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The Broken Window and the Recession

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Neodoxy replied on Thu, Aug 9 2012 2:31 PM

"And I am saying the Keynesian assumptions are not true, so it does apply, and it's also pointless to assume they are true for purposes of arguing with them.  Are you honestly saying I should assume true what I think is untrue for purposes of trying to prove it is untrue?"

No. I'm not, I'm saying the opposite and you seem to be incapable of understanding this. You are wasting your time over and over again just like many people on this thread are and I see no reason in arguing against you anymore. Please don't waste my time and yours any further.

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1. While the BWF does not specify time, the furthest Bastiat/Hazlitt goes is to say that people will be permanently worse off because of wasted time

And as I said, there is no expiration date on it.

2. I don't know how many times I have to say this, I'm dealing in the Keynesian dreamworld, the idea that the government cannot compare interpersonal utility is not a case of the BWF, but it can be used to make a stunningly different, and more equally relevant argument.

I know it isn't. I am specifically directing that argument to the notion that increased activity is necessarily beneficial activity (and if it is deemed beneficial, at what cost and for whose benefit?)

3. I'm supposing direct stimulus funded through an expansion in the effective money supply, either indirectly (government loans) or directly (direct money printing or as Keynes supports a surplus which is taken out of circulation from tax revenues beforehand). You cannot deny that this spending will increase AD and put people back to work. If this causes uncertainty then this is a different argument entirely.

It may increase spending and therefore "AD". It can also do a lot more than that, and this is where the BWF creeps in.

4. In Keynesian models wages are sticky on their own with or without interventionism

Like Esuric mentioned, a certain level of "stickiness" is desirable in the economy. Contracts and "idle resources" may be employed to deal with uncertainty. The government roughshodding over these won't improve the situation at all. I think Xahrx dealt with the whole "sticky wage" line of reasoning satisfactorily.

5. Most of the rest of the arguments you make are against other Keynesian assumptions and they do NOT have to do directly with the BWF.

Because I am aiming them at the notion that somehow "idle resources" renders the BWF inapplicable. They are supporting arguments in some cases, yes, but if you are arguing that a theory is inappicable due to certain conditions and I argue for separate reasons that those conditions do not obtain, then surely the arguments are relevant.

 

It is not shorthand, why would it be?

The fact that it encapsulates concepts over and above what Bastiat (and Hazlitt) had intended to convey by it does not mean it cannot be elaborated over time. The original parable is a lot simpler and has much greater impact, because Bastiat intended it to educate the general public as far as I know. It does not mean that the BWF cannot describe far more extensive, complicated situations.

 

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Neodoxy replied on Thu, Aug 9 2012 3:31 PM

Jon,

"Because I am aiming them at the notion that somehow "idle resources" renders the BWF inapplicable. They are supporting arguments in some cases, yes, but if you are arguing that a theory is inappicable due to certain conditions and I argue for separate reasons that those conditions do not obtain, then surely the arguments are relevant."

Yes, but this is not the BWF in its normal state. The whole point of this thread was to attack the practice of some Austrians (usually those who don't actually know too much about the subject) of crying that it doesn't apply because of the broken window fallacy when while if we're dealing with a Keynesian model, the BWF does not apply. We have to criticize parts of the Keynesian model before we can say that the BWF applies as such.

"The original parable is a lot simpler and has much greater impact, because Bastiat intended it to educate the general public as far as I know."

As Esuric said there's no reason to believe that Bastiat knew of or intended the BWF to criticize anything involved with Keynesian economics because he predates the school and many of the arguments used by Keynes.

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How it was originally intended to be used is irrelevant to whether it can characterise a broader range of scenarios than were originally envisaged. Now, on the matter of the assumptions of the Keynesian model, I'd agree that you need to dislodge some of them before discussing the BWF, but that isn't because the BWF is inapplicable due to idle resources per se, but rather idle resources along with a host of assumptions about the govt's efficacy in redirecting resources to other uses AND the assumption that it can do so in what is essentially a vacuum (or in a way that has no effect on the rest of the economy, which as Xahrx has shown is ridiculous.)

Probably the easiest condition to dismiss is the notion that utilities are interpersonally comparable/measurable, and without this assumption alone the BWF becomes operative.

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xahrx replied on Thu, Aug 9 2012 3:41 PM

No. I'm not, I'm saying the opposite and you seem to be incapable of understanding this. You are wasting your time over and over again just like many people on this thread are and I see no reason in arguing against you anymore. Please don't waste my time and yours any further.

If you'll note in my post, I already said I wasn't going to bother.  That you would throw this in strikes me as extremely trollish, which probably was your intent all along.  If not, you may want to consider the fact that just because you're not getting the answers you want doesn't mean the people giving them to you are at fault, your question may be poorly articulated, or just plain dumb.

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xahrx replied on Thu, Aug 9 2012 3:53 PM

How it was originally intended to be used is irrelevant to whether it can characterise a broader range of scenarios than were originally envisaged.
\

You should just give up, he's asking an unanswerable question which basically boils down to: "Assume this is right and then prove it wrong."  The BWF may not apply to the Keynesian model, but if the model is wrong, who gives a pile of cow twinkies?  In the dipstick model of physics entropy doesn't apply, so prove or disprove thermodynamics some other way...
 

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Neodoxy replied on Thu, Aug 9 2012 4:22 PM

Or maybe it means that someone needs to bother reading the OP or understanding exactly what their opponent was saying before jumping in an argument:

"I AM NOT ARGUING IN FAVOR OF KEYNESIANISM, I AM MERELY STATING THAT THE BROKEN WINDOW FALLACY BY ITSELF AND UNAIDED BY OTHER ARGUMENTS DOES NOT ADDRESS KEYNESIANISM"
 

"The BWF may not apply to the Keynesian model, but if the model is wrong, who gives a pile of cow twinkies? "

Everyone! That is where the argument is! If you're trying to critique theory X, but you invoke argument Z, which isn't effective with theory X because according to the assumptions of the theory Z cannot happen, then you're wasting your time. You have to argue specifically with the flaws of theory X that make argument Z applicable and possible in reality. I still have no clue if you understand the purpose of this entire thread which was to encourage an increase in effective Austrian argumentation, something which it has utterly failed to do because people are talking straight past what I'm trying to show. You finally hit on it above, but you do not seem to recognize the significance.

Jon,

"Now, on the matter of the assumptions of the Keynesian model, I'd agree that you need to dislodge some of them before discussing the BWF, but that isn't because the BWF is inapplicable due to idle resources per se, but rather idle resources along with a host of assumptions about the govt's efficacy in redirecting resources to other uses AND the assumption that it can do so in what is essentially a vacuum (or in a way that has no effect on the rest of the economy, which as Xahrx has shown is ridiculous.)"

Then we agree.

As for whether or not interpersonal utility comparison by itself proves that the BWF applies is to me a weak argument because the fact is that with the notion of interpersonal utility we can only prove that if everyone would prefer state of affairs A over state of affairs B, that state of affairs A must be better from the outlook of all of society. With this said though the problem is that we can't even guarantee that the existence of capitalism maximizes utility compared to other alternatives.

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I am not sure how you arrive at that conclusion. If interpersonal utility comparisons are not possible, you cannot really say, as a third party, that you have benefited anyone in excess of those whom you harmed to bestow the benefit on the former individual/group. Introducing interpersonal utility comparisons and assuming that the benefit is greater is how the BWF is imagined away.

It's true that you cannot prove that capitalism measurably maximises utility via interpersonal utility comparisons either. However, in its case the presumption is that individuals undertake actions that they assume, ex ante, will benefit them and that they are the best judges of such benefit, in choosing between competing courses for utilising their resources (with the consequence of repeated bad judgements stripping one of resources, thereby incentivising them to be more prudent.) So here we have individuals deciding for themselves how they want to utilise their resources. What the central planner (as a third party) would need to show is that they can improve on this outcome arrived at via voluntary interactions, through the interventions they propose. In the absence of interpersonal utility comparisons, they cannot do so. So it isn't a weak argument, it pretty much strips the central planner of a crucial tool in establishing the rationale for the intervention.

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One of the themes of the Broken Window parable, is that the 'one lesson of ecomics' (sic), is that attention must be paid to the unseen as well as the seen. I.e that what may appear 'idle' may yet play a role in an entrepreneurs future plans... that what may appear to be 'putting idle resources to work through government spending' may be diverting scarce resources into fruitless schemes....

 

Interestingly enough, there are writings on the uneconomic keynesian conception of idleness dating back to at least 1939...

 

http://mises.org/document/6116/
The Theory of Idle Resources (1939)
William H. Hutt
 
Blurb excerpt
<<Hutt goes for the heart of Keynes’s prescription for recovery, which was to get idle resources moving, whether that is money, capital, or labor. If something isn’t being employed right now, it is being wasted.
 
Hutt responded at length that there is nothing uneconomic or necessarily inefficient about an idle resource. It is the decision of the owner to hold back when faced with a long-term plan, a judgment call concerning risk, a high reservation wage, or a demand for larger cash balances.>>
 
 

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I think Neodoxy is making some of the same points I was trying to make in the Permanent Keynesian Refutation Thread. In light of my recent critique of Mises, I would reframe those points slightly. When looking at Bastiat's parable, there are actually two things being considered:

1. The intertemporal change, which we might call the transformation cost. This is the change of the intact window into broken shards of glass. Before, the window is intact; later, it is broken.

2. The intratemporal change, which we might call the opportunity cost. This is the change that involves resources (ultimately labor) that are shifted from making the suit to making the new window. There is no before or later at play here. We're considering the use of labor over the same period of time.

Thus, there are two evaluations being made. Is the intact window preferable to the broken glass? And: is the new window preferable to the suit? In the case of Bastiat's example, the two things are intimately connected. The suit is only preferable to the new window if the old window isn't broken. However, the actual examples of stimulus don't generally contain this connection. For example, suppose the government takes money (or prints it and diverts the resources indirectly) from a capitalist who plans to (eventually) construct a beauty salon. The government then spends the money on constructing a bridge. Thus, we can see how the labor that was going to go into the construction of the salon instead go into the bridge. This is the opportunity cost present in the BWF. [aside: There's nothing in the info given here to determine which opportunity cost is higher for "society." We just know that the capitalist prefers one and the government the other.]

Now, what about the transformation cost? In this case, the transformation cost consists in changing the raw materials needed for concrete that are present in nature into a bridge. In the case of Bastiat's example, almost everyone would consider the intact window preferable to broken glass. However, in the case of this stimulus, it's precisely the reverse. Almost everyone would consider the bridge preferable to the raw concrete.

Thus, using the BWF against stimulus spending is a dishonest tactic. The negative trait that is being invoked when people bring up "broken windows" and "nuked cities" is not present in government stimulus. Such spending doesn't destroy existing wealth. The real question is whether it creates more wealth than would be created without it.

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Really, putting so called 'idle' concrete to use in government commissioned bridges is necessarily always preferreble? to leaving the concrete and concomittant resources available to entrepreneurs?  

Ok, maybe it takes a more sophisticated mind to realise that *we built a bridge (and we are the government)* doesnt necessarily deserve a round of applause, but wait for it........ the parable of the broken window has trained the economist to think about... the UNSEEN. and what is unseen when somewhat utile (though possibly not / bridge to knowheres...) bridges are seen, and squandared resources taken out of the private sphere are unseen.

>>Thus, using the BWF against stimulus spending is a dishonest tactic. The negative trait that is being invoked when >>people bring up "broken windows" and "nuked cities" is not present in government stimulus. 

No, its honest, the point of the BWF is that a window, is not what has been lost to society once the full scenario has played out. what has been lost is the *suit*. If you are fixating on the window that is repaired, then you seem to be missing the message to economists, that it is the recognition of the (commonly UNSEEN) loss of the suit that marks out an economist, from the man-in-the-street.

 

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The suit is only preferable to the new window if the old window isn't broken.

Yeah, except the shop owner is without a window and without a suit. They have suffered a loss of wealth.

For example, suppose the government takes money (or prints it and diverts the resources indirectly) from a capitalist who plans to (eventually) construct a beauty salon. The government then spends the money on constructing a bridge. Thus, we can see how the labor that was going to go into the construction of the salon instead go into the bridge. This is the opportunity cost present in the BWF. [aside: There's nothing in the info given here to determine which opportunity cost is higher for "society." We just know that the capitalist prefers one and the government the other.]

And who, pray tell, is the "government"? A bunch of individuals acting as soi-disant "representatives" of other third parties. How is the government evaluating the business case for this new bridge? What experience does it have that shows it is good at managing resources without stealing them? I can answer this: next to fuck all.

However, in the case of this stimulus, it's precisely the reverse. Almost everyone would consider the bridge preferable to the raw concrete.

Who is "everyone"?

Thus, using the BWF against stimulus spending is a dishonest tactic. The negative trait that is being invoked when people bring up "broken windows" and "nuked cities" is not present in government stimulus. Such spending doesn't destroy existing wealth. The real question is whether it creates more wealth than would be created without it.

The stimulus spending is in reaction to the bust, which is the destruction of wealth in question - and this is real destruction due to malinvestment of resources. Depending on how the government finances the stimulus it will either steal the funds, borrow and enslave future generations to pay for the borrowing (as well as crowd out investors in the meanwhile) or issue currency via credit expansion, reigniting the boom if successful, further prolonging damaging malinvestments that have been put on life support from the previous boom, tying up more wealth in fruitless, illusory undertakings.

 

So no, it isn't "dishonest" given that the government is coercively obtaining the resources or financing their acquisition via other, potentially worse methods. Like Esuric mentioned, there is a reason resources remain idle.

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nirgrahamUK: Really, putting so called 'idle' concrete to use in government commissioned bridges is necessarily always preferreble? to leaving the concrete and concomittant resources available to entrepreneurs?

But I don't think the issue is that the government is using up all of the concrete. There's still plenty of concrete left to build the beauty salon. The problem is that the labor is now engaged in building the bridge, and the capitalist will now need to pay them more to build the salon. Thus, it is not the concrete itself that is affected. Destroying a window, on the other hand, is undoing the work of past labor.

No, its honest, the point of the BWF is that a window, is not what has been lost to society once the full scenario has played out. what has been lost is the *suit*. If you are fixating on the window that is repaired, then you seem to be missing the message to economists, that it is the recognition of the (commonly UNSEEN) loss of the suit that marks out an economist, from the man-in-the-street.

Exactly, the point of the broken window anaology is not the broken window. That's why its dishonest. If you think it really is the same thing as the constructed bridge scenario, then I propose that we change to that example. Every time the government resorts to stimulus, I want to hear Austrians say, "this is the constructed bridge fallacy!"--and then explain things in those terms.

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gotlucky replied on Tue, Aug 14 2012 9:10 PM

That's why its dishonest.

That's cute coming from you.

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And who, pray tell, is the "government"? A bunch of individuals acting as soi-disant "representatives" of other third parties. How is the government evaluating the business case for this new bridge? What experience does it have that shows it is good at managing resources without stealing them? I can answer this: next to fuck all.

What does this have to do with my point? I am not concluding that the bridge is better than the salon. I am simply pointing out that the scenario doesn't contain the same features as the broken window example. There's certainly still room to contest the decision.

The stimulus spending is in reaction to the bust, which is the destruction of wealth in question - and this is real destruction due to malinvestment of resources. Depending on how the government finances the stimulus it will either steal the funds, borrow and enslave future generations to pay for the borrowing (as well as crowd out investors in the meanwhile) or issue currency via credit expansion, reigniting the boom if successful, further prolonging damaging malinvestments that have been put on life support from the previous boom, tying up more wealth in fruitless, illusory undertakings.

So no, it isn't "dishonest" given that the government is coercively obtaining the resources or financing their acquisition via other, potentially worse methods. Like Esuric mentioned, there is a reason resources remain idle.

I am not contesting whether the government is doing anything wrong (I am leaving that question open). I am pointing out that the example is an incorrect analogy. These "destructive malinvestments" consist of things like turning raw wood into houses--not in breaking things that people didn't want to replace. These houses are malinvestments because they lie idle while a record number of people go homeless. These homeless people can't buy the houses because they don't have enough money. We can argue whether that's fair or not--and this is really the area of contention. But you have to acknowledge that there is a nonmonetary desire for the houses whereas there is no desire presumed for the broken glass.

You should listen to Neodoxy. He's only trying to put you in a better position to argue your case.

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The boom is a case of wealth ascendance of an illusory nature, only for it to come crashing down with the bust. You are correct that this is not a case of destruction being paraded as beneficial (even though it is, but this isn't usually advanced in its favour.) It is, however, a case of the seen "benefits" vs the unseen costs. There isn't even necessarily a non-monetary desire for the houses or other objects of the boom (bear in mind many house purchases were speculative; they thus failed as investment goods, not as consumer goods.)  The loss is both on the scale of genuinely profitable, sound investments being starved of funds and of unsound ones absorbing funds up until they no longer exist.

The stimulus (and bailouts) in reaction to the bust, and its financing, is the breaking of the window. Particularly since it is a favourite of interventionists to point to and blather on about "creating jobs", reducing unemployment below where it otherwise would've been (fancy that - unfortunately that's only if you ignore those discouraged from seeking employment) Neodoxy is trying to make a point that if you assume a series of rather lofty Keynesian assumptions regarding the economy hold true, then the BWF does not apply (and like Xahrx pointed out these assumptions are so ludicrous as to beggar belief.)

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xahrx replied on Wed, Aug 15 2012 3:58 PM

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gotlucky replied on Wed, Aug 15 2012 4:01 PM

lol that is really funny

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Neodoxy replied on Wed, Aug 15 2012 4:14 PM

... And yet still representative of the fact that he has no clue what I am saying. I guess writing responses is sometimes easier than reading them.

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You've argued that it doesn't apply during a recession. I and others have argued it does, unless you grant certain very specific Keynesian assumptions. So what is the issue?

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Neodoxy replied on Wed, Aug 15 2012 4:32 PM

The fact that I never said the last two words is the biggest one.

The entire point of this thread was simply to try to improve the level of discourse among Austrians who try to use the BWF while leaving the Keynesian assumptions unrefuted. As I have shown, if you assume these things then the Keynesians are correct and it doesn't follow the traditional BWF pattern. In attacking the Keynesian assumptions you're doing exactly what I'm encouraging people to do.

This thread was never that complicated, and it's probably my fault for letting it spiral out of control and not nipping it in the bud early, but the fact is that people like Xarxh and Esuric were never the type of people I was trying to address with this thread.

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I think it's more to do with how you positioned the issue.

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Neodoxy replied on Wed, Aug 15 2012 4:41 PM

Quite possibly. My OP wasn't stated as well as it could of been, a lot of my early posts were probably misleading, and I kept trying to assume that we were all on the same page . Anyway, I'm not up to arguing with anyone anymore about this, I already wasted a good 50 posts or so too many doing so...

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Malachi replied on Wed, Aug 15 2012 4:45 PM
Yah we need to liquidate those malposts so the bits can go to more productive replies ;-)
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gotlucky replied on Wed, Aug 15 2012 4:49 PM

Neodoxy,

It seems you have missed the point of the broken window fallacy. By saying that this thread was never that complicated, you have demonstrated that you cannot see what is unseen. cool

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Neodoxy replied on Wed, Aug 15 2012 5:02 PM

"It seems you have missed the point of the broken window fallacy. By saying that this thread was never that complicated, you have demonstrated that you cannot see what is unseen. cool"

"Yah we need to liquidate those malposts so the bits can go to more productive replies ;-)"

 

Damn you all!

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xahrx replied on Thu, Aug 16 2012 7:56 AM

You've argued that it doesn't apply during a recession. I and others have argued it does, unless you grant certain very specific Keynesian assumptions. So what is the issue?

Exactly.  I gave a point by point post which dealt with his whole argument, and he ignored it.  Which I think is the point; to turn this into another mile long wankfest thread.  The BWF applies.  It doesn't matter if you're at full employment or not, because there is no such thing as full employment.  No resource is ever being used 100% in its most productive way.  That's the very reason why exchanges continually occur.  Likewise, no resource is ever truly 'idle'.  Neodoxy's posts are either trolling at this point, or they may be sincere but they have the air about them of a guy who thinks he's spotted something profound and is unwilling to let go of it even after it's been shown to be lacking.  Kind of like when I was younger and got stoned and 'invented' the fork because I noticed my hands were messy from eating BBQ chicken.  "Man, I wish I had something that would just let me eat this stuff without getting my hands dirty..."  For about ten seconds, I truly though I was on to something.  I sobered up.

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xahrx replied on Thu, Aug 16 2012 7:59 AM

The entire point of this thread was simply to try to improve the level of discourse among Austrians who try to use the BWF while leaving the Keynesian assumptions unrefuted.

And you seem to have missed the fact that those Keynesian assumptions are exactly what have been repeatedly refuted.  You just seem to want to pick and choose which ones people get to refute and which ones they have to assume are true for purposes of argument.  Which is a fancy way of saying you want to fix the game and force a conclusion.

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Neodoxy replied on Thu, Aug 16 2012 9:17 AM

Yea, absolutely no clue what I'm talking about. Still has reading problems.

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Malachi replied on Thu, Aug 16 2012 7:23 PM
You just seem to want to pick and choose which ones people get to refute and which ones they have to assume are true for purposes of argument.  Which is a fancy way of saying you want to fix the game and force a conclusion.
see, you say this like its a bad thing, but THATS WHAT NEODOXY SAID HE WAS TRYING TO DO and the conclusion being forced is for austrians to learn to argue more gooder better. because austrians love to argue. We are all polemic gold medalists.
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xahrx replied on Fri, Aug 17 2012 8:08 AM

That may be true, but what has also been pointed out is assuming someone is right before attempting to prove them wrong is a stupid thing to do, especially if they are actually and factually wrong.  As I wrote in another post, assume entropy isn't a property of the universe and then go about proving the laws of  thermodynamics.  Better yet, assume 2 + 2 = 5 and then go about disproving that 10 / 5 = 2.  You can't argue with or disprove a Keynesian 'on their own terms' when those terms imply basic fallacies that are demonstrably false to anyone who spends more than a nanosecond thinking about them.  In the end all argumentation is an attempt to get to what is true and expose what is false.  So exactly what is the point of an argument where you explicitly remove the standard of truth?  You can't prove someone 'incorrect' when you purposefully remove any possible standard of 'correct'.  Even if you managed to somehow show a conflct in their reasoning, since there's no standard of truth they need to adhere to, they can simply dream up some bullshit spackle to fill in the crack, and the argument continues ad nauseum.

Lastly, what is the point of putting some dipshit level shackles on your brain and reasoning?  There is none.  If I think Keynesianism is wrong I'm not going to assume it's right, or right here and there but not elsewhere, for purposes of endlessly circle jerking with myself or someone else.  At the end of the day these arguments come down to fundamental points of disagreement, and there is no point in simply assuming agreement where there explicitly is none.  You've already ceded victory in the 'argument' at that point by, as mentioned before, eliminating any objective standard of defining success.  The arugment becomes a Nascar race with no lap limit, no time limit, and no finish line, and where you have both agreed to hobble your cars in some stupid, nonsensical way which you presumed would make the race more fun, all the while ignoring the fact that you just eliminated any possiblity of finishing the damn race, much less winning it to any standard.  So you all just end up driving in circles until someone finally just gets tired and decides to stop, and everyone else does then too and there is no resolution.

Which is exactly what happened to this thread, and which is exactly why his original question was pretty pointless to begin with.

And technically that makes me the winner of the argument, being the first person to realize there was no point in continuing.  I went and got a drink, got laid, got some sleep, got some work done.  You guys repeated yourselves for four straight pages.  (c:

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Malachi replied on Fri, Aug 17 2012 8:50 AM
assuming someone is right before attempting to prove them wrong is a stupid thing to do, especially if they are actually and factually wrong.
its not necessarily stupid. It might seem stupid if you dont understand the point.
You can't argue with or disprove a Keynesian 'on their own terms' when those terms imply basic fallacies that are demonstrably false to anyone who spends more than a nanosecond thinking about them.
yes you can
In the end all argumentation is an attempt to get to what is true and expose what is false.
demonstrably false, argumentation has a long history of persuasion.
So exactly what is the point of an argument where you explicitly remove the standard of truth?
thats pretty much not analogous to the issue at hand.
Even if you managed to somehow show a conflct in their reasoning, since there's no standard of truth they need to adhere to, they can simply dream up some bullshit spackle to fill in the crack, and the argument continues ad nauseum.
I think you dont understand the difference between fallacious reasoning, and sound reasoning from false axioms. At any rate, you confuse the two in your post.
Lastly, what is the point of putting some dipshit level shackles on your brain and reasoning?  There is none.
the point has already been explicitly stated ITT. Why dont you log off, go to the gym, and convince the people there who are trying to get stronger that "you would be a lot stronger if you didnt tire yourself out by slinging all those dipshit weights around."
purposes of endlessly circle jerking with myself or someone else
then why are you jerkin it in this thread
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xahrx replied on Fri, Aug 17 2012 9:49 AM

 

its not necessarily stupid. It might seem stupid if you dont understand the point.
 
Nope, it's stupid specifically because it's stupid to cede the argument before making it, and because there's no rational reason to prove someone wrong on point C when it is conditional on their premises A and B, which are demonstrably false.  It's like people who bitch about 'rules' to fighting.  My uncle taught me the rules of fighting.  He challenged me to a fight, and when we were walking out to the yard, kicked me in the balls.  You don't get to dictate rules to people who don't want to accept them and have no use for them.  If you want to do that, go work for the government.
 
yes you can
 
Ah!, again leaving out the relevant part where I mentioned they'd just use logical BS to spackle over the crack in their argument.  I guess I should have added "Or leave out critical points while nitpicking others and/or taking them out of context," so the irony could be thicker.  You're asking people to prove a building is unsuitable while also asking them to ignore the biggest flaw, which is the foundation is cracked, mouldy, and crumbling.  And we're supposed to limit ourselves to convincing people it's a bad structure by critiquing the window treatments.
 
demonstrably false, argumentation has a long history of persuasion.
 
True, but if you're persuading someone to believe something that is false, then somewhere in your argument is a false premise or a fallacious argument.  And if you're not allowed to point that out, what's the point of the argument?  Why are two false premises acceptable, why not three, or four, or ten, or fifteen hundred twelve?  There's your BS spackle, and by accepting things as true which are not, you just gave the other person a limitless supply with which to fill in any holes you may actually find.  The only way they will not simply invent more BS to do that is if you manage to target a sacred cow of theirs of some kind, but then again, that's exactly what you're forbidding by asking people to assume as true the argument's most critical flaws.
 
thats pretty much not analogous to the issue at hand.
 
That's exactly the issue at hand.
 
I think you dont understand the difference between fallacious reasoning, and sound reasoning from false axioms.
 
See above.  In any event the separation of the two is a false dicotomy.  A logically sound argument that's based on nonsense or false premises is still BS in the end.  It's just BS in a very well constructed box.  Same stink.
 
the point has already been explicitly stated ITT. Why dont you log off, go to the gym, and convince the people there who are trying to get stronger that "you would be a lot stronger if you didnt tire yourself out by slinging all those dipshit weights around."
 
Actually the correct analogy would be more akin to informing them that using an overly complex periodization scheme with insufficient weights is stupid, and that likewise that simply lifting as heavily as possible with poor form and no weight or volume progression over time is also stupid.  Which would lead one to the truth which is that you get strong by training your neuromuscular system specifically for strength and you can't do that while ignoring a key factor in strength training.  So you may lift light to practice form, but if you don't eventually put some weight on the bar, you're wasting your time.  And even more to the point, pretending the gym doesn't exist won't get you any closer to your goal either.  Likewise, practicing arguing with Keynesians while explicitly igoring fallacious arguments they make is kind of pointless.
 
then why are you jerkin it in this thread
 
Nothing better to do right now.  All my work for the day is done until a few appointments later, and all my other message boards are dead right now.
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gotlucky replied on Fri, Aug 17 2012 10:15 AM

xahrx,

There is at least one benefit to assuming certain premises are true even when you know they are false. The reason to do this is to show that they lead to absurd conclusions. I haven't read this thread too closely, so I don't know for sure if this is what Neodoxy was trying to do, but it can be done with Keynesian economics. If we were to assume the truth of many or all of the premises of Keynesian economics, then we would have absurd conclusions such as the idea that the government can essentially create something out of nothing. Or that it is better to consume than to save.

The problem with this strategy, in my opinion, is that Keynesians don't consider these conclusions to be absurd. So while it may be effective with your average Joe who can understand the value of saving, it is not going to get anywhere with people who have convinced themselves of the opposite because of faulty premises. I think this strategy is a weak one in this regard. After all, if your opponent thinks his conclusions aren't absurd, then it's not very effective to call his conclusions absurd. There may be some people who can demonstrate the absurdity of Keynesian conclusions, and maybe they can get away with this tactic.

However, there is another benefit to assuming a faulty premise. The reason humans have any kind of science at all is so that we may understand the world around us. If our conclusions aren't helping us understand the world around us, then we need to look at our premises and reasoning in order to see where we went wrong. I don't want to hijack this thread into an Objectivism thread, but I think this is a great example of what I mean. Randian Objectivists seem to believe that life and death are the fundamental choices a human makes, and then they go ahead and try to base a system of ethics on this idea. The problem with trying to understand the world in terms of life and death is that there are a great many things in which this dichtomy doesn't explain anything.

If I have a choice between eating a Granny Smith apple and a McIntosh apple, I am not choosing between life and death. Sure, by eating any apple I am eating, and eating is in opposition to starvation which eventually leads to death. But that is not the choice I am making. I am deciding between two apples, and my choice is based on the taste and consistency of the apples. If I take a life/death dichotomy, I cannot understand the choice in front of me. Claiming that the Granny Smith will lead to living instead of living is just simply useless. But if we take the Mises understanding of choice and action, we can learn and understand far more about the choice of which apple to eat. We end up with seeing that I am choosing the apple which tastes better (if that's my criterion).

So, a benefit of assuming a false premise can be that we can demonstrate how it does not enable us to accurately understand the world. Assuming a life/death dichotomy as the root of all choice, there are many actions and choices that quite simply cannot be explained. Forget ethics, we can't even understand why someone might choose one apple over another. So even without introducing Misean action as a superior premise, we can show that a Randian life/death dichotomy is insufficient for understanding the world around us.

I think Neodoxy may have been trying to do either of these tactics, but I don't know for sure, as I found his OP confusing (even after the edit).

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xahrx replied on Fri, Aug 17 2012 11:13 AM

 

There is at least one benefit to assuming certain premises are true even when you know they are false. The reason to do this is to show that they lead to absurd conclusions. I haven't read this thread too closely, so I don't know for sure if this is what Neodoxy was trying to do, but it can be done with Keynesian economics. If we were to assume the truth of many or all of the premises of Keynesian economics, then we would have absurd conclusions such as the idea that the government can essentially create something out of nothing. Or that it is better to consume than to save.
 
I can see some potential value in this, but then that assumes the person you're arguing with is honest, or smart enough to notice what you did, or granting both of those, will care.  Because if they're not, they'll simply dismiss your absurd conclusions as extremism or excluding the middle,or "not really what they said..."  And I write this from experience, because I used to deal with it every day when I was training people who insisted that they were either eating more or less than their required maintenance calories but still not managing to gain or lose weight respectively.  They would continually assert I was being too extreme or that I was somehow misconstruing what they were saying, even when several of them outright said calories in vs calories out "didn't apply" to them.  Fact is, it applies to everyone.  It's a physical law of the universe, not an option or something you can decide to not have to deal with.  But this would never sway their belief that either a magical wizard or a spacetime rupture was hiding in their digestive tract, and either gobbling up or inserting excess calories to thwart their attempts to gain or lose weight.  That they were counting wrong, and that there was a margin of error due to measuring inability/inaccuracies and that they were cutting too close, of course, never could be the case.  Nope, it was simply that a law of physics which applies to every known system in the universe up to and including black holes was somehow not applicable to their bodies.
 
So showing someone the absurdity of their conclusions is only useful if they're honest, smart enough to spot the same absurdity you have, and not so personally invested in being right that they just won't give a shit.  And most people tend to be honest only to the point it serves their interests, not all that smart, and very invested in being right even when they are demonstrably wrong.  Another way to look at it is, do you think Neodoxy is the first guy to have this general idea?  Do you think, if the majority of people out there that I presume 'we' are arguing with, were reasonable, rational, and logical, that Keyensianism would have ever gotten anywhere at all?  And that we, if we were reasonable, rational, and logical, would still be arguing with them?
 
If I have a choice between eating a Granny Smith apple and a McIntosh apple, I am not choosing between life and death. Sure, by eating any apple I am eating, and eating is in opposition to starvation which eventually leads to death. But that is not the choice I am making. I am deciding between two apples, and my choice is based on the taste and consistency of the apples. If I take a life/death dichotomy, I cannot understand the choice in front of me. Claiming that the Granny Smith will lead to living instead of living is just simply useless. But if we take the Mises understanding of choice and action, we can learn and understand far more about the choice of which apple to eat. We end up with seeing that I am choosing the apple which tastes better (if that's my criterion).
 
So, a benefit of assuming a false premise can be that we can demonstrate how it does not enable us to accurately understand the world. Assuming a life/death dichotomy as the root of all choice, there are many actions and choices that quite simply cannot be explained. Forget ethics, we can't even understand why someone might choose one apple over another. So even without introducing Misean action as a superior premise, we can show that a Randian life/death dichotomy is insufficient for understanding the world around us.
 
Well, that would all depend on how you feel about apples.  And I'm only half kidding.  If you were to meet some of the people who go the cider mills in northern New Jersey, suggesting one variety of apple is better than another might indeed lead to a life and death situation.  I'm no particular fan of Rand, her writing, or her philosophy, but I get your point.  However I think this overlooks a key point in how people think, which is that few people observe the world first, and then and logically deduce their opinions on various subjects.  They live in the world first, develop their opinions and positions on certain points over time and via subjective processes, and then spend more time looking for information to justify those views than to challenge them and see if they do indeed hold up to scrutiny.
 
As Rothbard once said, if you're going to argue economics, don't try and convert Paul Samuelson.  Go for the graduate student or under grad.  There's a chance of making a dent there.  But once they've been processed and spit out, people tend to get invested.  Which is another reason why I think it's counter productive to assume certain things to argue with people 'on their own terms.'  Either they are or are not invested.  If they are, arguing much of anything will be pointless except as a demonstration to the undecided who may be watching.  If they aren't, arguing minutia when you could take out the whole foundation of their belief system is a lost opportunity.  In both cases, you're better off kicking the whole belief system in the balls than just throwing a few respectful jabs.
 
And someone familiar enough with the BWF to apply it to Keyensian stimulus spending is very likely invested in one side or the other of that argument being right.  So, why not kick their argument straight in the balls?
 
I think Neodoxy may have been trying to do either of these tactics, but I don't know for sure, as I found his OP confusing
 
He may have.  I'll even assume he's a good guy and say that was likely it.  But, his posts have the air about them of someone who thought he had a great point to make and didn't appreciate it when it popped and did fart circles around the room.  We all have the occassional Eureka! moments that turn out to be nothing at all.  Best to recognize them as just that, and move one.
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Neodoxy replied on Fri, Aug 17 2012 12:27 PM

I intend this to be the last post I make on this thread. It's becoming aggravating and pointless beyond any end.

@Malachi

You got it exactly right in your first response to Xarxh.

@Gotlucky

I am not employing either of these tactics, although they are both theoretically effective, and that may well be the outcome of what has been said here. Indeed, if anything I was attempting to show just because of the intuitive reaction of someone "broken window bad", that this does not make it bad, it is necessarily the loss in utility by the owner of the broken window and the alternatives which everyone forgoes in the situation. If these are not present then the broken window, sheer spending, can theoretically create growth. Since these are assumptions that Kenyesians work under, arguing the BWF with them during recessions is pointless since under their model IT DOESN'T WORK. You must attack the model itself, for while you could show to someone working under and Austrian model that the notion is false, the same does not apply to someone working under a Keynesian one. It's like arguing in favor of Catholic dogma surrounding the Trinity with an athiest. There's a thing or two that has to be proven here first.

@Xarxh

Okay, please READ this. Please READ this all the way through if you want to show any evidence that you are capable of reading something and actually understanding it, that you actually care about understanding and not just asserting.

1. Here is the context in which this thread was intended: N00b becomes an Austrian because he saw a few videos online. Austrian n00b then watches a few more videos and reads Economics in One Lesson, and so he assumes that he knows everything to know about economics and that Keynesians are dumb because of the BWF. This is a CLASSIC argument against Keynesianism. However, whether or not our champion actually understands Keynesianism, he will go ahead and use the BWF to criticize the economic ideology. If Austrian n00b argues this against a Keynesianism, and doesn't understand what they think or why Keynesianism is actually wrong, then he's gonna get smacked down. The point of this thread was severalfold: To intercept Austrian n00b before he did got in this argument, hopefully encourage Austrian n00b and maybe even some more experienced people who didn't delve too far into the Keynesian dogma to shape up, both to further understand the economic context of our time and economic reasoning skills, as well as increasing their understanding of ABCT. This thread was also aimed at spawning some interesting, non-argumentative debate concerning something which it obviously failed at doing, whoever is to blame.

2. Therefore this thread, as I've said above, was never meant for you and several others who posted towards the end because you genuinely know what you're talking about, this is why in large part I never dealt with what you wrote except insofar as pointing out why it would be pointless if we assume the Keynesian assumptions, BECAUSE I AGREE WITH YOU. As I've said again and again you did exactly what I think people should do, which is attack, as you put it "this whole Keynesian thing" and prove why it is wrong through a real understanding of both schools of economics. If you assume that the Keynesian assumptions were right you would be wrong then the BWF wouldn't apply, the purpose of this is exactly to show that the attack must be on the assumptions themselves, not by stating the BWF and then patting yourself on the back. Because of this we were never "arguing" with one another, we were arguing past one another because I was never trying to argue against what you were arguing.

3. I never believed that I discovered a fancy new toy on the economic toybox. That's about all I have to say about that. I thought I was making an insight that was useful to make, and it's hard not to sound pretentious when people are both attacking you, not understanding you, and showing no attempt to rectify their understanding. In the end it doesn't actually matter what I sound like, or the fact that you just sound mad and arrogant, like a kid who thinks he's the biggest badass in the playground and gets mad when anyone else doesn't acknowledge this.

See, it's rather pointless to label and describe the attitude someone posting on the internet when you don't know them IRL and especially when I don't even believe we've even interacted in another thread. For what it's worth most people who know me say I'm a pretty good guy.

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Malachi replied on Fri, Aug 17 2012 12:30 PM
Nope, it's stupid specifically because it's stupid to cede the argument before making it
thats not what happened here so irrelevant
there's no rational reason to prove someone wrong on point C when it is conditional on their premises A and B, which are demonstrably false.
yes, there is a point. You dont have to like it, you arent the dictator of ends.
It's like people who bitch about 'rules' to fighting.  My uncle taught me the rules of fighting.  He challenged me to a fight, and when we were walking out to the yard, kicked me in the balls.
I hesitate to ask...how is it like this? It seems kind of like prohibiting jet skis in a swimming race "even though jetskis are demonstrably faster." you say theres no point to seeing who is the faster swimmer...then take your jetski and get out of the pool, dude.
Ah!, again leaving out the relevant part where I mentioned they'd just use logical BS to spackle over the crack in their argument.  I guess I should have added "Or leave out critical points while nitpicking others and/or taking them out of context,
that part isnt relevant.
You're asking people to prove a building is unsuitable while also asking them to ignore the biggest flaw, which is the foundation is cracked, mouldy, and crumbling.
yes, I am. This is because there is this crazy class of engineers I want to reach, who deny the necessity of sound foundations in construction and I want to convert them before the building collapses by demonstrating that even if a foundation isnt necessary, the walls wont hold up either.
And if you're not allowed to point that out, what's the point of the argument?
youre repeating questions that have already been answered. The point is to improve the quality of discourse among austrians.
Why are two false premises acceptable, why not three, or four, or ten, or fifteen hundred twelve?
probably because those are the terms established for the discussion.
There's your BS spackle, and by accepting things as true which are not, you just gave the other person a limitless supply with which to fill in any holes you may actually find.
non sequitur
The only way they will not simply invent more BS to do that is if you manage to target a sacred cow of theirs of some kind, but then again, that's exactly what you're forbidding by asking people to assume as true the argument's most critical flaws.
this is called "grasping at straws." so youre telling me that people spackle over inconsistencies with irrational bs UNLESS you challenge one of their "sacred cows," in which case they suddenly start thinking rationally? You have lost your mind.
That's exactly the issue at hand.
this mistake of yours is why we are having this ridiculous meta-discussion. That IS NOT the issue at hand.
See above.  In any event the separation of the two is a false dicotomy.  A logically sound argument that's based on nonsense or false premises is still BS in the end.  It's just BS in a very well constructed box.  Same stink.
you have much to learn about rational discourse. A poorly constructed (that is to say "false") syllogism is in a different category than correct reasoning from incorrect premises. Reasoning from premises that have been chosen for reasons other than their truth-value has utility.
Actually the correct analogy would be more akin to informing them that using an overly complex periodization scheme with insufficient weights is stupid, and that likewise that simply lifting as heavily as possible with poor form and no weight or volume progression over time is also stupid.
you missed the point, oh well.
practicing arguing with Keynesians while explicitly igoring fallacious arguments they make is kind of pointless.
actually the point would be so that you could focus on other fallacious arguments that they are making, because that could help us to learn better rhetoric/argumentation. Youre saying its "pointless" in direct contravention of people asserting the actual point. No doi, values are subjective.
Nothing better to do right now.  All my work for the day is done until a few appointments later, and all my other message boards are dead right now.
You have "nothing better to do" than something that has no point? Your life sounds miserable
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xahrx replied on Mon, Aug 20 2012 7:59 AM

 

1. Here is the context in which this thread was intended: N00b becomes an Austrian because he saw a few videos online. Austrian n00b then watches a few more videos and reads Economics in One Lesson, and so he assumes that he knows everything to know about economics and that Keynesians are dumb because of the BWF. This is a CLASSIC argument against Keynesianism. However, whether or not our champion actually understands Keynesianism, he will go ahead and use the BWF to criticize the economic ideology. If Austrian n00b argues this against a Keynesianism, and doesn't understand what they think or why Keynesianism is actually wrong, then he's gonna get smacked down. The point of this thread was severalfold: To intercept Austrian n00b before he did got in this argument, hopefully encourage Austrian n00b and maybe even some more experienced people who didn't delve too far into the Keynesian dogma to shape up, both to further understand the economic context of our time and economic reasoning skills, as well as increasing their understanding of ABCT. This thread was also aimed at spawning some interesting, non-argumentative debate concerning something which it obviously failed at doing, whoever is to blame.
 
This is all understood, and as I said I find it pointless. If N00b makes that argument and a Keynesian dazzles him with jargon, so be it.  I have no issue with people learning more about all schools of thought.  I have issue with the whole idea of arguing with people 'on their own terms,' or trying to prove them wrong in a context they dictate, which is well nigh impossible for the various reasons I've stated.  I completely disagree that there is anything productive to be gained by granting things that are false as true 'for purposes of argument,' gotlucky's Reductio Absurdum point not withstanding.
 
2. Therefore this thread, as I've said above, was never meant for you and several others who posted towards the end because you genuinely know what you're talking about, this is why in large part I never dealt with what you wrote except insofar as pointing out why it would be pointless if we assume the Keynesian assumptions, BECAUSE I AGREE WITH YOU. As I've said again and again you did exactly what I think people should do, which is attack, as you put it "this whole Keynesian thing" and prove why it is wrong through a real understanding of both schools of economics. If you assume that the Keynesian assumptions were right you would be wrong then the BWF wouldn't apply, the purpose of this is exactly to show that the attack must be on the assumptions themselves, not by stating the BWF and then patting yourself on the back. Because of this we were never "arguing" with one another, we were arguing past one another because I was never trying to argue against what you were arguing.
 
So, the Broken Window Fallacy is a perfect tool for showing how wrong Keynesian assumptions are, and for that very reason N00b shouldn't use it to show how wrong Keynesian assumptions are.
 
3. I never believed that I discovered a fancy new toy on the economic toybox. That's about all I have to say about that. I thought I was making an insight that was useful to make, and it's hard not to sound pretentious when people are both attacking you, not understanding you, and showing no attempt to rectify their understanding. In the end it doesn't actually matter what I sound like, or the fact that you just sound mad and arrogant, like a kid who thinks he's the biggest badass in the playground and gets mad when anyone else doesn't acknowledge this.
 
I could care less whether you acknowledge my existence at all.  You made a point in a poorly worded first, and subsequent posts, which upon examination doesn't hold much weight or value in my opinion.  Should someone respond in a similar vein to something I've written, I wouldn't get all butt hurt about it.  I'd examine my point and see if they were right.  This was your first point:
 
In short the broken window fallacy and the usual explanation of it does not, in and of itself, refute the Keynesian paradigm.
 
People, myself included, have repeatedly shown how wrong this is.  Here's another quote:
 
I want to make it very clear I'm not arguing for Keynesianism, merely the irrelevance of the fallacy in response to Keynesianism.
 
And this has also been shown to be wrong several times over.  In as much as full employment doesn't matter, in as much as 'idle' is a ridiculous term to apply to any resource, in as much as the BWF as an analogy covers a hell of a lot more than seen and unseen costs, and in as much as 'sticky prices' don't matter either.
 
It seems to me that people get your point, and think you're dead wrong.  In fact this whole thread is a demonstration of how wrong you were, because every single Keynesianesque objection or exception you raised was dealt with specifically within the context of the BWF.  Which kind of proves through demonstration its utility in refuting the Keynesian paradigm.
 
As for Malachi:
 
I hesitate to ask...how is it like this? It seems kind of like prohibiting jet skis in a swimming race "even though jetskis are demonstrably faster." you say theres no point to seeing who is the faster swimmer...then take your jetski and get out of the pool, dude.
 
Because setting rules to a fight which do nothing but arbitrarily stop you from doing what you can to win is what's being suggested here.  A person riding a jetski would not by definition be swimming, such a rule would make sense.  But what we're talking about here is more akin to a person calling a swimming race and then demanding everyone else bind their feet.
 
You have "nothing better to do" than something that has no point? Your life sounds miserable.
 
No, it means I have free time on my hands and this amuses me enough to stay involved to a certain extent.
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Student replied on Mon, Aug 20 2012 8:22 AM

I was reading a recent back and forth on Bryan Caplan's blog on Bastiat's essay that reminded me of this thread. Here is Matt Yglesias's contribution to that coversation (he's Slate's economics writer/blogger). I particuarly like this bit on why he is not impressed by people using the broken window fallacy to critique fiscal stimulus. Suprise, suprise. Neodoxy foresaw every single one of Matt's points. Considering Matt just posted this over the weekend, could it be he was reading this very thread!??!?!?! .... No.

But Neo deserves props anyways. He's shown he actually *understands* Keynesian economics, which should be step 1 for anyone that hopes to critique it. 

Similarly, Bastiat's alleged broken windows fallacy involves simply assuming that there's no such thing as genuinely idle resources or an "output gap." In that context, yes, it's a vibrant intuitive depiction of crowding out. But this doesn't counter any Keynesian or monetarist points about the viability of stimulus during a recession induced by nominal shocks, it involves assuming that no such recessions can occur even though they plainly do. In defense of Bastiat, at the time he was writing the modern industrial business cycle was a very new thing..[b]ut that's no excuse for people sitting around in 2012 to be pounding the table with an old book that's non-responsive to modern issues professing to be baffled why people don't find it more persuasive.

http://www.slate.com/blogs/moneybox/2012/08/18/why_i_don_t_love_frederic_bastiat.html

PS* Haters gonna hate.

Ambition is a dream with a V8 engine - Elvis Presley

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DD5 replied on Mon, Aug 20 2012 9:04 AM

Student:
He's shown he actually *understands* Keynesian economics, which should be step 1 for anyone that hopes to critique it.......

yes... it (bwf) certainly doesn't counter the points about a recession, that's when accoring to Keynesians, supply no longer creates demand, but government spending as such or pieces of green paper does.

So here, I concede the point - The Broken Widnow Fallacy is no fallacy at all to all those people, and also to all those 5 and 6 yr old grade schol children who think food just comes from the supermarket and that there must be something intrinsically valuable about the bills in Mommy's wallet.

 

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