What is Austrian Economics and why does it matter?
Having been a regular reader of, occasional writer for, and now sometimes-frenzied editor of Mises.org, I have a pretty good sense of the answer(s). But there's still something really spectacular about listening to Lew Rockwell read "Why Austrian Economics Matters" in his ongoing audiobook podcast series. (Yes, it's the voice, but it's also something more than the voice.)
The problem, though, with knowing deeper theory is that we become nitpickers. Some nits, in fact, won't leave us alone. These are distinctions that few will care about, but once I've spent any time struggling with the particulars of (for instance) property theory, they get a stranglehold on me.
Conventional economics teaches that if the benefits or costs of one person's economic decisions spill over onto others, an externality exists, and it ought to be corrected by the government through redistribution. But, broadly defined, externalities are inherent in every economic transaction because costs and benefits are ultimately subjective. I may be delighted to see factories belching smoke because I love industry. But that does not mean I should be taxed for the privilege of viewing them. Similarly, I may be offended that most men don't have beards, but that doesn't mean that the clean-shaven ought to be taxed to compensate me for my displeasure.
The Austrian School redefines externalities as occurring only with physical invasions of property, as when my neighbor dumps his trash in my yard."
And here I was, just recently stressing that Rothbardian property theory denies that property is physical. It therefore denies that invasions must be physical. If property is defined by use, then an invasion is whatever directly interferes with the use of your property.
If I homestead a patch of land to grow vegetables, and you come along and build a giant structure such that you block the sunlight from reaching my veggies, you have violated my property rights, despite the fact that everything you did was physically on your property and never physically violated mine.
In contrast, your radio transmissions do physically cross the spatial boundaries of my property without my permission, and yet, if they do no harm, there is no invasion.
I understand that Lew Rockwell was countering the absurd intersubjectivism of Coasean theory, and I'm not sure I have a suggested revision to the speech, given what a speech is and what it's supposed to achieve.
But I had a nit to pick, and what better place to pick it than on a private blog?
But no, wait. Read the fine print. It's not named after the American Tyrant.
June 17, 1933 - March 1, 2006
