On Menger, Austrian Economics, and the Use of General Equilibrium.

Nowadays mainstream economic textbooks maintain that economic laws can be established solely on the foundations of the exact sciences, such as mathematics or physics. The implication is that the historical date collected with the aid of statistics and other technical means can be used to scientifically unveil, explain, and predict mankind’s behavior. Although economics today embodies individual tastes in the form of elegant charts that are depicted in text books as ‘indifference curves’, it has not gone further in characterizing the all important motivations, influences, or feelings of the acting individuals. If the sole purpose of economic research is to analyze the properties of general equilibrium in the conditions of perfect knowledge and perfect competition, this may well suffice. It seems as if all approaches to economic phenomena which do not follow this doctrine are quickly branded unscientific and repudiated. Rather than constructing a system of timeless general equilibrium prices, as is the goal of the mathematically oriented schools of thought, in our world of scarcity, lack or dispersion of knowledge, and ever changing degrees of expectations, the Austrians attempt to explain the forces and causes that stand behind the price formation. The two main pillars of the Austrian school of economics are methodological individualism (a term used by J.A. Schumpeter) and methodological subjectivism. This approach to economic phenomena builds scientific analysis upon the insight that every individual chooses and acts purposively and in accordance with his perception of the expected actions of others. In observing the actions of others we are aided by our ability to “understand” the meaning of such actions because we are human beings and thus have insights into the behavior of our fellow men.

Preliminary Remarks on Mises in Interwar Vienna.

The professional class of which Ludwig von Mises (and to some extent also his friend Kelsen) was a member was not only fond of thinking of itself as the defender of their highly cultured environment. This large group of intellectuals, administrators, aristocrats, and politicians had also been raised to belief that they are the intellectual safeguard of a large multinational empire of well over 50 million people. The incredibly diverse ethnic composition of the Habsburg Empire gave it the appearance of an unique international and cosmopolitan order. The unexpected situation in which the fatefully reduced little Austria found itself as a result of the catastrophic war raised a new set of unprecedented problems which most scholars who had routinely come to assume that their primary tasks were attached to a huge multi-national Empire found difficult to turn their attention to. Their society had disappeared. While the final collapse of the old Habsburg Empire had become a fairly general expectation by late 1917, virtually no one had expected the state of affairs which was actually about to emerge. By 1918 the section of the Austrian population which considered itself heir to the ideals of European “liberalism” had been reduced to a position of political powerlessness. Mises found it especially difficult to turn his attention to the smaller problems and as he gradually became detached from the ethos of old Austria, his life and thought began almost reflexively to revolve around a social order which was characterized by the rule of law and peaceful cooperation, but which did not yet exist. Following old Austrian liberal tradition, von Wieser was the first to emphasize that an intimate connection existed between the conceptual foundations of legal and political theory on the one hand, and those of economic theory on the other.

Is the Welfare State A Model For Transition?

Despite the fact that today only very few still regard the old socialist ideas with nationalization ofenterprises and central planning as a way to promote more efficient production, greater equality, or a more just distribution of income some of its conceptions nevertheless seem to have penetrated into the minds of a majority of socialist scientists. There still is this deeply rooted constructivist belief that every social and economic problem can be solved by social engineering, social planning, or by just throwing government money at it. Although not openly advocating economic planning, it is widely believed that social legislation or social politics sold in a more subtle way can be used to achieve an already predetermined end: social justice. Most of these attempts, however seem to be little more than a repetition of the old planning idea dressed in emotionally more appealing clothes.Bien que peu nombreux soient ceux qui considèrent encore aujourdhui les anciennes idées socialistes de nationalisation des entreprises et de planification centrale comme la voie menant à une production plus efficace, à plus dégalité et à une distribution plus juste des revenus, certaines de ces conceptions semblent cependant sêtre ancrées dans lesprit de la majorité des scientifiques socialistes. Le sentiment constructiviste suivant lequel tout problème social ou économique peut être résolu à travers lingénierie social, la planification centrale ou des dépenses supplémentaires de lEtat demeure profondément enraciné. Même si leur obédience aux idées centralisatrices nest pas ouvertement évoquée, la croyance est largement partagée quune législation sociale ou des politiques sociales mises en avant de manière plus subtile peuvent être employées pour atteindre un objectif déterminé à lavance : la justice sociale. Cependant, la plupart de ces politiques ne semblent être rien dautre que la réitération de lancienne illusion de planification centrale simplement revêtue dune dimension émotionnelle plus attrayante.

How Much State University Education in a Free Society? Some Remarks on the ?Althoff System?

Examines the social aspects of the compatibility of public academic education with the principles of a free society. Discusses state education with regard to “equal treatment for all” and the question of who will benefit from such treatment.Education, Equal opportunities, Universities