An SEO keyword search for Austrian Economics can yield a lot of results like “Austrian Airlines” and “Vacations in Austria” and not much about economics.
A Google search might take the searcher back to 1871 and Carl Menger, the founder of Austrian economics.
The confusion of the country designation and the predominance of history is unfortunate in the sense that anyone in business today, and indeed anyone in life today, can learn a lot from the principles of Austrian economics.
It’s true that the founders of the stream of economic thought that’s called the Austrian school did their breakthrough thinking in Vienna. But it’s not very helpful for the understanding of the benefits their thought brings to mankind. The term Austrian economics describes a feature and not a benefit, and all of us who work in marketing know that to do so is a serious communications error.
If we were to think about Austrian economics in terms of the benefits it brings – its brand promise, if you will – what kinds of keywords might we generate?
Mainstream economics is purposely unrealistic. It’s about writing equations and constructing mathematical models to attempt to predict the unpredictable. Austrian economics, on the other hand, is about understanding individual people’s preferences and choices, and how they interact with the choices of others in economic systems of various sizes, from the family to the nation.
As a result, Austrian economics is helpful to businesses and anyone trying to understand human economic behavior.
Keywords: Real economics, economic realism, business economics, Economics for business.
Because it focuses on human economic behavior, Austrian economics concerns itself with human values – the values that motivate choice and interaction, and the search for betterment for all.
Keywords: Human economics, humanist economics, humanomics
The purpose of economic behavior is the generation of value, firstly for others, and them for oneself. Value is an experience – recipients of value are pleased, satisfied, happy, sometimes delighted. Value generation is doing nice things for people, or giving them nice things, and enjoying their response.
Austrian economics is totally focused on value – how to spot the potential for it, how to make it possible, and how to understand how and why some people find some things more valuable than others do. With this information, Austrian economics studies ways to generate even more value.
Keywords: Value economics, value logic, experiential economics
There’s a special individual or grouping of individuals in the world of Austrian economics: entrepreneurs. These are the individuals or teams who are alert to customers’ desire for improvement in their product or service experiences, and responsive enough to create and offer something new and better to solve the satisfaction problem.
Entrepreneurs are the ones to thank for all the innovation and improvement that ever hits the market, and all the value generation that results. They are economic heroes, the drivers of higher living standards and happier experiences. They make the world a better place.
Entrepreneurship is central to Austrian economic thought. Mainstream economics doesn’t even deal in the topic, because it doesn’t fit neatly into an equation. Yet it’s the engine of economy
Keywords: Entrepreneurial economics, entrepreneurship, economic heroes, economics of betterment
Austrian economics concerns itself with the generation of value in the future. What decisions do entrepreneurs make today, and what resources do they need to deploy over time, in order to deliver value to others in the future, and realize a future gain for themselves? All this is wrapped up in the concept of opportunity – customers have the opportunity of better future experiences, entrepreneurs have the opportunity to make a gain by delivering those future improvements. It’s uncertain, and someone must take action to make it come to fruition, so it’s a positive incentive and a happy outcome if it occurs. It’s optimistic. Everybody wins when opportunity is identified and then realized. There’s proactive creativity in bringing this about.
Keywords: Opportunity economics, optimism, excitement
Individual economic freedom
For entrepreneurship to be effective in serving customers as people, and for every customer to experience value as they subjectively and individually determine it, there is a requirement for the recognition of individualism on both the supply side and the demand side. Individual customers must be free to seek what they prefer (we often call this personalization or personal service) and individual entrepreneurs and entrepreneurial businesses must be free to craft and offer uniquely tailored products and services. Such an environment is made possible only by individual economic freedom. Austrian economics is the economics of individualism and individual freedom.
Keywords: Individualism, economic freedom, economics of liberty
Austrian economics subsumes contemporary theories of complexity and adaptive systems. One of the characteristics of complex systems thinking is emergence – that system properties result in greater output capacity than is explained by the combination of inputs. “The whole is greater than the sum of the parts” is the popular expression that captures this feature of complexity science. In economics, this form of analysis can explain economic growth, rising productivity, and the improved performance of some firms that utilize the same technologies and resources as others. It’s not subject to mathematical equations, which can’t cope with the non-linearity of emergence, although it can be computer-simulated in some respects. The understanding of emergence is still emerging, but Austrian economists have described it for decades. For example, F.A. Hayek identified what he called spontaneous order – today’s complexity theorists would say “self-organizing systems” – in the 1940’s.
Emergence brings the excitement of unpredictability to economics, and changes it from a dismal to a thrilling science.
Keywords: Emergence, anti-routine, breakthrough, innovation, creativity, abundance, high performance, radical, thrilling
Let’s substitute these keywords of those of travel to Austria and historic references.