Austrian school of Economics.

[Flying Purple People Eater]

Could anyone be able to enlighten me to it's origins?

[Popular Front of Judea]

http://en.wikipedia.org/wiki/Austrian_School#History

[Flying Purple People Eater]

I was hoping for something less brief than Wikipedia, but thanks.

[cyu]

http://www.alternet.org/economy/there-no-nobel-prize-economics?paging=off
http://www.revleft.com/vb/economic-calculation-argument-t113038/index.html?t=113038

[tuwix]

I was hoping for something less brief than Wikipedia, but thanks.

Less brief? Well. it's just reaction of bourgeoisie against Marxism and Keynesianism.

[Flying Purple People Eater]

Less brief? Well. it's just reaction of bourgeoisie against Marxism and Keynesianism.

Keynesianism came after the Austrian school, though.

And yes, I think it is necessary to criticise right-wing economics because, without a criticism of these theories that defend capitalism, they are free to flex themselves and shade out Marxian economics (something that's already happened in modern society). In example, the Austrian school completely leaves out the production process as part of the determination of value. It views capitalism as an 'expression of freedom', tossing aside the exploitation of workers and viewing the economy in isolation, believing that value revolves only around utility and scarcity, not labour.

Through the eyes of an Austrian economist, the difference between capitalists and proletarians is nothing more than technical terms for equal individuals. It's a rabidly apologistic economic viewpoint that defends capitalism to the death with it's reality-divorced economic conclusions about 'state regulation', 'barriers to entry', individual responsibility and 'crony capitalism', and needs to be combated and challenged wherever it takes root.

[tuwix]

Keynesianism came after the Austrian school, though.

But Austrians started to be widely promoted after Keynesianism.

And I don't want to discuss details of their 'economics' because it's waste of time. Their only solutions to all capitalism problem is soemthing that cannot exist due to its own definitions: free market.

[TheEmancipator]

But Austrians started to be widely promoted after Keynesianism.

Only very recently, popularised by those rap battles between Keynes and Hayek and the libertarian right in America, who seemed to have accidental stumbled upon Austrian economics and thought it suited them well.

Most people in the Anglo-Saxon world will actually tell you that Keynes' main opponent was Friedman and the monetarists. In Europe the "Keynesian movement" is show to be simply whenever government intervenes in peoples affairs, which believe it or not the monetarists still uphold.

The Austrian Economists tend to be discredited by most modern day professional economists. They offer no substantial mathematical conclusions, instead writing about something resembling more political philosophy and seem think the entire field of macro-economy is a fallacy.

[tuwix]

Most people in the Anglo-Saxon world will actually tell you that Keynes' main opponent was Friedman and the monetarists.


Well, Ron Paul's religion actually refers more to Austrians than to monetarists. Probably the main reason of that is what Friedman has written in early phase of his carrer and never revoked it which was recipe how to stimulate economy in very Keynesian way. But later he was advocating the same imposible solution: free market. So who was promoted more widely, in this case, is irrelevant.

[cyu]

The ruling class is always finding new ways to justify their rule. If it's not the divine right of kings, then it's monetarism or Austrian econ. Even if monetarism / Austrian econ is completely de-legitimized, if the ruling class is still around, you can expect they'll just find some other excuse to stay in power.

You can't really take any of what they throw at you seriously. Dispense with it and move on, because they already have other stuff in the works to replace it.

[Flying Purple People Eater]

You can't really take any of what they throw at you seriously. Dispense with it and move on, because they already have other stuff in the works to replace it.

Eh? I don't know all of what they're going to throw at me yet, hence why I wanted some resources (thanks for those links by the way). Why should I dispense with something I'm not knowledgeable about?

I haven't really delved into any economics outside Marxian and Keynesian econ, and all I know of the Austrian school are Marxist rebuttals to Austrian critics of the late 1800s and early 1900s which attack the labour theory of value, and that it centers around exchange, utility and scarcity, and ignores the role of production in determining an object's value. Beyond that I'm blind.

[cyu]

I guess what I mean is that there are three types of supporters for ideology that props up the ruling class:

1. The Help: They may work for think tanks, write editorials for mass media, or get a lot of funding in academia. They are paid based on how good they are at propping up the ruling class. They may or may not actually believe the ideas they promote - what matters is how successful they are in promoting those ideas.

2. The Dupes: They don't come up with ideas of their own, but are instead the victims of the first group. Your typical viewer of Fox News might be an example. These are True Believers and some may be quite dangerous in their fanaticism.

3. The Rulers: They pay The Help to make tools out of the The Dupes. Of the 3 types of supporters of their ideology, these are the least likely to actually believe it, but merely promote it as a means to an end. While some do manage to be convinced by The Help, it is not a general rule, it is only because their sense of conscience is more comforted by finding rationalizations for the behavior they were going to do anyway.

This applies to pretty much any ideology that supports the ruling class. When I say you can't take their ideas seriously, it isn't so much that all their ideas aren't worthy of confrontation, but it's that even after you wipe one ideology off the map, so long as group #3 exists, there will be another ideology to replace what you destroyed, and you'll have to start over, if your only strategy is to debunk whatever ideology-of-the-month that they come up with.

[juliusaugustus]

The long and short of it is that the Rockefeller family paid a bunch of smart looking people like Mises and Hayek to invent a new school of economics and tell people why rich people should remain rich and that the government doing anything to change the balance of power is evil and will lead to malinvestment.

[TheEmancipator]

The long and short of it is that the Rockefeller family paid a bunch of smart looking people like Mises and Hayek to invent a new school of economics and tell people why rich people should remain rich and that the government doing anything to change the balance of power is evil and will lead to malinvestment.

There's no need for conspiracy theories. In fact I find it disappointing that some here are dismissing all these theories as one and the same. If we look at the capitalist stage from a historical perspective, these theories differ from each other greatly. Simply dismissing them is immature at best, and tribalistic bias at worst. Since Marx wasn't alive during these movements, wouldn't the best thing a modern Marxist do is to re-criticise these new forms of capitalist economic theory from a Marxist perspective, instead of attributing them to "bourgeois ideology" (which is very much not the case, as these people like Hayek are brutally honest in their work).

[cyu]

From http://www.revleft.com/vb/capitalist-science-self-t172025/index.html

in 1969 Sweden’s central bank used the pretense of its 300th anniversary to push through an independent prize in “economic science” in memory of Alfred Nobel. To ensure the prize would be awarded to the right economists, the bank managed to install a rightwing Swedish economist named Assar Lindbeck, who had ties to University of Chicago, to oversee the awards committee and keep him there for more than three decades.

For the first few years, the Prize in Economics went to fairly mainstream and even semi-respectable economists. But after establishing the award as credible and serious, the prizes took a hard turn to the right.

five years after the prize was first created, it was awarded to Friedrich Hayek, one of the leading enrich the rich economists of the 20th century. Milton Friedman, who was at the University of Chicago with Hayek, won the prize just two years later.

Friedman had a scientific formula worked out, specifying exactly how to keep unemployment high enough to keep big business happy.

No democratic control over banking policies needed. The Swedish central bankers couldn’t get better spokesmen for their cause. At the time of the prizes, neoclassical economics were not fully accepted by the media and political establishment. But the Nobel Prize changed all that. What started as a project to help the Bank of Sweden ended up boosting the credibility of the most regressive strains of economics, and paving the way for widespread acceptance of libertarian ideology.

Before he won the award, it looked like Hayek was washed up. He was considered a quack and fraud by contemporary economists, he had spent the 50s and 60s in academic obscurity, preaching the gospel of economic darwinism while on the payroll of ultra-rightwing American billionaires. Hayek had powerful backers, but was out on the fringes of academic credibility.

that all changed as soon as he won the prize in 1974. All of a sudden his ideas were being talked about. Hayek was a celebrity. newspapers treated his mumblings about the need to have high unemployment as if they were divine revelations. Margret Thatcher was waving around his books in public, saying “this is what we believe.”

Billionaire Charles Koch brought Hayek out for an extended victory tour of the United States, tapping Hayek’s mainstream cred to set up and underwrite Cato Institute in 1974 (it was called the Charles Koch Foundation until 1977).

After getting the prize in 1976, Friedman got his own 10-part PBS series and became President Ronald Reagan’s economic advisor, where he had a chance to put the society-crushing policies he developed in Chile under Pinochet. Chilean economist Orlando Letelier published an article outing Friedman as the “intellectual architect and unofficial adviser for the team of economists now running the Chilean economy” on behalf of foreign corporations. A month later Letelier was assassinated in D.C. by Chilean secret police using a car bomb.

[Popular Front of Judea]

The rise of the "free market" Right can be traced back to the post-war Mont Pelerin Society (http://en.wikipedia.org/wiki/Mont_Pelerin_Society#History). The Right has turned out to be better organizational 'Leninists' than the Left could ever hope to be.

[Sotionov]

Austrian School has it's direct forefathers in Jean-Baptiste Say and Frederic Bastiat, and it's 'formal' beginning with Carl Menger and his Principles of Economics in 1871, whose thought has been elaborated on by Böhm-Bawerk and Mises, so that's where you start.

A detail I find interesting is that Carl Menger's brother Anton was a (libertarian) socialist, who wrote a masterpiece called The Right to the Whole Produce of Labour, a rational and systematic exposition on socialism not be surpassed until the advent of McKay's An Anarchist FAQ.