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Nov
30

They didn't buy into the Keynesian fantasy

What is Austria's secret?

Ever heard of the Austrian School of Economics?

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The Austrian Miracle – By Dardis McNamee
VIENNA — Walking through the beautiful and bustling streets of central Vienna, one finds it hard to imagine that elsewhere in Europe thousands of demonstrators are taking to other streets to protest c…

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4 comments

  1. Naveed Massjouni says:

    It seems like you didn't even read the article that you posted. Austria seems to be the posterchild for Socialism:

    The answer lies in a system of economic and employment policies built on a central commitment to social market economics, where individual and corporate prosperity depend on general prosperity in a tapestry of interdependent interests. These assumptions are played out, at least in part, through a "social partnership" system of representatives from labor, industry, government, and often academia, in which job security, wages, pensions, unemployment insurance, and other workplace standards, as well as related legal and policy questions, are discussed and negotiated, leading to recommendations to Parliament and the respective ministries.

    At the same time, Austria has a productive and highly competitive manufacturing sector, which accounts for the country's favorable trade balance. In a country with generally good secondary schools and effectively free higher education, the economy enjoys a well-educated workforce and stable relations between management and labor within the social-partnership system that allow for long-term planning. Austria also has an excellent medical system, ranked among the world's best, and a varied and flexible national health-care system supported by all participants.

    The single most important factor here is the role of a generous welfare state, which "steadies consumption" during recessions, said economists Markus Marterbauer and Sepp Zuckerstätter of the Austrian Chamber of Labor. "Confident that their basic needs are covered, Austrians use their savings to continue spending," said Marterbauer and Zuckerstätter in a 2011 interview with the Vienna Review. "Constant consumer demand and reduced savings in downturns, and increased savings in boom years, are characteristic of the Austrian economy. Both help keep output and employment levels up."

    Austria has also invested heavily in job training both for the unemployed and for youth entering the job market. With a budget of some 1 billion euros (a budget Kopf readily admits is "enviable"), the AMS is able to offer individual counseling and monitoring on a weekly basis for job seekers as well as usually two extended training courses in appropriate skill areas, including technology and languages, to improve job prospects. So though the unemployment rate overall is up slightly from last year (from 4 percent to 4.4 percent), there are also 45,000 more people working, meaning more people have entered the workforce, which is generally seen as a sign of confidence in the economy.

  2. Finn Krogstad says:

    Has there been any 'Austrian School' in Vienna since Mises left for Geneva?

  3. Chris George says:

    High rate of savings, low public debt and a public that is well educated in economics.

    Compare that with Chicago.

    The socialism is simply a wrapper for the basic economics. It is funny that we expect the government to run the economy for the benefit of the people. When they actually do we call it socialism.

  4. Chris George says:

    High rate of savings, low public debt and a public that is well educated in economics.

    Compare that with Chicago.

    The socialism is simply a wrapper for the basic economics. It is funny that we expect the government to run the economy for the benefit of the people. When they actually do we call it socialism.

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