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Indeed
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Everything
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Some additional "critiques" you might be interested in: Notes on the Austrian Theory of Malinvestment Must artificial credit expansion lead to overconsumption?
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Hmm, I'm no statistician, but I don't see a correlation on that graph either. You'd also have to compare it with a graph measuring the correlation between inequality and welfare spending. The closest I could find with a quick search is this graph relating inequality to tax revenue as a percentage of GDP. It seems like a better correlation
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No problem. Take your time. I took nearly a week to respond to your post. In the Crusoe example the net is supposed to show the importance of taking time for production instead of consumption. The Interest rate is likened to his time preference, since this is the Austrian view of what interest signals within society. The question I've always had
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Question: Is the Robinson Crusoe example supposed to communicate anything about the interest rate or is it simply supposed to illustrate that more roundabout production processes tend to be more productive? What exactly can be said about the interest rate (or even proto-interest rate) in the Crusoe scenario?
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I don't mean to dismiss the micro aspects of Austrian economics but rather highlight a perspective that seems to get marginalized, at least here. I'm kind of reminded of fundamentalist Christians who when asked what distinguishes them from other sects of Christianity say something like, "our beliefs and practices are based on the Bible
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There are limits to characterizing Austrian economics in terms of methodology or microfoundations. Ludwig Lachmann, for example, says Keynesians use the same methodology: AEN: How do you see the relationship of the Keynesians to the Austrians? Lachmann: Now, this is a bit more difficult because the question arises, "Who now are the Keynesians?"
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This is a good point, and I think that it might actually lead to a much more interesting view of the production structure, yet in this example that you give I should think that it's obvious where the product as a whole goes. For instance, iron which is then made into a tool to produce more iron is at the "top" of the production structure
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There are two things I find problematic about the thesis that higher order goods are more sensitive to interest rates: 1) It doesn't seem like the production process is as linear as supposed. True, the appropriation of natural resources from the Earth is a sort of starting point. However, even this uses capital. Which is the highest order, the miner