It has become increasingly clear that interventionism played a significant role in precipitating the 2008 financial crisis. The Austrian School is more than capable of providing the free market theoretical framework needed to understand why governments and central banks helped bring about the bust.
Jesus Huerta de Soto’s book offers a comprehensive yet concise overview of the Austrian school, an increasingly influential branch of economics. It succeeds in contrasting the most important elements of Austrianism with the Monetarist and Keynesian paradigm and draws from seminal Austrian texts to stress the importance of subjectivist methodology.
As the title suggests, a large portion of the book is dedicated to entrepreneurship, which the author describes as “the driving force behind Austrian economic theory.” The concept of entrepreneurship, he points out, is conspicuously absent from mainstream economics. Entrepreneurship in the Austrian form is a process whereby an entrepreneur discovers new information. This new information is then able to manifest itself as a profit opportunity. Such activity allows for the transmission of new information and, importantly, brings coordination.
A chronological account of the Austrian School is eloquently put together in the later chapters. Although many believe that Austrian economics began with Carl Menger, Huerta de Soto makes a convincing case that the forerunners of the Austrian School were in fact scholars from the Spanish Golden Age.
This book is ideal for those seeking to understand the key principles of Austrian economics and for academics and students looking for a different perspective to mainstream economic methodology. Moreover, Austrian economists and free-marketeers alike will find the fresh historical interpretation intriguing. Overall, this is another excellent book by one of the Austrian school’s leading figures.
The Austrian School: Market Order and Entrepreneurial Creativity is now available as a free download.