The Austrian school of economics, or Austrian Economics as it is widely known, in my view begins with the premise that each human being is an individual. As simple of concept as this seems, it is all but forgotten in the other schools of economic thought, and cannot be emphasized enough. As Peter Boettke wrote:

Man, with his purposes and plans, is the beginning of all economic analysis. Only individuals make choices; collective entities do not choose. The primary task of economic analysis is to make economic phenomena intelligible by basing it on individual purposes and plans…

To me the works of the Austrian economists have clearly shown that the spontaneous order that arises from a free market will always be a more efficient, expedient and ultimately fair way of dealing with the scarce nature of every aspect of our lives thank any other system. In fact, I’m convinced that this power of the market will ultimately dethrone the current state-sponsored system we’ve been told to accept as the natural order.

Effectively, the theories backing the Austrian school represent a form of anarchism — by rejecting the assumption that any sort of coercive government is “needed.” Indeed, thinkers like von Mises, then Rothbard and now Hoppe have progressively outlined how a civil, completely voluntary society can emerge in the absence or a coercive state. For my own part, I find it very easy to visualize how a company such as State Farm would adapt and pick up the slack if even the most basic “public services” of police and fire departments dried up tomorrow.

Perhaps the most succinct explanation for my take on Austrian Economic theory is a quote from Leonard Read’s wonderful classic essay — I, Pencil.

The lesson I have to teach is this: Leave all creative energies uninhibited. Merely organize society to act in harmony with this lesson. Let society’s legal apparatus remove all obstacles the best it can. Permit these creative know-hows freely to flow. Have faith that free men and women will respond to the Invisible Hand. This faith will be confirmed.

If you’d like to learn more about the subject, I’d immediately turn your attention to the Ludwig von Mises Institute or LewRockwell.com — as well as the materials I’ve compiled on my own Research List.