A full-employment policy produces unemployment. Keynesian economics became the dominant theory wherein inflation was endorsed as a method of increasing aggregate demand which should boost employment.
The Austrian School of Economics: An Introduction
These four lectures were delivered to the Department of Economics at the University of Colorado in the 1970s, and feature Friedrich Hayek, Israel Kirzner and Ludwig Lachmann. Special thanks to Mr. Fred Glahe for his generous donation of these recordings to the Mises Institute.
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Biographical remarks about Lachmann (1906-1990). Then, Lachmann describes Austrian economics as being subjectivism (individual human action), a certain attitude to time (the future is unknowable), and a distrust of macroeconomic entities (they exist, but Austrians look at macro as mechanistic).
Was George Stigler sympathetic to the Austrian school? Lachmann doesn’t think so because Stigler was a favorite student of Knight. Austrians should have dealt with Keynes, instead they quarreled with Knight. What policies do Austrians pursue? Those that favor the market.
The term Austrian will include people like Shumpeter and Morgenstern. Competition is seen as a state of affairs of perfect knowledge and equilibrium by mainstream economists. This fails to provide explanations as to how those market prices have been achieved.
