In this Slate article, Matthew Yglesias attempts to explain “Austrian Economics” to those unfamiliar with that school of thought. The Austrian school of thought has gained wider acceptance in recent years, in large part because it is Austrian economists who predicted the financial collapse while “mainstream” economists where completely clueless. Indeed, Presidential candidate Ron Paul recently declared “We’re all Austrians now” following the Iowa caucus.
Unfortunately, Yglesias does readers a great disservice by completely mischaracterizing Austrian economics, as Sheldon Richman very capably points out in this article. Richman dissects several critical errors made by Yglesias, including his erroneous conflation of Austrian economics with classical liberal political thought as well as his laughable claim that the Great Depression of the 1930’s somehow discredited Austrian business cycle theory (even though the theory accurately explains exactly why the Great Depression happened – much like the theory predicted the current recession.)
For those interested in advancing free market principles, in large part influenced by the Austrian Economic school of thought, I would recommend learning more at the Civitas Institute’s Free Market Academy.