The original Mont Pelerin Society meeting in 1947 featured Ludwig von Mises, whose warnings about the dangers of socialism and totalitarianism had gone unheeded. In the wreckage of World War II, the truth of his message should have been obvious. It wasn't.
Mainstream economists often base their analysis upon assumptions that do not square with reality. Austrian economics, on the other hand, is built upon realistic assumptions and the acknowledgement that good economics must reflect human action.
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.
Employing the Labor Theory of Value, Marx claimed that entrepreneurial profits arise from exploitation of workers. In reality, entrepreneurs earn profits when they correctly gauge markets. Exploitation has nothing to do with it.
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.
When government agents intervene into the economy, they do so without even understanding how market processes work in the first place. This lack of knowledge makes things even worse, as regulators are not even aware of the damage they are causing.
This week, David Gordon guides us through the thoughts of Kai Draper in his book, War and Individual Rights. Dr. Gordon praises a great deal of Draper's argumentation, but has some criticisms.
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.
There are numerous critics of the Austrian School of economics, but when their disparagements are closely examined, the so-called experts themselves are wrong. Austrians can do a better job of setting the record straight.
One of the important points made by Carl Menger in his 1871 Principles is that people ordinally rank their preferences, valuing some things more than others. While this seems to be a common-sense principle, it actually has important implications for economic theory.
