Austrian economics and Liberty

Are you sat there looking at the news feeling like you’re experiencing déjà vu but this time it’s much, much worse?

We have seen several financial traumas and crises over the years – the Winter of Discontent in the 1980s, the Russian process of demonetization in the early 1990s, the 1997 Asian financial crisis which of course leads us to the one we have at the moment.

So, we’re in a financial crisis. We’re skimming the edge of a recession. Will we end up with deflation or hyperinflation? Is QE as bad as the money printing in Zimbabwe or will we get away with it this time? If they’re creating more money then why haven’t we seen any of it?

And most importantly how was this allowed to happen?

Basically it’s down to an evil branch of economics. Unfortunately, we’re talking about the branches of economics which you were taught which the media refer to and that politicians base their policies on – Keynesianism and Monetarism.

The twentieth century saw a change in the focus of economics. We saw a rise in macroeconomics and the use of econometrics (using mathematics and statistical techniques in economic analysis) to look at economic phenomena. Keynesianism, along with monetarism, causes the illusion a good economy is something which can use demand to stimulate the economy. This, in our opinion, has seen a dangerous ascent of politicians’ power and a distorted image of capitalism. This ascent, like all ascents will head with a fall, but this will be one with a crash landing.

True, governments can reduce the rate of interest in the short run . . . issue additional paper currency . . . open the way to credit expansion by the banks. They can thus create an artificial boom and the appearance of prosperity. But such a boom is bound to collapse soon or late and to bring about a depression. Mises, Omnipotent Government.

Today we operate on a fiat money system. Central to this system is Keynesianism and Monetarism ‘they continue to have the biggest influence on the policy establishment, the media, and the financial industry,’. (Detlev Schlichter, Paper Money Collapse).

What you need to know is that these schools of economic thought are not only evil, they are also completely wrong.

If you learn just one thing from this site then let it be this: Austrian economics is good and tells the truth. It tells far more of the truth than any other branch of economics because its grounding is in human behaviour and history.

It’s not even that radical anymore. Ok, it might not be obviously in the papers, or in the economics text books, but it is everywhere else. It has literally taken over the blogosphere and people’s conversations.

What’s great is no one actually knows that they’re talking about Austrian economics, because what they’re saying is just common sense. So much so that it doesn’t seem to need to come under a term, or a school of thought.

Austrian economics is about liberty, free markets, small governments and sound money. Its basis is conventional wisdom and common sense.

As the Daily Bell recently pointed out if you google ‘Mises’ this returns around 3 million direct sites, only a few thousand less than ‘Keynes’.

Thanks to the internet, ideas can be discussed, debated and spread. One thing which is being talked about in huge volumes is topics with Austrian themes:

-          Inequality in the financial system

-          Government regulations

-          Socialism

It is now laughable to be a Keynesian. I mean, how often do you turn on the television and respectfully listen to some politician, economic advisor or ‘top economist’ present their next big solution to the on-going crisis? You can’t any more, they are almost humorous in their attempts at an ideological approach to this economic disaster.

Austrian ideas did not come from Ludwig von Mises, they have been around for hundreds of years. They have founded the basis for many stable economies, developments and technical advances.

In contrast Keynesianism is new, it’s just some flash in the pan. Lord Keynes’ ideas and theories, he acknowledged, did not come about as a result of developing new ideas but in ‘escaping from the old ones’. This is where much of our current society has gone wrong.

Lord Keynes, as his theories are understood, is like a slightly more successful John Law. He’s turned up with all these radical ideas, showed them to the power hungry politicians, crashed the economy and done a runner (read: died).

And just like when John Law did a runner, we’ll end up turning to what we know best; sound money and a stable monetary supply.

In the meantime though, be prepared for the uproar when everyone realises that what they’ve been wanting is sound economics, not the balderdash they’ve been mistreated with. As Henry Ford once said:

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning. Henry Ford

Well we’re here to help you understand it. And then we’ll help you thrive in the revolution.