TheFoundations of Modern Austrian Economics
Dickman, Howard
Gay '90s. At that time, most of the large beer gardens in the city had achieved a national reputation. Stars such as Carlotta Maconda, Grace von Smddiford, and the unforgettable Lillian Grub...
...Yet we have managed to combine unemployment, sluggish growth with much unutilized capacity, and a continuing rise in prices...
...Here is a clear, understandable introduction to the Austrian theory of depressions--which refutes the virtually universally held notion that depressions are an "inevitable" outcome of unhampered capitalism--and an application of its insights to the current economic impasse...
...and the challenges Austrian theory poses to current macroeconomic policy...
...To these papers Dolan adds an essay of his own, "Austrian Economics as Extraordinary Science," an intellectual Baedeker for the entire conference proceedings and a survey of our current economic policy landscape...
...the meaning of capital and money...
...If so, then the crucial investment component (capital goods like machines, buildings, inventory, etc...
...In the 1930s, conventional economists chose the Keynesian rather than the Hayekian diagnosis of and prescription for the Depression...
...Rothbard and Kirzner demonstrate why the failure to follow "methodological individualism" consistently results in an illegitimate use of holistic constructs and mathematically functional relationships as tools of economic theory and explanation...
...Though Ludwig yon Mises died in 1973 without receiving the honors due him, his most illustrious student, Friedrich A, Hayek, was awarded a Nobel Prize in Economic Science a year later...
...Kirzner and Lachmann argue in an ingenious if somewhat abstruse pair of essays that the "nation's" capital stock cannot ever be consistently measured (except when the economy is in the unreachable state of final equilibrium...
...The prevailing attitude in criminology is succinctly summarized by Edwin A. Roberts, Jr...
...Everybody is guilty except the hoodlums who kill and maim and rob and rape and mug...
...of national income accounts and macro32 The Alternative: An American Spectator February 1977 economic policy is an illusory figure...
...AELE wants to restore the rights of the victims of Wellington J. C-re'frith III is a woodsman from Bean Blossom, Indiana...
...for that one must turn to the magna opera, von Mises' Human Action or Rothbard's Man, Economy, and State...
...Against this background, the modern Austrian understanding of the systematic, mal-allocative effects of government-engineered and manipulated monetary expansion offers an alternative vision of considerable persuasiveness and power...
...Samuelson, Friedman, et al...
...Edited by Edwin G. Dolan (economics Howard Dickman is a graduate student in history at the University of Michigan...
...Kirzner shows in particular how only the "market process" approach makes entrepreneurship and advertising intelligible and necessary for the operation of the free market...
...professor at Dartmouth and author of TANSTAAFL, a popular, free-marketoriented fiook on the economics of environmental issues), The Foundations of Modern Austrian Economics is based largely on the proceedings of a Conference on Austrian Economics held in 1974 at Royalton College, Vermont...
...QQQGi~gQg~OIIIQ00aQ00Q060iQO0Q0g6iiiQQ~gQg04QQ00QDQO0IQ00~Q0D~Q0~I4aOQQ~geDDoOUggIIQ0j00Og0QQQ4060a10OQ~IQQ00g0O0QOgDOQ00oO0~IQQ4oQgI0oBi~m000iO0IQ0 BOOK REVIEW The Viaims Frank G. Carrington / Arlington House / $9.95 Wellington J. Griffith III The Victims is not just another deadly boring recital of lifeless crime statistics...
...the misconceptions of aggregative constructs and mathematical economics as tools of economic theory...
...Moreover, the essayists carve up many sacred cows which have too long been allowed to wander unmolested along the avenues of public discourse...
...ACLU's campaign to punish society for the sins of the criminal received codification by the Warren Court during the 1960s...
...This is where economic reasoning properly begins, and not with the fashionable view that economics is the study of how "society" allocates "its" resources...
...Lachmann and Kirzner continue in this vein, opposing the individualistic theory of "market process" (decentralized decision-making and voluntary exchange in the real world of imperfect knowledge and ever-changing tastes) to the collectivistic "equilibrium analysis" and one of its more preposterous children, "perfect competition...
...It is an intriguing application of Austrian business-cycle theory to our current economic woes, and an incisive criticism of the Keynesian (more government spending) and Friedmanite (constant growth of the money supply) nostrums...
...Bloomington, Indiana The Alternative: An American Spectator February 1977 33...
...now it is getting international recognition...
...Socalled because its founder, Carl Menger, and the first few generations of his students were Viennese, the school has long been international...
...The conference attracted some fifty participants who heard Professors Murray Rothbard (Polytechnic Institute of New York), Israel Kirzner and Ludwig Lachmann (both of New York University), and others deliver a baker's dozen papers on issues such as the proper methodology of economic science...
...Roberts writes that, "For many years it has been the fashion to say, and perhaps to believe, that 'society' is to blame for the extraordinary increase in crime...
...But this book is a very good introduction...
...in a column in the September 27, 1975 edition of the National Observer...
...It is seen in the productivity of active members, by their ability to gain an audience in, and the allegiance of, the rising generation of scholars...
...Messrs...
...According to the Keynesians, a general rise in prices should occur only when the aggregate demand for all goods and services continues to expand beyond full employment...
...But those who drink beer, think beer--as one sage once murmured--and modern drinkers at least can still ponder the wonders of their favorite brews under the stars in South St...
...Qmg0IIQ0QO0QIOQ000D0Q0QD0QmO06000OIOD~iQI0OOOQi0B000i0Q0g0QD00mQDOI06QQOI0QQ0iIQQOioIo~0DBiQQ~000DQQ6Q00I0QQe000IUoo OODO~00090OQ0QII~0togoQ*oDQOoo000 BOOK REVIEW The Foundations of Modern Austrian Economics Edited by Edwin G. Dolan / Sheed, Andrews & McMeel / I12.00 Howard Dickman The Austrian School, the most distinguished and least known group of free market economists in the last hundred years, may be staging a comeback...
...In fact, some of the beer gardens became local meeting places for the pro-German Bund movement, and were subsequently raided by local authorities...
...The same, I may say, is true for the book as a whole...
...Economics, emphasize the contributors, is a deductive science that studies the logical implications of purposeful, value-directed human action...
...Perhaps the great beer gardens are things of the past, victims of modernity's onslaught...
...crime who have been forgotten in the welter of banalities about the need to rehabilitate criminals as the victims of society...
...The best essay in the book, and the one readers will find most immediately relevant, is Gerald P. O'Driscoll and Sudha Shenoy's "Inflation, Recession, and Stagflation...
...Thousands of malt lovers packed Lemp's Park--near the present site of the Falstaff brewery--during summer months for a huge beer garden atmosphere...
...We are guilty...
...Americans for Effective Law Enforcement is a legal counterpoise to the American Civil Liberties Union which maneuvers, with depressing success, to expand the legal rights of criminals...
...Various studies indicate that as punishment has declined, crime has increased simply because it has become There ' "ty a! Sarkes Tarzian Inc...
...The word 'society' is meant to refer to you and me...
...The three~ day Bavarian rests at the park offered thousands of pig knuckles, liver sausages, and the best of wursts...
...The author, Frank Carrington, is not only outraged about crime, he wants to provoke other law-abiding citizens into taking effective action to control crime before all of us are cringing behind bolted doors, too suspicious and afraid of others to help even victims of crime...
...They find the latter two "ideal constructs" distinctly less than ideal...
...Louis...
...Recently, however, the distinguished and orthodox neo-classicist Sir John Hicks intimated that Hayek's business cycle theory may contain important truths for the current pickle the Western market economies are in...
...For his part Carrington is executive director of Americans for Effective Law Enforcement, which works to correct the current tilt of the legal system toward protecting criminals...
...It is, instead, a gut-wrenching portrayal of flesh-and-blood human beings needlessly and cruelly victimized by a legal system that rewards criminals...
...The Foundations of Modern Austrian Economics contains papers by working Austrian scholars, and is an indication of such vitality, as is a series of companion volumes sponsored by the Institute for Humane Studies in Menlo Park, California--the "Studies in Economic Theory...
...The conferees surveyed the basic tenets of their theory, exposed the fallacies of competing views, and indicated future research problems...
...This experience has caused uneasiness, to say the least, among the smooth-tongued wizards of macroeconomic policy...
...Carrington relates case after tragic case of people victimized by crime, because Supreme Court rulings have made it more difficult to collect evidence against criminals and easier for permissive judges to suppress the truth and turn loose the obviously guilty...
...Attempts to revive the grand old traditions had some success in the 1930s, but the golden age was over, and the oompah bands were forced to tone down when the Nazis came to power in Germany...
...The Victims reprints Roberts' hilarious take-off on the Lone Ranger as a masochistic white man who insists he is to blame for the depredations of outlaws...
...Aggregates and econometric tools have a place in historical research and business forecasting, adds Dolan, but only causal, individual-based theory can explain economic behavior...
...Other essays attack headlong the venerable God of the Marketplace, Gross National Product...
...the meaning of valuefree social research...
...But the vitality of an academic school cannot be judged by the dazzling brilliance of older (or deceased) theoreticians...
...The Foundations of Modern Austrian Economics is not'a systematic, textbook exposition of Austrian (or free-market) theory...
...Louis abounded in attractive spots where beer could be sipped to musical entertainment from grand operas to vaudeville...
...Renowned operas such as I Pagliaeei received their American debuts in Schnaider's beer garden, while people from all over America visited the Cherokee Garden for its famous scbmierkaese-cottage cheese...
...may have quite a tussle on their hands in the battle to win academic friends and influence public policy...
...Carrington marshals facts indicating that only swift and certain punishment deters crime...
...Louis newspaperman in the wet year of 1933 could reminisce: "It is now a popular diversion for the older generation to sit in their homes or local cafes quaffing cool steins of a newfound freedom, and to recall another time when St...
...Stars such as Carlotta Maconda, Grace von Smddiford, and the unforgettable Lillian Grub thrilled the hearts of revelers at the renowned Uhrig's Cave, a brewery adjunct that seated 3,500 persons in a man-made cave lined with potted palms and candles...
...At the same time, it is the hoodlums who have been given queer and unusual protection from society's wrath by the Supreme Court...
...But Prohibition closed most of the beer gardens for a decade, so that a St...
Vol. 10 • February 1977 • No. 5
