Sunday, 27 October 2013

To Be an Austrian: A Primer

By Sean Corrigan (November 2004)

To be an Austrian has become oddly fashionable in recent days, judging from the number of news reports thus describing commentators on economic and financial affairs. Because there is no trademark on the name, and the Mises Institute issues no Seal of Austrian Approval, our only real hope is that these good people take time off from talking to the press and spend  more time reading.

Man, Economy, and State by Rothbard, and Human Action by Mises, are both online, but the opportunity costs of such deep study are high. The same is true of the expansive Austrian Study Guide. There is a quiz to help, and 20,000 have taken it—all to the good. But even the quiz and audio prove too much in our times of instant everything.

So in the interests of broad public understanding, I present an admittedly imperfect Austrian Economics in one article: Philosophically, the idea is that Man is a rational actor insofar as he tries to increase his well-being, or to decrease his "unease," through purposive Action.

However, each man's individual motivation in Acting—his pleasure/pain scale, if you will—is wholly different to that of his neighbor’s and it is an ordinal one—with little scope for quantitative measurement and certainly none for aggregation. 

In this focus on the subjective elements of a man’s choice, all value - and, hence, all utility—originates. These are constructs of the human mind and explicitly not some derived property of the physical world. 
Value is thus a specific, not a generic, quality and varies according to time, place, and circumstance—e.g., a thirsty man in the desert is glad to exchange gold for water, while a tourist may be happy to be seen paying 10 francs for a cup of coffee in the Hotel Baur au Lac.

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