“Programmable money means programmable people. Sound money means free people.”-Dr. John Newman.

This quote came from a talk called “Central Bank Digital Currencies: The Last Battle in the War on Cash”. It was one in a long line of mentally stimulating, and ideologically confrontational lectures. My attendance at this year’s Mises Supporters Summit in Auburn, Alabama was one of the best decisions I’ve made in my life to date. To be in a place of intellectual prowess and integrity, and to be able to speak to some of the best representatives of Libertarian and Austrian Economic thoughts, was truly a great experience.

I came to the Austrian school of Economics by way of Ayn Rand and my studying of her philosophy of Objectivism. Rand had spoken very highly of Ludwig Von Mises, the man widely considered to be the one to popularize the Austrian school. She even went so far as to say if she could develop a curriculum for all to go by that he would be the economist for the job.

What is Austrian Economics?

Austrian Economics is a heterodox school of economic thought, brought about by Carl Menger in the 1800’s, with the writing of his book “Principles of Economics”. The school has some intellectual forefathers such as Jean-Baptiste Say, and one of my personal favorite thinkers, Frédéric Bastiat.

Carl Menger was responsible for kicking off the marginal revolution, by introducing the concept of marginal utility, or that things have value(utility) on the margin. For example,if you have 5 Oreos, the utility of continuous consumption falls with the consumption of every Oreo. The 5th Oreo is therefore far less valuable than the 1st was.

The Austrian school of Economics sets itself apart from mainstream or neoclassical economics in a few ways. The first way is through methodological individualism, or the analysis of the economy through individual voluntary Human Action. The Austrian school shies away from the usual way of economic analysis that relies on mathematics and the use of aggregates to find values and relationships in the economy, instead relying on things like an individual’s time preference, opportunity cost, and subjective values.

Menger understood that while economics wasn’t a hard science with perfectly replicable experiments like chemistry or physics, it was still a science with a need for universal laws.

What drew me to the Austrian School?

In the beginning months of 2022 in the United States, we had decade high rates of inflation, with interest rates set to rise and crush markets. Of course the people in charge at the Federal Reserve were content on downplaying these things as “transitory”. Being a few months into my own philosophical education, and already seeing the value of freedom for a prosperous society, I started to ask questions. I had very little knowledge of economic thought, aside from some very basic elements. The law of supply and demand with respect to prices, the dangers of high unemployment, and that printing money is a bad idea because quite literally there is “no free lunch”.

My first exposure to the Austrian school was Henry Hazlitt’s book “Economics In One Lesson”. This short book goes into many of the modern day issues in economic thought and policy, such as tariffs, minimum wage laws and inflation. The one lesson from the book is that “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” In order to think clearly about economic policies and decisions one has to be aware of “what is seen and what is not seen”, to quote Bastiat. This book convinced me that I was right to explore the path of economics.

Some time later I returned to the discipline and decided to attack something a bit more intensive and thorough.

Carl Menger’s “Principles of Economics” opens up with “All things are subject to the law of cause and effect. This great principle knows no exception, and we would search in vain in the realm of experience for an example to the contrary.” From those first lines I knew I had found something invaluable. The language used tied in with the philosophy I’d been studying, further cementing my idea that economic literacy helps build a strong foundation for understanding the world around us.

Over the course of this past year I read more books on economics, and also some covering the government and what it’s role is thought to be in society, from Bastiat’s “The Law”, to Murray Rothbard’s “Anatomy of the State”. 

Walking with the Austrians

Full disclosure, there are issues between Objectivists and Libertarians…although if I’m being honest I think it’s more on the Objectivist side, with the Libertarians just kind of doing their own thing. I would consider myself an Objectivist, not so much as to believe Rand can do no wrong, or that libertarian philosophers like Rothbard and Mises are entirely incorrect. I will be talking about the issues between the two schools of thought in my next article.

The 2023 Mises Supporters Summit, I will reinforce, was one of the best experiences of my life to date. The simple fact that everyone present was not a subscriber of either mainstream political party lent itself to such a wide variety of conversations. We were able to have conversations where participants held opposing ideas. Envision that at your next Thanksgiving when your left or right leaning family member starts in on their charged rant they just got from their favorite FOX or MSNBC news anchor.

Not everyone there was an anarchist, although representation of that school of thought was not in question. Some people were like myself, in favor of minarchy, a minimal state with night watchmen like qualities. The overall opinion of the state was low, that was certain. Despite varying levels of knowledge or interest in philosophy or even economics, the general interest was an increase in human liberty and happiness by the elimination of coercion into private life.

This can be seen by the quote at the beginning of my article, where the speaker was focused on the dangers of a Central Bank Digital Currency. Many liberty minded thinkers have talked about the danger of government involvement in things like the banking system and in general, money. To learn more I highly recommend Murray Rothbard’s “What has Government Done to Our Money?” , a relatively short book that highlights where money generally comes from, how a free banking system would work, and just what the government has done to our money over the last century.

Do not get me wrong, philosophy is very important in coming to understand the world around us. The humanities in general are an irreplaceable tool, although of late they have been captured by nefarious and reductive ideologies. However a proper understanding of economics and its role in the lives of the individual I believe to be truly complementary to a philosophical base. 

How else would you know that the government subsidy recently proposed is going to divert money from where the free market is actually directing it towards?

How else would you know that on principle it is criminal for a government to have an institution like the Federal Reserve, whose main goal is to inflate and debase the value of our nation’s currency, thereby destroying the purchasing power and livelihood of American citizens?

Only by walking into this school of thought can one really uncover the truth behind what the real effects government coercion has on our lives. 

**For a look at the titles I’ve read on the subject click here, and as always, thanks for reading.**