New Technology In Economic Science.

Those familiar with Austrian economics know that Austrian economics is part of the tradition of classical liberalism. One of the most distinguishing features of Austrian economics is the use of the methodology of subjectivism.

In Man, Economy, and State Murray Rothbard pioneered the use of diagrams built upon subjectivism, done in contrast to the empirical diagrams that were and are used in economics by the empirically-minded. There were other attempts within the Austrian economics tradition to convey economic concepts using diagrams as a supplement, for example the Hayekian triangle. The detailed exploration of the use of diagrams to build a bridge between the Austrian business cycle theory and the empirically-oriented alternative (yet mainstream) theories that was done by Roger Garrison, is another example of pioneering work in this regard.

These and all of the too-many-to-mention other examples were and are great pedagogical steps offering alternative ways to understand the commonly recognized economic concepts and laws. But these disconnected diagrammatical examples of the power and use of the methodology of subjectiveness that supplemented and supported the causal-realistic logic did not coagulate into a technology.

Between 2005 and 2012 a new economic model - built using the methodology of subjectivism - provided a broad platform that included macroeconomics, microeconomics, ethical economics and economic justice. It is because it is so broad yet wholly integrated and deductively sound that it can be regarded as a new technology.

The series of models built using the methodology of subjectivism that constitute this new technology include:

• Divine Economy Model
• Divine Microeconomy Model
• Model of the Ethics of the Divine Economy
• Model of the Justice of the Divine Economy

This new technology is comparable to the technological advance made when the lens was first introduced. Things are clearer, and it amplifies the ability to focus, and new things not seen before are noticed. No one would deny that the lens was a welcome and useful technology. As an Austrian economist myself, I can testify that this new technology is timely and important.

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Economic Modeling Using Subjectivism!

Divine Economy Model: A subjectivist model that describes the economy in the following terms: human spirit, transformation, law, order, purposeful action, capital structure, market, property rights, justice, and unity.

The degree of specificity and intricacy in this model has never before been achieved even though the logic and the concepts have always been there in both the classical liberalism tradition and in the Austrian economics tradition.

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With The Wings Of Subjectivism And Austrian Economics!

Like a phoenix - out of classical liberalism with the wings of subjectivism and Austrian economics rises the divine economy theory! Its flight encompasses macroeconomics, microeconomics, ethical economics, and economic justice.

The nest of its origin consists of the contributions of the great minds within the tradition, lined with the natural law pertaining to the remarkable human spirit.

This sustaining nurturance makes it possible for the phoenix to fly to hitherto undiscovered territories! And, not to be forgotten, eggs will hatch and carry everything forward, far and wide, and into the future.

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The Entrepreneurial Spirit Drives The Market!

The market is an expression of the human actors (it is the universal language and prices are the words) and all humans exercise some degree of the entrepreneurial spirit.

The magnificent thing about the market is that it communicates intent and has content. When the medium of exchange is the one that is chosen by the market (ex. commodity monies since the beginning of human history) then it is indeed true that the words (prices) are universal also.

Humans are seekers after truth, but in varying degrees and at various times, and some even are mostly latent but this condition of latency is amplified and stretched out by the denigration of the spirit caused by the propaganda of the State. Releasing the entrepreneurial spirit is one of the tremendous powers of the market.

At the same time it is the entrepreneurial spirit that drives the market!!!

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Economic Synonyms That Fit In The Divine Economy Theory.

The following terms all fit perfectly within the parameters of the divine economy theory. In a sense, then, the divine economy theory can be considered as a specialized version of each of these.

Causal-Realistic
Capital-Based Economics
Austrian Economics
Classical Liberalism
Laissez-Faire
Market Economy
Disequilibrium Analysis

It would not be wholly accurate to say that the divine economy theory is identical to any of these since there are many unique contributions in the divine economy theory that are not present in these other perspectives. Other than any claims made by some of the adherents to these other perspectives that atheism is implied, there is no aspect of these above mentioned perspectives that does not wholly fit within the divine economy theory.

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Economic Equilibrium In The Austrian And Divine Economy Theories.

There is less virtue in science when it is static and it is never the desire of the champions of science that their contributions be seen as the final contribution to its advancement. Just like it was before their contributions, science had reached a certain plateau where most of their contemporaries dwelt until the explorer began the trek towards a new summit.

In contrast to the empiricism-dominated economic 'science' the Austrian school never accepted the interpretation of equilibrium given by their contemporaries. Actually empirical economists have to use equilibrium to provide a framework so they can apply econometrics. In a sense the whole empirical construction depends on the assumption of equilibrium and it will necessarily crumble into a heap of nonsense if the concept of equilibrium is removed. Sensing its total self-destruction the gate-keepers of empiricism cannot allow query into the subjectivist approach. Right there - the fear of inquiry - demonstrates extremely poor scientific method.

In the Austrian school of thought equilibrium is viewed as a mental construct that never really exists and so it is not needed to make economic analysis. The real condition in the economy is disequilibrium tending towards equilibrium. As succinctly stated by Murray Rothbard "The final equilibrium state is one which the economy is always tending to approach." These tendencies reflect the actions of humans as subjective beings with uniquely functional human qualities, the effect of which can be understood further by praxeology.

The divine economy theory advances economics further by broadening the ontological foundation that fits into the natural law as it pertains to human beings. Not only are humans physical and intellectual but also spiritual which then has significance with regards to equilibrium. The equilibrium forces that create the tendencies spoken of by Rothbard are not randomly a part of Mother Nature. The equilibrium forces are part of the economy and the reason is because the economy only exists because humans exist and humans are spiritual in addition to physical and intellectual. By ignoring or being unaware of the spiritual nature of human beings the balancing and harmonizing potency of equilibrium is falsely deprived of the inherent motive force since human action is purposeful. In other words, the equilibrium forces are also purposeful, not dissociated from the special station of human beings in the world of creation.

Equilibrium as a force and the appearance of disequilibrium in the economy are fully within the realm of scientific exploration and the realm of advancing comprehension but it does require a dynamic approach to science. Our ability to test validity should make us willing to welcome claims of new discoveries because we can make reasoned judgments, that is, as long as we do not act as if science is something static.

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Where Is There A Free Market Economy?

It is ubiquitous! Theory only proves its existence!

The testing of the theory has to do with the laws that exist and the compatibility of the free market with those laws. Humans are subjective and they are physical, intellectual, and spiritual. Without going into details this is all perfectly compatible with the divine economy theory. I wouldn't worry too much about being able to see it - in all of its splendor - in these, the Dark Ages of economics.

If you understand how the physical laws operate and you see a jar containing water and sediment the fact that it is constantly being stirred does not mean that when the agitation stops the sediment will remain in suspension. What will happen is the impurities will settle out and the water will be clear for all to see! Likewise when all the agitation of the interventionists stop the glory of the divine economy - the unhampered market economy - will be clear to everyone!

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