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Austrian School Articles;

"Anticommunism" versus Capitalism

n the universe there is never and nowhere stability and immobility. Change and transformation are essential features of life. Each state of affairs is transient; each age is an age of transition. In human life there is never calm and repose. Life is a process, not a perseverance in a status quo. Yet the human mind has always been deluded by the image of an unchangeable existence. The avowed aim of all utopian movements is to put an end to history and to establish a final and permanent calm.

A Falling Dollar, After All

For some time I have been trying to defuse the hysteria over the US current account deficit (e.g., 1, 2, and 3). Using economic arguments and (I hoped) funny analogies, I tried to show that there is nothing necessarily bad about foreigners selling us more final goods and services than we sell to them.

Adam Smith, Airwaves, and Argumentation

In The Wealth of Nations, Adam Smith maintained that “the sovereign has only three duties to attend to.” The first two are national defense and the administration of domestic justice; then, famously, comes the third duty: “the duty of erecting and maintaining certain publick works and certain publick institutions, which it can never be for the interest of any individual, or small number of individuals, to erect and maintain.”

An Introduction to Value Theory

With interest in the "Austrian School" of economics increasing, it may be helpful to indicate some of the aspects of the value-concept which is so central to the theories of this group. The term "School" as used here refers, not to any institution or corporate set of buildings, but to a body of economic theory developed largely in Austria during the 1870s and 1880s.

Anarchist's Progress

When I was seven years old, playing in front of our house on the outskirts of Brooklyn one morning, a policeman stopped and chatted with me for a few moments. He was a kindly man, of a Scandinavian blonde type with pleasant blue eyes, and I took to him at once. He sealed our acquaintance permanently by telling me a story that I thought was immensely funny; I laughed over it at intervals all day. I do not remember what it was, but it had to do with the antics of a drove of geese in our neighborhood.

Artwork and the Subjective Theory of Value

According to the subjective theory of value, the value we place on goods and services is determined by the individual who is evaluating, and there is no intrinsic value as such in items themselves. In regard to works of art, we often hear people say they are "undervalued," "underappreciated," "hyped," or "overvalued."

Austrian Macroeconomics

In the 1930s, there appeared several book-length surveys of contemporary monetary and business cycle theory. In each one of these Friedrich A. Hayek’s version of the Austrian theory of money, capital and the business cycle was given central prominence, along with the competing theories of John Maynard Keynes, Dennis Robertson and Ralph Hawtrey. The authors of these surveys considered Hayek to have made valuable contributions to the understanding of the relationships between money, interest rates, the structure of production and economic fluctuations.

Behavioral, Experimental, and Austrian Economics

This year(2002) the Nobel prize in economics was awarded to Daniel Kahneman and Vernon Smith. These two economists have been probing the validity of popular economic theories regarding peoples' choices. Kahneman integrated insights from his psychological research into the field of human judgment and decision making under conditions of uncertainty. Smith has established an experimental laboratory as a tool for validating economic theories.

Friedman Contra Rothbard

One might have anticipated that a review of Rothbard's book by Friedman would be very much worth reading. Rothbard contends that Adam Smith, far from being the founder of economics, "contributed nothing of value to economic thought …

Globalization: The Long-Run Big Picture

Globalization, in conjunction with its essential prerequisite of respect for private property rights, and thus the existence of substantial economic freedom in the various individual countries, has the potential to raise the productivity of labor and living standards all across the world to the level of the most advanced countries.

Good Fascists and Bad Fascists

First let us state our definition of fascism. It is, put briefly, a system of social organization in which the political state is a dictatorship supported by a political elite and in which the economic society is an autarchic capitalism, enclosed and planned, in which the government assumes responsibility for creating adequate purchasing power through the instrumentality of national debt and in which militarism is adopted as a great economic project for creating work as well as a great romantic project in the service of the imperialist state.

How and How Not to Desocialize

It is generally acknowledged that bureaucrats are obstructing the process, but confusion abounds among free-market proponents themselves. Matters are scarcely helped by the fact that Western economists, to whom the former Eastern bloc is looking for wisdom, have themselves done virtually nothing to study, let alone solve, this problem during the sixty years since Stalin established socialism in the Soviet Union and the half-century since the Soviets imposed it on Eastern Europe.

How and How Not to Desocialize

It is generally acknowledged that bureaucrats are obstructing the process, but confusion abounds among free-market proponents themselves. Matters are scarcely helped by the fact that Western economists, to whom the former Eastern bloc is looking for wisdom, have themselves done virtually nothing to study, let alone solve, this problem during the sixty years since Stalin established socialism in the Soviet Union and the half-century since the Soviets imposed it on Eastern Europe.

How Big Is Bush's Big Government?

When teaching economics I sometimes find it beneficial to use government budget data to apply the lessons of economics to our current political circumstances. The students tend to be surprised at the size of our government, the amount of tax revenues that we "pay," and the amount of government debt. The following numbers get the point across.

How Society Works: Plato's Contribution

The theory of the division of labor is one of the cornerstones of economics. It is the very foundation of the scientific analysis of society and the market.

Imperialism and the Logic of War Making

Commentaries on war stretching back more than two millennia to the Peloponnesian Wars have enshrouded the fundamental causes of war in an almost impenetrable fog of myths, fallacies, and outright lies. In most studies, war is generally portrayed as the inevitable outcome of either complex historical forces or accidental circumstances generally beyond the understanding or control of the human combatants.

Investment that Raises the Demand for Capital

The purpose of this article is to state a proposition which underlies the modern "monetary over-investment theories" of the trade cycle in a form in which, as far as I know, it has never before been expressed but which seems to make this particular proposition so obvious as to put its logical correctness beyond dispute.

J.K. Galbraith Celebrated Power, Not Freedom

Indeed, if being tall and having silver hair is what is required for being "distinguished," then the late John Kenneth Galbraith certainly fit that description. I used to refer to him as the "Dilbert economist" in reference to the Staples advertisement. However, although Galbraith was revered by other "intellectuals" and by Harvard students during his heyday in the 1960s and 1970s, in truth, he was as clueless about economics as Dilbert's boss is on the workplace.

Liberty and the Warfare State

Robert Higgs has a well-deserved reputation as an eminent economic historian, but in this collection of essays and interviews, he shows himself an adept moral philosopher as well.

Mechanism Design and the Free Market

Earlier this year three Americans won the Nobel Memorial Prize in Economics for laying the foundations of "mechanism design theory." The work of Leonid Hurwicz, Roger Myerson, and Eric Maskin was noted for its help in implementing efficient voting, trading, and regulatory schemes.

Menger the Revolutionary

"There never lived at the same time," wrote Ludwig von Mises, "more than a score of men whose work contributed anything essential to economics."[1] One of those men was Carl Menger (1840–1921), Professor of Political Economy at the University of Vienna and founder of the Austrian school of economics.

Mises on War

War…is harmful, not only to the conquered but to the conqueror. Society has arisen out of the works of peace; the essence of society is peacemaking. Peace and not war is the father of all things. Only economic action has created the wealth around us; labor, not the profession of arms, brings happiness. Peace builds, war destroys.

Nation and Nationality

The concepts nation and nationality are relatively new in the sense in which we understand them. Of course, the word nation is very old; it derives from Latin and spread early into all modern languages. But another meaning was associated with it. Only since the second half of the eighteenth century did it gradually take on the significance that it has for us today, and not until the nineteenth century did this usage of the word become general.

Natural Elites, Intellectuals, and the State

A state is a territorial monopolist of compulsion, an agency which may engage in continual, institutionalized property rights violations and the exploitation of private property owners through expropriation, taxation, and regulation.

On Equality and Inequality

The doctrine of natural law that inspired the eighteenth century declarations of the rights of man did not imply the obviously fallacious proposition that all men are biologically equal. It proclaimed that all men are born equal in rights and that this equality cannot be abrogated by any man-made law, that it is inalienable or, more precisely, imprescriptible. Only the deadly foes of individual liberty and self-determination, the champions of totalitarianism, interpreted the principle of equality before the law as derived from an alleged psychical and physiological equality of all men.

Overproduction and Underconsumption Fallacies

James Mill (1773–1836) is perhaps best known as the father and educator of John Stuart Mill. He deserves to be remembered for much more, however. Not only was he an influential popularizer of the ideas of his friend, David Ricardo, but also, as appears from the excerpt here presented, an important economist in his own right.

Perpetual Trade Deficits Can Be Good

In response to a qualified plug that I gave to his book Crash Proof: How to Profit from the Coming Economic Collapse

Prohibition and the Economists

Since economists have been leading the battle against drug prohibition, most people would be surprised to learn that they played an important role in establishing and defending the alcohol prohibition of the 1920s. It is still an open question whether economists set public opinion or mirror it, but the relationship between economists and prohibition provides interesting insights into the economics profession, the origins of Prohibition, and the current debate over drug legalization.

Socialist Man in the Big Easy

Marxists long theorized that communism would bring about the new socialist man. Through communist programs, man would turn his sole purpose to laboring and struggling for the greater good of the collective.

Study Guide to Human Action, Chapter II

Praxeology and history are the two main branches of the sciences of human action.

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