The Austrian School is a school of economic thought that is based on the analysis of the purposeful actions of individuals (see methodological individualism)…
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Speaker: Professor Lawrence H. Goulder Recorded on 20 October 2014 in Old Theatre, Old Building. How can climate change policies be designed to be not only environmentally effective but also…
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5 Responses to “Austrian School of Economics Explained: Capital, Interest, Business Cycle – Ron Paul (1988)”

  • A. C. Abbey:

    Ron Paul is and always has been the man!

  • Michael Brinton:


  • Odysseus Ulysses:

    This man is the most dangerous kind of liar: one that is 50% correct.

    On social issues such as drugs, religious freedom, and personal freedom
    he’s right, however a child could tell you this stuff, yet somehow he gets
    a round of applause for it.

    On economic issues, he’s a horrible totalitarian and what he espouses would
    be the single most destructive attack on american democracy since the war
    of 1812.

    Libertarianism economic theory, is based on Classical economics, which was
    theorised in a pre-industrial and pre-capitalist world, those who professed
    it did so under the belief that free markets would lead to perfect equality
    and that this system would be better than the feudal society that came
    before it, one of those is right and I don’t think I need point out which
    one. Adam Smith, James Madison, John Locke, Von Humboldt etc could not have
    imagined the society of the 21st century in which state involvement in the
    economy would be an absolute necessity not only to meditate the effects of
    the vast power gathered by private tyrannies but also in order to prevent
    the destruction of the environment and to prevent the death/suffering of
    millions. Private power does not mean the same thing it did in the 1700s or
    even the 1900s, it has increased to unfathomable levels and many private
    empires now outweigh countries in terms of wealth and manpower; and as if
    they weren’t content with this state affairs they now seek to wipe out the
    only real threat to their existence, democratic governments. For this in
    short is the aim of all libertarians, the end of public control over
    society to be replaced by a system of survival of the fittest, private
    tyrannies, and the commoditisation of everything. They proclaim in the
    supreme act of double think and double speak, that this system will have no
    force behind it, everything will be voluntary. Their definition of force is
    as flawed as a ship without a bottom, who would say there is no force
    present when the starving man begs for work, degrades himself for
    substance, and is driven by hunger to do work alien to him just to survive.
    Sure there may be no tax man or government with a gun to force you to work,
    but who would need them! Who needs force when you got the threat of
    destitution to keep people in line and to make obedient workers out of. Who
    needs the tax man when the huge profits and power reaped from control of
    everything would allow the rich and powerful to build personal roads like
    one saw in the soviet Union, reserved for higher ups only, or ability to
    hire their own mercenary armies. Just as in the 1984 the desperate desire
    for work would create the high, with all the power, the middle, with less
    but desperate to hold onto it, and the low with nothing, but distracted,
    kept stupid and ignorant. Even Adam Smith as early as the 1700s recognised
    that the slave is better of than the man at the mercy of the free markets,
    for as property, his master is encouraged to look after him, as a loving
    owner polishes a car, while the wage worker is like a disposable fork, good
    only for shovelling food into the mouth until the fork breaks.

    A corporate ruling government would be the end of humanity, either by
    environmental destruction or by the simple fact that whatever people
    accepted this dystopian world as tolerable would no longer be human, for
    the object of all humans is free and creative work, this would stop for 90%
    of the population.


  • Marcos Ronald Roman Gonçalves:

    *Austrian School of Economics Explained: Capital, Interest, Business Cycle
    - Ron Paul (1988)*

    The Austrian School is a school of economic thought that is based on the
    analysis of the purposeful actions of individuals (see methodological
    individualism). It originated in late-19th and early-20th century Vienna
    with the work of Carl Menger, Eugen von Böhm-Bawerk, Friedrich von Wieser,
    and others. Current-day economists working in this tradition are located in
    many different countries, but their work is referred to as Austrian

    Among the theoretical contributions of the early years of the Austrian
    School are the subjective theory of value, marginalism in price theory, and
    the formulation of the economic calculation problem, each of which has
    become an accepted part of mainstream economics.

    Many economists are critical of the current-day Austrian School and
    consider its rejection of econometrics, and aggregate macroeconomic
    analysis to be outside of mainstream economic theory, or “heterodox.”
    Austrians are likewise critical of mainstream economics. Although the
    Austrian School has been considered heterodox since the late 1930s, it
    began to attract renewed academic and public interest starting in the 1970s.

    According to economist Bryan Caplan, by the late twentieth century, a split
    had developed among those who self-identify with the Austrian School. One
    group, building on the work of Hayek, follows the broad framework of
    mainstream neoclassical economics, including its use of mathematical models
    and general equilibrium, and merely brings a critical perspective to
    mainstream methodology influenced by the Austrian notions such as the
    economic calculation problem and the independent role of logical reasoning
    in developing economic theory.

    A second group, following Mises and Rothbard, rejects the neoclassical
    theories of consumer and welfare economics, dismisses empirical methods and
    mathematical and statistical models as inapplicable to economic science,
    and asserts that economic theory went entirely astray in the twentieth
    century; they offer the Misesian view as a radical alternative paradigm to
    mainstream theory. Caplan wrote that if “Mises and Rothbard are right, then
    [mainstream] economics is wrong; but if Hayek is right, then mainstream
    economics merely needs to adjust its focus.”[21]

    Economist Leland Yeager discussed the late twentieth century rift and
    referred to a discussion written by Murray Rothbard, Hans-Hermann Hoppe,
    Joseph Salerno, and others in which they attack and disparage Hayek. “To
    try to drive a wedge between Mises and Hayek on [the role of knowledge in
    economic calculation], especially to the disparagement of Hayek, is unfair
    to these two great men, unfaithful to the history of economic thought” and
    went on to call the rift subversive to economic analysis and the historical
    understanding of the fall of Eastern European communism.[75]

    In a 1999 book published by the Mises Institute,[76] Hans-Hermann Hoppe
    asserted that Murray Rothbard was the leader of the “mainstream within
    Austrian Economics” and contrasted Rothbard with Nobel Laureate Friedrich
    Hayek, whom he identified as a British empiricist and an opponent of the
    thought of Mises and Rothbard. Hoppe acknowledged that Hayek was the most
    prominent Austrian economist within academia, but stated that Hayek was an
    opponent of the Austrian tradition which led from Carl Menger and
    Böhm-Bawerk through Mises to Rothbard.

    Economists of the Hayekian view are affiliated with the Cato Institute,
    George Mason University, and New York University, among other institutions.
    They include Peter Boettke, Roger Garrison, Steven Horwitz, Peter Leeson
    and George Reisman. Economists of the Mises-Rothbard view include Walter
    Block, Hans-Hermann Hoppe, Jesús Huerta de Soto and Robert P. Murphy, each
    of whom is associated with the Ludwig von Mises Institute[77] and some of
    them also with academic institutions.[77] According to Murphy, a “truce
    between (for lack of better terms) the GMU Austro-libertarians and the
    Auburn Austro-libertarians” was signed around 2011.

    Many theories developed by “first wave” Austrian economists have been
    absorbed into mainstream economics. These include Carl Menger’s theories on
    marginal utility, Friedrich von Wieser’s theories on opportunity cost, and
    Eugen von Böhm-Bawerk’s theories on time preference, as well as Menger and
    Böhm-Bawerk’s criticisms of Marxian economics.[citation needed]

    Former U.S. Federal Reserve Chairman Alan Greenspan said that the founders
    of the Austrian School “reached far into the future from when most of them
    practiced and have had a profound and, in my judgment, probably an
    irreversible effect on how most mainstream economists think in this
    country.”[80] In 1987, Nobel Laureate James M. Buchanan told an
    interviewer, “I have no objections to being called an Austrian. Hayek and
    Mises might consider me an Austrian but, surely some of the others would

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