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Austrian and Objectivist Economics

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Many schools attempt, through various rationales, to defend the free market principles. As someone who is not an Objectivist (instead a classical liberal/libertarian), but someone who gains his understanding of Rand's philosophy from reading Atlas Shrugged, it is manifestly obvious that Rand opposed collectivism. What's more, were I to read Rand or her followers' books, I'm sure I would find spot-on criticisms of collectivism, something that free market advocates all despise. Putting aside Rand's dislike of religion and belief that many of the defenders of Capitalism are irrational, I'm interested in understanding the economic differences--if any exist--between the Austrian School and the Objectivist School. As a note, I know next to nothing about Objectivist philosophy but a decent amount of Austrian economics. Now, Ludwig von Mises demolished Marx's labor theory of value. Both he and criticized FA Hayek criticized the German Historical School (the primary rival of the Austrian School in the late 19th and early 20th centuries.) They also went the Insitutionalism School, the Keynsean School, and to a lesser extent, the Chicago School and monetarism and supply-siders such as Milton Friedman. But never have i discovered any criticisms of Rand's works. Nor have I found any articles in which Rand slammed Austrian economics. Is this because Austrian economics and Objectivist economics are the same? Thanks.

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Since Grames beat me to the post, I'm revising this to explain why there is no such thing as “Objectivist economics.” If we think of "Objectivism" meaning simply the philosophic thought of Rand, since Rand didn't ever venture into the science of economics, she has no economic theories, and there isn't an “Objectivist school” of economics. One of the points Rand was ready to make in regards to Objectivism, and a quite good point, is to draw distinct limits between philosophy and science. For example, her metaphysics are quite sparse compared to many other philosophers, because she does not quite frankly care about certain things. It makes no difference for an objective (i.e. upholding the “primacy of existence” principle) philosophy whether the laws of physics turn out to be XYZ, or ABC. They are whatever they are, and whatever they are has no consequences for an objective philosophy except insofar as it may inform the philosopher how the nature of reality and man work.

So what does this mean about comparisons between Rand's thought and the Austrian school? It means they are not necessarily the same, nor necessarily different, compatible or incompatible, you can only compare them on an individual basis. The terms "Objectivist" and "Austrian" only denominate what kind of views are held by the person in these two different realms. There is only philosophy and economics, and different schools of thought on each. Different Austrians and Objectivists can hold different theories and conclusions about philosophy and economics. Objectivists can be “Austrian economists” or not. Austrian economists can be Objectivists or not. There is only the laws of economics and it is up to the individual economist to discover them.

The same thing can be said about philosophy. For example, Mises held that an objective ethics is impossible and was a utilitarian. Rothbard, on the other hand, held that an objective ethics is possible and necessary, but did not agree with Rand's egoism exactly. So this is a similar pattern. Generally, Murray Rothbard is most compatible with Rand on the basic philosophical foundations (objective metaphysics, “empirical” epistemology, rational ethics), but they differ as regards their content.

There's a good article written by Roderick Long about some of the similarities and differences between Rand and Mises: http://praxeology.net/praxwho-x.pdf

Edited by 2046
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There is no such thing as Objectivist economics. Economics is not a part of philosophy. What criticisms there are by Objectivists about Austrian economics are about epistemological and ethical premises.

There is no Objectivist economics? Very well, I don't have enough knowledge to dispute that. It makes sense. Then, given that, what were criticisms of Objectivists regarding the epistemological and ethical premises of the Austrian School? Also, given that concerns were raised about Austrians, which school of free market capitalism aligns most with Objectivism?

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There is no Objectivist economics? Very well, I don't have enough knowledge to dispute that. It makes sense. Then, given that, what were criticisms of Objectivists regarding the epistemological and ethical premises of the Austrian School? Also, given that concerns were raised about Austrians, which school of free market capitalism aligns most with Objectivism?

2046, your post was very helpful as opposed to Grames.His post was of limited help in so far as he made a distinction between economics and philosophy, but your post that down these complex elements into a coherent group of sentences. I realize questions I ask from time to time are obscure questions, much like my somewhat inane "when did Capitalism begin," yet there you replied to me as well, and I thank you. I ask the questions I ask, not to waste anyone's time, but because I'm interested in the discussion for the discussions' sake. of course, talking about the dangers of collectivism and how we might beat back are more practically constructive. But I have a knack for seeking out the somewhat obscure things. I've always been fascinated by slight economic differences between, say, Austrian and Chicago economics, and numerous others, and how these differ a little, yet have in common an acknowledgement of the importance of fighting collectivism.

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Also, given that concerns were raised about Austrians, which school of free market capitalism aligns most with Objectivism?
You can ask yourself the following: what would it mean for economics to align with Objectivism? "Standing on one foot", it would be a school that agrees that individuals are not just capable of rationality, but that it is crucial to human survival; it would be a school that agreed that it was practical for every man to exist for his own sake; it would be a school that held that values are objective -- not intrinsic nor subjective; it would be a school that was compatible with a political system based where a government existed to protect individual rights and little else.

Various schools from the Physiocrats, through Adam Smith, through the neo-Classical economists and the monetarists and the Austrians, have championed aspects of these ideas. Yet, each also either has significant differences with other aspects.

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I don't know a whole lot about the Austrians, but from what little I know of them, I like them. They argue for the free market, and if I'm not mistaken, their reasoning for this is that the free market works the best. In contrast, Objectivism promotes the free market for moral reasons. But Objectivism regards the moral as the practical. Objectivism's moral recommendations are there because they work (for the individual). Objectivism promotes Capitalism as righteous because it is the social system that's best for the individual. Objectivism argues that it is both practical and moral, but primarily argues that it is the morally best system.

Like I said, I don't know a whole lot about the Austrians. But if I'm not mistaken, there are areas that Objectivism contradicts the Austrians. In ethical and epistemological premises like the above posters have argued. But one difference I've noticed between Objectivism and at least some Austrians is intellectual property. Objectivism promotes intellectual property and argues that, in essence, all property is intellectual property. Whereas some Austrians argue that intellectual property violates property rights. That's because the Austrian(s) in question don't grasp that the human mind is responsible for the identification and creation of all values, and that intellectual property is therefore one of the most important property rights to protect. If I'm not mistaken, some Austrians might be anarchists, but I am probably mistaken on that one. Hopefully the Austrians recognize that the government needs to be there to protect people from criminals.

Like the above posters have noted, Objectivism doesn't have any economics to it. Economics is more of a specialized science than philosophy. But Objectivism has political recommendations that amount to Laissez-Faire Capitalism being the ideal social system for man. One of the reasons Objectivists are generally careful with people promoting freedom is because they'll just be making a political recommendation without any philosophical base for it. This problem can be observed in the fact that you can have such seemingly small, yet very important differences even among Austrians, such as whether intellectual property is good or not. Consistent Objectivists will generally agree across the board on many issues like that, because they're the logical conclusions of shared premises. Whereas libertarians and even Austrians can't be guaranteed to share the same philosophical premises and can therefore come to contradictory conclusions from each other.

Edited by Amaroq
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  • 3 weeks later...

It seems to me that Austrian thinkers invoke important parts of Objectivist philosophy, although they don't always explicitly identify them.

For example, Austrians generally observe scrupulous respect for the Law of Identity, rarely or never conflating concepts, but never actually mention the law itself.

There is also a lot of overlap between the Austrians' "praxeology" and the Objectivist epistemology, both of which hold that reason is man's proper guide to action.

Edited by iflyboats
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