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Miscellaneous meanderings and philosophical ramblings. The title from a spiral notebook I used to jot down my thoughts on religion and other matters some years ago. I like to write, think and express my views on various issues. Robust discussion is welcome.

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"Lan astaslem."
I will not submit. I will not surrender.
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Friday, August 21, 2009

Free economic theory lessons

It will take some time to read the literature but if one is wondering why the economic plans of the Obama administration are failing, or would simply like to gain a better understanding of free markets, the effort will be rewarded.

“Vox Day” has a post with numerous PDF downloads concerning Austrian economic theory. This would be counter to the Keynesian like economic philosophy so in vogue within our government and the media today.

His post and recommendations were in response to an inquiry by a reader:

My reason for writing today is related to your views on economics. I have been sceptical of Keynesian economics ever since I went to university (at the LSE, no less- one of the chief incubators of both Keynesian and Austrian thinking), and my move to America for graduate school, along with recent events, have only contributed to my growing distrust and dislike of an over-mighty and overly large public sector. After doing some reading, it appears to me that only Austrian economics seems capable of predicting, understanding, and- crucially- solving financial crises, panics, manias, and bubbles. As such, I would like to explore a more rigourous and thorough analysis of Austrian economic theory. Therefore, would you be able to recommend a list of 5-10 books that you believe all prospective Austrian economists should read? The universe of Austrian economic literature is vast; a starting point would be useful.

Here is his post with links to the PDF downloads.

And since I’m sure that someone might claim that Austrian economic philosophy is dead, since they’ve dismissed it before, it will be instructive to read Vox Day’s reply to Paul Krugman’s criticism of the Austrian model as Krugman has dismissed the Austrian theory in similar fashion. It does have an entertaining start:

A Keynesian who rejects the Austrian theory of the business cycle is no more credible than an alcoholic who doesn't believe in hangovers or a rocket scientist who doesn't believe in gravity. (source)

As Vox Day points out in scathing fashion, it’s rather pathetic that a Nobel Prize winner would so misunderstand what he is trying to criticize.

In what may be dangerous for this country, such misunderstanding of economic matters seems endemic to the Obama administration. But then a question comes to mind. Is it really just an intellectual failure and therefore correctable, or rather, a deep-seated animosity to free markets and a natural inclination towards more control and government that is more intrusive, facts and evidence be damned?


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