The Austrian School of Economics is gaining more adherents as this economic crisis lingers. Keynesian Economics has caused many of the current problems. More and more people outside of Washington recognize this linkage.
The Austrian School has never been simple in the sense that the economy can be modeled by simplistic equations. But then, neither is the real world simple. Perhaps one way to describe this school is “common sense.” There are no magical formulas to achieve better living conditions. Most of the veracities passed on by our ancestors and parents apply to good economics.
Ty Andros cites what he calls the 7 commandments of the school. Others will object that he has left items out, but these seven are not bad for a layman trying to grasp what the school represents:
The Austrian School’s Seven Commandments:
- The Austrian free-market economists use common sense principles.
- You cannot spend your way out of a recession.
- You cannot regulate the economy into oblivion and expect it to
- You cannot tax people and businesses to the point of near slavery and
- expect them to keep producing.
- You cannot create an abundance of money out of thin air without
- making all that paper worthless.
- The government cannot make up for rising unemployment by just
- hiring all the out of work people to be bureaucrats or send them
- unemployment checks forever.
- You cannot live beyond your means indefinitely.
- The economy must actually produce something others are willing to
After reading the above, you undoubtedly are tempted to say, “but I knew all of this.” All that means is that you are not a Keynesian economist. You have common sense. Tutor a Keynesian today; a mind is too precious to waste.