I'm aware that many people here have read Human Action. Many here have read A History of Money and Banking in the United States. Some have even read Principles of Economics. A few Capital and Interest.
We're all very familiar with the Austrian canon.
But how many of you lot have read the General Theory of Employment, Interest, and Money? The Theory of Political Economy? A Monetary History of the United States? Any other of a million different books written from both mainstream economic perspectives and alternative heterodox ones?
As a student of economics, I'm coming to feel that no one really has all the answers. The Austrians are certainly the closest to a 'complete' picture of how economeis operate, but I still feel like Austrian theory is 'incomplete', or 'imperfect' in a grammatical sense. I feel like every school of thought has something to add, and what makes the Austrian theory so powerful isn't its ability to refute every other school, but rather its ability to incorporate every other school.
So, as students, hobbyists, and activists, how many of you are familiar with material written on economics from outside the Austrian perspective?
I think Austrian economics appeals to the economically illiterate because it's not a rigorous science. Its outright rejection of empirical evidence, refusal to make use of econometric and statistical methods, and lack of mathematical formalization allows anyone with a moving pie hole to join in the debate.
I mean it's hard to solve New Keynesian and Real Business Cycle Theory DSGE models. Intricate mathematical models of the macroeconomy are not too appealing to a public that gets its economic education from youtube videos. It's easier to sell them pop pseudo-philosophical ideas that have no empirical, scientific backing
Pop-Keynesianism has this same problem. Explain things with simple models and easy to understand analogies and people will assume you're right because you're an expert and must be presenting facts. Certainly tells us how a guy like Krugman can get away with peddling 80 year old theory.
But I'm not really concerned with insulting the people here, I'm just concerned with getting them to tell me whether or not they've done some reading outside the narrow range of Austrian economics.
Typical ill-informed wikipedia/youtube critique of Austrian economics.
The funny thing, though, is that Austrian economics has gained so much attention in recent years, and has become so popular amongst the general population, precisely because Austrian economists were, for the most part, the only ones who saw this last recession coming (something that all of the econometric models completely missed) and weren't afraid to publicize their predictions (Mises and Hayek also predicted the great depression, stagflation, and Nixon's price controls). Milton Friedman was right when he proclaimed that predictive power is the hallmark of a good theory.
"If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion."
While his over all thrust might be flawed, the sub-point he makes is, I feel, spot on. Austrian economics does seem to attract a lot of people who are more interested in using it as an easy-to-understand tool for political debates, rather than as an actual tool for analyzing economic phenomenon. They don't want to become experts, but simply sufficiently versed in the rhetoric to be able to squash debating opponents. The point of this topic is to either confirm or dispell that notion.
JadedRailman:They don't want to become experts, but simply sufficiently versed in the rhetoric to be able to squash debating opponents.
If Austrian opponents can be squashed with nothing more than rheteric, that either speaks very highly of Austrian economics or very poorly of its opponents.
The point of this topic is to either confirm or dispell that notion.
I thought the point was to determine how many people who read the Mises Institute forum have read Keynes and Friedman...not if they are well-learned in Austrian theory.
While his over all thrust might be flawed, the sub-point he makes is, I feel, spot on.
If you wish to critique/refute an entire school of thought then you need to actually present logical arguments and empirical evidence that contradict certain positions held by that school. Marginalizing pseudo-Austrian economists (youtube Austrian economists) simply wont do (primarily because they aren't actual Austrian economists in the first place).
Also there are millions of so-called "Marxians" that don't know the first thing about Marx's actual economic and sociological framework, and merely call themselves Marxians because they believe it supports their ideological biases. But their existence does not refute Marx's version of the LTV, his theory of crises, accumulation, etc.
"I thought the point was to determine how many people who read the Mises Institute forum have read Keynes and Friedman...not if they are well-learned in Austrian theory."
Indeed, and, to clarify, I meant experts in economics, not just experts in Austrian economics.
Let's try to keep this one on point: To all you who have responded so far, could you answer the question lain out in the original post?
JadedRailman:Austrian economics does seem to attract a lot of people who are more interested in using it as an easy-to-understand tool for political debates, rather than as an actual tool for analyzing economic phenomenon. They don't want to become experts, but simply sufficiently versed in the rhetoric to be able to squash debating opponents.
And this is not true for progressives or conservatives? Are you interested in what prospective or actual Austrian economists have read, or what libertarians with a passing or strong - but nonprofessional - interest in economics have read? I'm quite certain that the young Austrian economists out there are not getting their education through youtube. If you're interested in confirming or dispelling this notion, go stroll around GMU, or sit in on economic classes at Loyola New Orleans, or get a spot at the NYU colloqium.
As one of the libertarian non-economists, I have pretty much only read the work of Austrian and classical economists, and some contemporary near-Austrians (e.g. Buchanan, Ostrom). Other than what I read years ago in AP Economics and the odd journal article today, I don't know much about New or Old or Pop Keynesianism, Monetarism, MMT, or macro theory in general, and I don't claim to know. I do want to read Keynes's General Theory, as well as some of the other non-Austrian work, but as I begin to realize how much there is out there to read and digest, I don't know when I would ever get to it. But I'm just a layman. Your world frighten and confuses me!
'And this is not true for progressives or conservatives?'
No. In fact, it's true of every political persuation.
I never said it wasn't.
Thank you for actually answering the question. It is indeed a frightening world, if only because I feel like Aristotle trying to tackle physics -- economics is an infant science! To me, Austrian economics is an image of what economics wants to be when it grows up, and the mainstream of mathematical Jevonian-Walrasian economics is the actual, slow, painful, incredibly long process of actually maturing towards adulthood.
JadedRailman: So, as students, hobbyists, and activists, how many of you are familiar with material written on economics from outside the Austrian perspective?
Im pretty familiar with it...Since Mainstream Econ is kind of a necessity to know if one wishes to get a degree in Econ...
My Blog: http://www.anarchico.net/
Production is 'anarchistic' - Ludwig von Mises
I've read books by non-Austrians such as Wicksell, Schumpeter, and Hutt (though WIcksell is technically Austrian), and various articles written by Knight, Berle, Means, Coase, Williamson, Holmstrom, Samuelson, Alchian, Demsetz, Bewley, Simon, Fama, Manne, and Winter. I've also read a good amount of Capital, volumes 1 and 3.
No I've never read the GT and don't plan on doing so (though I've read chapters 19, 21, 22, 23), and I've never read the Monetary History of the United States (too long). I hope I've adequately answered your question.
On a side note.... Why read General Theory, unless you decide to read it as a hobby? Keynesianism differs greatly than what is in the General Theory. Paul Krugman says something similar here, claiming that if one seriously wants to critique Modern Keynesianism, one cannot do it by critiquing Keynes. I agree with Krugman that modern Keynesianism is much closer to what Paul Samuelson writes in his famous textbooks than what is in the General Theory
claudius: I think Austrian economics appeals to the economically illiterate because it's not a rigorous science. Its outright rejection of empirical evidence, refusal to make use of econometric and statistical methods, and lack of mathematical formalization allows anyone with a moving pie hole to join in the debate. I mean it's hard to solve New Keynesian and Real Business Cycle Theory DSGE models. Intricate mathematical models of the macroeconomy are not too appealing to a public that gets its economic education from youtube videos. It's easier to sell them pop pseudo-philosophical ideas that have no empirical, scientific backing
This is quite a funny critique. Even IF we hold your general idea as true, then a subject has to be hard in order to be valid... err. do you see the error in your premise? somebody needs a logic lesson....
From what you said in your critique, you havent even come close to scratching the surface to the subject. Also, Austrian Econ does not reject empirical evidence, please stop strawmanning the subject and actually research the topic before critiquing...
My experience is mostly with Marxist writers and little bit of Chicago school. Yes, I was one of those foolish souls reading ponderous tome written by French Marxists and trying to make sense out of them. In the end I gave up completely, part because I had a "gut feeling" their theories were rubbish but mostly because the language they use is so damn heavy and repetitive it was threatening to kill my famous appetite for reading.
I think there is a huge assumption in this whole thread, conflating research in a subject with expositions of the subject.
Many books explain the concepts of physics, chemistry, biology, even math itself, with little to no use of math.
So saying people are not interested in mainstream economics because the math is so heavy leads me to think of several possibilities:
1. No accurate, popular books on the subject exist, which makes one wonder why they can't get their message across. Are the concepts deeper than those of any other science? Allow me to be sceptical.
2. The popularizations do exist, and the fellow who thinks you have to know heavy math to understand mainstream economics never heard of them.
Fishy.
My humble blog
It's easy to refute an argument if you first misrepresent it. William Keizer
Yeah, I have a bachelor's degree in political economy. I had to read quite a lot of nonsense.
Probably everyone who has studied economics in schools.
JadedRailman: But how many of you lot have read the General Theory of Employment, Interest, and Money? The Theory of Political Economy? A Monetary History of the United States? Any other of a million different books written from both mainstream economic perspectives and alternative heterodox ones?
I've gotten about 1/3 way through Human Action. Mises's insights really are quite amazing and it is difficult to imagine how to generalize his ideas any further and still be talking about the real world. I have a beef with the Austrian school, as it is today, on two counts.
First, there seems to be a lot of friction surrounding the idea of understanding how our biology and praxeology are related. It seems obvious to me that the one is the outcome of the other... a car behaves as it does because it is made the way it is, so understanding how the car is made can help you understand how it behaves. True, stripping down a Formula One race car will never teach you how to drive it at 200mph. And even though the driver doesn't need to know how to strip the car down, he does benefit from understanding the technical details of the vehicle's construction insofar as those details impact the behavior of the vehicle at speed. The analogy to our biology is direct. The human body is a machine - the most complex and intricate machine we know of, but still just a machine. Understanding how it is put together and how its systems function (especially the brain) cannot but help us better understand how we behave even though we don't need to understand what's "under the hood" in order to act. But even pointing this out seems to generate quite a bit of heat and friction, which I don't understand.
Second, there seems to be a bit of methodological dogma, at least among some camps. There seems to be this conviction among Austrian scholars that they have the One, Right Methodology and it is this methodology that makes them right. However, we know that there is no one, right method to find the truth, there are just a large variety of heuristics which work better on some domains and worse on others. The science of particle physics is vastly different from the science of paleontology even though both have the same goal: searching for factual truth about the physical world. The Austrians are right in observing that the methods of the physical sciences are not appropriate to the social sciences but then they seem to commit the very same error in insisting that the Austrian method (deduction from praxeological axioms) is the only right way to ascertain truth about human behavior. There is absolutely room for empirical methods to inform analytical methods and we should expect that both approaches are coming to similar kinds of answers and it should be a red flag if they are not. Either our observations or our reasoning could be in error. Perhaps we're measuring the wrong things or measuring them the wrong way. Or, perhaps we've chosen the wrong axioms. An axiom, after all, is just an assumption.
Clayton -
The human body is a machine - the most complex and intricate machine we know of, but still just a machine.
...but then you seem to commit the very same error in insisting that materialism is the only right way to ascertain truth.
@Andris: Huh?
So claudius, was Paul Samuelson rigorous with his fancy equations? Even when he said that the Soviet model was fine and sound in 1989?
I think Austrian economics appeals to the economically illiterate because it's not a rigorous science. Its outright rejection of empirical evidence, refusal to make use of econometric and statistical methods, and lack of mathematical formalization allows anyone with a moving pie hole to join in the debate. I mean it's hard to solve New Keynesian and Real Business Cycle Theory DSGE models. Intricate mathematical models of the macroeconomy are not too appealing to a public that gets its economic education from youtube videos. It's easier to sell them pop pseudo-philosophical ideas that have no empirical, scientific backing.
I mean it's hard to solve New Keynesian and Real Business Cycle Theory DSGE models. Intricate mathematical models of the macroeconomy are not too appealing to a public that gets its economic education from youtube videos. It's easier to sell them pop pseudo-philosophical ideas that have no empirical, scientific backing.
You are a brave man to flaunt your math skills on a forum where most of the people have a background in hard sciences. Oooh, DSGE models. Sounds real advanced like. Did it hurt your social 'sciences' brain to do them?
I think Claudius had a point, even if he kinda overstated (and came off something of an arrogant dick). As somebody who disagrees with the Austrian position on almost everything let me chime in. Once you move past the basic classes in principles and the like I think you start to realise that Austrians often caricature the position of mainstream economists. You can cite ridiculous passages from The General Theory but it doesn't mean you're actually saying anything about the macro research that's been done in the last 30 years. Of course, a decent mathematical background is somewhat required for a decent understanding of this work (which, as of now, I wouldn't consider myself having). But, a decent Intermediate Micro/ Macro II book or a good book in OI will teach you a lot of stuff that flies well under the radar of most Austrian discussion for the 10^10th rehashing of "Why Kenyes was stupid and evil".
I've kinda come to a few conclusions regarding Austrian economics, the first is simply to the extent that Austrian econ. says something interesting it's probably not in line with the definition of what most people would consider contemporary economics. Its true that "no model is true" but that doesn't mean that there aren't a plethora of economic models that, while somewhat "unrealistic", help us make a great deal of sense of the world out there. So Austrians can kick up a fuss about certain modelling or simplifying assumptions but if it helps us explain why we see merger waves (and inform antitrust policy) that's pretty good. On a related note, that part of Austrian economics that does say something about economic phenomena, its moot unless you can show how much of it Austrian theory explains. The old joke that "economists have predicted 11 out of the last 10 recessions" seems especially biting in the Austrian case. Its one thing for Austrians to say "there's going to be a recession sometime in the future", I'm pretty sure most people can figure out that as time passes the likelihood of a recession sometime tends towards one. It's quite another to make an explicit model (and believe me, there is a model implicit in the ABCT) of the theory, statings your assumptions and then putting it to work against the data. If the model is supported by data then congratulations, you've showed that you're theory is relevant, anecdotes about tractors being unuses and houses being empty don't quite support all the self congratulatory back patting that goes on amongst Austrians. Especially not if the ABCT only turns out to explain one particular business cycle way back in the day in Austria.
Clayton, I have never seen any Austrian state that praxeology is the only method of the social sciences.
Rothbard:
To sum up the relationship and the distinctions between praxeology and each of the other disciplines, we may describe them as follows: Why man chooses various ends: psychology. What men’s ends should be: philosophy of ethics. also: philosophy of aesthetics. How to use means to arrive at ends: technology. What man’s ends are and have been, and how man has used means in order to attain them: history. The formal implications of the fact that men use means to attain various chosen ends: praxeology.
Elsewhere he states that the methods of the social sciences range from the most verstende (history) to the least verstende (praxeology; economics). Also see Mises' discussion of the differences between thymology and praxeology.
You can cite ridiculous passages from The General Theory but it doesn't mean you're actually saying anything about the macro research that's been done in the last 30 years.
You can cite ridiculous passages from The Egyptian Book of the Dead but it doesn't mean you're actually saying anything about the macro research that's been done in the last 3,000 years.
Point is, if the basic principles are ridiculous, 30 years of research built on them will not improve matters.
ABCT only turns out to explain one particular business cycle way back in the day in Austria.
That line belongs in the comments section over here
Without a grasp of the latest research, you have no idea how relevant your criticism are. It'd be like criticizing free marketers by quoting Adam Smith on the labor theory of value.
I dunno, Samuelson's book is the same ole same ole for decades.
EconomistInTraining:Austrians often caricature the position of mainstream economists.
And the opposite is not true?
I have never in my life heard anyone cite passages from The General Theory in anything other than a critique of the text itself. And even then it's been less than a handful.
But, a decent Intermediate Micro/ Macro II book or a good book in OI will teach you a lot of stuff that flies well under the radar of most Austrian discussion for the 10^10th rehashing of "Why Kenyes was stupid and evil".
Got any examples?
that doesn't mean that there aren't a plethora of economic models that, while somewhat "unrealistic", help us make a great deal of sense of the world out there.
Kind of like how the tales of big Paul Bunyan dragging his big axe on the ground and Pecos Bill ridding a tornado and then getting lost in the desert and being thirsty helped us make a great deal of sense of the Grand Canyon and the Rio Grande.
So Austrians can kick up a fuss about certain modelling or simplifying assumptions but if it helps us explain why we see merger waves (and inform antitrust policy) that's pretty good.
And astronomers and geometricians can kick up a fuss about how assuming the Earth is flat just because the horizon looks flat is a flawed analysis, but if it helps us explain why Austrialians don't fall off the bottom (and informs travel restriction policy) that's pretty good.
On a related note, that part of Austrian economics that does say something about economic phenomena, its moot unless you can show how much of it Austrian theory explains. The old joke that "economists have predicted 11 out of the last 10 recessions" seems especially biting in the Austrian case. Its one thing for Austrians to say "there's going to be a recession sometime in the future", I'm pretty sure most people can figure out that as time passes the likelihood of a recession sometime tends towards one. It's quite another to make an explicit model (and believe me, there is a model implicit in the ABCT) of the theory, statings your assumptions and then putting it to work against the data. If the model is supported by data then congratulations, you've showed that you're theory is relevant, anecdotes about tractors being unuses and houses being empty don't quite support all the self congratulatory back patting that goes on amongst Austrians. Especially not if the ABCT only turns out to explain one particular business cycle way back in the day in Austria.
And you think any of this is relevant because, what? ABCT didn't predict and/or can't explain a certain recession? Which one might you be talking about?
Coase:Without a grasp of the latest research, you have no idea how relevant your criticism are. It'd be like criticizing free marketers by quoting Adam Smith on the labor theory of value.
Not only is that more or less a fallacy, the analogy isn't even a good one. In what way does Adam Smith represent any sort of pioneering effort or historical significance in the realm of free market economics? As shown by the total ignorance of other posts in this thread, it's kind of important to know something about the history of economic thought and Austrian theory before trying to critique it. Have a look here for the problem with your analogy.
While I could care less what Rothbard says about Smith (and I do think his critique sucks), whatever. Pick your favorite historical champion of liberty. He/she will undoubtedly have been wrong about something related to their argument for liberty. And it proves nothing about the validity of pro-liberty arguments, for obvious reasons.
Coase:While I could care less what Rothbard says about Smith
You could? How much less?
(and I do think his critique sucks)
Of course you do. Some actual specifics of your apparent analysis would be useful.
...whatever.
With all the wit and lucidity of a 13 year old girl. Nice.
Pick your favorite historical champion of liberty. He/she will undoubtedly have been wrong about something related to their argument for liberty. And it proves nothing about the validity of pro-liberty arguments, for obvious reasons.
And I would assume this holds true for economic arguments as well? Regardless of whether that champion published his work in the last few hundred years or in the last...say...30 years?
K, k, k, and sure, what's your point?
For the record, I'm a FOURTEEN year-old girl.
John James,
I've had quite lengthy arguments with supporters of Rothbard with regard to Rothbard's treatment of Smith, both on Usenet and on the web--I expect you can find them with a little searching. I regard Rothbard's arguments as deliberately dishonest. He accuses Smith of wanting an export tax on wool, for instance, without ever telling the reader that what Smith was proposing was to replace an absolute ban on export, enforced with ferocious penalties, with an export tax. And that's only one of multiple examples of leaving out essential facts in order to attack Smith. -David Friedman
-David Friedman
Coase:K, k, k, and sure, what's your point?
How is "k" an answer to my questions? And most would consider my second statement an implied request for your analysis...in which case the letter "k" isn't really a sensical response either. So...Would you please provide some specifics of your apparent analysis of why "Rothbard's critique sucks"? And the point is, if what someone in the field says proves nothing about the validity of the arguments pertaining to that field, then what is the relevance of knowing what a few people in the field say?
Coase:For the record, I'm a FOURTEEN year-old girl.
Kudos. Most people wouldn't be able to bring themselves to admit their vocabulary and parlance was a year behind where it should be.
:EDIT:
Switching the placement of two letters to correct a typo.
+1!
justinx0r,
I'm confused. Are you suggesting Coase is David Friedman?
It's irrelevant, so who cares. Also, didn't understand what you were getting at before. Look, you can't criticize modern macro by finding flaws in Keynes. That's just silly.
Also, you misspelled vocabulary ner ner.