This paper provides a comprehensive survey of the contributions of the Austrian school of economics, with specific emphasis on post-WWII developments. We provide a brief history and overview of the original theorists of the Austrian school in order to set the stage for the subsequent development of their ideas by Ludwig von Mises and F.A. Hayek.
National defense is the textbook example of a public good. In order to understand how economists present public goods to undergraduates, we analyze 50 texts from across three widely taught undergraduate economics courses: principles of economics, intermediate microeconomics, and public finance.
U.S. military contracting has been plagued by systematic corruption, fraud, and waste during both times of peace and war. We argue that these outcomes are the result of inherent features of the U.S. military sector which incentivize unproductive entrepreneurship.
The opening lines of F.A. Harper's 1951 article, "In Search of Peace," read as follows: "Charges of pacifism are likely to be hurled at anyone who in these troubled times raises any question about the race into war. If pacifism means embracing the objective of peace, I am willing to accept the charge. If it means opposing all aggression against others, I am willing to accept that charge also. It is now urgent in the interest of liberty that many persons become "peacemongers"."
Economists often model national defense as a pure public good optimally provided by a benevolent and omnipotent "defense brain" to maximize social welfare. This paper critically considers five assumptions associated with this view.
The governments of American states often attempt to incentivize businesses to locate within their
borders by offering targeted benefits to particular industries and companies. These benefits come
in many forms, including business tax credits for investments, property tax abatements, and
reductions in the sales tax. Despite good intentions, policymakers often overlook the unseen and
unintended negative consequences of targeted-benefit policies. This paper analyzes two major
downsides of these policies: (1) they lead to a misallocation of resources, and (2) they encourage
rent-seeking and thus cronyism. We argue that these costs, which are often longer-term and not
readily observable at the time the targeted benefits are granted, may very well outweigh any
possible short-term economic benefits.
The Oxford Handbook of Austrian Economics provides an overview of this school and its theories. The various contributions discussed in this book all reflect a tension between the Austrian School's orthodox argumentative structure (rational choice and invisible hand) and its addressing of a heterodox problem situations (uncertainty, differential knowledge, ceaseless change).