Countries that followed the Austrian School to Prosperity

[LastBattle]

Hyperbole goes both ways I guess if you think the Pinochet era was A REIGN OF TERROR!!1. Sure, he rounded up and killed, tortured and imprisoned his enemies but that's no different than what happens now in the world. Do you consider the United States a reign of terror because the administration likes to kill a lot of muslims and torture them in Guantanamo?

Of course I do! (think that the USG is guilty of mass murder and torture) - The US is a police state at home and a nightmare abroad if you happen to live in one of the countries they are currently targeting. The USG is quite literally the Evil Empire at the moment, with the highest rate of incarceration at home and more military spending than most of the rest of the world combined

The hidden hand of the market will never work without a hidden fist. McDonald's cannot flourish without McDonnell Douglas, the designer of the F-15. And the hidden fist that keeps the world safe for Silicon Valley's technologies to flourish is called the US Army, Air Force, Navy and Marine Corps. (Tom Friedman, NYT persistent defender of US capitalism/globalization)

Of course the Pinochet regime was a reign of terror -- What else do you call it when a dictator assumes power in a military coup and systematically kills, imprisons, or destroys his political enemies, embezzles millions from the government, etc. Really, you have absolutely zero moral ground to stand on here if you are trying to make the case that Pinochet's regime was somehow "freer" or "more democratic" than Allende's

The irony, of course, is that the US armed forces are, in effect, socialist... i.e. state-funded and run.

As for the notion that Pinochet may not have been that bad after all... it takes a spectacular disconnect from history to even suggest something of the sort. I guess our friend thinks that Austrian economics is Austrian because that was the birthplace of Hitler... also not such a bad chap, after all.

Yes, the US army is socialist. Please, find a better attack, since you won't find much resistance there.

Yes, Pinochet was a murdering bastard. However, what differentiates him from socialistic murdering bastards is that he was creative enough to not nationalize everything in a fit of communistic self-aggrandizement and instead had people who had at least a bit of an idea as to what they were doing take over. Thus, while both Pinochet and, say, Castro were murdering people, people under Pinochet generally didn't face mass starvation, collectivization of their livelihoods, dependence on foreign tourism (later on, mind), terrible hospital conditions, and a rapidly declining standard of living.

With Pinochet, the Chilean economy gradually began to grow despite Allende utterly screwing it up, the standard of living and most other measures of life rose considerably, and Chilean currency didn't turn into toilet paper. Because of these reforms, Chile became the most prosperous country in South America and weathered out disasters that caused economic problems for other nations. Mind, Chile had problems in the early eighties, but that was because of the Achilles Heel of Monetarism, which is monetary policy, and issue that they continually screw up and often ruins the appearance of many of their better policies.

Also, while Pinochet was, again, a murdering bastard, don't make wild claims that Allende was better. Yes, Allende was elected democratically, but as I recall he then proceeded to flagrantly violate the Chilean constitution, ignore the legislature, collectivize everything, steal everything in sight that wasn't already "State Property", and spent a large portion of that money on a large "Socialist Computer" for calculating the economy's growth. The legislature actually ordered the army (and, by extension, Pinochet) to throw Allende out for his blatant misuse of power. Had Allende not been overthrown, he had already demonstrated that he didn't give a damn for the democratic process and would have doubtless became a dictator himself, with the exception that he wouldn't have improved the economy and instead would have made it into something resembling Cuba or Zimbabwe. Furthermore, his lack of success would result in there never being a peaceful end to his (or his successor's) reign as their was with Pinochet.

[ronwan]

Chile turned from a communist shithole into one of the most prosperous countries in Latin America because of laissez-faire policies. Technically they followed the Chicago School, not the Austrian, but they basically followed the same principles: cutting taxes and tariffs, de-regulation, privatization, less welfare, low inflation etc.

I think most people are missing his point.  The people can be economically freer while not being politically free.  If you did not get on the governments bad side and were a free market business, you would do better under Pinochet.  This does not make that business man bad.  I guess people say the same thing about China today. They are not politically free but economically freer and standards of living depend more on economic freedom than political freedom.

His point is more subtle.  If you wrote angry things in news papers about the government, things would suck for you a little more under Pinochet, but if you were a free market, very productive person that stayed away from the government sector, things would suck for you under Allende.  The government was more likely to come and take your life's work.

The simple "Pinochet bad... so Allende good" is a bit too simple.

[ronwan]

Since there are so many fans of Austrian economics here I'd like to ask for examples of success stories where a country used Austrian economic polices to become prosperous.

Please post what you find below, thanks!

 

Here is a quote that might fit your request.

"Medieval Iceland was almost a purely free market society, even the law arose from private courts and from law making bodies which could literally be bought at a price. They still had a "state" but it was disconnected from geographical location and was in a sense voluntary since the people could freely choose which "goddard" (spelling?) to protect him. The poor, if they were aggressed against, could even sell their claim to a more powerful person who would then pursue the compensation for his own benefit. So it provided an extremely effective check on power and protection of human rights. They lasted 300 years before their first civil war (eventually the various set regions were monopolized), but they lasted an impressively long time and had a body of law that was extremely rich and complex. David Friedman compares Medieval Iceland to Athens in terms of cultural development.

However, because they still had in some sense delegated authority (although technically it was voluntary until it was monopolized) they eventually had internal conflict. It is an amazing testament to how stable a free market society could be, even considering that the Vikings were pretty much brutes! Just think what America could be like if it were purely voluntary! It would be incredible.

Down with the state (and sorry, but that includes the Constitution)!
—

"Truth is treason in the empire of lies." - Ron Paul"

http://dailypaul.com/73539/is-there-a-nation-or-country-that-has-an-economy-based-on-austrian-school

[cbeast]

Athens was merely an early version of a modern society and certainly no place you would want to live today. Iceland would have been no better. Romanticizing about early civilizations and how they would work even better today is magical thinking. Ignoring facts about ancient times like slavery and the continuous threat of war only proves that there still is no case to show any country that followed the Austrian School to Prosperity (unless you want to be a slave or foot soldier).

[The Script]

Athens was merely an early version of a modern society and certainly no place you would want to live today. Iceland would have been no better. Romanticizing about early civilizations and how they would work even better today is magical thinking. Ignoring facts about ancient times like slavery and the continuous threat of war only proves that there still is no case to show any country that followed the Austrian School to Prosperity (unless you want to be a slave or foot soldier).

This is true.  The Austrian school has only been around for just over a hundred years, so it is not really logical to claim that Medieval Iceland followed the "Austrian school".  What you can say is that despite the instability of the times, and the harsh standard of living, is that they developed and successfully used private law.  This is something many proponents of the Austrian school have written and theorized about.  Well, there actually is a historical example of it working.  Of course I wouldn't want to live in Medieval Iceland or Somalia, even.  I want my current society to adapt to the ideas of liberty, not to be transported back in time to days when men still believed it was lawful to own other men.

[LastBattle]

Chile turned from a communist shithole into one of the most prosperous countries in Latin America because of laissez-faire policies. Technically they followed the Chicago School, not the Austrian, but they basically followed the same principles: cutting taxes and tariffs, de-regulation, privatization, less welfare, low inflation etc.

I think most people are missing his point.  The people can be economically freer while not being politically free.  If you did not get on the governments bad side and were a free market business, you would do better under Pinochet.  This does not make that business man bad.  I guess people say the same thing about China today. They are not politically free but economically freer and standards of living depend more on economic freedom than political freedom.

His point is more subtle.  If you wrote angry things in news papers about the government, things would suck for you a little more under Pinochet, but if you were a free market, very productive person that stayed away from the government sector, things would suck for you under Allende.  The government was more likely to come and take your life's work.

The simple "Pinochet bad... so Allende good" is a bit too simple.

Allende was completely nuts. Had he not been overthrown, he probably would have been about as bad as Pinochet in terms of political freedoms.

[BBanzai]

Certainly, Austrian economics is about 100 years old.  Fabian Socialism is about 100 years old. Keynesian Economics is the same.  Communism is slightly younger, so are New Deal and Great Society models.  I think that what a lot of "free-thinkers" fail to notice is that the successful "powers that be" members follow the oldest rules of success.  Subtle or overt slavery, marketing hero-worship, theft through warfare, constant surveillance, and monetary fraud.  None of these new theories have much in the way of a predictable future compared to the last 20,000 years of known history.  All of them have their adherents.  Anarchistic models, on the other hand, have been with us as far back as we can measure.  The Apache "Nation" beat the hell out of Spanish invaders for an extraordinarily long time because every single one of them was a warrior.  I haven't the slightest idea what they had in the way of an economy, but I do know that they very nearly won against seemingly overwhelming forces.  What tripped them up was technological differences, not tactics.

[Sjalq]

This link got hijacked long ago, for an answer go here;

https://bitcointalk.org/index.php?topic=34593.0

[jpent]

You can take a look at this map: http://www.cato.org/pubs/efw/map/index.php

It shows economic freedom by country. As you can see no country has a perfect score though here.

[niemivh]

I met a bunch of guys from Austria, and they seemed to really like it there.

I met some people from Chicago, they really seem to like it there too.

[niemivh]

Just look at all the former soviet bloc nations that turned capitalist

West Germany vs. East Germany

United States vs. Soviet Union

Hong Kong vs. China

Modern China vs. Older China

Japan vs. China

South Korea vs. South Korea

Romania now vs. Romania during Ceaușescu


These are just the basic examples, there are plenty more. It seems to be the rule too.

What is capitalism?  I'd really like to know.  Does Sweden qualify as a capitalist country?  How about China?  How about Somalia?  If it has any portion of it that uses a market, does that qualify?  Because by that definition all countries are capitalist.

I think you mean non-communist but I'm not sure and don't want to impose that on you if you don't mean that.  Please define your terms.  These terms are not as polarizing and black-and-white as Milton Freidman would lead you to believe.

[niemivh]

Austria, duh! 

10th richest country in the world per capita.  Whether that's a result of the former finance minister's Karl Heinz Grasser's policies is debatable though.

Grasser is a self-proclaimed Austrian (one of the few Austrians who actually come from Austria!)

Is it upon me (or anyone else) to procure the details and fact-finding of others' statements yet again? 

Can you make a brief case for this argument?

[niemivh]

But is still a primary economy example. CODELCO has much money and invest in investigation but they still exporting 99% of copper without value added.  I mean industry, not raw resource extraction.

We used to define (when we had some sanity in our economic schools of thought) that a nation that exported value added goods was a good indicator of wealth over nations that export raw materials. 

I think the population of the US will learn this again the hard way once we fully fritter away our world reserve currency status and we actually have to produce things the world will want to buy in order to buy things from the world.  It's going to be a rough transition.

[niemivh]

"A fundamental rejection of mathematical methods in economics, seeing the function of economics as investigating the essences rather than the specific quantities of economic phenomena. This was seen as an evolutionary, or "genetic-causal", approach against the alleged "unreality" and internal stresses inherent in the "static" approach of equilibrium and perfect competition, which are the foundations of mainstream Neoclassical economics (see also praxeology). This methodology is also driven by the belief that econometrics is inherently misleading in that it creates a fallacious "precision" in economics where there is none."

How is this not good?

Pretty much anytime any country makes a decision that is based of a logical and certain occurrence (like the need to eat or sleep or transportation, etc.), they are applying Austrian theory.
If they analyze data that they chose to construct, and make a decision based of the data (thus assuming the original construct was perfect enough to analyze) then they are applying mainstream economic theory.
I could go back and forward with examples, but long story short is governments go back and forward with how they handle everything.
"Oh we need money for whatever it is right now, make a set of data and request it." Then. "Oh shit its getting real because we did so many <------ requests based on BS data. We better apply some logic to get it back under control, hopefully."

That's the way I see it, I may be wrong. It just seems like they go back and forward to basically come up on profits, and still keep things going. Spinning plates balancing act.

Also Does it count as prosperous if you are 10,000,000,000,000 in debt? Im not sure where you live but where I am, Orange County, CA we get a lot of people that "look" prosperous but really only have a bunch of debt and will eventually be living in a one bedroom apt. The wiser of us know better than to give them any credit at all.
Same can be said for any entity or governemnt in debt.
So if there are no Solely Austrian Successes than there arent any solely mainstream successes either, IMO.

According to you logic is a function of Austrian theory....

umm, ok.

Regarding debt, do we want to go over the history of how we went from the biggest creditor nation to the biggest debtor nation?

[niemivh]

Btw, I live in Chile too and have 3 high quality hospitals near me plus a couple other regular ones, so I guess that averages things out for the country

Do you want saying "clínica"?

Clínica = Private hospital only for rich.

See, things are well for JohnDoe.  He was lucky enough to do well in this system therefore there is no problem with it and it can't be improved.

Problem?  What problem?  Your poverty is not his concern.  He's doing well.

[niemivh]

Since there are so many fans of Austrian economics here I'd like to ask for examples of success stories where a country used Austrian economic polices to become prosperous.

Please post what you find below, thanks!

 

Here are a few good examples of "free market" vs. "socialist" economic structures and you can understand the results pretty easily. Certainly, they're not "Austrian economics" countries, but the examples exemplify the principles of markets vs. coercion which is at the core of Austrian ideology.

- North Korea vs South Korea
- East Germany vs West Germany post WWII
- East Germany under USSR vs. East Germany after unification
- Haiti vs. Dominican Republic
- Cuba vs. Costa Rica
- Any Chinese City vs. Hong Kong
- China vs. Taiwan
- China under communism vs. China today
- India pre-market reformations vs. India post-market reformations
- Any Malaysian City vs. Singapore
- Vietnam vs. Singapore
- UK vs. Ireland over the past 20 years
- Chile pre-Pinochet vs post-Pinochet (not that Pinochet wasn't also a violent douchebag)
- Venezuela vs Chile
- Zimbabwe vs South Africa
- Burma vs. Thailand
- Syria vs. United Arab Emirates
- Communist Estonia vs. Post-USSR Estonia
- Soviet Russia vs. Russia post 1989

And surely I needn't mention US history from 1776 up through about 1920, when it was actually a generally capitalist, free-market nation and grew from mere peasantry to the world super power in 150 years.

Every single example above compares a territory that is/was more centrally planned vs a territory that is/was more free. This list doesn't prove anything, but you might want to take note OP.

Whoa (mis)information overload!  Calm down buddy.  Apparently the 'carpet bombing' technique was more popular on this forum than I originally thought.  Nice list, but let's try to focus more on a single success story, not a laundry list of things deemed successes.  I don't want to even start with the list because: the burden of proof isn't on me to disprove a claim (or else I'd spend the rest of my life writing a rebuttal to this post as you've listed so many countries) and we want "a success story" a single story, not a list.  If we want to say that the 'opposite' of a 'free market' is the obvious failure of the system of true communism then we are in agreement; but that isn't the dichotomy here.  It's not a choice between total laissez faire 'free markets' and total state controlled top-down Soviet style communism.  I'm talking specifically about Austrian economic policy, views, beliefs or suggestions and how that was used as a framework for building a nation out of the primitive state of man: poverty.  Observing a system that has an element of market dynamics isn't a Austrian phenomenon, the market doesn't belong to the Austrian school.

Maybe you should do US history, specifically how Austrian style "Free Market" views were critical in creating prosperity, just flesh out 1776 to 1920 and why you think that "when it was actually a generally capitalist, free-market nation and grew from mere peasantry to the world super power in 150 years".  Why 1776?  The US economic situation was in horrible disarray during and shortly thereafter the Revolutionary War; in addition there were multiple other economic and social calamities in this time frame.  You don't even mention the Civil War.

You completely fail on so many levels Niemivh, I really don't know where to begin.  Oh heck screw it, I got better things to do than deal your delusions.

Yep.  Please don't bother explaining how and where I "fail" for that might expose your ignorance.  After all the more you write the more opportunity you have to stick your foot in your mouth.  Maybe that's maybe why I'm not afraid to post more than a few sentences at a time.

Get back to 'doing better things' like playing World of Warcraft.

[niemivh]

hoooly shit. i can't believe JohnDoe is seriously pointing to Chile as a free market success story. Are all libertarians creeping authoritarian fascists or just this one? (yes yes, I know you're not all secret authoritarians, but really there need to be more AnCaps in this thread denouncing Chile wholeheartedly as it is about as far from a voluntary society as you can get) For god's sake I realize that a dictatorship is a "smaller government" than a democracy, but each step towards smallness is not the same folks. You are as bad as Communists that defend Stalin or Mao.

You missed the part where JohnDoe admitted he's one of the few people doing well in that system.  Since that system is supporting JohnDoe there is no problem with it. 

It's like asking someone to kill their Golden Goose.  It's like asking Bill Gates' children to support the Estate Tax.

[BBanzai]

I still have a knee-jerk response to anything that stinks of communism...if only because I have a vivid imagination, and can imagine starving to death in the Ukraine because my farm was collectivised, if only because I can imagine being a violin player that specialized in Bach during Mao's cultural revolution, I can remember how Puritans escaping religious intolerance in Europe came to America and promptly murdered Jews, burned Quakers, and shot Indians....there is an underlying model here that is not economic or political or religious or racial.  Its the Death Cult at war with the rest of us.  And they are capitalists and socialists, bankers and blacksmiths, politicians and "lone-wolf" cranks...the language we all use to try to figure out who the bad guys are keeps getting twisted off target.  Ah, well.  Lets holler about The Federal Reserve instead, so the future, de-centralized Bank of All Worlds sounds like a welcome replacement.   Let's think that Standard and Poor ratings are unbiased and non-political.  By the way, the CIA is ferociously interested in Bitcoin.  They like money, they like cryptology, I'm not even remotely surprised.  Seeing as how I have always heard that drugs are a good investment, as long as the war on drugs continues, and precious metals have always been a solid investment, except for the brief periods when the banks convince the masses to use paper, AND seeing as how I could apparently buy both silver and dope with bitcoins....I think I'll stay in the pool.  I have a dayjob after all.  If its good enough for the CIA, its....well, actually, it isn't, but I have always thought it wise to keep your enemies closer.

[Murwa]

if only because I have a vivid imagination, and can imagine starving to death in the Ukraine because my farm was collectivised,

Some people would argee that farms were in fact were privately owned by communist party and collectivised only in name, and were used as a political tool.
Famine was artificially created bu it looks like you have no clue whatsoever you just repeat propaganda.


Just like most of the farm lands and seeds will soon belong to monsanto and the like, your ass will be owned just like in ukraine. Communist or "free market" it is all the same shit used to control just different method.

[BBanzai]

Propaganda?  Are you implying that the Holodomor and Povolzhye famine were not directly caused by collectivisation?  Whose propaganda do you think I've been cozened by, exactly?