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.
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.
Austrian economics today needs critics. It doesn‘t need the critics (like Paul Krugman) who cannot give valid and accurate criticisms, but rather people who actually understand the concepts upon which Austrian thinking is built provide a real challenge.
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.
