff
• Tax protester history

Notes[link]

External links[link]

• Pay No Income Tax, Irwin Schiff's website.
• Irwin Schiff at the Internet Movie Database
• Daniel B. Evans et al., "Irwin Schiff," from Tax Protester Dossiers: Gurus and Other Big Fish

Walter Block

Austrian School
Walter Block teaching
Born	(1941-08-21) 21 August 1941 (age 70) New York
Nationality	United States
Field	Political economy, environmental economics, transport economics, political philosophy
Influences	Ludwig von Mises, Murray Rothbard, Ayn Rand

Walter Edward Block (born 21 August 1941) is an Austrian School of economics economist and anarcho-capitalist.^[1]

Personal life[link]

Block was born in Brooklyn, New York to Abraham Block, a certified public accountant, and Ruth Block, a paralegal, both of whom Block has said were liberals.^[2] He earned his undergraduate degree in Philosophy summa cum laude from Brooklyn College, where he was a member of the varsity swimming team. Block earned his Ph.D. degree in economics from Columbia University and wrote his dissertation on rent control.^{[citation needed]} Block, who is of Jewish background, self-identifies as a "devout atheist".^[3]

Block's early thinking life was characterized by egalitarian thought. In an interview by the Austrian Economics Newsletter, Block stated, "In the fifties and sixties, I was just another commie living in Brooklyn."^[4] Block credits his "conversion" to Libertarianism to personal meetings with Ayn Rand while he was an undergraduate student. Alan Greenspan was in attendance at some of these meetings.^[2] As Block describes it, "In 1963, when I was a senior at Brooklyn College, Ayn Rand came there to give a lecture. I attended, along with about 3,000 of my fellow mainly leftish students, in order to boo and hiss her, since she was evil incarnate. Afterward, the president of the group that had invited her to campus announced there was to be a luncheon in her honor, and anyone was welcome to take part, whether or not they agreed with her ideas. Not having had enough booing and hissing at Ayn in her formal lecture, I decided to avail myself of this opportunity to further express my displeasure with her and her views."^[2]

Block thereafter attended a luncheon with Rand, Nathaniel Branden, and Leonard Peikoff. After Block's challenging of several luncheon attendees, Branden forged an agreement with Block: "Nathan very graciously offered to come to the other end of the table with me for this purpose, but he imposed two preconditions: first, I would be honor bound not to allow this conversation to lapse with this one meeting, but would continue with it until we had achieved a resolution: either he would convince me of the error of my ways, or I would convince him of his. Second, I would read two books he would later recommend to me (Atlas Shrugged by Ayn Rand and Economics in One Lesson by Henry Hazlitt).^[2]

Although Block credits Ayn Rand, Branden, and other Objectivists with his initial interest in laissez faire theory in general, he says of Murray Rothbard that,

After I met Murray, it took him probably all of 15 minutes to convert me to the same anarcho-capitalist position I have held ever since.... In retrospect, before I had met Murray, I was nine tenths of the way toward embracing laissez faire capitalist anarchism; all I needed was a little push in the same direction I had already been going for some time.^[2]

Professional career[link]

Block now holds the Harold E. Wirth Endowed Chair in Economics at Loyola University in New Orleans. From 1979 to 1991, he was the Senior Economist with the Fraser Institute. In addition to his faculty position at Loyola, Block is also a Senior Faculty member of the Ludwig von Mises Institute for Austrian Economics. His most famous work is Defending the Undefendable, of which John Stossel said, "Defending the Undefendable... opened my eyes to the beauties of libertarianism. It explains that so much of what is assumed to be evil--is not."^[5] Lew Rockwell of the Mises Institute said this about Walter Block's active role in modern libertarianism:

Murray Rothbard, in his life, was known as Mr. Libertarian. We can make a solid case that the title now belongs to Walter Block, a student of Rothbard's whose own vita is as thick as a big-city phonebook, and as diverse as Wikipedia. Whether he is writing on economic theory, ethics, political secession, drugs, roads, education, monetary policy, social theory, unions, political language, or anything else, his prose burns with a passion for this single idea: if human problems are to be solved, the solution is to be found by permitting greater liberty.^[6]

Political views[link]

Block, along with Robert Nozick, is one of the leading libertarian defenders of voluntary slave contracts, arguing that a slave contract is "a bona fide contract where consideration crosses hands; when it is abrogated, theft occurs". He critiques other libertarians who oppose voluntary slavery as being inconsistent with their shared principles. Block seeks to make "a tiny adjustment" which "strengthens libertarianism by making it more internally consistent." He argues that his position shows "that contract, predicated on private property [can] reach to the furthest realms of human interaction, even to voluntary slave contracts."^[7]

On February 17, 2006, Dr. Walter Block publicly expressed his support for the Free State Project (FSP). He is quoted as saying,

You people are doing the Lord's work. The FSP is one of the freshest practical ideas for promoting liberty that has come out of the libertarian movement in the past few decades. May you succeed beyond your wildest dreams, and thus demonstrate in yet another empirical way the benefits and blessings of liberty.^[8]

Books[link]

As author[link]

• Defending the Undefendable (1976; translated into Chinese, Dutch, French, Italian, Portuguese, Romanian and Russian languages) ISBN 0-930073-05-3
• A Response to the Framework Document for Amending the Combines Investigation Act (1982)
• Focus on Economics and the Canadian Bishops (1983)
• Focus on Employment Equity: A Critique of the Abella Royal Commission on Equality in Employment (with Michael A. Walker; 1985)
• The U.S. Bishops and Their Critics: An Economic and Ethical Perspective (1986)
• Lexicon of Economic Thought (with Michael A. Walker; 1988)
• Economic Freedom of the World, 1975-1995 (with James Gwartney, Robert Lawson; 1996)
• The Privatization of Roads and Highways: Human and Economic Factors (2006)
• Labor Economics from a Free Market Perspective: Employing the Unemployable. (2008)
• The Case for Discrimination (2010)
• Ron Paul for President in 2012: Yes to Ron Paul and Liberty (2012)

As editor[link]

• Zoning: Its Costs and Relevance for the 1980s (Ed.; 1980)
• Rent Control: Myths & Realities (Ed. with Edgar Olsen; 1981)
• Discrimination, Affirmative Action and Equal Opportunity (Ed. with Michael A. Walker; 1982)
• Taxation: An International Perspective (Ed. with Michael A. Walker; 1984)
• Economics and the Environment: A Reconciliation (Ed.; 1985; translated into Portuguese 1992) ISBN 0-88975-067-X
• Morality of the Market: Religious and Economic Perspectives (Ed. with Geoffrey Brennan, Kenneth Elzinga; 1985)
• Theology, Third World Development and Economic Justice (Ed. with Donald Shaw; 1985)
• Reaction: The New Combines Investigation Act (Ed.; 1986)
• Religion, Economics & Social Thought (Ed. with Irving Hexham; 1986)
• Man, Economy and Liberty: Essays in Honor of Murray N. Rothbard (Ed. with Lew Rockwell; 1988)
• Breaking the Shackles; the Economics of Deregulation: A Comparison of U.S. and Canadian Experience (Ed. with George Lermer; 1991)
• Economic Freedom: Toward a Theory of Measurement (Ed.; 1991)
• Libertarian Autobiographies (Ed.; forthcoming)

Articles[link]

• "Katrina and the Future of New Orleans" Telos 139, Summer 2007.
• "Hayek's Road to Serfdom". Journal of Libertarian Studies (Center for Libertarian Studies) 12 (2): 339–365 (1996).

Notes[link]

External links[link]

• WalterBlock.com
• Commentary by Walter Block for CNBC
• Biography and Article Archive at Mises.org.
• Media Archive at Mises.org.
• Defending the Undefendable