# Think Tank > Austrian Economics / Economic Theory >  Has anyone read this critique of the Austrian School?

## xyz123

http://www.huppi.com/kangaroo/L-ausintro.htm

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## wizardwatson

> http://www.huppi.com/kangaroo/L-ausintro.htm
> 
> What do you think? Under close scrutiny, the Austrian School of Economics doesn't seem very credible.


Austrian economics is to economics what Jeet Kune Do is to martial arts.   And in this vein it is very easy to see why it is attacked by classical economists.

This is also good to keep in mind.




> Economics is haunted by more fallacies than any other study known to man. This is no accident. The inherent difficulties of the subject would be great enough in any case, but they are multiplied a thousandfold by a factor that is insignificant in, say, physics, mathematics or medicine-the special pleading of selfish interests. While every group has certain economic interests identical with those of all groups, every group has also, as we shall see, interests antagonistic to those of all other groups. While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit by such policies, having such a direct interest in them, will argue for them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting its case. And it will finally either convince the general public that its case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible. -Henry Hazlitt, Economics in One Lesson


I've only read part of it, but I've found numerous things already I disagree with.

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## Isaac Bickerstaff

It is a poorly written hit piece employing virtually all logical fallacies of discussion.

The "differences" the piece focused on were not the real differences that would actually make the "mainstream" look foolish and show where the Austrians make sense. Most offensive to someone actually interested in studying economics is the references to economics as a science instead of a cult, which would be more accurate. The real differences between current schools of economics are the subjective "truths" that they are based upon, but never discussed.

The Austrians are not without their warts either. The school was developed well before the 100% DEBT-backed fiat currency we are under now. They have not adapted, and seem to ignore the most obvious problem with this. Money does not just get printed out of thin air! It is loaned into existence! The classic notions of inflation are not accurate when the "debt reserve" keeps sucking money out of existence.

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## eric_cartman

troll

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## Ilhaguru

I think it is abundantly clear that there are numerous disagreements within libertarianism and especially within the Libertarian Party.

We don't know everything, after all. Still lots to find out. So with that in mind, always keep an open mind.

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## rapidtrends

Have not read it, dont care to read it.

Why?

Because a statue was never erected to a critic.

Armchair quarterbacks do not impress me.

Never ceases to amaze me how people will make commentary on something they have never done, or been personally responsible for.

People who have never run a gold bullion operation have no problems trying to explain to me how one should be run.

Cracks me up every time.

Big difference between a person who complains about how another person is climbing Mount Everest...and the guy who is actually climbing it.

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## wizardwatson

> troll


+1

Probably right with the one post and all.  But check out this gem from the source document of the Austrian critique document:




> Myth: I earned that money; it's mine!
> Fact: The free market in which people make their money wouldn't even exist without government support.


HA!  Talk about the cart before the horse!


Here's the source document:  http://www.huppi.com/kangaroo/LiberalFAQ.htm
Here's the myth link above quote is from:  http://www.huppi.com/kangaroo/L-earnedmoney.htm

Feel free to get your fill of ignorance from the above links.

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## FountainDew

every system has its criticisms. The only problem is that the critic can never provide factual data since its illegal to toy around with the world economy. So really only a very select few get that kind of chance, and one of them is Alan Greenspan. Everyone's school thinks they're the right choice for the economy mainly because their computer models say so, and the fact that its near impossible to prove them wrong.

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## Bruno

> http://www.huppi.com/kangaroo/L-ausintro.htm
> 
> What do you think? Under close scrutiny, the Austrian School of Economics doesn't seem very credible.



You created an RPF account with an incredibly clever name  just for the purpose spewing some anti-Austrian School blather?  

Slow Sunday morning your life, huh?

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## Isaac Bickerstaff

Maybe he is the author of the article desperately trying to get some precious hits so he can get paid.

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## bill50

Even though its not meant to attack Keynesian economics, the best book to really show how wrong mainstream economics is is the book Economics In One Lesson by Henry Haslitt.  After reading the book you'll see how mainstreamers fail to look beyond the immediate results of their intervention to fully understand the consequences of their actions.  

People think mainstream economics work because it often produces immediate positive results in the area the policy was meant to affect.  The negative effects that the policies cause are not as apparent or take years to become noticeable.

That and mainstream economics allow politicians a means to offer people something that is impossible and justifies the existence of the politicians.  Politicians are the ones who decide who gets the grants and the funding to continue their study.

Austrian economics is to mainstream economics as astronomy is to astrology .

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## Met Income

Why is xyz a troll?

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## Danke

> Why is xyz a troll?


axy123 is offline now, hold your question until the troll returns and ask him directly.

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## Bossobass

All I need to know is:

With one system there could be no $10 trillion in debt, which is sucking the life out of the US economy, and...

The money I saved all of my life would be worth the same as it was when I saved it.

The rest is philosophical bull$#@!.

Heeding the Rothschild's Ivy League propagandists always reminds me of an important life experience:

In 1971 I had just graduated high school. I received a gold coin. A month later, I met a middle aged man of means who was selling all of his real estate holdings, some of them to my father.

He told me the coin had a fixed value of $35 and thus it would be worth the same amount years from then. He offered to buy it from me for $50 because, he said, he liked to collect gold coins.

Years later I heard that he was a member of the JBS and was hip to the demise of the Bretton/Woods gold standard (which happened a month after his offer to buy my coin) so he liquidated his real estate holdings and bought gold.

That gold coin was worth $800 just 9 years later.

It's the same as the central bankers today (through their propaganda machine) telling everyone that gold as money is an ancient relic and today it's only a commodity, while at the same time every one of them holds gold in their safes listed as an asset on their balance sheets.

I like Congressman Paul's idea best. Legalize competing currencies and we'll see which is the better idea. To heck with philosophical blathering. I've had enough of that.

In the old neighborhood was a saying: "Money talks and BS walks". Let them compete and the question will answer itself.

Bosso

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## Bruno

> All I need to know is:
> 
> With one system there could be no $10 trillion in debt, which is sucking the life out of the US economy, and...
> 
> The money I saved all of my life would be worth the same as it was when I saved it.
> 
> The rest is philosophical bull$#@!.
> 
> Heeding the Rothschild's Ivy League propagandists always reminds me of an important life experience:
> ...


Great story.  

You didn't say whether you sold the coin, though.

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## jyakulis

man i don't know if this is much of a "critique". it's more like a hit piece. i mean just the first page all the name hurling going on, calling austrians cranks and conspiracy theorists. also, specifically noting how academia  doesn't generally accept their ideas. i mean if you are going to write a critique at least do so objectively.

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## eric_cartman

> Why is xyz a troll?


because it's his first post.  so he comes to the forums, signs up for an account, and tries to push his nonsense on us.  clearly he is not a ron paul supporter if he just makes an account to try to discredit the Austrian theory of economics.

it's still amazing how people don't believe the austrian school when pretty much the only people who predicted this economic collapse were austrian thinkers.  all the traditional economists thought everything was fine, and it was the austrians who were trying to warn everyone. 

the video of peter schiff vs. art laugher is a good example of Austrian Economics vs. Mainstream Economics.... and i think we all know who won that bet of a penny.

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## danberkeley

> because it's his first post.  so he comes to the forums, signs up for an account, and tries to push his nonsense on us.  clearly he is not a ron paul supporter if he just makes an account to try to discredit the Austrian theory of economics.
> 
> it's still amazing how people don't believe the austrian school when pretty much the only people who predicted this economic collapse were austrian thinkers.  all the traditional economists thought everything was fine, and it was the austrians who were trying to warn everyone. 
> 
> the video of peter schiff vs. art laugher is a good example of Austrian Economics vs. Mainstream Economics.... and i think we all know who won that bet of a penny.


Exactly. What ever happened to dinner and a movie. xyz123, signs up and goes stright for the kill.

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## forsmant

> man i don't know if this is much of a "critique". it's more like a hit piece. i mean just the first page all the name hurling going on, calling austrians cranks and conspiracy theorists. also, specifically noting how academia  doesn't generally accept their ideas. i mean if you are going to write a critique at least do so objectively.


+1

What a weak attempt at criticism.  A two page hit piece without any attempt to refute Austrian arguments.  Worthless.

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## Malakai

Can see it is written from a collectivist viewpoint from the first paragraph on.

Collectivists are always going to have problems with the individualist Austrian school.

Just remember that it is free market economics and individualism that America was founded on, and the Austrian school is just a continuation of the understanding and detail of classical liberalism that came about from the renaissance.

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## cien750hp

> The school was developed well before the 100% DEBT-backed fiat currency we are under now. They have not adapted, and seem to ignore the most obvious problem with this. Money does not just get printed out of thin air! It is loaned into existence! The classic notions of inflation are not accurate when the "debt reserve" keeps sucking money out of existence.


Austrian economics does not only pertain to the US currency. We are not the only currency in the world to have never had hard-backing of our currency. The colonists had the same problem with continental dollar. and the austrians do not ignore the problem of that the treasury does not literally call up bernake, ask for a trillion dollars, and they start up the printing press. The austrians always acknowlege that the treasury issues bonds and the fed buys them, but it is the same principle. Describing that process just describes the little hurdle they have to jump over to print money. It it merely simplifying the language so it is easier to understand.

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## RSLudlum

> check out this gem from the source document of the Austrian critique document:
> 
> 
> 
> 
> 			
> 				Myth: I earned that money; it's mine!
> Fact: The free market in which people make their money wouldn't even exist without government support.  
> 			
> ...


^^
well, if that's the case I guess it's not worth the click of a mouse for me 




> Maybe he is the author of the article desperately trying to get some precious hits so he can get paid.

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## lavis88

That article does not make one real claim as to why the Austrian economics view fails. Not one, broad generalities comparing Austrian to mainstream.

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## bill50

Woops I got my analogy backwards earlier.

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## roho76

> Great story.  
> 
> You didn't say whether you sold the coin, though.


I know the suspense is killing me.

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## Paulitician

People consider that "critique" close scrutiny?  Please, try harder next time, troll.

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## The_Orlonater

This article is just a bunch of drivel.

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## WRellim

> You created an RPF account with an incredibly clever name  just for the purpose spewing some anti-Austrian School blather?  
> 
> Slow Sunday morning your life, huh?


I've never understood why new members are able to start threads right away.

There ought to be a waiting period.

Say that you have to wait 2-3 days after joining before you can post a REPLY, and then 1-2 weeks (plus a required posting of say 5 replies) before being allowed to open a new thread.

For established communities, I think that would help eliminate a lot of this type of "hit and run" activity.

Especially since, in my experience, the type of people who become "solid" new members of an online community tend to "lurk" for quite a while before posting anyway. If the additional "waiting period" were known ahead of time, I cannot see this truly aggravating any "solid" new members. 

*Just thinking out loud.

*

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## Bruno

> I've never understood why new members are able to start threads right away.
> 
> There ought to be a waiting period.
> 
> Say that you have to wait 2-3 days after joining before you can post a REPLY, and then 1-2 weeks (plus a required posting of say 5 replies) before being allowed to open a new thread.
> 
> For established communities, I think that would help eliminate a lot of this type of "hit and run" activity.
> 
> Especially since, in my experience, the type of people who become "solid" new members of an online community tend to "lurk" for quite a while before posting anyway. If the additional "waiting period" were known ahead of time, I cannot see this truly aggravating any "solid" new members. 
> ...



Seems reasonable enough to me.  This "hit and run" got 27 replies and an amazing 416 views already.  And he/she/it never even came back for a single reply since the OP.

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## danberkeley

> Seems reasonable enough to me.  This "hit and run" got 27 replies and an amazing 416 views already.  And he/she/it never even came back for a single reply since the OP.


Or have a minimum post count and one month waiting period before being able to start a thread.

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## Josh_LA

> http://www.huppi.com/kangaroo/L-ausintro.htm
> 
> What do you think? Under close scrutiny, the Austrian School of Economics doesn't seem very credible.


yeah read it, one of the first things I've read when I first was into using gold as currency

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## Met Income

> because it's his first post.  so he comes to the forums, signs up for an account, and tries to push his nonsense on us.  clearly he is not a ron paul supporter if he just makes an account to try to discredit the Austrian theory of economics.
> 
> it's still amazing how people don't believe the austrian school when pretty much the only people who predicted this economic collapse were austrian thinkers.  all the traditional economists thought everything was fine, and it was the austrians who were trying to warn everyone. 
> 
> the video of peter schiff vs. art laugher is a good example of Austrian Economics vs. Mainstream Economics.... and i think we all know who won that bet of a penny.


You have to be a RP supporter to post here?  Is that what you want?

His first post advanced a discussion.  So it didn't ball wash Ron Paul, that doesn't make him a troll.

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## Met Income

> I've never understood why new members are able to start threads right away.
> 
> There ought to be a waiting period.
> 
> Say that you have to wait 2-3 days after joining before you can post a REPLY, and then 1-2 weeks (plus a required posting of say 5 replies) before being allowed to open a new thread.
> 
> For established communities, I think that would help eliminate a lot of this type of "hit and run" activity.
> 
> Especially since, in my experience, the type of people who become "solid" new members of an online community tend to "lurk" for quite a while before posting anyway. If the additional "waiting period" were known ahead of time, I cannot see this truly aggravating any "solid" new members. 
> ...


This really matter that much to you?  People should have the FREEDOM to post when they want.

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## fj45lvr

> I like Congressman Paul's idea best. Legalize competing currencies and we'll see which is the better idea. To heck with philosophical blathering. I've had enough of that.
> 
> In the old neighborhood was a saying: "Money talks and BS walks". Let them compete and the question will answer itself.


This is the WORD right here......and shows how far we are from being FREE PEOPLE with LIBERTY.   


Just cut through the BS and let us actually choose for ourselves our own security and happiness in monetary freedom.  

The fact that the CROOKS and LIARS don't allow that to happen just shows people that the vast majority are really just SLAVES.  

The black market rules.

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## jon_perez

That so-called "FAQ on Liberalism" at http://www.huppi.com/kangaroo/Libera...tm#Backausmain is anti-right wing propaganda with very strong biases and so must be read with this in mind. 

It doesn't mean that they can't make some correct observations every so often, but by and large it seems that the author(s)' aims are to more to demolish the opposite side of the political spectrum rather than to provide enlightenment.

Personally, I think that one must take into consideration at least _some_ of the views presented on that site.  On the other hand, mainstream economics has its fair share of garbage that Austrian ideas manages to expose handily.

Only the naive would believe that either is the last word on economics.  In fact there is a new school of thought that attempts to apply complexity theory to the study of economics and makes the claim that all attempts to analyze economics using linear style equations or simple cause-and-effect are doomed to fail.

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## jon_perez

> You have to be a RP supporter to post here?  Is that what you want?
> 
> His first post advanced a discussion.  So it didn't ball wash Ron Paul, that doesn't make him a troll.


It *was not* a troll.  The post accusing it of trolling was more of a troll, in fact. It was a legitimate question and not at all phrased offensively (unless one is extremely closed-minded, I guess).

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## jon_perez

Hehe, in http://www.huppi.com/kangaroo/L-ausintro.htm we read that _"Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." (1) Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone."_

as if mainstream economics is not just as cranky and idiosyncratic and full of unwarranted assumptions too... or worse...

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## jon_perez

Here's a prime example of loose reasoning by "mainstream economics" at http://www.huppi.com/kangaroo/L-ausgold.htm

_"At low levels, inflation under fiat money is relatively harmless. However, the deflation caused by the gold standard is truly destructive. If dollars have inflated to 2 percent of their original value, and the price of gold has risen 20 times, then maintaining the gold standard would have deflated the dollar to 2.5 times its original value. That's a lot of unemployment.'_

Hmmm... how in heck did deflation become unequivocally related to unemployment?!?  Also, if the money I hold increases in value, then I wouldn't mind being unemployed!  Duh...

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## WRellim

> This really matter that much to you?  People should have the FREEDOM to post when they want.


Certainly.

But "people" should be actual participants in a forum, and not simply "drive by shooters" who post links to straw man articles and then disappear into the woodwork... that is not discussion, nor debate, it is a "hit and run."

And if you argue that it is NOT the sole post but rather that some long time RPF member has simply assumed another "new identity" in order to post this, then it is simple cowardice.

My "thoughts" were simply that this thread is an example of an instance why the privilege of starting new threads would be best limited to those who actually "stick around."

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## eric_cartman

it's fine that new members can make a post.  you want to invite and encourage people to join the conversation.

if trolling gets to be a big problem, then we can consider making minimum post requirements.  but this hardly ever happens, so a couple people doing it isn't that big a deal. we shouldn't sacrifice liberty for security! but if we get attacked by lots of terrorist trolls, starting threads on their first post, then we'll have to give up our liberty to ensure the safety and security of the forum.

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## Met Income

> Certainly.
> 
> But "people" should be actual participants in a forum, and not simply "drive by shooters" who post links to straw man articles and then disappear into the woodwork... that is not discussion, nor debate, it is a "hit and run."
> 
> And if you argue that it is NOT the sole post but rather that some long time RPF member has simply assumed another "new identity" in order to post this, then it is simple cowardice.
> 
> My "thoughts" were simply that this thread is an example of an instance why the privilege of starting new threads would be best limited to those who actually "stick around."


Says who?  They can post how they see fit.  You seem very authoritarian in your posting preferences.

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## Met Income

> It *was not* a troll.  The post accusing it of trolling was more of a troll, in fact. It was a legitimate question and not at all phrased offensively (unless one is extremely closed-minded, I guess).


I've been called a troll for posting threads that do not immediately bow down to Austrian economics.  It's damaging to the community.  We don't want a bunch of one-sided parrot heads.

If Austrian economics is key, it can withstand any and all criticisms.  It doesn't have to hide behind personal and ad-hom attacks.

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## Mini-Me

> Here's a prime example of loose reasoning by "mainstream economics" at http://www.huppi.com/kangaroo/L-ausgold.htm
> 
> _"At low levels, inflation under fiat money is relatively harmless. However, the deflation caused by the gold standard is truly destructive. If dollars have inflated to 2 percent of their original value, and the price of gold has risen 20 times, then maintaining the gold standard would have deflated the dollar to 2.5 times its original value. That's a lot of unemployment.'_
> 
> Hmmm... how in heck did deflation become unequivocally related to unemployment?!?  Also, if the money I hold increases in value, then I wouldn't mind being unemployed!  Duh...


I started to read the "critique" as well, but I should have already known what I was getting into, because that huppi site was in fact the very first resource I started reading from after I heard about Ron Paul and his rejection of fiat money, etc.  I looked to that site to refute Ron Paul's own arguments, and on the surface, their reasoning seemed sound in certain articles (like this one).  After a long while of thinking about it, I began to see the now-obvious fallacies and misconceptions on that site...and it wasn't until many months later that I finally signed up here and started posting.

The particular quote you presented is a great example of intellectual dishonesty.  The huppi site is apparently assuming *not only* that price stickiness outright prevents price level deflation when the economy grows (and therefore causes unemployment as the economic growth cannot be sustained at the same money supply levels), it is *also* assuming out of hand that the subsequent unemployment and economic recession would exceed the prior economic growth that presumably led to it.  Following from these debatable assumptions, they also engage in sleight of hand, pretending as though all of that "destructive" price deflation would happen at once and cause widespread unemployment, as it would during precipitous *monetary* deflation (widespread credit contraction...which, it is important to note, has only ever happened to us under the Federal Reserve).  In reality, no real monetary deflation would occur under commodity-backed currency...in fact, slow and gradual monetary inflation would still occur as more gold is mined.  Of course, as technology, competition, and other factors allow the economy to grow and become more productive, more and more goods and services will be gradually offered at lower and lower prices, causing slow and gradual price deflation.  Depending on GDP growth, this growth-fueled price deflation would probably exceed the price increases otherwise caused by the infusion of new money, to the tune of a couple percent a year or so.  Price stickiness under commodity-backed currency may slow this growth, but it would not actually reverse it as it would during times of sudden and severe monetary deflation, such as during the Great Depression and our current crisis.  Although I have not read their full "critique" and have trouble stomaching the smug tone and overall propagandistic bias, everything I've seen so far on the huppi site is written under the assumption that gradual price deflation over years, generations, and centuries is absolutely no different from precipitous currency deflation over a short period of time.  *For instance, in the article I linked to, they used the Great Depression argument to highlight the destructive effects of deflation, but they failed to actually acknowledge the fact that the Great Depression did not even occur under an honest gold standard anyway.*  The Great Depression only occurred after the Federal Reserve came about and abused the gold standard (turning it into a fake gold standard basically), so of COURSE massive credit contraction eventually occurred, reversing the previous massive credit expansion.  The idea that this was somehow the fault of the US following a "gold standard" is absolutely preposterous.

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## jon_perez

> Certainly.
> 
> But "people" should be actual participants in a forum, and not simply "drive by shooters" who post links to straw man articles and then disappear into the woodwork... that is not discussion, nor debate, it is a "hit and run."


It doesn't matter if the threadstarter didn't stick around.  The site he referred to was worth reading.  There are _some_ intelligent arguments in it even if it is clearly biased towards left-wing ideas.  If it were a site completely devoid of merit, then I don't think anyone would bother calling the OP a troll either, because the ideas in the site he referred to would simply be too absurd and would be dismissed outright.

*Could the reason the OP was being dismissed as a troll was because the site he was pointing had some tough arguments that could not be easily refuted?*

I myself came across this so-called "Liberalism FAQ" earlier (didn't bother referring to it here on rpf though) and it certainly made me rethink / reconsider some of my beliefs.





> And if you argue that it is NOT the sole post but rather that some long time RPF member has simply assumed another "new identity" in order to post this, then it is simple cowardice.


Who cares about "identities"?  What is important is the substance of the arguments.




> My "thoughts" were simply that this thread is an example of an instance why the privilege of starting new threads would be best limited to those who actually "stick around."


Dunno about you, I think that site he referred to had some interesting arguments worth discussing, so, for me, it was a far better  contribution to the forum than much of the empty parroting that goes on around here...

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## jon_perez

> but if we get attacked by lots of terrorist trolls, starting threads on their first post, then we'll have to give up our liberty to ensure the safety and security of the forum.


"Terrorist" trolls huh?     You sound like a neo-con, geez.

Read http://www.ronpaulforums.com/showthread.php?t=32994 again, by the forum founder himself.

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## Mini-Me

> Says who?  They can post how they see fit.  You seem very authoritarian in your posting preferences.


Not that this is really the thread to discuss this, but...private property rights of the forum admins are similar to private property rights of a home owner.  Anyone and everyone has the right to free speech (i.e. not to be physically restrained from speaking or harmed in retaliation for speech), but if you're having a party at your house, you still have the right to set conditions on your guests' attendance, kick them out if they become unruly, etc.  It's not Josh or Bryan's responsibility to literally provide everyone on Earth with an outlet for their opinions on this forum...and so WRellim's suggestions are entirely valid policies for them to implement.  Of course, compared to the admin/mods on most boards, I think the admins and mods here do tend to be pretty lenient in respect for the spirit of freedom and open discourse anyway (though the howlers may nevertheless have a chilling effect ), but that doesn't mean they actually *have* to.

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## WRellim

> *Could the reason the OP was being dismissed as a troll was because the site he was pointing had some tough arguments that could not be easily refuted?*



Nah. The article he linked to was a POS; it erects a "straw man" which it then calls "Austrian economics" and then proceeds to utilize virtually every other logical fallacy known to man to smear and destroy.

I could refute that article with one hand behind my back... but would there be any benefit? If the original poster absents himself, then who is left to dialog with?

Anyone (especially on this site) who would (still) be so easily convinced by the linked piece would also be very unlikely to understand the difference between a reasoned, logical argument, and a diatribe filled with lies and distortions.

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## jon_perez

^ Frankly, I think neither Austrian economics nor "mainstream" economics are both fully right or wrong.  *They are perspectives to consider, not dogmas to subscribe allegiance to.*  There are good insights as well as misleading ones to be found in writings belonging to both camps.

I am aware that many mainstream economists dismiss "austrian" economics outright (e.g. Krugman referring to it as "a theory about as worthy of serious study as the phlogiston theory of fire..." while the more hardened advocates of Austrian economics seem to think of Keynesianism (and even Friedman Monetarism) in much the same way [interestingly, Keynes himself, in later years, seemed to depart from his initial views, which had already coalesced into its own economic school of thought].

All these different economic theories are much like the descriptions of an elephant by the blind men.  They make valid and intelligent comments and observations of specific economic phenomena but they are not necessarily able to capture the entirety of economic events (there are more things under heaven and earth than can be dreamed of by any philosophy...).

Much as the blind men ended up fighting with each other even though they were all partially right, so the same goes with the more zealous advocates of specific economic schools of thought.  

The great lie which economists seem to like telling themselves is that economics can ever be a real science with the same kind of rigid predictability as, say, physics.

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## WRellim

> ^ Frankly, I think neither Austrian economics nor "mainstream" economics are both fully right or wrong.  *They are perspectives to consider, not dogmas to subscribe allegiance to.*  There are good insights as well as misleading ones to be found in writings belonging to both camps.



All of which means you probably don't have a very good understanding of _either_ camp.

Understanding gravity, or the "laws" of thermodynamics does not require one be "dogmatic" -- but rather simply that one understands reality and attempt to describe and quantify it in as simple a fashion as possible, versus attempting to deny it via superfluous obfuscatory terminology.

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## SeanEdwards

That criticism piece was like a menu of logical fallacies. I'm not sure if the author left any of the biggies out. I saw numerous examples of "appeals to authority" and "poisoning the well". Just a terrible piece overall with zero intellectual merit.

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## Paulitician

> Hehe, in http://www.huppi.com/kangaroo/L-ausintro.htm we read that _"Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." (1) Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone."_
> 
> as if mainstream economics is not just as cranky and idiosyncratic and full of unwarranted assumptions too... or worse...


Definitely worse.

I wouldn't mind the hitpiece if it actually presented arguments; alas, all I see are fallacies.

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## Met Income

> Not that this is really the thread to discuss this, but...private property rights of the forum admins are similar to private property rights of a home owner.  Anyone and everyone has the right to free speech (i.e. not to be physically restrained from speaking or harmed in retaliation for speech), but if you're having a party at your house, you still have the right to set conditions on your guests' attendance, kick them out if they become unruly, etc.  It's not Josh or Bryan's responsibility to literally provide everyone on Earth with an outlet for their opinions on this forum...and so WRellim's suggestions are entirely valid policies for them to implement.  Of course, compared to the admin/mods on most boards, I think the admins and mods here do tend to be pretty lenient in respect for the spirit of freedom and open discourse anyway (though the howlers may nevertheless have a chilling effect ), but that doesn't mean they actually *have* to.


Obviously, it's not the site owner's responsibility to provide speech to others on their property.  However, those looking to censor the OP are not the site owners, are they?  Case closed.

He's not a troll just because people say so.

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## danberkeley

> Obviously, it's not the site owner's responsibility to provide speech to others on their property.  However, those looking to censor the OP are not the site owners, are they?  Case closed.
> 
> He's not a troll just because people say so.


No one is trying to censor him. They were simply calling him a "troll". Dont people have the right to call someone a "troll"?

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## Chester Copperpot

> Obviously, it's not the site owner's responsibility to provide speech to others on their property.  However, those looking to censor the OP are not the site owners, are they?  Case closed.
> 
> He's not a troll just because people say so.


No, but he is a troll because he opens an account to make ONE post that is so wrong, its dumb.

There was a time the Austrian school WAS the mainstream. and back then all the Keynesians were nutjobs.

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## Met Income

> No, but he is a troll because he opens an account to make ONE post that is so wrong, its dumb.
> 
> There was a time the Austrian school WAS the mainstream. and back then all the Keynesians were nutjobs.


Why does that make him a troll?  You need to prove that he intended to provoke others.

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## jon_perez

> All of which means you probably don't have a very good understanding of _either_ camp.
> 
> Understanding gravity, or the "laws" of thermodynamics does not require one be "dogmatic" -- but rather simply that one understands reality and attempt to describe and quantify it in as simple a fashion as possible, versus attempting to deny it via superfluous obfuscatory terminology.


Like I said, the single biggest folly of economists (or people with pretensions to such) is to think that their field will ever somehow be like the hard sciences such as physics, for which you can come up with "laws".

Economics is part sociology and philosophy as can be so easily seen by the arguments put forth for this or that economic idea.  For what it's worth, I would say that arguments put forth by the so-called Austrian school appeal far more to common sense compared to Keynesian gobbledygook taught in schools.  But, historical revisionism aside, the mainstream seems to agree that Keynesianism did prove itself at some time in the past (but was eventually also proven to have its limits).  If you look at that so-called Liberalism FAQ, it even does a hatchet job on Monetarism, so for those Austrians who think Friedman is as much bunk as Keynes, I guess they have something in common with its author, LOL!

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## jon_perez

> Why does that make him a troll?  You need to prove that he intended to provoke others.


He was considered a troll because he pointed to ideas that some on this forum found _unpalatable_.

I would say that while the site clearly has a bias, the points there are not as easily dismissed as some of the posters on this thread would like.  If they were _that_ ridiculous, it would have been completely ignored instead of being attacked as trolling.

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## WRellim

> He was considered a troll because he pointed to ideas that some on this forum found _unpalatable_.
> 
> I would say that while the site clearly has a bias, the points there are not as easily dismissed as some of the posters on this thread would like.  If they were _that_ ridiculous, it would have been completely ignored instead of being attacked as trolling.


And there's YOUR "revisionism" at play.

He was called a "troll" quite accurately in this instance.

Here's the definition that Wikipedia uses for "Internet Troll": An *Internet troll*, or simply *troll* in Internet slang, is someone who posts controversial, inflammatory, irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of provoking other users into an emotional response or to generally disrupt normal on-topic discussion.Since this was a NEW user account -- which was used to place that  SINGLE post, containing solely the LINK to the article in question... well, THAT action was one of "trolling" in the form of _"disrupt[ing] normal on-topic discussion."

_Therefore the use was accurate and apropos. *I also think the term "coward" would be appropriate*, as I am beginning to believe that the OP is actually just a second "anonymous" account for someone else who wanted to post that link, but did NOT want to directly associate it with themselves. (The admins [moderators?] could check the IP number on that account and compare it to others and confirm or refute this ...but regardless, I wouldn't expect them to finger the person publicly). _




And it is NOT that the article is unrefutable (you're kidding, right?) or simply "unpalatable" -- I could refute that piece of garbage very easily. It would just be BORING to go through it from top to bottom and cite all of the logical fallacies it contains -- for it contains virtually nothing BUT logical fallacies.

_

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## Dsylexic

^^ this is the problem with us fricken ron paulites.we are an useless debating society.

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## WRellim

> ^^ this is the problem with us fricken ron paulites.we are an useless debating society.


I believe that would be "A" useless debating society.


Besides, what else is there to do at nearly 3 AM in the morning... storm the Fed?

Like that would matter anyway?

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## Met Income

> And there's YOUR "revisionism" at play.
> 
> He was called a "troll" quite accurately in this instance.
> 
> Here's the definition that Wikipedia uses for "Internet Troll": An *Internet troll*, or simply *troll* in Internet slang, is someone who posts controversial, inflammatory, irrelevant or off-topic messages in an online community, such as an online discussion forum or chat room, with the intention of provoking other users into an emotional response or to generally disrupt normal on-topic discussion.Since this was a NEW user account -- which was used to place that  SINGLE post, containing solely the LINK to the article in question... well, THAT action was one of "trolling" in the form of _"disrupt[ing] normal on-topic discussion."
> 
> _Therefore the use was accurate and apropos. *I also think the term "coward" would be appropriate*, as I am beginning to believe that the OP is actually just a second "anonymous" account for someone else who wanted to post that link, but did NOT want to directly associate it with themselves. (The admins [moderators?] could check the IP number on that account and compare it to others and confirm or refute this ...but regardless, I wouldn't expect them to finger the person publicly). _
> 
> 
> ...


You did not prove that he intended to provoke others.

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## Conza88

4 - 1 stars...

Can we make it 5?

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## xyz123

First things first, I am not a troll, although in retrospect I can understand why my post seems so inflammatory. I apologize for any misunderstanding. But accusing me of being a troll 10+ times hardly seems necessary. To be honest, I was hoping that someone could offer a clear rebuttal of some of the points the site makes, because I am not informed enough to do so on my own. I am a supporter of Ron Paul, it's just that I am in doubt as to whether he really needs Austrian Economics as his basis for argument. (Free market, balancing the budget, sound money, etc - a lot of that could simply be called good sense, could it not?)

If you disagree with the critique, then it because you have found fallacies with the author's arguments. That is obvious. Therefore, it follows that pointing a few of those fallacies out for demonstration would be very helpful and enlightening. Just telling me that you have found numerous errors and mistakes does nothing to help me, or anyone else, learn more. 

(For fear that I might be misunderstood again, I want to make clear that the previous sentence is NOT a 'challenge' of sorts; I simply want to _understand_ how one would refute these sorts of arguments.)

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## wizardwatson

> First things first, I am not a troll, although in retrospect I can understand why my post seems so inflammatory. I apologize for any misunderstanding. But accusing me of being a troll 10+ times hardly seems necessary. To be honest, I was hoping that someone could offer a clear rebuttal of some of the points the site makes, because I am not informed enough to do so on my own. I am a supporter of Ron Paul, it's just that I am in doubt as to whether he really needs Austrian Economics as his basis for argument. (Free market, balancing the budget, sound money, etc - a lot of that could simply be called good sense, could it not?)
> 
> If you disagree with the critique, then it because you have found fallacies with the author's arguments. That is obvious. Therefore, it follows that pointing a few of those fallacies out for demonstration would be very helpful and enlightening. Just telling me that you have found numerous errors and mistakes does nothing to help me, or anyone else, learn more. 
> 
> (For fear that I might be misunderstood again, I want to make clear that the previous sentence is NOT a 'challenge' of sorts; I simply want to _understand_ how one would refute these sorts of arguments.)


Your original post said this...




> What do you think? *Under close scrutiny, the Austrian School of Economics doesn't seem very credible.*


You also say in the above (your 2nd post?) that you understand why your post was inflammatory.  If, as you say, you 'are not informed enough to do so on your own', why do you claim that 'under close scrutiny', ASE doesn't seem very credible?  Anyway, seems your just backpedaling now.  

My best guess is that you are a sock-puppet of someone else on here who wanted to argue, but didn't want to take the heat for starting it.

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## WRellim

> First things first, I am not a troll, although in retrospect I can understand why my post seems so inflammatory. I apologize for any misunderstanding. But accusing me of being a troll 10+ times hardly seems necessary. To be honest, I was hoping that someone could offer a clear rebuttal of some of the points the site makes, because I am not informed enough to do so on my own. I am a supporter of Ron Paul, it's just that I am in doubt as to whether he really needs Austrian Economics as his basis for argument. (Free market, balancing the budget, sound money, etc - a lot of that could simply be called good sense, could it not?)
> 
> If you disagree with the critique, then it because you have found fallacies with the author's arguments. That is obvious. Therefore, it follows that pointing a few of those fallacies out for demonstration would be very helpful and enlightening. Just telling me that you have found numerous errors and mistakes does nothing to help me, or anyone else, learn more. 
> 
> (For fear that I might be misunderstood again, I want to make clear that the previous sentence is NOT a 'challenge' of sorts; I simply want to _understand_ how one would refute these sorts of arguments.)





> Your original post said this...
> 
> You also say in the above (your 2nd post?) that you understand why your post was inflammatory.  If, as you say, you 'are not informed enough to do so on your own', why do you claim that 'under close scrutiny', ASE doesn't seem very credible?  Anyway, seems your just backpedaling now.  
> 
> My best guess is that you are a sock-puppet of someone else on here who wanted to argue, but didn't want to take the heat for starting it.


WizardWatson is right -- you can't have it both ways. Either you are capable of putting an article under "close scrutiny" and claiming that it stands up -- or you are a "noob" and have little understanding of anything (including logical fallacies -- go look them up -- no one has to spoon feed you) -- but now you claim to be both at the same time?

Not buying it.

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## xyz123

Ok then to make things clear, I'll go with noob.

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## xyz123

Ok then to make things clear, I'll go with noob.

You can't expect a person to know everything. Until recently, I didn't even know there existed a congressman named "Ron Paul". I've only just started getting exposed to this kind of information, and obviously I've been too careless.

Please just ignore the original post, it was made in haste. A better phrasing would have been: "I became interested in the Austrian School after I first heard it mentioned [in a video of Ron Paul criticizing Bernanke on the bailout], but I didn't and still don't know the full extent of what Austrian Economics would entail. After some rudimentary research I came across this critique of The Austrian School, and now I am in doubt as to whether the Austrian School of Economics is as credible as mainstream economics. "





> My best guess is that you are a sock-puppet of someone else on here who wanted to argue, but didn't want to take the heat for starting it.


um...

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## wizardwatson

> Ok then to make things clear, I'll go with noob.
> 
> You can't expect a person to know everything. Until recently, I didn't even know there existed a congressman named "Ron Paul". I've only just started getting exposed to this kind of information, and obviously I've been too careless.
> 
> Please just ignore the original post, it was made in haste. A better phrasing would have been: "I became interested in the Austrian School after I first heard it mentioned [in a video of Ron Paul criticizing Bernanke on the bailout], but I didn't and still don't know the full extent of what Austrian Economics would entail. After some rudimentary research I came across this critique of The Austrian School, and now I am in doubt as to whether the Austrian School of Economics is as credible as mainstream economics. "
> 
> 
> 
> 
> ...


Well I said it was my *best guess.*  But I've been wrong before.  Kind of like you were, when you started this thread.  If you want some advice though, you're going to have to at least pick something about Austrian Economics that you disagree with.  Starting a thread the way you did only invites the treatment you received.  Following that up by asking other people to defend AE against what the article you linked to attacks, is just laziness on your part.

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## xyz123

I don't know enough about Austrian Economics or mainstream economics to _disagree_ with anything. After all, one cannot validly pass judgment on anything until one understands it.

I guess a basic question that needs answering is whether or not the writer's _portrayal_ of the Austrian School is accurate. If his assumptions about the Austrian School are wrong, then his subsequent arguments can be dismissed. If not, then one can't be too casual about refuting his arguments.


The writer gives the following summary of the differences between Austrian and mainstream economics.




> The differences between Austrian and mainstream economics
> 
> The Austrian School is not a monolithic ideology. One of their top professors, Peter Boettke, writes: "It must be admitted that Austrian economics is plagued with many thorny issues of an epistemological, theoretical, empirical, and political nature. Disagreement within the ranks of Austrian economists still persists over [many] issues" (7) Perhaps the largest split is between the "narrow church" of Mises and the "broad church" of Hayek. The Miseans do not consider Hayek a "true" Austrian, and even refer to him privately as a "social democrat," because he did not subscribe to all the tenets of hard-core Austrianism.
> 
> Factions aside, the general differences between Austrian and mainstream economics can be summarized as follows:
> 
>     * Mainstream economists use the scientific method; Austrians reject it, at least for the study of the economy. Instead, they use a pre-scientific method which deduces truths from a priori knowledge.
> 
>     * Mainstream economists make heavy use of statistics; Austrians claim statistics have very little value, because of their extreme limitations.
> ...


How accurate is this comparison?

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## 2_Thumbs_Up

Xyz, if you're really interessted in learning i suggest you take a look around at http://www.mises.org

What austrians say is really just common sense and I don't think you need a lot of economic background in order to understand it. I don't know how much time you feel like putting down but I really recommend the following course: http://mises.org/media.aspx?action=category&ID=89

If you have any specific questions after reading up I'll be happy to discuss them with you. But right now I think you are just asking questions that are way too general. On the points you took up in your last post, some of them are accurate but most aren't. The author doesn't seem to know what he's talking about at all. And even those points that are somewhat accurate are worded in a way to discredit the austrians. It's really just a very bad attempt at refuting the school.

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## nate895

> * Mainstream economists use the scientific method; Austrians reject it, at least for the study of the economy. Instead, they use a pre-scientific method which deduces truths from a priori knowledge.
> 
> * Mainstream economists make heavy use of statistics; Austrians claim statistics have very little value, because of their extreme limitations.
> 
> * Mainstream scientists believe in both objective and subjective truth (that is, absolute truth and personal truth); Austrians believe only in subjective.
> 
> * Mainstream scientists seek to explain human behavior on many different levels: the gene, the individual, the group and the specie. Austrians believe that all explanations of human behavior can be traced back to the individual.
> 
> * Mainstream economists often use models that use perfect starting assumptions; Austrians claim not to.
> ...


These comparisons are mostly accurate. I'd object to these:




> * Mainstream economists make heavy use of statistics; Austrians claim statistics have very little value, because of their extreme limitations.


The reason why this is flawed is because he fails to explain the reason why Austrians reject statistics is that what is good for statistics is not always good for individuals, and what is good for the individual is not always good for statistics. The Austrians believe that the most important thing in the World is the individual, and to make policy to force an individual to make bad individual decisions, but good for the GDP, is, at its best, immoral. 




> * Mainstream economists often use models that use perfect starting assumptions; Austrians claim not to.


The only time Austrians use models is to explain systems that Keynesians use. They use simple common sense for their "models." Such as "more saving with less depreciation is good for you, therefore everyone should save and there be less monetary depreciation."




> * Mainstream economists assert that the mystery of the business cycle is deep and poorly understood; Austrians claim the government causes it.


They believe fiat currency and a central bank cause it. Those are caused by the government, but the government is not the direct cause.

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## krazy kaju

I've refuted this twice already.

Here is the short version:



> Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." (1) Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone."


If you deny the superiority of a priori science, you deny the fact that there are universal logical laws that govern our existence. If we cannot deduce economic science from certain axioms, then certainly we cannot use history (empiricism) to form theory, since humans are bound to be irrational and to act in a different manner every time they do something. Obviously, this empiricist/positivist/historicist viewpoint is absurd, when you come down to it.




> Today the Austrian tradition is kept alive by the Ludwig von Mises Institute, a think tank financed entirely by wealthy business donors. It is part of a broader phenomenon, the explosion of far-right think tanks in the last 20 years, funded by such conservative and libertarian donors as the Bradley, Coors and Koch family foundations. These foundations have poured hundreds of millions of dollars into the creation of an "alternate academia" of right-wing think tanks, after the failure of mainstream academia to support right-wing dogma. This alternate academia comes complete with extensive media ties to publicize their research, which is why Austrians are so frequently found on conservative talk radio


1. Who donates to whom is irrelevant. This is simply a poisoning the well/guilt by association fallacious attack.

2. The Mises Institute is not far-right by any means.

3. Austrian scholars are rarely on any media. The writer clearly has no clue what he's talking about.




> The Miseans do not consider Hayek a "true" Austrian, and even refer to him privately as a "social democrat," because he did not subscribe to all the tenets of hard-core Austrianism.


1. Please do note the use of "Miseans" and not "Miseseans" of "Misesians," which are the proper terms. Clearly, even the author of this "critique" doesn't even know two $#@!s about the Austrian school.

2. I've never heard, read, or seen any Austrian refer to Hayek as a social democrat. That is simply absurd. Good job not providing sources.




> * Mainstream economists use the scientific method; Austrians reject it, at least for the study of the economy. Instead, they use a pre-scientific method which deduces truths from a priori knowledge.


Pre-scientific? You need an epistemology class, son. Besides, most economists use theory just as the Austrians do, just that they justify it with empirical studies. The Austrians interpret empirical data with theory. In essence, the two groups do the same thing.




> * Mainstream economists make heavy use of statistics; Austrians claim statistics have very little value, because of their extreme limitations.


Huh? Statistics are used by all economists. They have little value when it comes for deciding economic laws from them, due to the problem of post hoc analysis. But besides that, I don't know where the author got that statement.




> * Mainstream scientists believe in both objective and subjective truth (that is, absolute truth and personal truth); Austrians believe only in subjective.


Not true at all. Truth can only be objective, and no Austrian has ever claimed otherwise. Again, the author shows that he barely knows anything: Austrians point out that value is subjective, which most economists agree with.




> * Mainstream scientists seek to explain human behavior on many different levels: the gene, the individual, the group and the specie. Austrians believe that all explanations of human behavior can be traced back to the individual.


Well, unless you're prepared to say that your mind is shared among multiple humans, you cannot say that groups make decisions.




> * Mainstream economists often use models that use perfect starting assumptions; Austrians claim not to.


They don't.





> * Mainstream economists believe that monopolies can arise from a number of causes; Austrians believe that only government causes monopolies.


It's the highest contradiction to say that in the most competitive system, one uncompetitive goliath can arise.




> * Mainstream economists believe in fiat money; Austrians believe in the gold standard.


New classical and monetarist economists have come onboard for the gold standard in different instances. Another example showing the author has no clue what he is writing about.




> * Mainstream economists assert that the mystery of the business cycle is deep and poorly understood; Austrians claim the government causes it.


No... rational expectations and monetarist economists often point to things like inflation shocks and similar gov't interventions as causing business cycles.



As you can see, even the starting assumptions of the author are completely wrong.

----------


## nate895

> I've refuted this twice already.
> 
> Here is the short version:
> 
> 
> If you deny the superiority of a priori science, you deny the fact that there are universal logical laws that govern our existence. If we cannot deduce economic science from certain axioms, then certainly we cannot use history (empiricism) to form theory, since humans are bound to be irrational and to act in a different manner every time they do something. Obviously, this empiricist/positivist/historicist viewpoint is absurd, when you come down to it.
> 
> 
> 
> ...


I'd agree his assumption are wrong, however to say they are entirely wrong is inaccurate. A lot of those are right, it is just that he doesn't understand why Austrians think that way. Mainstreamers of today in all subjects think in bullets and they cannot understand that while bullet points are true, they rarely tell the whole story. Those bullet points, most of them at least, are somewhat correct, they just don't explain why someone thinks that way. He does that for mainstream economists as well. If mainstream economists thought processes were put up against Austrian thought processes, anyone with a lick of common sense and basic intuition would say the Austrians are more often right, and mainstreamers are more often wrong.

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## xyz123

Thank you all for the information you have provided. I will continue researching.



By the way, there should be a warning sign about this article or something. Otherwise people like me, who are new to all this, will end up stumbling right into it. 





(



> Maybe he is the author of the article desperately trying to get some precious hits so he can get paid.


Horrible, horrible speculation on your part. The site has gotten a lot of hits already (number 4 on Google after searching for "austrian school of economics").

More importantly, the author is dead.

)

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## Brassmouth

> The site has gotten a lot of hits already (number 4 on Google after searching for "austrian school of economics").


$#@!.

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## krazy kaju

> I'd agree his assumption are wrong, however to say they are entirely wrong is inaccurate.


A lot of them are completely false and pure misinformation.

----------

