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The Austrians as Trotsky or Goldstein


Lets hear it for the Austrian School. Yes, after much soul searching and research the Washington Post’s resident Marxist E.J. Dionne has discovered why things are not getting done in Washington the way he would like. Yes, it is the Austrian School of Economics. Yes, we Austrians are wrecking the country and keeping economic recovery from occurring because we tend to be skeptical about unleashing the power of the state.

Like Stalin, who declared that every failure of the U.S.S.R. (and the failures were legion) was due to sabotage by Leon Trotsky, or Big Brother, who claimed that Emmanuel Goldstein was the lurking saboteur of Oceania, Dionne wants us to imagine that F.A. Hayek and Ludwig von Mises are behind Barack Obama’s failure to restore prosperity and full employment. Yes, if Hayek had not written The Road to Serfdom and had Mises not written Human Action, our economy would be humming.

While I realize Dionne’s column was written a month ago, it still is relevant in that it demonstrates the utter intellectual bankruptcy of the Statist Classes that now rule this country. The Austrian, you see, somehow control the entire economic apparatus, or at least are influencing so many people that the government is unable to “fix” the economy. Despite the fact that only a few people in Congress actually have read anything in Austrian Economics, and despite the fact that no Austrians are employed in key positions in Congress and at the Federal Reserve, somehow the ghosts of Hayek and Mises overshadow all of Washington.

To quote George Leef, “If only it were so.”


Dionne takes a quote from the late Tony Judt as “proof” of the absolute idiocy of Austrian thinking:

Hayek believed, Judt said, that “if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.”

He then goes on to declare that it was government intervention and economic organization that prevented Western Europe from going communist after the end of World War II (a war that Dionne claims “helped rescue the U.S. economy from depression.” (Robert Higgs has a few things to say about such a claim, and Higgs actually does research, unlike Dionne.)

…postwar initiatives along Keynesian lines are precisely what prevented both the resurgence of fascism and the collapse of Western Europe into communist hands. For that matter, Keynesian steps also kept the whole world from going into a much deeper and more disastrous slide after the financial crisis of 2008.

This is a most interesting commentary, given that Hitler’s economic program essentially was Keynesian. Furthermore, Dionne’s claim that the Marshall Plan “let loose an economic juggernaut across the Western world” is just plain false. (The postwar economy of West Germany — which received essentially no Marshall Plan money — was the powerhouse of Europe. Great Britain received the most Marshall aid, and its socialist economy sputtered.)

Not that facts matter to people like Dionne. Obama had a filibuster-proof Senate and a huge Democratic majority in the House of Representatives and managed to pass his beloved healthcare law (misnamed the “Affordable Care Act”) without a single Republican vote. Yet, somehow Trotsky and Goldstein, err, the Austrians, kept Obama from being able to do what was “necessary” to bring back the economy from its 2008 disaster.

He ends the column with yet more Statist ignorance that dominates the nation’s capital:

So let’s give Ron Paul credit for unmasking the true source of gridlock in Washington: Too many conservatives are operating on the basis of theories that history and practice have discredited. And liberals have been more reluctant than they should be to call the ideological right on this, partly because they never fully got over the shell shock of the Reagan years and also because they have a strange aversion to arguing about theory. When it comes to government policy, the Austrian economists paved the road to paralysis.

Yes, Reagan left office 26 years ago, Mises wrote Human Action in 1949, and Hayek penned The Road to Serfdom 70 years ago, while Hitler still was living. Ron Paul always faced huge opposition from the Republican Party. But Dionne has managed to uncover the truth: the long-dead Reagan shellshocks liberals, Ron Paul controls Congress, and Hayek and Mises are creating discord from the grave.

Bill Anderson is a professor of economics at Frostburg State University in Frostburg, Maryland.

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