- 18 Apr 2013 16:09
#14217114
In mathematics, we routinely trust the process of starting with a-priori assumptions and proceeding using logical deductions. Often, reaching highly non-trivial, even counter-intuitive results.
Austrian Economics starts with the Action Axiom which cannot be effectively refuted. It merely states that humans behave purposefully.
From this very humble starting point, and making some empirical assumptions which are equally hard to refute (that most people value leisure over work, or that money exists), it proceeds to develop a body of conclusions.
To my knowledge, there is no serious attempt to refute Austrian Economics on its premises, i.e. by faulting either its starting assumptions or its logical derivations.
The main value of Austrian Economics isn't so much in achieving positive results - most of those have, by now, been incorporated into mainstream economics, and are rarely in dispute.
When they are disputed on empirical grounds, the a-priori basis of the Austrian derivation is a valuable anchor against obfuscation and confusion. For example, the effects of a small increase in an already fairly-low minimum wage might be difficult to measure empirically. Difficulty in measurement can translate to diverging conclusions when attempted using "sophisticated" and unstable econometrics techniques.
However, the effects of minimum wage need not be measured any more than the conservation of energy in a complex system. We know, from first principles, that demand for labour (like for all other commodities) will, other things being equal, decline as its cost increases.
The main value of Austrian Economics, however, is in clarifying the meaning and nature of commonly-used and commonly-misunderstood economic concepts such as capital and profit, prices, knowledge, coordination, money, interest, risk and the role of entrepreneurship and time.
Free men are not equal and equal men are not free.
Government is not the solution. Government is the problem.