[tootie]

The political/economic climate around the time bitcoin caught on was also the Ron Paul/Austrian economics fad. They were calling the end of the USD and fiat currencies because central banks were risking hyperinflation. Lots of people were calling for a return to gold. BTC seemed even better. I think it's safe to say they were completely wrong about everything and orthodoxy won the day.

[AznHisoka]

Weird, is Austrian economics a fad? I always thought it was a legitimate, alternative model of economics that was just as valid (if not more) as Keynesian.

[sprafa]

Both the Keynesian and the Austrian models have been shown to be flawed and incomplete understandings (from what I understand of it). They can explain some things, but they break down, and in those breakdowns we had crises - keynesian thinking was abandoned after the 70s crisis, and now monetarism is being (slowly and reluctantly) abandoned after 2008.

I find that the assumptions on both models, that humans can measure and act according to their own preferences, might be one of the core issues with economics today. In fact if you keep to that idea economics is more of a religion than fact. There's very little evidence that humans act rationally in economic situations. There's accumulating evidence they don't. Economics makes more sense if you come at it from psychology from my view: humans are irrational and so are markets. Rational thinking is the exception, not the norm (might be an odd idea for the HN audience, but think about everyone else...)

[tootie]

No. Austrian economics has virtually zero support in mainstream academia or industry. You won't more than a handful of people who manage money for a living who think Austrian school is sensible. Keynesianism as Keynes wrote it is full of holes, but is the biggest contributor to modern economic thought. Good writeup on reddit a few years ago:

https://www.reddit.com/r/Economics/comments/ip2nb/know_your_...

[jeffbax]

This is a pretty shortsighted view of things. The various economic theories all have their insights and shortfalls… and there's no one theory to rule them all.

Recommended: Marginal Revolution's "Game of Theories" https://www.youtube.com/watch?v=cYNVB5iqydk&list=PL-uRhZ_p-B...

To call Austrian economics as something with zero support in mainstream academia or industry is really just revealing your own biases more than anything.

[AznHisoka]

"a handful of people who manage money for a living "

Half of those people don't even perform better than an index fund, so let's not put them in some sort of pedestal...

[ufo]

The Austrian school most certainly does not align with modern mainstream economics.