Great suggestions. I especially like Man, Economy, and State. Read that and you are master of the universe. It really teaches. Mises’s HA is a different kind of book, the book of a lifetime.
I like “Pillars of Prosperity” by Ron Paul. But that’s just me…
Thanks for all of the suggestions! I feel like I’m beginning to get the hang of the Austrian theory. I’ve read Libertarian Manifesto by Rothbard, Principles of Economics by Carl Menger, Omnipotent Government, Economics in One Lesson, Meltdown: A Free Market Lesson in Economcis and a few Ron Paul books. I’m reading Human Action right now. I think I get the basics of the theory. It’s that economic action is purposeful.
When government interferes with the free market it’s trying to prevent loss- and loss is something natural. It’s something that happens. Government intervention creates a system of dependency where the people who will lose things will pressure the government in protecting them fro the successful competitors. It’s economic populism that drives them yet they see good in it… yet it is compulsion at the same time because they’re coercing the tax payers money for it.
The austrian theory states that central banks can cause bust-boom cycles. It does this by when central banks inflate the currency it leads people to think they have more money than they actually have. It has to inflate the currency more to keep it going and eventually the whole system comes crashing down because they can’t inflate any more- they’ve over inflated and then the statist economy goes through a period of a bust where they don’t have that artificial growth any more.
Entrepreneurs and business people have to respond to the free market. They make decisions about what goods to make based on what trends they see in the free market. If good A is wanted more than good B they’ll make more of good A.
Market prices correspond to the subjective theory of value. It’s the consumers that set the prices. It just so happens that money is a medium of exchange for this. The prices of goods is not equivalent to the labor that goes in to it but rather how much people want the said good.
All business people have to respond to the rules of competition. Unless they’re being helped by the government and their losses are protected they have to respond to the same rules as every competitor. They respond to the wants and needs of other people or they’d lose money.
It’s not a question of if people have free will or not. Acting man makes a choice and that choice is neither rational nor irrational. It is a logical choice and while acting man/woman’s means may differ from what we would do the acting person has to outweigh the costs with the benefits, and, if it would bring benefits to them they would do it. If not… they would not pursue the action.
Government intervention doesn’t create wealth. It only transfers wealth from one area to another. Government intervention requires a lot of money so the losses in the government program are socialized by taxes and so when the government intervenes in the economy it doesn’t follow the free market system… and when it doesn’t do that it/the industries that accept the government intervention pays the price for it. They think they have more money than they actually have and which creates a bubble and it comes crashing down on them later.
Do I have it down so far? I have zero training in economics… it’s probably a good idea that I get some. I think I have a better understanding now… I just want to make sure I’m on the right track.
You, sir, are on the right track. I think you will discover that ignorance is receding and a new paradigm is at hand.
I know you are just presenting a summary, but it is critical to understand that is not merely that printing money “leads people to think they have more money than they actually have.”
Printing money (and the lowered interest rate) causes capital to be misdirected, thus distorting the structure of production. The central bank’s intervention (money printing) causes increased consumption AND investment to occur simultaneously. This is the boom. In reality, all this does is rob the economy of real resources. It is unsustainable. When the central bank stops printing, the malinvestments are revealed. The free market tries to readjust the structure of production toward sustainable activities, but the central bank and central government intervene (once again, as they did during the boom). This prolongs and deepens the depression as more resources are consumed, squandered, or destroyed. Zero interest rate policy, “quantitative easing”, and deficit spending (referred to as “stimulus” by the ignorant) all contribute to increased destruction of valuable, scarce, precious, capital.
I, too, am new to the Austrian school. I have watched the housing boom and subsequent bust, and marvel at how Austrian business cycle theory explains it all. I am a noob, but I feel like I have a better understanding of how the economy ACTUALLY WORKS than do Phd Keynesian eggheads.