Check out the "Are You an Austrian?" quiz at the Mises Inst. I scored 94/100 (96, if I hadn't misread a question.)
Not surprisingly, the two questions I got "wrong" are the Mises Institutes' take on "market anarchism" and pacificism. Ex: "A market society needs no antitrust policy at all; indeed, the state is the very source of the remaining monopolies we see in education, law, courts, and other areas." and "Security [ie: the military], like any good desired by individuals in society, can and is provided by the market economy, which is to say, by individuals organizing themselves voluntarily within the matrix of private property and exchange." (Emphasis mine)
Last time I checked, Ludwig von Mises himself was no anarchist. Which brings up the question � is Austrian economics defined by what the actual Austrians thought, or what Rothbard�s anarchist followers believe?
Question: Austrians seem to support a subjective view of value, what are your thoughts on that?
Posted by: Mike at November 12, 2003 11:56 PMAllow me to quote Ludwig Von Mises in "Human Action:"
"The ultimate source of the determination of prices is the value judgments of the consumers. Prices are the outcome of the valuation preferring a to b. They are social phenomena as they are brought about by the interplay of the valuations of all individuals participating in the operation of the market. Each individual, in buying or not buying and in selling or not selling, contributes his share to the formation of the market prices. But the larger the market is, the smaller is the weight of each individual's contribution. Thus the structure of market prices appears to the individual as a datum to which he must adjust his own conduct."
In other words, prices are (the only) objective evaluation of individuals aggregate value judgments. Individually, they are subjective evaluations of what a good is worth, but together, they represent an objective evaluation of what the market demand for a good is.
I know Ayn Rand was critical of this Mises, but unfortunately, I have not read her (or any other Objectivist�s) critique of Austrian economics. Among other things, I would reply that individual value judgments are no more subjective than market prices: the value provided by a given good carries an objective benefit (or harm) to an individual�s life. For example, individuals may highly value crack cocaine, and the market will objectively reflect their high valuation of it, but cocaine nevertheless provides a negative to your life.
In short, I would say that Mises was right about market prices being objective evaluations of individual value judgments, but wrong in viewing those value judgments as axiomatic and subjective evaluations, independent from the benefit they provide to an individual�s life. But that�s just my opinion � I don�t know the Objectivist take, and I�ve read very little of �Human Action�.
Laurel, I bet you're going to read this sooner or later. Thoughts?
Posted by: David at November 13, 2003 12:21 AMIn capitalism, the unknown ideal, rand claimed there was subjective and objective value. as she laid it out, I don't think it would really conflict with the austrian view of things as the objective value would have no relevance to economics.
Posted by: Joe at November 13, 2003 01:39 AMIs Austrian economics defined by what the actual Austrians thought?
Austrian economic theory cannot really be separated from the context in which it was formulated.
It represents the end of a dying culture of liberalism and cosmopolitan laissez faire.
No, I'll correct that - it represents nostalgia for a culture of liberalism and cosmopolitan laissez faire.
To be able to see clearly along the "road to serfdom" you have to have a clear picture of what the Austrian experience of "serfdom" amounted to.
Having confused even myself with this obliquity I had better get back to...
Posted by: andrew at November 13, 2003 05:51 AMDid a search of the Ayn Rand Bookstore and found the following:
http://www.aynrandbookstore2.com/store/prodinfo.asp?number=DB01D&variation=&aitem=9&mitem=28
and
http://www.aynrandbookstore2.com/store/prodinfo.asp?number=DB55D&variation=&aitem=10&mitem=28
along with
http://www.aynrandbookstore2.com/store/prodinfo.asp?number=DS08D&variation=&aitem=12&mitem=28
Looks like interesting stuff...
Posted by: Mike at November 13, 2003 07:17 PM