According to the Austrians, economic theories cannot be proved or disproved based on empirical evidence but rather through deduction based on irrefutable axioms. So my question to you, as humans utilizing the little time we have on this world to strive for truth, is what sort of empirical evidence would it take for you to question the truth of some of most defining theories of the Austrians? What would it take to be convinced that, even if you don't have the cognitive capacity to identify where the deductive error in the Austrians' logic occurs, they've gotten it wrong in some fundamentally refuting manner throughout the years? What would it take to convince you, even if it is unlikely/impossible for the existence of a state not to grow and grow into the behemoths we see today, that a little bit of state is better than none at all?
It seems to me that the only field of study in my life that operates independent of any sort of proving or disproving empirical evidence is that of Austrian economics. I understand the arguments for why this might be the case, but when we take into account that somewhere along the way our logic could simply be wrong (even if we don't know where the error is occurring), I don't think it is illegitimate to take into consideration the empirical evidence in favor of or contrary to our economic theories to decide whether or not we've aligned ourselves with a consistent and correct economic school of thought.
I can't possibly be the only frequenter of these forums that struggles with this sort of thing, so my question stands: what would have to happen in the physical world to shake your faith in the correctness of established Austrian economic theory?
If I noticed that AE's theories and predictions were constantly upended, it would make me think that I had not reasoned correctly. It is difficult to give you an exact moment when I would finally go back to the chalk board, but the fact that AE is not contradicted by reality makes it an academic point.
Every decent man is ashamed of the government he lives under - Mencken
Why not ask yourself and most others a similar question? What would it take for you to be convinced that the law of the excluded middle is incorrect?
I'm no hardcore Austrian; personally, I think it is more important to question the models used in evidence presented than outright reject them. For example, I usually reject GDP as evidence of anything other than economic activity. Many people treat it as a measure of economic growth, which it isn't.
"I can't possibly be the only frequenter of these forums that struggles with this sort of thing, so my question stands: what would have to happen in the physical world to shake your faith in the correctness of established Austrian economic theory?" - Alex M
You're not the only one. I've simply decided that on the question of empricism, Austrians are at least partially full of shit. You can't study reality and make theoretical claims without at least some measure of testing some how. Theory proves its merit in application, or it's worthless. I look on the empricism question as a matter of experimental controls and/or epistimological limits. There are certain things we simply can't know and variables we can't control, so there are necessarily limits to what can be tested. Limits, but not total exclusion. One of the more powerful tests for Austrian Economics in my mind is research on past economic crisis. If correct, the theory should provide insights and open avenues of investigation into historic episodes that others wouldn't think to look for, and would just blame the episodes on general flaws in the capitalist system or whatever. Books like Rothbards look at the panic of 1819, papers on the tulip mania and free coinage laws and what not, etc. Since controlled experiments are not possible, the investigative power of AE is one way for it to show it's power. When applied to historic episdoes it should help find and propose plausible causes/explanations beyond the simplistic assumption of a 'fundamental flaw in the free market system,' or whatever jargon is hip at the time for people to use to hide the fact that they're commies.
This thread of mine might be of interest, especially the first, second, and fifth post.
If I wrote it more than a few weeks ago, I probably hate it by now.
"This thread of mine might be of interest, especially the first, second, and fifth post." - I. Ryan
When we encounter that much justification for something which is relatively simple in my field and hobbies, we call it wanking. Arguing over definitions is suitable for a PHI class, not that it isn't necessary or instructive at times, but it also wastes time when a simple issue is being addressed. If theories about economics are untestable and not subject to falsification, what the hell is their point? Science without testing, without repicability, without falsification, is not science plain and simple. It's more than acceptable to acknowledge limits on the ability to carry out controlled experiments because of the nature of the subject, what can be known and controlled. Even assuming an extreme materialist/reductionist view of the world where free choice doesn't exist, the variables of cause and effect are simply beyond our knowledge to have access to and to adequately model in order to make meaningful predictions much like the weather. And Austrians would be better served positioning their objection to empiricism in those terms because any other approach merely sounds like a cop out and a convenient way to escape accountability to reality with your theories. If the theory offers no explanatory or predictive benefit, it's just so much wind baggery. It's akin to the Global Warming crowd's approach, who seem to stick to their precious theory even though it's either framed in ways which render it unfalsifiable and/or 'predicts' and forms to all historical events in a post hoc manner.
If one could demonstrate we existed in a situation where the praxeological concepts did not apply, then Austrian economics would be meaningless (though not thereby false). That's about it.
“Socialism is a fraud, a comedy, a phantom, a blackmail.” - Benito Mussolini"Toute nation a le gouvernemente qu'il mérite." - Joseph de Maistre
xahrx: When we encounter that much justification for something which is relatively simple in my field and hobbies, we call it wanking.
When we encounter that much justification for something which is relatively simple in my field and hobbies, we call it wanking.
What a ridiculous comment.
xahrx: If theories about economics are untestable and not subject to falsification
If theories about economics are untestable and not subject to falsification
Did you not even read what I linked to?
how many triangles will you need to measure before you believe a certain theory about the sum of the angles?
http://nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-lecture.html
"The theory which has been guiding monetary and financial policy during the last thirty years, and which I contend is largely the product of such a mistaken conception of the proper scientific procedure, consists in the assertion that there exists a simple positive correlation between total employment and the size of the aggregate demand for goods and services; it leads to the belief that we can permanently assure full employment by maintaining total money expenditure at an appropriate level. Among the various theories advanced to account for extensive unemployment, this is probably the only one in support of which strong quantitative evidence can be adduced. I nevertheless regard it as fundamentally false, and to act upon it, as we now experience, as very harmful."
A relevant quotation:
Ludwig von Mises: Some authors have raised the rather shallow question how a praxeologist would react to an experience contradicting theorems of his aprioristic doctrine. The answer is: in the same way in which a mathematician will react to the "experience" that there is no difference between two apples and seven apples or a logician to the "experience" that A and non-A are identical.
Some authors have raised the rather shallow question how a praxeologist would react to an experience contradicting theorems of his aprioristic doctrine. The answer is: in the same way in which a mathematician will react to the "experience" that there is no difference between two apples and seven apples or a logician to the "experience" that A and non-A are identical.
"If one could demonstrate we existed in a situation where the praxeological concepts did not apply, then Austrian economics would be meaningless (though not thereby false). That's about it."
I think you're right since logic is mainly about meaning and since praxeology is fueled by logic, and assuming that it is all logical, then it's meaning applies only to a world of praxeological concepts; but not to a world without these. So it would be, I suppose, a contingent science -true in only a set of possible worlds.
As to the question at hand, I would argue that AE is both empirical and open to falsification.
The latter because as it is made up of conditional statements, if the consequent is wrong (expansion of the money supply leads to no depression), then the antecedent is wrong (money supply didn't increase...). This brings up the question of whether or not the theory of depressions is derived from the action of man as a consequent of an antecedent -if it is, then at certain times it seems like man doesn't act -impossible.
The former because the reasoning of AE is basically, mathematical induction with an emphasis on induction. This is the rational that allows us to say if one statement is correct then the next derived statement is correct and so on...
Forgive me if my ideas here seem a bit half-baked though, I really thought of this today on the fly.
It's hard to answer this question because there is torrential empirical evidence supporting Austrian economics. But to answer your question: If suddenly everything was backwards, that is, if government interventionism, inflation, and deficits lead to sustainable/robust growth patterns (~15% per year), or if North Korea's communist system made it the wealthiest nation on Earth, then, and only then, would I reject AE.
"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."