Once upon a time the word 'economy' was etymologically used as a term for household management. In time the word 'economy' grew in importance and made its way from just being a reference to household management to affairs of nation and even the entire globe. Global economy is commonly used term in our present day language which signifies the growth and importance of economics in understanding global events.
Economics is a Social Science which studies economic phenomenon. All economic phenomenon are subjected to human actions with respect to the general condition they live in. We all live within an economy and thus it is important for us to understand basic theories and laws of economics. What is economics and what it is not economics is vital for us to know.
The history of economic though spans several centuries right from Aristotle till date. It was not till, Adam Smith, the father of the classical school of economic thought and Karl Marx the founder of Marxist Economics started discussing economics that economics as a science started gaining popularity during the Industrial Revolution and post revolution period. These era's brought attention and interest of the masses to the importance of Economic Science. Adam Smith's was baffled by the diamond-water paradox. This paradox and the foundation of Adam Smiths work; the labor theory of value was rebutted and solved by the founder of Austrian School of Economic Thought; Carl Menger.
On the other hand Karl Marx and Adam Smith's views were considered polar opposite to each other. But Karl Marx himself had no more knowledge of economics than those provided by classical economists which is the the labor theory of value or that goods have inherit value in themselves determined by their utility they serve and the labor required to produce these goods. The marginalist got rid of this fallacious ideas including Carl Menger.
Socialism and Communism were the most popular ideas in those times and their influence on economic science and economic policies remain till present day.
Debates between the Communists and their opposition became quite common. Karl Marx's criticism begin from the Austrian School by Eugen von Böhm-Bawerk, a follower of Carl Menger. The Austrian criticism of Marx came when Marxism was popular and the socialist scholars had to accept the points raised by Bawerk . Communism as we know turned out to be catastrophe. Ludwig von Mises and F.A. Hayek later on proved that economic calculation in a socialist economy was not possible.
In the 20th century after the Great Depression of 1920 and the two world wars came the Keynesian revolution in economics which promised to make economic depressions and crisis history. Keynesianism Ludwig von Mises, F.A. Hayek and Murray Rothbard were prominent Austrians who are well known critiques of Keynes. The debates between Hayek and Keynes are key chapters in history of Economics. The failures and the problems with Keynesian Economics with business cycles and recessions are felt by most of us.
However the knowledge and understanding of economics is negligible among the masses. Many consider economics as a dismissal science. The school and college textbooks are full of theories of Adman Smith, Marx and Keynes whom the Austrian Economists have refuted time and over again. Yet presence of Austrians or Austrian Economics in the mainstream textbooks and books. Carl Menger is hardly gets a mention in school and college text books. Shouldn't this blackout be surprising shocking fact for all of us and we can simply wonder why?
Ludwig von Mises famously said:
Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of mans human existence.
There is nothing as such wrong with the science of economics nor that economics is complicated that the masses cannot grasp it. In fact for all that is wrong with economics is due political reasons and few other. Economics as a science couldn't eliminate certain critical errors, deviations and flaws made by some economic theorists who were propagandize for certain reasons. Austrian Economics and Austrian Economists were simply sidelined and ignored but seldom refuted, falsified and rebutted.
Austrian Economics is as simple and complicated as any science. There are textbooks of physics for which explain physics to the masses and there are books dealing with complex deeper aspects of physical sciences. There are no difference between economics and Austrian Economics except for the fact that Austrian Economics uses certain methodologies and approach towards analyzing economic phenomenon which distinctly differs from Classical, Marxist and Keynesians.
Austrian Economics is itself not free from errors or flaws. Not all Austrian Economist follow exactly the same 'methodology' nor is the case that they agree upon everything with each other. In fact every generation of Austrian Economists had certain agreements and disagreements with the former Austrians as well as within the generation. The Institute of Austrian Economics was thus formed to refine Austrian Economics and advance economics science by spreading it to the masses.
We welcome you to The Institute of Austrian Economics to learn economics that won't be taught to you anywhere not even in your schools and colleges.
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