Hey ya’ll. I have a question regarding the Austrian School view of the Progressive movements pushes in business such as the development of child labor laws and 8 hour work days. In the Austrian view of laissez faire towards big business would they just not have these regulations because it impedes on a “truly” free capitalist economy? Sorry if its seems like a stupid question, but I am just beginning to learn about this view of economics and am altogether new to economics anyway.
Thanks.
Welcome!
The Austrian school of Economics feels like rules such as no child labor and 8 hour work days should be left at the discretion of the employer, not government. It also shows how implementing mandatory rules is harmful economically.
Austrians do not believe in these regulations. They impoverish the folks they are trying to help and they exist to make wealtheir folks who do not have the same problems feel better about themselves. Take child labor, if you own a farm then you employ your children. This happens in the US and in almost all societies. Whatis the difference between a farm and family resturaunt? What about a family manufacturing company?
In poorer societies, all family members must work to support the household. A law preventing child labor only serves to reduce the income earning capability of the family AND stops children from earning valuable experience. Americans do not understand the desperation in these places. Americans have so much wealth that they think their values apply to people who think having 1/10 of the wealth of the average American is wealthy. These folks work for shelter and their next meal. Americans work for their own property, cable TV, 2 cars, etc.
I had a feeling that would be the true Libertarian Austrian School position.
Would ya’ll advocate getting rid of these regulations then? And, could anyone substantiate the Austrian argument against these regulations with any kind of statistics?
As with the AS view on pollution emittions with big businesses I guess the change in child labor lawsand work day regulations would have to come about by the market or people demanding these things, as they did in the early twentieth century right?
If this is the case, AS economic views are always subject to change in a Democratic society right? What would ya’ll do in that case; if a democracy decided for those regulations? Just take it and continue on as free market and capitalist as possible?
I hope these questions make sense. And thanks for the greatly helpful responses so far.
Yes, we would advocate the elimination of said regulations.
Laws and regulations aren’t goods or services, so they’re not subject to the laws of demand and supply. Rather, they’re generally lobbied for by busybodies and/or special interests. These laws and regulations imply the use of force to enforce them, which is not applicable to a free market.
It doesn’t matter whether a democracy decides for those regulations or not, because we don’t subscribe to government at all…especially not democracy.
Hope this helps!
Also, I think a lot of the changes that were legislated had already happened in the market. The laws just kind of cemented what capitalism had already brought about. If we hadn’t become more productive, that loss of labor (child labor and shorter work weeks, etc.) would have done harm. To the extent theses laws are effective, they do harm.
Thanks for the info.
But the people lobbying for those regulations would represent wants of the people right?
Just curious, why do you say that the AS epecially dislikes democracy?
If they are trying to help the people, they are just misguided policy-wise.
And just because a majority wants to take coercive action, doesn’t justify it.
People lobbying for regulations indicates their wants. If the state acts in their favor it will be at the expense of every one else.
A better question might be “why does anyone like democracy?”, especially when all the arguments in favor of it are apparently crafted with the intent of being heard by eight year olds.
I’ve noted that some libertarians like to replace Adam Smith with Turgot, who was an absolutist, in the founding myth of economics. Even among libertarians who accept the existence of the state, there is probably a preference for a sort of static, perfectible government rather than one that is constantly involved in evaluating claims and attempting to resolve disputes (or rather, there is a place for such a function, but it belongs to judges and not to legislators).
What form of government would AS economists most identify with?
Some Austrian Economists, like Ludwig Von Mises, would want a “night watchman state”, or a minarchist government that only does essential things like defence, justice, and police. Others, like Murray N. Rothbard, would advocate the complete absence of a state, or “anarchy”.
One in which the government was subject to the same competitive pressures as any other service provider, in which event it wouldn’t be a “government” in the classical sense. Rather, it would be another for-profit entity competing for customer dollars as well as human and financial capital.
It is possible to beleive in free market, Austiran School principles as well as Democracy right? This is the foundation for people like Ron Paul and Peter Schiff, right?
Yes. Austrianism is a school of economic thought. It’s not about value judgements. It merely points out that government intervention in the economy will cause inefficiencies, corruption, and decreased standard of living for everyone. It doesn’t say that those things are bad, that’s a value judgement you have to make for yourself.
Thanks for clearing that up for me and all the great info ya’ll have responded with. Please pardon my ingnorance, I am learning!
And I’m happy to be a new addition to this forum.
I was going to give the standard “yes” and then elaborate upon value freedom. But since somebody already did that I’d like to say that I’m not too sure if one truly can believe in, and understand, Austrian Economics whilst still believing in the viability of democracy, not without some serious doublethink going on anyway.
As for Ron Paul, he’s an anarchist.
[^o)] Really? How do you know this?
Oh, I totally agree with you on that, I just thought I’d make a point to illustrate the economics vs politics dichotomy that newcomers to Austrian Economics seem to often blur.