Austrian Skeptice Here:

Economics Economics Questions
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Hi guys,

I am new to the forums, though I have been vaugely familliar with austrian theory for a while now, and I would like to hear some perspectives on austrian theory from those whom (I hope) are far more familliar than myself with its ideas. While the Eurozone crisis rages and a variety of other possible bubbles threaten our stagnated economy, I in an effort to better understand where we are going have decided to hear some of the dissenting opinion. Generally I dont consider marginilized views, but over the years I have learned that typically if you can cut past the pure gibberish of the mindless masses and reach an ideas “radical” origins, you learn some things about the situation that are never mentioned in all mainstream forums of thought. In some cases I have literally come to the conclusion that both sides of an opposing issue, rather than being inclined to plainly state what their issues are and why, instead choose to systematically obscure the truth, or just dumb it down into an un-enlightening slop of garbage mantras that the masses chant. I certainly hope that by comming onto a forum of radical economic conservative theory I can get an idea of what you all actually believe and what the reasons are. An example recently of a problem I have never heard of in a liberal forum regarding healthcare, which makes implicit sense, is that the free market cannot function at all not because of obama care, or the interventions of the government, but because of price transparency or the lack thereof. Never once heard a politician here in ohio adress this issue, even though John Boenor lives here; but from what I am told, wisconsin tried passing a law on it. Now most conservatives I know of seem religiously against the government even on areas which I generally ask, “if not them, then who?”. My questions to you all on this actually pretty simple:

would you approve of regulation to restore transparency?

do you believe that private industries can cause any problems through anticompetitve behavior?
—do you believe the private enterprise was the origin of the lack of transparency in the case above?

is there any role for the government in regulation?

—if so, where are some generally agreed upon austrian areas?

What are some other general thoughts on the healthcare system that are commonplace among austrians that would be good to know?

Anyway, I think thats a good enough start for an introduction for the forums. Assuming I get some actually intelligent responses and not seemingly “pre made” responses, like the good old sayings such as “i dont believe in punishing success” or what not, Ill post a couple of other topics related to the healthcare industry. I actually work as nurse, and I think some of the things I have to say you all would find pretty amusing.

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Welcome to the Mises Forum! Always great to have inquisitive new minds.

I always like to inform newcomers of The Ultimate Beginner meta-thread, which is a comprehensive collection of links and threads for all sorts of topics that you’ll probably want to explore at some point. I think you’ll find it really useful. (Also be sure to check out the welcome link there for forum tips and how-to’s).

As for your questions…

These are mostly having to do with political theory and ideology…whereas the Austrian School is a school of economic thought. But I’ll take them as they are:

First off, the answer to this is going to depend your definition of “regulation”. One would typically assume you mean “government mandate”. But you might mean something more general and inclusive of more possiblities. Either way, the answer will depend on who you ask, (as it is of course technically a personal question). But there is arguably no hard-lined “Austrian” answer to this, as it is more a political question. You may very well find adherents of the Austrian School who may approve of such things. However, many adherents identify as “anarcho-capitalists” or “voluntarists” (these are generally considered synonyms). For these Austrians, there is no role for a State at all.

This is kind of a loaded question, as it’s a lot like asking: “do you believe that automobiles can cause any problems through being large, fast-moving, and made of thousands of pounds of metal, glass, and plastic?”

Of course Earth is not Nirvana, but I think most people already know that. As Thomas Sowell said “nothing is easier than to prove that something human has imperfections.”

So to answer your question, yes “problems” (again, depending on your definition) can arise through the behavior of people involved in private industry…just like problems can arise through behavior of people anywhere.

You’ll have to be more specific of what you mean when you talk of “lack of transparency” and what “case” you’re talking about.

Again, the answer to this will depend on whom you ask, but for anarcho-capitalists/ voluntarists, the answer is “no”.

That’s actually a tough one. I am reluctant to say that virtually all Austrians are essentially voluntarists, but I would actually have a hard time coming up with any “generally agreed upon” Austrian prescription for government involvement in anything.

See here. Everything you see listed there is generally something Austrians would agree with, especially the “Mises Dailies” section, which is articles published by this website.

As for general tenets of the Austrian School in general, definitely check here. In particular, I find that “A Primer on Austrian Economics” offers a very well done and comprehensive overview of the school. However, it may be a bit much for someone who’s brand new…so if you find it too difficult to get through, you might try some of the other articles in that other link.

Welcome!

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Firstly, welcome. Secondly, I’d like to point out that either a philosophy has or does not have internally consistent logic. Austrian economics is predicated around the idea that “humans act”. From there, logical implications are derived, and a free market economy emerges. I’d like to say, however, that just because a small demographic of people believe that Austrian economics is correct wrt real world circumstances does not mean that there is any reason to doubt it’s veracity.

If you want to be an Austrian Skeptic, become familiar with the Austrian perspective, and ask questions. So with this in mind, read http://mises.org/daily/6031/How-Should-Prices-Be-Determined - this will probably address your questions about “price transparency” or however you put it.

I apologize in advance for linking you to another article, which you seem to be against - you want to hear it from us - but this article is written by “one of us”: an Austrian. I don’t understand the utility of asking us questions (tough questions that require sourcing and heavy research) and expecting answers in two short sentences. Anyway, hope the ‘tough love’ and great resources you can find on mises.org, and in John James’ posts will help you to see the light.

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My dad worked in a hospital in Canada. I’m guessing you are in the U.S.

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What gave it away? Was it the “John Boenor lives here” or the “here in ohio”?

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How Gov’t Solved the Health Care Crisis by RT Long:

http://freenation.org/a/f12l3.html

to sum it up, before socialized medicine most people belonged to a mutual aid soceity (fraternity, sorority, church, etc.) that were highly organized and provided the social safety net.

You may have heard about ‘death panels’. That is not hyperbole. The title may invoke an image of a group of people sitting around with a list saying who goes and who doesn’t. That’s not what happens. What you will get is a congressionally appointed committee with medical and pharma interests deciding how they will allocate the resources. How is this a death panel? Since the state is limited in it’s resources (theres only x amount of doctors, hospitals,money, etc.) it has to decide what disease is the most important to tackle. That’s where the waiting lists come from. The state can’t fix all things at once, so it makes an agenda: “We’ll focus on cancer first, then this, then this.”

An analogy is your paycheck. You only have so much money to spend so you have to decide whats most important to you and you spend your money there first, and each succesive thing is less important. Likewise for the state. It has only so many doctors, so it decides for you what diseases are important. It chooses the fate of others and places a value judgement on their life. The state says who is and is not valuable to society.

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Ahhh, good ole canada huh… I have heard that your nationalized heathcare is slowly bankrupting your economy, but here across the mudd puddle in ohio, I never hear any figures about your system up there in terms of cost or %GDP. And yes, of course, I live in the United States. lol!

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That article is very interesting branson. The only problem is that I am not really sure the issue is one with government vs the free market in this case. Granted, my views next to their research would probably amount to idle speculation, but what immediatly comes to my mind is the primitiveness of care back then compared to now. Essentially I would figure that back then it was impossible to render care at an amount (which was easily justifiable) which would take up any significant portion of GDP. I would in fact wonder if the free market is actually not making some kind of choice in the opposite direction now due to all the diagnostic testing which can be done. It may be cheaper for the society as a whole to pay for the excessive use for testing on nearly every illness versus take the risk that they were wrong, loose the persons life, and the tax revenue, and the productive capacity of the person. I also know that currently there is a general practitioner shortage in the united states. This basically accounts for all the routine walk-in type shows that are run. This insufficiency is present at a time where there are more doctors per capita than any other time in our history. As I understand it, the reason for the shortage is that these new doctors generally follow the market towards the more profitable areas, which right now are all forms of specialization. Disbarring defunkt market incentives for specialization, I would think its likely there is a pretty strong case that the free market may actually be the root cause of the abnormally high price for routine visits. However, I cant imagine how routine visits would account for a healthcare system which costs 16% of our tax revenue yearly. I wish I could remember the place I found the figure at, but one study I read said that the majority of jobs added in the healthcare sector were administrative in nature, and not centered around any form of patient care. Does anyone have an idea what the incentive would be for a buisness to hire an administrator and associated personel when they essentially “were not needed” prior with a simmilar case load? Also anyone else who has something to contribute or comment on, please post. Im intersted to hear all your thoughts. You dont even have to cite any sources, though they would be nice. I would just be happy if someone pointed me in some new directions.

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The single most important difference between mainstream and Austrian economics is methodology. Everything else just follows from the methodological differences.

Clayton -

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First RT Long IS NOT an Austrian he is a mutualist.

My optometrist thanks you for your lengthy response :slight_smile:

I don’t claim to be a professional. I can only speak from experience and

light research. The general practioner has disappeared b/c their not needed

anymore. You can go to the medcenter for stitches and broken bones, and you can

go to the store and get medicine for colds. There is no demand. What profit does

is indicate to the doctor what people want, b/c that’s where people are spending

their money.

Medicare is socialized medicine. The standard Austrian line would be to point

out the socialist calculation problem. Since the government lacks price signals

and profti incentives, it can’t properly allocate resources. The state suffers

from sever lack of info. The ratio of congressperson to citizen is about

1:500,000. How can they possibly know what you and I need?

A good book for you to check out is “Free to Choose Medicine”. I sat in on a

lecture by the author and he discussed the FDA. The length of time for new

pharmaceuticals to be approved is 6-10 years. This creates a bottle neck and

restricts the supply thus raising prices. Another great study is "Health Care: A

Crisis of Artificial Scarcity" available at c4ss.org. The big thing I took from

that was patent law, which forces companies to dump tons of money into R&;D

so there drug is just different enought to avoid a law suit.

Another angle we need to look at is monetary inflation, which has devalued

the dollar and caused prices to rise. So on one end we have a ton of anti-market

legislation that drives up the price of healthcare and on the other legislation

that furthers the increase while at the same time decreasing our purchasing

power.

The most interesting thing to me was the fact that alot of this New Deal

stuff came from Mussolini. Read “What is Facism” by John Flynn available

here.

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  • First RT Long IS NOT an Austrian he is a mutualist.

I’m not sure where you’re getting that Roderick Long is a mutualist. He identifies as a “left-libertarian” but very much uses Austrian theory in his ecomonic views. To be an Austrian doesn’t mean you also have to be a strict Rothbardian or right-libertarian.

Here’s a peice where Long specifically critiques the mutualism of Kevin Carson:
http://mises.org/journals/jls/20_1/20_1_6.pdf

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Guilt by association. He runs a website that promotes mutualism.

I am aware that An-cap isn’t a requirement for Austrian Econ. but a subjective theory of value is and mutualists dont hold that. Hence I thought he was a mutualist.