The Austrian School and neoliberalism

You claim that the Austrian School is an extremist offshoot of neoliberalism. I disagree with that characterization. I too am very critical of both the Austrian School and neoliberalism. However the Austrian School does have a couple of good ideas, depending on which economist we are talking about. Specifically Hayek, despite his delusions, did make a valid contribution to economic theory through his concept of a market as a system whereby information is transmitted among economic actors, and thereby, as he stresses, obviating the need for central planning. I think if Che Guevara had read Hayek he would have avoided many of his blunders as minister of the economy in Cuba, where overcentralization wrought havoc on the economy.

But the Austrian School does not merely provide a critique of socialism -- it also provides a critique of neoliberalism, and largely for the same reason. Neoliberalism, being a creature of the parasitical financial oligarchy, relies on exactly the same sort of reckless aggregation of economic data as does central planning. For example the Capital Asset Pricing Model, the mathematical models associated with a mathematician called Sholes, on which Long-Term Capital Management relied and that led to its downfall, and countless other aggregation tools that are central to the neoliberal financialized approach to the economy, are all firmly rejected by the Austrian School on exactly the same grounds as those they invoke to reject central economic planning (and I am using the term "central economic planning" in its strict sense, namely that a central planning board determines years in advance the manufacture, distribution and consumption of every last tiddlywink, as opposed to the propagandistic use of the term by flea-market capitalism fetishists to denote and denounce ANY kind of government planning. They do this merely in order to invoke Hayek's use of the term to designate the final Stalinist stage of his crackpot model according to which all government intervention in the economy inexorably leads to totalitarianism.)     

And the grounds the Austrian School invokes to reject this aggregation frenzy is that only decentralized economic actors have enough information available to make sound business decisions, since they are in close contact with their respective economic environments, which involve parameters that are difficult to quantify and are consequently not susceptible to aggregation, as well as because such conditions vary from place to place and from time to time. Of course "decentralized economic actors" need not mean private capitalists. They can also be state-owned or municipal enterprises, cooperatives, and so forth. And Hayek's concept of the market does not rule out macroeconomic planning, or industrial policy either. As a matter of fact Hayek is on record as advocating a state welfare safety net! 

Consequently the Austrian School has saving graces that neoliberalism lacks.

https://fixingtheeconomists.wordpress.com/2013/06/20/nazism-and-neoliberal-mythmaking-part-i-german-reconstruction-as-state-phobia/

https://fixingtheeconomists.wordpress.com/

As for the ordoliberals around Walter Eucken, they were a left-wing heresy of the Austrian School, and I consider at least two of their key ideas to be sound:

1. to prevent by all means capitalists from influencing government policy.  In other words they opposed lobbying and revolving-door staffing, which nobody can object to, and
2. the state should ensure competition and fight monopolies. This was a position that the hard core of the the Austrian School namely Ludwig Mises, disparaged. Mises wrote that the state should not act as an arbiter, and that only government monopolies were bad, while private monopolies were good.

On the subject of ordoliberals, I just read an interview in German with Lars Feld, who is currently the chairman of the German economic advisers council and a prominent ordoliberal. I found his remarks on current German economic policy quite sensible and not the least bit neoliberal-extremist. He approves of extra German government spending on raising wage subsidies for part-time workers in connection with the epidemic, and other Keynesianoid measures.

Source: «Wirtschaftsweiser» Lars Feld: «Es lohnt sich politisch nicht, liberal zu sein»
https://theworldnews.net/ch-news/wirtschaftsweiser-lars-feld-es-lohnt-sich-politisch-nicht-liberal-zu-sein

I don’t want to get on your nerves, but here is a very cogent instance of how pertinent Hayek's concept of the market is as an information network that transmits the first-hand knowledge that managers of firms have about their respective environments.

It’s a quote from an article by the Hungarian economist János Kornai. 

"Back in 1956 I was working on my dissertation, having regular discussions with enterprise managers in light industry. They spoke scornfully of the meticulous plan directives they got from the ministry, laying down for the following year, fabric by fabric and width by width, how many square metres of woollen or cotton material they had to weave. How, they exclaimed, did “the powers that be” come by those exact figures, what with all the uncertainties of production and sales? Based on my researches I finished my dissertation, which after some upsets [a tactful reference to the Hungarian Uprising of 1956 and its bloody suppression by the Red Army] appeared in 1957 as Overcentralization in Economic Administration."

It backs up my claim that Che Guevara should have read Hayek.

Source: Központosítás és kapitalista piacgazdaság [Centralization and the Capitalist Market Economy], by Janos Kornai, Népszabadság, Budapest, 28 January 2012
Available on János Kornai's website: www.kornai-janos.hu