1. If the economy is interconnected such that the prosperity of one part causes the prosperity of another and vice versa, then is there anything like actual economic growth or decline? If the wages of labor decline then people can't demand goods which causes a keynesian "race to the bottom" then however, the price level declines which allows for a rise in real wages and a return or business/demand. So in what way did the economy decline or grow? Wasn't it rather a reshuffling of resources such that one situation was arbitrarily called "depression" while the next was just as arbitrarily called "recovery".
2. All things in the economy are subject to human valuation. But then if you value something, then this value must be valued and so on and so on, creating an infinite regress -is this true and how can one get out of the regress?
3. I think that economics might be open to mathematical treatment, and this is why: In my earlier question I wondered if there was an infinite regress of valuation. The concepts of economics like valuation, are open to quantitative analysis like infinity. Could then utility be open to such quantification or some other concept? Mises often gives us implicit quantities like "the entrepreneur is always the executor of the consumer's will". Perhaps this opens up the possibility of some sort of system of equations drawing on the number of consumer's and entrepreneurs, which could model the intersection of the plans of the entrepreneur and the consumer.
If the economy is interconnected such that the prosperity of one part causes the prosperity of another and vice versa, then is there anything like actual economic growth or decline? If the wages of labor decline then people can't demand goods which causes a keynesian "race to the bottom" then however, the price level declines which allows for a rise in real wages and a return or business/demand. So in what way did the economy decline or grow? Wasn't it rather a reshuffling of resources such that one situation was arbitrarily called "depression" while the next was just as arbitrarily called "recovery".
You can't divorce economics from politics. The boom-bust cycle wouldn't happen at all without the corropt monopoly and debasement of the currency.
Every time there's a 'depression', the state picks some minority special interest groups to patronise in the name of 'recovery', and resources are sucked from the general economy and redirected to this group by force. It's not simply a matter of shuffling indestructible resources around, though... Consider that during the Great Depression, farmers were given subsidies to destroy or simply not grow their crops, in a superficial effort to increase the price of said crops.
If you have a situation where crops are being burned and people are starving, I think you can call that a shrinking economy. It's more a result of the state-orchestrated 'recovery' effort than anything else, though... Of course if it weren't for the state's manipulation of interest rates and credit to its own sordid advantage, bust-boom cycles would never happen to begin with.
fakename: Perhaps this opens up the possibility of some sort of system of equations drawing on the number of consumer's and entrepreneurs, which could model the intersection of the plans of the entrepreneur and the consumer.
Why would one want to model such a thing? What is hoped to be gained once such equations are in hand? When these equations reveal the intersection of the plans of the entrepreneur and the consumer, then what?
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.
I'll be honest, possibly nothing -it's just idle curiosity and speculation for speculation's sake. I figure, any knowledge is good knowledge.
fakname -"it's just idle curiosity and speculation for speculation's sake."
But you are describing the essence, the foundation, of mainstream economics. To the interventionist economist, the search for such equations seems to be the ultimate goal, the purpose being to provide a means to intervene in the economy.
If we can deduce equations, they reason, we can control the things we desire to control. If we like certain outcomes in the economy, we can push some levers over here, if we dislike other outcomes, we can pull some levers over there. We can achieve the outcomes we desire, or so goes their way of thinking.
If one's understanding of economics has nothing to do with intervention, but rather concerns the nature of economics itself, then such equations are useless, meaningless, pointless. But I guess that depends on one's perspective. To control or not to control, that is the question.
for a better defense of my concept of quantitative econ: The equations would merely be translations of austrian econ into math. The numbers only express the quantitative and not qualitative relations between entrepreneurs/labor/demand etc. This opens up the possibility for more precision in AE but it also bars the possibility of mistaking the models for the actual theory since the latter is qualitative and guides the application of math and the making of equations.
1. If there are more goodies in the world than before, the economy has grown. If there are less, it has shrunk. Now if you take resources and throw them intio the sea, there are of course less than before. Same thing if you waste time, money, labor and resources building and making stuff people have no use for. Then the people making the useless tuff have to be fired as well, which is the recession, until they get new jobs making useful stuff.
2. Not sure what you mean. I value something by saying to myself "This tuna sanwhich is worth $3 to me. I am willing to pay $3 or or less, but not more." What do you mean by this value has to be valued?
3. it may be posssible, although there are those who will argue against it. More power to you if you can find something.
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It's easy to refute an argument if you first misrepresent it. William Keizer
On number two -if all things in an economy are valued, and if values are in an economy, then the values have to be valued, but this value is in an economy so an infinite regress occurs.
I dont get it. What counts is things that can be bought and sold. The value I place on a sandwhich isnt bought and sold, so what difference does it make what value it has?
Also I dont get the concept itself. What value do I place on me willing to pay 3 bucks for a tuna sandwhich? Or on my neighbor's willingness to pay $3.50?
None whatsoever, in both cases. What's it to me?
Especially with the view very common here, that intangibles are not anyones property, so they have no value.
It's a purely formal relationship, if something really does occur all the time then it follows that it happens at any one arbitrary time.
If I value a thing, that thing becomes an economic good and hence in the economy -as long as a good = subjective value+objective existence.
but if the value is in the economy then it too must be valued if it is true that everything in the economy is to be valued.
I'm not sure what you're getting at. Yes, all things in an economy are valued though I am not sure what you mean by "values" being in an economy as opposed to valued things. There is no infinite regress. A thing is only valued from the minute someone begins to value it. I don't even begin to see how this makes economics amenable to pseudo-scientific quantification.
Freedom of markets is positively correlated with the degree of evolution in any society...
It's a purely formal relationship, if something really does occur all the time then it follows that it happens at any one arbitrary time. If I value a thing, that thing becomes an economic good and hence in the economy -as long as a good = subjective value+objective existence. but if the value is in the economy then it too must be valued if it is true that everything in the economy is to be valued.
There are ends and then there are means. When austrian economists talk about ends we refer only to ultimate ends: One the actor strives for solely for its own sake, rather than as a step in a plan. There has to be an ultimate end otherwise action is impossible. If an end is merely an intermediate one then it is actually a means.
Means have value because they can be helpful in obtaining an ultimate end. Ultimate ends do not serve other ultimate ends, they are valued in and of themselves. How much an actor values a particular ultimate end is a completely arbitrary and final decision for which the process and results are of no consequence to praxeology.
fakename - "On number two -if all things in an economy are valued, and if values are in an economy, then the values have to be valued, but this value is in an economy so an infinite regress occurs."
Several of us on this thread need help understanding what you mean by the infinite regress occurring. I do not see an infinite regress. Can you take us through this, step by step, to demonstrate the infinite regress?
1. If the economy is interconnected such that the prosperity of one part causes the prosperity of another and vice versa, then is there anything like actual economic growth or decline? If the wages of labor decline then [...]
If the wages of laborers (as an aggregate) decline, then the people who used to pay the laborers have more money than they would otherwise; the economy has not grown or shrunk by a single penny.
2. All things in the economy are subject to human valuation. But then if you value something, then this value must be valued and so on and so on, creating an infinite regress [...]
I don't think people value their valuations. Do you? If you want (value) a new car, do you value this want? Would you part with anything in order to maintain the want? Would you labor toward the maintenance of this desire?
As to question 3, I don't think Austrian principles (which are often derived with logic and praexology, not experience or statistics) translate readily into mathematical equations. Numbers are great for examples, but what you're describing sounds more like modelling to me. And Austrians quite often take a dim view of mainstream economic models.
Sorry about the messed-up format on my last post - I'm new here, and haven't learned the forum controls yet. Ignore the boxes, but pay attention to bold vs. not-bold.