It is within the bowels of government where the real yes-men problem lies. Here, there is no automatic feedback mechanism of the market to rely upon, to quell any incipient tendencies in the direction of yes-manning.
What sets Austrians apart from mainstream economists is methodology and consequent analyses. The first section contains an analysis of their methods, which are found wanting.
This paper reviews Austrian approaches to the firm and drafts a theory that emphasizes the firm as a market phenomenon. Here the firm is a vehicle for imaginative entrepreneurs to create artificially high factor density,
The existence of and need for property is a consequence of scarcity, which is further affected by the very institution to which it gives rise. However, this “problem” in a sense supplies its own solution
Most of the economists of the Austrian School use straightforward representations of the Hayekian structure of production. Even though these depictions are helpful in order to visualize
Austrian economics has important contributions to make in two particular areas — to the theory of rent and to an understanding of the meaning of equilibrium. The legacy of perfect competition casts a long shadow, inhibiting an adequate understanding of the dynamic market process in which rent is earned in disequilibrium.
Mises created an artificial construct, the evenly rotating economy (ERE), from which to ascertain the source of entrepreneurial profit and loss. In particular, the ERE is characterized by two distinct elements.
Austrian insights are useful for not only interpreting recent claims, but also for understanding their reach. In particular, Misesian insights are helpful here
Rothbard (1993, pp. 638–45) refuted the important economic fallacy that excess capacity is a normal consequence of profit maximizing behavior by businesses in some industries when they are in long-run equilibrium.
In his Man, Economy, and State, Murray Rothbard introduces the catallactic function of decision-making owner, and the correspondent income of decision-making ability rent.
