Austrian economics

The acceptable face of this conspiracy cluster is Austrian economics, first put together in its present form by Ludwig von Mises (hence “Austrian”). Its key technique is praxeology, in which economic predictions are made entirely by extrapolating from fundamental axioms. It explicitly repudiates any sort of empirical testing of predictions, and holds that you can’t predict future behaviour from past behaviour even in principle, so testing your claims is meaningless:

The subject matter of all historical sciences is the past. They cannot teach us anything which would be valid for all human actions, that is, for the future too …

No laboratory experiments can be performed with regard to human action. We are never in a position to observe the change in one element only, all other conditions of the event remaining unchanged. Historical experience as an experience of complex phenomena does not provide us with facts in the sense in which the natural sciences employ this term to signify isolated events tested in experiments. The information conveyed by historical experience cannot be used as building material for  the construction of theories and the prediction of future events …

[Praxeology’s] statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts.

Despite this, proponents keep making  predictions  and  claims,  and  insisting they are, somehow, still worth listening to and applying to the world.

Austrian economics was heavily promoted by heterodox economist Murray Rothbard, founder of the Ludwig von  Mises  Institute.  Rothbard  invented  the term anarcho-capitalism for his ideology that a complete absence of government is essential, and that property rights, which are paramount, will somehow still function without it. An offence against one’s property is equivalent to an offence against the self; so the “Non-Aggression Principle” holds that trespassing is aggression, but the owner shooting you for trespassing somehow isn’t. Police will be replaced with private security services and courts with arbitration services. Really extreme Austrians like Hans-Herman Hoppe admit that all this would lead directly to functional feudalism. Which becomes neoreaction and the alt-right, but Phil Sandifer already wrote that book.

Austrian economics has produced vast quantities of detailed theory to support the claim that a gold standard is the only sensible way to run an economy – rather than the more conventional view that a zero-sum economy quickly seizes up, both in theory and practice  – and that central banks and fractional reserve banking will inexorably lead to a collapse. Disaster is imminent, and you need to be hoarding gold.

Sadly for Bitcoin, most Austrian economists aren’t fans – even as Bitcoiners remain huge fans of Austrian economics.27 You will find Austrian jargon in common use in the cryptocurrency world.

Proponents of Austrian economics include the fringe economics blog Zero Hedge, which has confidently predicted two hundred of the last two recessions. Zero Hedge covers Bitcoin extensively, and Bitcoiners are fans in turn.

Related Articles