Austrian Economics

[urg8rbait]

I am not an economist but I have recently gotten interested in the subject and I have found that Austrian Economics is the only one that makes logical sense.

What do you guys think about it?

[ThePlayer]

"Yah...I like things of that nature, things of that sort".
-Ahnold

[mdgator05]

A couple of reasonable ideas a long time ago (specifically Opportunity Cost). For the most part, their suppositions (which is really all they can be called) have been proven incorrect by empirical evidence, which is one of the reasons being an Austrian often involves the rejection of econometrics.

Austrian Econ is more of a philosophy than a science, like many of the outside the mainstream econ theories.

[orangeblueorangeblue]

I am not an economist but I have recently gotten interested in the subject and I have found that Austrian Economics is the only one that makes logical sense.

What do you guys think about it?

Having spent three years studying general macro, I can't help but find this is a pretty superficial view of things.

What do you think "Austrian" represents in a nutshell, and what would you pit it against in a battle of "logical sense."

[orangeblueorangeblue]

Austrian Econ is more of a philosophy than a science, like many of the outside the mainstream econ theories.

This is no less true of, say, Keynesianism.

[Dreamliner]

Good point. Look at where Keynesianism got us.

[orangeblueorangeblue]

Good point. Look at where Keynesianism got us.

We've never seen the Keynesian model in action, though.

[gator10010]

We've never seen the Keynesian model in action, though.

We haven't seen the Keynesian model in action because it has been all spending, in good and bad times.

[orangeblueorangeblue]

We haven't seen the Keynesian model in action because it has been all spending, in good and bad times.

Right.

[Dreamliner]

We've never seen the Keynesian model in action, though.

Sure we have, at least much moreso than the Austrian model.

[orangeblueorangeblue]

Sure we have, at least much moreso than the Austrian model.

I'd say evenly, although it's been a long time since we've seen something that allowed more natural cycles. The Austrian model isn't exactly hands off either.

[orangeblueorangeblue]

The point is people lump constant spending with "Keynesianism" and "total free market" with the Austrian school and neither is exactly right nor fair.

[Dreamliner]

But we're much closer to the former. Borrow and spend has been the mainstay of government. Yes, government = economy.

[orangeblueorangeblue]

We're equally removed from either policy / school of thought. In fact, what we do here in the US is completely antithetical to both Austrian economics and Keynesianism.

[Spurffelbow833]

Hayek vs. Keynes round 1 and round 2

http://www.youtube.com/watch?v=d0nERTFo-Sk

http://www.youtube.com/watch?v=GTQnarzmTOc&NR=1&feature=fvwp

[Dreamliner]

We're equally removed from either policy / school of thought. In fact, what we do here in the US is completely antithetical to both Austrian economics and Keynesianism.

Sorry, borrow and spend is the order of the day. Aside: our economy is not remotely close to rough-and-tumble. Unless you're underground, you feel the warm, baited breath of government on every level.

[wgbgator]

Economics is not a hard science, its a study of human behavior, really. It's like history, but with a few more accepted assumptions and "laws" and a greater interest in macro decision making - what used to be called Political Economy.

[orangeblueorangeblue]

Sorry, borrow and spend is the order of the day..

And that's (mostly) antithetical to Keynesian policy. People have a really generalized, glossed-over and inaccurate view of both the Austrian school and Keynes.

[wgbgator]

It probably needs to be pointed out that "Austrian" isn't an entirely coherent school of thought. Hayek and Von Mises werent exactly in agreement on everything after all.

[Dreamliner]

And that's (mostly) antithetical to Keynesian policy. People have a really generalized, glossed-over and inaccurate view of both the Austrian school and Keynes.

No, we haven't. Central Bank, 'fiscal policy', 'monetary policy', borrow and spend, all are hallmarks of Keynesianism. This is what we have. Does it perfectly hew to Keynes ? Maybe not ? So ?

[orangeblueorangeblue]

So an apple and an orange are both round, but neither are baseballs.

None of those things are actually at all hallmarks of Keynesianism, though a few are the venue in which Keynes can play.

[orangeblueorangeblue]

For example, "central banks," "monetary policy," "fiscal policy" all play a role in the Austrian School's models and policies, but they're not "hallmarks" either.

[brainstorm]

Speaking of the central bank, has this ever been discussed here?

http://www.youtube.com/watch?v=Zx0vrR2BFp8

[orangeblueorangeblue]

I think it has. I think that's eye opening to people who really have never taken any time to consider the notion of fiat before or understanding that creating the representative medium for value is not the same thing as creating value.

[wargunfan]

The US "economy" insofar as government involvement is concerned is more like the economy of the Roman Catholic Church in the sixteenth century. The selling of indulgences has never been more popular.

[urg8rbait]

A couple of reasonable ideas a long time ago (specifically Opportunity Cost). For the most part, their suppositions (which is really all they can be called) have been proven incorrect by empirical evidence, which is one of the reasons being an Austrian often involves the rejection of econometrics.

Austrian Econ is more of a philosophy than a science, like many of the outside the mainstream econ theories.


Economics is more of a social science. Keynesians treat economics as if its some other physical science. The bottom line here is that actors in the market place mostly behave in an unpredictable and rational manner. And Keynesians mistakenly try to predict/manipulate people's behavior in an attempt to "improve" the economy only to watch it fail over and over.

[urg8rbait]

Having spent three years studying general macro, I can't help but find this is a pretty superficial view of things.

What do you think "Austrian" represents in a nutshell, and what would you pit it against in a battle of "logical sense."


Read "Human Action"... its a great book.

[urg8rbait]

We've never seen the Keynesian model in action, though.

That's the funny thing about Keynesians. When implementing the models leads to failure, the excuse is always "well, if we had done x, y, and z it model would have worked" Or, "it would have worked if the unpredicted a, b, and c events didn't happen.." There is always an excuse. The reality of the situation is that people behave differently when the incentives change... Keynesians think people are robots and will continue to behave the same when the incentives change. Hence why the economy continues to fail.

[urg8rbait]

We're equally removed from either policy / school of thought. In fact, what we do here in the US is completely antithetical to both Austrian economics and Keynesianism.

uuuhhhhh... the US fiscal/monetary policies is almost all Keynesianism.

[urg8rbait]

For example, "central banks," "monetary policy," "fiscal policy" all play a role in the Austrian School's models and policies, but they're not "hallmarks" either.

Uhh. No. Austrian School says that those things you listed is what causes violent boom-bust cycles. Kenysianism says that government control of those things you listed is what is necessary to keep the economy running healthy (which is obviously not working).

[orangeblueorangeblue]

That's the funny thing about Keynesians. When implementing the models leads to failure, the excuse is always "well, if we had done x, y, and z it model would have worked"

You don't understand Keynes. Keynes never advocated for long-term fiscal injections - those were only for reviving a stuttering / recessive economy. In fact, the government is supposed to get out of the way. So this isn't an excuse. It's simply that nobody has ever done what Keynes suggested.

What you're lambasting is something wholly independent from Keynes or the Austrian school. It's simply greed at the political level, unfettered by checks & balances.

uuuhhhhh... the US fiscal/monetary policies is almost all Keynesianism.

Monetary policy is not just interventionism and even the Austrian school is not 100% anti-intervention.

Uhh. No. Austrian School says that those things you listed is what causes violent boom-bust cycles. Kenysianism says that government control of those things you listed is what is necessary to keep the economy running healthy (which is obviously not working).

No, sorry. The Austrian School dictates that "those things" simply delay or extend natural depressions.

No offense, but I think you have a somewhat tenuous grasp on the concepts that would benefit from further reading.

And Human Action was required reading in econ school, I have a copy not 10 feet from me.

[urg8rbait]

You don't understand Keynes. Keynes never advocated for long-term fiscal injections - those were only for reviving a stuttering / recessive economy. In fact, the government is supposed to get out of the way. So this isn't an excuse. It's simply that nobody has ever done what Keynes suggested.

What you're lambasting is something wholly independent from Keynes or the Austrian school. It's simply greed at the political level, unfettered by checks & balances.



Monetary policy is not just interventionism and even the Austrian school is not 100% anti-intervention.



No, sorry. The Austrian School dictates that "those things" simply delay or extend natural depressions.

No offense, but I think you have a somewhat tenuous grasp on the concepts that would benefit from further reading.

And Human Action was required reading in econ school, I have a copy not 10 feet from me.


I think you're a little lost looking through your political glasses. Keynes believed when there is economic trouble, it was because aggregate demand was dropping and advocated that the government did what it had to do to boost demand to boost the economy... basically demand-side economics. He basically ignored Say's Law. His failed ideas was that government manipulate the economy to boost demand until the economy is "back" and then have the government manipulate the economy again by letting off the "economic throttle".

What are you talking about dude??? Austrian School SPECIFICALLY says that the boom-bust cycle (ie the business cycle) is more violent BECAUSE of government manipulation... I have read enough AE books and papers and watched enough talks and lectures to have a very good understanding of it. I think you need to read Human Action a few more times... actually, you need to just start over with "Economics In One Lesson"... ;)

[T3goalie]

I am not an economist but I have recently gotten interested in the subject and I have found that Austrian Economics is the only one that makes logical sense.

What do you guys think about it?

The more you study Austrian Economics the more you will realize the folly and dishonesty of Keynes. Politicians world wide love Keynes because he provided them a theory in which they can control money, people and resources. Keynes gives politicians a tool for power. He is the hero to central planners.

If your are really interested in AE, get a copy of the Road to Serfdom. It is a good starting point and will read as if Hayek was a prophet. It is not a quick read but it is worth the time. That said, it is just a launching point. Hayek's collective works on Good Money are also quite good as next step introduction to AE and relevant to today's fed policy.

Based on what i have read in this thread there does not appear to be anyone here who has spent any time studying AE... Just lip service, and summaries of a talking points.

Study for yourself. It is worth the time. You can buy paperback online.

Note- The hayek/keynes spoof videos are funny and clever. Smart kids...

[urg8rbait]

The more you study Austrian Economics the more you will realize the folly and dishonesty of Keynes. Politicians world wide love Keynes because he provided them a theory in which they can control money, people and resources. Keynes gives politicians a tool for power. He is the hero to central planners.

If your are really interested in AE, get a copy of the Road to Serfdom. It is a good starting point and will read as if Hayek was a prophet. It is not a quick read but it is worth the time. That said, it is just a launching point. Hayek's collective works on Good Money are also quite good as next step introduction to AE and relevant to today's fed policy.

Based on what i have read in this thread there does not appear to be anyone here who has spent any time studying AE... Just lip service, and summaries of a talking points.

Study for yourself. It is worth the time. You can buy paperback online.

Note- The hayek/keynes spoof videos are funny and clever. Smart kids...

I haven't read "Road to Serfdom" yet... its definitelyon my to-do list.

[orangeblueorangeblue]

I think you're a little lost looking through your political glasses.

Not really, no. Keynes did not advocate what liberals and conservatives alike have been doing in Washington for decades. I mean, which party hasn't been a non-stop spender? We have no Keynesians. If we did, we'd at least live within our means, periods of monetary injection notwithstanding.

What are you talking about dude??? Austrian School SPECIFICALLY says that the boom-bust cycle (ie the business cycle) is more violent BECAUSE of government manipulation...

It states that recessive cycles are natural and inevitable. It does not state that government manipulation always makes it more violent. In fact, even Mises posited that when (acknowledging it can happen) government attempts to curb recessive splines, it can lessen but lengthen the valley. In other words, the idea is government manipulation will either:

1. increase the trough ("more violent")
or
2. decrease the trough, increase the length

[orangeblueorangeblue]

And for the record, I'm not really even a Keynesian. It's - by design - intentionally going to lead to slower economic growth over time.

But it's unfortunate so few people have bothered to really understand what Keynes' model required.