Austrian Economics
By Daryl Dominic Tan

For most of my teenage life, I believed Karl Marx to be the greatest economist and political philosopher the world had ever seen. I was about fifteen when I discovered Communism, and I was deeply drawn to its philosophy to the point where I actually purchased an olive green jacket just to look like Fidel Castro, whom I practically worshipped back then. I was one of those kids who believed that equality had to be achieved among everyone through any means possible and that redistribution of wealth was absolutely necessary for a nation to be sustainable. It wasn’t until recently that I woke up, however.

It wasn’t until I came across the core ideals of what true liberty was really all about, that I crawled out of my little Leftist hole (as mentioned in my previous post entitled ‘True Liberty’). I have to credit Ron Paul’s book, ‘The Revolution: A Manifesto’ for changing my life tremendously. I was introduced to the works and theories of Ludwig Von Mises, Murray Rothbard, and Friedrich Hayek, all prominent key figures in the world of Austrian Economics, a theory that I now strongly believe will save the world from a looming economic depression.

It was a difficult period of time accepting what was a more logical and sensible approach to economics. I literally transformed from being a full-fledged Socialist adherent of Marxism, to a Fiscal conservative free-market supporter of the Austrian school of economics in a matter of a few months after extensive reading and research on the subject. For once, I had actually developed an interest in Economics. I wanted to learn about monetary and fiscal policies and most significantly, how the government spends our money. An interest that was not present whilst I was preaching Socialist ideals.

Firm believers and stalwart proponents of Austrian Economics are vehemently opposed to Keynesian Economics , created by none other than John Maynard Keynes himself. Keynes believed that the economy had to be viewed like a vehicle - that it had to be directed, guided, and controlled by a driver. Most alarmingly, he believed that the driver's role belongs to the government. The driver influences the market, the growth, the interest rates, the costs, etc, of the means of production, and takes charge of the economy with the help of a central bank to influence all outcomes of the market.

The United States has evidently adopted Keynesian Economics, and look where they stand today. A continuous flow of budget deficits afflict the U.S. year after year. The United States is currently undergoing one of the worst economic crises since the Great Depression in 1929. A fear of a global economic collapse is pandemic and widespread. But who is to blame? A large percentage of people blame the Bush administration while a fraction blame the Obama administration. None of these administrations should receive full blame however. Of course, they have both played major roles in worsening the crisis at hand. However, the economic system that the United States have adopted should be held accountable. The Keynesian approach is no longer a feasible idea as it once was.

With Obama constantly creating new job plans and injecting stimulus into the economy and bailing out failing businesses, the crisis is in fact worsening A befitting analogy to use is that of a drug addict; a drug addict needs his fix, he is at the lowest form of physical and mental state without drugs, you give him a stimulating jab of heroin into his bloodstream and he’s immediately okay. That’s exactly what the current administration is doing. Short term, it artificially props up the economy. Long-term wise, it only exacerbates the crisis at hand by prolonging the day of reckoning.

The Austrian school of economics is undoubtedly the best approach. Unlike the Keynesian methodology that the economy should be seen as a vehicle, Austrian economists believe that the economy should be viewed as a natural entity, a sort of biosphere that should never be interfered with. In a nutshell, Austrian economists believe strongly that economics is the science of individual choice (known as methodological individualism) and that the significance of utility is what determines value. They deem mathematical analyses and statistics highly unreliable and far too untrustworthy to analyze the economy, believing that the human mind is too complex for such analyses to be made and that the fate of the economy should be left to the free market to decide seeing as to how costs are subjective. Ultimately, the profitability gained long-term wise from an Austrian Economics approach is incredible and would yield prosperity.

That being said, the likelihood of a nation ever adopting the Austrian school of economics is highly unlikely. Most, if not all, governments, have a strong desire to control and influence the outcome of every situation that appears before them. The more it usurps all form of decision-making, we can only remain duped, and then doomed.