Have you ever considered taking a step back when trying to see the bigger picture? It can help, doesn’t it? The Austrian School of Economics offers a step back on how we shall understand economics, this step backward gives us not only a better understanding of the macroeconomic relations but also a much more insightful way of logical deduction on how society works. Many would now say “Wait, economics without maths? That’s no fact.” But this is where they are wrong, in the eyes of an Austrian economist. You see, Austrian economists don’t use complicated mathematical equations as their premise for an argument, they don’t seek out complicated models and statistical predictions, an Austrian only uses his head and what’s in there. And this, in my eyes, is already very powerful and a very compelling reason why you should know about it at least on a fundamental level.
Hang on, I have more reasons being listed below, make sure to stick around until the end, I am going to give you a link to a free college-level course about Austrian economics and more.
Keynesian School of Economics or the traditional School of Economics taught in schools all around the planet can only be fully understood with a bachelor’s degree, at least. The system is so complicated that it makes all sense to give your economic powers to someone with expertise in the financial/ banking field. Austrians despise this idea, they argue that economic relations are subjective, making the whole idea of giving away your economic capabilities idiotic. Every single one has an influence on the market and its relations. The market reflects a functioning society, so once the subject is removed from this equation, is the market still a reflection of what state the society’s health is? Austrian Economists argue with the strength of deductive reasoning and logic. Having said so, this approach is very market-wise laissez-faire and is standing for trade not influenced by government or other counterfeiters trying to manipulate the economic relations of societies. Governments have no reason to play with economic relations because fundamentally they can only make human action from an objective point of view possible. Realizing the objective view of governments is flawed and more often harmful than constructive is like thoughtfully embracing the Austrian School of economics. Realizing that economic laws can be played is dangerous, realizing that they shouldn’t be played with, is the way to go. How is this helpful?
Well, we as humans can take market action, remember? So, let’s take some action!
Having fiat currency is already a prerequisite for being part of the problem. Money is the link between subjectivities, it helps to market participants to agree upon the value and market action of buying and selling. Fiat currencies such as the dollar are not covered by real-term value, they are covered by debt. Look at the debt pile of major countries, all of them are in huge debts to finance their expenses. Look even closer and see how every government is spending more than they are making. But not least, we still have an inflation target of 2% per year. When a government produces more of a currency, it increases the supply of the dollar e.g., and by doing so, effectively decreases the remaining value of each dollar in the market. Once a government can produce more of your money, they control your money. Austrians say that this is the problem of all our economic problems. The exchange between humans using the dollar is an exchange based on trust. It should be of real value. Buying gold or Bitcoin can help you to avoid human influence on monetary exchange. A medium of exchange that offers limited supply is of most importance here. When humans influence monetary supply, they influence our economies.
By simply buying or selling a monetary asset with limited supply will have an influence on the price of the remaining units of this good making the market action as pure as it can get.
Having a bachelor’s in finance is nothing everyone can get, buying and selling is something that we do daily. Why should we be dictated on how we buy and sell on a day-to-day basis by someone that does not recognize subjective importance? Austrian economics is much more than a way of describing how humans interact and exchange, it is also critical thinking and logical deduction enabling everyone to equip themselves with thinking that is worth more than a college degree.
If you want to learn more about human action, marginal utility, and Austrian economics principles be sure to visit the links below.