Bloomberg Op-Ed Compares Austrian Economics to 'Brain-Worms'

What does it suggest when someone, writing in Bloomberg, calls his critics “9/11 truthers… enslaved by… brain worms?”

It suggests that he is very worried. He not only thinks the barbarians are at the gate; he thinks that his cozy citadel might actually fall.

And what does it tell us when he accuses his target, Austrian economics (the kind of economics espoused by Ron Paul) of having “anti-Semitic overtones?” – and then documents this outlandish charge by linking to someone’s video on YouTube? Even Noah Smith, the maker of these accusations, has to admit that the founders of contemporary Austrianism were themselves Jewish.

Smith may not be just worried. He may be terrified if he has to resort to such nonsense.

Behind all this is a fierce contest of ideas which the economics and other establishments want to go away, and go away now!

Fortunately we are not a totalitarian society, and a free society has a market in ideas as well as in products. Many people have a vested interest in defending old ideas. In the case of economists, their very livelihood may depend on it. So change comes slowly and is always hard fought.

When new people challenge the old orthodox ideas, the establishment first ridicules them. “What a joke!” If the new ideas gain some traction, the establishment resorts to a stony silence. “Shh! Don’t say a word about it; we don’t want anyone else to hear about it!”

If the silent treatment doesn’t work, the establishment comes out swinging, attacking the new ideas with a bloodlust. “War to the death!” If finally, in a fourth stage, the new ideas win out and become the new orthodoxy, the old opponents just shrug and say, “Oh, I knew that all along.”

Looking at it this way, Noah Smith’s savage attack on Austrian economics is a good sign. Much of the establishment media is still giving Austrian economics the silent treatment. An article like this in the establishment bastion Bloomberg News suggests that we may be entering stage three, where the final battle will be fought.

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Hunter Lewis is co-founder of AgainstCronyCapitalism.org, co-founder and former CEO of Cambridge Associates, a global investment firm, and author of two recent books, Crony Capitalism in America 2008-2012 and Free Prices Now!, about the Fed.