If Libertarianism / Austrian economics is so great, why isn't it in use?

[Mahkato]

My cousin posed this question to me via e-mail. I haven't replied yet.

Is there a country where pure libertarianism and Austrian economics are in full use? If not, why not?

[Broadlighter]

I've heard that Guernsey, a French speaking island nation off the Atlantic coast uses Gold coin as currency.

It seems to be a very prosperous nation.

That's as close as I can get.

[Thomas Paine]

Because then government elites would not be interfering with macro economic policies in a way that benefits their constituencies.

[kalami]

Is your cousin posing that question ironically? It's pretty obvious that people don't always pursue what's in their best interest, but whether or not libertarianism is that is irrelevant.

[brandon]

Hong Kong is he closest

[murrayrothbard]

My cousin posed this question to me via e-mail. I haven't replied yet.

Is there a country where pure libertarianism and Austrian economics are in full use? If not, why not?

Why would they be? States have nothing to gain and everything to lose (possibly even their existence) if these ideas were widespread.

[kalami]

Hong Kong is he closest

Hong Kong has very little political freedom, what is it the closest to?

[Chester Copperpot]

My cousin posed this question to me via e-mail. I haven't replied yet.

Is there a country where pure libertarianism and Austrian economics are in full use? If not, why not?

back in the day when we were on the gold standard (along with most of the world) the people who advocated paper money were considered kooks...

A good reason is that anytime in our history when we've had war.. We've had to go OFF the gold standard in order to pay for it.. And we pay for it with inflation. Over the years the politicians have realized that not only war but grand social programs could likewise be paid for with paper money.


TO sum it up simply. Nobody uses a gold standard because it makes the job of the politician more difficult. And people are inherently lazy. A paper money system lets them promise whatever they want without touching the citizen for direct taxes to pay for it.. The people are happy because they get what they want and the politician is happy because he gets re-elected.

[MN Patriot]

People understand that if someone has something they want, like money, it is easiest to just take it from them. Obviously society frowns on direct theft by one person to another. But using the government as an intermediary works well; politicians say they will solve our problems with tax money, it isn't their personal money, so they can spend it freely. "We tax the other guy and give the benefits to YOU".

Even businesses that require customers to pay for goods and services use government to take money from taxpayers and have the politicians give them subsidies and government contracts for various un-necessary projects.

Some people are inherently greedy and lazy and envious, they want things, but are unwilling to work for them and expect others to give it to them. Other people are apathetic, many are ignorant.

Popular culture reinforces the idea that money is bad; to work and earn a lot of money is somehow stealing. I had a number of Democrats tell me John Kerry's fortune wasn't bad because he didn't make it, but his wife's former husband was a scumbag capitalist who did earn it.

Then people call our system of soft corporate fascism a "free market", further smearing the idea of freedom as a system of exploitation by the rich over the poor.

Money is power, some people never have enough so they use the government to gain more. Freedom is always under attack, so naturally it gradually is reduced.

Hope these ideas work for you.

[Indy Vidual]

New Zealand has actually reduced the size of their Federal Government.
```````

Here is one example:

Miracle Down Under: How New Zealand Farmers Prosper without subsidies (http://www.freetrade.org/pubs/FTBs/FTB-016.pdf)

[jonahtrainer]

My cousin posed this question to me via e-mail. I haven't replied yet.

Is there a country where pure libertarianism and Austrian economics are in full use? If not, why not?

It is in use. Economic theory is not a 'program' that is followed. Economic theory is the way things are such as gravity.

Sure, someone can jump off a building and not be 'using gravity' but reality will assert its consequences. So likewise, government can interfere with the free market but eventually the consequences will be asserted.

[Mattsa]

I've heard that Guernsey, a French speaking island nation off the Atlantic coast uses Gold coin as currency.

It seems to be a very prosperous nation.

That's as close as I can get.

That's not quite right but the Channel Islands, Jersey, Guernsey and Alderney use a form of debt free fiat currency for public expenditure.

You can read about it here.

http://www.ercouncil.org/How%20Guernsey%20Beat%20the%20Bankers.pdf

There is some interesting stuff on the web regarding the monetary system adopted by the Channel Islands. Just type 'Guernsey' and 'debt free currency' into google and you'll pull up numerous articles.

The most interesting thing about their currecny is that it is not commodity backed and indeed, it never has been. A currency does not need to be commodity backed to be inflation proof, providing that the system for administering the currency is honest and transparent.

Panama is also another very interesting case study in inflation control.

Panama uses the US dollar as its currency but inflation is rigorously controlled by exporting any excess currency out of the country. Inflation in Panama has remained at around 1% for over 30 years..............using the US dollar as its currency! Amazing huh!

So a gold or silver backed currency is desirable as it straighjackets money creation but it isn't essential providing that there are systems in place to curtail excess growth of the money supply.

You can read about Panama's currency at the mises.org website

[Goldwater Conservative]

In a democracy, people usually don't vote based on what's logical or right, but on emotion and the version of truth/reality they're fed by the media, school system, etc. They vote themselves benefits at their neighbor's expense, but the favor is returned. That's why democracies tend to become as authoritarian as dictatorships, whose reasons for not adopting free market policies I probably don't have to get into (cronyism, basically).

In other words, governments by nature trend away from liberty and in the direction of control, regimentation, etc.

[Mahkato]

Thanks for your responses everyone. Very helpful.

[john_anderson_ii]

The United States is a libertarian society.

Austrian economics was in use to one degree or another up until 1970. We've gone pretty much downhill since then.

[Mitt Romneys sideburns]

Thats like saying, "If diet and exercise are so great, why dont more people go to the gym?"

[Mitt Romneys sideburns]

The United States is a libertarian society.

Austrian economics was in use to one degree or another up until 1970. We've gone pretty much downhill since then.

Earlier than that. FDR, Lincoln, Wilson. All of them played their part.

[Chester Copperpot]

Thats like saying, "If diet and exercise are so great, why dont more people go to the gym?"

very true

[Mahkato]

Thats like saying, "If diet and exercise are so great, why dont more people go to the gym?"

Nice!

[Richandler]

Because a gold standard would mean the government would have to actual tax when it spends money on welfare.

[diesirae]

It is in use. Economic theory is not a 'program' that is followed. Economic theory is the way things are such as gravity.

Sure, someone can jump off a building and not be 'using gravity' but reality will assert its consequences. So likewise, government can interfere with the free market but eventually the consequences will be asserted.

This is an astute observation. However, if we acknowledge that Austrian economics makes predictions about how, and when, government should intervene in the economy, the simple answer is that Austrian policies have been roundly incorporated into more contemporary economic theories such as Monetarism and growth theory.

You don't see Austrian policies in action, because most of the applied work on them was done by later economists who were not Austrian per se. For instance, Milton Friedman and Alan Greenspan are good example of "synthetic" economists who took Austrian ideology and theories and developed neoclassical models based on them which could be readily applied to the real world.

Part of the problem with Austrian acceptance in mainstream (read: neoclassical) economics is that Austrian economics did not merely challenge the outcomes of classical or Keynesian economics, but it attacked the very foundation of economic analysis. This is very similar the degree to which Marxian theories differ from regular economics -- however, the striking difference is that the debate which Austrian economics touched off in economics led to actual adoption of many of the underlying principles and motivations; whereas Marxian theories remained (in most areas) basically unintegrated. Which is, perhaps, ironic, given that Marx/Heidegger loved the dialectical process.

[scooter]

The biggest influence on our economic system from the Austrian School is that the Fed managers admit that inflation is a monetary phenominon. Keynes always said that it was a market-driven phenominon.

Now, despite this knowledge and acceptance by the Fed, they still choose to utilize the monetary policies which create the inflation problems.

[diesirae]

The biggest influence on our economic system from the Austrian School is that the Fed managers admit that inflation is a monetary phenominon. Keynes always said that it was a market-driven phenominon.

Now, despite this knowledge and acceptance by the Fed, they still choose to utilize the monetary policies which create the inflation problems.

This is not precisely true. Stabilization policy does create inflation, but Federal Reserve behavior for the past few decades has been much closer to monetarist theory in its behavior with respect to printing money, which was the Austrian theory.

To put it another way, they adopted Austrian/Monetarist theories in governing the money supply -- not in how it is managed day-to-day, via interest rates. However, this was not the issue that Austrians raised during the last century.

[dvictr]

the united states is a mixed economy meaning that it relies on monetary and fiscal policy... since the great depression the keynesians believe that the free market does not find convergence (supply does not equal deman) so the gov. needs to step in an interfere...

austrian economics believe that in an absolute free market with no gov. intervention the market has no inefficiencies. because there has never been a truly free market in the world.. this theory or the idea of Austrian economics cant be proved "true" only not proven false.. THEORETICALLy the world would be a better place if all nations stoped war, and there were no trade barriers such as duties and taxes.. The welfare state would be abolished

there are major fundamental differences between Austrian and current (neo-classical) economics and frankly some of the differences are technical and some are IDEOLOGICAL but rest assured that i have studied economics at great lenght and the Austrian School is the true fundamental theoretical understanding of the world we live in.

its like the debate between evolution and creationism... in this case... Austrian Economics is not creationism but "intelligent design"... It has to do with human behaivior not empirical evidence.

to answer the question of why libertarianism is not in use we have to stop for a second and understand where we are in the course of human history... 5000 years ago.. the egyptians were building the pyramids and it was a total totalitarian state... Only in the past 20 years has there been a communications revolution and the world is connected by ideas and information. the natral trend is towards capitalism and libertarianism but there are people in this world that need "power".. look at hugo cavez.. he believe that economies should be centrallly planned and go back to socialsim... Islam is a form of collectivism and communism...

libertarianism follows the same ideas that we observe in biology.. survival of the fittest, natural selection( capital is directed towrds its most efficient uses)... however people that have power want to alter the natural convergence and distort the market outcome... example.. people that are aristocratically wealthy in the world tend to have children that grow up to be worthless POS... so they use there power to keep fortunes in the family (BUSH) and in the course screw the regular people that are trying to move up. Libertarianims is the only compasionate economic system because it give every one a chance to get ahed


sorry for the sppelling errors i type fast and i feel strongly about these issues...

RP2008