Thursday, December 09, 2010

10 Propositions That Define Austrian Economics

  1. Only individuals choose.
  2. The study of the market order is fundamentally about exchange behavior and the institutions within which exchanges take place.
  3. The “facts” of the social sciences are what people believe and think.
  4. Utility and costs are subjective.
  5. The price system economizes on the information that people need to process in making their decisions.
  6. Private property in the means of production is a necessary condition for rational economic calculation.
  7. The competitive market is a process of entrepreneurial discovery.
  8. Money is nonneutral.
  9. The capital structure consists of heterogeneous goods that have multispecific uses that must be aligned.
  10. Social institutions often are the result of human action, but not of human design.

(HT Steven Horwitz)

1 comment:

Anonymous said...

hey brian,

confused about a couple of these points. I know you are wise in these areas, can you respond:

"Only individuals choose." - does this exclude decisions by state/corporate actors or are they considered decisions made by individuals (albeit to benefit a different organization)?

"Utility and costs are subjective." - Aren't many costs objective if reduced to an arbitrary monetary scale? How is say, a $35 cost, objective? Because of (possibly unknown) externalities?

What does money is non-neutral mean?