

Friedrich Hayek put the Austrian in Austrian Economics; the term was invented by the Germans and was meant to be disparaging towards him and others like him.

Hayek has an extensive body of written work, the jewel of which is “The Road to Serfdom”. Russ Roberts of the Hoover Institute has hosted an ongoing podcast called EconTalk[1] that while not studying Hayek specifically, often brings a Hayekian viewpoint to his discussions with guests.

[1] https://www.econtalk.org/

This an interesting interview with Hayek from 1982:


His quote here makes me think he would have rejoiced at the idea of Bitcoin:

"Well, I have despaired of ever again finding a way of restraining government abuse of any money which it issues. My proposal to denationalize money was always in a sense Utopian because governments will never freely allow competition in this business. I believe there are ways around this, and my present view—which I hope before long to state in detail—is that there is probably a possibility of not issuing currency but starting with credit accounts under some other name—say, call the unit a “stable” and promise to redeem it with enough of whatever current monies are required to buy a certain list of raw materials. So it doesn’t involve issuing any circulating money, but it enables the holder to keep a stable unit in the form of a credit. Once you’ve succeeded in this, the next step would be issuing credit cards on these accounts. And then you have circumvented the whole monopoly of government. Since it is politically impractical to deprive the government of its monopoly, you have to circumvent it."

If you’ve ever tried paying your taxes in Bitcoin you’ll have discovered the limitation of this viewpoint.

The government monopoly isn’t over money. You can use and issue whatever money you can get others to accept.

The monopoly is over the denomination required to extinguish the liability that government has the legal power to impose upon you and while you live in its sovereign area. Aka taxation

Ultimately you cannot circumvent state money while there are states that control land areas. You will always need their money to pay taxes and that need is sufficient to allow a state to provision itself - since the only place to get the denomination is from the state in exchange for goods and services

The monopoly includes laws around legal tender, which of course, is government money. The government money can be used to settle any debt - this isn't true for other monies. This means that even if the legal tender is rapidly losing its purchasing power and there exists a harder money which creditors would rather receive as payment, they are forced to accept the legal tender instead.

"The government money can be used to settle any debt - this isn't true for other monies."

Legal tender is often misconstrued as an argument. Legal tender laws relate to the settlement of enforcement in courts. Nothing else.

You can require that your customer pays you in Highland Sheep if you want - and refuse to sell anything to them unless they produce those Sheep.

However if you advance them credit (aka creating your own money) and the customer refuses to pay in the Highland sheep denomination as they promised, and then you go to court to enforce your contract, the court can dismiss the case if the customer has offered "legal tender" to discharge the debt.

What legal tender laws do, in effect, is force you to peg your own currency and your own credit advances to the denomination of the state you choose to enforce your contracts in.

Bear in mind you can change the jurisdiction by adding a jurisdiction clause to your contract. Even though I'm in the UK I can guarantee payment in US dollars simply by making my contract subject to the laws of California (say).

> You can use and issue whatever money you can get others to accept.

Nope. You can't just issue money, and you have to accept the state currency in most places on Earth. Paying taxes using Bitcoin is mostly easier than using cash thanks to services that will do a bankwire for you, so what.

"Nope. You can't just issue money,"

Look up "contra entry". http://desktophelp.sage.co.uk/sage200/sage200standard/Conten...

All business credit is issuing money, and as the contra shows you can easily settle debts with it.

"Paying taxes using Bitcoin is mostly easier than using cash"

Where do those services get the state money from? The service are providing the exchange for you. That's not paying taxes in Bitcoin. That is paying an exchange service to pay your liability in dollars for you. Exchanging a liability isn't extinguishing it.

The Treasury account at the Fed doesn't accept Bitcoin. At that's ultimately the bit you've missed. Follow the transactions through transitively and see if you can eliminate state money from the process completely. You won't be able to.

> His quote here makes me think he would have rejoiced at the idea of Bitcoin:

Except for the “stable” part

Bookmarked (well, saved to Instapaper). Thank you for link.

Another good place to start is with his 1945 paper, The Use of Knowledge in Society [1]. It’s readable in a single sitting, and packed with insights that go far beyond economics.

[1] https://en.m.wikipedia.org/wiki/The_Use_of_Knowledge_in_Soci...


> Friedrich Hayek put the Austrian in Austrian Economics

No he didn't. The concept of 'Austrian Economics' was applied to Carl Menger a central part of the marginal revolution of the late 1800s. His books 1871 – 'Principles of Economics' and 'Investigations into the Method of the Social Sciences with Special Reference to Economics'. Are the foundation stone of Austrian economics.

Hmm, if that’s the case then my understanding here was shallower than I thought and I have some reading of Menger to do.

If you want some more detail, the term Austrian specifically was defined by the German Historical School. It was over a debate of method.

See here: https://en.wikipedia.org/wiki/Methodenstreit

The most important Austrians you might want to study are:

- Carl Menger (Microeconomics, Methodology)

- Eugen von Böhm-Bawerk (Capital Theory, Famous for Marxist critics)

- Friedrich von Wieser (Oppertunity cost)

- Ludwig von Mises (Methodology, Buissess Cycle Theory, Political Philosophy)

- F.A. Hayek (Buissess Cycle Theory, Information Economics, Political Philosophy)

- Joseph Schumpeter (Austrian educated but went his own way in many ways)

- Fritz Machlup (Buissess Cycle Theory, Trade)

- Israel Kirzner, not actual Austrian (Entrepreneurship)

- Murry Rothbard, also not Austrian (Political Philosophy)

Of these Hayek, Schumpeter, Machlup and Mises all eventually tought in the US and Kirzner and Murry are US studends of them.

There are books on the topic:

- The Austrian School of Economics: A History of Its Ideas, Ambassadors, & Institutions

Today there is split between those influence by Murray Rothbard, who has a perticular interpretation of Mises and very extrem views in many ways. The 'Ludwig von Mises Institute' is pushing this view, they are partly a lobby organisation. I don't think much of them. They tend to dislike Hayek.

There is the more traditional more academic branch, tody mostly represented by George Mason University.

In the same vein: https://cafehayek.com
