The Austrian school recognizes that economic analysis is timeless and the ancient story of “The Poor Man of Nippur” provides an excellent example. From time preference to the structure of production, many of the lessons are contained in this story.
Imagination is a key aspect of abstract thinking and economics. However, many fallaciously assume that one‘s failure to imagine how something would work on a free market necessitates state provision. This is an unjustified leap in logic.
How should we approach the study of history? An unfortunate trend has been to implement “history by theory” in which practitioners take theories and present them as facts. An honest approach is to take the historical facts and interpret them through coherent theories.
Why do we study history? Some study it as a way to confirm their own political ideologies, something that often happens when historians look at the US Civil War and its Reconstruction aftermath. According to Ludwig von Mises, one cannot bring an ideological lens and honestly approach history.
Modern academics are relentless in trying to find any nuances they can from the works of Karl Marx, but they miss the larger issues with his work. Marx was alive and active when the marginalists logically took apart his value theory, but hope springs eternal for Marx‘s supporters.
The Austrian School of economics traces its roots to the School of Salamanca in medieval times. The scholastics of Salamanca, in turn, were influenced by the canon jurists from the University of Bologna, demonstrating the rich and historic roots of Austrian economics.
It is hard to find an article in the past century more influential in economic methodology than Milton Friedman’s “The Methodology of Positive Economics.”
Mainstream economists today examine economic phenomena from a “black box” perspective in which they look at inputs and outputs without trying to understand causal mechanisms that make the outcomes possible.
The Austrian school recognizes that economic analysis is timeless and the ancient story of “The Poor Man of Nippur” provides an excellent example. From time preference to the structure of production, many of the lessons are contained in this story.
Modern academic economics is based upon the methodologies used to study the natural sciences. However, such methodologies are inappropriate to study economics, which must be based upon causal-realism.
