Austrian Economics Overview

Interviewed by Judge Andrew Napolitano on the “Freedom Watch” program, 27 January 2010.

Presented by Llewellyn H. Rockwell, Jr. at “The Failure of the Keynesian State,” the Mises Circle in Houston, sponsored by Jeremy S.

Presented by Congressman Ron Paul at “The Failure of the Keynesian State,” the Mises Circle in Houston, sponsored by Jeremy S. Davis.

Price is determined by the equilibrium price and the equilibrium quantity. If your good is not selling, you lower the price. If your goods fly off the shelves you are selling too cheaply and you raise prices.

Why is it that things like bread and water which have high use values are cheap while on the other hand luxury items like diamonds are very expensive? This paradox was not solved until it became understood that people choose only a marginal unit - this loaf or this diamond.

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What causes business cycles? Keynesians say the cycles happen because the free market economy does not spend enough. Thus, pump spending in. Additionally, Keynesians say that animal spirits cause these cycles. Government must fix things. Nobody could understand Keynes' General Theory. What was simply obscure was wrongly considered deep.

From The Failure of the “New Economics”. Narrated by Josiah Schmidt.