​​The Austrian Mindset and the Ambiguous Future

One of the key tenets of Austrian economics is a deep focus on process rather than outcomes. While many other forms of economic or political theory have a stronger emphasis on results, Austrian economics is unique in that it believes that the best results will ultimately arise from the enablement of good processes rather than the promotion of any end state. While much of the progress we see in the world today has arisen from systems with poor processes, those systems are a limiting factor rather than a driver of growth. The desire to get from one state to another too quickly ultimately hampers long-term growth rather than accelerate it. While there are many benefits for individual choice in using an Austrian framework to decide a policy, the greatest benefits actually come from the vast range of futures that an Austrian mindset leaves open. An Austrian worldview has no box in which it forces creativity to fit. Whether in business policy or government structure, only a focus on process can provide the best chance of success in a constantly ambiguously changing world.

The Austrian prioritization of the market process over any specific business outcome allows for the most creative and compelling range of futures. Mises’ detailed examination of human action and the associated understanding of the inherent complexity of humans and markets humbles Austrian economists to recognize that any attempt to shape the future will ultimately backfire on regulators. Even seemingly neutral ideas for business regulation are based on numerous unspoken assumptions that could change at any time in the dynamic future of business. Even in antitrust enforcement many arguments are made with the future in mind, but the focus on specific outcomes for specific businesses makes the prescriptions only hold true until the situation changes. An Austrian understanding could let business policy become far more durable because it could focus on providing stable regulatory conditions rather than rearranging the world how the regulators see fit. Businesses yearn for institutional stability and the slight subjective benefit gained by interfering in business as far outweighed by the loss in trust that businesses develop for the government. The Austrian obsession with process allows for the future of innovation to unfold by recognizing that real growth comes from individuals and firms navigating the constantly changing trade-offs of the real world. As technology, human wants, and business structures change over time, the Austrian obsession with process will allow for human ingenuity to be unlocked far better than any deterministic for your bureaucratic concept of a successful outcome.

The Austrian insight into the importance of process is also extremely important in establishing governmental structures that are stable through time. It is easy for governments to feel that they are successful if the people are happy or if they are powerful with a stable financial situation. However, a government that can sustain success through electoral cycles requires an Austrian focus on process rather than final outcome. External success often masks grave incentive or structural issues with governments that should be dealt with with more urgency than most external crises. An example of this focus on outcome is how some business successes from lobbying can be used to justify regulatory capture. While its strength relative to other countries has grown greatly in the past hundred years, only a rigorous evaluation of America’s institutional incentive structure can give us the best chance of doing so during the next hundred years. The impossibility of predicting future conditions and outcomes means that the best way a government can protect itself over time is by ensuring that at the very least the government processes themselves are not the core problem holding the nation back. The Austrian ambivalence to success alone is a powerful defining characteristic that inoculates it to the endless stream of arguments in favor of systems that have had good outcomes in the past.

The more specific a plan of the future is, the more ways it can go wrong. The Austrian prioritization of process allows preparation for the future that is truly as robust as can be possible. Any assertion of an optimal end state fails to take humanity and inherent randomness into account. Even if some technocrat could ensure that their ideal set of conditions for the world occurred, there is an infinity of ways it could go wrong. This imperfect world must first be recognized in its imperfection to allow for any true movement towards better outcomes to occur. The wealth and freedom that abounds in the world today is a miracle rather than a right, and the Austrian method approaches that miracle with humility.