I would like to take this possibility to present the idea that Austria has found the most ideal balance in its societal and economic policies. And for disclosure I am not from Austria by the way.
There is Spontaneous Order - whereby order is kept by the voluntary actions of individuals and not forced by government policy. This depends on general order being a normal part of the society and would not happen in most countries unfortunately.
There is an Emphasis on Individual Action - people know about their own situations much better than any centralized government can. Therefore limited government interference (unlike Germany, sorry) leads to a more efficient distribution of resources.
It is a Social Market Economy - Despite being market-driven there is a strong social safety net, leading to a stable, healthy, and skilled workforce.
There are additional factors such as Innovation, Quality of Live, Sustainability, Emphasis on Exports…
however the thesis here is that Austria has found the best balance and has harvested the most positive aspects of both capitalist and socialist philosophies.
@MFrank I grew up in the US, but I live in Europe as a personal preference. One would agree that perhaps Europe does find a better balance between commerce and quality of life. However the above article points out factors that are difficult to quantify. One of the most important is a tolerance for immigration that attracts terrific minds to the U.S. from all over the world. They arrive, feel welcome, and generally integrate and thrive.
As an immigrant in Europe, I can say first hand that the spirit of openness is not returned.
It’s possible that I’m misunderstanding your framework, but even though the Austrian School of Economics originated in Austria, it doesn’t necessarily reflect Austria’s current economic system. Many economists from the Austrian School, including luminaries like Mises and Hayek, who developed this model before WWII, were displaced by the war and continued their research in the U.S, taking their work with them.
I’ve always considered the Austrian School of Economics as a counter-theory to Modern Monetary Theory (MMT), with both serving as opposing economic philosophies, each having its own unique perspective on how to manage the economy. For instance:
Austrian School of Economics:
Advocates for minimal government intervention and emphasizes free markets.
Focuses on sound money and critiques inflationary monetary policy.
Generally opposes deficit spending, advocating for balanced budgets.
Prefers market solutions to economic problems and stresses individual choice and entrepreneurialism.
Expresses concern about inflation as a potential outcome of monetary expansion.
Modern Monetary Theory (MMT):
Accepts more government intervention, especially in fiscal policy, and recognizes government’s role in achieving full employment and stability.
Asserts that a sovereign government has more control over money supply due to its ability to create its currency.
Considers fiscal deficits to be useful, particularly during economic downturns, and does not equate government solvency with business solvency.
Often emphasizes the state’s role in steering the economy.
Perceives inflation as a limit on government spending but manageable through appropriate fiscal and monetary measures.
My viewpoint is that, considering the ongoing monetary expansion happening among central banks globally (including in Europe), all nations are effectively functioning within the MMT framework at this time. The government deficits and growth of the money supply, executed under this approach, have arrived at a stage where repayment is no longer viable, unveiling a troubling aspect of our current economic situation. This concern, I believe, has brought the Austrian School of Economics back into the public consciousness, as many, myself included, are reassessing the existing system.
Thank you @Jo-CKC-Studio for the excellent info. It is more in depth than what I understood. You raise an interesting concept that government debt around the world is so huge that it can never be realistically paid back.
Under Merkel’s strict austerity policies, it seemed like Germany was trying to brand the Euro as the currency of responsibility. And as a ratio to GDP Germany remains one of the lesser in debt countries. But the austerity seemed to have no real benefit. The lack of government spending slowed the German economy, and with it the entire Euro zone. At the same times countries like the US and Japan borrow and spend like there is no limit, and there does not seem to be an effect. They just keep going like that and no one seems to worry about it.
Indeed. It is likely very challenging to enforce austerity measures when other countries choose not to, and this might explain why central banks often appear to follow each other.
@CohenJoseph This video is the best example. Try to do business in Germany and you will get frustrated to the point of losing it. Business life in Germany is like spending 10 hours a day at the DMV.
