Saturday Book Review: Liberty Defined by Ron Paul: Austrian Economics

by wisdomhunt

If I can stomach it, I intend to review Liberty Defined chapter-by-chapter so that you never have to read it.

We are not cogs in a macroeconomic machine; people will always resist being treated as such. Economics should be as humanitarian as ethics or aesthetics or any other field of study.

Humanitarian?! The definition of  the adjective humanitarian is: having the interests of mankind at heart. Ron Paul wants us to believe that being humanitarian involves practicing his cold-hearted, everyone-fends-for-herself structure of society as espoused by Austrian economists:

The Austrian School champions private property, free markets, sound money, and the liberal society generally. It provides a way of looking at economics that takes into account the unpredictability of human action (absolutely no one can quantitatively know the future) and the huge role of human choice in the way economies work (in markets, consumers drive decisions over production), and explains how it is that order can emerge out of the seeming chaos of individual action.

I put in bold the key kook words that you should pay attention to in the passage above: free markets, liberal society and human choice. What Ron Paul is driving at here is that individuals know what is in their best interests. He is saying that a society of such free individuals will collectively make better decisions than the government can make for us.

This is a terribly dangerous idea, as proven by the fact that it has never truly been attempted in modern society.

I personally feel that I am capable of such freedom, but I do NOT feel that my neighbors are. Therefore, I prefer that the majority (especially when I am in the majority) gets to elect government officials that tell my neighbors how to behave. Majority rule is the American way.

And thus, at the heart of good economics in a truly humanitarian society is state-controlled and regulated mixed economy such as we enjoy today in America, not Austrian Economics as Ron Paul would have you believe.

Furthermore, Austrian economists believes society is too complex to make definitive predictions about the future through the use of equations and mathematics (or as Ron Paul says above: “absolutely no one can quantitatively know the future.”) Well what good is economics if you can’t influence policy by making predictions based on cherry-picked data?

Reporters use [Austrian economics] with some degree of understanding, and with an expectation that readers and viewers will understand it too. This is just thrilling to me…

Well Ron Paul better hope they never advance past “some degree of understanding.” If they do, they will also realize just what a kook he really is.

Previous chapters reviewed:
The Introduction