Austrian Economics: The Libertarian Philosophy Explained

Austrian libertarianism, also known as Austro-libertarianism, is a political and economic philosophy that has its roots in the revival of classical liberalism in mid-20th century America. It is associated with economists and philosophers such as Murray Rothbard, Robert Nozick, Ludwig von Mises, and Friedrich Hayek, who advocated for individual liberty, free markets, and limited government intervention in economic affairs. The Austrian School of Economics, founded by Carl Menger and developed by economists such as Friedrich von Wieser and Eugen von Böhm-Bawerk, is a key influence on this ideology. However, it is important to note that not all Austrians subscribe to libertarianism, and the term libertarian can encompass a wide range of political philosophies beyond Austrian libertarianism.

Austrian economics is not libertarianism

Austrian economics and libertarianism are not synonymous. Libertarianism is often associated with the Austrian school of economics, which is named for the Austrian origins of its founders, but this does not mean that Austrian economics is libertarianism.

Austrian economics is a school of economics that argues that human behaviour is too complex to model. As such, it promotes deductive reasoning in its analysis. It is a highly individualistic school of thought, advocating for laissez-faire policies and opposing most or all government intervention in the economy. However, Austrian economics and libertarianism are distinct.

The Austrian school of economics and libertarianism share some similarities, which may contribute to the perception that they are synonymous. Both Austrian economics and libertarianism emphasise individualism and oppose excessive government intervention. However, it is important to distinguish between the two. Austrian economics is a specific school of economic thought with its own methodologies and theories, while libertarianism is a political philosophy that emphasises individual freedom and minimal government intervention.

Furthermore, not all libertarians subscribe to Austrian economics. While some libertarians may find support for their beliefs in Austrian economics, others may favour alternative economic schools or approaches. Additionally, not all proponents of Austrian economics are libertarians. Austrian economics may appeal to individuals with varying political beliefs, as it offers insights into economic behaviour and policy beyond ideological boundaries.

In conclusion, while Austrian economics and libertarianism share certain principles and there is some overlap between the two, they are not synonymous. Austrian economics is a distinct school of economic thought, and libertarianism is a political philosophy that can draw on various economic theories.

Austrian libertarians

Austrian libertarianism is a political philosophy that promotes individual liberty and free-market capitalism. It is associated with a foreign policy of non-interventionism and is often described as conservative on economic issues (fiscal conservatism) and liberal on personal freedom (cultural liberalism).

Austrian libertarianism has its roots in the Austrian School of Economics, which was founded by a group of late 19th-century economists at the University of Vienna. The Austrian School, named for the nationality of most of its founders, promotes individualism and laissez-faire policies, opposing nearly all government intervention in the economy.

Austrian libertarianism is also influenced by anarcho-capitalist author Murray Rothbard, who based his philosophy on 19th-century libertarianism and American individualist anarchists such as Benjamin Tucker and Lysander Spooner. Rothbard sought to meld 19th-century American individualists' advocacy of free markets and private defence with the principles of Austrian economics.

Austrian libertarianism is one of the four principal traditions within libertarianism, with the others being the libertarianism developed by Robert Nozick in the 1970s; the libertarianism that emerged in the mid-20th century from the revival of classical liberalism; and the libertarianism associated with the Libertarian Party, founded in 1971.

There are two main types of libertarianism: right-libertarianism and left-libertarianism. Right-libertarianism, the dominant form in the United States, is associated with capitalist free-market approaches, neoliberal policies, and economic liberalisation reforms. Left-libertarianism, on the other hand, is related to anti-capitalist, free-market anarchist strands such as left-wing market anarchism.

Anarchism in Austria

While Austrian economics is often associated with libertarianism, it is not synonymous with it. Libertarianism in Austria has its own distinct characteristics and followers. Notable Austrian libertarians include Erik von Kuehnelt-Leddihn.

The Austrian government severely prohibited anarchism as a philosophy and practical application in the labour movement, even in a purely theoretical sense. This repression pushed some well-meaning idealists from the "radical" Social Democratic Marxian wing into terrorism, which was then labelled as anarchism by the government and the "moderate" wing. The "radical" faction faced extreme censorship and punishment for any attempts to publish their ideas, while the "moderate" wing was allowed to evolve and grow.

It was only after universal suffrage was achieved in 1907 that anarchism began to regain a foothold in Austria. A group of comrades launched a fortnightly paper, "Wohlstand für Alle" (Welfare for All), which succeeded in spreading anarchist propaganda where previous attempts had failed. Despite the challenges, the anarchist cause persisted and began to attract attention from workers, showing them an alternative to Social Democracy.

Austrian anarchism is communistic in its economic ideals, drawing inspiration from thinkers such as Kropotkin and Reclus. It also reflects the country's strong Catholic influence, with tendencies influenced by Tolstoy's ruthless annihilation of churchism as contrary to the true "genesis" of Christianity.

Libertarianism in Europe

Libertarianism is a political philosophy that holds freedom and liberty as its primary values. It is derived from the Latin word 'libertas', meaning freedom. While libertarianism originated as a form of anti-authoritarian and anti-state left-wing politics, it has evolved over time and is now commonly associated with right-wing politics, particularly in the United States. However, it is important to note that libertarianism has different interpretations and manifestations around the world, including in Europe.

In Europe, libertarianism has a presence in various countries, including Austria, Belarus, Belgium, the Czech Republic, France, Germany, Hungary, Italy, Luxembourg, the Netherlands, Romania, Russia, Spain, Sweden, Switzerland, Ukraine, and the United Kingdom. The extent and nature of libertarian influence vary across these countries, and it is challenging to generalize its presence in Europe as a whole due to cultural, historical, and geographical differences.

One notable example of libertarian influence in Europe is the recent election of economist and television commentator Javier Milei as the world's first self-identified Libertarian head of state in Argentina. Milei's victory in the 2023 Argentine general election represented a significant shift from traditional politics, as he advocated for radical economic reforms, including government spending reduction and the elimination of several federal agencies. Milei's platform was rooted in classical liberal thinkers like Milton Friedman and Murray Rothbard, emphasizing individual economic freedom and minimal state intervention.

In addition to Milei's influence in Argentina, there are other instances of libertarian parties and movements in Europe. For example, Girchi, a libertarian party from Georgia, has gained electoral success and is known for its strong online presence and popularity across social media platforms. In the United Kingdom, the Libertarian Party was established in the 1970s, and libertarianism has had some influence in the country's political landscape.

However, it is worth noting that libertarianism in Europe may differ from the interpretation commonly associated with right-wing politics in the United States. In Europe, libertarianism can encompass a broader range of perspectives, including left-libertarianism, which supports egalitarian redistribution of natural resources and social freedom. Additionally, the term "libertarian" in Europe may be used differently than in the United States, where it is often associated with fiscally conservative and socially liberal views.

Overall, while libertarianism has a presence in Europe, it manifests differently across countries and may hold a variety of meanings. The interpretation and influence of libertarianism vary depending on cultural, historical, and political contexts.

Libertarianism by country

Libertarianism is a political philosophy that upholds freedom and liberty as its primary values. While there are no countries that are truly libertarian, several nations have libertarian ideals.

United States

The United States is home to the Libertarian Party, which advocates for "minimum government, maximum freedom." Due to the decentralised nature of US governance, some states are considered more libertarian than others. Florida, New Hampshire, and Indiana are among the most libertarian states in the country. The United States also has a long history of libertarian thinkers and organisations, such as the Foundation for Economic Education, which was established in 1946.

England

England's departure from the European Union has been viewed as a libertarian move, as it freed the nation from EU regulations and taxes.

Andorra and Monaco

Andorra and Monaco are examples of countries that do not impose income taxes on their citizens, which aligns with libertarian ideals of low taxation.

Germany and the Netherlands

Libertarians generally support the legalisation of prostitution, and countries like Germany and the Netherlands have taken steps towards this, with brothels being regulated and taxed by the government.

Portugal

Portugal has decriminalised the possession of drugs for personal use and has implemented government-funded therapy programs to help drug addicts.

Switzerland

Switzerland is often considered the most libertarian country in the world, with a high score on the Human Freedom Index, which measures personal and economic freedom.

Chile

Chile elected Gabriel Boric, a self-described libertarian socialist, as its head of state in 2021.

Argentina

Argentina has seen the rise of libertarianism in recent years, with the election of Javier Milei, a self-described "liberal libertarian," as the country's leader in 2023. Milei's policies include reducing government spending, eliminating federal agencies, and promoting free-market competition.

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