Another good find by Kendall posted at simply Capitalism: Austrian Economists on the Crisis.
On Bloggingheads.tv, Arnold Kling and Russ Roberts, two economists with approaches heavily influenced by the Austrian School of economics, discuss key contributing factors to the current economic crisis along with the rationale behind many of the responses by government.
I have thoroughly enjoyed Russ Robert and Arnold Kling's contributions to the discussion on EconTalk and elsewhere. Both are informed, appear to be honestly curious and critical, and make attempts to engage the other side in a respectful manner.
This clip has many worthwhile take-home points, but perhaps my favorite is Kling's summary of the various approaches to government's role in the economy. As he put it:
The Chicago School (monetarists) say: "Markets work--use markets."
Keynesians say: "Markets fail--use government."
Economists from George Mason University (heavy Austrian influence) say "Markets fail--use markets."
Pithy, but not quite accurate. First off, monetarists are only partial advocates of the free market. Milton Friedman (and many others) believe in the market for goods and services, but support the government's role in the market for money through Federal Reserve manipulation of the money supply. Some in the Austrian School might say that markets fail, but that is because of how they are defining failure. If "failure" means that mistakes will occur, then all human activities (not just markets) are failures because humans are neither omniscient nor infallible--and never will be. Such a definition equates human life with failure!
I think the following formulation is more accurate and more helpful:
Markets work (as a discovery process.)
Governments fail in markets (by disrupting market discovery.)
None of the above formulations, however, address the other crucial aspect of markets vs. government. Free markets are based on voluntary exchange; government is based on coercion. Not only does government intervention into the market disrupt proper market functioning, but the way that it does so is to violate its primary raison d'etre: the protection of individual rights. One more, and perhaps the primary, reason to "use markets."