April Freeman Banner 2014


Austrian Economics: Ahead of its Time?


So I'm a closet futurist. Being one, I sometimes find myself checking out sites like Transhumanity.net. I recently came across an article there that does a pretty good job of unpacking the difference between 20th century science and 21st century science.

One of the things I noticed about 21st century science, as characterized, is that it suggests the Austrian School economists were way ahead of their time (that is, if you buy most of Rachel Armstrong's contrasts, which can be found in full here).

Here are some interesting bits of comparison, according to Armstrong:

Reality Framework

20th Century - Cartesian – deals with hierarchies, objects and dualities.

21st Century - Complexity – deals with connections, relationships and webs.


20th Century - Deterministic – the future can be predicted by extrapolation.

21st Century - Probabilistic – the future is contingent & always under construction.


20th Century - Practically falsifiable.

21st Century - Highly complex, contingent and probabilistic, so may be much theoretically falsifiable but much more difficult to practically falsify e.g. Higgs Boson.


20th Century - Exclusive. [Which I read as centralized, closed and managed by elites.]

21st Century - Inclusive.  [Which I read as diverse, experimental, cross-disciplinary and open.]

There are debates about whether or not the social sciences are really sciences at all. Austrian school a priorism can militate against the idea of economics as an empirical science per se. And Hayek, of course, warned us against scientism.

But if we think a little about the different approaches to science (or economics) above, I don't think we can help but conclude that Mises, Hayek and the gang were way ahead of the game. (Contrast variations on Keynesian economics and neoclassical economics, which seem hopelessly mired in 20th century thinking based on Armstrong's characterizations.)

Here's one I worry about, however:


20th Century - Retrospective – backwards-looking. Evidence acquired from events that have happened.

21st Century - Prospective – forwards-looking. Speculative propositions tested through models and experiment.

I have expressed in these august pages my concerns about speculative models and how they can be used. Of course, we should be more forward looking and imaginative with our theorizing. But we should always be suspicious of scientists and economists bearing models.

Max Borders Author Thumb



Max Borders is the editor of The Freeman and director of content for FEE. He is also cofounder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

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April 2014

Around the world, people are struggling to throw off authoritarianism, with deeply mixed results. From Egypt to Venezuela, determined people build networks to overthrow their regimes, but as yet we have not learned to live without Leviathan. In this issue, Michael Malice and Gary Dudney discuss their glimpses inside totalitarian regimes, while Sarah Skwire and Michael Nolan look at how totalitarian regimes grind down the individual--and how individuals fight back. Plus, Jeffrey Tucker identifies a strain in libertarianism that, left unchecked, could reduce even our vibrant movement to something that is analogous to the grim aesthetic of architectural brutalism. The struggle for our lives and freedom is a struggle for beauty; it begins inside each of us.
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