Original Article published on Dailylibertarian.com.
In an attempt to refute the ideas behind Austrian Economics, a Marxist website (no hyperbole here), stooped to the level of blatant intellectual dishonesty in order to dissuade people from one viewpoint and proselytize them to their own. This deception was so glaring and obvious that I felt compelled to stop their attempt to persuade the easily deceived. The author, John Case, did a terrible job researching his subject.
In Frederic Bastiat’s introduction to “Economic Sophisms – First Series,” Bastiat wondered why it is that liberty is “so hidden as to be discovered only by professional Economists.” His timeless conclusion was repeated by Milton Friedman, in Friedman’s own words, over two centuries later in his book “Free to Choose.” Bastiat said:
We must confess that our adversaries have a marked advantage over us in the discussion. In very few words they can announce a half-truth; and in order to demonstrate that it is incomplete, we are obliged to have recourse to long and dry dissertations.
Fortunately there is no need for me to write a dissertation here and writing one would do more harm to my purpose than good as the folks atpoliticalaffairs.net do not seem inclined to read as much as would be required. Instead I will quickly address three of their claims.
First, the claim that proponents of Austrian Economics are “calling for the end of public schools, roads, post offices, Internet, media of any kind, health care, retirement, fire stations, etc, etc, etc” is wrong. Austrian Economists are not against things like health care and the internet. Rather, Austrian Economists have enough of an imagination to suppose that things can be produced and created without the use of the initiation of coercion as a means for wide-scale social cooperation. In fact, many libertarians believe the use of coercion limits the creativity of the individual and impedes the development of society as a result. The internet is not a result of coercion but the result of many dispersed individuals cooperating to create something amazing. The internet embodies the results of non-coercive social cooperation that economists like Mises and Hayek espouse.
My second point of contention is Case’s mysterious imbuement of religion into the Austrian Business Cycle Theory (ABCT) that cannot be traced back to a single major proponent of Austrian Economics (or anyone but Case himself). In describing how his version of ABCT he says:
Every graph of the financial crises showing crashes and bubbles is just God’s continuing morality play. Government intervention in this “virtuous” cycle prevents God and/or nature from rendering justice with the “tough love” everyone needs
The most prominent model used as an explanation for the business cycle is Hayek’s triangle. I searched the internet for one that included “God’s Wrath” but the best I could come up with is mining tools depicted in the most elongated portion of the its representation of the market.
Well, maybe Hayek wasn’t religious. However, modern day proponents of Austrian Economics must be! This turns out to not be the case. Ludwig von Mises, Murray Rothbard and Walter Block are all atheists and the latter two are even associated with the Ludwig von Mises Institute (of which he cites in his article). Even those who do believe in a God do not use God in their economic models. For good measure, some of those folks include Hans Sennholz, Robert Murphy, and Tom Woods, all of which think the business cycle is a bad thing and have devoted large portions of their lives attempting to educate others.
Finally, the last bothersome claim I want to address is the claim that Austrian Economists suggest NO policy solutions to end the business cycle. It’s easy to see how someone can get this impression. Ron Paul gave interview after interview on how prices should decline in order to adjust from bubbles that were caused by monetary expansion and interest rate manipulation. However, if any research for this article was done at all I would be curious as to how Case could have missed Ron Paul’s NY Times best-selling book “End the Fed.” Isn’t ending the Fed a policy solution? How about Murray Rothbard’s “What has Government done to our Money,” Lawrence White’s “Competition and Currency,” Hans Sennholz “Age of Inflation” (with a picture of a money bubble on the capital building), or Tom Wood’s “Meltdown.” I admit, a few of these books would require one to not glean Austrian Economic policy solutions from the cover, a few pages would have to be read, but to make such a vociferous claim about a school of thought that is diametrically opposed to actual policy suggestions is dishonest and lazy.
There are many more claims made by Case in his article but demonstrating the absurdity of a few satisfies me. Most readers of Students for Liberty are well aware of how absurd the claims made by Case are, but, in case you’re not aware of the more insidious, gasp – the claim that Austrian Economists do not use math- here is a great introduction to Austrian Methodology. Unfortunately full-truths require a bit more reading than half-truths because of the ease at which half-truths are spoken.