Economics is perhaps one of the most lamented subjects at an academic level. Not only do most people find it hopelessly boring - in some cases they find it infuriating. Admittedly, I didn't form an interest in economics (per se) until I got my degree. And, even then, looking back on the little econ I had at an academic level seems almost as boring as the subject itself would have sounded to me ten years prior.
When I started digging into the subject for myself it was largely an attempt to add some sound foundation to some of my political views. Interestingly enough, a little bit of econ ended up changing my political views almost completely. I found many of the different schools of economic thought interesting, but I particularly gravitated towards Austrian economics - if, for nothing else, it's peculiar predisposition to derive economic theory through logical deduction as opposed to empirics per se. Austrian methodology, in this respect, almost stands alone even though most of its logical insights are in step with classical and neo-classical insights.
Yesterday I came across a couple of things that pulled me back to when I was first learning about what distinguished Austrian theory from more conventional ones. The first was a video-lecture given by Roger Garrison on the trade cycle; from an Austrian perspective of course. The second was an article by Don Boudreaux about crony-capitalism. Regarding this item, several separate conversations and arguments ensued in the comment section. At one point, there was a roundabout discussion regarding opportunity cost and the negative effects of the 2008/2009 bailouts and taxation in general. When the US-Auto bailout was brought up specifically, a commenter named Joshua tried to defend the bailouts (against accusations of negative effects) by opening with this line:
Alot of what are called bailouts are merely loans. Didn’t I read that GM just paid back what it was given to bridge it’s restructuring?
If I had just taken the main structure of what I've learned through mainstream econ, I would have thought that the argument regarding the cost of such "bailouts" ended right there. But, given the focus of Austrian economic points that I'd been exposed to, it simply didn't cut it. Very simply, time is one dimension of cost regarding money because, as human beings, we have time-preferences. $100 dollars in your hand today is not $100 in your hand in ten years (even with no absolute inflation or deflation). Therefore, there is a cost associated with loans. This is specifically the origin of interest itself.
I think what's interesting is that mainstream economics doesn't refute this...but apparently it's not stressed enough, as I see people often getting tripped up in arguments about usury and, just like the commentary above, over the real cost of taxation, even when the government is doling the funds out in loan-form. That isn't to say that the government doesn't collect interest on some of these loans (as they might well have) - although such rates might be artificial and there's still the knowledge/signalling issues that occur when you operate outside of voluntary exchange. In either case, it's kind of odd to think that there's no cost associated with loaning money.
Maybe it's not a strictly Austrian insight per se - but I can see the failure in logic is pretty blatant here. After all, if this were true then we could all loan each other money ad infinitum without recourse. The capitalists would be very happy and the lenders would be very broke. Given that no one can seem to manage to undercut the going interest rate(s) too effectively, I think we can safely say there are some costs involved.