This is an honest appraisal of Austrian Economics, uncritically accepted, uncritically believed, and uncritically explained - not revealing that the three principles upon which Austrian Economics is based are phantom principles: a set of tactics for Entrepreneurs to manipulate the Market for their own financial advantage. What Eamonn Butler calls his "individual-and-values based approach" to the Market is simply another name for uncontrolled greed. He dances around the moral implications of the making and use of money and overlooks the fact that all monetary relationship are essentially moral. Greed is a voracious "subjective value" and two subjective greeds in conflict can easily become a battle of the Titans - which is exactly what the Market becomes. Witness the collapse of the American economy in 2008 - to say nothing of the stock market collapse that brought on the Depression of 1929...and the mass arrest of "insider traders" in the 1980's.
Austrian Economics is based on three fictions concocted chiefly by Carl Menger in his battle with the last holdouts of the Austro-Hungarian Empire, who dominated the commerce of the country for the finanncial and social advantages of the landed aristrocracy. He knew firsthand the social and financial privileges of the ruling classes, since he was tutor to the heir to the throne, Rudolf, whose tragic death by suicide at Mayerling became the stuff of legends. Menger's "Principles of Economics" was an attempt to free the commerce of his country from the grasp of the privileged classes, creating unknowingly a new privileged class of "Entrepreneurs" who were determined to control the commerce of their country for their own financial advantage.
The three fictions he created were: Praxeology, Catallactics and Subjective Value - phantom economics at best and the positing of subjective greed as the motor of the Market. It certainly did transform economic science - for a generation of "Entrepreneurs" - another name for those who play the market with no moral standards, with only their "subjective values" to guide them.
"Praxeology" is a theory of voluntary human behavior.
"Catallactics" is a theory of voluntary monetary exchange.
"Subjective Value" is a theory of the monetary value of economic goods.
"Praxeology" is an unproved psychological phenomenon, arbitrarily applied to the psyche of "Entrepreneurs".
"Catallactics" is the manipulating of data to explain the formation of prices based on the subjective values of the participants.
"Subjective Value" holds that the value of economic goods is not determined by any inherent property of the good nor by the amount of labor or cost required to produce the good.
The Subjective Value theory is empirically unprovable and monetarily absurd.
Since the monetary value of goods is based on the subjective estimations of the parties involved, the "exchange" is a kind of phantom economics, just a phantom game the participants are playing with each other.
This is voodoo economics at worst, and the reduction of Market values to mere opinion or to the subjective feelings of the participants.
Thus, the whole structure of Austrian Economics is based on three principles: subjective in nature, arbitrary in application, and totally devoid of ethical standards.
That is the weakness of the whole book: Phantom Economicss for Phantom Entrepreneurs and the reduction of Economics to the subjective greed of phantom participants. Austrian Economics is a dressed up version of the economics of the landed aristocracy by the creation of an aristocracy of "Entrepreneurs". All that is changed is the labels of the participants in the Market and a new kind of profiteering.
Father Clifford Stevens
Archdiocese of Omaha
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