https://en.wikipedia.org/wiki/Austrian_School
General criticisms[edit]
Mainstream economists have argued that Austrians are often averse to the use of mathematics and statistics in economics.[71] However, independent scholar Martin Sibileau, in 2014, suggested a logics-based approach for a definitive formalization of the Austrian thought.[72]
Economist Bryan Caplan argues that many Austrians have not understood valid contributions of modern mainstream economics, causing them to overstate their differences with it. For example, Murray Rothbard stated that he objected to the use of cardinal utility in microeconomic theory. Caplan says that Rothbard did not understand the position he was attacking, because microeconomic theorists go to great pains to show that their results are derived for any monotonic transformation of an ordinal utility function, and do not entail cardinal utility.[59][73] The result is that conclusions about utility preferences hold no matter what values are assigned to them.[citation needed]
Economist Paul Krugman has stated that because Austrians do not use "explicit models" they are unaware of holes in their own thinking.[74]
Economist Benjamin Klein has criticized the economic methodological work of Austrian economist Israel M. Kirzner. While praising Kirzner for highlighting shortcomings in traditional methodology, Klein argued that Kirzner did not provide a viable alternative for economic methodology.[75] Economist Tyler Cowen has written that Kirzner's theory of entrepreneurship can ultimately be reduced to a neoclassical search model and is thus not in the radical subjectivist tradition of Austrian praxeology. Cowen states that Kirzner's entrepreneurs can be modeled in mainstream terms of search.[76]
Economist Jeffrey Sachs argues that among developed countries, those with high rates of taxation and high social welfare spending perform better on most measures of economic performance compared to countries with low rates of taxation and low social outlays. He concludes that Friedrich Hayek was wrong to argue that high levels of government spending harms an economy, and "a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness."[77] Austrian economist Sudha Shenoy responded by arguing that countries with large public sectors have grown more slowly.[78]
Economist Bryan Caplan has noted that Mises has been criticized as allegedly overstating the strength of his case in describing socialism as impossible rather than as something that would need to establish non-market institutions to deal with the inefficiency.
