Opinion of the Austrian School

[Sol]

I'm curious. I've been learning about the Austrian School recently, and I'd like to read some in-depth critiques since the presentation I've been receiving, while useful, is also rather biased.

[Sol]

It is rather biased. At the same time, to a certain degree, it's as biased as the Keynesian school or whatever they teach us in college. If you read the earlier books from people like Carl Menger, you realize most of the discoveries in economic thought have been from the Austrian school. Don't pay attention to clowns like Rothbard that are bias. Mises and Carl Menger are good. Hazlitt is good too. Hayek as well. After that, the more recent austrians are a little unintellectual although they are usually right.

By bias, I meant that the way it has been taught to me has been largely presented from an Austrian perspective- I'd like to hear a sort Keynesian rebuttal.

[ingemann]

It is rather biased. At the same time, to a certain degree, it's as biased as the Keynesian school or whatever they teach us in college. If you read the earlier books from people like Carl Menger, you realize most of the discoveries in economic thought have been from the Austrian school. Don't pay attention to clowns like Rothbard that are bias. Mises and Carl Menger are good. Hazlitt is good too. Hayek as well. After that, the more recent austrians are a little unintellectual although they are usually right.

By bias, I meant that the way it has been taught to me has been largely presented from an Austrian perspective- I'd like to hear a sort Keynesian rebuttal.

Good luck, right now economic theory seem total dominated by anti-Keynesians, of course if you look at economist dealing with the practical economics, they seem more or less all to embrace Keynesianism, but it's not them who writes the articles.

[AggregateDemand]

By bias, I meant that the way it has been taught to me has been largely presented from an Austrian perspective- I'd like to hear a sort Keynesian rebuttal.

There is no Keynesian rebuttal because Keynesian economics doesn't deal with many of the concepts within the Austrian school. Austrian school isn't really comprehensive theory. It's specialized modification, based upon subjectivity within decision-making environments.

Keynesian and Classical economics are somewhat confrontational bodies of comprehensive economics, but they are periodically revised to deal with unexpected economic outcomes, like the Great Depression or Stagflation.

[Snowstalker Mk. II]

Not real.

[AggregateDemand]

Didn't the subjective theory of value come out of the Austrian School?

Yes. Much of the mainstream Austrian School has been adopted as general theory.

[King]

Sociology

[Person Man]

Not real.

As real as people want it to be. If there was a school of thought based on self-fulfilling prophecy, its this one.

[Dr. Liberty]

Freedom (sane)

[Deus Naturae]

Not real.

As real as people want it to be. If there was a school of thought based on self-fulfilling prophecy, its this one.

What does this even mean? I'm sorry but this sounds like something AD would post.

[TheDeadFlagBlues]

The Austrian School of Economics bears no relation to academic economics or social science. It also resembles a cult more than it resembles a school of thought.

[Person Man]

Not real.

As real as people want it to be. If there was a school of thought based on self-fulfilling prophecy, its this one.

What does this even mean? I'm sorry but this sounds like something AD would post.

It only explains business and work if you believe it does

[AggregateDemand]

It only explains business and work if you believe it does

That's your interpretation of inductive reasoning?

[Redalgo]

HS, insofar as its adherents cling to archaic, classical liberal interpretations of individual freedom and human rights. Look to the Chicago school for practical, neoclassical counsel so long as you can remember the assumptions it makes about human nature are flawed, and that the prescriptions offered need to be filtered through political considerations beyond those of fine-tuning the engine of a market economy.

Personally, I also like to borrow ideas from the Freiburg School but - not really knowing which currents of economic thought are wisest - try to consider advice from them all on a case by case basis.

[GaussLaw]

Sociology

Austrain school = sociology for conservatives and libertarians, basically.

It has more math than normal sociology though.

[Deus Naturae]

HS, insofar as its adherents cling to archaic, classical liberal interpretations of individual freedom and human rights.

Austrian economics has nothing to do with either of those. It's possible to adhere to the Austrian School and support a central bank, for example. You just need to believe that boom/bust cycles are a good thing.

[Deus Naturae]

It only explains business and work if you believe it does

Isn't that true of literally every belief system, ideology, school of thought, etc ever?

[TheDeadFlagBlues]

The Austrian School of Economics bears no relation to academic economics or social science. It also resembles a cult more than it resembles a school of thought.

>Has no idea what he/she is talking about^

I'm actually quite certain of this. I'm not a scholar of Austrian economics but it's my understanding that Austrian economics rejects empiricism and relies only theories that it derives from logical axioms. This bears no relation to academic economics or social science, both of which rely upon rigorous empirical methodologies designed to test various social scientific theories. Inductive reasoning plays an important role in academic economics and Austrian "economists" reject this approach on the grounds that data is "subjective". That isn't an assertion accepted by any social scientific scholars, who believe that rigorous methodology and natural experiments provide sufficient grounds for revising, rejecting and proposing theory.

Even in its primitive years, economics was a data driven and empirical discipline. Scholars of political economy might have used rudimentary methods but they firmly believed in relying upon observation to make assertions about economics. Rejecting empiricism is effectively rejecting economics. Austrian economics isn't economics, it's shoddy philosophy. It resembles a cult or a religion because there are no grounds for disagreement among Austrian "economists". If I say that counter-cyclical fiscal policy has a demonstrable effect on output, Austrian "economists" would say that fiscal policy creates recessions and I'd reply that there are many instances in which price fluctuations exist without the presence of any state and reference the findings of behaviorists. Austrians would have no response: I'd be wrong because I rejected the internal logic of their cult. This hypothetical is no different than a Biologist attempting to have a conservation with an Evangelical Christian.

[TheDeadFlagBlues]

HS, insofar as its adherents cling to archaic, classical liberal interpretations of individual freedom and human rights.

Austrian economics has nothing to do with either of those. It's possible to adhere to the Austrian School and support a central bank, for example. You just need to believe that boom/bust cycles are a good thing.

"Creative destruction" isn't a tenet of Austrian economic thought.

[AggregateDemand]

I'm actually quite certain of this. I'm not a scholar of Austrian economics but it's my understanding that Austrian economics rejects empiricism and relies only theories that it derives from logical axioms. This bears no relation to academic economics or social science, both of which rely upon rigorous empirical methodologies designed to test various social scientific theories. Inductive reasoning plays an important role in academic economics and Austrian "economists" reject this approach on the grounds that data is "subjective". That isn't an assertion accepted by any social scientific scholars, who believe that rigorous methodology and natural experiments provide sufficient grounds for revising, rejecting and proposing theory.

Even in its primitive years, economics was a data driven and empirical discipline. Scholars of political economy might have used rudimentary methods but they firmly believed in relying upon observation to make assertions about economics. Rejecting empiricism is effectively rejecting economics. Austrian economics isn't economics, it's shoddy philosophy. It resembles a cult or a religion because there are no grounds for disagreement among Austrian "economists". If I say that counter-cyclical fiscal policy has a demonstrable effect on output, Austrian "economists" would say that fiscal policy creates recessions and I'd reply that there are many instances in which price fluctuations exist without the presence of any state and reference the findings of behaviorists. Austrians would have no response: I'd be wrong because I rejected the internal logic of their cult. This hypothetical is no different than a Biologist attempting to have a conservation with an Evangelical Christian.

The Austrian School uses data, and Austrian economists use inductive methodologies to explain the data. Austrians are not particularly concerned with the predictive value of universal models because they don't support the notion of universal economic models. Instead, Austrians tend to view economic activity as unique to a particular time and space (econometrics is not highly valued). Since economic circumstances are unique, Austrians attribute predictive accuracy to the deductive work (praxeology) of individual economists. On occasion, Austrians have developed theories with universal applicability, like subjective value theory or time preference, but since they have no comprehensive macro or micro models of their own, other schools simply conscript Austrian theories without attribution.

Neoclassical economists and Austrians were getting relatively cozy in the middle of the 20th century, but Milton Friedman cleaved the Austrian school from neoclassicism, when he said that any field of economics is relatively worthless, if it lacks predictive capability. Because the Austrian school generally though of Friedman as one of their own, these remarks started a schism within the Austrian School, imo. Some Austrians wanted more discipline and more focus on "mainstream" economic theory, while others used Friedman's remarks as justification for a move farther towards experimental theory.

The schism has become uncivilized because the mainstream-wing has attempted to claim both Hayek and von Mises for themselves, though Hayek was quite conventional and von Mises was quite experimental. The experimental-wing of the Austrian School wants to cede Hayek to the neoclassical schools and move on in the tradition of von Mises. Disparaging Hayek and dismissing him from the Austrian school has drawn criticism from outside the Austrian School, giving rise to allegations of puritanical cultism within the experimental-wing.

[Tender Branson]

Not bad.

I attended one for 12 years (or better said, 3 of them).

[Person Man]

It only explains business and work if you believe it does

That's your interpretation of inductive reasoning?

Inductive reasoning only explains anything if the assumptions its based on are correct.

Sociology

Austrain school = sociology for conservatives and libertarians, basically.

It has more math than normal sociology though.

This. Sociology has no math and the only reason AS has math is because of it quantitative nature. The math is just basic Differential Equations.

[AggregateDemand]

This. Sociology has no math and the only reason AS has math is because of it quantitative nature. The math is just basic Differential Equations.

How is math at predicting the future? Intuition, deduction and induction are worth more than econometrics advocates are willing to admit. People are not actually homo economicus.

[Person Man]

This. Sociology has no math and the only reason AS has math is because of it quantitative nature. The math is just basic Differential Equations.

How is math at predicting the future? Intuition, deduction and induction are worth more than econometrics advocates are willing to admit. People are not actually homo economicus.

So

Sociology

Austrain school = sociology for conservatives and libertarians, basically.

It has more math than normal sociology though.

[AggregateDemand]

People who argue that the Austrian School is just sociology are all basing their remarks on the lack of econometrics in Austrian economics. Math does not accurately predict the future or provide consistent economic forecasting.

Lack of math does not make economic theory something other than economics.