Posted on 08/04/2009 1:45:12 PM PDT by parsifal
Mainstream economists dismiss the Austrians as cranks. Nobel economist Paul Samuelson wrote that "I tremble for the reputation of my subject" after reading the "exaggerated claims that used to be made in economics for the power of deduction and a priori reasoning [the Austrian methods]." (1) Noted economist Mark Blaug has called Austrian methodologies "so cranky and idiosyncratic that we can only wonder that they have been taken seriously by anyone Perhaps the defining difference between mainstream and Austrian economists lies in their opposing philosophies towards learning truth.
Mainstream scientists use a well-developed process called the scientific method. This method employs both data and theory. "Data" includes facts, evidence and statistics. "Theory" is the attempt to describe general laws, principles and causes and effects found in the data. Both form a cycle, as data goes into the formulation of theory, whose conclusions then engender more data collection in an attempt to confirm, refute or develop yet more theories. The accuracy of this process is verified by experimentation or prediction. Scientists believe they are on the right path when both theory and data agree; when they disagree, they know something is wrong. It could be the theory is wrong, or the data is badly collected or interpreted.
(Excerpt) Read more at huppi.com ...
"Environmental regulation has been among the worst offenders in recent years. Nobody can calculate the extraordinary losses associated with the Clean Air Act or the absurdities associated with wetlands or endangered species policies."(2)
One presumes the "extraordinary losses" evoked in the above quote refer to corporate profits. Regardless, it's worth noting that in the hundred years before the Clean Air and Clean Water Acts, the environment grew increasingly polluted. In the two decades since, it has grown cleaner. Rockwell's claim is simply unhistorical.
Leftist swill. Corporate Profits used as a profanity. Obamarxist double talk. Complete waste of time.
Well, I have a problem with open borders too. However, if there were no welfare state and benefits for these interlopers, they would have to make it on their own just like my ancestors did. If there were no anchor babies, it would make all of this debate pretty well moot. In addition, if the tax rate were 10-15 percent max, unlike what we have now, the demand for labor would be so great that we would welcome them. Have to add to this equation, no monopolistic labor unions too.
I read most of HA with a dictionary at my side. It was struggle, but made reading the rest of his tomes easy by comparison. Unfortunately, you can’t get the average bloke to read a 1500 page book with tiny type and no pictures. The books by Percy Greaves and Murray Rothbard helped make Mises accessible to the average person.
Pretty much, 1934 was the only major deflation since the Fed started blowing bubbles. You could make a case that the recession of the early 1980’s resulted in some deflation, but it was a recession and not a depression.
http://www.huppi.com/kangaroo/L-ausmain.htm
The group of short essays found at your link above is one of the most dishonest displays of malicious ignorance I have ever witnessed. Take this sh*t for example:
“...Socialism has been proposed in many forms, ranging from social democracy to anarcho-socialism. In the latter, workers would own companies that would compete on the free market, absent any government at all. As you can see, socialism is hardly synonymous with a central planning committee. But one thing socialism cannot be is a dictatorship — worker’s do not own anything if a totalitarian government tells them what to do. Mises and Hayek may have refuted the principle of economic totalitarianism, but they didn’t come close to refuting socialism. This is one reason why academia didn’t view their arguments against socialism as conclusive.”
That you would encourage the spreading of lies on this site does not speak well of you.
Sorry, but that’s the way it is.
BS. I warned you that the Kangas stuff was from a liberal site, but was written in English for the most part. That’s why I used it for the thread. I double checked the items and provided a link to more scholarly articles written at a higher level.
I find it amazing that you can find one of the goofy things that Kangas said and zero in on that, and miss all the rest. Did you bother to read any of the two Professor Caplan articles?
Did you just happen to notice that the Austrians don’t really do any numbers to back up their theories, and no testing ala the scientific method? Kangas, and Caplan also pointed out fallacies between the real world and the Austrian’s theories.
And though it is admittedly an ad hominem argument, what about ‘Ol Lew Rockwell being the Chairman of the von Mise org?
I went overboard to provide plenty of information about the Austrian school for your perusal. If all you want to do is find funny stuff to laugh at on Kangas, go to his “gun” articles. They are hilarious.
Now, pull your head out of your hind quarters, git yorself to that non-liberal link I provided, grab a cold beer or two, and start reading.
parsy, the honest and forthright!
There are many many “goofy” analyses, as you call them on that site. There are misrepresentations and strawman examples on each of the Commentaries. There is no truth there - only lies.
Your acceptance of the bogus “scientific method” sophistry says little for your understanding of logical analysis.
Economics is NOT science.
However, I will take the time to check out what you call “more scholarly articles.”
I retract nothing of what I said about the other site’s contents. Absolute rubbish.
An amazing thing, massive deflation.
Because as can be seen, inflation will only go so far, then it will be followed by deflationary depressions, 1873, 1893, 1934.
Do you think deflationary depressions are a good thing or a bad thing?
Because the economy was so stable (and bubble free) during the times when we had no central bank?
The output of the scientific method are observable and repeatable facts (ex: water boils at 100 °C at sea level) not more data collection.
Thank you. I appreciate it. I have been busy looking up how economics fits into the “science” field. Wiki has one of best analyses so far.
parsy.
And this may surprise you, but I have always said that economics ought to have some leeway for qualitative analysis also. For example, it may make perfect economic sense for us to buy stuff from China, but if we destroy our mgf base and move jobs offshore, I think it is relevant.
In a strange way, an Austrian approach to economics favors me and my arguments. It puts the “reason” into economics, and like the article said, once you do that, you open the door for what anybody thinks is right.
That being said, there are ways to measure some things, and I think any valid economic school ought to be able to back up a little of what they theorize and predict some things once in a while, based on observable facts.
One thing that p*sses me off about rhe von Mises set here on FR, is that they pop up all the time with these grand pronuncimuntos about things, UNDER THE BANNER OF ECONOMIC SCIENCE, and the truth is, it ain’t science at all to the Austrians.
And BTW, when was the last time you ever saw an actual analysis of the Austrian SE on FR? I think never. People quote it, cite it, and argue it, and I thought it was time for us all to see exactly what it is. Frankly, the Emperor is running around in his undies.
That set could just as well have cited Ayn Rand as economic justification for some of their arguments.
parsy, who has another first on FR.
The one thing about most economic theories is that it assumes a lack of fraudulent intent, and that is a huge factor to assume away.
Yep. And a lot of folks will be standing around with their mouths gaped open asking how it could possibly have happened when it's currently happening right in front of them and they deny seeing it.
OK. You’re right. I never read a book at all about nothing.
Seriously, I went to the mises site and it doesn’t even look the same as it did a few week ago. When i read his stuff on there, I remember there was like the shield thing in the top middle of the page. Each page was like 3 or 4 paragraphs. Then you hit an arrow or something to go to the next page.
There was also an index. That’s what I remember.
Now, I can’t even find anything like that on the site.
parsy, who for sure read In the Electric Mist with the Confederate Dead.
Thats for sure and thats what got me interested in getting to the bottom of the von Mises type denial syndrome. How do you have the oil speculation screwing, then the sub-prime mess, followed by the TARP crap and not realize that some stuff needs fixing.
Supposedly, it was economic scientific fact, and here’s the von Mises quote to cover it (I am free lancing here a bit), and that just didn’t make sense to me.
So I started researching the Austrian SE. I am working on my Ayn Rand and the Great Snipe Hunt Thread, but that will take a few more days.
parsy, who also notes that audited financial statements don’t look for fraud.
As long as the government can print fiat money, they are inevitable. Deflations do have some salutary effects. The monetary unit goes up in value, which encourages savings, increased work and providence and thrift. Since wages will not decrease as quickly as prices in a non-manipulated labor market, the purchasing power and savings of those working increases, thereby increasing their standard of living. Since increasing purchasing power will also mean that debts actually go up in value, reckless borrowing will be curtailed.
The negatives are that collateral for loans in nominal terms will decrease. Also, the increasing value of debts will cause certain debtors to default and go bankrupt.
Contrast these negatives with inflation as dictated by the Fed. Real wages go down since wages don’t rise as fast as prices. The real rate of savings sinks since the inflation adjusted return often becomes negative. Reckless borrowing is encouraged as debtors will be able to pay back their loans in depreciated dollars. The trade value of the currency will go down until it collapses.
Finally, the inflationary depression will become a deflationary depression, as banks will not loan money because as it loses value there is little demand for it. Eventually interest rates will skyrocket and the there will be great monetary destruction thereby increasing the value of the currency. Unless the monetary creation increases to try to counteract these forces. Then you wind up with the Weimar Republic or Zimbawe.
Choose your poison, I would rather has deflation than inflation, which is the debasement of the currency and the destruction of society.
It also encourages lower production, higher unemployment and decreased investment.
Since wages will not decrease as quickly as prices in a non-manipulated labor market......
(Allow me to finish)..... unemployment will increase.
the purchasing power and savings of those working increases, thereby increasing their standard of living.
It's true that the 75% of the workforce that still had jobs during the Depression enjoyed lower prices.
Since increasing purchasing power will also mean that debts actually go up in value, reckless borrowing will be curtailed.
Intelligent borrowing will also be curtailed.
Contrast these negatives with inflation as dictated by the Fed. Real wages go down since wages don’t rise as fast as prices.
But wages rise faster than prices.
banks will not loan money because as it loses value there is little demand for it. Eventually interest rates will skyrocket
If there is little demand for money, interest rates will fall, not rise.
Choose your poison, I would rather has deflation than inflation
That's only because you don't understand deflation.
See Ben Bernanke Economic Forecasts Proven to be Incredibly, Uncannily Wrong
Out of curiosity, why were you looking to attack Austrian economics? I don’t understand. What prompted the interest?
The theory that the Fed's monetary expansion and easing of credit restrictions results in "malinvestment" is an unsupported claim. It is backed up only by the Austrian's faith and deductive "logic" that such malinvestment occurs.
You want to defend that? Remember the dot-com bubble? Or the surfeit of condos built, still unsold, and half-completed new housing developments, still empty? Not to mention commercial construction. ,
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