Post predictions made by Austrians which have come true, whether regarding recent economic events or anything else which has occurred in the past. Of course, the entire body of Austrian theory is itself one big prediction, but I’m thinking here of more specific examples of predictions made by Austrians which have subsequently come to pass.
For example, this is Hans F. Sennholz in Age of Inflation Continued, 2006, p. 7:
"Some economists envision continuation of present monetary policies with the U.S. dollar depreciating at a rate of two to four percent. The Federal Reserve, we are told, is giving the country a measure of stability and pointing the way to economic growth and prosperity throughout the world. But these partisans blithely overlook the huge federal government deficits, as well as the massive trade deficits which render the American economy rather vulnerable. American savings are at a record low and current account deficits are at a record high, which have ignited a global housing boom, the biggest financial bubble in history. A world economy so maladjusted is dangerously vulnerable to painful readjustment.
The economic situation presently looks ominously like the 1970s, when inflation soared at double-digit rates. Surely, the present bubble will burst, as all such bubbles did inexorably in the past, but what will it do to the economy? With price inflation edging up already, will the Fed slash its interest rates, as it did in 2001-2002, and thereby accelerate the dollar depreciation? And how will the federal government react? With present budget deficits at record highs, will it double the highs and reach six hundred or even seven hundred billion dollars a year? We had better prepare for one or the other, soaring inflation or a nasty slump."
Just how prescient do these predictions need to be before people start listening seriously to what Austrians have to say? Has Mr. Bernanke ever come anywhere near being as correct about the economy as Mr. Sennholz is here? Will he ever?
Keynesians and Friedmanites alike maintained that the gold bugs were dinosaurs. Whereas Mises and his followers held that gold was giving backing to paper money, both the Keynesian and Friedmanite wings of the Establishment maintained precisely the opposite: that it was sound and solid dollars that were giving value to gold. Gold, both groups asserted, was now worthless as a monetary metal. Cut dollars loose from their artificial connection to gold, they chorused in unison, and we will see that gold will fall to its non-monetary value, then estimated at approximately $6 an ounce.
There can be no genuine laboratory experiments in human affairs, but we came as close as we ever will in 1968, and still more definitively in 1971. Here were two firm and opposing sets of predictions: the Misesians, who stated that if the dollar and gold were cut loose, the price of gold in ever-more inflated dollars would zoom upward; and the massed economic Establishment, from Friedman to Samuelson, and even including such ex-Misesians as Fritz Machlup, maintaining that the price of gold would, if cut free, plummet from $35 to $6 an ounce.
…
Flouting all the predictions of the economic Establishment, there was no contest as between themselves and the Misesians: not once did the price of gold on the free market fall below $35. Indeed it kept rising steadily, and after 1971 it vaulted upward, far beyond the once seemingly absurdly high price of $70 an ounce.[3]Here was a clear-cut case where the Misesian forecasts were proven gloriously and spectacularly correct, while the Keynesian and Friedmanite predictions proved to be spectacularly wrong.
We should not give credit to economists because of their predictions. It’s all about theory and concepts. Predicting economy is very difficult: millions of variables, individual actions. Mises said that the ABC is also subject to individual actions, so that it could “fail” as a model.
Rothbard there was right because he had the right theories.
Very true, however when debating, people still like to hear concrete examples of someone putting theory into practice. When I tell people Mises predicted the Crash of 1929 while Keynes lost his personal fortune in it, people are less likely to scoff at me.
Mark Thornton was predicting this current mess as far back as 2001 I believe. Sean Corrigan also was on this back in '03. If you listen to his Theory Meets Praxis speech on Mises.org in fact he cites the housing market as a particular concern and corporate profits coming about 60% from the inflationary boom, which given Greenspan’s recent conjecture of 50-70% should impress people, as they still hold him up as some kind of God. Knowing that someone from the Austrian school not only preceeded his prediction by 6 years but nailed it right where Greenspan puts it, and he only with the benefit of hindsight, should give them pause to think. But likely it won’t.
One thing about the Austrian school is people are essentially retarded when it comes to it. They don’t understand it, so even their criticisms are off. You heard this for example in Bill Maher’s most recent show where some woman characterized the Austrian school as letting all economic activity stop or come to a gringing halt, as if the choice were spend spend spend or that. She doesn’t get, nor do most people, the false nature of that choice. They don’t seem to understand that they’re trying to treat alcoholism by feeding the addict more whiskey. Specifically missing is any understanding that where we are now is the result of past policy. To most people any level of government intervention short of outright nationalization is negligible. If the entire economy were nationalized except for producers of rubber dog poo, you can bet people would still blame the free market and the obscene profits of those horrible capitalists in the rubber dog dookie market as the cause of all their woes.
Point being that correct predictions aren’t going to sway people anymore than finding the tomb of Jesus with his remains therein would shake the faith of the majority of Christians. People in the US and elsewhere have essentially been raised by a bunch of commies. It is nigh impossible for them to even think in any other terms than Free Market = Bad and Government = Good. Not only that, any and all markets are free as far as they’re concerned. It doesn’t matter the level of government intrusiveness, it will be excused away as necessary and maintained to be negligible, and the market free. I’ve been arguing for a while on another board with some guy, attorney and reasonably intelligent in other areas, who thinks that if the government taxed everyone to provide each family with a ‘free’ car, not only would that not affect their spending habits in general, it wouldn’t affect their spending habits specifically regarding cars themselves. That is, he thinks after getting taxed to be provided with a ‘free’ Honda not only will being out the tax not affect their marginal decision making, but that people will be just as likely to buy a new BMW as they would without the tax and the ‘free’ car. This is magical thinking at its best, and a denial of basic economics at its most fundamental levels.
There’s one way to get the word out, it’s to go after the kids. An intern in my company is going for an Econ major. I slipped him a copy of The Austrian Theory of the Trade Cycle. Needless to say he’s not an Austrian as of now, but he’s definitely thinking along lines other than his professors these days. If you’re concerned about your future, go after the kids. Right now all they’re learning, if anything, is Keynesian economics and perhaps a smattering of monetarist thought. It’s really only the kids who will be impressed by correct predictions and consistent thought. The rest of the world, I’m sorry to say, is lost at this point.