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Talk:Austrian school

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Gary Becker?[edit]

No, seriously, why is Gary Becker classified as an Austrian? He's famous for applying economic models to human behaviour, and is associated with the Chicago School, which at least attempted to apply empiricism.

What is the objection to the action axiom (aside from the fact that it's put forth as an axiom rather than an observation)[edit]

The action axiom basically states that one takes actions with specific goals in mind, with the intent of alleviating one's felt uneasiness in the present by acting in ways one anticipates will bring about a more desirable state of affairs in the future. Thus, human action is distinguishable from the actions of an air conditioner, vacuum cleaner and TV, which do not understand the purpose for why they do what they do; they do not select means based on their ability to accomplish goals.

One can argue that it's unscientific to claim that statements such as this are true without proving them. But does anyone doubt the truth of the statement (as opposed to objecting to the epistemology behind one's belief in it)? There are a lot of unproven theorems that mathematicians find useful. If a mathematician errs in saying that Euclid's Parallel Postulate has been proven, it doesn't mean that the postulate is untrue.

I would interpret "choice" to mean that you were looking for a way to solve a problem and considered various possible means. It could be, then, that a chess program that looks for a solution to a "mate in x moves" problem, finds the optimal one, and executes it, is engaging in what could be considered "human action". The goal is to win; various means are available; and the program selects and carries out the one that will achieve the goal. Maybe even electricity engages in such action, in that its goal is to complete a circuit by the shortest route, and given two alternatives, it will pick the one that achieves that goal best.

When you look at it that way, maybe appliances do engage in "human action". A ball thrown straight up in the air, too, seems to behave as though its "goal" is to reach the earth by the shortest route; does it make much difference whether its behavior is not the result of physics that take place within the ball (as is the case with the vacuum cleaner, whose circuits that perform its functions are located within the "acting" object, rather than outside of it)?

Mises might be wrong in making an arbitrary distinction between human and non-human action, but it's not clear that it would be fatal to the rest of his theories. So what if animals and appliances also engage in purposeful behavior sometimes; it doesn't mean that humans don't engage in purposeful behavior. One can still proceed from the idea of purposeful behavior to theories of supply and demand that show that interventionist policies would cause certain problems (such as shortages and surpluses); whether one views the costs as outweighing the benefits (even the Austrians admit that taxes and regulations benefit some people at the expense of others) depends on what your goals are. The Austrians admit that there is no way of proving objectively that one goal is better than another.

Whether the ABCT or the Keynesian "aggregate demand" theory are correct probably partly depends on what humans believe will best accomplish their goals. For example, if people think that a recession won't get better unless the government intervenes, and that they therefore shouldn't increase their savings or spending unless they anticipate such intervention, then the Keynesian theories could be self-fulfilling. On the other hand, if they were to believe in the ABCT and act accordingly, that theory might become self-fulfilling.

By the way, it would be an interesting question to ask "What is felt uneasiness"? What are pleasure and pain exactly, and what distinguishes what living creatures experience from the processes that take place within nonliving things and cause them to do what they do? Some of these questions, our language may be too limited to be able to express precisely. Maybe our minds now are incapable of solving these mysteries, but a future superhuman creature will be able to.

"There is a history of logic as there is a history of technology. Nothing suggests that logic as we know it is the last and final stage of intellectual evolution. Human logic is a historical phase between prehuman nonlogic on the one hand and superhuman logic on the other hand." Let's hope Mises was at least right that a more powerful kind of logic than what we have now may be on the way.

The Austrians say that economic principles can't be proven by the scientific method, but they are always citing historical examples as evidence backing up their theories. Really, when they point out that it is hard or impossible to know that one has adequately isolated particular variables in the social sciences, they are just saying that the laboratory conditions are not perfect. They do not regard the economic "experiments" that have been conducted by states and other actors as totally useless, though. Austrians still try to support conclusions using evidence. They use both deduction and induction at various times to prove various points, even though they claim armchair economics to be superior. Glideslope (talk) 01:12, 6 December 2013 (UTC)

"Perhaps one reason they are so uncomfortable with empiricism is that Austrian economists are more interested in defending the political ideology of libertarianism than they are in advancing economic understanding,[6] and rigorous testing can sometimes undermine deeply held political beliefs." So in other words, perhaps they're being intellectually dishonest, which might include putting selfish personal gain ahead of truth. (Presumably worthy goals are almost always pursued by finding and sharing truth rather than lies. Lies are typically advanced to further selfish personal gain. Would anyone disagree with either of those two statements?)

We could accuse almost anyone of intellectual dishonesty, though. Suppose there is a person who believes capitalism is good for the world. He might become a factory owner because of this belief. It could also be that a person who wants to become a factory owner for personal gain uses the capitalist ideology as intellectual cover to diminish people's opposition to him or to put his own conscience at peace, if he is capable of such mental gymnastics. Do we have any way of knowing which it is?

People tend to end up in professions that are aligned with their ideology and to adopt ideologies that are aligned with their chosen professions. Unless there's a shred of evidence to support the speculation of intellectual dishonesty, maybe the sentence should be removed. Glideslope (talk) 03:13, 6 December 2013 (UTC)

One can argue that it's unscientific to claim that statements such as this are true without proving them. But does anyone doubt the truth of the statement (as opposed to objecting to the epistemology behind one's belief in it)?
You mean besides all of modern neuroscience and psychology? Not to mention the destruction of any useful conclusions that might be drawn from such an axiom as a result of the work done by Herbert Simon. Dsmelser (talk) 22:01, 12 April 2014 (UTC)

Terrible Article[edit]

Rational Wiki is supposed to be about debunking pseudo-science, not advancing political agendas. — Unsigned, by: / talk / contribs 27 March 2014, 12:24 (UTC)

Political agendas that rely on rank pseudoscience are fair game. Star of David.png Radioactive afikomen Please ignore all my awful pre-2014 comments. 03:41, 28 March 2014 (UTC)
Austrian Economics is not a political agenda, nor is it accurate that it "eschews mathematical modeling and empirical testing in favor of a narrative approach termed 'praxeology.'[2][3]"
The fact, if whoever wrote that would BOTHER to read some actual economics history, is that early Austrians are responsible for creating many of the principles behind the mathematical economic models, and many of models themselves, that are in common use today.
The difference, i.e. "praxeology", is that Austrians have come to believe that the mathematical models are not "wrong" as a whole (though some of them demonstrably are), but rather the whole point is that they are insufficient to accurately model real-world economics.
And in the U.S. we have 80+ years of classical, neo-classical, and Keynesian economic policy which indisputably proves that in fact the mathematical models are not sufficient to predict. If they could, we wouldn't have recessions or market crashes.
While I have a great deal of appreciation for alternative viewpoints, this article is mostly just ignorant garbage.
Anne Ominous (talk) 23:29, 27 May 2016 (UTC)
That sounds like a nirvana fallacy: "economic models aren't perfect, so they're worthless". Also you've elided a rather important thing: even if a model predicts something, that doesn't automatically mean people will do anything about it. For instance, quite a few people (myself included!) were aware the U.S. housing bubble would eventually burst. It wasn't really hard to see coming. But by and large, society and government did nothing to prevent it, because that would have been hard. Wishful thinking is free! See also global warming. And while Austrian economics might technically not be in itself a political ideology, Austrians are pretty much to a man right-libertarians/minarchists/anarcho-capitalists. One might ask oneself why everyone who espouses Austrian economics clusters around one ideological alignment. Contrast with mainstream economics, where there are economists all over the political map. --Ymir (talk) 02:07, 28 May 2016 (UTC)
You're reading something into my words that doesn't exist. Try again.
From a scientific standpoint, if a model does not effectively model, it's worthless. That's not anti-science, it's science. Good example: according to Phillips Curve, which was a cornerstone of neo-classical and Keynesian economics, the "stagflation" of the 1970s was IMPOSSIBLE. It took years and Milton Friedman to come up with an explanation for it that could even remotely be shoe-horned into the theoretical model.
One can call a theory "objective science" all one wants, but if it doesn't match observation, it's neither objective or good science. "It doesn’t matter how beautiful your theory is, it doesn’t matter how smart you are. If it doesn’t agree with experiment, it’s wrong." -- Richard Feynman
The point was that Austrians don't claim more "conventional" economics is "unscientific", meaning that the models are not scientific attempts to model economic reality. When they say "unscientific", they mean it is unscientific to put too much faith in models that have consistently failed to predict the future. They don't hate the methodology of mathematical economics. (Why would they? They helped create it!) They simply concluded -- based on a plethora of good evidence -- that it is not sufficient YET to the task. And contrary to popular belief, they don't reject those mathematical models out of hand. They use them, too. They just don't put an excess of faith in them.
Re: "For instance, quite a few people (myself included!) were aware the U.S. housing bubble would eventually burst. It wasn't really hard to see coming. But by and large, society and government did nothing to prevent it, because that would have been hard." Utter nonsense. They did everything they could to prevent it, according to conventional (largely Keynesian) interventionist economic theory. In fact, there's a YouTube video in which Peter Schiff is talking about the coming bubble burst, which was called nonsense and even laughed at by economist Art Laffer (of Laffer Curve fame), a dyed-in-the-wool Keynesian, and others who followed interventionist economic theory. They were convinced that government interventionism (via, among other things, the Fed) had everything under fine control. Obviously they were wrong.
Re: "And while Austrian economics might technically not be in itself a political ideology, Austrians are pretty much to a man right-libertarians/minarchists/anarcho-capitalists. One might ask oneself why everyone who espouses Austrian economics clusters around one ideological alignment."
First, anarcho-capitalism is a branch of economics, not politics. As for the rest: one might legitimately ask why you haven't seen the blatantly obvious answer.
While it's true Austrians TEND to be Libertarians, if there is any causation in that correlation it is the opposite of what you imply: Austrian economics gives strength to the idea of Laissez-Faire capitalism, which is not possible under a central-planning, interventionist government. So it should be no surprise to anybody that Austrians tend to not be Democrats, who believe in central planning and interventionism.
Further, those who really support free markets today tend to not be Republicans, who give lip service to the idea of free markets but in recent decades have given little real-world support for same, instead opting to increase government spending and central control. And frankly, both parties have favored their friends and campaign donors over free markets.
I hope that is sufficient explanation for you. I think I've been very patient in politely explaining the obvious. Austrian economics *is* strictly economics. But it pairs quite well with Libertarianism. (talk) 23:21, 29 May 2016 (UTC)
Is there anyone who calls economic theories "objective science"? The term "social sciences" exists for a reason, because it's very hard to do controlled experiments on whole human societies. Do you actually know what Austrian economics preaches? You seem to be saying Austrians are merely a wee bit skeptical of mathematical modeling, which is kind of understating things. Well okay, there's kind of a split between the "Misesean" and "Rothbardian" strains of Austrian thought. You're more describing Mises, who was somewhat critical of mainstream economics but didn't totally reject mathematical modeling. Rothbard on the other hand pretty much did. That's what "praxeology" is all about: "You can't describe people's actions with math!" I would say most current-day Austrians are Rothbardian; it's Rothbard's writings that pull most people into the Austrian school these days. Moving on, your claims about the run up to the financial crisis are the standard Austrian bullshit. Greenspan was a hardcore laissez-faire proponent, and was saying right up to his last day as Fed Chair that everything was hunky-dory and the free market fixes itself. The mortgage crisis was set up by the American right wing's decades-long push for "deregulation", which led to banks handing out designed-to-fail mortgages to anyone with a pulse and then palming off the mortgage bundles onto suckers. The suckers bought credit default swaps to insure their "investments", and, surprise surprise, CDS were unregulated, thanks to lobbying by the companies selling them, which meant of course the insurers just pocketed the premiums and had no way to make good on claims. Economists not living in Austrian la-la land are basically unanimous in crediting government and central bank action after the shit hit the fan with preventing Great Depression 2.0. This isn't to say that it couldn't have been done better, instead of throwing piles of money at the companies that created the crisis, but the point is that it worked at stopping the world financial system from collapsing. As for Schiff, see the whole section in this article with his name on it. Also, not on your main point, but "anarcho-capitalism is a branch of economics, not politics" is just plain false, under the accepted meanings of the words "economics" and "politics". Anarcho-capitalists advocate for a certain political system, in their case, abolition of government and markets for everything. --Ymir (talk) 05:17, 31 May 2016 (UTC)

We pissed someone off[edit]

What this article has to do with socialist indoctrination is anyone's guess.--TemplarJLS (talk) 09:01, 22 September 2014 (UTC)


Perhaps if you accept scientific anarchism on top of political anarchism, it's a little easier to accept unscientific theories. Fuzzy. Cat. Potato! (talk/stalk) 03:54, 10 February 2016 (UTC)

Everyone seems to be missing the point behind Austrian economics. So here it is in a (scientific!) nutshell: the entire worth of a scientific theory is in its ability to predict. Since it is easy to demonstrate that current mathematical economic models are terrible at predicting, it is THEY that are unscientific. They have been demonstrated, not to be false per se, but to be insufficient to the job.
That is the basis of Austrian theory. Nothing more. It is no more "unscientific" than the models (which they originally helped to create!) which do not predict.
Anne Ominous (talk) 23:34, 27 May 2016 (UTC)

More facts, please[edit]

If I started reading this article knowing nothing about Austrian economics, I would finish reading knowing nothing except that somebody strongly disagrees without it. I don’t gain any knowledge of the thing they disagree with. It’s a very well written rant. That’s totally cool, but, without more facts about the Austrian school, totally uninformative. Ordinarily, I’d dive in, but changing such a passionate rant seems like a pain, likely to be not worth it. Am I wrong? 2601:285:8380:1AC8:B407:43EA:8197:2A2E (talk) 14:07, 12 December 2020 (UTC)

You didn't learn everything there is to know at "they reject empirical evidence"? ☭Comrade GC☭Ministry of Praise 14:15, 12 December 2020 (UTC)
They're idiots, but we need to explain what their views are and why they're idiots. Twodots (talk) 14:23, 12 December 2020 (UTC)
'xactly. 2601:285:8380:1AC8:142E:16CE:8F11:8F6 (talk) 15:08, 12 December 2020 (UTC)