Tag Archives: Austrian School


Prove your arrogance and stupidity by wearing a shirt that shows which economic religion you follow.

Prove your arrogance and stupidity by wearing a shirt that shows which economic religion you follow.

Those of you mired in the teaching world may or may not be familiar with the so-called “Austrian School” of economics. Turgidly, the “Austrian School” holds that markets are perfect and the government should stay out of them so that they can work their magic. There is tremendous, if not total, overlap between Austrian economics and libertarianism. Ron Paul is an adherent of the Austrian School, as he and his followers constantly like to remind us.

You can get a quick introduction to the Austrian School by visiting its Wikipedia page which, apparently, has been locked in an internecine editing conflict. The conflict involves a criticism of the Austrian School by Paul Krugman which used to show up on the page. Certain libertarian acolytes have been taking down the Krugman part because they say it misrepresents Austrian economics. Others say that Krugman is a well-respected economist whose criticism should be included. Wikipedia has prevented the article from being edited for the rest of the month.

For my part, I do not see why Krugman’s criticism cannot be left up there. If the Austrian folks think his argument is a straw man, then they can always include a rejoinder from another economist demonstrating how. This would assume rational dialogue and open debate is also part of the Austrian School. Unfortunately, Austrian economics has become a fundamentalism to many of its followers and they live in a constant state of jihad.

There are Wikipedia pages about heroes of mine, like Friedrich Nietzsche and Michel Foucault (my avatar), that contain criticisms that I think are unfair. Never did I think of editing them out of existence. This is probably because Wikipedia is one very limited source of information. Those of us familiar with the ideas of these thinkers encountered them through the books they wrote. We have probably also read many books written by others that attempt to elaborate on these ideas and the criticisms they have faced. Therefore, when I read the Wikipedia pages of my intellectual heroes, I am already largely familiar with everything on the page. It is not a shock or an affront to read something negative about them.

This seems to be the crux of the entire Austrian School Wikipedia fiasco. It is a philosophy nay, an ideology, that has gained many converts in this age of the internet. People like Ron Paul have become heroes in cyberspace. His stances on issues like imperialist war, the War on Drugs and government surveillance appeal to a young crowd naturally and rightfully mistrustful of the system. On top of that, a generation of half-digested internet documentaries and websites convey many libertarian ideas in easily consumable sound bites and slogans. Someone who is honestly looking for news from a non-mainstream source cannot help but encounter these things, especially since many of them are the first, second, third and fourth entries that come up on Google searches.

Unfortunately, the whole anti-government tenor of the Austrian School is intellectually untenable. It posits that rules of the free market are immutably written on the face of nature, that a free market is the “natural” state of human society and that the existence of any imperfections in the market is the result of government interference. It is a system of beliefs that are not falsifiable. How does one “prove” that a “free market” is “natural”? This is such a loaded statement that it does not pass the giggle test. The Austrian folks take this as an article of faith, thereby betraying the spirit of economics as a social science. What sets science apart from most other fields is the fact that its conclusions are falsifiable through observation and analysis.

The great economist Joe Stiglitz called such people “free market fundamentalists”. He was referring to economists but the label can be easily applied to the laymen who consider themselves adherents of the Austrian School. Its tone of anti-authoritarianism appeals to people who mistrust the system. It just so happens that the internet attracts these types of people.

For my part, I have had many discussions with libertarians both at Occupy and in my salad days as an internet troll. When I ask what they would do with things like education, police, transportation, energy and other big government programs, their answer is always a simplistic “hands off” ideology for the government. For them, the role of government should be to merely hang back and enforce private contracts. When I would then ask them what happens if a monopoly starts to develop which is anathema to the free market, the answer either is “it won’t happen” or “there should be laws in place to prevent such things”. The first response is hokum with no basis in reality or history, another belief that is not falsifiable. The second response starts a slippery slope where every free market eventuality can be corrected with laws. In that case, free markets need the very same government that Austrian types blame as the cause for all of the free market’s ills.

What I have found is that people who believe this type of stuff fall into one of two categories. They can be wealthy people who have embraced an extreme “small government” idea that amounts to a bunch of self-serving nonsense. Or, more frequently, they are people with a simplistic, individualistic view of society who believe that everyone has full control of their destiny at all times. It is the “pull yourself up by your bootstraps” crowd. They are the people who watch a video of starving children in Africa and ask “why don’t they just move to where the food is?” or “serves them right for being lazy”. They are the people who think that the fact they can go camping in the woods for a weekend means they are “self-sufficient”, the meaning of that term apparently being totally lost on them. They are the people who believe that over 100 million unemployed Americans are just being lazy. They are the Ayn Rand fans and other assorted lickspittles of the wealthy.

It is no surprise that the page on Austrian economics is being purged of every criticism by its acolytes. To them, the internet is everything. Anything that is worth knowing about the world comes from cheesy documentaries and simplistic slogans delivered in pixels. The one idea that they have latched onto must be the correct idea, despite the fact they have not bothered to expose themselves to any other ideas. They are allergic to books, especially works of history since they tend to have a “liberal bias” or are a product of the filthy system. It is like the child who learns something at school and cannot wait to share it with everyone they know, assuming that they are the only ones privy to this awesome knowledge.

Despite what the Austrian folks think, they are not the guardians of knowledge and truth. Another person’s rejection of their beliefs does not automatically make that person an idiot. The world contains a vast array of ideas and perspectives. Knowing one theory about one discipline does not make you an expert on anything.

A Wikipedia page is not an indoctrination tool where every word has to follow the party line. It is supposed to contain a range of ideas associated with a subject, including criticism of that subject. This might not comport with the dogmatic, fundamentalist world in which they live but, after all, we do still live in the United States.

Although if the free market fundamentalists, Neoliberals and austerity hawks keep having their way, then I might not be living here for much longer.


A Brief Study of Economics with Ron Paul

We learned last time that August von Mises was the Father of the United States. He led the country to victory over Britain in the War for Independence and later wrote the Constitution. While birthing our nation he was also helping birth the Austrian school of economics, the only economic school known to man. It just makes sense that a highly theoretical school of economic thought conceived in central Europe in the 20th century should be the best economic model for the United States to follow. As Thomas Jefferson once said, “nothing should interfere with the workings of Austrian economics, absolutely nothing.” Austria is pretty similar to America. After all, Vienna did have its own Congress.

The first thing economics teaches us is that the government is a giant rat bastard that always looks to take money from productive people in order to give it to lazy people. This is a natural fact of human society. Egyptian pharaohs taxed landowners so they could give jobs to the Jews to build pyramids. This was a waste of Egypt’s resources. There was no demand for pyramids at the time. Instead of getting welfare, the Jewish migrant workers should have found real jobs in the private sector. This is why Egypt only lasted 5000 years as a civilization.

We see that it is a natural law for governments to be greedy. They use things like central banks to create fake money. Before central banking, people had the freedom to use whatever money they wanted however they wanted to use it, as long as it was gold. All the civilizations that used cowrie shells or wampum were just plain wrong and did not understand nature as well as we do. We believe central banks should not control the money supply or interest rates and instead let the free market decide what kind of currency people use and how much they charge for borrowing it, as long as it is gold. You see, government money is fake because it is fiat, meaning it only has value because the government says it does. We want to replace fiat currency with gold, since gold has value because we say it does. Gold’s value is intrinsic. That means God created gold because its value can be measured in worthless fake government fiat currency. When we become the government, we will just cut out the middleman and tell people they have no choice but to use gold, making it the new fiat currency. Of course, the gold supply is limited and that means the government won’t be able to just make more out of thin air for stupid reasons like poverty or unemployment. You should have bought gold before you went and got fired.

The fake currencies of central banks are inflationary. The constant flood of worthless money into the marketplace pushes prices up. We care about poor people and we do not like this inflation tax that they have to pay. On top of this, government makes these poor people pay income taxes. The 16th amendment that introduced the graduated income tax in America was the worst thing to happen to the working man. We want to replace the graduated income tax, where wealthy people have to at least in theory pay a greater percentage of their income, with a flat sales tax. Flat sales taxes are great, since it is equal for all. It does not matter if the poor end up paying a much larger percentage of their money than the wealthy, all that matters is that we end the graduated taxes and inflation that hurt the poor. It has nothing to do with the fact that these are policies traditionally championed by the wealthy. We are for the working man.

The underpinning of all of these policies is the idea that the government has no place telling the private sector what to do. When we say government, we of course mean the federal government. We all know the Austrian economists had no problem with the overweening power of state government, Austria being a hotbed of states’ rights sentiment and all. For example, the Civil Rights Act of 1964 was evil because it told businesses that it had to desegregate their facilities. On the other hand, the Jim Crow laws of southern states which mandated business segregate the races was an exercise in economic freedom. We want to undo the Civil Rights Act so that the state governments could have the exclusive privilege of telling businesses what to do.  Plus, it makes sense to have economic regulation as the exclusive province of state government, since many of the businesses that would be regulated would be bigger and wealthier than those state governments.

One of the most economically oppressive things the government (federal, of course) does is protect the environment. Just because a few hipsters in coffee houses want to stop global warming, there are all types of federal laws telling businesses what to pollute and how to pollute it. If they make a mistake, they get hit with a fine or a lawsuit. It is impossible for business to survive in this system. We believe if a business has given you cancer, you should sue them. If a multinational corporation pollutes a poor neighborhood, those poor people should just sue the corporation. In other words, it is citizens who should try to penalize corporate pollution, not the government. It is unfair for the government to use its coercive power against defenseless corporations. We believe in a fair fight. Pitting poor people against Monsato is a fair competition between equals in the marketplace.

It is clear that Dr. Paul knows the policies that will lead us towards utopia. Austrian economics is the study of natural, observable behaviors of the human race. Those behaviors have proven that the government (federal) is the only one that has coercive power and is always out to use that power to rob people of their hard-earned money. Other economists like the Keynesians who think differently do not have the keys to human nature like we do. We are scientists. Our theories are backed by testable evidence. This makes us right and any economist not from Austria is wrong. Why do you think Dr. Paul lectures everyone about Austrian economics without bothering to think that there are other schools of economic thought out there that could be pontificated upon with greater logic and clarity? We all know why. It is because Dr. Paul is the only one who knows America and the Constitution. After all, James Madison, the father of the Contitution, approved the creation of a central bank when he was president. Why not elect Dr. Paul, since he knows better than the Founding Fathers?