Tag: austrian school of thought

How I Became An Austrian Economist

Jozef Martiniak | Slovakia

In March of 2018, I attended a seminar on Austrian economics in Slovakia that was organized by an institute whose statements I had been following for a long time. The event lasted four days with lectures on economics, money, and business cycle theory among other things, and the statements made seemed consistent to me. The rhetoric remained the same – what was said ten years ago was still relevant to today.

Moreover, these views have somehow all given awareness to me, a man with common sense. Suddenly you find out that something that you feel intuitively has a 150-years-old historical tradition and that there is a school that studies and develops this tradition.

Surprisingly, the majority of the attendees ended the seminar with a conviction against Austrian economics, but I experienced a change. Out of the blue, I became an Austrian. My ideas were synthesized and I found out it all makes sense. I used to talk about this moment like the story of St. Paul’s fall off of his horse. It was a moment after which you start looking at the world through different eyes and you know it will never change, you will never get back. You start to realize the connections in everyday situations. Not long ago, you have not seen them, but now you can clearly. Tom Palmer says that suddenly you look at the world through the lenses of freedom, through a filter that the majority of people do not have.

You start to become aware that this change is not so obvious like you feel it is. You have a feeling that everybody must see it, so you control yourself, you dose your knowledge to people around you just in bits. Then you find out that people around you do not care about you at all and most of them have not noticed any change in you, they are preoccupied by their own problems.

The impression that you understand the world better is followed by the impression that people will not understand you anymore. Suddenly, it is clear to you how some things will end up, because you distinguish responsibility from irresponsibility. And that is what really irritates the eminent experts who somehow see the change happening in you, though they do not know what has happened, they just see that you can say something responsibly and hold your ground, because you simply know it is true. They do not like debating with you because instead of trying to understand your point of view, they focus on trying to humiliate you in rhetorical competition.

A side-effect of the “conversion” is that you suddenly start to understand the Idealists whom you did not understand before.

Hazlittian awareness of invisible consequences of the events that already happened is another consequence of the ‘conversion’. Only few people realize it. Most people simply analyze their lives and only see the closest area of consequence of the acts that happened and that are related to their past.

In the summer of 2018, I completed a course at Mises University and henceforth joined a sect of people with an Austrian point of view in economics. I have used the word “sect” on purpose since we fit into the characteristics of the word ‘sect’ – we are in minority, we look at the others like those who do not understand yet, but if they are insistent, they will find out where the truth is. The lecturers at the Mises Institute say we belong to the two percent of the population who understands economics better than the majority. Even if it is said as a joke, it seems to me inappropriate since those who really understand the nature of Austrian economics know that they really belong to that small percentage. And those who do not understand are uselessly given a false feeling of exceptionalism, because they do not know why and in what they should be exceptional.

I like working in a world where your steps have meaning. Since we are homo sapiens, we should stop and think about future consequences of our present actions. The economists of the mainstream cannot explain how debt of countries will impact their future. They cannot explain how long the FED and ECB control will work and the public will trust it. In these aspects, they have adopted Austrian rhetoric of “laissez faire” – let it be, it is working somehow.

The Austrians are not satisfied with an explanation that it will work out somehow, because everything has always ended up working somehow. They want to change this system – even though it is very corrupted – so that it is the furthest possible from disaster. I do not know how other Austrian economists came into existence, perhaps they were born like this (at least Carl Menger, as he was nobody’s pupil and he was quintessential to the marginal revolution), but I am for sure a convert.


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Scarcity: A Natural Imperative to Human Reality

TJ Roberts | United States

My good friend Kevin Shaw released the article “Post-Scarcity and Freedom” to this website just yesterday. Mr. Shaw is a brilliant individual with a deep dedication of liberty for all human beings. His recent article brings up the progress humanity has made in spite of government regulations, almost reaching an apparent lack of scarcity in several industries.

The problem, however, is that scarcity will always exist so long as nature exists. Even if humanity achieves a superabundance of resources, which is hypothetically possible, it will still be impossible to shake off human nature.

Scarcity in the Garden of Eden

Suppose humanity managed to return to the Garden of Eden. Work is meaningless, for all that one desires is provided by nature. There is a superabundance of every resource. Even then, there is a form of scarcity, which demands the establishment of natural private property norms.

Even when all resources are readily available to the inhabitants of this hypothetical Eden, our bodies are still scarce. There is only one me. There is only one you. Our bodies, no matter what, are scarce resources. It is with this in mind that it is natural that I am the owner of my body in the same way that you are the owner of your body. Truly, we are the original appropriator of our own physical beings. To argue against this is to prove it, whereas to make the claim “I do not own myself” is to employ self-ownership.

Scarcity and Action

Whereas a human being owns themselves, it is axiomatically true that human beings act, i.e. they deliberately attempt to modify their condition to a condition that is more satisfactory based on their subjective valuation. Since human beings act, they choose. They must prioritize what they will do now and what they will do later. Even in a post-scarce world, time is scarce. Eventually, we will all die. With this in mind, there are things we will not be able to do or have.

But even if humans were immortal, time is still scarce. You cannot do several things at the same time. I must choose if I will eat an apple now, or if I will drink water now. I must choose if I will read or if I will watch a movie. The list goes on. As actors prioritize, certain goals are set aside for more pressing needs. By having a choice, you are incurring a cost upon yourself every time you act. This is the basic principle of opportunity cost. If my first choice in action is to drink water and my second choice in action is to eat an apple, the cost of me drinking water is the satisfaction abandoned in not eating an apple at that moment.

Scarcity and Reality

Throughout human society, technological advancement has made life easier. Whether it be the creation of agriculture in the Neolithic Revolution or the Industrial Revolution, entrepreneurship has allowed for a more efficient use of resources. This can make prices drop significantly, allowing for a cheaper and more comfortable life.

I agree with Mr. Shaw that the best way to increase abundance is to allow for the free market to flourish and to get the government out of people’s lives. What is problematic, however, is the belief that scarcity can be eliminated. No matter how efficient production becomes, scarcity will always be a natural part of life because we are all inherently scarce.


This post was originally published in LIFE.


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