Where do you clowns come from, really? You obviously know NOTHING about Austrian economics, yet you're all out here like ventriloquist dummies telling the world how bad it is. It's like the Red Scare with everybody talking about how bad commies were, but nobody knew anything about them other than what the establishment had told them.
I'm sure you pray at the temple of Keynes, like all the other "Nobel prize" winning economists do. You know, those same ones whose policies have ruined the economies we have now. But we'll just ignore that, right?
Ok, little AC, I'll reply.
Austrian economics is, at best, a pseudoscience, and at worst, fabulist storytelling by one charlatan to another, in an effort to explain things that they either don't understand, or actively refuse to understand, because they say "we don't need math or empirical testing".
Austrian econ uses praxeology (application of deductive reasoning, applied to a set of "unquestionable" axioms) to generate its further generate implications, scenarios, and results. Of course, these unquestionable axioms are quite questionable - they take them as blind faith, "because we've said them, they must be true". Often in there, they reject formal logical analysis of their axioms, instead choosing to use verbal analysis, because it's easier to weasel word your way out of corners. (Fingers are often inserted in to the ears of young Austrian economists at this point, as they say, "la la la la, I can't hear you".)
Then there's their use of the Austrian Business Cycle Theory, which uses many terms that they've mis-defined (they change the meanings of words to be whatever they want, so when they misuse them, they can say "You just don't understand"), such as "inflation" and "natural rate".
ABCT ultimately is better at explaining why the Austrians and libertarians are such hardcore goldbugs and why they rail against the Fed so much than it is at explaining actual business cycles.
The Austrians get around the problems of market failures, natural monopolies, morality, and rationality through the use of clever wordplay. They rely on an extreme form of methodological individualism based on the "action axiom" as described above. To wit: Because only individuals exist, only individuals can act. Societies cannot act because, to quote Margaret Thatcher, "there is no such thing as society." Therefore, all action can be described at the individual level. If an action is good or moral for one individual, then it must be good or moral in the aggregate because good + good = good. In reality, only basic game theory is needed in order to refute this. Austrians claim, for example, that savings represent money that will be invested in the future, and so money can never be "hoarded." They entirely reject the paradox of thrift.
Even the hero/founder of the school admitted it was BS.
Ludwig von Mises himself wrote of his theory: "Its statements and propositions are not derived from experience... They are not subject to verification or falsification on the ground of experience and facts."
F.A. Hayek wrote that any theories in the social sciences can "never be verified or falsified by reference to facts." By the way, he won one of those Nobel prizes for Economics that you sneered at, for his "theory of money and economic fluctuations". That would be the last actual contribution by the Austrian school to economics as a whole, in the last 40 years.
(Special thanks to RationalWiki for significant portions of this post.)
