Why is Austria not influenced by the Austrian School of Economics?

I am forgetting the name but someone did tell me this: That the famous Austrian school is perhaps least famous in Austria itself.

In this piece,  Mohammad J. Malayeri and Bill Wirtz look at recent evidence. They wonder why is Austria so un-Austrian?

On October 15th, Austria held its parliamentary election following the breakup of the coalition between social democrats and the center-right OVP. With a public debt-to-GDP ratio of 85 percent, continuous deficit spending, and rank 16 in the richest countries with the most wasteful government spending, you’d think that Austrians would be demanding an approach which comes closer to the actual Austrian School of Economics. But, in the light of the latest election, why are there actually no Austrians in Austria anymore?


Liberal (in its classical sense) ideas might not have been as popular in Austria in recent years compared to its neighbors, but many of the founders of Austrian economics did hold prominent positions in the country. The founders of Austrian economics such as Carl Menger, Friedrich Wieser, and Eugen Böhm von Bawerk were all respected individuals in leading positions in universities, and in the case of Bawerk, even held the title of Finance Minister (1895-1904).

With the collapse of the Austro-Hungarian empire and Anschluss to Nazi Germany, many Austrian liberal thinkers decided to exile themselves. This was either because they were Jewish or because they saw no possibility of having any vital position in an annexed Austria. Ludwig von Mises, Jewish himself, left the country before the Anschluss in 1938 took place. The same could not be said about his works which were confiscated and burned as a demonstration of opposition to his ideas.

After the end of the Second World War, many of these intellectuals did not return. Far more disconcerting was that the new Republic also had no interest in creating an incentive for them to return. F.A Hayek did nothing impactful in Austria (besides his short tenure at the Salzburg University) and was never asked by any post-war governments for advice, despite being one of the most respected economists of his time. Mises only visited Austria very seldomly.

But there is hope for these ideas:

Despite the considerable resistance to the ideas of classical liberalism, not all hope is lost for today’s Austrians. The emergence of the Internet, as well as blockchain technology, has made it possible for liberal ideas to affect society. In essence, positive change for the ideas of liberty is coming from abroad. With the emergence of Bitcoin and blockchain technology, Hayek’s idea of denationalization of money has become a more realistic possibility. House of Nakamoto and the owners of Cointed, both libertarian and supporters of the Austrian school, decided to use this market to sell Bitcoin ATMs to local shops. House of Nakamoto not only sells their ATMs, but they also organize seminars in which they teach people the benefits of cryptocurrencies for free. Blockchain beginners are being introduced to cryptocurrencies through vouchers with pictures of famous Austrian economists.

Even in politics, there are a few reasons to remain positive. The rebranding of the Liberal Democrat party into NEOS has seen a re-launch of a Germanic form of ordoliberalism. This party, created in 2013, was assembled by older Liberal Democrats and members which defected from the center-right. In their first try, NEOS made it into parliament. The party, despite being an EU-federalist movement, is also fueled by more positive influences. It openly advocates for both cuts in public spending and taxation. It’s spokesperson on economics, Sepp Shellhorn, even quotes Ludwig von Mises in parliament sessions. In the recent election, NEOS obtained 5.2 percent of the vote, which means that they are inescapable for a two-thirds majority.

All in all, Austria might not be on its way to becoming a paradise for lovers of liberty, but its impressive intellectual potential and the widespread positive work ethic makes it fertile ground for the activists who have yet to come.

Or as Ludwig von Mises would put it: “The criterion of truth is that it works even if nobody is prepared to acknowledge it.”


On these grounds, one wonders whether it was fair to call the school Austrian at all? Just because people who proposed these ideas happened to be from Austria, does not mean the school should have been called Austrian school. Ideally econ schools named after certain countries are based on economic conditions based in the country and the policies/ideas which are tried around these conditions.


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