That would be very difficult to say since we've never really been in an Austrian economic system. Austrians will point out that the knob twiddling done by Keynesians is a method of postponing or spreading out the pain of a recession over a large number of years. You can only do that so often before this creates a self-reinforcing mother-of-all-recessions where the accumulated debt and unhealthy investment comes crashing down.
We have pushed our debt forward to our grandchildren since 1971. This is morally repugnant and hardly humane.
Given how heterodox the Austrian school is: what would it even mean to have an Austrian economic system and how would it differ (and some Austrian ideas are part of "mainstream" economics anyway)?
> what would it even mean to have an Austrian economic system and how would it differ
It’s difficult to know exactly, but you would have an unmanaged system. No reserve bank, no stimulus, no regulation, minimum to no restraint on trade depending on how anarchist the Austrian Economist happens to be.
People could decide privately on banking regulation, but then it's quite close to a meaningless distinction between government and people as both would effectively coerce holdouts.
For stimulus the current sizes are just beyond any other organization. Could perhaps be some distributed system, but then why would it be better than delegation?
> societies tend to put some limits and controls in place.
It’s not just a tendency, societies always have limits and controls in place. The anarcho-capitalist wing of Austrian Economics would propose limits and controls too, but not centrally controlled involuntary limits and controls. There’s no real world government, nations relate to each other in a more or less anarchic manner where the limits and controls are voluntary but the consequences short of war are being sanctioned ie not being traded with. Anarcho-capitalists would probably propose a system like that for individuals. Would that require a different kind of person? Maybe, my own views certainly differ with them.
mother-of-all-recessions where the accumulated debt and unhealthy investment comes crashing down.
that happened in the U.S. was before Keynesian principles were used. It was the use of Keynesian principles that helped FDR win 3 elections.
Im not an economist so anyone with a moderate amount of training will run circles around me in a discussion about economics. So I’ll just say two more things. Your comment about Austrian economics never having been implemented reminds me of leftists who say communism has never been implemented so we can’t say communism doesn’t work. Secondly, before Keynesian economics recessions and depressions occurred much more frequently in the U.S. The data seems to clearly point to at least some level of success of Keynesian economics.
> Secondly, before Keynesian economics recessions and depressions occurred much more frequently in the U.S. The data seems to clearly point to at least some level of success of Keynesian economics.
Having some recessions and depressions are healthy. There needs to be a mechanism to punish people who persist in allocating capital in wealth-destroying ways.
The US has real problems with capital allocation. All the manufacturing capital seemed to be invested and created in Asia and there is a retirement crisis because a generation didn't prepare appropriately for old age. There isn't a way to run a counterfactual, but the US has been on the warpath to protect people from having to recognise that they keep giving their money to charlatans. That means it all gets wasted, instead of just some of it being wasted.
>a generation didn't prepare appropriately for old age
This will have a snowball effect because their children will need to support them and save less for their own retirement, then their children's children and so on.
In all fairness, it's tough for most people to save with massive recessions/depressions with mass layoffs every 10 years and near zero interest rates on savings accounts for 20+ years now. Add to that wage pressure from offshoring and things like NAFTA and 2-3% regular inflation targets.
Also, the government won't keep social security payments up with inflation and they tax it. Just more ways to keep the people down. If only we spent the $34T we now have in debt since the 80s on something less frivolous.
> There needs to be a mechanism to punish people who persist in allocating capital in wealth-destroying ways.
But the cost of recessions, especially pre-Keynsian ones, falls most heavily on workers?
> but the US has been on the warpath to protect people from having to recognise that they keep giving their money to charlatans
They keep electing them. There's a huge popular demand for charlatans backed up by the charlatan news channel. It's probably going to result in a Liz Truss level financial disaster at some point.
> But the cost of recessions, especially pre-Keynsian ones, falls most heavily on workers?
I dunno, does it? Why do you think that? Who is the cost of bad capital allocation going to fall on? I'm not expecting any millionaires to go hungry or do without in their old age, or lack housing and goods in their youth. The people eating the brunt of it are workers. They can't save money.
> Your comment about Austrian economics never having been implemented reminds me of leftists who say communism has never been implemented so we can’t say communism doesn’t work
Maybe, however the difference being that there are many countries and regions that have claimed to be communist for over a century but none that have claimed to be adhering to Austrian Economics.
> pretty much every country implemented Austrian economics principles
Looking at history I’m seeing pretty much every country having a government controlled and manipulated currency, mercantilist restraint of trade, guilds and unions with government enforced monopolies fixing prices, central banks, pseudo-governmental corporations, and on and on. Those are all antithetical to Austrian economic principles. Can you point me to the overwhelming historical examples you were referring to?
1870 U.S. is one example. There was restraint of international trade but that trade wasn't much and it didn't have the capacity to be much. A continental sized country at a time when transportation was still limited that used a gold standard satisfies the condition of "implemented Austrian economic principles".
They were implemented in the same way one says that communism has been tried and it failed. It wasn't true communism and it wasn't true Austrianism. Government intervention has shortened recession/depression lengths and lengthened the time between them. It's a lot better than Austrianism.
I'm not going to convince you of anything and vice versa. My comment is for anyone who happens to be reading the thread. Hopefully they will have read enough perspective on this to make a semi-informed decision.
> A continental sized country at a time when transportation was still limited that used a gold standard satisfies the condition of "implemented Austrian economic principles".
Merely having a gold standard in a nationally regulated currency where contracts in that jurisdiction must accept payment in that currency in order to be enforceable is not an implementation of Austrian economic principles.
> They were implemented in the same way one says that communism has been tried and it failed.
You say the examples of AE implementation are overwhelmingly numerous, you give one extremely dubious example of a single superficial similarity to back that up. Can you even point to a single country that claimed to be implementing Austrian Economics? I can point to any number of places that claimed to be Keynesian or Communist, and even one or two that were giving Friedman a try but no Austrians. Your comparison to Communism are nonsense.
Hard to claim to have implemented a system before a word for that system was invented. Small groups of people were wildly successful in implementing the idea of shared ownership/responsibility way before the word communism was invented.
Lots of large societies had systems of governance where the vast majority of the economic system was free of government control/safeguards and where the value of the currency was not controlled by the government. As societies grew larger/complicated and concentrated more in urban areas people became aware that government intervention was a good thing if done properly. As with all things if done badly then the intervention is not a good thing.
>Hard to claim to have implemented a system before a word for that system was invented.
You said "pretty much every country" had implemented them, and the name has been around for well over a century, it's actually one of the older active schools of Economics these days, we have hundreds of countries and many more in recent history and none of them have claimed to have implemented Austrian Economics? The comparison remains total nonsense.
I'd prefer to solve problems individually and treat economics as just that. If there are other problems in other areas of society they can be addressed, but I'm not interested in creating a study of economics that doesn't focus on the principles.
