Thursday 3 January 2013

Austrian Economics - Why It Matters

“So it goes to show that our society can have less aggression, less injustice, more prosperity and more shared prosperity, if we just put the guns down and stopped having everybody try to loot everybody else through the mechanism of government.”
Tom Woods

As I've expressed before it's my view that if we're ever going to see true justice in the world, we're going to have to wise up to how the money game is played.  It seems to me economic power trumps political every time. Indeed dictatorships the world over have given way to democracies, amidst banner waiving and global celebrations, whilst leaving the underline 'economic dictatorship' in place.   Only now it's worse because everyone thinks they're free.

For this reason I've started reading more about economics over the past few months, it gets quite addictive!  I intend to regularly post about it on this blog. The perspective that has come to interest me the most is the so called 'Austrian School'. Partly I think because it's the most radical and I always like the challenge that engaging with radical ideas presents, but more importantly what appeals to me, is that as far as I can see it is the only system of economic thought that doesn't at its root require violence (or the threat of) to function.  Instead it places it's faith in humanities ability to cooperate in a non-coercive manner.

Over the past several years it seems nobody has had anything good to say about the free-market, (I often wonder which of the two concepts people don't like, freedom or markets?), the belief that too much freedom has brought us to our current economic woes and now we need government to step in and restrict that freedom to stop the robber barons looting us, (the assumption being that government is for us and not the robber barons of course).   What interests me is that many people who adhere to this view are of a liberal disposition and would be opposed to government restricting freedom in other areas.  They're not people who are calling out that there is now too much freedom in education and we need government to restrict what children are learning, so that they don't end up with a head full of wrong ideas!  Too much freedom in health care choices, ban those supplements!   Too much freedom in the media, government must restrict what we know!   No, none of this and yet a special case is made for the economy.

In the above video Tom Woods (he's talking about the American economy, but if you substitute 'Federal Reserve' for 'Bank of England' it'll work just the same) points out the ludicrous nature of blaming the free-market, when we've never had any such thing.   Money, the mechanism of exchange and most important commodity of all, far from being chosen by the market is regulated and produced by the central bank.   This is the antithesis of a free-market.

It amazes me how we've all been conditioned (myself absolutely included) to think that people freely engaging in voluntary exchanges is the problem and the coercive violence of the state the solution.

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