Austrian Economists Put Their Heads Together for Crisis Solutions

Cris Lingle of Francisco Marroquín University, Guatemala, is a critic of unbacked, fiat currencies. (Francisco Bosch)

EspañolThe American continent faces severe economic problems, particularly currency instability, and the Fifth International Conference of Austrian Economics — held in Rosario, Argentina, on November 17-19 — zeroed in on solutions. The 140 attendees heard prescriptions such as the closure of central banks, a return to the gold standard, and trade liberalization under the premise that such freedom produces wealth.

The biennial event, organized by the Bases Foundation of Rosario at the Catholic University of Argentina, spanned economics, political philosophy, epistemology, and methodology. The speakers came from throughout the Americas and included, among many, Axel Kaiser of the Foundation for Progress in Chile and Benjamin Powell of the Free Market Institute at Texas Tech University.

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Austrian Economics a Remedy for Argentina?

One of the most anticipated lectures was offered by José Luis Espert, known for his opposition to the financial and monetary policies of Argentinean President Christina Kirchner.

He began his talk with a defense of the free trade that characterized Argentina’s economic policy in the 1920s. During that era the country experienced a significantly higher growth rate than the rest of the world.

The economist perplexed, “Where did we get the idea that liberalism is bad for the country?”

At the end of the first day, all participants were invited to toast the fall of the Berlin Wall, including noted academics Guillermo Covernton (left) and José Luis Espert (right).
At the end of the first day, all participants were invited to toast the fall of the Berlin Wall, including noted academics Guillermo Covernton (left) and José Luis Espert (right). (GC Facebook)

Espert said the real fight is a redistributive one being fought between the oligarchs who live off the state and those who don’t. He criticized the fact that the state has taken on an ever-increasing number of responsibilities, rather than remaining faithful to its true role: the provision of public goods.

An increasing tax burden is one of the most fundamental problems he sees with the Kirchner government: “an Argentinean works half the year to pay taxes.”

As opposed to most opposition candidates for the Argentinean presidency, Espert says the most problematic public expense is the government payroll, not public subsidies: “There’s your clientele.”

In the Q&A session, Espert was asked, “What is the solution to the country’s monetary problems?”

“Close the Central Bank [of Argentina],” he quipped.

“#AustrianSchoolInRosario. Pedro Schwartz: “Who invented exchange controls? Well, Hitler.”

From Origins to Future

Adrián Ravier, professor at the National University of La Pampa, spoke about the early days of the Austrian school. These date back to 1871 and the writings of Carl Menger, which further stemmed from Scottish Enlightenment thinkers such as Adam Smith.

“The Austrian School is characterized by multidisciplinary economic thought,” Ravier explained, “which includes complex analysis of social reality, based in philosophy, political science, law, history, anthropology, and psychology, in addition to economics.”

Professor Gabriel Zanotti highlighted the importance of the school’s legacy, and why it must continue to be fostered. The best way to do this, he said, is through academic friendships, from which a fruitful dialogue can emerge: “Austrian economists should establish themselves in non-Austrian organizations and publications, and speak on equal footing within them.”

Similarly, Bases Foundation President Federico Fernández said the primary objective of the conference was to spread the ideas of Austrian economics in an academic setting. He opined that they are not well represented in universities, with the exceptions of ESEADE in Argentina and Francisco Marroquín University in Guatemala, among a few others.

“The panorama in universities is so complicated, our primary objective is to plant our flag there,” Fernández said, because the “Austrian school attempts to explain the world as it is, rather than with an arbitrary model, riddled with arbitrary variables.”

Translated by Alex Clark-Youngblood. Fergus Hodgson contributed to this article.

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