The Austrian School is a classic example of crank science
January 30, 2012 § Leave a comment
“Perhaps the first thing to stand out about Austrian economics is its relationship to mainstream economics. The two completely reject each other, and proudly so. (…)”
Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that “I tremble for the reputation of my subject” after reading the “exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods].” (1) Noted economist Mark Blaug has called Austrian methodologies “so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone.” (2)
Of course these words are by Mainstream Economists, so it’s hard to take them seriously.
But Samuelson does make a very valid point saying “exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods].”
I have also noted that Austrians like to mistake their definitions for the real world. They’ll try to involve you in deductive arguments, ignoring what is actually happening. This is what blinds in their defense of deflation, for instance. They have their logic explaining it should be beneficial, which makes them vehemently disagree that deflation is usually related to contraction.