Academic journal article Libertarian Papers

Austrian Economics-The Ultimate Achievement of an Intellectual Journey

Academic journal article Libertarian Papers

Austrian Economics-The Ultimate Achievement of an Intellectual Journey

Article excerpt

I CANNOT BEGIN MY LECTURE without first expressing all my deep gratitude to the Mises Institute, which honors me so much by presenting me the Gary G. Schlarbaum Award. And my gratitude is also addressed to Mr. Gary Schlarbaum who has so generously founded this award.

Receiving this award is certainly one of the greatest achievements I could dream of in my professional life. I highly appreciate the recognition you thus offer to me and the support you give to me, all the more so since I live in a country, my country, France, which has been home to some of the most convincing classical liberal thinkers, but which is now, unhappily, one of the most socialist countries in the world.

And I feel honored because I have tremendous admiration for Lew Rockwell and the outstanding work he has done, as well as for the staff of the Mises Institute and all those who support it, whether academics or members of the business community who have understood that clear principles were essential for the peaceful development of societies and, also, for their day-today life.

The Mises Institute can be considered as the center of the world for those who cherish liberty. I can testify that, outside the US, the Mises Institute brings an unique intellectual support to all those who are longing for a rigorous analysis in the defense of a free world and who could feel so isolated--in the absence of such a support--that they might become doubtful about the relevance of their own thinking.

Unhappily, I had not heard of the Mises Institute until late in my academic career, and I am somewhat jealous of all these young scholars who have the unique chance of being educated through the seminars and publications of the Mises Institute. However, from another point of view, I was lucky not to have known the Mises Institute at the dawn of my professional life, since, in the French intellectual context, I would have never been appointed as a Professor . . . .

The title of my presentation refers to Austrian economics. In fact, I would like to deliver some thoughts along the lines of Austrian economics, mainly, but not exclusively, about the working of monetary systems, a topic which has been splendidly developed in the present conference.

But I would also like--as it has been suggested to me--to explain how I happened to discover Austrian economics and to draw some lessons from my intellectual trip in the world of individual liberty.

I. The Coherence of Austrian Economics

For many years I had been an Austrian economist without knowing it.

But when I did discover Austrian economics, I was amazed, because economics appeared as it ought to be: Not as a patchwork of partial theories, of different fields of thought without any link between them, but as a logical process of thought founded on realistic assumptions about individual action. Economics became coherent. As Mises rightly wrote "There are no such things as 'economics of labor' or 'economics of agriculture.' There is only one coherent body of economics."

He could have added: "There are no such things as microeconomics and macroeconomics." Thus, when I was asked to write a textbook in macroeconomics, I was first tempted to decline the offer. But, I finally accepted it, because it gave me an opportunity to express the view that it is impossible to understand so-called macroeconomic problems--such as inflation, unemployment, growth--without referring to individual behavior.

What is fascinating in economics--or, at least in Austrian economics--and which does not exist in other fields of knowledge, such as physics or biology, is the fact that all economics can be deduced from one single principle, the axiom of action or the principle of individual rationality. In physics there can be a change of paradigm, a complete intellectual revolution with a complete change in the basic assumptions. This cannot happen in economics: it is meaningless to try to develop an economic theory based on the assumption that man is not acting or that individuals are basically irrational! …

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