This thread contains the best explanation I've seen of the Austrian position, and it actually makes a lot of sense. In economics, there is simply not enough variables to do a controlled experiment. So you have to use deduction and reason in order to understand events. Insisting on using Popperian falsifiability where such a procedure is not possible, creates the well known keys and lamp post fallacy.
I don't have the time to post a defense of the Austrians, but I encourage anyone who is really interested in the subject to read this comment thread: http://commentlog.org/bid/4408/Feynman-Rothbard-and-the-Science-of-Economics
This thread contains the best explanation I've seen of the Austrian position, and it actually makes a lot of sense. In economics, there is simply not enough variables to do a controlled experiment. So you have to use deduction and reason in order to understand events. Insisting on using Popperian falsifiability where such a procedure is not possible, creates the well known keys and lamp post fallacy.