I have been witnessing a debate on another board, and an argument has been made without anyone including myself able to refute this claim. Any Missian's wanna take a crack @ this?
We have neoclassical economics referring to how pareto optimality can be achieved because of the actions of rational economic man. As we introduce market imperfections, we will necessarily move to the realm of ‘theory of the second best’. Here, apparently distorting policies can increase economic welfare. There is very little else out there to justify a “government is bad” approach. You could try and refer to minor schools such as Austrian economics, but that stuff is ironically built on an understanding of economics more naïve than perfect competition. They do not even have a valid theory of the firm to appreciate economic outcome.
Evidently, someone knows next to nothing about Austrian economics, yet they feel like opening their big mouths anyway. No "valid" theory of the firm? Peter Klein and Nikolai Foss would beg to differ. "Naive"? Based on what?! It's the only school to use disequilibrium analysis and base itself on realistic assumptions. They might mean Mises' apriorism, but like 90% of people who have a problem with it, I'm willing to bet they haven't even read a single book of his, let alone understood him. Sorry, little can top perfect competition in terms of "naivety". Ironically, he is the only naive one in question.
As for the neoclassical school, that's all fine and dandy, unless one recognizes the possibility of government failure. The public choice school of economics has pretty much eviscerated the myth of efficient interventionist government, much like the Austrian school has. So it remains a fact that government is bad. Sorry to break that to its fetishists.
Do you mind if i use some of your points to make this idiot look like what he/she is?
He/she is very skilled in rhetoric. Personally, i believe this person is a devoted european socialist, who is hell bent on siting models of smaller socialist modeled policies in countries such as a Norway, and comparing them to selected states that reserve a high level of "if". All the while, claiming it is relevant ONLY on the basis of an input output approach.
He/she know's very little about Mises, and calls Hayek a much more useful provider of Austrian insight, as well as praising the consumer indifference theory, further showing his preference to Hayek.
I think i can hold my own, as i am not the most versed in Austrian theory, but have a decent grasp in neo-classical economics. Yet i tend to favor the Austrian Business Cycle Theory.
So, i shall only use this post as a measurment of the validity of these "opinions", and will undoubtedly self research anything i borrow form you. That is if you dont mind
Goldenboy219:We have neoclassical economics referring to how pareto optimality can be achieved because of the actions of rational economic man. As we introduce market imperfections, we will necessarily move to the realm of ‘theory of the second best’. Here, apparently distorting policies can increase economic welfare.There is very little else out there to justify a “government is bad” approach. You could try and refer to minor schools such as Austrian economics, but that stuff is ironically built on an understanding of economics more naïve than perfect competition. They do not even have a valid theory of the firm to appreciate economic outcome.
I'm sorry, what's the argument? Maybe you can't respond because he's just asserting without actually arguing.
Agreed.
I was wondering, what about the book The Fortunes of Liberalism ? The 4th volume of course. Do you recomend it to an intermediate economics student hell bent on learning about the Austrian School of thought?