Austrian Economics?

I’ve been really busting my butt trying to get a handle on the economics I wasn’t taught in college. I was taught that there were boom and bust cycles in the economy and that they were caused by greedy speculators. My professors were never able to really explain that if it was greed that caused booms and busts, why it was then that greed seems to rear its head in regular, predictable, and cyclic intervals. There is a rogue school of economics called the Austrian School of Economics whose discipline not only predicts booms and busts, but can anticipate the intensity of those booms and busts, and can explain exactly why they happen. The Austrians were coopted by the statist Keynesian School (after economist Lord Maynard Keynes) shortly after WWII, but experienced a significant expansion of interest during the 70′s when F.A. Hayek received the Nobel Prize in Economics in part for his anti-socialist book “Road to Serfdom.”

These videos [Link 1, Link 2]are probably the most entertaining, and wildly popular – 3 million combined plays, videos contrasting the two schools of economics. Our current economic system, especially under Obama, uses Keynesian doctrines to try to steer markets in the directions the politicians and connected corporations want them steered. To them, it is all about government spending to stimulate the economy. The Austrians, on the other hand, want markets set free and the individual empowered to act according to his own conscience. They believe that free markets provide the most efficient allocation of resources, and that they do it spontaneously.

The father of Austrian Economics was a guy named Carl Menger, from Austria. He spent a lot of time studying Adam Smith and other classical economists. He began to dive deeper into the strengths of free market economies. His genius pupil was named Ludwig von Mises, also from Austria. Because Mises wrote about the negatives of state control of economics and the strength of the individual, he became a target for the Nazis. He narrowly escaped capture, fled to America, learned English and wrote his most import work, of hundreds of works, Human Action. It was through Mises that Hayek was introduced to the boom and bust cycle. These guys are the intellectual foundation to concepts such as the gold standard, free markets, the immorality of inflation, etc. In short, everything we all instinctively know to be true but never knew there were real academics to back it up.

Today, the Austrian tradition is experiencing a renaissance and that is largely due to the work of the Ludwig von Mises Institute [Wiki, Link] in Auburn, Alabama and by the popularity of Ron Paul, an avowed Austrian. I have tagged this post with some important websites

Primary References:
Self Education Syllabus to Learn Austrian Economics [Link]***This is an amazing collection of resources and is what I’ve been working through. Also, the guy who put this together is Thomas Woods. His book “Nullification” is what laid the groundwork for the Idaho State Legislature [Link] to forgo suing the Federal Government over Obamacare and instead simply declare it null, one month after Tom Woods lectured on the forgotten Jeffersonian doctrine at Boise State University. t’s a great book. Woods is a GREAT historian.

LRC aka LewRockwell.com This guy is the founder of the Ludwig von Mises institute. His website really is “the best read Libertarian website in the world.” The contributors list is staggering. Including names like Andrew Napolitano, Congressman Ron Paul, Thomas DiLorenzo (author of “The Real Lincoln”), and Pat Buchanan. Some of the articles get pretty far down the Libertarian rabbit hole, but most are entertaining and educational insights into liberty.

Freedom Watch is Judge Andrew Napolitano’s show on fox business news. He is bar none the most intellectually honest Constitutionalist at Fox.

Cato Institute is a Libertarian think tank in Washington DC. Since they are inside the beltway they are a little less radical than a lot of their Libertarian brothers. These guys are who keep me grounded when it comes to what is politically feasible here in America.

Secondary References:
Foundation for Economic Education
The Freeman