1. Chapter 13: Austrian Critiques
Questions for Review, Discussion
and Research 7

2. Capitalist System
Economic discussion making by individuals and households in theory roles as
Consumers
Owners of factors of production
Land
Labour (includes management)
Capital
Entrepreneurship

3. Capitalist System Cont’d
Private ownership of the means of production pp
One essential ingredient is liberty where people are free to buy and sell in all markets
The catalysts for the system have been:
capitalists – first 125 years
entrepreneurs – last 125 years

4. Capitalist System Cont’d
Liberal democracy permits economic change at the same time it preserves the underlying political and institutional structures
Markets coordinate economic exchanges within a given structure of institutions and property rights that have been modified

5. Austrian School
First four generations were adherents of mainstream economics but did not concern themselves with mathematical concepts such as the relative maxima and minima of functions
They always incorporated laws, institutions, markets processes and disequilibrium

6. Austrian approach only emerged as a separate heterodox doctrine in the second half of the 20th century
skip pp

7. Gestalt of Austrian School
Radical subjective
Methodological individualism
Purposeful human action
Causal – geneticism
emphasis on the “essence’ of an action or event rather than functional relationships

8. Gestalt of Austrian School Cont’d
Methodological essentialism
Claim to be scientific with modest claims for insights and understanding of human society
No concern for prediction