The Austrian School of Economics

by Veronique de Rugy

There are days where I wonder whether things will ever get better, and then there are days when I know things will. Saturday was the latter kind of day, because I read this article in the Wall Street Journal about the Austrian school revival being led by George Mason University’s Peter Boettke.

Full disclosure: I am a big fan of Peter Boettke; he was on my dissertation committee and taught me most of what I know about Austrian economics. More importantly, Boettke is the one who, ever since I left the econ department at George Mason to pursue a career in policy (which he wasn’t happy about, as he thinks that academia is the place to fight our fight), has tirelessly reminded me that ideas, not politics, are what matter and what I should focus on. Ideas are what we are fighting for, no matter what’s happening in Washington, no matter what the America people think at any given moment. It is because of our long conversations during the financial crisis, when I was depressed about my total inability to change things, especially in light of the resurgence of Keynesian economics, that I am still out here today fighting for free markets, for the power of the price system, and against centralization .

And that’s why the Journal article made me so happy. We all remember how Glenn Beck, a few months ago, managed to put Friedrich Hayek’s Road to Serfdom on the Amazon bestseller list. That was great. However, no matter how powerful Glenn Beck is and how capable he is at popularizing some of Hayek’s ideas, this moment can’t be sustained without recognizing where the ideas come from. This movement is based on real ideas that are studied in academia by serious economists — even when no one believes in them.

From the article:

Mr. Hayek’s 1944 classic, “The Road to Serfdom,” became the top-selling book in June on Amazon.com. The Austrian think tank Foundation for Economic Education had to turn students away this summer from its overflowing seminars.

Of course, economic theory ebbs and flows. The Austrian school surged along with inflation and unemployment in the 1970s. By the 1980s, free-market ideas ushered in the Reagan Revolution. But the success faded as inflation was successfully controlled by central bankers and government spending actually rose during the Reagan years. Besides, no one figure emerged as the leader of a fractious group of economists averse to central planning.

Mr. Boettke has come as close as anyone in recent years. In the last decade at George Mason, he has helped recruit the Austrian school’s leading scholars and drawn students from around the world. Roughly 75% of his students have gone on to teach economics at the college or graduate level.

Mr. Boettke “has done more for Austrian economics, I’d say, than any individual in the last decade,” says Bruce Caldwell, an editor of Mr. Hayek’s collected works.

The whole piece (with pictures) is here.