Abstract
The Austrian school of economics increasingly has become identified with antiwar groups. This is not due to religious or political views. Rather, the antiwar viewpoints of the Austrians come from the fundamental tenets of economics as expressed by the school's founders and refined for 140 years. This article applies post-world war II Austrian thought to the subject of war.
Highlights
What’s more, the Austrians see effects emanating from the structure of production on an economy but on civilization itself, as well as on specific cultures
Instead of consumers and entrepreneurs looking after their own long-term goals, they look after the short-term ends of political and military leaders
One area in which Austrian economists differ from the economic mainstream is in their views on capital and capital formation
Summary
Kirzner (1973) argues that entrepreneurship springs from the basic idea of arbitrage: Entrepreneurs seek to buy low and sell high. An entrepreneur who buys factors, engages in production, and sells the finished product at a profit has engaged in arbitrage, understood broadly: He bought (factors) low and sold (goods) high. Entrepreneurs alert to changes in markets can see that profits have shifted out of consumer goods and into war goods. An increase in the number of men in uniform drives other changes, such as a shift from packing soup in small cans for home consumption into packing soup into barrels for mess hall consumption. In the former case, subtle changes in taste might have huge impacts on profits; in the latter, sheer volume is the primary issue. The societal cost, as always, lies not merely in the tax paid for war goods, and in the foregone utility from consumer goods that are not created for the duration of the war
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