I am an anarcho-capitalist libertarian who competes on the forensics (speech and debate) team at my university. I have recently qualified for a national collegiate tournament in both impromptu and informative speaking and want to use the opportunity to discuss libertarian ideas to the group. I am specifically planning to give my informative speech on Austrian economics, but I don’t feel my current understanding of the school is thorough enough to most effectively do so.
Can someone please explain to me and/or offer good sources clearly and completely explaining one, two, or all of the following points:
How Austrian School methodology works
Its main differences from other schools of economics
How the Austrian Theory of the Business Cycle works and how it was applied to predict the current economic crisis.
Its political implications.
(Most importantly) Why its insights are relevant to everyone today
I raised this concern to Walter Block via email, and he referred me to these forums with his blessing. Hope you can be of help guys! :]
Praxeology: The methodology of the Social Sciences
Methodology.
Austrian Business Cycle Theory: A Brief Explanation
Austrian Economics is value free. If x , then y.
Libertarianism however, deals with political philosophy (a subset of ethics). i.e What should/should not be law.
It’s important to make the distinction. Most Austrians are Austro-Libertarians though.
Most people have a desired goal or end, and seek to use means to achieve it. (When it comes to politics, often government / legislative action is seen as the only way). Austrian economics can be used to show, it is often impossible to achieve those goals with government / state decrees. (eg. A person wants to help those in a disaster zone, so they support price controls to stop the “price gouging” by Petrol / Gas stations… What happens then, is instead of the price going up extremely high, because supply is low and demand is high… the price control keeps prices lower than they would be.
Instead of the consumers fleeing the disaster zone just getting enough to leave the area, they fill up the tank. Soon the Gas is all gone. Price controls create shortages. Those people left behind… now die, because of government / state action - which was supported and meant to be ‘helpful’, although it never is.
Then there are individuals who recognise the praxeological consequences of such policy, i.e rent control being socially and economically destructive. So a Nazi supporter could implement such policies against the Jews, their goals and ends are achievable with state and government action (particularly!). The state isn’t just inefficient, it is remarkably efficient when it comes to theft, coercion and violence. There is no other institution MORE efficient - for one class of people though, the parasitic class.
This is where a rationalist axiomatic-deductive objective ethics is needed. i.e Libertarianism (political philosophy), which deals with “the proper role of violence, the sphere of rights, or the definitions of criminality and aggression.” Self ownership, non aggression axiom etc.. i.e the state is unethical, coercive, unjust, evil, tyrannical etc.
Combined, imo - both make a very powerful case for Liberty.
Perhaps one of the best books concerning a foundational approach to Austrian economics for beginners is David Gordon’s Introduction to Economic Reasoning. You will also hear Economics in One Lesson by Henry Hazlitt.