r/austrian_economics

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has there been any case of unchecked capitalism, no rules or regulations around market size and behaviour, that has not converged into oligopoly? every neo-liberal says it will correct itself but i have never seen or heard of it?

Edit: Apparently there can't be an oligopoly without the government? If there are no governments why wouldn't cooperations collude and concentrate? This happened in feudal times with landowners

How do Austrian Economists deal with information frictions and asymmetric information?

The arguments that lemons lead to market collapse can be made without any mathematical prove and solely can be derived from logic in my opinion.

If and how did Austrians incorporate this in their theory?

Half the posts you see about people complaining on reddit about housing prices or the wealth gap increasing or the latest enshittification or whatever it may be.....it's all inflation and other Keynesian policy.

2%, 3%, 3.5%, etc compounding yearly for over a century. Worse if you're further from dollar creation like developing countries.

this is an actual question. mostly asking cuz yall like the stv

Reducing payment size below the interest rate will cause your loans to grow, even with regular payments.

I know that this is obvious to most, but I keep seeing posts on all corners of the internet saying stuff along the lines of "I have been paying $200 a month for 20 years and my loans are BIGGER now!" and then imply it's a crime that that's the case. "how can it be fair that I have paid 10k and made no progress?"

How does this blow peoples minds all over the internet???

Money is not free to loan out, the govt is paying for the interest by issuing bonds. Right now some dude is getting paid 5% to loan the government money for them to loan to you, a much riskier person than the USgovt.

The ONLY free lunch in student loans is PSLF, RAP and other forgiveness schemes. Otherwise, try to get off reduced payments as soon as you can and get out of this debt. It's gonna weigh your NW growth down hard until you dig out. Best of luck to you (us) all!

Hi all,

I have a distant memory of story told by, I think, Milton Friedman (though it may have been Thomas Sowell or someone else), but I can't seem to find the video clip, or even a text version of the story, anywhere.

Basically, the story goes something like this:

Milton (maybe Thomas or someone else) was writing a paper while in grad school. He came to a certain conclusion in the paper, finalized it, then sent it to his advisor.

A couple days later, he stopped by his advisor's office to ask what he thought of the paper and the conclusion. His advisor said something like "have you ever considered your conclusion may be wrong?"

Milton said "why do you think I'm wrong?"

The advisor said "I don't think you're wrong; I actually agree with you. But have you even considered the possibility?"

I think it's a great lesson, but I can't dig up the source anywhere, though I've tried several times. Does anyone remember this story, where it was from, who told it, who it was about, or anything else?

Thanks!

Recently, Bitcoin developer Peter Todd gave a talk in favor of tail emissions, and it raises a question that I'd love to hear more Austrian econ perspectives on.

Link to the talk here: https://www.youtube.com/watch?v=OmAAeEm1nIE&pp=ygUZcGV0ZXIgdG9kZCB0YWlsIGVtaXNzaW9ucw%3D%3D

Around the four minute mark, Todd first makes the point that if Satoshi had implemented a fixed block reward (for instance 50 BTC each block indefinitely, instead of the halving schedule), it would still be upheld as sound money by Austrian economists, since the inflation rate approaches 0% eventually.

So with that in mind, I have the following questions. From an Austrian econ perspective (or various competing schools of thought within Austrian econ):

1. Is there a meaningful difference between a hard monetary supply cap, vs. a technically infinite supply cap that's mathematically guaranteed to approach 0% monetary inflation?
2. Would Hayek, Rothbard, Mises, etc. have different perspectives on the topic? If they had the ability to design their perfect system of digital money, would it even look like BTC, or would it look completely different?

In a debate we are discussing if should social security, Medicaid, Medicare, etc be completely abolished and Turned into tax cuts and a deregulated, voluntary, individualist system.

The problem; my opponent says no for these reasons

1: people have paid into these systems there whole life and they are on it, it would be unfair to them to just cut it.

The problem I point out: based on A, B, C, etc economic theory, laws, principles, supported by data, those programs started out as very little tax percentages such as social security 1%, they then, because of explained economic principles, became more expensive so now the taxes paid and requirements are much higher, and will continue to increase. As a result you have generational inequity, a new generation is now paying more than them, and in the future will pay more and the next set of people on it will raise the same point again. “We paid into this system”

2: if you cut those programs due to the expensive cost of living and no alternative many people such as old people will be left on the street.

The problem I point out: this sounds like catch 22 logic, because the exact programs themselves based on economics makes those things expensive and inefficient such as healthcare. And the existence of those programs in general removed the incentive for those people to invest, save, and take actions to secure their future in the first place.

As well as removing the liquidity and potential savings to even be able to set up something.
In short the programs themselves are what is causing the issue of expensive services, lack of savings, and alternatives in the first place.
It’s creating the very dependency the other guy is talking about.

TLDR/Summary:

"We need the program because there are no alternatives, and there are no alternatives because we have the program."

The Setup: You cannot abolish the program because people are dependent on it and have no alternative.
The Cause: People have no alternative because the program taxed away their surplus income, crowded out private solutions, and made them more expensive .
The Paradox: The program must stay to fix a problem that the program itself is actively creating.

How do you deal with this hostage/catch 22 logic. It’s basically a lot of the lefts argument.

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I was debating with an associate about how I don't think EBT should be given out to as many people as it is, and how I think a lot of welfare programs are being taken advantage of. His rebuttal, was that food stamps and EBT actually 'stimulate the economy, up to 1.80$ for every dollar spent."

I don't even know what to say to that, he sent me a source which I will link below, but common sense tells us it's bull. If you could simply put one dollar into the economy and get 1.8 back, then it would be an infinite money glitch. Obviously it can't work that way.

Can someone please explain this to me and help me debunk this nonsense?

https://www.cbpp.org/blog/snap-food-assistance-is-a-sound-investment-in-our-nations-health-well-being-and-economy

https://www.ers.usda.gov/media/8907/err-265.pdf?v=32304