'..To me, this phenomenon – the invisible hand – together with its implications and limitations appears to be one of the most interesting fields of study for anyone who seeks to understand the world we live in. So why did I start out with the statement that economics is a weird science? This has to do with the turn economics has taken. What has been said about the subject matter of economics in the first paragraph has not much to do with what is taught at German and, as far as I can tell, other Western universities under the label economics..'<blockquote>'Economics is a weird science. It deals with one of the most astonishing and mind-blowing phenomena of human society, namely, how order comes into what appears to be a sheer chaos. Adam Smith's famous metaphor of the "invisible hand" relates exactly to this phenomenon. Although nothing and no one is occupied with coordinating the plans and actions of the millions and billions of more or less isolated participants of the modern market economies, nonetheless the result is not, as one could expect, hopeless confusion and disintegration. Instead, mysterious economic laws seem to hinder modern societies from drifting into disorder. Somehow, our breakfast appears on the table; somehow, seemingly useless coins, flakes of paper, or even digital numbers allow us to buy nearly anything we want and need; somehow, our average number of work hours decreases over the decades and centuries, but still we become wealthier and wealthier. To me, this phenomenon – the invisible hand – together with its implications and limitations appears to be one of the most interesting fields of study for anyone who seeks to understand the world we live in.
So why did I start out with the statement that economics is a weird science? This has to do with the turn economics has taken. What has been said about the subject matter of economics in the first paragraph has not much to do with what is taught at German and, as far as I can tell, other Western universities under the label economics. The invisible hand has been buried beneath the complicated and at the same time simplifying equations of what is usually called price theory, microeconomics, or, more generally, neoclassics. The justified critique of this development, however, has not led to a renewed interest in the foundations of our economic system. Rather, what has happened is that economics as a science has become fragmented. Economic education in current graduate schools – and also most articles in scholarly journals – is not oriented toward one easily identifiable leading question.'
- Dr. Eduard Braun,
Finance Behind the Veil of Money: An Austrian Theory of Financial Markets, January 27, 2014</blockquote>
'..Eduard Braun invites us to step back and reflect about the meaning of finance..'<blockquote>'..Whereas the classical tradition had stressed that “financing” an economy meant providing it with the real goods required to sustain human labor during the production process (which was called the wage fund respectively the subsistence fund), the Keynesian counter-revolution deflected attention from his real foundation of finance..
..
Two achievements stand out.
One, Braun resuscitates the theory of the subsistence fund out of the almost complete oblivion into which it had fallen after WWII. He argues that this theory has been neglected for no pertinent reason, and with dire consequences for theory and economic policy. In particular, without grasping the nature and significance of the subsistence fund, one cannot understand the upper turning points of the business cycle, nor the economic rationale of business accounting, nor the interdependence between the monetary side and the real side of the economy.
Two, the author reinterprets the role of money within the theory of finance. He revisits the theory of the purchasing power of money (PPM) and argues that a suitable definition of the PPM relates exclusively to consumer-good prices, not to capital-good prices. Dr. Braun argues that the PPM in
that sense is the bridge between the theory of money and the classical theory of the subsistence fund.
His book shows that this is a fruitful approach and a promising framework for future research in a variety of contemporary fields, such as financial economics, finance, money and banking, and macroeconomics. The current crisis is a devastating testimony to the fact that mainstream thought in these fields is very deficient, and possibly deeply flawed. At the very moment when governments and central banks, with the encouragement of academic economists, set out to apply the conventional Keynesian policies with ever greater determination, Eduard Braun invites us to step back and reflect about the meaning of finance. This is time well spent, as Braun’s readers will find out.'
- Dr. Jörg Guido Hülsmann,
Why the Austrian Understanding of Money and Banks Is So Important, February 17, 2015
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Context<blockquote>
(Praxeology) - '..Menger’s experience stressed subjective factors..'(Haptopraxeology) - '..We have lost three centuries as a result of ignoring our scholars!'(Haptonomy - Affectivity) - Praxeology as the Method of the Social Sciences - (Affective) Phenomenology of the Social World</blockquote>