Here I will start, at refuting some of these claims:
http://world.std.com/~mhuben/austrian.html
Myth: The Austrian School of Economics is “apart and above” mainstream economics.
“The Austrian School of Economics is an anarchist branch of economics”
Not Anarchists. Some prominent Austrian Economists (such as Mises) were not anarchist.
“Perhaps the first thing to stand out about Austrian economics is its relationship to mainstream economics. The two completely reject each other”
Not so. Both agree on some principles, such as supply and demand.
“Their dismal showing in academia stems from the fact that they have simply failed to make their case.”
Not necessarily. Austrian economists have made their case, but other people didn’t believe them.
“Austrians have a conspiracy theory to explain this failure.”
“The first is that ordinary people cannot tell the difference between good and bad economics. The second is that the training ground for professional economics is the university. In modern times, the university is more likely than not to be funded by the government. In a democracy, government funding implies (1) a competition for funds and (2) bureaucracy. Both of these characteristics favor positivism.”
how is this a conspiricy theory?
"
- Mainstream economists make heavy use of statistics; Austrians claim statistics have very little value, because of their extreme limitations.“”
wrong - while austrians often discount statistics, they will still sometimes look at certain statistics, or show how statistics can be proven. But this is mostly true
“Mainstream scientists believe in both objective and subjective truth (that is, absolute truth and personal truth); Austrians believe only in subjective.”
Austrians believe in objective truths, take the a priori truth “Humans Act”, how is that subjective?.
"
- Mainstream scientists seek to explain human behavior on many different levels: the gene, the individual, the group and the specie. Austrians believe that all explanations of human behavior can be traced back to the individual."
Again wrong, a better way to put this would be that Austrains segregate why/how humans act from economic theory, but mainstream economists may attempt to integrate them.
“Mainstream economists often use models that use perfect starting assumptions; Austrians claim not to.”
False for mainstream economists, the assumptions have logical errors. This is better applied to Austrain Economics, except for the word model.
“Mainstream economists believe that monopolies can arise from a number of causes; Austrians believe that only government causes monopolies.”
Actually, its because we have a different definition of the word monopoly. 
“Mainstream economists believe in fiat money; Austrians believe in the gold standard.”
Austrians don’t all believe in the gold standard, but many believe that the state should not interfiere with money. If fiat money arised in an ancap society, it would be perfectly compatible.
“Mainstream economists assert that the mystery of the business cycle is deep and poorly understood; Austrians claim the government causes it.”
Actually, mainstream economists also have a theory for the business cycle, and believe that drops in spending cause the business cycle.
“In other words, Austrians get to critique the real world, but the real world is prevented from informing their theories. Even their predictions are “qualitative,” not “quantitative” – meaning they are free to call the government “bad,” without being held down to the statistics that would verify this claim.”
That is the point of an a priori study.
“The Austrian approach to philosophy is a very old one: Rationalism. You have to go back to the 17th and 18th centuries to find when it was last considered a serious philosophical movement. It was widely abandoned after its inadequacies were laid bare by other schools of philosophy: Empiricism, Positivism, and most famously by Immanuel Kant’s Critique of Pure Reason. Philosophy has progressed tremendously since Rationalism; the Austrian approach is a relic of history.”
-
The Austrian School being based on an old philosophy does not dismiss it.
-
Why doesn’t he back up his claims?
-
Being widely abandoned doesn’t make the claims true or false
“The problem with rationalism is that it makes the search for truth a game without rules. Rationalists are free to theorize anything they want, without such irritating constrictions as facts, statistics, data, history or experimental confirmation.”
-
Non sequitor, rationalism has rules, that is the entire point.
-
Rationalists can theorize the argument they want, but they have to support it.
“Their only guide is logic. But this is no different from what religions do when they assert the logical existence of God (or Buddha or Mohammed or Gaia). Theories ungrounded in facts and data are easily spun into any belief a person wants. Starting assumptions and trains of logic may contain inaccuracies so small as to be undetectable, yet will yield entirely different conclusions.”
-
False analogy - Rationalism is not the same as a religion, and in fact rationalists are against accepting mere assertions as proof.
-
Actually, rational argument must be grounded in previously established facts, he is giving a non sequitor that it isn’t.
-
Stating that logic has fallacys does not apply to this argument, it merely establishes that a logical argument may have errors.
"
In fact, if we accepted all the tenets of the Austrian School, we would have a second reason why it fails to qualify as science. To be a science, a school must produce theories that are falsifiable – that is, verifiable. If a theory’s correctness or falseness cannot be verified, then it is not science."
By this definition, Austrian Economics can be a science, because its theories could theoretically be falsified if there was a problem in an argument. See a self-contradiction?
“Austrian economists make claims about the market (such as markets know better than governments), but then deny us the tools for verifying those claims (such as statistics).”
Why not counter the argument that statistics can’t be used to verify these claims?
"
Austrians claim to know these things by logic. But although their literature frequently evokes “a priori” knowledge, this term appears to be misused. Humans are not born knowing that “two plus two equals four.” It is something they must learn from their environment, namely, school. Forging this learned knowledge into axioms comes later, and then through a process of trial and error. So in this sense, “a priori” knowledge doesn’t even exist, unless one refers to a very basic level of knowledge capability, such as the physical construction of the human brain or animal instincts."
That is not the point of “a priori” knowledge. The point is that it can be known without empirical experience, not that you don’t need empirical experience to know it.
“Austrians may be using the term “a priori” to mean logical proofs or axioms, such as “If A=B, and B=C, then A=C.” But if Austrians were creating economic axioms that were true by logical force, then the Austrian School would become world famous overnight, whether mainstream economists liked it or not.”
Fallicious (forget name of fallacy). Whether a school uses logical axioms has no bearing on whether they are valid or not.
“In truth, Austrian journals are not filled with these kinds of axioms. Their arguments are really no more than theories that are guided or tested by logical proofs. Again, that’s no different from what religions do.”
Assertion, and false comparison to religion. Why is he so focused on “Austrian Econ IS A RELIGION OMG!”
“The fact that we have thousands of different religions in the world is remarkable evidence of the fallibility of this method.”
Fallacy alert - religions are not theories that are guided or tested by logical proofs. They can be defined by seperating SACRED from PROFANE.
"
But the argument that a statistic is a one-dimensional historical fact is strained, to say the least. Suppose a private eye tells you that your neighbor is stealing your apples. You respond this is not logically possible. So he produces a photograph of your neighbor in your tree, with a smile and a basket full of apples. And you respond that the value of this photograph is slight, because it does not show the full context, movement and soundtrack of a movie recording!"
False analogy ALERT!!! - A photograph is not the same as a statistic, as it contains different evidence. Also, the context is different.
"
A good analogy is the study of gases. They are composed of countless individual molecules, each with different positions, directions, energy levels, etc. Yet early scientists did not study them individually; they studied them collectively. And this approach proved quite useful for producing valuable information, statistics and general laws."
But you failed to prove the statement that economics is the same as a science. Sorry. So false analogy.
"
There is an underlying reason why Austrians seek to deny the validity of statistics: if they accepted them, their positions would prove untenable. An example is the fastest period of growth in U.S. history: the New Deal era, from 1933 to 1973. This was also a time of unprecedented government growth, when the top tax rate reached 91 percent. Obviously, these numbers have to be denied."
Failed example. Austrians could reject it on the basis that growth can occur in spite of government intervention, and correlation != causitation, and not reject the statistics themselves.
“The only numbers that Austrians trust to any great extent are prices.”
Not true. There are other numbers that Austrian economists use in their arguments, and they may use numerical figures to make an argument more clear.
“One could ask how they even know a business cycle exists, or whether the economic events they are critiquing are even happening.”
Maybe because there are telltale signs? And that Austrians do read numbers ;).
“The paradox is that if they can critique accurately, then government can calculate accurately.”
Non sequitor.
"
Even the Austrian’s allies in business would not want to live in a world without statistics. Entrepreneurs have a huge demand for numbers other than prices: for example, Neilson ratings, consumer surveys, price trends, etc. It is the only way they can make enlightened investment decisions. As Libertarian critic Mike Huben points out: "
Austrians don’t deny that there are numerical values that are useful other then prices. So strawman. They are critiquing certain economic statistics such as GDP. A critique of a statistic doesn’t mean that they don’t believe that it isn’t practical either.
“mainstream economists find it useful to know that unemployment has risen from 6 to 12 percent, because that means more workers will be competing for fewer jobs, and they will be reducing their wage demands to get them”
not necessarily. It could mean that more people don’t want to work.
“It doesn’t matter what the individual wants, plans or believes – his decision to accept a lower wage is being determined by a market force larger than himself.”
Yes it does matter what the individual does. His actions are not “predetermined” by the market, just constrained because he doesn’t have power. And there are other choices besides accepting a lower wage.
“And one can accept the mainstream view while acknowledging there may be exceptions to the generalization.”
But what if those exceptions disprove the mainstream view?
"Even granting the premise that humans are endowed with free will, there is no denying that even impersonal forces affect human actions to a very large degree. "
true, but it doesn’t disprove praxeology, only outlines some of the reasons why humans act.
"Both mainstream and Austrian economists agree that economics is “primarily concerned with the efficient allocation of scarce resources among competing uses.” (4) But resources are often discovered by accident – for example, the well-driller who strikes oil, the sailor who discovers an island, or the coal miner who finds gold. Technology is also often discovered or invented by accident as well, as in the invention of plastics. These accidents of history ripple through the economy, sometimes radically altering its supply and demand, and creating the market forces to which people must respond.
Even natural disasters throw entire economies into new directions. For example, the steam engine was considered equal to or even superior than the gasoline engine from 1890 to 1914. But then a national epidemic of hoof-and-mouth disease led to the withdrawal of horse troughs, which is where steam cars refilled with water. The disappearance of a market for steam engines brought their thriving research and development to a halt, whereas gasoline engines profited from another 80 years of research and development. (5) Thus, an accident of history is responsible for the big oil companies of today, and the direction of an entire global economy (not to mention the attendant pollution problems). Is this economic activity primarily traceable to the beliefs, plans or expectations of subjective individuals? Of course not."
Actually it is. Not the disaster itself but how people acted in response to the disaster. Which caused the economic changes you are discussing about. As an example, suppose someone struck gas, but people chose to keep their behavior constant. To illustrate, would there be any difference in economic activity in the striking gas example, if people had simply ignored it?
"
An Austrian might argue that individuals are nonetheless responsible for searching out resources and inventions. But even eliminating the luck involved with finding them, the fact remains that entire market forces are unleashed by the discoveries of a relatively few people. The subjective effect that Austrians evoke is actually slight; the vast majority of people are not subjectively interacting with each other on the market, but are responding to market trends created by a small group of discoverers."
Austrains don’t rule out that all means and ends may be invented by a handful. And this is another red herring, as the fact that people are affected by market trends created by a few people doesn’t mean that they don’t subjectively interact. In fact, it is conceivable that there is only one inventor, yet people still interact.
“The opposite of this is methodological holism, which holds that groups have traits, behaviors and outcomes that cannot be understood by reducing them to their individual parts. That is, groups consist not only of individuals, but also relationships between individuals. It is not enough to say that “the functions and traits of my car can be reduced to, and explained by, the atoms that make it.” This overlooks an equally important point – that these atoms need to be shaped into a car. The fact that atoms are fundamental units that exhibit certain properties actually explains very little.”
Interesting idea. But it seems like another false comparison, HUMANS ARE NOT ATOMS. Also, relationships can be explained through individual action.
“The economic equivalent here would be a factory. A car factory may have thousands of employees, but none of them possess the complete knowledge to build an entire car. Each worker’s knowledge and responsibility are specialized and limited, and can only build part of a car. Only the interdependent efforts of the entire group can roll a car off the assembly line.”
How is this not explained by individual action? Austrian economics, in fact, shows how individual actions lead to businesses such as these.
“An individualist might object that human beings are unlike atoms, in that people have the ability to create their own relationships and therefore such interdependent groups as company workforces. But this occurs neither spontaneously nor at an individual level. Suppose a car factory has no central organization, and workers just began building a car, communicating with no one except the workers whose parts were immediately connected to their own. It could turn out that the engine workers thought they were building a Mercedes Benz, while the trunk workers thought they were building a Yugo. Obviously, there needs to be centralized organization.”
Misses the point of that objection, as he is changing an argument of humans not being fixed to having no central organization. These are two different things.
“Austrians seek to get around this problem by establishing the entrepreneur – the firm’s central organizer – as the “isolated actor” of their analysis. Here are some Austrian assertions to this effect:”
- The entreprenuer is not necessarily the “central organizer”. He is merely speculating that a certain business will contain profit in the future. Even workers can choose to be entreprenuers by getting a share of the profit instead of a wage.
“These quotes evoke the delightful image of entrepreneurs running their companies all by themselves.”
THIS DOES NOT HAPPEN IN REAL LIFE. Entreprenuers are necessary to have a company, but aren’t necessary to run a company. These are two different functions that may coexist. For a company run by one man is this statement definitively true.
“We should not, of course, interpret this to mean that Austrians are so gullible as to believe that entrepreneurs run their companies single-handedly.”
Of course we aren’t that gullable :P.
“But these are the conceptual games they must play to protect the fiction that “isolated actors” and “primary agents” exist in an economy that is overwhelmingly interdependent.”
ENTREPRENUERS ARE NOT ISOLATED, UNLESS THEY ARE MERELY TRYING TO SATISFY THEMSELVES. The success or failure of their venture depends on their ability to cater to others, which implies interdependence. Austrians actually integrate that fact.
“Even in their primary role as organizers, entrepreneurs depend on the group.”
Other people, not group. And this assertion fails if someone is trying to entreprenuer for himself a la Robinson Cruesoe economy.
“A company president can only issue general guidelines to his managers, who must inevitably organize and direct much of their departments on their own. The larger a company gets, the less personal and direct control an entrepreneur has over it. He must delegate out an increasing share of authority and responsibility, and is more dependent than ever on others to help him run things, investigate conditions, inform policy, and make recommendations.”
This may happen but it is irrelevant.
"
Furthermore, individual employees who are acting on delegated authority are attempting to act in the interest of their employer (usually a corporation, not an entrepreneur), which depends on their model of that abstract entity."
The fact that humans act does not attempt to deny that, but this doesn’t prove that humans act as groups per se.
"
The firm’s lack of individualism can be seen from the other direction as well. Individual firms are rarely the basic unit of the economy; almost all products run through several firms before completion. Information brokers, for example, often do not know where their information comes from or how it was derived, or where it goes or for what purposes. Stores like Sears do not produce all their own goods; they merely serve as part of a larger network of firms cooperating to sell their products."
Irrelevant to human action. The fact that there exists so much interconnection does not discount human action.
"
Ultimately, there is a continual network of interdependence running from the individual worker to the global economy. Picking out the “entrepreneur” as the primary level of analysis is like singling out the quarterback as the “isolated actor” of a football team."
False analogy. Time to make a drinking game on this ~/. And the fact that there is a reason to analyze the quarterback a lot in a football team.
“Another objection to methodological individualism is that it fails to adequately account for culture, tradition, rules and other social habits. (6) Much of human behavior is to be explained on these grounds, not individual knowledge or choice.”
People must individually agree to conform. All this establishes is that many humans act to conform to this, and prefer ends that further these goals as opposed to running counter. And the fact that much of human behavior can be explained by this is irrelevant, and the field of the why and how humans act, not praxeology.
“The answer is group selection. Imagine two farms, one more efficiently organized than the other. Over time, the less efficient farm and its methods may disappear, and the more efficient farm will pass on its customs and rules to future generations (of both farms and people). Individuals who join these farms will learn by teaching or imitation. Much of their future activity will be based on these social norms, not their own individual choices. To the extent that individual choice is present, it is to follow these social norms, or attempt to create new ones.”
What if those two farms are run by two individuals? That can hardly be called group selection. And you don’t explain how it disappears, and assert that it is because something is “more efficient”. And individuals have more choices then to follow or create a new social norm.
"
In debates between methodological individualism and holism, the winner that usually emerges is a compromise position: we are both individuals and members of the group."
It is what we act as, not who we are, that he is arguing, as praxeology does not deny that humans can be members in a group. The crucial question is what people act as. And also, it is a fallacy to say that the compromise argument is the winner, or that it wins because debates “say so”.
“Being open to different types of methodologies is characteristic of mainstream science. Insisting on only one methodology at all times is a feature of crank science.”
Oh noes another false analogy ~/. And a fallacy, as one methodology vs. many cannot be evaluated on that position alone.
“The problem with insisting on only one level of analysis is that counter-examples crop up which are nearly impossible to explain. Methodological individualists claim that individuals seek to maximize their personal rewards.”
No, they claim that individuals claim to maximize psychic profit ex ante (before the action).
“But if this were true, then soldiers would become conscientious objectors instead of risking death in war.”
This assumes that humans value their life above everything else. Which isn’t necessarily true. And soldiers may have other ends in mind then life.
“Charity, favors, volunteer work, loans and other forms of altruism would never happen.”
Loans I wouldn’t qualify as altruism. Anyways, there are always other ends in mind other than self-gain.
“Parents would not sacrifice for their children.”
Maybe because they hold helping their children as a high end?
“True believers would not sacrifice their resources or their lives for a cause. Yet these things happen.”
Maybe because they hold the cause highly? Bad disproof.
"
One of the most famous failures of methodological individualism is why people vote. According to public choice theorists, who base their science on this method, there is no logical reason for individuals to vote. The costs and inconvenience of voting (getting off work, driving to the polling site, getting picked for jury duty) far outweigh its rewards (which would only occur on the extremely rare occasion that someone cast the deciding vote)."
But people choose to vote because they are trying to achieve certain ends (such as satisfaction, believing that their vote will be deciding, fufilling their “duty”) that are completely ignored by your strawman.
"This remarkable paragraph essentially calls for the utopian perfection of the human race before the Austrian model can be applied or even criticized! All market failures today can be blamed on the fact that we have a government, regardless of the actual level of government involvement in the failure.
Fail. False assumption that the austrian model cannot be applied with government, however they do apply it because it explains things like interest and prices. And it can be criticized on the basis of logical deduction.
“But what if the U.S. decided to become libertarian, and adopt an Austrian economic policy? Then they would still be protected from accusations of failure, because they can always blame criminals for wrecking the market process.”
Strawman. What about disasters? What about people complaining of negetive effects of a high time preference?
"
Liberals can point out an even more basic flaw in the “absence of force” requirement. And that is that all property rights are maintained and defended by force, or the credible threat of force. All property is protected by police and military forces, and violations of property rights result in the appropriate forceful response. Therefore, the idea that a land of perfect property rights can exist force-free is either a giant self-contradiction or hopelessly utopian."
Ugh ranting on and on about how this condition is unrealistic. The point is that the effects of coercion are analyzed by studying the theoretical no coercion first. This isn’t bad, but a path to understanding.
Will continue later…