Jump to content

Austrian school of economics: Difference between revisions

From Wikipedia, the free encyclopedia
Content deleted Content added
No edit summary
Larry_Sanger (talk)
Undoing another edit from 213.122.236.xxx (just added /////////'s)
Line 1: Line 1:
A school of economic thought founded in 1871 with the publication of [[Carl Menger]]'s [[Principles of Economics]]. Austrian economics is currently closely associated with advocacy of unregulated capitalism and extreme laissez faire views.
A school of economic thought founded in 1871 with the publication of [[Carl Menger]]'s [[Principles of Economics]]. Austrian economics is currently closely associated with advocacy of unregulated capitalism and extreme laissez faire views.

Austrians view entrepreneurship as the driving force in economic development, see private property/////////////////////////// as essential to the efficient use of resources, and often think government interference in market
Austrians view entrepreneurship as the driving force in economic development, see private property as essential to the efficient use of resources, and often think government interference in market

processes to be counterproductive. The school originated in [[Vienna]] and owes its name to members of the [[Historical School]] of [[economics]] who derisively called it the "Austrian School" to emphasize its departure from mainstream German thought.
processes to be counterproductive. The school originated in [[Vienna]] and owes its name to members of the [[Historical School]] of [[economics]] who derisively called it the "Austrian School" to emphasize its departure from mainstream German thought.




Menger was closely followed by contributions from
Menger was closely followed by contributions from

[[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]] and [[Friedrich von Wieser]].
[[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]] and [[Friedrich von Wieser]].

[[Austria|Austrian]] economists developed a sense of themselves as a
[[Austria|Austrian]] economists developed a sense of themselves as a

school distinct from [[neoclassical economics]]
school distinct from [[neoclassical economics]]

during the [[economic calculation debate]],
during the [[economic calculation debate]],

with [[Ludwig von Mises]] and [[Friedrich von Hayek]]
with [[Ludwig von Mises]] and [[Friedrich von Hayek]]

representing the Austrian position. The school was
representing the Austrian position. The school was

no longer centered in Austria after [[Hitler]] came to
no longer centered in Austria after [[Hitler]] came to

power. Austrian economics was ill-thought of by most
power. Austrian economics was ill-thought of by most

economists after [[World War II]]. Its reputation has
economists after [[World War II]]. Its reputation has

lately risen with work by students of Israel Kirnzer
lately risen with work by students of Israel Kirnzer

and Ludwig Lachmann.
and Ludwig Lachmann.




[[Carl Menger]] was one of a group of economists founding
[[Carl Menger]] was one of a group of economists founding

neoclassical economics in the 1870s. Neoclassical
neoclassical economics in the 1870s. Neoclassical

economists reject classical cost of production
economists reject classical cost of production

theories. Instead they explain value by subjective
theories. Instead they explain value by subjective

preferences of individuals. Supply and demand are
preferences of individuals. Supply and demand are

explained by aggregating over the decisions of
explained by aggregating over the decisions of

individuals, following the precepts of methodological
individuals, following the precepts of methodological

individualism and marginal arguments, which compare
individualism and marginal arguments, which compare

the costs and benefits for incremental changes.
the costs and benefits for incremental changes.

Contemporary neo-Austrian economists claim to
Contemporary neo-Austrian economists claim to

adopt [[Economic subjectivism]] more consistently
adopt [[Economic subjectivism]] more consistently

than any other school of economics and reject many
than any other school of economics and reject many

neoclassical formalisms.
neoclassical formalisms.




Some contributions of Austrian economists:
Some contributions of Austrian economists:




* A theory of distribution in which factor prices result from the imputation of prices of consumer goods to goods of "higher order", that is goods used in the production of consumer goods, goods used in the production of those producers goods, etc.
* A theory of distribution in which factor prices result from the imputation of prices of consumer goods to goods of "higher order", that is goods used in the production of consumer goods, goods used in the production of those producers goods, etc.




* An emphasis on opportunity cost, reservation demand, and a refusal to consider supply as an otherwise independent cause of value. (The British economist Philip Wicksteed adopted this perspective.)
* An emphasis on opportunity cost, reservation demand, and a refusal to consider supply as an otherwise independent cause of value. (The British economist Philip Wicksteed adopted this perspective.)




* An emphasis on the forward-looking nature of choice.
* An emphasis on the forward-looking nature of choice.




* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]'s critique of Marx centered around the untenability of the [[labor theory of value]] in the light of the transformation problem.
* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]'s critique of Marx centered around the untenability of the [[labor theory of value]] in the light of the transformation problem.




* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]'s capital theory which equates capital intensity with the degree of roundaboutness of production processes and explain interest rates through intertemporal choice.
* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]'s capital theory which equates capital intensity with the degree of roundaboutness of production processes and explain interest rates through intertemporal choice.




* The Mises-Hayek business cycle theory which explains depression as a reaction to an intertemporal production structure fostered by monetary policy setting interest rates inconsistent with individual time preferences.
* The Mises-Hayek business cycle theory which explains depression as a reaction to an intertemporal production structure fostered by monetary policy setting interest rates inconsistent with individual time preferences.




* Hayek's concept of intertemporal equilibrium. (J. R. Hicks took over this theory in his discussion of temporary equilibrium in ''Value and Capital'', a book very influential on the development of neoclassical economics after World War II.)
* Hayek's concept of intertemporal equilibrium. (J. R. Hicks took over this theory in his discussion of temporary equilibrium in ''Value and Capital'', a book very influential on the development of neoclassical economics after World War II.)




* Mises and Hayek's view of prices as permitting agents to make use of dispersed tacit knowledge.
* Mises and Hayek's view of prices as permitting agents to make use of dispersed tacit knowledge.




* The [[time preference theory of interest]]
* The [[time preference theory of interest]]




=== Major Austrian Economists ===
=== Major Austrian Economists ===

* [[Carl Menger]]
* [[Carl Menger]]

* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]
* [[Eugen von Boehm-Bawerk|Eugen von Böhm-Bawerk]]

* [[Friedrich von Wieser]]
* [[Friedrich von Wieser]]

* [[Ludwig von Mises]]
* [[Ludwig von Mises]]

* [[F. A. Hayek]]
* [[F. A. Hayek]]




Other related economists:
Other related economists:

* [[Frederic Bastiat]] (precursor)
* [[Frederic Bastiat]] (precursor)

* [[Henry Hazlitt]] (introduced the Austrian School to the USA)
* [[Henry Hazlitt]] (introduced the Austrian School to the USA)

* [[Murray N. Rothbard]] (successor)
* [[Murray N. Rothbard]] (successor)




<p>[[/Talk]]
<p>[[/Talk]]




* See also: [[classical liberalism]]
* See also: [[classical liberalism]]


Revision as of 18:18, 22 November 2001

A school of economic thought founded in 1871 with the publication of Carl Menger's Principles of Economics. Austrian economics is currently closely associated with advocacy of unregulated capitalism and extreme laissez faire views.

Austrians view entrepreneurship as the driving force in economic development, see private property as essential to the efficient use of resources, and often think government interference in market

processes to be counterproductive. The school originated in Vienna and owes its name to members of the Historical School of economics who derisively called it the "Austrian School" to emphasize its departure from mainstream German thought.


Menger was closely followed by contributions from

Eugen von Böhm-Bawerk and Friedrich von Wieser.

Austrian economists developed a sense of themselves as a

school distinct from neoclassical economics

during the economic calculation debate,

with Ludwig von Mises and Friedrich von Hayek

representing the Austrian position. The school was

no longer centered in Austria after Hitler came to

power. Austrian economics was ill-thought of by most

economists after World War II. Its reputation has

lately risen with work by students of Israel Kirnzer

and Ludwig Lachmann.


Carl Menger was one of a group of economists founding

neoclassical economics in the 1870s. Neoclassical

economists reject classical cost of production

theories. Instead they explain value by subjective

preferences of individuals. Supply and demand are

explained by aggregating over the decisions of

individuals, following the precepts of methodological

individualism and marginal arguments, which compare

the costs and benefits for incremental changes.

Contemporary neo-Austrian economists claim to

adopt Economic subjectivism more consistently

than any other school of economics and reject many

neoclassical formalisms.


Some contributions of Austrian economists:


  • A theory of distribution in which factor prices result from the imputation of prices of consumer goods to goods of "higher order", that is goods used in the production of consumer goods, goods used in the production of those producers goods, etc.


  • An emphasis on opportunity cost, reservation demand, and a refusal to consider supply as an otherwise independent cause of value. (The British economist Philip Wicksteed adopted this perspective.)


  • An emphasis on the forward-looking nature of choice.



  • Eugen von Böhm-Bawerk's capital theory which equates capital intensity with the degree of roundaboutness of production processes and explain interest rates through intertemporal choice.


  • The Mises-Hayek business cycle theory which explains depression as a reaction to an intertemporal production structure fostered by monetary policy setting interest rates inconsistent with individual time preferences.


  • Hayek's concept of intertemporal equilibrium. (J. R. Hicks took over this theory in his discussion of temporary equilibrium in Value and Capital, a book very influential on the development of neoclassical economics after World War II.)


  • Mises and Hayek's view of prices as permitting agents to make use of dispersed tacit knowledge.



Major Austrian Economists


Other related economists:


/Talk