I interviewed Professor @PerBylund on Austrian Economics, how countries get rich, the role of hard money and gold, and what's coming next for the debt-ridden US economy.
— Peter St Onge, Ph.D. (@profstonge) August 31, 2024
I hope you enjoy! pic.twitter.com/i5sBk6NK7F
Per Bylund, Prof at Oklahoma State, author of How to Think About the Economy.
You are Twitter famous for one of the best economic tweets in history, "What causes poverty? Nothing. It is the original state, the default and starting point. The real question is what causes prosperity?" The biggest problem in any discussion nowadays and also in science, is that we are asking the wrong questions, and it's mostly more important to ask the right questions and to have a good answer I like to twist things over a little bit and uncover an actual issue that we're talking about we tend to assume so much, and we tend to assume that in today's society that there's plenty of wealth. So the problem becomes just how to spread it around? The wealth comes from somewhere. It is the case that if you don't do anything, you're not going to have produced anything. If you don't do anything at all, you're just going to die. But if you just rely on nature and don't do anything with nature, you're also going to die pretty soon; you're definitely not going to be wealthy. So we have to ask, where does this prosperity that we are living in and benefiting from, enjoying everyday, where does it come from? That's the real question, "How come someone is poor?" because that's a lack of prosperity, a lack of wealth. Real question is, "Why are some countries, or nations rich and wealthy universally, and some countries they haven't caught up, and how can they catch up? These are the main questions really in economics.
Mainstream economics tends to be more focused on the distribution of wealth it almost takes wealth as a given and it focuses a lot on who is getting that wealth income inequality which kind of suggests a more political project really than than an economics project like which voting constituencies are we trying to appeal to but in Austrian the focus is much more on production and do you you're familiar course with the Robinson cruso tight do you know when you give your courses sort of introducing students to Austrian Theory or economic theory, like how things are producing how we get prosperity in the first place?
Robinson Crusoe is a good example although most days most students don't know what Robinson Cruso is. So you have to talk about Tom Hanks in Castaway, and then they get it which is sort of funny. It wasn't the case 10 years ago they don't really know what it is. But starting from the default point where you have nothing and talking about how can you accumulate wealth and by what means do you do that, I mean, that's super important cuz for the individual person, like Robinson Crusoe, alone, and also for society like where does it come from and how come we experience growth but not GDP growth but actual growth in terms of increased well-being? And where does it come from? How can we get more of it, how can we share it, or what is it actually mean?
So what are the top policies in your mind that would increase well like if we look at today's America for example what kinds of policy changes do you think would have the biggest impact?
One is to lower the barriers to entry. I think a lot of economists go wrong when they think about how competition is important, and they count the number of businesses doing the same thing. Well if they're all doing the same thing, they're not going to contribute a whole lot maybe making a specific production process more effective. But economic growth and actually producing wealth is about disrupting and creating new value not not stopping entrepreneurial ship but creating new businesses and new types of production and we have a huge problem there
