Public Choice and Austrian Economics

Aletse López  | 05 de enero de 2018  | Vistas: 910

Is Interventionism the way to go? Dr. Richard Ebeling shares in this video why various forms of government control, intervention and regulation can be self-defeating or counter productive in terms of the general welfare of the society as a whole.

The Austrian Economics are concerned in analyzing the institutional requirements for a free and prosper society, which include: private property, voluntary exchange, and private ownership of the means of productions. All these let prices form and allows information to be spread through the market.

It is through prices that we successfully interact and communicate to each other. “

Ebeling explains that price controls and production regulations prevent prices to inform what goods are wanted and what is their value.  It does not allow the economic calculation to be made which leads to no rational decisions. Through prices actions are coordinated and division of labor is enabled.

Price controls and production regulations are throwing sand to the machine of the economy, it prevents the gears from properly moving, pieces to coordinate, and the system to do what it’s supposed to do.”

The Public Choice Theory defends that people follow their own interests, including the ones in the government.  Politicians want power and material benefits. Special interest groups pursue profit through political power. While an average citizen decides a rational ignorance in political issues, special interest groups seek for this knowledge in order to intervene in the market and get benefits.

You must let the market set the price.”

The Austrian Economics focus on the outcomes of the different types of institutions in a society. While the Public Choice Theory focus in the psychology behind the behaviors of the individuals in a society. Dr. Ebeling finally says that these two approaches defend a devastating argument against socialism and interventionism.