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Why Study Economics? / Artikel mises.org

verfasst von - Elli -, 12.08.2003, 22:36

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Why Study Economics?
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by Stephen W.
Carson

[Posted August
12, 2003]

<img alt src="http://www.mises.org/images3/thefonz.gif" align="right" border="0" width="166" height="243">My
first exposure to formal economics came during my undergraduate degree at
Washington University. I was working on an engineering degree and they
required that we take some basic economics. So in 1990-1 I took Econ
103/104, introductory micro and macro economics. I found it boring, irrelevant
and uninspiring. If you had told me then that I'd be returning to the
university 10 years later to do graduate study in Political Economy I would
have told you that you were crazy.

A year or so
after graduating, I somehow found my way to a little book published in 1944
that had been touted as a conservative classic. It was The Road to Serfdom
by an economist originally from Austria named F.A. Hayek. It rocked my world.
I wasn't the first conservative to have been influenced by this scholar. In an
interview published in a 1981 book, Rowland Evans asked Ronald Reagan about
his influences:

<blockquote dir="ltr" style="MARGIN-RIGHT: 0px">
Evans:
"What philosophical thinkers or writers most influenced your conduct as
a leader, as a person?"

Reagan:
"Well ... I've always been a voracious reader—I have read
the economic views of von Mises and Hayek, and ... Bastiat .
.. I know about Cobden and Bright in England—and the elimination of
the corn laws and so forth, the great burst of economy or prosperity for
England that followed."<a id="_ftnref1" title href="http://www.mises.org/fullstory.asp?control=1294#_ftn1" name="_ftnref1">[1]</a>

[/i]
Similarly, John
Ranelagh writes of Margaret Thatcher's remark at a key Conservative Party
meeting in the late 1970's: "Another colleague had also prepared a
paper arguing that the 'middle way' was the pragmatic path for the
Conservative party to take, avoiding the extremes of Left and Right. Before he
had finished speaking, the new Party Leader reached into her briefcase and
took out a book. It was Friedrich von Hayek's The Constitution of Liberty.
Interrupting our pragmatist, she held the book up for all of us to see. 'This,'
she said sternly, 'is what we believe,' and banged Hayek down on the
table."<a id="_ftnref2" title href="http://www.mises.org/fullstory.asp?control=1294#_ftn2" name="_ftnref2">[2]</a>

I can't say what
Reagan and Thatcher found in Hayek, but in my reading of The Road to
Serfdom here are some of the startling arguments that caught my attention:

<ul type="disc">
<li class="MsoNormal">The rise of
the Nazis was not the result of some kind of right wing capitalist
extremism, but the result of an increasingly interventionist welfare state
that long predated their rise to power, (they were, after all, National Socialists).
Hayek wrote:"this process of the decline of the Rule of Law had been
going on steadily in Germany for some time before Hitler came into power
and... a policy well advanced toward totalitarian planning had
already done a great deal of the work which Hitler completed."<a id="_ftnref3" title href="http://www.mises.org/fullstory.asp?control=1294#_ftn3" name="_ftnref3">[3]</a>
<li class="MsoNormal">The rise to
power of tyrannical dictators like Stalin or Hitler was not an accident
but an almost inevitable consequence of a government that tried to plan
more and more of everyone's life. (See Hayek's fabulous chapter,"Why
the Worst Get On Top").
<li class="MsoNormal">There was a
doctrine, though in the 1940s it's followers were pitifully few, that
stood unalterably opposed to the various communist, socialist and
democratic socialist schemes of the 20th century and stood for"capitalism
and individualism, free trade and... love of peace"<a id="_ftnref4" title href="http://www.mises.org/fullstory.asp?control=1294#_ftn4" name="_ftnref4">[4]</a>.
<li class="MsoNormal">Economic
liberty cannot, in practice, be separated from all of our other liberties,
"Economic control is not merely control of a sector of human life
which can be separated from the rest; it is the control of the means for
all our ends."<a id="_ftnref5" title href="http://www.mises.org/fullstory.asp?control=1294#_ftn5" name="_ftnref5">[5]</a></li>
</ul>
I soon came to
realize that these brilliant insights into politics and political history were
not divorced from Hayek's economics but flowed from the insights he had as an
economist. Maybe economics wasn't so irrelevant after all!

So I started
reading more Hayek hoping to find the wellspring of his insight. I found many
wonderful things in his writing, but not that much more economic theory. An
exception to this was a couple of short books written in the early 1930s that
explained how the market crash of 1929 had not happened due to some kind of
inherent instability in the free market but due to sustained and deeply
misguided government intervention. Hayek, in fact, had predicted the crash due
to his understanding of what was going on.

But in digging
deeper I eventually came to realize that an even greater and more systematic
economic thinker had influenced Hayek. His name was Ludwig von Mises. Hayek
said that it was reading a paper by Mises in 1920(!) that convinced him that
the socialist experiment begun in Russia shortly before and indeed any future
socialist experiments were doomed to failure. Mises spelled out his argument
about the impossibility of socialism in readily accessible form in his 1922
book Socialism. The argument, in brief, is that if all the means of
production are socialized, which socialism required, then there would be no
prices to guide producers in deciding what to produce or how to produce. There
would be economic chaos, too much of this, not enough of that and no way to
sort it all out. But to truly understand just how deadly Mises's critique is,
a reading of his original argument is essential.

In some ways,
even more exciting though was to find out about his book Human Action.
Here Mises laid out a full and systematic explanation of the body of knowledge
that had allowed him to see the flaw in socialism, both he and Hayek to
understand the true nature of the cycle of booms and busts, the ability to see
the fallacies in Keynesian manipulation of the economy and so much else. With
these tools, I too could see the fallacies in the latest economic proposals
for myself. Hayek and Mises had introduced me to the power and the beauty of
economics.

Unfortunately, I
also found out that the kind of economics that Mises and Hayek practiced was
not the mainstream in academic economics. This was part of why I had found
Econ 103/104 so boring. In place of clear reasoning in English, mainstream
economics tended to use equations and calculus with dubious assumptions that
made what they were doing seem to not have much relevance to the real world.
Mainstream economists also seemed to spend much of their time trying to find
exceptions to the clear teachings of economics.

Where Mises
taught the virtues of a sound, stable money, mainstream economists were in
love with the Fed and it's constantly inflating paper money. Where Mises
taught that government intervention into the economy yielded chaos and a
reduction in everyone's welfare, mainstream economists spent their time
justifying government regulation and"trust-busting".

I began to
realize that, without planning it, I had become part of a"school"
of economic thinking. These"Austrian" economists (some of whom,
like the great Murray N. Rothbard, weren't even Austrian) sought to build on
hundreds, even thousands of years of good thinking on the nature of human
action and human cooperation in society. But the mainstream didn't like going
back further than Adam Smith (a rather shoddy economist). In fact, many of
them preferred to just play with the latest mathematical model rather than
engage in the careful reasoning that had always advanced economics.

The study of
Austrian economics has led me to insight after insight, has made me a more
principled conservative and a knowledgeable skeptic of the latest government
boondoggle. If you're interested, I recommend that you start with Gene
Callahan's brief Economics
for Real People: An Introduction to the Austrian School. If you want
to dig deeper, turn to Mises's Human
Action and Rothbard's Man,
Economy and State.


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Stephen Carson studies political economy at Washington
University in St. Louis. He is the official Mises.org
film reviewer. Stephen@RadicalLiberation.com.
This essay was prepared for WU
Witness 2003 Summer Freshmen issue, June 15th.

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[1]Rowland Evans & Robert
Novak, The Reagan Revolution, New York: E.P. Dutton, 1981, p. 229.
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<div id="ftn2">
<a id="_ftn2" title href="http://www.mises.org/fullstory.asp?control=1294#_ftnref2" name="_ftn2"></a>[2]Ranelagh,
Thatcher's People.

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<div id="ftn3">
<a id="_ftn3" title href="http://www.mises.org/fullstory.asp?control=1294#_ftnref3" name="_ftn3"></a>[3]Hayek,
The Road to Serfdom, p. 87.

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<div id="ftn4">
<a id="_ftn4" title href="http://www.mises.org/fullstory.asp?control=1294#_ftnref4" name="_ftn4"></a>[4]Hayek,
op. cit., p. 26.

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<div id="ftn5">
<a id="_ftn5" title href="http://www.mises.org/fullstory.asp?control=1294#_ftnref5" name="_ftn5"></a>[5]Hayek,
op. cit., p. 101.
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gesamter Thread:

Why Study Economics? / Artikel mises.org - - Elli -, 12.08.2003, 22:36