Austrian School/Application of Austrian School
Forethought
[edit | edit source]The Austrian School insists on asking the question "if this policy is implemented, will it have the effects you intend?" instead of "should this policy be implemented?" As such, the School is based on principles and practical application.
Austrian School solutions
[edit | edit source]Austrian Economics emphasizes free market capitalism, as both morally correct and practically applicable. All students of the Austrian School agree that the Market shouldn't be forcibly regulated by any body or entity, such as the State or a government. They say in a true free market environment the Market is self-regulating. For example, let's say we have Bob and Fred. Both sell children's toys, however Bob's products are tainted with lead paint, while Fred's are not. An independent review board doing a study on the most popular toys discovers the lead paint in Bob's product and reports this to consumers. Obviously parents don't want a child playing with Bob's toys, so either he has to redesign his product to remove the lead or he'll go out of business. From this point forward it would mostly likely end a business if a company sells toys tainted with lead. Thus, the Market has regulated that lead children's toys are unwanted.
While the Austrian School agrees on the free market, the role of government varies. This lesson will present the later views of the Austrian School. Many earlier students of the School spoke of an extremely limited government, however the later students, such as Murray Rothbard, promoted anarcho capitalism.