Austrian Economics Overview

The gold standard is not a game but a social institution.

Economists can say little about population and its size, despite the gloomy views of Malthus. More people are a good thing because of the division of labor. Living standards are higher when populations are higher.

As factors of production, supply and demand of labor, land and capital will determine how much the producer will get out of this process. This process occurs in different stages.

The time market determines the pure rate of interest. Price per unit of time may be wages or rent. The interest income will be earned by the capitalist who has assumed the task of advancing present money.

In order for anyone to make ethical judgments, he must know the consequences of his various actions. In questions of union actions displacement or unemployment for oneself or others will be considered unfortunate by most people.

The objective of the corporate firm is to maximize profits and avoid losses - the same objective of the free market. But the costs are paid out before the income comes in. Stockholders will sell stock to shake up the managers.

The only cartels that have lasted have been government cartels. There is no essential difference between a cartel and an ordinary corporation or partnership. Not even the De Beers cartel is all powerful.

Thou shalt not sell a certain product or service below a certain price, e.g. wheat, cotton, corn, cheese, sugar. This will result in an artificial unsold permanent surplus, as it does in the American farm situation.

Business men must make sure they can cover their costs by incoming revenue. The production function will yield a certain quantity of a product. The firm considers marginal costs and average costs to weigh where along the demand curve production is.

The peanut butter crunch was in 1980. Crop acreage and production was cut down by 45% by government price support, import quotas, and cartelizing of the industry. The price of peanuts more than tripled.