The Austrian school recognizes that economic analysis is timeless and the ancient story of “The Poor Man of Nippur” provides an excellent example. From time preference to the structure of production, many of the lessons are contained in this story.
Many people were puzzled why so many WNBA players were hostile to the arrival of superstar Caitlin Clark. After all, they reasoned, Clark would make the league more popular, bringing more money and publicity. Austrian economics, however, shows a logical explanation for the hostility to her.
Modern academic economics is based upon the methodologies used to study the natural sciences. However, such methodologies are inappropriate to study economics, which must be based upon causal-realism.
One important difference between the Austrian and other schools of thought is the emphasis Austrians place upon purposeful human behavior. Consumption by individuals is not random, but rather purposeful action driven by subjective individual preferences.
Mainstream economists often base their analysis upon assumptions that do not square with reality. Austrian economics, on the other hand, is built upon realistic assumptions and the acknowledgement that good economics must reflect human action.
Austrian economics today needs critics. It doesn‘t need the critics (like Paul Krugman) who cannot give valid and accurate criticisms, but rather people who actually understand the concepts upon which Austrian thinking is built provide a real challenge.
The Austrian School of Economics represents a heterodox methodological approach to economics that significantly differs from the orthodox teachings
Originally published in the Mises Institute’s Studies in Classical Liberalism series in 1999.
Contrary to anti-freedom myths, "greedy" business owners don't decide what prices will be for goods and services.
Bob reacts to Bryan Caplan's current views, arguing that the history of economic thought is indeed important, and the Misesian approach to praxeology is crucial.
