Austrian theory holds that government intervention, not markets, causes boom-bust cycles

Evidence

First, they challenged the New Liberal claim that the operations of the unadulterated free market endangered capitalism using the counterargument that the market had a long-run evolutionary structure that government intervention could neither change nor predict. As such, intervention is always and everywhere harmful. Moreover, because government interventions produce market distortions and malinvestments, they were the source of credit booms and busts. Markets were stable unless they were interfered with. Capitalism wasn’t inherently unstable: government made it so. — Mark Blyth, Austerity, 316

Categorization

• XREF: The claim that ‘capitalism isn’t inherently unstable: government made it so’ is the core Austrian premise austerity advocates deploy; connects to Mattei and the broader economic crisis literature. — connects to: Austrian theory holds that government intervention prolongs recessions and triggers capital strikes — Mark Blyth, Austerity: The History of a Dangerous…, 393; Austrian business-cycle theory correctly describes asset bubble dynamics but offers no policy — Mark Blyth, Austerity: The History of a Dangerous…, 398; Austrian economics frames recessions as necessary austerity after an interventionist party — Mark Blyth, Austerity: The History of a Dangerous…, 316 (+3 more)
• QUESTION: Worth chasing: exactly how this Austrian causal inversion fed into post-2008 austerity justifications for bailouts being curtailed.

Broader Connections

• Austrian theory holds that government intervention prolongs recessions and triggers capital strikes #expands (0.85) — Mark Blyth, Austerity, 393
• Austrian economics frames recessions as necessary austerity after an interventionist party #qualifies (0.75) — Mark Blyth, Austerity, 316
• General equilibrium frameworks can only explain change through outside intervention, not internal dynamics #expands (0.73) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 814
• Austrian business-cycle theory correctly describes asset bubble dynamics but offers no policy #qualifies (0.72) — Mark Blyth, Austerity, 398
• Austrian economics originated as a reaction against state-led development #expands (0.72) — Mark Blyth, Austerity, 382
• Austrian economics interprets corporate cash hoarding in recessions as rational fear of state expropriation #exemplifies (0.72) — Mark Blyth, Austerity, 395