Wednesday, June 2, 2010

What's Wrong with Austrian Economics?

Before your eyes roll to the back of your head to peruse its own lids, just stop and think for a moment. Settle yourself. Take a deep breath, and consider this. Does Jesus really care about everything that we do? I mean everything?!

If you're like me, then you're probably going to have to answer in the affirmative here. Jesus does care, and since economics is really just a study about human action in the realm of capital, money, investing, purchasing, etc., then Jesus cares about economics.

With that out of the way, then, if you are into Social Justice, what economic system we "buy into" really matters. Many Catholics, particularly of the "conservative" bent, have turned to Austrian economics as the Catholic economics because it emphasises, rightly, the importance of subsidiarity when so many other economic systems function either in the realm of big government interventions that are justified by socialist principles or into systems that are so far removed from the real and practical concerns of the individual as to make them useless guides to Christian behavior. These economic systems tend to make it difficult for a Catholic to balance solidarity with subsidiarity, those two great sisters of Social Doctrine.

The most popular advocate for Austrian economics is Thomas Woods, Jr. a Senior Fellow at the von Mises Institute and a devout Catholic. He has written several books on economics and the most popular of those have been The Church and the Market and Meltdown. Woods is an astute thinker most of the time. He was astute enough, at least, to abandon his radical traditionalist buddies. Woods co-wrote The Great Facade with Christopher Ferrara, radical traditionalist par excellence, which argues that the Second Vatican Council introduced a fake Catholic Church to the world, one which must simply be abandoned wholesale. However, Woods' passion for Austrian economics is likewise problematic. It is problematic not so much for what it affirms, but for what it denies.

In Church and the Market Woods' main thesis is that Austrian economics demonstrates beyond a shadow of doubt, that is it demonstrates to any right-thinking mature person of which camp he is of course a member that economics is a hard science which provides us with necessary and irrefutable truths about human activity. But that's not all. These necessary truths, these a priori facts, are so sound that should Catholic Social Doctrine advocate behavior that they irrefutably discovered to be harmful to persons, then Catholic Social Doctrine should be ignored. What, after all, does religion have to tell us about 2+2=4? Nothing.

This is dangerous stuff which Woods plays with, and unfortunately, after having read the book, I was left with more questions that before and a great deal of concern for Thomas Woods, Jr. These questions, though, lead me to investigate the roots of Austrian economics and praxeology, an invented science by Ludwig von Mises, who is considered one of the great founders of Austrian economics. Praxeology is the study of human action. At its root, then, Austrian economics is built upon a philosophical system in praxeology that needs to be investigated. In the following posts, I will try to do just this.

The most important point, however, is that I do this not because it's fun, or because I enjoy economic theory all that much. I do this because Jesus cares about what we do, everything! So I need to find out if Woods is right about Austrian economics and about praxeology. The goal, however, is always Jesus.

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