The UT Mises Circle, a new organization founded by students Michael Goldstein, George McHugh and Jose Nino, focuses on economics in terms of “praxeology,” the logic of human action. Rather than using models or data from past events to interpret economic activity, as is often the case with conventional economics, praxeology is centered around a simple concept: “humans act purposefully.”
“Praxeology does not investigate why people do things, what people should do or what people have done — those investigations belong to psychology, ethics and history,” McHugh, a management information systems senior, said. “Rather, praxeology asks, ‘What are the implications of people’s actions?’ Basically, the study of common sense and, thus, economics.”
The namesake of the group, Ludwig von Mises, was an Austrian-born economist and one of the founders of the Austrian School of Economics, which according to Nino, a history senior and president of Libertarian Longhorns, “is free-market oriented discipline that sought to explain recessions and other related economic crashes through the expansion of credit that is characteristic of practically all central banking systems.”
Plans to form the Mises Circle have been in circulation since spring 2011, but did not become a reality until last semester when the group officially registered as a student organization. While the founders and many members also participate in Libertarian Longhorns, which explores similar economical theory, the group does not officially endorse any political position and focuses exclusively on the economics.
“Economics may be known as ‘the dismal science,’ but you wouldn’t know it based on the enthusiasm of the students [in our organization],” Goldstein, a computer science sophomore, said. “Even more, very few of the members are economics students at the University.”
The diverse student make-up of the organization is largely due in part to the unconventional economic principals from which the Mises Circle finds its basis. According to Goldstein, the economic thought the organization uses is often overshadowed by more “mainstream” economic teachings, such as those of John Maynard Keynes.
However, the works of Mises have recently gained prominence in the headlines through Congressman Ron Paul’s frequent references to Austrian economics during Republican debates.
“In what little time is given to Paul in the debates, he will sometimes make some Austrian economic references with regards to various economic policy prescriptions,” Nino said.
One such prescription would be the recent economic recession, which has rekindled interest in these often overshadowed economic teachings. As explained in the 2009 Wall Street Journal article, “The Man Who Predicted the Depression,” Mises is said to have predicted the economic turmoil of the 1920s, even going as far to turn down a job offer with the Viennese bank Kreditanstalt, claiming that “a great crash is coming, and I don’t want my name in any way connected with it.”
“Only the Austrian economists understood and continue to understand what truly causes the booms and busts of the business cycles and how they can be fixed and avoided,” Goldstein said.
As UT does not offer a course specifically over Mises’ principles, the Mises Circle presents students with the opportunity to discuss the Austrian school of economics through means of group discussion, presentations and relevant readings.
“Our ultimate objective for our group is to have a class that covers Austrian economics at UT,” McHugh said.
While the plan is still in its early stages, the Mises Circle hopes to eventually gather enough interest for a course or seminar on Austrian economics through student involvement in their organization.
“Many people are starting to question the Keynesian economic establishment, its economic models and policy prescriptions,” Nino said. “Our goal at UT is to provide UT students [with] a legitimate forum that discusses Austrian economic principles.”
Printed on Wednesday, February 15, 2012 as: UT Mises Circle founded on humanist economic approach