An Economic Sing-Along

Just outside the storied concert halls of Vienna, Austria, I stumbled upon a song of a different nature...

Vienna is known as the home of musical geniuses like Wolfgang Amadeus Mozart and Ludwig van Beethoven.

It's also where economists Friedrich Hayek and Ludwig von Mises made their marks in the 1920s and 1930s.

The two men were prominent figures at the Austrian school of economics. The school was founded by Carl Menger, a strong supporter of free markets.

Few folks know, though, that Hayek and von Mises also dabbled in music...

They were part of the Mises-Kreis – a circle of thinkers who wrote and performed witty-yet-profound songs about free markets.

The song I found (right near Menger's memorial plaque) critiques socialism, communism, and the role of central planning. That's the idea that governments should make all economic decisions.

And it got me thinking about what other valuable lessons these satirical songs have to offer. While it might sound a bit silly at first, there's a lot to be learned from the Mises-Kreis...

The lyrics argued that individuals, not governments, should dictate how wealth is created, distributed, and spent...

Take the blunt opening of "Downfall of the Business Cycle," which states...

The ways of science provide for us but one small slice
And it alone cannot a nation feed.
By far the worst methods for the state,
when analyzing our collective fate
Is one that touts the motto "Wert frei heit"
We know for sure our future is not bright.

The song criticizes overreliance on scientific models. And it accuses governments of ignoring freedom and individual choice... the real drivers of prosperity.

This is something I've discussed at length, as regular readers know. Freedom and choice allow people to spot – and act on – economic opportunities. They fuel innovation, competition, and growth.

And those same concepts are what sets America apart from the rest of the world. Nobody else matches our innovation and productivity.

The same song later warns of the danger behind stripping decision-making power from individuals...

 Put simply, it removes their purpose and direction. As the Mises-Kreis wrote...

Oh take not value from our repertoire
Heavens, without it man has no North Star.
Our only course of action, best assault:
Oh, State's defender, call a "halt!"

While Americans have plenty of room for decision-making, they can still fall into this trap. It's like following an analyst's investment recommendation... without questioning his motives or incentives.

Anyone can recommend a flashy stock. But if you ignore crucial factors like consumer sentiment and business investments, that analysis is meaningless.

You have to look at the complete picture.

Another verse pokes fun at institutional hypocrisy...

We know a Business Cycle Institute
Conducting research [as] its main pursuit.
It has a board renowned, and without quirk,
(Of course one man produces all the work.)

It notes how respected organizations tend to rely on the efforts of just a few "experts." The point is, broadening your sources can give you better insights.

These Austrian jingles aren't just silly little rhymes...

They remind us that economies are really about people. It's the consumers, workers, and investors who make the market tick.

Many investors put too much faith in what the "experts" say. And they miss what's actually happening.

The Mises-Kreis' songs encourage us to go deeper to achieve better outcomes.

Don't accept recommendations and analysis at face value, no matter who's offering them. Look at the incentives. Look at the behavior. And always think critically about the data.

Independent thinking will help you uncover the real investment opportunities. And if it helps you to remember... you can set those lessons to music.

Regards,

Joel Litman
July 17, 2025