Welcome to Econ Talk, part of the Library of Economics and Liberty. I'm your host Russ Roberts

of George Mason University and Stanford University's Hoover Institution. Our website is econtalk.org

where you can subscribe, find other episodes, comment on this podcast, and find links to

another information related to today's conversation. Our email address is mailadicontalk.org. We'd

love to hear from you. My guest today is my colleague here in the Department of Economics at

George Mason University, Pete Betke. Pete, welcome back to Econ Talk. Welcome Russ, thanks. Our topic

for today is Austrian Economics, the Austrian School of Economics. My goal is to give you the

less darn overview of the Austrian School, and few are more qualified to do that than Pete. Pete

tells about the origins of the Austrian School. Well, the Austrian School started on the late 19th

century, as in a lot of cases in economics, the school label was given to them by their enemies,

not by their, not, they didn't self-identify themselves as Austrian economist Carl Manger wrote a

book he was working as a financial journalist, and he wanted to sort of understand how you could

explain prices and movements of prices. And he thought that the German language contributions to

economics had under emphasized the sort of universal theoretical ideas that are essential for being

able to interpret historical phenomena such as the movement of prices. And so he set out to write a

book explaining how it is that prices emerge on markets. And he dedicated, in fact, to the German

historical school because he thought that he was, in fact, contributing to the great tradition of

German language economics, which stood in somewhat juxtaposition to classical British economics,

but he was trying to bring a non-recordion. So the British economics had moved to a

Ricardian tradition in which tended to under emphasize the human element and instead focus on the

long-run cost side of things, technology and resource scarcity, not the perceptions of the human

agents. As Manger says in his book, man is the alpha and the omega of economics, and so he wanted

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