The Austrian Economists

I'm now back in Virginia, preparing for an Austrian economics examination. It's reaffirming to encounter the theory and method that enchanted me so much back as an undergraduate in Liverpool, and feel that professional study has only added to excitement.

Unfortunately my revision has been incomplete and patchy, solely because of the unmissable Ashes series that demands to be seen. I was revising for my A-Levels in 1999, and was in my bedroom swatting up on "the role of money" (having never been told how money ever came to exist). I heard my Dad scream from the living room - Fleming had bowled out Saeed Anwar and Pakistan were on 21-2. From that point on I couldn't tear myself away from the screen, and watched Warney take 4 wickets and the top order knock off their easy target, comfortably winning the World Cup for Australia. I got a 'D' in that exam, but it was worth it.

Of course I'd fail Norman Tebbitt's Cricket Test, but then again I'm not an immigrant (and am white) so maybe i'm allowed to be of "dual heritage". Regardless, away from procrastination and toward the point: Austrian economics, and it's contemporary relevence. Two points to note.

The first is the fact that my Professor Pete Boettke has teamd up with Mercatus senior fellow Frederic Sautet and former Mason PhD students Chris Coyne and Pete Leeson to create a weblog called The Austrian Economists.

Also, here's an excerpt from The Economist's recent survey of China and the World Economy:

The Austrian school of economics offers perhaps the best framework to understand what is going on. The entry of China's army of cheap labour into the global economy has increased the worldwide return on capital. That, in turn, should imply an increase in the equilibrium level of real interest rates. But, instead, central banks are holding real rates at historically low levels. The result is a misallocation of capital, most obviously displayed at present in the shape of excessive mortgage borrowing and housing investment. If this analysis is correct, central banks, not China, are to blame for the excesses, but China's emergence is the root cause of the problem.

When I started to become interested in Austrian economics, it felt very much as a cultish facet of the history of economic theory. The more equipped I become, the more it feels like a cutting edge toolkit that generates answers within a sound, humanist methodology. It can only spread and prosper if there's enough of us forgetting about the past, and looking to blast through the future.