“Notice, I haven't said anything about Austrian Economics. I want you to elucidate how you will be any different because you use an equation?” (RFB) Ludwig von Mises never understood profit, and by logical consequence, how the economic system works. That's self-defeating. To this day, Austrians have not realized their scientific blunder. Ignorance cannot recognize its own ignorance. Like other approaches, Austrianism has defined itself as a social science and accordingly has been based on subjective/behavioral assumptions/axioms. This is the methodological ur-mistake. The free-market economy runs on profit. Macroeconomic profit is given by the axiomatically correct Profit Law Qm≔(I−Sm)+(G−T)+(X−M)+Yd. The Law implies PublicDeficit-Is-PrivateProfit Qm≔(G−T)>0, i.e., macroeconomic profit is (co-)produced by deficit-spending/money-creation, i.e., the growth of public debt. Von Mises had a voodoo explanation of profit: “The ultimate source from which entrepreneurial profit and losses are derived is the uncertainty of the future constellation of demand and supply.” He leaves open the question of how the spiritual concept of uncertainty materializes into measurable hard cash in the box. In free-market economies, public debt has increased with minor interruptions for over 200 years. Therefore, Qm≔(G−T)>0 is a critical element of the economy's survival. The minimum requirement of a free-market economy is that macroeconomic profit is greater than zero, i.e., Qm≥0. If Qm<0, recession/depression/breakdown results. This is the main economic principle; all other explanations of how the economy works are secondary at best. Utility/profit maximization or free people on free markets or competition or hard work or innovation or the entrepreneur or optimal allocation do not keep the economy above the zero-profit cutoff. Scientifically, it's rather simple: no macroeconomic profit, no economy. But economists are only look-alike scientists. They have never had enough brains to understand the objective, systemic facts, i.e., the existential preconditions. Among scientifically incompetent economists, Austrians are the dumbest. Free-market economies are temporarily saved from breakdown by the deficit-spending/money-creating duo of Treasury/ Central Bank, i.e., the State. This means that the Austrian premise that the unfettered free-market economy is a self-adjusting, self-stabilizing, and self-optimizing system is axiomatically false. Austrianism is failed/fake science. Neither von Mises nor the sorry bunch of followers ever understood what keeps the economy going.
— AXEC (@EgmontHandtke) October 26, 2026
October 26, 2026
Occasional X: The foul spirit of political economics (CCCXCXXVI)
