Of Wolves and Ravens – Austrian Economics


Happy Tyr’s Day


Having an Economics Minor is a real boon at times when you listen to politicians.  The reason is you know somewhat how a politicians plans will affect the economy.  It gives you an insight as to what that politicians is asking the government to take control of and what damage it will do.

I make no secret a I am a very free market person.  I think when you look at inflation there is no doubt that it is created by government interference to reduce their debt burden by shifting it to the population.  When you look at things through the lens of economic law, this is the best way to go as people though their own individual expression will meet their own needs if motivated by survival and prosperity. This has led me to the Austrian School of economics as the most realistic course for libertarian thought and economics.

Economics is not a theoretical science.  It has laws much like the laws of physics. The problem with most theories of economics is that they attempt to bypass these laws.  These laws are based on observation and human nature.  Economics is often called organized common sense and the Austrian Economist simply tries to understand and work with those laws.  They simply do not think in terms of the government being a solution but rather the cause of problems with the economy and they are right.

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One famous example is Ron Paul’s prediction of the housing bubble collapse in 2003.  While Keynesian economists were urging the Fed to create the housing bubble on purpose, Paul was warning that its collapse was inevitable and would be detrimental to the economy effecting everyone negatively. Paul ended up being very right.  People lost equity in their homes and the housing market became completely burned out for quite some time.  I would say only now can we say it has recovered full and this collapse was the product of direct government interference.

The real issue with all other schools of thought is that they think that they think government has some magic to prevent these things or cause growth.  In truth, much like they cannot legislate people to be moral, economically speaking they have no magic to make things better to make people more productive or safer economically.  I find it funny that one part says that morals are not the place for government but the economy is.  The others say morals are where government should be and the economy is not.  Neither one can really explain how the area they think the government which is bad for one thing wouldn’t be bad for the other.

To the Wolves and Ravens:

Needs (Geri):

What we need from government is a referee, not a player.  The more control the government gets in the economy the more they become players of they act as referee but they have accepted a bride.  The best way to handle this is to not give them economic power but only the legal power to settle disputes.  Nothing more.

Wants (Freki):

What I want is economic freedom.  The more the government gets involved the less economic freedom I have.  Austrians simply state that economics is not the place for government to be.  The only role they should have is to protect against fraud and coercion.  Unfortunately and inevitably, the greater government power grows over the economy, the more fraud and coercion they engage in themselves.

Reason (Huginn):

The most rational course is liberty in economic matters. Let people work out for themselves how resources should be allocated and they do far better than a central planning committee.  There will always be personal greedy motives of any monopoly, whether that monopoly is held by a corporation or government.

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Wisdom (Muninn):

Austrian economics for me has is central wisdom the fact that a central committee as proposed in socialism or communism has the same problem as a monopoly.  The individual will always suffer in such a situation and a central committee always benefits.  As George Orwell Observes in Animal Farm – the pigs become the farmer at the expense of the rest of the animals.    The wisdom we can draw from them is that the poison that kills economies is this idea of control at the expense of liberty.


Now it should be noted that I would love to live in a world of pure capitalism where he government isn’t even present.  The one problem I have with that is the fact that there are people who are bastards and so people want some sort of referee and I don’t think people would accept such a notion without some sort of system of filing grievances. I agree that private ways of doing this would be produced and would probably be better. However, practicality in dealing with human nature is what has kept me Austrian and a Classical Liberal rather than an anarchist.  It I more a question of what people will accept rather than what would be best.

I remain,

The Rabyd Skald – Wandering Soul, Bard and Philosopher. The Grey Wayfarer.


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