When you first began learning about Austrian Economics, Libertarianism, and Anarcho-Capitalism, what was the hardest concept to get? For example, there are many people that won't in a million years believe in a voluntary society.
Seen vs unseen is a little difficult to master. Its also hard to restrain one's self from interpersonal comparisons of utility.
(1) What really happens with negative externalities?
(2) But wouldn't warlords take over?
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"Even when leftists talk about discrimination and sexism, they're damn well talking about the results of the economic system" ~Neodoxy
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Concepts that were difficult to grasp:
1) How the Fed actually works. Took several months of study to prove to myself how and why they create money out of thin air. I thought the Fed was there to provide "counter-cyclical policy", provide full employment and stable prices. (It sounds so absurd now that it was actually hard to write those words.)
2) That money is created by the market, through free exchange. I used to believe that government was required to "create" it, "regulate" it, etc. Understanding the true nature of money was a revolution in thinking.
3) Austrian Business Cycle Theory. Spent months on this one. Had to prove to myself that this is the correct explanation, had to dig in and really take it apart. I drew dozens of diagrams to visually present to myself what is going on. Hardest things to grasp: That money printing causes distortions, what "malinvestment" means, the "structure of production", "pool of real savings" (Shostak terminology). These concepts were at first bizarre, but are now indispensable. This is the area that interests me most, and it's where I've spent most of my time.
4) That an anarcho-Capitalist society is desirable or even possible. I am convinced that limited government is a fiction, an impossibility. That leaves omnipotent government or no government. I reject omnipotent government. That is how I arrived at anarcho-Capitalism. But this is an area I have studied only superficially.
5) Philosophy and Ethics: I've realized that this area does dovetail into economics, but seeing the words "ontological", "epistemological", etc. causes pain.
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.
chloe732: 5) Philosophy and Ethics: I've realized that this area does dovetail into economics, but seeing the words "ontological", "epistemological", etc. causes pain.
and Chloe it is my understanding that Mises perferred catallactics or value free "economics" anything else was political economy.
For me it was the basic nuances of Praxeology. Esspecially when dealing with uncertain futures. I got it eventually though. (the first part of Human Action bassically).
Comapritive advantage was a difficult concept for me
The biggest thing for me is the whole natural rights debate. I think libertarianism and anarcho capitalism is appealing and easy to understand, until you get into the whole ethical debate which is very complex. I still have a lot to learn about this issue, but it's already obvious to me that anarcho capitalism is the best theory out there. Austrian economics is also the only economic thought that makes sense to me.
Tbh, I didn't get the austrian theory of utility-welfare economics and I still don't. Also, I'm always uneasy about the objective/subjective definition of capital and consumer's goods.
For me the hardest concept to remember is who started what when and where. Who followed, How did it change. Did it get better or worse or both over time. What do people today think about this?
Are people today ready to openly discuss tyranny without the taboo?
I prefer the phrase "contractual society"
Better be that time to step up before the dread hits.
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It took me a lot of time to understand the nature of fractional reserve contracts . For some reason I was spinning around yelling fraud for quite a while before I finally got it.
Fractional reserve banking for sure. After I read Selgin's and White's work on FRB it completely changed my opinion and now I reject the Rothbardian position.
Can you link me to the Selgin and White books/articles? Whats the difference between them and Rothbard?
viresh amin:Whats the difference between them and Rothbard?
They favor whats called "free" banking or fractional reserve banking. Allowing individual banks to expand the currency rather than a central bank. They believe through the entrepreneurial process and profit/loss it will achieve "monetary equilibrium". They contend that 100% reserves which is the Rothbard position would hinder capital accumulation and economic growth. There is an FRB topic on here some where.
How would that work if gold is used as money?
Banks would print their own notes that would act as gold substitutes.
Robert Murphy just wrote about this: http://mises.org/daily/4499
viresh armin:what was the hardest concept to get?
Why an absolute concept of rights is of the upmost necessity for a functional ancap society.
1. Why and how Full-reserve banking works and why a state wouldn't need to impose it on high (and instead simply let free markets and the recognition of Fractional reserve banking as theft work it out). This is the first thing I tackled in Austrian economics (and part of the reason I got into Austrian economics) and my development was stalled for months on this one issue. The issue was really finally settled with me when I asked Mark Thornton about it when he was speaking at my college (Auburn University).
2. Methodological individualism. I still have to watch myself so I don't say "Society does blank/needs blank." or stuff like that. It was a big leap in my ability to debate big government types when I finally managed to grasp the fact that only individuals can act and there can be no "public goods" because in order for the men and women of the government to even realize there was a need for such goods, there had to be individuals demanding it--and therefore, the market can take care of it without forcing it on those who don't want it.
3. The relevance of praxeology to economics. When I first started reading Human Action I kept thinking "Come on, Mises...can you get to the economics already?" not realizing that he had been talking about economics since page 1. I've yet to restart reading it--I stopped and detoured to more basic texts like Economics in One Lesson--but I will soon now that I realize why praxeology is important.
4. And, most importantly, realizing that the logical conclusion of my ideals and beliefs led to anarcho-capitalism. I had actually come up with a philosophy remarkably similar to anarcho-capitalism all on my own (mainly because I advocated unlimited secession if someone wanted to, who could then form their own states or live without one). I just stopped short of bona-fide Rothbardian anarcho-capitalism because I didn't realize the predatory nature of the state. As I mentioned before, the logical conclusion of my beliefs dragged me kicking and screaming to ancap. When I first took my tour of the Ludwig Von Mises Institute in Auburn and the guide described Rothbard, I thought he was a kook. Now I know he's a genius and I was the fool.
Naevius - nice post. Each of your #'s 1 through 4 were also breakthroughs in my own thinking. I didn't "struggle" with those things (the topic of the thread), but I will say that the phrase "Human Action" had me scratching my head for quite awhile.
I thought, Human Action? Why did Mises name his treatise on economics Human Action? Why didn't he call it "Economics"? Now, it is perfectly clear. Human action is the essence of economics. What else could economics be?
justinxOr: Fractional reserve banking for sure. After I read Selgin's and White's work on FRB it completely changed my opinion and now I reject the Rothbardian position.
That's because Selgin and White strawman Rothbard, and also conveniently ignore the most damning parts of capital theory that make their Monetary Equilibrium theory false.
Shawn77: They contend that 100% reserves which is the Rothbard position would hinder capital accumulation and economic growth.
They contend that 100% reserves which is the Rothbard position would hinder capital accumulation and economic growth.
That the above is totally fallacious is actually one of the most assertive and consistent economic stance of Mises. It's almost intellectual fraud to somehow portray this as being some Rothbard unique position or twist.
chloe732:I thought, Human Action? Why did Mises name his treatise on economics Human Action? Why didn't he call it "Economics"? Now, it is perfectly clear. Human action is the essence of economics. What else could economics be?
Social cooperation. (The original title of the book)
Angurse: Social cooperation.
Social cooperation.
Which is human action.
If I wrote it more than a few weeks ago, I probably hate it by now.
ABCT was difficult for me, particularly how monetary policy and interest rate adjustment affect the structure of production. While I understood it fairly well, I worked a little harder at it so that I could teach its basic fundamentals to my high school economics class, which I began doing towards the end of my teaching career. Ironically, attempting to do that vastly increases your understanding, because students will come up with questions that you sometimes take for granted.