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stoutmaker
01-11-2008, 01:50 PM
As Ron Paul Supports we sometimes scoff at the fact that others get lost when Dr. Paul starts talking about Austrian Economics. But my question is, as a Dr. Paul supporter yourself, do YOU understand it. (I admit I do not. Looks like a wikipedia day for me)

Tschaka
01-11-2008, 01:52 PM
I'm from Austria and dont understand this referance.

By the way Ron Paul is very popular in Politics interested people in Europe. He is better known than one might think

graddium
01-11-2008, 01:57 PM
Read Economics for Real People (http://www.mises.org/books/econforrealpeople.pdf). Very good introduction, and easy to read if you have no economics background.

stoutmaker
01-11-2008, 01:57 PM
what do you think accounts for Dr. Paul's foreign popularity? I would not think that Congressmen from Texas would get much play in the international media.

snaFU
01-11-2008, 01:59 PM
Sure do! I'm happy he mentioned the Austrian Business Cycle in the debate.

Xenophage
01-11-2008, 02:00 PM
"Human Action" by Ludwig Von Mises is the Austrian Economics Bible. Other must reads include: "On Liberty" by J.S. Mill and "Capitalism: The Unknown Ideal" by Ayn Rand.

Xenophage
01-11-2008, 02:01 PM
If you're less of a reader, check into Milton Friedman's "Free to Choose" video series.

tekmo
01-11-2008, 02:03 PM
I minored in Economics in college, so I was very into it a few years ago. I haven't studied up on it recently, but free markets are where its at!

Gimme Some Truth
01-11-2008, 02:04 PM
I understand enough to know why Paul says the things he does. When I get time I'll definately be learning everything there is to know.

malibu
01-11-2008, 02:05 PM
I was wondering how many in the audience - or on stage for that matter - understand where the reference comes from -

"The Ludwig von Mises Institute is the research and educational center of classical liberalism and the Austrian School of economics."

but really, I'll have to find out more.

Gimme Some Truth
01-11-2008, 02:06 PM
what do you think accounts for Dr. Paul's foreign popularity? I would not think that Congressmen from Texas would get much play in the international media.

I think his Foreign Policy is the main thing. The rest of the world, on the whole, see the US as the no.1 enemy of peace and stability.

Xenophage
01-11-2008, 02:06 PM
Bear in mind please that I've read the Wikipedia article, and its not the best. It implies several times that the Austrian School is inconsistent with observational phenomena or that it is entirely theoretical, and not pragmatic. That is simply not true. For a *real* understanding, you're going to *have* to read something written by an economist.

However, wikipedia does do a decent job summarizing a great many things.

Xenophage
01-11-2008, 02:08 PM
I'd like to stress also that the Free Market economic ideas are just as important as Paul's ideas on foreign policy, and married to them such that you can't have one without the other (well, you could, but then you'd be holding contradictory beliefs). It is an entire political philosophy that he advocates.

Shellshock1918
01-11-2008, 02:09 PM
partially. I ordered Mises' book on socialism, should be here Monday. Looks to be a good read.

malibu
01-11-2008, 02:10 PM
http://en.wikipedia.org/wiki/Ludwig_von_Mises

Mises wrote and lectured extensively on behalf of classical liberalism and is seen as one of the leaders of the Austrian School of economics. In his treatise on economics, Human Action, Mises introduced praxeology as the conceptual foundation of the science of human action, establishing economic laws of apodictic certainty rejecting positivism and material causality. Many of his works, including Human Action, were on two related economic themes:

1. monetary economics and inflation;
2. the differences between government controlled economies and free trade.

angrydragon
01-11-2008, 02:10 PM
Still studying on it.

Get a copy of Economics in one Lesson by Henry Hazlitt.

Oh and The Law by Bastiat

Free to read online
http://bastiat.org/en/the_law.html

Free audio
http://www.freeaudio.org/fbastiat/thelaw.html

gpickett00
01-11-2008, 02:13 PM
If you're less of a reader, check into Milton Friedman's "Free to Choose" video series.

link?

snaFU
01-11-2008, 02:14 PM
Its important that you learn the fundamentals of the ideas of a free market. Its the basis of all Liberty.

The most important thing one must do is become knowledgeable in Austrian Economics if you want to explain to people why as people we must favor this over government central planning or other government interventionist policies. The fallacy that the people can't live free and be completely control of the market still prevails to this day. The only way one can dispel this is by teaching others about what you know.


If you want to learn about Austrian Economics and are not familiar with the terminology used your best beginning should be with Rothbard since he wrote in the "common" mans language in order to let the seeds of liberty spread.

http://www.mises.org/

sharkcity
01-11-2008, 02:20 PM
it's basically free markets and obeying the constitution- not the corporate fascist bs we have now, not the socialist bs many countries have, not one size fits all central planning bs, no subsidies to distort supply or move jobs offshoare, True True free markets, True competition, no favoratism to people or companies or unions that donate to get you elected. There's no question America can compete and excell with lower labor cost countries if the playing field is fair. We have the technology and capital to smoke low cost producers. My guess is the gboys are trying to develop the middle east and the far east by pumping in capital. Don't buy the they have the oil bs. We have a 100 year supply of proven reserves right here in this country. Truth is for enviornmental reasons we really need to get off carbon based fuels and the govt should stop subsidizing coal/oil. Does anyone really believe the far east can out do us in manufacturing? I could rant forever..

Read Mises, Hayek..These 60 second soundbite debates don't lend themselves to smart discussion with intellectually dishonest candidates.

Pii
01-11-2008, 02:36 PM
what do you think accounts for Dr. Paul's foreign popularity? I would not think that Congressmen from Texas would get much play in the international media.

It's not just the U.S. that would benefit from a return to non-interventionist foreign policy. It's them too... While our stated purpose in interfering everywhere, particularly in the Middle East, is to promote stability, you can very easily come to the conclusion that our efforts often lead to the opposite effect.

I think the rest of the world would very much appreciate a United States that went back to minding it's own business (at least, until the next natural disaster occurs).

apc3161
01-11-2008, 02:39 PM
If you're less of a reader, check into Milton Friedman's "Free to Choose" video series.

Yea, that is definitely good advice.

surf
01-11-2008, 02:42 PM
it's all about freedom. it's really that simple. understanding that gov't influence (prohibitions and subsidies) causes market defficencies pretty much means that you understand Austrian economics :)

capital flows are more efficient and "beneficial to all" (save Haliburton) in a free market

Rede
01-11-2008, 02:43 PM
As Ron Paul Supports we sometimes scoff at the fact that others get lost when Dr. Paul starts talking about Austrian Economics. But my question is, as a Dr. Paul supporter yourself, do YOU understand it. (I admit I do not. Looks like a wikipedia day for me)

Yes, but I read Hayek, Mises, and Nozick during my stint as a PolySci major... otherwise I wouldnt.

ladyliberty
01-11-2008, 02:45 PM
cut government spending = no need for taxes = end the IRS!

i do not understand economics at all ... i had to sit and watch that cartoon video with the giant inflation monster chasing the poor taxpayer around the globe to even understand it as much as I do.

kirkblitz
01-11-2008, 02:46 PM
This was never even touched on in my econ class at the university heck im in my fourth year and its not been mentioned in any class and im majoring in 2 buisness degrees, i want to learn it though. Guess i gotta go to barnes and nobles.

Sesshomaru
01-11-2008, 02:49 PM
Im getting my PhD in Economics so yes :)

762x54r
01-11-2008, 02:51 PM
Here is the book my kids read that taught them the basics of Austrian economics and the dangers of fiat money/ central bank.

http://www.amazon.com/Whatever-Happened-Explanation-Economics-Investments/dp/0942617525

While written for children it is actually a very good read for adults who may lack the basics of economics.

Big Boss
01-11-2008, 02:53 PM
http://mises.com/forums/t/762.aspx

Full pdfs of Economics for Real People, Human Action, and Man, Economy, and State, plus a bunch of relevant articles/excerpts sorted topically.

MJfromCT
01-11-2008, 02:59 PM
Ron Paul's mention of Austrian Economics last night as well as references to Mises, Hayek, "Just War" doctrine, Freedom to Fascism etc. are his way of offering those hungry for knowledge a homework assignment. When people seek information for themselves they are more likely to receive it with an open mind. Ron is running a very smart campaign and an even smarter movement.

BillyFromPhilly
01-11-2008, 03:23 PM
As Ron Paul Supports we sometimes scoff at the fact that others get lost when Dr. Paul starts talking about Austrian Economics. But my question is, as a Dr. Paul supporter yourself, do YOU understand it. (I admit I do not. Looks like a wikipedia day for me)

I highly recommend reading Human Action by Ludwig von Mises and The Road to Serfdom by F. A. Hayek.

And if you really get into it, The Case Against The Fed by Murray Rothbard.

karat3
01-11-2008, 03:26 PM
what do you think accounts for Dr. Paul's foreign popularity? I would not think that Congressmen from Texas would get much play in the international media.

Well I personally think it has to do with his stance against "big government". Atleast people in europe know how annoying it is, since we have the massive bureaucracy known as the EU. Also his stance on the us forgein policy helps.

iznourbaby
01-11-2008, 03:28 PM
Here is an audio link to Ron Paul`s opinions of Mises.

http://mises.org/multimedia/mp3/audiobooks/MisesPersonalView.mp3

N13
01-11-2008, 03:29 PM
Im getting my PhD in Economics so yes :)

You should take this opportunity and do some teaching here.

It would help the movement.

Trance Dance Master
01-11-2008, 03:34 PM
Jason Hommel's Free Market 101 is the super condensed version.

http://silverstockreport.com/2007/free_market.html

The Free Market: 101
Silver Stock Report
by Jason Hommel, September 12, 2007


Understanding free market concepts is essential to your own prosperity and well being.

By free trade, I mean trade with other nations.

I can justify it with a few simple words.

If it's my money, that means I'm the one who has the right to spend it where ever I want to.

I could end the argument there, and say no more. But then, this article would be too short, so I'll continue.

If you are against free trade, I have a question. Whatever in the world made you think in the first place that you could dictate to me where I can, and cannot, spend my money, which is my money, not yours; and what makes you think you can steal that from me, and not consider it theft?

Yes, I know that the U.S. Constitution allows for tariffs. But a Constitutional government need not exercise that power, and could just as easily levy a tariff of .00001 of a penny on every tonne of imports, as levy no tariff at all.

Tariffs are arbitrary, and therefore unjust. What is the standard to say what is a "fair tariff"? Is a 1% charge fair? 5%? 10%? 50%? 100%? 200%? What is the standard, where do you draw the line? If a 100% tariff is good, why isn't a 1000% tariff better? Should all tariffs be a standard 10%? Even on the importation of things like gold and silver? If gold and silver ought to be exempt because they are money, then why not copper or platinum? If those, why not exempt all commodities?

Tariffs are not merely a tax on an importer, nor only harmful on those on whom tariffs are levied. Tariffs also harm the people in the nation that levies the tariffs, because they are the ones who have to pay more for the final goods!

Therefore, the solution to the problem of "free trade" vs. "fair trade" is rather simple. There is no need to enter into any trade agreements of any kind. The best any nation can do is to simply open the borders to allow import and export of all goods. Period.

Any nation that adopted such a policy would become a magnet for trade around the world. For any two other nations, who might not otherwise trade with each other, may end up trading through the only honest nation on earth that did not restrict trade.

You can profit in many ways from understanding the merits of free trade. For if you are for it, then you can allow yourself to benefit from buying foreign made goods that may be cheaper and of better quality, and you can save money. And if you are for it, you can allow yourself to invest overseas in stocks, companies, or factories that may be more capable of producing things cheaper, and you can make money.

And if you realize that free trade is good, then you will recognize that the increased trade with China that has taken place over the last decade will lead to higher standards of living for them, and for us. And if you realize that, then you can see that China's demand for commodities will continue to greatly increase, due to the increase of trade.

But if you are against free trade, then you sabotage yourself, and you can harm your nation as well. For if you are against it, you may deny yourself the right to buy goods made in China. You may come to resent foreigners, which is divisive, and harmful most of all to yourself. And if you are against it, and lose your job due to it, then you may blame foreigners or corporations instead of taking personal responsibility for your own education and employment. And if you work against it, and succeed in restricting trade, for the benefit of any special interest group, then you harm all Americans.

More importantly, a proper understanding of the benefits, and righteousness of free trade can help you to understand the direction of the economy. For if free trade is increasing, then prosperity for all will increase. But if free trade is decreasing due to a rise in protectionism and higher tariffs, then you can know that the economy will be hurt. If you understand those trends, then you can better guide your investments or job prospects.

Specifically, if there is a rise of protectionism in the U.S., then it will hurt the economy and the dollar. But if U.S. trade increases with other nations, it's generally good for the economy and the dollar.

For those people who may feel that they have lost a job due to trade with China, let me try to help your pain. Aren't you glad that we don't have to haul ice down from icebergs anymore, and that we have refrigerators instead? Aren't you glad that men don't labor to make buggy whips, or horse carts anymore, and that we have cars instead? Aren't you glad when you can afford to buy any kind of labor saving device, from a washing machine to a dishwasher? And if labor saving devices are good, then isn't it better when other people, foreigners, do the work better, faster, and cheaper than us, too?

If you live in the U.S., you are most likely here because your ancestors needed to trade. Remember Christopher Columbus discovered the New World because he was looking for a shorter trade route to India (which is why Native Americans were called "Indians" even though India was still half the world away).

Understanding the benefits of trade is absolutely essential to your prosperity. For trade produces wealth. Without trade, how can you easily produce more than you need so you can sell it in order to obtain the things you want in life?

When you understand the benefits of trade, it also helps you to actually trade your investments, rather than lazily sit and hold while your stocks move up and down. You are more likely to try to sell at the peaks, and buy on the dips, knowing that you are providing a service for others (at a handsome profit for yourself) when you do. For if you trade like that, it requires a bit more work, and you help to smooth out the market's volatility and increase the liquidity, providing stocks to others at a time when the price may be too high, and buying the stocks at a time when the price may be too low. You end up helping out the over-eager buyer, and accommodating the frantic and desperate seller.

I suppose trading in such a manner as to meet the needs of the market is like giving a man water when he is thirsty and food when he is hungry.

And if you are invested in commodity mining or exploration stocks right now, then aren't you providing for the needs of the nations that are benefiting from increased trade?

Why is the topic of free trade so important to a newsletter on gold and silver? Because gold and silver are the form of property that is perhaps the hardest to confiscate. Thus, gold and silver are the ultimate form of private property.

The study of precious metals themselves leads one to understand the nature of property rights. The nature of property leads one to conclude that they have the right to use their own property as they see fit; and to trade it to whomever, and where ever, they will. The study of free trade then leads one to understand the benefits of all forms of free trade and freedom.

The truly beautiful thing about free market concepts is to realize that they are a key solution to all economic problems; both national and personal, both for the present and future. Increasing trade can solve economic problems today. And it is the only pathway out if there ever comes an economic collapse in the future.

Another main benefit about recognizing the benefits of trade is that you realize that there is little reason to try to provide for all of your own needs yourself by hoarding all kinds of goods, or trying to isolate yourself. That leads to inefficiency, and poverty. Instead, it is far better to understand the benefits of the division of labor and specialization that is made possible through trade.

Finally, the national policy of free trade that I am advocating requires using absolutely no force on anyone. It is a policy of total freedom, the maximum freedom.

In contrast, those who would restrict trade are those who would need to use guns and force to force their will on everyone else. Therefore, trade restrictions, or tariffs, are not only a policy of theft, but also murder, for that is what they must ultimately resort to, in order to enforce their uneconomic policies on the rest of us.

I force my views on nobody. If you don't like what I have to say, please unsubscribe from my email list.

But if you like what I have to say, then please use the links below to forward this email on to your family and friends, (especially to those who see things differently) so that they, too, can benefit.

Thank you.

tommy7154
01-11-2008, 03:36 PM
I dont have a damn clue what Austrian economics is, until a week ago I didn't know wtf the Gulf of Tonkin incident was...my point is that Dr Paul needs to dumb down his speeches for the masses because the masses are too ignorant to know already and too dumb or lazy to bother looking anything up. When they don't know what he's talking about they are not going to listen. He needs to be extremely clear on where he stands and state it very simply.

chilledfresh
01-11-2008, 03:39 PM
This is one of the reasons why I'm so proud to be a part of the Ron Paul Revolution. I used to think that I was the only person who actually cared about things like Austrian economics until I discovered Ron Paul. Now I'm part of a movement filled with many people who are intelligent, motivated and historically aware. You aren't going to find supporters this smart in any other campaign. It just makes me smile. :)

Someone mentioned Mises.org... they carry the full Frederic Bastiat collection, which is a good starting point for anyone interested in how economic freedoms affect personal liberties. Bastiat wasn't an Austrian economist, but he is considered to be one of the most influential forerunners. It's a good add to your book collection.

BillyFromPhilly
01-11-2008, 03:45 PM
Our western economic system has been run on Keynesian economic principles since after the Great Depression. Stated simply, the state should run counter-cyclical policies, deficits during the busts and surpluses during the booms, and act to provide a smoothing of the business cycle.

The Austrian School believes that these policies only serve to increase the severity of the eventual downturn as bust cycles are pushed out or attempted to be minimialized. The natural business cycle should be permitted to run its course and clean out the malinvestment during bust cycles to allow the economy to build and invest properly creating the next boom cycle.

tommyzDad
01-11-2008, 03:47 PM
I just now started reading Thomas Sowell's Basic Economics: A Citizens Guide to the Economy (http://www.amazon.com/Basic-Economics-Citizens-Economy-Expanded/dp/0465081452). Truth be told I've owned if for months, but couldn't get my wee little brain around the first chapter, so I shelved it. It was until recently that I found the "courage" to try again.

BillyFromPhilly
01-11-2008, 04:01 PM
A great place to start...

Ludwig von Mises Institute (http://www.mises.org/)

Oh and for you all just starting out make sure you pronounce Ludwig von's name correctly, it sounds like geeses. I was there too once ;)

Trance Dance Master
01-11-2008, 04:02 PM
I'm certain this video was linked to months ago on this forum, but since there are a lot more people here who are interested in this now, watch "Money As Debt". In 47 minutes you'll understand all the flaws with our current economic system and why a free market system is better. It's made by the same guys who made the "Money Masters" documentary in the 1980's which included clips of Ron Paul.

http://video.google.com/videoplay?docid=-9050474362583451279

FrankRep
01-11-2008, 04:09 PM
Read Economics for Real People (http://www.mises.org/books/econforrealpeople.pdf). Very good introduction, and easy to read if you have no economics background.

Awesome. I was looking for that.

srmpass98
01-11-2008, 04:12 PM
Actually I do have some indepth knowledge of Austrian Economics and the philosophy of free markets.

The strange thing I concluded upon intense research is the notion that free markets alone are the solution to a crux of issues; in fact in the absence of even a rudimentary form of regulation free market capitalism in its truest form is either a highly uncompetitive price control oligopoly (as seen in the agricultural markets in the 20's where the industry was as close to free markets as it could be) or its an extremely unstable economic activity which rewards those in fruitful times and devastates those when there is a downturn in productivity and profits.

Remember, in the absence of an external form of control, free market enterprise is championed by the notion of "self interest". It is within the scope of this philosophy that self interest alone can dictate a small amount of competitors to actually "fix" prices that will benefit the profitability of all enterprises involved, instead of the contrary direction where competitors compete on prices to the detriment of profitability. In this case, prices are sticky down which literally translates to price-push inflation as companies would rather cut workers then reduce prices, especially when they are fixed in the free market doctrine of economics.

Be weary of the romanticism of free-markets. It sounds really great but in reality it necessitates some form of external control to prohibit the oligopoly nature that free market enterprise seems to inevitably champion.

MikeFallopian
01-11-2008, 04:12 PM
Austrian economics is one of the aspects of Paul's platform that I'm skeptical about. It seems (and I'm admittedly basing this off the wiki article, which is all I know about the Austrian school), that the theory comes from deductive reasoning rather than empirical data. As an engineer who loves data, this worries me. It seems a bit like some of Freud's psychological conclusions - very smart and well thought-out, but not quite right when all is said and done. Are there any examples of a (fairly large) modern state that has successfully run on the Austrian principles?

dmspilot00
01-11-2008, 04:14 PM
Austrian economics is one of the aspects of Paul's platform that I'm skeptical about. It seems (and I'm admittedly basing this off the wiki article, which is all I know about the Austrian school), that the theory comes from deductive reasoning rather than empirical data. As an engineer who loves data, this worries me. It seems a bit like some of Freud's psychological conclusions - very smart and well thought-out, but not quite right when all is said and done. Are there any examples of a (fairly large) modern state that has successfully run on the Austrian principles? Most Austrian policies have been substantiated with data, except then it's called the Chicago School. But there is nothing wrong with the reasoning. For example, a tax raises the price of a good and thus less of that good is bought and sold. Or, minimum wage causes unemployment, as it raises the cost of labor and lowers the demand. There's really nothing wrong with simple logic.

rwl4
01-11-2008, 04:27 PM
You can watch Milton Friedman's Free To Choose here:

http://www.ideachannel.tv/

MikeFallopian
01-11-2008, 04:36 PM
Most Austrian policies have been substantiated with data, except then it's called the Chicago School. But there is nothing wrong with the reasoning. For example, a tax raises the price of a good and thus less of that good is bought and sold. Or, minimum wage causes unemployment, as it raises the cost of labor and lowers the demand. There's really nothing wrong with simple logic.

So then why Austrian instead of Chicago? It seems like the difference is between a philosophical theory of economics vs. a scientific, data-driven one that has successfully been put into practice. Are there any examples of modern states using the Austrian system?

bluemarkets
01-11-2008, 05:17 PM
the main debate is Austrian vs. Keynesian economics

Keynesian just means that the government can intervene when the economy goes south, in our case affect the money supply through the FED and interest rates.
This causes inflation and makes the economy worse off

Austrian's basic premise is let the free market alone, it will correct itself, ie there should be NO BAILOUTS (paid for by you and me) when companies are in trouble let them go bankrupt, and new companies, smarter and better will emerge.

Todd
01-11-2008, 05:21 PM
No but I'm learning. And some of what I am learing meets my preconceived ideas of what is healthy.

murrayrothbard
01-11-2008, 05:46 PM
Our western economic system has been run on Keynesian economic principles since after the Great Depression. Stated simply, the state should run counter-cyclical policies, deficits during the busts and surpluses during the booms, and act to provide a smoothing of the business cycle.

The Austrian School believes that these policies only serve to increase the severity of the eventual downturn as bust cycles are pushed out or attempted to be minimialized. The natural business cycle should be permitted to run its course and clean out the malinvestment during bust cycles to allow the economy to build and invest properly creating the next boom cycle.

The Austrian Theory of the Trade Cycle, or Credit Theory of the Business Cycle, concludes that expansions of credit via fractional reserve banking induces an artificial boom, and since it is artificial, necessarily consists of massive malinvestment in regards to the real demands of the consumers. This sets up a situation where market forces will eventually force these malinvestments to be liquidated in order to restore the production structure to one that is in line with the demands of consumers. This is the recession/depression phase of the cycle. It is a corrective phase. Government intervention in the correction phase can only prolong it and/or increase its severity.

The boom phase only exists due to credit expansion.

murrayrothbard
01-11-2008, 05:49 PM
So then why Austrian instead of Chicago? It seems like the difference is between a philosophical theory of economics vs. a scientific, data-driven one that has successfully been put into practice. Are there any examples of modern states using the Austrian system?

It is a difference in philosophy and methodology. "States using an Austrian system" makes no sense. There is no program/system to put in to place. The Austrians hold that economics is properly understood as a descriptive science, not a prescriptive science.

murrayrothbard
01-11-2008, 05:51 PM
Are there any examples of a (fairly large) modern state that has successfully run on the Austrian principles?

All of humanity "runs" on the "Austrian principles". The principle very simply being that human beings act, i.e make use of scarce means to achieve desired ends. Economics is then simply the development of the logical implications of this fact.

stoutmaker
01-11-2008, 05:54 PM
the main debate is Austrian vs. Keynesian economics

Keynesian just means that the government can intervene when the economy goes south, in our case affect the money supply through the FED and interest rates.
This causes inflation and makes the economy worse off

Austrian's basic premise is let the free market alone, it will correct itself, ie there should be NO BAILOUTS (paid for by you and me) when companies are in trouble let them go bankrupt, and new companies, smarter and better will emerge.


This is the starting basics I need and now, time to do research. thanks.

Broadlighter
01-11-2008, 05:56 PM
I read the intro essay on Austrian Economics from the Mises Institute. It basically treats money as a product of the marketplace,, not an enforcer for debts as we have in our current system.

It's basically free market economics.

snaFU
01-11-2008, 06:02 PM
So then why Austrian instead of Chicago? It seems like the difference is between a philosophical theory of economics vs. a scientific, data-driven one that has successfully been put into practice. Are there any examples of modern states using the Austrian system?

There aren't any examples of modern states using it because of it being heterodox. However many investors have great respect for the Austrian theories. Also the Chicago school are monetarists which believe that the federal reserve is bad but that you can find a balance which makes it become ok. The chicago school besides that are pretty good in some respects for example the Coase Theorem is pretty nice stuff coming out of there.

Another thing you must pay attention to when questioning philosophy vs science.
If government has countlessly proven to be a failure in various aspects then why reject the market so quickly when it has already become superior. Remember stagnation of the 70s. The savings and loans crisis. The housing market which is -currently in a depression!


Also doesn't it bother you that Economics is probably the only science where we refuse to study anything beyond a few decades ago? It sounds pretty unreasonable to me since if we are dealing with a science the best thing to do would be to learn every aspect of what we are dealing with.



Also for those who want some starting points on Austrian Theory

http://video.google.com/videoplay?docid=-466210540567002553 - Money, Banking, & the Federal Reserve

http://www.mises.org/store/Economics-in-One-Lesson-P33C9.aspx - Economics in One Lesson

http://www.mises.org/store/What-Has-Government-Done-to-Our-MoneyCase-for-a-100-Percent-Gold-Dollar-P224C9.aspx

-What Has Government Done to Our Money?/Case for a 100 Percent Gold Dollar

http://www.mises.org/store/Austrian-Theory-of-the-Trade-Cycle-and-Other-Essays-The-P46C9.aspx

- Austrian Theory of the Trade Cycle and Other Essays, The

http://www.mises.org/store/Free-Market-Economics-A-Reader-P393C9.aspx

- Free Market Economics: A Reader

clouds
01-11-2008, 06:15 PM
I've started reading human action. My grandpa's copy :)

tfelice
01-11-2008, 06:16 PM
Yes, but 99% of the people watching the debate last night have no idea what he was referencing, and 99.9% of those people will not bother to learn about it.

clouds
01-11-2008, 06:32 PM
but perhaps they should vote for someone who does?

tfelice
01-11-2008, 06:46 PM
but perhaps they should vote for someone who does?

That would be nice, but Paul has to convince them to do so. His problem is the ability to explain these economic principles in a way that the average person can understand. Reagan was a master at that.

Trigonx
01-11-2008, 06:58 PM
no, but i plan to learn all about it and understand. more knowledge is awesome

Knut Schreiber
01-11-2008, 07:33 PM
Austrian economics is one of the aspects of Paul's platform that I'm skeptical about. It seems (and I'm admittedly basing this off the wiki article, which is all I know about the Austrian school), that the theory comes from deductive reasoning rather than empirical data. As an engineer who loves data, this worries me. It seems a bit like some of Freud's psychological conclusions - very smart and well thought-out, but not quite right when all is said and done. Are there any examples of a (fairly large) modern state that has successfully run on the Austrian principles?

Austrians usually question the use of empirical data in economics for two reasons:
1. An economy is too complex to be described by numbers.
2. There is no control group.

icon124
01-11-2008, 07:45 PM
im still learning, but i can say it is very interesting...i love it and believe i will benefit so much from it

stoutmaker
01-11-2008, 10:16 PM
So here's a larger point about this topic. If only ~1/2 of us (currently 152 - 121) say we understood what Austrian economics is before the start of this discussion, (and I would put this groups intelligence at an above average level), what makes Ron think that he's gonna break through to the rest of America?

I'm not saying he shouldn't talk about it, I'm just suggesting that during a nationally televised debate when you have the chance for the greatest single voter penetration , you need to curb the message SLIGHTLY to keep it simple for folks and get them fired up about your candidacy. Once they are interested, THEN hit them with the heavy stuff, as if they're interested like we are, they're more inclined to WANT to learn more.

Someone (campaign manager, most likely) REALLY needed to help focus Ron for these debates and help him to still clearly state his messages, but in more user friendly to the format methods.

inibo
01-12-2008, 12:02 AM
I understand it well enough to realize Mises was genius.

I actually learned the basis of it in a way that had nothing to do with economic. I spent a few years studying formal Chaos Theory (http://en.wikipedia.org/wiki/Chaos_theory) and non-linear dynamic systems. I don't have the math background to call myself an expert, but I do have the computer skills to understand the algorithms that allow the exploration of fractals like the Mandelbrot Set (http://en.wikipedia.org/wiki/Mandelbrot_set)and self-organizing systems, like John Conway's Game of Life (http://en.wikipedia.org/wiki/Conway's_Game_of_Life).

It boils down to Spontaneous Order (http://en.wikipedia.org/wiki/Spontaneous_order). When left to themselves, non-linear systems generate emergent properties (http://en.wikipedia.org/wiki/Emergence) that cannot be inferred from existing conditions--and cannot be forced to arise because they are hidden in the very fabric of existence. Emergent properties cannot be planned because the are built in. Whenever intervention takes place the implicit order collapses into drab uniformity and random noise. I grasped these concepts as interesting abstract ideas and ways to draw pretty pictures and create entertaining computer simulations.

What does any of that have to do with economics?

When I stumbled upon the Austrian School I realized that the thinkers like Mises and Friedrich Hayek (http://en.wikipedia.org/wiki/Friedrich_Hayek) were talking about the same thing. They were talking about how humans interact in free markets to create wealth and order. How it cannot be made to happen, only allowed to happen, and that those who wish to control human action can only increase poverty and destroy life.

Humanity will either realize this truth or decline into a global tyranny that culminates in barbarism and savagery. It is why Ron Paul's message is more important than Ron Paul.

Trance Dance Master
01-12-2008, 12:13 AM
Actually I do have some indepth knowledge of Austrian Economics and the philosophy of free markets.

The strange thing I concluded upon intense research is the notion that free markets alone are the solution to a crux of issues; in fact in the absence of even a rudimentary form of regulation free market capitalism in its truest form is either a highly uncompetitive price control oligopoly (as seen in the agricultural markets in the 20's where the industry was as close to free markets as it could be) or its an extremely unstable economic activity which rewards those in fruitful times and devastates those when there is a downturn in productivity and profits.

Remember, in the absence of an external form of control, free market enterprise is championed by the notion of "self interest". It is within the scope of this philosophy that self interest alone can dictate a small amount of competitors to actually "fix" prices that will benefit the profitability of all enterprises involved, instead of the contrary direction where competitors compete on prices to the detriment of profitability. In this case, prices are sticky down which literally translates to price-push inflation as companies would rather cut workers then reduce prices, especially when they are fixed in the free market doctrine of economics.

Be weary of the romanticism of free-markets. It sounds really great but in reality it necessitates some form of external control to prohibit the oligopoly nature that free market enterprise seems to inevitably champion.
Labor unions develop so that the best workers stay employed and get paid what they deserve for being the best, or they all go elsewhere. Workers all have the right to organize for their benefit, or chose not to. The main reason labor unions have been declining in popularity these days is because the government got involved with them. My dad told me about when Reagan forced the airline workers to end their strike. I was two years old back then, but even when he told me about it over a decade later I could tell he was still angry about it.

http://eightiesclub.tripod.com/id296.htm

I'm so glad that the union I'm in, the Teamsters, have finally broke apart from the corrupt AFL-CIO.

http://www.msnbc.msn.com/id/8682415/

Hoffa is great. This is a new era for the working man.

http://www.teamster.org/05news/nr_050725_1.htm

peacemonger
01-12-2008, 12:38 AM
Im getting my PhD in Economics so yes :)

I'm earning a PhD in Strategic Management. I just started my doctoral course in Econometrics. :confused: Ouch!!! This stuff is a little scary!

Oh yeah, the Austrian school of economics... I'm no expert, but I've been paying attention for a while. I think it makes a lot of sense.

Mattsa
01-12-2008, 12:43 AM
I've never found anyone who could satisfactorily explain to me how a gold standard would work in today's world.

The amount of gold in the world is so small, it's difficult to understand how it could support the level of economic activity in the USA, let alone the global economy.

I think it's been calculated that 1oz of gold would have to be worth $300,000 to support all the trade in the global economy. That hardly seems like a realistic proposition so I'd like to hear more from RP exactly how he intends to do it.

AceNZ
01-12-2008, 12:44 AM
Labor unions develop so that the best workers stay employed and get paid what they deserve for being the best, or they all go elsewhere.

Really? How does the union know that their members are the best? Do they test people? So if I could prove I was better at a given job than an existing union member, and if I joined the union, would they support me in getting a job, even if it meant that another union member would lose their job as a result because he wasn't as good as me?

I don't belong to a union, but from an outsider perspective, I always thought their goal was primarily to protect the incomes of the people who are already union members, and that asking people to give up their jobs (based on seniority) was an acceptable price to pay for that protection. I didn't think it has anything to do with "being the best".

If that's not right, please correct me.

AceNZ
01-12-2008, 12:54 AM
The amount of gold in the world is so small, it's difficult to understand how it could support the level of economic activity in the USA, let alone the global economy.

The key thing to understand is that *any* amount of gold would be enough to support the global economy.



I think it's been calculated that 1oz of gold would have to be worth $300,000 to support all the trade in the global economy. That hardly seems like a realistic proposition so I'd like to hear more from RP exactly how he intends to do it.

OK, let's say your number is right. Why isn't that a "realistic" proposition? Just because it's a lot higher than price for gold than it is today? So what? The price is irrelevant when it comes to using gold as money.

The price of gold was $20/oz in the early part of the century, and is almost $900/oz today. That's a factor of 45. Going from $900/oz to $300,000 is another factor of 333. Given the amount of new money that's been created over the last 100 yrs, that doesn't seem unreasonable to me at all (the actual ratio doesn't matter -- it could be 1 million and a gold standard would still work).

I don't know if RP has said how he would do it, but others have sketched out plans. Using the US as an example, basically the idea would be to take the number of Federal Reserve Notes (FRNs) in existence in all forms (paper and electronic), and divide that by the number of ounces of gold in the US strategic reserves. Then issue new gold-backed money using that ratio.

EDIT: FWIW, current US gold reserves are about 8100 tons. The money supply as measured by M3 is about 11 trillion dollars. Dividing one by the other would make the price of gold about $46500/oz. -- only about a factor of 50 over where it is today.

kodoandkang
01-12-2008, 12:58 AM
unions don't hire the best people, in fact, if anything they subsidize the poor workers. that is why in a free market they would inevitably break up. the same goes for cartels.

I think the best introductory book to Austrian economics is "Man, Economy and State" by Murray Rothbard.

NMCB3
01-12-2008, 01:03 AM
Really? How does the union know that their members are the best? Do they test people? So if I could prove I was better at a given job than an existing union member, and if I joined the union, would they support me in getting a job, even if it meant that another union member would lose their job as a result because he wasn't as good as me?

I don't belong to a union, but from an outsider perspective, I always thought their goal was primarily to protect the incomes of the people who are already union members, and that asking people to give up their jobs (based on seniority) was an acceptable price to pay for that protection. I didn't think it has anything to do with "being the best".

If that's not right, please correct me.I just recently had to join a union (new job) and can say that your view is correct. Being the best has absolutely nothing to do with it. Their is no incentive to be the best in a union because everyone is treated as if they produce the same amount of work even though they don't. All workers at pay grade two get the same wage regardless of their ability to produce. Raises are acquired only by contract and seniority, not by merit. Promotions are based on seniority, not by competence. If layoffs are necessary those with less seniority are the first to go, not the least competent and productive individuals. Production per worker (in my estimation) is half that of non union shops. Why produce when you are not rewarded for it? Instead you are rewarded for hanging around and sucking up a paycheck (seniority)

Personally I hate unions and am actively seeking new employment. I would much rather negotiate with my employer for wage and benefits one on one, than be forced into collective bargaining. Collective bargaining is socialistic, and predictably leads to less production and worker satisfaction.

Trance Dance Master
01-12-2008, 01:08 AM
Really? How does the union know that their members are the best? Do they test people? So if I could prove I was better at a given job than an existing union member, and if I joined the union, would they support me in getting a job, even if it meant that another union member would lose their job as a result because he wasn't as good as me?

I don't belong to a union, but from an outsider perspective, I always thought their goal was primarily to protect the incomes of the people who are already union members, and that asking people to give up their jobs (based on seniority) was an acceptable price to pay for that protection. I didn't think it has anything to do with "being the best".

If that's not right, please correct me.
Workers who stick around are usually the best. If better workers do get hired, they can prove how good they are for the labor union as well as the business or businesses they work for based on how long they stick around to improve the company. If they're no good, they might wind up having some problems where they can't work anymore. Inferior workers create problems, sometimes those problems lead to their inability to work. Some businesses and unions don't have to ask the low seniority workers to quit. They make it unbearable for them to stay. If they can take the heat, they stick around and get better or take a job that better suits their abilities.

The labor market is a rapidly changing environment.

AceNZ
01-12-2008, 03:53 AM
Workers who stick around are usually the best.

So "best" really means "most senior"? Why's that? It doesn't sound very free-market...

If I was going to have a doctor operate on me, for example, I would want the most skilled person available, and I would be willing to pay accordingly. I wouldn't want the most senior person, just because they've been around the longest, and then have to pay top-dollar to boot. It doesn't make sense in a free-market. Right?

CelestialRender
01-12-2008, 03:58 AM
Somewhat. Wasn't very confident in clicking "yes", but I can argue it pretty effectively, so I guess I understand it as much as anyone who isn't a professional does.

dkim68
01-12-2008, 04:05 AM
Unfortunately, I agree. This is where Dr. Paul is turning off a lot of potential supporters. He sounds like an Economics professor. It's not his fault he's as intelligent as he is. But the average person does not know what he's talking about. He needs to practice actually coming down a few levels to your average American's way of speaking. When he says "consumers" he should say "people". When he says "Non-interventionist Foreign Policy" he should say "Let's mind our own business." When he says "Monetary Policy" he should say "The way we handle money." When he refers to himself as a "Strict Fiscal Conservative" he should say "I don't like to waste money." Etc, etc.

Unfortunately, voters sometimes think in terms like "Is this a guy I could sit down and have a beer with?" and choose their candidate based on that.

swefred
01-12-2008, 05:20 AM
Grate Free literature on liberty and economics:

Video: Money, Banking and the Federal Reserve (http://video.google.com/videoplay?docid=-466210540567002553)

Audio: What Has Government Done to Our Money? - Murray N. Rothbard (http://www.mises.org/media.aspx?action=category&ID=92)

Audio: The Economics of Inflation - George Reisman (http://www.mises.org/mp3/MU2003/MU03-Reisman-4.mp3)

Audio: The Law pt1 (http://www.freeaudio.org/fbastiat/24-Audio%20Book%20-%20Frederic%20Bastiat%20-%20The%20Law,%20Part%201.mp3) pt.2 - Fredric Bastiat (http://www.freeaudio.org/fbastiat/24-Audio%20Book%20-%20Frederic%20Bastiat%20-%20The%20Law%2C%20Part%202.mp3)

pdf: HUMAN ACTION - Ludwig von Mises (http://www.mises.org/humanaction/pdf/humanaction.pdf)

Text: Economics in One Lesson - Henry Hazlitt (http://jim.com/econ/contents.html) Audio: pt 1 (http://www.fee.org/!UserFiles/events/Economics%20In%20One%20Lesson%201.WMA) pt 2 (http://www.fee.org/!UserFiles/events/Economics%20In%20One%20Lesson%202.WMA)

Text (short): The state - Frédéric Bastiat (http://www.panarchy.org/bastiat/state.1848.html)




Maby we shuld start a thred devoted to links to literature on economy and liberty.

PS. If avaible plase post literature as audio, atleast I prefere to listen to books.

Trance Dance Master
01-12-2008, 06:35 AM
So "best" really means "most senior"? Why's that? It doesn't sound very free-market...

If I was going to have a doctor operate on me, for example, I would want the most skilled person available, and I would be willing to pay accordingly. I wouldn't want the most senior person, just because they've been around the longest, and then have to pay top-dollar to boot. It doesn't make sense in a free-market. Right?
It would still be free market. People could still choose whether or not the join a union or hire union workers. However, the union would make it make sense to those who don't get it. If they don't pay the top dollar, they'll get bad work done that will have problems later. It can be arranged for that to be the case for those who don't like unions.

As far as the doctor operating on you, the most important skill the doctor needs to have is the ability to sell you on the idea that you actually need an operation. 90% of a doctor's work is salesmanship.

Pingwin
01-12-2008, 06:53 AM
Here's an article by Lew Rockwell that is a good overview:
"Why Austrian Economics Matters" 10 pages - not too long.

http://www.heritage.org/Research/Economy/upload/92230_1.pdf

Trance Dance Master
01-12-2008, 07:05 AM
I've never found anyone who could satisfactorily explain to me how a gold standard would work in today's world.

The amount of gold in the world is so small, it's difficult to understand how it could support the level of economic activity in the USA, let alone the global economy.

I think it's been calculated that 1oz of gold would have to be worth $300,000 to support all the trade in the global economy. That hardly seems like a realistic proposition so I'd like to hear more from RP exactly how he intends to do it.
About return to gold as money:

http://www.financialsense.com/editorials/hultberg/2005/0227.html

About paper money boom and bust cycles:

http://www.benbest.com/polecon/buscycle.html

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin

freedominnumbers
01-12-2008, 07:15 AM
I find Austrian theory much easier to wrap my head around than Keynesian. I believe this is because Austrian theory is based directly on Libertarian principles. This means that if I've never heard a particular issue on the Austrian side or don't understand it I can simply ask "Would that practice violate the Life, Liberty or Property of another?".

Ron Galt
01-12-2008, 08:53 AM
As a SC native, I'll assure you that most people in SC don't understand "Austrian" economics.

In fact, most SC voters have probably never heard of Austria and probably thought he said "Australian" economics.

stoutmaker
01-12-2008, 09:14 AM
that probably goes over the average joe's head as well:

Fiat Currency.

I've heard him use the term on many an occasion and have to admit I didn't know exactly what the heck this meant either. So, Ron would be very happy...I did my homework. For those of you who had similar interests:

In economics, fiat currency or fiat money is money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt.


Just when I thought I was smart, I started listening to Ron Paul. Damn this guy has his feces together.

stoutmaker
01-12-2008, 09:18 AM
that probably goes over the average joe's head as well:

Fiat Currency.

I've heard him use the term on many an occasion and have to admit I didn't know exactly what the heck this meant either. So, Ron would be very happy...I did my homework. For those of you who had similar interests:

In economics, fiat currency or fiat money is money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt.


Just when I thought I was smart, I started listening to Ron Paul. Damn this guy has his feces together.


So what would the Opposition to Fiat Currency be called? And what would be a real world example, if there is one?

Mises
01-12-2008, 09:39 AM
About return to gold as money:

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." Thomas Jefferson, Letter 1802 to Secretary of the Treasury, Albert Gallatin

Ugh. Let's stop throwing this quote around. While the sentiments certainly fits Jefferson's worldview, there is no verification that he ever said this. It doesn't appear in any letters he wrote that we have record of. The dead giveaway is the usage of modern nomenclature such as "inflation," "deflation," and "corporations."

http://etext.lib.virginia.edu/jefferson/texts/

Here is what Jefferson did say in a letter to Gallatin in 1820:

At home things are not well. The flood of paper money, as you well know, had produced an exaggeration of nominal prices and at the same time a facility of obtaining money, which not only encouraged speculations on fictitious capital, but seduced those of real capital, even in private life, to contract debts too freely. Had things continued in the same course, these might have been manageable. But the operations of the U.S. bank for the demolition of the state banks, obliged these suddenly to call in more than half of their paper, crushed all fictitious and doubtful capital, and reduced the prices of property and produce suddenly to 1/3 of what they had been. Wheat, for example, at the distance of two or three days from market, fell to and continues at from one third to half a dollar. Should it be stationary at this for a while, a very general revolution of property must take place.

It's as good a description of the inflationary process as we have from him. He's actually recognizing its effect on the economy in general, what Austrians would call malinvestment and the "boom/bust cycle" in the 20th century.

Bradley in DC
01-12-2008, 09:50 AM
If you're less of a reader, check into Milton Friedman's "Free to Choose" video series.

That is NOT Austrian economics. He's an empiricist using the perfect competition model, not our market process approach.

malibu
01-12-2008, 09:55 AM
I've never found anyone who could satisfactorily explain to me how a gold standard would work in today's world.

The amount of gold in the world is so small, it's difficult to understand how it could support the level of economic activity in the USA, let alone the global economy.

I think it's been calculated that 1oz of gold would have to be worth $300,000 to support all the trade in the global economy. That hardly seems like a realistic proposition so I'd like to hear more from RP exactly how he intends to do it.


ok, well then make it all commodities - or several like it was before -
Silver Certificates and Gold Certificates were issued in paper as well as the more common Federal Reserve Note.

Then Nixon got rid of the commodities supported dollar.

Platinum Certificates anyone ?

stoutmaker
01-12-2008, 09:38 PM
the dates of the original Federal Banks and which president was responsible for getting rid of them? If you know why, I'd love to hear that as well.

peacemonger
01-12-2008, 10:32 PM
I've never found anyone who could satisfactorily explain to me how a gold standard would work in today's world.

The amount of gold in the world is so small, it's difficult to understand how it could support the level of economic activity in the USA, let alone the global economy.

I think it's been calculated that 1oz of gold would have to be worth $300,000 to support all the trade in the global economy. That hardly seems like a realistic proposition so I'd like to hear more from RP exactly how he intends to do it.

Ron Paul proposes all of his ideas as gradual transitions so that we can try to maintain stability of the system.

First, remove all taxation from the exchange and capital gains for metals like gold and silver (probably also, copper, platinum, palladium, and a few others). This will bring back some of the barter economy and get some people to start to invest their earnings in a diverse portfolio of metals and commodities.

We could just legalize competing currencies. This would have 2 counterbalancing effects the relative scarcity of some of these metals would cause the price of those metals in paper dollars to rise, while at the same time, the international confidence in the dollar would cause a counterbalancing increase in the value of the dollar.

Prices of everything would not change much because simply legalizing competing currencies does not cause mass hysteria. In the old days in Europe I could buy just about anything anywhere by paying in dollars, Deutsch marks, or Guilders. Many shops would have a list with several prices. Some gave you a fair exchange rate. Others did not. You would probably get a better exchange rate at a bank than you would at a restaurant, but that is because banks have to compete with other banks according to the spot rate. That is the ideal situation. Is it perfect? No. Is it better? Hell yes!!!

So, Gold would not go to 300,000 per ounce because it is only part of a diversified commodity exchange system. The bulk of the currency use would probably transfer to silver because it is FAR more plentiful, therefore provides greater liquidity. When they made the transition from the multiple currencies to the Euro, first they pegged each of the currencies to a Euro exchange rate. Next, for about 2 years they had all of the currencies drifting up and down in relation to one another. Everybody was nervous!!! The prices in all of the stores were written in 2 currencies. Then, one day the transition deadline passed with out a bump and the old currency was no longer accepted.

The same thing would happen here. Legalize the metals. Congress can dictate the weights, measures, and purity standards of the new currency if they want to but value of the currency for exchanges should be determined by the market. The reality is that a silver coin will still by dinner for 2 people. A few ounces of gold will still buy you a car. Things will be interesting but life will go on. It may take a little longer than 2 years to make this transition but who knows? Personally, I like gold and silver. They are beautiful metals and it is a total waste to keep them locked up in some vault somewhere. Melt those bars down and make some nice coins.

I don't think we will ever get rid of paper money or electronic money. I just want my paper and electrons to be redeemable 1 for 1 with gold (no fractional reserve banking).

That is my take on how this would work. Others may have a different opinion.

peacemonger
01-12-2008, 10:38 PM
So what would the Opposition to Fiat Currency be called? And what would be a real world example, if there is one?

We had silver and silver certificates in circulation in this country until the 1970's.

stoutmaker
01-12-2008, 10:48 PM
We had silver and silver certificates in circulation in this country until the 1970's.

but Fiat Currency is:
money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt.

If the government owns X amount of silver (gold, what have you), and thus is able to print out X # of appropriate dollars whereby equally valuating this commodity, doesn't the government still OWN this silver, until you would essentially "trade in" your silver certificate for the equivalent amount of silver, if you wanted it?

Thus wouldn't this STILL be money backed up by the government who is the one holding the controlling interest in this "currency", which would thereby make it fiat currency?

Someone help me with the holes in this logic. I would REALLY like to have a better understanding, so that I can more accurately defend Dr. Paul's position of returning or supplementing our currency with a gold standard enforced "dollar".

AceNZ
01-12-2008, 11:14 PM
but Fiat Currency is:
money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt.

Yes. The "authority" is called a legal tender law. People are forced to accept the currency for all debts, public and private.



If the government owns X amount of silver (gold, what have you), and thus is able to print out X # of appropriate dollars whereby equally valuating this commodity, doesn't the government still OWN this silver, until you would essentially "trade in" your silver certificate for the equivalent amount of silver, if you wanted it?

No. The government doesn't own it. They are custodians, but only for some of the gold, not all of it.



Thus wouldn't this STILL be money backed up by the government who is the one holding the controlling interest in this "currency", which would thereby make it fiat currency?

No. In addition to the paper money, gold (for example) would also circulate as coins. There would be a free market that allows the exchange of coins for paper. Third parties, in addition to government, could participate in that market -- there's nothing special about government's role, other than the printing of the certificates and insuring that they are actually backed by something.

If the certificates were to suddenly be exchangeable for less gold, they would be driven from a free market (why hold a depreciating currency when an alternative is available). It's the same concept that would allow a gold-backed currency to be established in the first place. If you had the choice between a currency that could be depreciated and one that couldn't be, which would you choose?

AceNZ
01-12-2008, 11:44 PM
the dates of the original Federal Banks and which president was responsible for getting rid of them? If you know why, I'd love to hear that as well.

Bank of North America (formed before the Constitution was written)
-- did not have its charter renewed by Congress, and closed in 1783
Bank of the United States, formed in 1791 (encouraged by Hamilton)
-- fought by Jefferson, its charter was not renewed by Congress in 1811
Second Bank of the United States, formed in 1816
-- fought by Jackson, its charter expired in 1836


Jefferson's portrait is now on our $2 bills.
Hamilton is now on our $10 bills.
Jackson is now on our $20 bills.

snaFU
01-13-2008, 12:15 AM
So here's a larger point about this topic. If only ~1/2 of us (currently 152 - 121) say we understood what Austrian economics is before the start of this discussion, (and I would put this groups intelligence at an above average level), what makes Ron think that he's gonna break through to the rest of America?

I'm not saying he shouldn't talk about it, I'm just suggesting that during a nationally televised debate when you have the chance for the greatest single voter penetration , you need to curb the message SLIGHTLY to keep it simple for folks and get them fired up about your candidacy. Once they are interested, THEN hit them with the heavy stuff, as if they're interested like we are, they're more inclined to WANT to learn more.

Someone (campaign manager, most likely) REALLY needed to help focus Ron for these debates and help him to still clearly state his messages, but in more user friendly to the format methods.


Good point

Misesean
01-13-2008, 01:06 AM
Bear in mind please that I've read the Wikipedia article, and its not the best. It implies several times that the Austrian School is inconsistent with observational phenomena or that it is entirely theoretical, and not pragmatic. That is simply not true. For a *real* understanding, you're going to *have* to read something written by an economist.

However, wikipedia does do a decent job summarizing a great many things.

Depends what things. On some topics it's decent, but on others not so much. The "NPOV" (neutral point of view) rule is virtually interpreted to mean that you can't write an article saying the earth is an oblate spheroid, because that's not neutral to the views of flat-earthers. On subjects related to economics, all the crazies who disagree with economics (socialists, Real Bills people, etc.) appear to make sure the article doesn't provide any real information.

Misesean
01-13-2008, 01:17 AM
Im getting my PhD in Economics so yes :)

Non sequitur. Most PhDs in economics don't know anything about [Austrian] economics :(

Trance Dance Master
01-13-2008, 01:33 AM
Depends what things. On some topics it's decent, but on others not so much. The "NPOV" (neutral point of view) rule is virtually interpreted to mean that you can't write an article saying the earth is an oblate spheroid, because that's not neutral to the views of flat-earthers. On subjects related to economics, all the crazies who disagree with economics (socialists, Real Bills people, etc.) appear to make sure the article doesn't provide any real information.
For wikipedia, you're better looking up free market economics.

http://en.wikipedia.org/wiki/Free_market

People talk about free market economics as "Austrian economics" so that they can sound smart and look like they know about cool foreign stuff that you have to be super educated to understand. It's like the way people who gamble on stocks and commodities like to sound smart talking about a gazillion different technical indicators they look at. Makes them look like big shots, especially when they talk about it at cocktail parties. I can talk about this stuff for hours to people who are interested in hearing me talk about the stock market, and they'll listen because they think I know what I'm talking about as far as how to become a successful trader.

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:intr oduction_to_tech

Successful trading and investing can be summed up on one sentence: Allocate assets, manage risk.

Free market economics can also be summed up in one sentence: If it's my money, that means I'm the one who has the right to spend it where ever I want to.

If anybody can tell me, in their own words, what the difference between Austrian economics and free market economics is, I'm all ears.

Misesean
01-13-2008, 05:44 AM
If anybody can tell me, in their own words, what the difference between Austrian economics and free market economics is, I'm all ears.

Methodology. "Free market economics" isn't necessarily Austrian (e.g., the Chicago school - Milton Friedman, etc.), and Austrians aren't necessarily free marketers. Austrian economics in the strict sense is merely the application of the science of praxeology to the subject of economics, and is "wertfrei" (value-free; meaning it only tells you that if you do A, B will result, etc., but doesn't have anything to say about whether or not you should do A). If you want everyone to be poor and miserable, Austrian economics tells you that you don't want free markets :) Or you can use bad (non-Austrian) methodology and nevertheless conclude that free markets are the way to peace and prosperity; then you're a free-marketer but not an Austrian.

Misesean
01-13-2008, 06:36 AM
FWIW, it's not called "Austrian" after Mises, but after Menger - two generations before Mises.

bucfish
01-13-2008, 06:37 AM
I received the Von Mises Intstitute newsletter and read works by many. Of course Ayn Rand and her philosophy will help many. Objectivist thinking is the key to understanding logic and reason. Austrian Economics follws logic and reason in economic terms

snaFU
01-13-2008, 10:10 AM
I received the Von Mises Intstitute newsletter and read works by many. Of course Ayn Rand and her philosophy will help many. Objectivist thinking is the key to understanding logic and reason. Austrian Economics follws logic and reason in economic terms


No offense but turning into a Randroid doesn't make you the most intelligent person. It turns you into a big business humper.

Omnis
01-13-2008, 10:36 AM
Non sequitur. Most PhDs in economics don't know anything about [Austrian] economics :(

So true. I told my history professor I liked Austrian Economics and he just had this blank face like, "Well, we're going to talk about Austria soon. What about German economics?"

DJ RP
01-13-2008, 11:29 AM
what do you think accounts for Dr. Paul's foreign popularity? I would not think that Congressmen from Texas would get much play in the international media.

The Internet

snaFU
01-13-2008, 01:02 PM
So true. I told my history professor I liked Austrian Economics and he just had this blank face like, "Well, we're going to talk about Austria soon. What about German economics?"

LMAO

JGalt
01-13-2008, 01:05 PM
Yes I do, and I've got a copy of The Road to Serfdom coming from England via UPS sometime in the next few days.

Interesting that my economics textbook is clearly biased against hard money, among other things.

manuel
01-13-2008, 08:39 PM
I not only understand it, I try to explain it to all my friends and family.

Son of Freedom
01-13-2008, 08:46 PM
I understand it also, it's not as complicated as you might think. I have a great video regarding Mises on the website in my signature. The video is under the Freedom & Liberty section, as Austrian Economics is based on Liberty. Ron Paul has a cameo in that movie also.

If you really want to understand it in detail you should visit the mises site and when ready take their quiz. http://www.mises.org/quiz.asp?QuizID=4

If some of this info is posted already, sorry, this is a very long thread, don't have time to read 10 pages.

DrCap
01-13-2008, 10:31 PM
Philosophically it is the most clear and believable economic argument and is best able to actually predict human action (which ultimately is what economics is about, human choice theory, and also the title of von Mises book).
The reason it is not as popular is because a basic tenet is that although we can study economic trends from the past, they are only historical facts and thus not open to empirical predictions.
This issue creates 2 problems for mainstream economics:
1). if we cannot predict, then economics is not a science like physics, but more of a social science. (and the profession has had achip on its shoulder since it realized this, and so has tried to avoid this idea, feeling economics is not as 'worthy' of a cause in academia).
2). if we cannot use detailed math (i.e multivariate calculus) to 'prove' economic theories, then we are not respected as economists and, more importantly we cannot do great 'new science' and thus academics can't publish a lot of esoteric articles and professors can't make a name for themselves.
Economics is not physics and never will be as scientific as physics. No matter how good your processor is, it cannot beat the Heisenberg uncertainty principle and so cannot acurately predict the timing and quantity of economic change, though it can predict direction of change.

I became jilted with graduate studies in economics, at what would be considered a highly respected university. I had the unfortunate luck of already having a good Austrian background before I got to the graduate studies.
Don't kid yourself, though, there were many professors who were very much Austrian in their philosophy, they just did other economics to build their name and shoot for their chance at the Nobel Memorial Prize.
Some Austrians remain amongst the winners of the prizes.

TulsaRevolution
01-14-2008, 03:15 AM
I voted yes, but with the small caveat that I somewhat get the gist of it. I have not studied the Austrian theory, but have a logical idea in my head of the theories of a truly free market, which we are far from having here.