I have heard the claim that the Austrian school is the fastest growing school of economic thought. I would love to believe that this is true, but what is the evidence? How does anyone know?
If so, people must be hiding their knowledge really well.
I wouldn't be surprised if it were true among lay people. Ron Paul supporters would be evidence of that I think. I hadn't a clue what Austrian economics was a few years ago, but now that's totally different. It was all because of Ron Paul introducing it to me (and then the Mises Institute for providing me the reading material).
And now there is a lot of mistrust of the Fed among the general public (even if they are unacquainted with ABCT), which is a cause of the Austrian school.
I'm sure it is. With the Mises institute, a variety of libertarian crusaders throughout the internet, and most importantly the Ron Paul campaign, all of which are directly related to, and backed by Austrian Economics, making modern libertarianism the second real mass movement to be backed by a school of economics, the first being the socialist movements of the late 19th and early 20th centuries. The thing with other economic schools is that they aren't involved with modern political movements in just about any way, and they aren't seeking to educate the public on their teachings, and that is how the Austrians might win.
I've always searched for 'minority lore' in any given field. Meaning that which is not currently in favor but might yet be profitable. For instance, 'method acting' is not historically the main way acting was accomplished, not that I became an actor :P There always seems to be hidden or forgotten corners of info in any field which generally tends to be much better than the prevailing wisdom somehow.
When studying economics in college, I was taught Keynes, etc., and I knew there were other schools of thought and discovered Austrianism back then. It actually made me really angry at my professors, to be taught stuff that I knew was wrong, right there in class. Oh really, so pumping the economy is going to solve every problem, riiight. Maybe that's partially why I never majored in econ, despite having a strong interest in it since early highschool.
Whether Austrianism is 'fastest growing' or not, don't let it fool you into thinking things will soon change or anything like that.
The reason Keynes is such a factor in public policy is because his theories give politicians intellectual cover to do what they already wanted to to: to spend money and control the economy. That's it. That's the only reason Keynes is everywhere politically.
There's no question of principle or truth about it. Especially on the left which doesn't even believe in truth!
Austrian economics has grown significantly since 1974.
Austrian economics was virtually extinct when Keynes "won". Lachmann called the 40-60's "the years in the Wilderness", and used to joke he and Hayek were the only Austrians left. He was not exagerrating by much. The "revival" was pre-empted by writings such as Human Action, Capital and It's Structure, and Competition and Entrepreneurship. But really came into fruition with Rothbards MES, the 1974 conference, and Hayeks nobel prize. And with the Ron Paul campaign, Mises Institue, etc it has made leaps and bounds in the popular mindset. It would take a leap of logic to say it's growth hasn't been impressive.
No clue on the fastest growing school. We need criterea and a method of verification. Post-Keynesian thought has been growing - and Keynesianism is back from the dead. So there is at least that to think about.
"As in a kaleidoscope, the constellation of forces operating in the system as a whole is ever changing." - Ludwig Lachmann
"When A Man Dies A World Goes Out of Existence" - GLS Shackle
This could be a true fact though I can't imagine how one could actually determine such a thing. This is probably a function of the very small size of the Austrian school - a school of size 1 that gets 1 new convert has grown to 200% of its original size.
Clayton -
Clayton's got it. Most of the time you hear this "fastest growing [whatever]" claim, it's simply a misleading way to imply popularity so as to sound interesting and make people think you're telling them something that's not obvious. (Of course the places you usually hear these claims are virtually always media outlets.) "Senior citizens are the fastest growing Internet demographic." "People over 60 are the fastest growing age group of facebook users".
Duh. Everyone else is already f-ing using the Internet and Facebook.
I think that it's important to note that not very many people consider themselves as part of a school of economics. How many casual liberals do you know who would really identify themselves as "Keynesians"? Meanwhile I feel that a good number of libertarians, especially in its newcomers, consider themselves as adherents of the Austrian Economic school, and probably know more about the school than the average liberal who will probably know nothing more than Keynes' name and the 5 second rundown of stimulus economics.
Post-Keynesian thought has been growing - and Keynesianism is back from the dead. So there is at least that to think about.
What exactly's the difference between Post-Keynesianism and New Keynesianism? I know the former is considered a "heterodox school", much like the Austrians.
New Keynesians believe that, if only prices were perfectly flexible, then economies would adjust rapidly to full employment equilibrium. Post Keynesians, following Keynes himself, reject the view that perfectly flexible wages, prices and perfect competition would lead to full employment equilibrium. Even if there were perfectly flexible wages and prices, there could still be failures of aggregate demand (Davidson 1992).
Source: http://socialdemocracy21stcentury.blogspot.com/2012/06/price-rigidity-in-new-keynesianism-and.html
here is a cool blog I found with great resources:
http://socialdemocracy21stcentury.blogspot.com/
From what I know, post-Keynesians focus a lot on uncertainty, subjectivism, and heterodox methodology. They focus more on Chapt 12 and 17 of General Theory. From what I can make out, for an Austrian it may be the most interesting and closest related school in economics.
whoops,Wheylous beat me to the punch,
same blog and everything
That lord Keynes guy is the poster boy for intellectual dishonesty. Unless he's actually dumb. I've written about him in my blog here and there.
Take for example, his latest scribbling, http://socialdemocracy21stcentury.blogspot.com/2012/07/hayek-and-pinochet-endless-love.html
He quotes Mises on Fascism, calling what Mises wrote disgraceful. But if one reads the section on Fascism, of which that quote is the last paragraph, one gets a totally different picture.
As for that quote by Hayek, he is again being intellectually dishonest, writing that Hayek's saying sometimes a dictatorship can be a good thing means Hayek loved every bad thing any dictatorship has ever done. By the same token Lord keynes admiration of democracy means he approves of everything the Nazis ever did, because Hitler was democratically elected.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
If that's the case that's a lot of problems I have with political conversation.
Pay attention to the analytical framwork and the conclusions that can be drawn from the thinkers, if that is what they are doing. Focusing on buzzwords like "fascism" is silly bullshit, or even Mises personal traits and political agendas - these things are irrelevant. Of course, every side of the spectrum in politics is guilty of this, and it is very very frustrating
Every once in a while I try to join in debates with 'Lord Keynes' (for example: "Sloppy Interpretations" and "Fiduciary Cycles"), and I have to agree: he either oftentimes doesn't understand what he reads/quotes/skims, or he purposefully takes them out of context.
Smiling Dave:...because Hitler was democratically elected.
I've heard this is a myth. Not that it matters, but we should at least be as accurate as possible.
Even if not democratically elected, Hitler was democratically supported, as the quote at the end of that article demonstrates.
That's where I got it from, too, Schirer's book.
States quite clearly that he was democratically elected, by a two thirds majority.
Jonathan,
In our last debate, it was you who glossly misunderstood Mises and Rothbard's view of the market's tendency to equilibrium, by absurdly transforming them into radical subjectivists. When challenged again and again to cite one Austrian eocnomist who agreed with you in this nonsense, you threw a tantrum.
And then you actually backtracked from your extreme position over at Isaac Marmolejo's blog in this comment:
"It would be more defensible to argue that he [sc. Mises] believed in a short-run tendency towards equilibrium. But, Mises held that the real world is characterized by constant changes in the data, and it is these changes that creates disequilibrium. If these changes are constant occurring then it is impossible for there to be a long-run tendency towards equilibrium."
http://radicalsubjectivist.wordpress.com/2012/06/09/lachmann-mises-and-equilibrium/#comment-258
"As for that quote by Hayek, he is again being intellectually dishonest, writing that Hayek's saying sometimes a dictatorship can be a good thing means Hayek loved every bad thing any dictatorship has ever done"
The words in bold are just an outright lie or a stupid straw man of your own devising. I said no such thing.
"But if one reads the section on Fascism, of which that quote is the last paragraph, one gets a totally different picture."
No you don't:
“It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.” Mises, 1978 [1927]. Liberalism: A Socio-Economic Exposition (2nd edn; trans. R. Raico), Sheed Andrews and McMeel, Mission, Kansas. p. 51.
This confrims exactly that Mises thought of Mussolini's facism as a short term solution, just as he viewed Dolfuss' Austrio-facsism as "a quick fix to safeguard Austria’s independence—unsuitable in the long run, especially if the general political mentality did not change" (Hülsmann, 2007. Mises: The Last Knight of Liberalism, Ludwig von Mises Institute, Auburn, Ala. pp. 683–684).
Dave: "As for that quote by Hayek, he is again being intellectually dishonest, writing that Hayek's saying sometimes a dictatorship can be a good thing means Hayek loved every bad thing any dictatorship has ever done"
LK: The words in bold are just an outright lie or a stupid straw man of your own devising. I said no such thing.
You insinuate that Hayek wants people to "disappear":
One wonders whether, if in his day when pressed, he would have expressed preference for Pinochet’s Chile (where people where regularly “disappeared”) to social democratic Sweden?
Hayek wrote, and you quoted him, that "Personally, I prefer a liberal dictator to democratic government lacking in liberalism." Since liberal people do not make others "disappear", one is forced to conclude that you think Hayek's saying sometimes a dictatorship can be a good thing means Hayek loved every bad thing any dictatorship has ever done.
Dave: "But if one reads the section on Fascism, of which that quote is the last paragraph, one gets a totally different picture." LK: No you don't. [And you, LK, then go on to quote the exact same last paragraph, not the whole section, on Fascism].
Dave: "But if one reads the section on Fascism, of which that quote is the last paragraph, one gets a totally different picture."
LK: No you don't.
[And you, LK, then go on to quote the exact same last paragraph, not the whole section, on Fascism].
If you read the whole section, you see that the only thing Mises "liked" about Fascism is that they were fighting the much worse Socialists. He explains in detail why Socialists are infinitely worse than Fascists, even though Fascists are pretty much the dregs, as he explains in detail.
And your rebuttal of this is to, once again, quote the last paragraph out of context.
One can only conclude that you are either doing this on purpose [=intellectually dishonest], or fell on your head as a baby [=incapable of thinking as rational people do]. There is no middle path here.
BTW, your whole blog, and your reply here is a great example of what Mises was talking about. As a socialist, you will stop at nothing to further your evil cause, including lying and misleading. Guys, don't meet LK in a dark alley.
"You insinuate that Hayek wants people to "disappear":
One wonders whether, if in his day when pressed, he would have expressed preference for Pinochet’s Chile (where people where regularly “disappeared”) to social democratic Sweden?"
I insinuate no such thing.
I ask the rhetorical question whether Hayek would prefer social democratic Sweden ( where people are not "disappeared" or tortured) to Pinchet's Chile where people were in fact "disappeared". As to Hayek's answer we will never know of course, since he is dead.
LOL.. No, I dont, you're a ridiculous liar.
Making stuff up is not a good debate tactic. ;) I trust those interested in validating both of our cases will see the facts by reading the relevant threads. And, btw, throwing up randomg excerpts that you don't even understand isn't citing evidence. (Edit: And that people disagree w/ me is not disproof of my position; at least I went to the original source and interpreted it <i>within context</i>.)
And, I didn't backtrack. You need to re-read what you quote. Emphasis on "it would be <i>more defensible</i>;" not, "it would be defensible." Lack of reading comprehension, much?
LK. no point in replying to your latest post, since you will never retreat from your position, however indefensible. And that's OK. It helps us understand who you are.
The reader will have to draw his own conclusions.
Just one technical question. How did you find out you were mentioned here in this humble forum? Do you have some softwate or other technical means of finding out? Do you read every thread here?
Austrian school is almost certainly becoming more well-known among the wider population, as is likely evidenced by google search data and web traffic and the uptick in news items mentioning Austrian econ in recent years. A recent WSJ article covered Prof. Boettke of George Mason, describing him as the leader of an "Austrian revival" in economics. And in my limited experience, economics students (profs not so much) are generally much more aware of Hayek and libertarian ideas and so forth probably largely thanks to the internet. I have also heard it said that Austrian analysis is becoming particularly prevalent in top business management journals. All of this is bound to be somewhat anecdotal.
I can't think of any other "school" that is so clearly increasing in prominence. Behavioral economics somewhat but that's really apples to oranges. If "market monetarism" counts then maybe that in some circles anyway. Orthodox Keynesian, Post-Keynesian and other left-heterodox stuff a little bit too, but not so much. Among academics, Hayekian ideas about institutions, coordination and planning, emergence, psychology, etc. look to be on the slow rise even if Hayek is not as often cited himself.
As someone who generally agrees with Austrians regarding policy conclusions, but disagrees on methodology and some substantive economics, I'm not sure if the rising identification of Austrianism as a sort of "official opposition" to status quo statism is all good. But better Austrian that than most any other "heterodoxy." Would be nice to see the opposition rounded out by experimental economics (eg Vernon Smith), game theory (eg Anthony de Jasay), law and economics (eg David Friedman), political economy (eg Jan Lester), new institutionalism, and even the employment of (over-maligned and misunderstood) standard mainstream neoclassical economics of which most good Austrian work is more appropriately considered a subset.
Regarding the excerpts from a debate on equilibrium vs. disequilibrium, I may be missing the point entirely, but I don't see what's going on there. Didn't Lachmann see his work as an extension of Hayek's capital theory (e.g. from capital stock to capital structure with heterogenous expections) and Hayek agreed, right?
Aren't "long-run tendency to equilibrium" and similar terms usually referring to the economic process whereas the "disequilibria" provide perpetual motivation toward short-run equilibrium? So, like, the long-run equilibrium is the state around which the economy continually fluctuates. Individuals interact based on each individual's self-percieved interests and information. Because individuals act in this way are not completely stupid or blind, a market economic process will emerge bottom-up and motivated by disequilibria which acts to counter or reduce the disequlibria (e.g. firm increasing production or lowering price or investing in capital or utilizing more of its capital stock in response to--or in expectation of change in--prevailing market conditions, or an entrepreneur starting business where she sees likelihood of gaining economic profit which will function to reduce economic profit in that industry or whatever, etc.). This process is itself constitutive of the "long-run tendency to equilibrium," even though individuals and firms may continually see disequlibrium conditions from their perspective.
All neoclassical economics (including Austrian) uses this conceptual tool, but Austrians use it very differently from, say, DSGE New Keynesians. Austrians factor the nature and function of perceived disequilibrium more explicitly and consistently.
I could be completely wrong. As I said, I'm not really sure what the discussion above is about. What do the discussants think is at stake?
Seems like people generally became aware of Austrianism generally after the 2008 market crash or so.
If I was to say, "It's better to lose your arm than to lose your head", Lord Keynes would rush in to declare, "You see! Rcder supports mutilation!"
From Hazlitt's "Economics in One Lesson", revised after 30 years:
"THE FIRST EDITION of this book appeared in 1946. It is now, as I write this, thirty-two years later. How much of the lesson expounded in the previous pages has been learned in this period?
"If we are referring to the politicians—to all those responsible for formulating and imposing government policies—practically none of it has been learned. On the contrary, the policies analyzed in the preceding chapters are far more deeply established and widespread, not only in the United States, but in practically every country in the world, than they were when this book first appeared."
So, my sense is, simply advocating good economics is likely to change nothing.
"The policy of inflation, as I have said, is partly imposed for its own sake. More than forty years after the publication of John Maynard Keynes' General Theory, and more than twenty years after that book has been thoroughly discredited by analysis and experience, a great number of our politicians are still unceasingly recommending more deficit spending in order to cure or reduce existing unemployment. An appalling irony is that they are making these recommendations when the federal government has already been running a deficit for forty-one out of the last forty-eight years and when that deficit has been reaching dimensions of $50 billion a year."
Despite being discredited, Keynes serves as philosophical cover, to give the veneer of rationalization to policies the politicians already want to implement.
It's been another 34 years since Hazlitt revised the book. How much has been learned still?
One need only look at the recent healthcare law.
Not a word.
@Anenome: How depressing. Ugh.
The Austrian school of though would be the fastest growing if libertarians weren't the absolute worse at forming an organized front on which to take Leviathon head on.
Ron Paul failed miserably and that was the best shot in the history of Libertarianism at changing anything. And as Anenome pointed out, the future doesn't look good at all.
I still don't honestly know how the libertarian movement plans to move forward from here.
Clayton, it seems sheep will be sheep and will continue to beg the shepherds to shear and milk them -- for the benefit of everyone involved. Match made in heaven. Ugh, indeed.
The only way forward for libertarianism is to start an independent nation founded on libertarian principles and compete in actualities rather than in theories.
That's literally the only way forward.
TheFinest: The Austrian school of though would be the fastest growing if libertarians weren't the absolute worse at forming an organized front on which to take Leviathon head on.
We're not too terribly organized. Rather the policies we advocate would be a lot like cutting off the limb to stop the spread of gangrene and that causes many problems.
For each decade of wrongheaded economic policies put in place, the amount of pain caused by eliminating that policy gets worse and worse.
Each time the repubs put in some half-baked law along the lines we would recommend, the result is a little taste of that pain, and the dems come right around and blame them for the ills caused thereby, with neither party looking at the long-term results.
The biggest problem is the incentives created by democracy itself. When implementing the correct and true policy means cutting out government action--the only thing the gov cannot do is look like it's not doing anything. To implement libertarian policies becomes political suicide.
This is why the right is unable to become significantly libertarian, because any republican who becomes a libertarian is almost immediately unelectable, and a thorn in the side of every other republican who merely wants to remain in power.
And what's the point of being in power if your philosophy leads you to cast off that power? So, the kind of people who seek to be in power are those who want to use it, not those like us whom would return power to the individuals.
And, best case scenario, let's say that we had a single libertarian generation in the US, where libertarians captured total government power. If they didn't significantly change the constitution, statism would begin its creep yet again with a few generations.
What's needed is structural legal change. Yet, libertarians aren't likely to protest in the streets like the Occupy idiots, much less use violence as a form of political inducement, due to the NAP. Nor can we justify away using aggression as a form of protest as much of the left can. Nor would we want to.
TheFinest:Ron Paul failed miserably and that was the best shot in the history of Libertarianism at changing anything. And as Anenome pointed out, the future doesn't look good at all.
Ron Paul's outcome is likely the outcome of anyone who tries to effect change via the internal process. At best it's a sisyphean task. Ron Paul will likely die in a decade or so, and realize on his deathbed that his entire life was virtually a waste of effort in achieving any signficant change towards libertarianism. It's a realization that many people make when death nears, especially those who have spent a lifetime in politics.
We need to break the rules without violating the NAP. We will not foment or support any form of aggressive revolution in any country. Already, the makes pulling off stunning power grabs, such as the communists rely on, impossible.
Libertarians up to now have been relying on the idea of an intellectual movement leading to a mass awakening of sorts.
This is unlikely because the masses will not study economics deeply enough to ever understand what we want to do and why it makes sense, and thus they will be taught just enough economics to be deceived by opponents wishing to malign our economic plan.
Besides which, why would we ever want to control a system predicated on the socialist ethic of majority rule?
Wouldn't it be hypocritical of us to force the country to accept libertarian policies, using socialist organs of power like the majority vote and legal fiat, becoming in essence legal dictators, saying, "This is going to be really good for you, just wait."?
We don't want to do that.
What we need is a liberty seed: a libertarian community in the form of a voluntaryist political order.
Yes, there's no ungoverned land left in the world. That's certainly a problem. So, I suggest first an ocean-borne community, and later space-borne communities.
We can have legal sovereignty if we swim out 14 miles from shore.
It's literally the only way we can achieve sovereignty absent either changing the mind of an entire country (not gonna happen), or taking over the reigns of government via aggression (which we simply won't do).
We do have one massive advantage, and that is that generally we know what the fuck we're talking about and are extremely smart people. Most of the people on this site qualify as intellectuals compared to the average citizen. To even become a libertarian implies a significant personal philosophical journey. I don't anyone who was raised as a libertarian or absorbed it from their parents.
This means that if we did start our own community, and other libertarians actually flocked there, we would experience an intellectual magnification effect. We would create a culture of libertarianism, such as exists only virtually now.
Within a generation, we'd have the world's first libertarian community. Imagine children being raised as libertarians, with libertarian values, knowing nothing else, being raised in free-market schools with the world's greatest educations (practically guaranteed by default).
I think that is an exciting prospect. Personally I've abandoned the idea that the USA, much less any other nation, is going to accept the philosophy of freedom any time soon.
Even a complete financial crash will not cause they to question their premises, but will serve only to tighten the noose.
It's personal secession or die having advanced libertarianism hardly at all, like so many libertarians before us have done.
Writing a great libertarian book is the next best thing to starting and living in a libertarian society. But we need at some point to put these values and ideals into action, or it too will die out from inaction.
Absolutely false. There are many ways forward. LvMI, FEE, FFF, etc. are promoting economic education and education in liberal philosophy as one way forward. Local political action is a way forward. Secession/nullification/10th amendment movements are a way forward. "Leap-frogging" Western governments through cell phones and the Internet is a way forward. Seasteading/"experimental governance" is a way forward. Constitutionalism/common-law restoration movements are a way forward. There are many, many different strategies being pursued and I think we need them all. At the very least, this wide-spectrum of movements puts the government on the horns of a dilemma having to defend multiple fronts simultaneously. We only need one victory. They have to prevent us from getting any victories.
Clayton: That's literally the only way forward. Absolutely false. There are many ways forward. LvMI, FEE, FFF, etc. are promoting economic education and education in liberal philosophy as one way forward. Local political action is a way forward. Secession/nullification/10th amendment movements are a way forward. "Leap-frogging" Western governments through cell phones and the Internet is a way forward. Seasteading/"experimental governance" is a way forward. Constitutionalism/common-law restoration movements are a way forward. There are many, many different strategies being pursued and I think we need them all. At the very least, this wide-spectrum of movements puts the government on the horns of a dilemma having to defend multiple fronts simultaneously. We only need one victory. They have to prevent us from getting any victories.
I suppose it's a question of what we mean by 'way forward.'
If we mean, the path towards achieving an actual libertarian society, then I think starting one outright is indeed the only way forward, meaning the only way to accomplish that goal.
If you mean merely things we can do to have an influence on society, then everything else you've listed is certainly something anyone can do, though many of them aren't likely to add up to an impact on US society. I just showed you 70 years of libertarian thought, ala Hazlitt, having zero impact on US policy, and we've just been dealt our largest blow with the passage of healthcare.
It's not working.
In terms of political momentum, statism is a steamroller to our toy car. Our philosophy similarly prevents us from accumulating political power within the system (ala Ron Paul) because such is anathema to us.
Each new interest group that receives largesse from the taxpayers becomes another obstacle to ever progressing to laissez faire.
With Obamacare, the entire country is about to become a special interest group. We couldn't even roll back social security--to touch that has always been political suicide, it is said. How much more then will healthcare be irreversible?
Let's talk about unfunded liabilities. The US has what, $75 trillion in unfunded liabilities? And that was before healthcare. We're running trillion dollar deficits today, the first sign that the S.S. America has hit an iceberg. I don't want to go down with the ship.
Those aren't liabilities I accept, nor want to pay for.
As Paul Krugman has pointed out, that figure doesn't include growth projections for NGDP, which would most likely make that number look less dramatic. It's frightening to be sure, but not as frightening as that statistic makes it out to be.