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posted on 06 December 2017

Documentary Of The Week: Liberty And Economics

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Ludwig von Mises is considered one of the icons of economic history. Although Carl Menger is recognized as the founder of the Austrian School of Economics, von Mises is also widely considered to be a co-progenitor, although he was younger by 31 years. He is considered the leading proponent of pure free market economic theories of the 20th century.


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The theory of free markets is criticized for bring too idealistic - failing to recognize that markets are not free because of asymmetry of information and power. But the logic of von Mises is powerful if one accepts that he expresses a view of what "ought to be" in contrast to a perspective influenced by acceptance of any of the limitations imposed by what "actually exists".

To understand the fundamental basis from which the value of von Mises work stems, I am reminded of the George Bernard Shaw paraphrase made by Robert Kennedy:

There are those that look at things the way they are, and ask why? I dream of things that never were, and ask why not?

One final comment - it is curious in the introduction of the following video that a basis of Austrian economics is attributed to the market providing the mechanism by which consumers determine which products are succesful and which fail. I say curious because many Austrian economics subscribe to what has become known as Say's Law:

Aggregate production necessarily creates an equal quantity of aggregate demand.

Say's Law arguments have been made that demand cannot be independently created before production exists. I would suggest that Say's Law is a tautology and makes no inference regarding whether "the chicken or the egg" comes first. Some demand is created with the development of new products; in other cases a demand exists for which a product emerges to satisfy.

Source: YouTube

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