Lawrence Reed - Economic Philosophy

Economic Philosophy

Reed is a longtime advocate for what is recognized as the Austrian School of economics. His prolific writing career, as well as his occupational affiliations, have been dedicated to advancing free societies via recognizable Austrian credos such as spontaneous order of pricing systems, voluntary contractual agreements, and limited government intervention in all aspects of life. Austrian economists champion free enterprise and competition,--something Reed has referred to as one of the highest and most beneficial forms of human cooperation-- and believe human interaction and the human condition are the true dictators of how societies are formed, and how they will perform.

Reed believes that, "Competition in the marketplace means nothing less than striving for excellence in the service of others for self-benefit. In other words, sellers cooperate with consumers by catering to their needs and preferences."

I’m an advocate of what is known as the Austrian school. Its most notable scholars were Ludwig von Mises and Nobel Laureate F. A. Hayek, who were born in Austria. Austrian economists (most of whom have never been to Austria, by the way; it’s just the name for a school of thought) start from the premise that “the economy” cannot be best studied as lumps of lifeless stuff you can express with equations. It is composed of living, breathing, decision-making entities called individuals. All economic phenomena can and should be traced back to how individuals perceive, think, act and interact. Austrians see competition and the entrepreneur as critical factors in economic growth. We appreciate the role of incentives and of free prices as natural market-clearing mechanisms. We suffer from no “pretense of knowledge” that would suggest any group of people with power could rationally plan an economy from the top down. We are rigorous in our analysis of money as an invention of the market and are constantly warning that when government takes charge of it, the door is wide open to business cycles and currency debasement. We also tend to be among the strongest defenders of private property; ultimately, everything has an owner and it’s only a question of whether the person to whom it really belongs owns it, or somebody else with a gun owns it. No school has all the answers, but I think it is ever more apparent with time that the Austrian school starts from the right premises, analyzes the economy with the proper tools and humility, and yields the most fruitful insights of any school of thought.