Austrian school

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Austrian School

A school of economics that argues that human behavior is so complex it is extremely difficult or impossible to model. For that reason, it promotes deductive, as opposed to inductive, reasoning in its analysis. It is an extremely individualist school, advocating laissez faire policies and opposing all or nearly all government interventions in the economy. The Austrian School, and particularly its rejection of modeling, has faced criticism from both right- and left-leaning economists. It is so named because most of its founders were born in or around Austria. See also: Ludwig von Mises.
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Austrian school

a group of late 19th-century economists at the University of Vienna who established and developed a particular line of theoretical reasoning. The tradition originated with Professor Carl Menger who argued against the classical theories of value, which emphasized PRODUCTION and SUPPLY. Instead, he initiated the ‘subjectivist revolution’, reasoning that the value of a good was not derived from its cost but from the pleasure, or UTILITY, that the CONSUMER can derive from it. This type of reasoning led to the MARGINAL UTILITY theory of value whereby successive increments of a commodity yield DIMINISHING MARGINAL UTILITY.

Friedrich von Wieser developed the tradition further, being credited with introducing the economic concept of OPPORTUNITY COST. Eugen von Böhm-Bawerk helped to develop the theory of INTEREST and CAPITAL, arguing that the price paid for the use of capital is dependent upon consumers’ demand for present CONSUMPTION relative to future consumption. Ludwig von Mises and Friedrich von Hayek subsequently continued the tradition established by Carl Menger et al. See also CLASSICAL ECONOMICS.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
The purpose is not only to simply deepen our conceptual knowledge, but to, and this is particularly relevant to Austrianism, identify and examine the potential of going beyond the mere and rigid dichotomy of risk vs.
Lavoie's hermeneutical Austrianism represents an unfortunately forgotten, yet important development that is sorely needed in contemporary debates in economic methodology.
Embrace Austrianism, the only principled opposition to Keynesianism in all of its varieties.
Austrian praxeologists do criticize each other's work, but only within the general framework of praxeological Austrianism. If they question the general framework of praxeological Austrianism, they are to that extent not Austrian economists.
Although neoclassicism, like Austrianism, adheres to an ordinal (and subjectivist) theory of value, there is a very significant difference.
The wing of Austrianism associated more closely with the ideas of Murray Rothbard and with the Ludwig von Mises Institute clearly elevates Mises (and Rothbard) above the squishy Hayek.
approaches that might be classified as Post Keynesian, Austrianism, Institutionalism in the UK anyway, came together in one forum ...' (Lawson 2000).
Such congeniality of view may be surprising, given that Marxism and Austrianism (my own starting point) are widely considered to lie at opposite poles of economic thought.
Therefore, his musical nationalism is, it seems to this writer, parallel to the "Austrianism" of Johannes Brahms and Johann Strauss Jr.
In Keynes's philosophy, an individual will voluntarily lay down his life for the nation but in Austrianism the individual does it because s/he is compelled to do so by legal or customary rules outside an otherwise opportunistic preference set.
In short, if one does not recognize the role of the Austrian paradigm within the text itself or the relevance of the text to the Austrian tradition, one might consider reassessing what exactly are her understandings regarding the essential facets of Austrianism. As Mises suggested in Theory and History, the inherent purpose of theory is to do history, to explain the complex social world around us.