Home > Main > Not much common ground between Austrians and MMT, because one side is insane

Not much common ground between Austrians and MMT, because one side is insane

May 3, 2011

A few posts recently pointed out that Austrians and MMTers have a decent amount in common.  Edward Harrison and the Rouge Economist both point out that there are many similarities between the two groups.  These two people are hugely smart, so reading their articles is worthwhile.  Also, Tom Hickey has a great comments section going on at Mike Norman’s place on the same topic.

It is true the MMT crowd can think like the Austrians at times. But before we get too far in thinking about the similarities, we should note the Austrians hate government.  In fact, you could say the entire reason the Austrian movement exists today is to oppose government because it distorts markets.   You can see it on the front page at Mieses.org, with posts like “To tax is to destroy.” You can see it in classic interviews with Hayek.  Austrians loudly and proudly proclaim their dislike of government.

These are not practical men, and yes, these Austrians are nearly all men.  These are radicals, wild eyed idealists as dangerous as any state crazy Stalinist.  When someone decides to ignore the fact that government basically equals civilization, but still claim that they follow reason as their guide, they are insane.  No amount of logic can cover up the elementary observation that their hated of government must mean they hate civilization.

So there can never be large amounts of common ground between MMT and Austrians.  The Austrians do not recognize the legitimacy of government.  The basics of the MMT framework are descriptions of how governments must actually issue and use currency.

Any similarities and common ground between MMT and Austrians must eventually be torched by these raving fanatics; who believe in fairy tales about a magical world where human civilization can peacefully and efficiently exist without any government; which, as far as I can tell, has not happened in recorded history, and frightfully few times in fiction.*

*Thanks to John Donne and David Hume for the inspiration in sentence structure.

Categories: Main
  1. carnahan
    May 4, 2011 at 10:18 am

    Although there is a smattering of truth here, it is a gross exaggeration to say that Austrians “do not recognize the legitimacy of government” in the sense you’re using it to state they feel there should be no government whatsoever. Do I see a straw man out there in the field?

    • TC
      May 4, 2011 at 10:48 am

      It’s only a partial strawman. Yes, I’ve exaggerated a bit. But lets face it, you do not have to look far to find Austrians who think there should not be a government. For example, Bob Murphy. And Bob Murph is one of the big shots.

      He hates that governments are special: http://mises.org/daily/2020

      Here is a whole class he teaches on a “completely free society” http://mises.org/daily/4616/Explore-the-Theory-of-the-Completely-Free-Society

      Here is a quote:

      “n the first two weeks, we will sketch an outline of how a truly free society — with no agency holding the power to tax or monopolize any type of service — could codify and defend property rights, and how it could defend itself from foreign conquest. (Click on the nearby image for the course syllabus, and note you may need to click a second time on the image for your browser to enlarge it.)

      Naturally, we can’t say exactly what a free society would look like — libertarians don’t have the hubris of central planners. Even so, we can explain how market forces would lead to a much more peaceful and prosperous society than one plagued by a parasitical and violent State.”

      And here is good old Peter Thiel claiming democracy is incompatible with freedom.


      The libertarian/Austrian divide is not deep.

      I’ll admit to a bit of over the top exaggeration of their position. But just looking at what they say, these people do not recognize the legitimacy of government. It is hard to have a rational discussion with people like this.

      I do recognize the very important work that the RE and Ed Harrison do in their posts. They are smart people, and there is something to Austrian economic thought. The economic caluclation is very hard, and the focus on self interest is semi-justifiable. The theories about money are 1/2 genius, 1/2 madness.

      But never forget they hate government and will work against it at all times.

  2. May 5, 2011 at 7:32 pm

    I’ve been to Eastern Austria many times. Perhaps in a financial sense the Austrians might dislike government, but never in all of my 2 passports worthh of global travel have I seen government work better than in the Austrian regulation of heavy industry and municipal services. Typically one can find a steel mill by following the plume to the smelter. It’s easy to spot in the country side, or city, by the obvious yellow tan cloud. In Austria (at least in Kapfengberg) there’s giant blast doors that enclose the mill – picture the old hotel ice machines where there’s a large door to get to the ice. That nice mural next to the river, with the covered ponds, that’s a sewage treatment plant? There’s no stench. The smooth roads without pot holes in a mountainous country that sees significant snow fall? Yes, the Austrians DO government VERY WELL.

    • TC
      May 5, 2011 at 9:00 pm

      It is pretty hilarious. Their economists hate government, but the Austrians are world class at executing government.

      • Peter D
        May 5, 2011 at 10:53 pm

        Are there many Austrian School economists in Austria nowadays? I thought they exported all of them to the US. For which I guess we need to thank Hitler again?

        • TC
          May 5, 2011 at 11:08 pm

          lol exactly.

      • Whatsinaname
        May 6, 2011 at 8:26 am

        As far as I know, the so-called Austrian economists have had absolutely zero impact on economic policy in the post-war period. In fact, that nation’s policies have been described as Post Keynesian (although the PDF only half works when I try to view it in Acrobat):


        The University of Vienna was the early 20th century hotbed of the Austrian school, but looking at the research output of its current professors reveals an entirely conventional economics department.

        Conclusion: George Mason is more Austrian than anyone in Austria.

  3. Jo
    May 9, 2011 at 3:41 pm

    Hey, MMTers, buy a clue.

    • TC
      May 9, 2011 at 6:14 pm

      We can’t afford it – we’re all on welfare.

  4. Matthew Swaringen
    May 9, 2011 at 4:59 pm

    War is peace
    Freedom is slavery
    Ignorance is strength

    And apparently we now need to add to it the statements of our wonderful MMT friends:
    The state is civilization

  5. William Merrick
    May 11, 2011 at 2:32 am

    No one has said anyone useful in this comments section.

    Matthew, you’re not an exception.

    Neither am I.

    Yay. Useless 1010101001010101101100110010101011001010100101010101010101.

  6. September 22, 2011 at 2:07 am

    There was an interesting review in the Economist http://www.economist.com/node/2647328 on the psychopathic corporation where they suggest that plenty of states have been psychopathic, although overlooking that their examples were dictatorships while suggesting even modern democratic states can be psychopathic.

    The point for me is that state and corporate power need to be restrained by each other and voter, union, consumer power blocks…a kind of corporatism updated for the digital consumer age.

  1. May 9, 2011 at 4:25 pm
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