David Graeber and Robert Murphy have been debating the validity of the monetary regression theory. They seem to be talking past one another. Graeber is assuming that Austrian theory agrees with neo-classical theory in areas where it does not, and Murphy is assuming that Graeber is substantially more familiar with Austrian ideas than he seems to be. To clear up the confusion, we need to take a step back and start at the beginning.
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Perhaps the greatest contribution of socialism to economics was to cajole Austrian economists into understanding just how different their theoretical approach was from the main stream of economics. At first, Ludwig von Mises and F.A. Hayek thought they were on the leading edge of that main stream. But the two major debates that they engaged in in the first half of the 20th century — over business cycle theory and regarding calculation in the socialist society — both proved vexing. They should have won both debates. They had the better arguments. But in both cases the majority of economists sided against Mises and Hayek.
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