# Think Tank > Austrian Economics / Economic Theory >  The Case Against Austrian Economics

## 0zzy

> One criticism of the Austrian school is its rejection of the scientific method and empirical testing in favor of supposedly self-evident axioms and logical reasoning.[6] Bryan Caplan has criticized the school for rejecting on principle the use of mathematics or econometrics which is "more than anything else, what prevents Austrian economists from getting more publications in mainstream journals"[7] There are also criticisms of more specific theories.[8]


http://en.wikipedia.org/wiki/Austrian_School#Criticism




> Austrian Economics is a fringe academic view which is greatly preferred by many libertarians on ideological grounds. However, it has even less predictive power than mainstream economics, and has many commonsense problems.


http://world.std.com/~mhuben/austrian.html

I didn't really read much of that, but apparently Austrian Economics has many flaws and that's why it's not taught a lot or in economic magazines or anything like that. 

:[ I guess every economic school of thought has it's haters? But apparently they be hatin on Austrian Economics because it ignores new mathematical, something.

I dono :X. 

So, is Austrian Economics superior? Are these haters just haters? Do they have a point? :X

----------


## 0zzy

:O?

----------


## user

Other economic schools will dazzle you with math and make incredible claims, but they are based on a flawed premise. This is where the Austrian School has them beat.

----------


## davver

If you look at all of history, there is plenty of emperical evidence to support Austrian Economics.  The more important point they make, however, is that emperical results with no theoretical backing are meaningless.  For instance, inflation has been lower then money supply growth for an extended period because foriegners have been willing to import our dollars (inflation).  Now that trend is finally changing and all of those dollars are going to come back, causing the CPI to catch up to where money supply growth has been.

Whiz kids like Alan Greenspan kept droning on about how we were having low unemployment and low inflation at the same time as empircle proof of thier claim, but now we know it was a bunch of hogwash.

----------


## Billsfan

http://video.google.com/videoplay?do...arch&plindex=0

This is a great video.  There are 3 other parts to it.  I do believe it is Austrian economics.

----------


## Chester Copperpot

Years ago Austrian Economics was the norm and the Keynesian economics people were considered the kooks...(paper for money??? Youre mad)

now its
(gold for money??? youre nuts)

----------


## ThePieSwindler

Its mostly methodology, though i fully understand why Austrians don't like to arbitrarily use econometrics. I think Joseph Schumpeter (a pseudo austrian, trained by Bohm-Bawerk) had some of the better views, that mathematical analysis has its uses, but that the "Ricardian vice" of trying to apply it to actual policy is ridiculous, as Keynesians essentially do. I think the Austrian school is absolutely right some an epistemiological and even a priori methodology standpoint, though i dont see anything wrong with using some formal analysis on markets. The one thing i think the Austrians/Schumpeter do have right is that Economics is alot more of a social science than a natural science, and thus does not confrom to the scientific method or mathematical observation in the same way. Mises understood this, thus he developed the idea of "praxeology" or "the science of human action". 

A pure Mengerian view (what Bohm Bawerk and Mises followed) is what is really critiqued. there are plenty of Austrians who do use econometrics, they just dont use neoclassical models, which are really idealized paradigms. I think that is what Austrians are really against, is 1) using idealized scenarios and assuming equilibrium and perfect information as the basis for econometric analysis and 2) applying conclusions drawn from such analysis to public policy, as Schumpeter also critiqued.

I think any economics school will necessarily have its important contributions and its flaws. I think the Austrians and Schumpeter are astute in realising that there are so many real world variables in economics that simply using abstract models with a few variables is fallacious. I think alot can be learned, however, from mathematical economics, unfortunately, mathematical economists too often try to model every sector of an economy mathematically, which, according to Schumpeter, could not be done, and according to the Austrian school, is naive and makes false assumptions about human nature and human action.

----------


## murrayrothbard

uhm, economics deals with the actions of real individuals.  Not some nonvolitional rock.  There is absolutely no way to "test" an economic theory the way the positivists claim it must be done.  There is no controlled laboratory; no way to "recreate" an "experiment".  The goal of economics is not to predict but to describe the general laws of human action and the resultant patterns that arise from interacting individuals.  Economics is categorically different than physics.

----------


## murrayrothbard

Here read this to get an idea of what makes "Austrian" economics different:

Economic Science and the Austrian Method - Hans Hermann Hoppe

----------


## jblosser

It all comes down to people's desire to intervene.  People are sure they know what's best and if they just get their hands in there, they can fix it all.  Domestic policy, foreign policy, economics, casearean sections: Interventionism for everyone!

----------


## EotS

> The goal of economics is not to predict but to describe the general laws of human action and the resultant patterns that arise from interacting individuals.  Economics is categorically different than physics.


Good point - I arrived at the Austrian school of economics after a long period of study in Newtonian vs. Quantum physics and reductionist vs. synthetic methods.

The pattern I observed over time was that the great successes of the Newtonian era (and its reductionist methodology) influenced all other academic disciplines.  They sought to become more "scientific" which usually meant more reductionist, much more assumptive in cause and effect, and, always, more mathematical.

Keynesians have a socialist agenda, and they hijacked economics to promote the agenda in the name of making economics a "hard science."

----------

