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Is the Austrian School the Creationism of Economics?

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Austen posted on Thu, May 2 2013 12:54 AM

This guy thinks so. http://www.debate.org/forums/economics/topic/30571

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I would consider it more like the Theistic Evolutionism (or I like the term Biologos by Francis Collins) of Economics.

That poster reasons his comparison of Austrian Economics to Creationism based off of the attribute of Creationism to disregard scientific findings that prove contrary to its postulations, as well as von Mises describing Economics as a measure of human actions of course. I can gather that the poster extrapolates von Mises into thinking that because Austrian School includes variable, human behavior into the study of an economy, that somehow this variability completely lacks any model or logical basis. Both of these positions seem incomplete to Austrian Economics (as flushed by von Mises). Austrian Economics realizes that the truth as based in as much pursued and simplified logic relies on natural as well as scientific means of organization - much like Biologos, which posits the explanation of the natural world as one based off of historical, scientific and faith based conclusions.

"...if there is one thing that stings people just enough to commit violence, it is the feeling of powerlessness." - Monroe "yes, I just quoted myself..." - Monroe
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Irregardless of that

didn't even bother reading the rest...

"The Fed does not make predictions. It makes forecasts..." - Mustang19
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"I also find it really peculiar that the Austrian school rejects mathematics so easily. If they're basing their methods "a prior" then mathematics is as deductive reasoning as it comes. Unless of course, you're trying to make your school appeal more to the general public rather than taken seriously in academia. Then write away mathematics, because the general public hates equations."
 
The problem with mathematics is not that it is a priori, the problem is specifically with the way that mainstream economics plays fast and loose with time, causality and uncertainty by applying mathematical equations which neglect time, causality and uncertainty to economic phenomena. William Stanley Jevons argued that there was a connection between the sunspot cycle and the business cycle. Identifying correlata is of no use to the comprehension of phenomena without some kind of causal mechanism. It is not impossible that the sunspots are influencing the business cycle... but absent some kind of causal mechanism, it is nothing more than a curiosity. Mainstream economics is little more than a game of "spot the correlation", aka, running lots of regressions on lots of statistics like GDP or CPI (questionable in their own right, but that's a separate issue).
 
Keynesian, for example, has been described by Austrians as the logical conclusion of removing the element of time from capital theory. It is because money does not spread instantaneously through an economy (rather, it spreads exchange by exchange) and it is because the structure of production in the economy cannot be instantaneously lengthened that Keynesianism fails. If for every window you break, three new, fully functional producers sprang into existence demanding employees, there might be an argument for breaking windows. Absent such miracles, you're just babbling.
 
"Austrian Economics school of thought basically follows the definition of a pseudoscience, since the school itself states that they don't strive towards falsification."
 
This is a blatant misreading of AE. Falsification is another way of talking about empiricism, which AE rejects as a sound method for economic science because the phenomena are not causally regular. Protons and neutrinos do not make plans, they do not update their reactions to circumstances based on prior experience so that they react to the same circumstances differently at different times in their existence.
 
The methodology of Austrian Economics is not scandalous - biology is another discipline where math equations are rarely suitable, and no one has ever said biology is a "soft science". And while biology is not fundamentally a priori because it is not a reflective science (as praxeology, ultimately, is), people forget that biology employs many a priori principles which cannot be tested by any empirical method (e.g. common descent).
 
There are more gems in there but I'm off to bed...
 
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Lol, the OP appears to have trolled successfully. I'm thinking about making a thread called something along the lines of  "common misinterpretations of economics and their Austrian cure", because I just keep running into bullshit like that in the thread. Austrian economics, when taken out of context, sounds ridiculous because of its rejection of empiricism, which leaves it open to attacks that it is akin to a religion. The ironic thing about this is that the grounds upon which Austrians reject empirical work in the economic realm aren't based off of flaws in empiricism, Mises was a strong empiricist, it's because Austrians look first at the conditions needed to justify empirical research, and they refuse to apply empiricism where it is useless. You don't use a measuring stick to determine something's weight, and a refusal to do so is not non-scientific.

I also like how someone in the thread basically implied that there were these big methodological wars which were solved in academia decades ago. There was never any such thing. Empiricism leaked into economics as the next logical step for a science without any true grasp of its true foundations, and insofar as it has it still employs a priori models of behavior, which is why ceteris paribus is common terminology throughout economics.

At last those coming came and they never looked back With blinding stars in their eyes but all they saw was black...
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Monroe replied on Thu, May 2 2013 10:41 AM
Aristophanes:

Irregardless of that

didn't even bother reading the rest...

Now try!
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Re: some of Clayton's comments, I believe that both deductive reasoning AND the scientific method are classified as ways of empirical testing.  They test different kinds of theories, is all.

Economics (a social science), as for example the Austrian school, relies on reason because it tests axioms that are intellectual and not sensory.

Formal sciences like math (again, relating to intellectual and not sensory subjects) test propositions rationally also, by utilizing the rules specific to the system in question. 

Natural sciences, as for example Biology, relies on the scientific method because it tests hypotheses that are about sensory data.

The word "empirical" as I understand it doesn't refer only to the hard sciences, but to the process of testing a proposition in the way that is suitable for the sort of information it encompasses.

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Bogart replied on Thu, May 2 2013 11:57 AM

My opinion is that Austrian Economics is the true economic science simply because it is the only one that is consistent with with micro-econmic theory, and even more importantly, it is consistent with most of the theories on morality as well. 

Not a single one of the opposing schools of economics is consistent with long run micro-economic theory.  For example this whole idea of a stimulus through the artificial creation of money and credit violates Say's Law.  Now is it fine to say that Say's Law is invalid?  Sure, but you better be able to post a rational theory as to why Say's Law is invalid and not just point to a short term economic event and say thats it.  For example say a statistician provided evidence that Say's Law did not apply from 1845 to 1856 in Russia so he proved that it is not valid.  But even if your alalysis is true and Say's Law is not valid then you still should be making policy recomendations that affect the lives of millions of people based upon an analysys not backed up by any logical theory.

Even if you buy the idea that you don't need theory because the statistics are beyond refutation then you will have a much hard time getting by the failure of these other schools to be consistent with most theories of morality.  The whole idea of a government monopoly provided currency is a violation of the moral principal that theft is wrong.  And inflation is logically theft through the stealing of purchasing power of the monopoly currency instead of through the stealing of the currency directly.  And if you can get by that then how about the question of what to do with people who violate the monopoly on currency?  Do you send these people to jail?  Do you kill them if they resist going to jail?

 

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Yeah, positivism is often conflated with empiricism though nowadays. Austrians are most forcefully positioned agains positivists, because the approach of the latter to epistemology is intellectually bankrupt - a joke. Older forms of empiricism did not dismiss a priori truths out of hand.

Freedom of markets is positively correlated with the degree of evolution in any society...

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I think in colloquial use hardly anybody would have the need to use the word "empirical" to mean anything other than a hypothesis from hard science, but I don't really believe there's any confusion about this in reputable academic circles.

You wouldn't say that geometry wasn't an empirical science merely because the Pythgorean Theorem isn't lab-testable, for example.

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Suggested by Jon Irenicus

On empiricism and the Austrian method:

I've watched this lecture at least 3 or 4 times all the way through and I learn something new each time. I cannot recommend it highly enough.

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The methodology of Austrian Economics is not scandalous - biology is another discipline where math equations are rarely suitable, and no one has ever said biology is a "soft science".

Not at all true. Biology beyond the introductory level is actually pretty mathematically intensive and has been for quite a while. Game theory has found very fruitful applications in evolutionary biology since the 1970s, but population genetics has been mathematically modeling changes in gene frequencies for almost 80 years. 

I think biologist John Maynard Smith said it best "an ounce of algebra is worth a ton of verbal argument". 

Ambition is a dream with a V8 engine - Elvis Presley

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I disagree with the last bit, utterly.  Math is applicable to propositions where calculation yields insight.  Reason is applicable to propositions that are not subject to calculation but rather to top-down deconstruction.  The one is not substitutable for the other. 

Biology is one of the physical sciences so of course math and the scientific method are the ideal tools for study in that field.  Not so with social sciences, though data can be gathered by those methods; but the testing of axioms cannot be undertaken the way it is in Biology.

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Please, tell us what is the Fundamental Equation of Mammal Anatomy? 

*rolling eyes

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I think biologist John Maynard Smith said it best "an ounce of algebra is worth a ton of verbal argument". 

And he is entitled to his opinion.
 
Perhaps we should all just begin parsing our posts in mathematical symbols.

Freedom of markets is positively correlated with the degree of evolution in any society...

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