Introduction to Austrian Economics

Contrast Austrian economics with mainstream economics by showing that humans act, unlike inanimate objects, and apply empirical methods to natural sciences while deduction governs human action.

Apply the action axiom to define praxeology as the deductive study of human action, focusing on individual ends and means amid scarcity to derive economic laws.

Explore how value is subjective and ordinal, derived from ends we seek and only assigned to means through their ability to help attain those ends, with scarcity driving trade-offs.

Show how scarce means are allocated among ends based on ordinal preferences, reveal the first law of utility and diminishing marginal utility, and define opportunity cost.

Explore production and the capital structure in Austrian economics, tracing how land, labor, and capital goods transform into consumption through a time-based hierarchy of production.

Identify how factors of production, from land and labor to capital, gain derivative value as entrepreneurs anticipate and discount marginal revenue to create consumption goods.

Explore how voluntary exchange arises from a double coincidence of wants, as Karl and Ludwig trade apples and oranges, transferring ownership and demonstrating preferences in action.

Explore how voluntary exchange creates mutual benefits through supply and demand, illustrating price formation, equilibrium, and the double coincidence of wants across multiple buyers and sellers.

Explore how money becomes a widely accepted medium of exchange. Understand its role as a unit of account, store of value, and its durability, portability, divisibility, and recognizability.

Compares 100 percent reserves keeping gold-backed warehouse receipts redeemable, with fractional reserves issuing extra receipts as loans, creating fiduciary media and a growing money supply.

Explain the universal law of time preference, showing how people prioritize present satisfaction and how money as a unit of account shapes saving, lending, borrowing, and production.

Explain how varying time preferences create the interest rate through voluntary exchange of present for future money, showing market clearing and a single economy-wide rate guiding loan and production decisions.

Austrian economists critique socialism by showing it cannot economize resources or perform price-based calculation through voluntary exchange, since ownership of production is restricted and decisions become bureaucratic and top-down.

Explore the Austrian business cycle theory, detailing how sustainable growth relies on saving and lower time preference, and how artificial credit expansion causes malinvestment, booms, and a corrective bust.

Explore the Austrian method from action axioms to subjective value, money and banking, time preference, and the Austrian business cycle theory, concluding with the critique of socialism and growth implications.

Explore foundational Austrian economics through recommended readings, from economics in one lesson to human action, highlighting decentralized knowledge, business cycle theory, and policy impacts.