George Leef’s latest column for Forbes defends the Austrian school of economics against spurious charges from a left-of-center newspaper columnist.
Every so often you read a column that is so snide and utterly mistaken that it burns inside you like a terrible ulcer. Washington Post writer E. J. Dionne recently wrote one of those columns, “An economic school has led to gridlock in Washington.”
The economic school in question is the Austrian School, an approach to comprehending economics that began in 19th century Austria and now has adherents worldwide. No doubt the most famous of the Austrians is F.A. Hayek, who won the 1974 Nobel Prize in economics and wrote, among many other books, The Road to Serfdom (1944). There are many other Austrian School economists who have contributed greatly to our understanding of economic phenomena, among them Ludwig von Mises, Murray Rothbard, and Israel Kirzner.
I would bet my last dollar that Dionne has never read a page in any of their many books, nor any objective discussion of the analytical differences between Austrians and economists of other schools. No matter – he is certain that the Austrians must be wrong because politicians he dislikes have taken to citing them when arguing against further expansion of our federal Leviathan.
Dionne probably isn’t interested in learning anything more about the Austrians, but I think it’s important to set the record straight and provide some food for thought for readers who might be wondering, as Butch Cassidy said to the Sundance Kid, “Who are those guys?”
The Austrian who most gets Dionne’s goat is Hayek. In The Road to Serfdom, he warned that governmental welfare policies would have very detrimental effects on any society – that it would start it down a slippery slope of increasing demands for more welfare, growing government control, declining personal responsibility, and competition for power in which “the worst get on top.”
Hayek’s argument has Dionne in high dudgeon. He blares that in Hayek’s view, FDR’s policies were “objectively comparable to those of Hitler or Stalin.” That’s an absurd strawman argument if ever there was one.
