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Why is Austrian economics attractive? What are the features of it that make
it so attractive?
What is it that makes this exciting? There are two features of
what you're gonna be studying this week that I think are
attractive. The first is that you feel practically compelled
by what is presented to you when you learn, for example,
Mengerrian price theory. There's nothing about this that requires
heroic assumptions or any kind of unreasonable postulates.
It practically compels your assent
because it's so it seems so obvious. Again, it's gonna seems so obvious
that you almost feel I don't need to write this down, that's how obvious it seems.
But that's because it's realistic it rings true when you hear it.
It's not like we're- we're not claiming the human beings are
economic agents for whom economists may invent mathematical-
mathematically tractable utility functions to try to understand them.
We're actually treating people as people, this wild
experiment were running here's to treat human beings like human beings.
So, when you read in slate, or saloon, or on the Internet
about how unreasonable and crazy the Austrians, and bear that in mind
what we're really doing with causal realists economics is treating
human beings with the dignity that human beings deserve, not trying to
mathematize them but treat them and treat them as actually
human beings. In fact, if you read Menger's 1871 book principles of economics you
will not walk away from that book thinking
that was too complicated for me to understand. You will not think that.
You say, wow, that actually was a lot easier for me to understand than I
thought it would be.
Well, that's true of a lot of Austrian text. Now, as you get more advanced it does
become more difficult but
again to the the person who is
reasonably educated has made his way step by step through the literature,
I dare say that the major treatises on the Austrian School,
for example, Rothbard's "Man, Economy and State" or Mises' "Human Action"
are not out of reach of the educated person
who has worked his way up to those books. It is not impossible, you don't need
some kind of special training to be able understand that they didn't
consider themselves failures if that was the case
and yet at the same time they were writing in a way that spoke to
contemporary economists.
Certainly that's true of Rothbard if you look at as footnotes, absolutely
filled with references to the contemporary literature, which he knew
backwards and forwards.
But he could speak in a way that could resonate with an economist and could
resonate
with normal human beings. An extremely rare talent
that Rothbard had. But I think more than this
is the second thing that makes the school so attractive to us, and that is
the connection, and I know I'm gonna get some objection here,
but the connection between Austrian economics and liberty. Now I know we have to be
careful here because
Austrian economics is not libertarianism
and libertarianism is not Austrian economics and it is very important to
distinguish these things
because what we're doing as Austrian economist is not engaging in special
pleading on behalf of the political philosophy.
That is certainly not the case especially when you look at the early
austrians, Menger and Böhm von Bawerk, for example,
they're really not writing a whole lot
that would be policy advocacy. They really are doing scientific economics
and that really is what the Austrian school was doing and a lot of people you're
going to be hearing from today that's what they do all the time.
So these things are different and it's important to distinguish them.
The Austrians are descriptive and libertarians are prescriptive.
So the Austrians are simply describing to you
how the world works and describing cause-and-effect relationships that
exist in the world.
What you do with that knowledge is a separate question. So, as I say, it's
important to distinguish these things so when people say to you,
what's the Austrian position on government spending?
Well, there isn't. There is no Austrian position on government spending, there's no
Austrian position on the minimum wage,
there's no Austrian position and monopolies, there is a
in in terms of policy, but there is an option position in terms of what we
think about
monopoly theory. What's the correct monopoly theory? Well, sure, there's an
Austrian view on that
but an Austrian, per se, does not go around and say it is wicked for the
government to do X, the government ought to do Y.
At the same time, though, it seems like it can't just be a coincidence that
most people who become interested in the Austrian school
happen to be libertarians. So, why would that be?
It is worth looking into. I think that's where a lot of the excitement
comes from.
Is that people are interested in the question of human liberty, then they read
the Austrians,
they're obviously perceiving something- they're perceiving some kinda connection
and I wanna try to figure out what that might be.