https://www.lewrockwell.com/2019/03/walter-e-block/im-an-austrian-economist-what-does-it-mean/
In addition to being a libertarian in political philosophy, I am also a member of the Austrian school of economics.
Austrian economics has nothing to do with the economy of that European country. It is so named because its founding fathers all emanated from that part of the world. They include such European scholars as Carl Menger, Eugen von Bohm-Bawerk, Ludwig von Mises, Friedrich A. Hayek (Nobel Prize winner in the dismal science in 1974) and Joseph Schumpeter. Murray N. Rothbard and Israel Kirzner are the most high profile American Austrians. In like manner, the Chicago School of economics does not at all focus on the commercial well-being of that particular city. Rather, this perspective too takes its name from the fact that its progenitors were all in some way associated with the University of Chicago. Luminaries include Aaron Director, Henry Simons, Milton Friedman, George Stigler, Gary Becker and Ronald Coase.
Austrian economics diverges in several important ways from that followed by our colleagues in the mainstream of the profession. First and foremost, the praxeological school, at least insofar as I see matters, belongs in the realm of logic; it is not an empirical science. For the mainstream neo-classicals, logical positivists to the core, the be-all and end-all of proper empirical science is falsifiability and testability. All claims in economics are only tentative hypotheses, which stand or fall if and only if they can withstand empirical testing. While Austrians also entertain such hypotheses, we also deal in the realm of apodictic necessarily true laws. They cannot be tested nor falsified and yet are absolutely certain.
Let us consider some examples of the latter. 1. Whenever voluntary exchange occurs, both parties necessarily gain, at least in the ex-ante sense of anticipations. Joe sells an apple to Mary for one dollar. At the moment this commercial transaction takes place he values the money he receives more than the fruit he gives up. She more highly regards the foodstuff than the price she has to pay. We do not have a clue as to why these two folks have these preference rankings. It may be that the ordinary motives are in play. She sees a bargain, he fears the rotting process will soon occur, rendering his goods valueless; a dollar is far better than nothing. For all we know, however, the price is so low because he wants to ingratiate himself to her so that he can date her. Or perhaps she is poor, and he is “selling” her this apple to promote her self-esteem and is really doing this out of charitable impulses. But there is no testing possible here. We know it is undeniably true that both parties think this transaction will benefit each of them. Why else would both agree to the deal were it not for the fact that they hope to thereby improve their economic situations? Read the rest of this entry »
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