Paul Krugman and other economists have characterized the Austrian School as a branch of philosophy rather than economics because it doesn't meet the scientific standard of rigorous hypothesis testing and falsifiability.

Economies are extremely difficult to experiment on because radically new economic theories can only be tested by implementing them in actual nations, and a failed experiment destroys a nation, which makes fringe economic ideas hard to disprove in the way chemistry experiments can be disproved.

The central economic problem is that human consumption potential is limitless while access to resources is finite, and every economic theory, policy, and experiment is ultimately an attempt to solve this fundamentally unsolvable problem.

Smith's pin factory example demonstrates that a single worker cannot efficiently make one complete pin because they would need to mine materials, refine steel, forge it, and sharpen it, but multiple specialized workers could each focus on one task and produce pins so abundantly that the surplus could be shared among all contributors.

The Austrian School of economics originated with scholars from Vienna who recognized that an economy was not an amorphous blob of production but rather a collection of individuals, and they added allowances for how individuals acted and specifically how they valued things—improvements on Classical economics.

Before the 18th century, great empires rose and fell with economies that functioned without people specifically studying them as a distinct academic discipline, as evidenced by historical figures from Aristotle to Jesus presenting answers to economic questions without first understanding what the fundamental question was.

Keynesian fiscal policy proposes smoothing the business cycle by taxing more and spending less government money during economic booms and taxing less and spending more during economic downturns, which artificially reduces spending and debt during good times and increases spending during bad times.

Economics is a social science that follows the same scientific processes as more rigorous fields, but economists are more likely to have visible disagreements than physicists because the foundation of economics rests on an unanswerable question that introduces elements of philosophy and morality into what economists attempt to sterilize with mathematics.

Adam Smith gave birth to economics as a separate academic discipline in the 18th century and formed the foundation of Classical School economics by studying how the world actually operated to increase the wealth of nations, rather than continuing to follow mercantilism.

The first steam-powered factories fundamentally changed the economic reality because wealth was no longer being grown or mined but being created en masse for the first time, which meant that all people could become wealthier simultaneously rather than in a zero-sum competition.

Adam Smith argued that there is an optimal distribution of wealth creation among all members of society—it should not be equal but also should not consist of a swelling peasant class supporting a tiny nobility—not for virtuous reasons but because developing markets and dividing labor requires a certain wealth distribution to function efficiently.

Before the industrial era, feudal villages and individual households were largely self-sufficient because village markets were basic and most peasant workers did not receive cash wages, but factory work and cash wages enabled specialization because individuals could now make purchases in markets rather than being locked into self-sufficiency.

Immanuel Kant argued in his 1785 book 'Groundwork and Metaphysics of Morals' that all crafts, trades and arts have benefited from division of labor because when each worker specializes in one kind of work, they can do it better and more easily than when one person does everything, and when work is not differentiated and divided, crafts remain at a primitive level.

These Classical economics theories worked very well when applied during the age of industry and served as a guiding force behind the development of modern jobs, companies, and markets as we know them today, but they were not perfect.

Carl Menger, the father of the Austrian School, and his student Friedrich von Vieser developed the theory of Marginal Utility, which argued that goods provide utility but that utility decreases for every extra unit of that good, meaning that eventually additional units can have negative marginal utility value to consumers.

Marginal utility theory contradicted Classical economics' approach because it recognized that some desires can be over-satisfied, meaning an economy must avoid over-producing those goods so that resources remain available to satisfy other desires that have not yet been met.

The Subjective Theory of Value argues that an item's worth is not determined by the sum of materials and labor required to make it, but rather by how important it is to consumers, exemplified by a titanium car being objectively superior but economically inferior because consumers won't pay 300,000 dollars for a marginally better Toyota Camry.

Rational consumers, through their purchasing decisions, determine which goods get produced and which do not through the free market mechanism of expressing subjective value preferences, making the most important aspect of production not manufacturing capacity but careful decisions about what to manufacture.

John Maynard Keynes is touted as the most influential economist of the 20th century and has defined the way almost all governments around the world manage their economic affairs, particularly through his contribution of countercyclical fiscal policy.

Keynes wrote his most widely recognized work 'The General Theory of Employment, Interest and Money' during the Great Depression, addressing how to manage the unsettling ups and downs of business cycles that could impact long-term economic health if not smoothed.