What do you think is the main thing that separates Austrian school economics from other economic theories? The really noticeable thing to me is the emphasis on debt. Most other economists seem to think debt is almost a non-factor. I think that’s why they missed the crash of 08 and why they are missing the coming currency crisis.
Capital theory is one of the main differences.
The nature of capital, the importance of the price system, and methodology seem to be the most prominent.
The Austrian School is the most consistent of all the schools, also.
Another thing I noticed is that Austrian schoolers believe large trade deficits are a bad thing. This surprised me because I had always heard from many free market economists like Milton Friedman and Walter Williams that there was no such thing as a trade deficit. I think the Austrian perspective makes more sense. If you’re printing money and trading it for goods you might be “winning” in the short run but not in the long run. When they stop taking your paper you’re going to be in trouble. I think a trade deficit is a sign that you are not competitive as a country.
I’ve always thought (rightly or wrongly) that the austrians are the only school to effectivly look at the structure of production, which I think is where they have huge advantages over other schools and see why government involvment F***s everything up.
Furthermore praxeology is also used in AE as opposed to all other schools
Not true.
Also, Austrians look at the market as a process in a dynamic sense (known as the coordination problem). There are many aspects to this but it’s one of the main differences.
Holy Lexicon Batman!
Had to look that one up … 
Trade deficits aren’t bad in and of themselves. My house has a trade deficit. Perhaps my state does too. If you’ve got a money deficit, then you’ve got a good surplus. In all trades, both sides benefit ex ante. So the transactions that lead to the “trade deficit” are beneficial. The conditions which cause those trades to be beneficial to the participants - now there’s the focus.
Nope.
Most of my Austrian School exposure comes from Peter Schiff. Whether it’s Austrian school or not I do believe trade deficits are a bad thing. But I’m totally against any type of protectionism. I think large, long running trade deficits are a sign that your government needs to cut spending and regulations.
Methodology is the main difference. Austrians practice a method Mises called “praxeology” and some know as deductivism. It consists of logically computing the result of certain abstract processes and comparing these results.
Other schools of economics either do not have a methodology or borrow theirs from physics to create equilibrium models of equations.
haha, ok you win… I agree that trade deficits do not matter, in and of themselves.
It’s a simple accounting identity, nothing more. Nations shouldn’t have large deficits nor large surplus’s; but if they do, it’s no big deal. A problem, though, is when they inflate their currencies in order to stimulate exports artificially. That causes all sorts of imbalances. So, we have to distinguish between natural and manufactured balances of trade.
Methodology: we verstehen human beings, ‘the other guys’ erklaren atoms.
But what if the trade is goods for printed paper?
The way it’s supposed to work is I trade 100 dollars to a person in China for a TV. He takes those dollars and buys oil from a Saudi. The Saudi takes those dollars and uses them to buy a Hummer from the US. Thus the cycle is complete. If the US simply prints money with no ability to produce goods that anyone wants to buy then counterfeit dollars start piling up offshore. This is a bad thing.
I just wanted to add that if the trade were using real money like gold then I would agree that there is no trade deficit. But when you are using fiat currency you are really using IOUs that can only be redeemed at the original country where they are printed. Another way to look at it is that a trade involving fiat money is not complete until the fiat money ends up back in the original country.
Misesians use fictitious constructions (like the evenly rotating economy) as a limiting notion to help them think through and discover laws of action. They then use those laws to say things about the real world. Neoclassicals erroneously use fictitious constructions (like perfect competition) to try to directly infer things about the real world.
Economics isn’t really my forte. I mean I know how to make change and whatnot but I don’t really have any business commenting about Australian economics or whatever.