The reason austrian economics works and why healthcare, education and housing is so expensive goes back to Hume’s philosophy of empiricism

Empricism means learning based in experience. as opposed to reason.

Hume died well before Austrian economics was created but was a huge influence and quoted frequently by Hayek and many others. Hume’s work then proceeded to influence Adam Smith to write Wealth of Nations.

Basically the problem is that third parties(government, banks and insurance) are too far removed from the situation to understand the particulars of the circumstance. Human’s learn based on experience and act on it in very specific situations. For instance there are estimates that somehwere around 8 to 10 percent of medical claims currently are fraudulent, this is because the insurance company isn’t actually there with the patient. A car crash or house fire is different because those are actual one time events that can be documented and pictured.

Mortgage companies and college loans are similair. They are pushed by the government to give loans to individuals based on algorithms, they have no real idea of the stability of ths persons job, intellectual capabilities, what the college classes contain, the line items of the college expenses, the job prospects etc. Bringing third parties into a situation and creating artificial demand never works. Same can be said with K through 12 education which has become more and more administrative not as much emphasis on student teacher relationship.

Hume’s predictions on public debt and taxes are also crazy accurate for modern times and he made them in the 1750s. The founding fathers were well aware of Hume’s work especially James Madison. For instance, the federalist papers has Hume’s language in it and explain how humans are in factions at conflict with one another and through self-interest of commerce can we begin to get along and create order.

Adam smith had similair views explaining that the statesman doesnt know what product to bring to market as well as the farmer himself would. This is a very simple concept people don’t seem to grasp.