Tuesday, 25 September 2012

Austrian Economics destroyed Austria

   Bohm-Bawerk almost destroyed Europe by getting the Austro-Hungarians to switch from levies on Production to taxes on such impredicatively chrematistic chimeras of the Economists as 'Income' & 'Capital', with the result that Market corrections to the Balance of Power ceased to be the but Campaign Season, Champagne fuelled, Sport of Kings rather than Misery's levee en masse. 
  In contrast, the German 'Historical' School eventually gave rise to something which could prevail- the concept of a Social Market founded in actual Production not praxeology- not in the Academic Seminar but on the ground but only by a detour through ideas just as specious as 'Income' and 'Capital' viz. as 'Race & Destiny'.
 Still, the German interest in Production, as opposed to the Austrian insistence on purity of method, is an important corrective to the Anglo-Saxon tradition. The, recently much reviled, Prophet of doom, Hans Werner Sinn , who now appears to be conforming to Rothbard's Law (Economists end up specializing in what they are least good at) , was surely on the side of the angels when he pointed out that the State's role as an insurer (rather than re-distributor) is highly positive for risk taking and, indeed, the 'natural' way to view Transfers, or that an obsession with demand side Environmentalism gives rise to a 'Green paradox' which would tend to hasten depletion of fossil fuels.

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