In discussing economics with a person, they made the claim that Austrian economics is unscientific. When asked how it is unscientific, they simply linked the following link.
How would mises.org respond to this:
http://www.huppi.com/kangaroo/L-aussm.htm
I am an Engineer. I will tell you this. To predict an outcome you must understand the fundamental principles underlying the topic under consideration. The principles of chemistry, physics, thermodynamics, electronics, etc.. are all logically derived from laws - facts. Principles that are derived from facts & laws (axioms) are sound and last the test of time. Austrian Econ. is a science, not necessarily based on statistics, mathematical models and theories, but based on logic derived principles from facts underlying human behavior.
Modern day economics consist of simplistic models, diagrams, math and jargon. Many created to model observed past statistics. This is not science. It's curve fitting. You cannot fundamentally predict the outcome of an event based on curve fitting. Modern day economics is not science. It's guess work.
Nirgraham
You said I misunderstand my own position. Forgive the candor but that's a really stupid thing to say. Whether or not I am correct is fine for you to debate, but I'm not arguing with myself. Don't be ridiculous.
You seem unable to accept the theoretical idea that only one firm could exist in a market. Since you apparently don't understand barrier to entry, i will give you an example from history. Standard Oil (19th century) controlled by John D Rockefeller who was the richest person in history.
barriers to entry include the enormous amount of capital you'd have to purchase to start up, not to mention access and ownership of limited resources, most especially oil. Because of these barriers no one could compete with him, even though they wanted to, even though the market was wide open. The barriers to entry were too enormous to allow for the market to correct itself. That's rock solid.
Um. Are you seriously arguing that something that pleases someone doesn't have intrinsic value?
Spide,
I said almost that exact same thing in my original post. I'm not here to say that the austrian approach is wrong, I'm here to say that all points of view have value and are all attempting to model reality, but that isn't completely achievable yet. I'm not advocating a certain school or a certain method, rather attention should be paid to them all. What I'm getting though, from here, is that there are many austrian hardcore fanboys who would rather argue for the sake of arguing instead of trying to further their education by studying all views.
If you've studied economics as extensively as you purport, how can you fail to notice that economists reject the notion of "intrinsic" value as far as their science goes? Aesthetic valuation of a tulip would be one of the prime examples they'd marshal.
Freedom of markets is positively correlated with the degree of evolution in any society...
CaseyKing:I'm describing it in the most technical way available. I didn't invent the term. But for clarity a failing market is one that doesn't satisfy both the demand and supply curves accurately. Either over producing, under producing, most generally because the price (which is where the graph of supply intersects with the graph of demand) is higher or lower than what is optimal. That's a failing market in a technical sense.
well, there is no evidence that would permit you to determine the correct quantity that should produced, you dont know the demand schedules of the agents in the economy. These are all fictions. So you have nothing to contrast your 'monopoly' with..
CaseyKing:Ok so we have a mutual trade off. In your example I am trading household services and sex for financial support. You have given an example of a single supplier and a single demand point. Which, by all rights, isn't really a market. Since the market for mates, for example, would include other people I could trade these services with.
this is fine so long as your ex, doesnt care who she gets the services from, if the provider is no great shakes, if there is no product differentiation then what you say is the truer. however the more that your ex discriminated between the people that provide the services, the more she notices that hitler and cassanova have different bedroom styles, the more any given provider of services, becomes a provide of 'mopoloy services' , a monopoly on 'sex with X' or a monopoly on 'food cooked by Y' etc.
CaseyKing: "Your marriage partner is getting the benefit of your various services at some price less than their income." I don't see how. This is the point you have to explain in great detail. Because it doesn't make sense to me. Both partie sin this example are rational decision makers, there is no reason to suppose that one is getting less out of it than the other. In fact, there are several reasons to assume the opposite. That both are getting as much out of it as they are putitng into it, maybe even more. When a trad eis made it's usually in the benefit of both parties, otherwise the trade doesn't go down. (except for in cases of elasticity problems)
"Your marriage partner is getting the benefit of your various services at some price less than their income."
I don't see how. This is the point you have to explain in great detail. Because it doesn't make sense to me. Both partie sin this example are rational decision makers, there is no reason to suppose that one is getting less out of it than the other. In fact, there are several reasons to assume the opposite. That both are getting as much out of it as they are putitng into it, maybe even more. When a trad eis made it's usually in the benefit of both parties, otherwise the trade doesn't go down. (except for in cases of elasticity problems)
i think you flat out confused about my statement. assuming the only source of income is your partners income, and it is sufficient to pay for you providing the aforemention services to them; then the cost of the services is less-than-or-equal to the income. in the monetary units. i.e they earn 1000£ a month. you sex and cook -> sex and cook costs less than 1000£ a month. (this assumes away the ability to debt finance an other such matters)
CaseyKing:I would say this is a non-sequitir, but I can't even make sense of it long enough to see the point you're trying to make. If I am a firm offering a product, say cheese, and I exit the market, the price for my cheese is not infinite. It's simply a product that is no longer available. There is a huge difference between "infinity" and "not present."
if you cant buy a good for-any-price. the cost to purchase is infinite in extent. if you can't climb to the top of a tree no matter how high you go. the tree is of infinite height.
Where there is no property there is no justice; a proposition as certain as any demonstration in Euclid
Fools! not to see that what they madly desire would be a calamity to them as no hands but their own could bring
Intrinsic value is usually in reference to money, for example old stone boulders or coins or modern paper represent far more value than their intrinsic value, so we generally describe money as having "no intrinsic value" but in reality the items themselves have some small amount, because they are physical matter. I could break my stone boulder and use it as a table. I could make a neckless of pennies and wear it as jewlry. I could take my cash and burn it to start a small fire. None of these may be impressive as values, but the inherent intrinsic value is not zero.
And further, trying to assume that nothing has intrinic value, as you seem to suggest, is ridiculous.
CaseyKing:You seem unable to accept the theoretical idea that only one firm could exist in a market. Since you apparently don't understand barrier to entry, i will give you an example from history. Standard Oil (19th century) controlled by John D Rockefeller who was the richest person in history.
you seem to think that there was a point of time in the 19th century when no-one owned any oil aside from Rockefeller.
CaseyKing:And further, trying to assume that nothing has intrinic value, as you seem to suggest, is ridiculous.
the austrian position is that no economic goods have intrinsic value. to think anything else is ridiculous. perhaps now you should go away. or read some menger/bohm-bawerk/mises
Yes, fiat money does more or less work that way, but one still does not speak of "intrinsic" value except in a very loose sense. Gold, likewise, has no intrinsic value, except in a very loose, metaphorical sense.
All valuation is the valuation of some object by some evaluator. It is in that sense agent-relative. No value exists apart from agents to hold it as a value. Most economists would go further and just call it "subjective", except perhaps for old school Marxians.
If they only demand sex from person A, and person A is unwilling to give it to them, they cannot satisfy that demand and must seek out a substitute good. I can see why you might think the price is "infinity" but it isn't infinity. I guess you could say that it's undefined. But basically what you're trying to do is find an intersection between two curves when one curve does not exist. The intersection is not infinity, the answer is there is no intersection, aka there is no price. (notice no price is not the same thing as no charge)
the use of curves, is an example of poor neoclassical methodology. if you cant say what you are trying to tell me without introducing curves; then im not interested.
I agree the value is subjective to a high degree, but it's *not* arbitrary. It's based on how much people want it and how oftenb, and usually that demand is informed because of some sort of value they get from it, so, logically, it has a finite value greater than zero. A value that can only be described as intrinsic in nature. But I see your point.
CaseyKing:I could break my stone boulder and use it as a table. I could make a neckless of pennies and wear it as jewlry. I could take my cash and burn it to start a small fire. None of these may be impressive as values, but the inherent intrinsic value is not zero.
Things in nature have properties. These properties can be found to have a causal relation with percieved ends by men. When men use the things in nature to satisfy their ends, there is value in it. Value of things result from finding of ends/goals/whatnot and their satisfaction by acting men. The things left to their own devices can have absolutely no value, as value is a result from human action.
Indeed it is not arbitrary but intrinsic goes further and points to an existence apart from agents who carry out valuations. So to be accurate it is agent-relative, as value is relative to the agent's ends, i.e. value is the conduciveness of the means to servicing those ends.
That's an interesting point, so we're disagreeing on what "value means" well since the aim of my post wasn't at all hinged on whether or not something has intrinsic value, I'll let you have that one. Though I disagree to a point.
The main point was that the price of the tulips was far greater than the actual value (yes value) that should have been assigned to them. For example it might have been something like this.
Actual Value = Beauty and Usefulness of the Tulip
Market Value = Beauty/Usefulness of the Tulip + the expectation that demand will keep rising
Because demand cannot always keep rising, there is an inflation which ends in a market failure. And you cannot dispute that because history proved it with the incredible crash in the value of the flower for no other reason than speculative bubbles eventually pop.