Ten propositions that define Austrian economics

This is a list that was put together by Peter Boettke in The Concise Encyclopedia of Economics:

  1. Only individuals choose.
  2. The study of the market order is fundamentally about exchange behavior and the institutions within which exchanges take place.
  3. The ‘facts’ of the social sciences are what people believe and think.
  4. Utility and costs are subjective.
  5. The price system economizes on the information that people need to process in making their decisions.
  6. Private property in the means of production is a necessary condition for rational economic calculation.
  7. The competitive market is a process of entrepreneurial discovery.
  8. Money is nonneutral.
  9. The capital structure consists of heterogeneous goods that have multispecific uses that must be aligned.
  10. Social institutions often are the result of human action, but not of human design.

I will have to think about this since on my first reading I agree with each of these and yet they do not sum to my own structure of beliefs about what I think is important. Nor do they give me a sense of policy direction since I cannot see what in particular is prohibited to governments even if all of this is true.

I also have a list of five axioms and ten principles at the start of my Free Market Economics but they are very different in character since their focus is to explain why a market economy with limited direct government involvement is optimal. It is aimed at what should and should not be done and who should or should not do which parts of it. In looking at the list, since modern socialism doesn’t seek to expropriate the commanding heights of the economy, I do not see anything that a socialist in the modern mould or a John Maynard Keynes might not assent to in full and yet remain a socialist and a Keynesian. You can read Peter Boettke’s complete article at the link and see what you think.

I might note that the list came by way of a posting on the Austrian website in which the writer stated his own disappointment with the ten propositions, as part of a letter of resignation from further commenting at the website:

My own interests might or might not be contained in #9, but it is too vague to have any clear meaning. The rest of the 10 propositions are excess baggage, or worse. #6, followed by #2, may be taken to put an arbitrary blessing on the existing distribution of private property, however arrived at, and however property may be defined.

IMHO, the term ‘Austrian’ should refer back to ideas found in the Austrian pioneers: Menger, Wieser, EvBB, and Wicksell, especially their capital theory. Later writers have wrongly hijacked the term to mean the above 10 propositions. Most participants, however, apparent do subscribe to them, and would have no positive interest in my criticisms.

The major economic question of our own day and age is the role and worth of a government spending and regulation. Yea or nay, how much and when, where and what are the questions I think need to be resolved. The ten propositions do not seem to me to provide answers one way or the other for any of this.

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