Austrian Economics Made Obvious
Start from what people actually do, and the conclusions stop looking like theory and start looking like description.
The argument in four steps
- Everyone knows different things, and decides differently as a result.
- Acting on what they know, people trade, save, produce and cooperate.
- Austrian economics describes those actions rather than modelling an average person.
- Where force replaces the action, the same description tells you what breaks.
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Terms in this piece
- Praxeology
- The study of human action as purposeful behaviour. It begins from the fact that people choose, and reasons out what must follow from that.
- Division of labour
- People producing different things and exchanging them. It is what makes cooperation worth more than doing everything yourself.
- Malinvestment
- Investment drawn into projects that the real supply of savings cannot finish. It shows up as a bust when interest rates rise again.
“People’s actions are obvious.”
From the article
Keep reading
Four ways to go further on the method
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What is Austrian economics?
A plain introduction, written for someone starting from nothing.
About 15 minutesThe Institute’s own overview
What the Austrian school is, in the Institute’s words, with the main figures and ideas.
About 2 hoursWhat Has Government Done to Our Money?
The short book most readers start with, and the clearest single application of the method.
Several monthsMan, Economy, and State
The treatise this article follows, building the whole system from human action upward. About 1,400 pages.
Chosen from the tags this piece carries: Austrian Economics Overview, Philosophy and Methodology, Praxeology.
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James Anthony
A chemical engineer by training who writes on government and politics, and the author of several books. Everything he has written for the Institute.
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