The Austrian School of Economics – a good theory with slim chances of becoming good policy

Abstract

The goal of this article is to prove that, starting with the Great Depression of 1929 – 1933 and up until today, the Austrian School of Economics has always positioned itself “against” the status-quo. In other words, the official economic policy did not build on its theoretical foundations. Considering this as our starting position, we attempt to prove that this was a bad course of action for the economic policy, as well as for the wellbeing of the individual. For the economic science, the fact that the Austrian School did not sign the pact with political compromise is a positive thing. In this context, we will present how the usual marriage between science and politics takes place by using the Keynesian example, and all the consequences that follow from such an affair.