Austrian Economics Overview

The Mises Institute’s new documentary provides a look at how the Federal Reserve uses its expanding power to damage our economy, increase inequality, and to impoverish ordinary Americans.

Critics of Austrian economics often claim that real economic events are too complex to be dealt with via free markets. However, because Austrian economics is based upon understanding human action, it better explains why economic intervention routinely fails.

Central to the paradigm of Austrian Economics is the action axiom. People act, and they act purposefully. That knowledge alone permits us to construct an entire set of theories that explains economic life.

When people speak of “old school economics,” they generally mean the application of economic thinking that involves what we might call “common sense.” That would include permitting a price system to work, protecting private property, and so on. But there is more.

Many “mainstream” economists are bothered by the popularity of economically-flawed policy proposals like tariffs and price controls. It’s their own fault.

Keynesians are known for using obscure and jumbled jargon to explain their fallacious ideas. The hope being that, the more confusing the language, the greater the perceived scholarship. Good economics can and should be clearly logically explained.

Marx built his infamous labor theory of value on the premise that labor itself was a commodity. However, as Mises and other Austrians have noted, Marx failed both at understanding the complexity of labor and subjective value theories.

Keynesians are known for using obscure and jumbled jargon to explain their fallacious ideas. The hope being that, the more confusing the language, the greater the perceived scholarship. Good economics can and should be clearly logically explained.

The phrase, old school economics, is often used approvingly by many, but it's rarely explained. What is it?