The Austrian school of economics is generally considered an antiwar school. The Austrian view is not derived from a religious or class-based ideological view. Instead, it derives entirely from the school's fundamental economic tenets. This article applies the economic views of the Austrian school's founders - Menger, Bohm-Bawerk, and Wieser - to the issue of war.
The Austrian school of economics is generally considered an antiwar school. The Austrian view is not derived from a religious or class-based ideological viewpoints, but instead derives entirely from the school's fundamental economic tenets. This article examines the writings of Ludwig von Mises and Friedrich von Hayek as they relate to war and the causes of war. (A predecessor article on Carl Menger, Eugen von Böhm-Bawerk, and Friedrich von Wieser, the founders of the Austrian School, appeared in vol. 5, no. 1 of this journal.)
PurposeThe purpose of this paper is to analyze the havoc created by Hurricane Katrina from the viewpoint of Austrian Economics. The aim is to look specifically at the malinvested capital that came about because of the construction of the complex levee system around New Orleans.Design/methodology/approachThe paper applies Austrian Economics, and especially the economic analysis of Carl Menger.FindingsIt is found that there indeed was much malinvested capital in New Orleans, and the situation was made worse because the levee system upon which everything else depended was unfit to withstand a storm the size of Katrina.Research limitations/implicationsResearch implications include the examination of other situations in which large amounts of government capital help to leverage other investments, but the original government capital itself proves to be unsustainable.Practical implicationsThe practical implications include a warning to people who we believe should base large amounts of private investment upon government projects that have a political basis, but either cannot withstand natural forces or simply are untenable.Originality/valueThe new aspect of this paper is the larger‐scale application of Austrian business cycle theory to a specific instance, as opposed to applying it to the economy at large.
PurposeThe purpose of this paper is to analyze the rebuilding of the Gulf coast post‐Hurricane Katrina.Design/methodology/approachThe paper posits that though Frédéric Bastiat passed away in 1850, the beauty of his sound economic reasoning is that it does not change over time and that his essay, “That which is seen, and that which is not seen,” is especially insightful in analyzing the rebuilding of the Gulf coast. The paper first expounds his lesson and then applies it to the conflict between the private and public sectors in order to attack the fallacies of government spending and vindicate the free‐market approach to reconstruction.FindingsThe paper finds that the areas where the government has coercively arrogated to itself a monopoly – police and fire departments to protect lives and property, courts to punish rights violators, water and sewer systems to restore potable water to homes – are the areas where recovery lags the most. Since government has diverted its attention from these services where competition is not allowed, and has instead become involved in the provision of goods and services otherwise provided on the free market – houses, food, clothing – its efforts have not only not assisted the recovery, they have actually stood in its way.Originality/valueThe paper provides a valuable overview of lessons that can be learnt from the aftermath of the Katrina disaster.
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