I’m looking for anecdotal evidence that studying Austrian Economics will help me succeed in the business world.
Just to be clear, I’m not studying it for that reason, but I am hoping it’ll be a by-product (and am looking for any anecdotal evidence to support that claim). In case anyone is curious why I’m wondering, it basically comes down to me assuming that tools that help you understand the world, will also allow you to make wiser decisions. I’ve studied a good deal of “mainstream” economics (I have a bachelor’s and master’s in the field) and the higher up I got, the less convinced I was that it had any practical value for real world decision making. The only econ class that seemed that practical was introductory micro, and maybe that’s partially because it was taught from somewhat of an Austrian perspective (we used Heyne’s/Boettke’s textbook). All the other classes seemed helpful, only in so far as they helped me understand (both the strengths and weaknesses) of the concepts we covered in introductory econ. So, one of the main conclusions I’ve came to, is that most of my econ training wasn’t practical precisely because it didn’t aid me in understanding the real world very well. I’m studying Austrian Econ out of a straight love for the subject, but in the end, I’m also hoping it will help me professionally (since I’ve decided to pursue a career in the private sector, rather than academia). Any thoughts, opinions, advice, questions, and/or criticisms are more than welcome.
My understanding of AE is shallow, but knowing about the Austrian Business Cycle will help you navigate the peaks and valleys with less malinvestment. Maybe you can even learn to ride malinvestments to the top and dump them before they correct.
Generally, free market economics emotionally prepares you for failure in business, because you know it is a necessary part of the process. And otherwise, only failure teaches businessmen.
If you mean starting and running your own business, then it would be no more helpful than it is for your personal finances. It might help in identifying major problems in the economy that would adversely affect you and allow you to position yourself to better survive economic turbulence.
But for the day to day operation of a small business you would be much better off understanding things like cash flow analysis, the specific industry that you are in, the habits and behaviors of your customers. Most small businesses are not in control of the large economy wide structure problems that things like the ABCT would help you identify.
Austrian economics is value-free, but being ethically libertarian (which is a completely separate thing) can help, allowing you to establish a reputation as a business to be trusted. The libertarian philosophy excludes initiation of coercion, including deception, the gaming of contracts, and other bad behaviors that are all too common. Respecting the private property rights of customers and employees can’t hurt, either.
If you mean starting and running your own business, then it would be no more helpful than it is for your personal finances. It might help in identifying major problems in the economy that would adversely affect you and allow you to position yourself to better survive economic turbulence.
But for the day to day operation of a small business you would be much better off understanding things like cash flow analysis, the specific industry that you are in, the habits and behaviors of your customers. Most small businesses are not in control of the large economy wide structure problems that things like the ABCT would help you identify.
Just to be clear, I don’t mean understanding AE at the exclusion of those other things, but rather in addition to those other things. In other words, does understanding AE have a marginal benefit? For example, maybe thinking in terms of market processes and entrepreneurship (and other AE concepts) are a beneficial foundation for thinking about business, and the world in general. If one has the right set of “reading glasses” for understanding the world, I hope they might be able to exploit their insights in some shape or form.
This ^^ is exactly why you will fail in business. You’re not sure if knowing more is better than knowing less.
Knowing more isn’t always better than knowing less. In my opinion, some disciplines will actually hurt your ability to make wise decisions. Take for example a claim I heard from some business students, who said they’ll have to forget all the finance they learned in college if they actually want to understand markets and succeed as an investor. I would also claim that implementing high-level “mainstream” econ, might be a bad decision in the practical business world. Lastly, even if it doesn’t hurt you, it might not help either.
Study business. Study management. Study economics. Economics will better prepare you to analyze market and economic conditions.
That was/is my plan. Just curious to see how much people expect the AE component to help (and also, I’m really interested in learning about successful business people who’ve been influenced by AE).
Just to be clear, I don’t mean understanding AE at the exclusion of those other things, but rather in addition to those other things.
If you have the time and energy. Then it is not a waste of time to study economic theory and how the large economy works. But most small business owners do not have much free time. It is not unusual for a small business owner to put in upwards of 80 hrs a week running thier business. So time is at a premium. So the reality is most likely that you will not have time to do all you want to do.
The value to a small business owner would be marginal at best, because it will generally help you understand those things over which you have little to no control.
If one has the right set of “reading glasses” for understanding the world, I hope they might be able to exploit their insights in some shape or form.
Maybe, but maybe not. There are countless people who have made a great deal of money who know nothing about economic theory or business cycles. What they do understand is the field in which they work, the markets they serve, how to interpret financials, and how to manage money.
With limited time and resources make sure you understand these things first, if you have free time afterwards then more knowledge is always better than less.