EXPOSE! Austrian “School” of Economics is a “Kindergarten”

Kangas ^ | 1996 | Steve Kangas

[parsifal]

Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." (1) Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone Perhaps the defining difference between mainstream and Austrian economists lies in their opposing philosophies towards learning truth.

Mainstream scientists use a well-developed process called the scientific method. This method employs both data and theory. "Data" includes facts, evidence and statistics. "Theory" is the attempt to describe general laws, principles and causes and effects found in the data. Both form a cycle, as data goes into the formulation of theory, whose conclusions then engender more data collection in an attempt to confirm, refute or develop yet more theories. The accuracy of this process is verified by experimentation or prediction. Scientists believe they are on the right path when both theory and data agree; when they disagree, they know something is wrong. It could be the theory is wrong, or the data is badly collected or interpreted.

[Theophilus]

...the truth is, it ain’t science at all to the Austrians.

That's true to my understanding. Economics is more about the moral philosophy governing complex human behaviors and less about observable science to the Austrian School.

[parsifal]

And frankly, that may be a good thing. I just intend to pull this little bon mot out every time I argue with one of those anarcho-capitalists.

parsy, who has been researching anarcho-capitalists