History of the Austrian School of Economics

This is your one-article guide to understanding a core idea of economics.The law of diminishing marginal utility plays a crucial role in showing that socialism is economically and ethically inferior to capitalism. It also has surprising implications for every area of policy, including money, interest rates, and property rights.

The use of mathematics necessarily leads the economist to distort reality by making the theory convenient for mathematical symbolism and manipulation. Mathematics takes over, and the reality of human action loses out.

It was the physiocrats who broke with centuries of sound economic reasoning and contributed to what would become, in the hands of Smith and Ricardo, a reactionary and obscurantist destruction of the correct analysis of value.

Human beings do not possess a mystical property of “probability” inside them; rather, they always act on their subjective beliefs and values. Probability in the human world is thus merely a measure of man’s uncertainty about the subjective beliefs and values that influence the actions of other men.

The Mises Circle in Houston, Texas. Sponsored by Jeremy S. Davis. Recorded 22 January 2011.

Fifty years ago, Rothbard saw the need for institutions to support scholarship, writing, publishing, and the exchange of ideas in the libertarian tradition. Otherwise, young people will turn to political activism and find themselves drifting left and right rather than staying on the path toward liberty.

Childs was mightily impressed by what he read inside the covers of Rothbard’s books and by what he heard from Rothbard himself in that famous living room. And he was determined to pass his enlightenment along to the students of Objectivism.

The theory of profit/interest has major implications for the understanding of capital accumulation, the determination of real wages and the general standard of living, taxation, inflation/deflation, and the business cycle.

The sudden emergence of the word “conservative” highlighted a more general unease of the counterrevolutionary forces in the United States. They were quite sure what they were against: communism, fascism, socialism, the New Deal, the Fair Deal, etc. But what did they stand for?

Without a dynamic price mechanism — trademark of a money-based, capitalist society — there can be no calculation, and without calculation there can be no advanced division of labor. Our society would be no more advanced than it was during the age of barter.