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?
I didnt closely read your response. Note that I edited my response after reviewing your post.
True, empowering an overseer to oversee the despot is illogical and history has shown that it always fails.
yet the proposition of a free society may not be realistic at this point in history. This is based on my previous assertion that man is a social animal whose primary defect may be the irrational need for central governance as history has shown time and time again.
For example, a false sense of security gained by surrendering power to a central authority, whether human or law, that in reality is anathema to freedom and prosperity. Moreover, there seems to be no shortage of opportunists like obama, bush, pelosi, et al to exploit this defect for personal gain and self-aggrandizement.
I believe that the outcome is in doubt. We are as likely to see a worldwide Islamic caliphate as a Mises envisioned private paradise.
I am new to the austrian school, and considering myself independent thinking, rational, and objective -- I can be swayed. however, I have been censored and banned from forums like alternet, huffpo, thomhartmann, dailykos, et al for far less revolutionary opinions then those offered by von mises adherents --- and I can assure you that these fools are unyielding in their ignorance.
Based on what little I have listened to on the media you recommended, it is revolutionary, albeit predictable considering its source. I will reserve responding until listening to it more closely and in its entirety.
"Then you must reject the bill of rights, declaration of independence, and the constitution which are all constructs of government."--rettoper
What freedom have they provided to you exactly?
The mistake is in not realizing that these documents and constructs are themselves coercive in nature. They inherently violate your property rights from the beginning, so any notion of government as a property rights protector is self contradictory. -- DD5
I have seen worse examples of tyranny, and precious few better than the US Constitution. For example, unless you have a practical substantive method to force freedom down the throats of an ignorant and sheepish majority, work for change within this framework. I believe with a little tweaking it can be done.
History is strewn with examples of armies of automatons led by despotic conquerors that have destroyed peaceful, prosperous, and free societies.
Or through coercion forced peaceful and free societies to bend to their will and therefore surrender freedoms without conflict.
while the Constitution is not perfect, it can be amended. For example, an amendment to balance the budget could lead to an amendment to eliminate the power of government to tax.
moreover, the 10th amendment can be used to reduce the tyranny of one to the lesser tyranny of many (50) -- at this point, it is only a matter of time before a "prosperous free state" emerges that is an example for change among the others.
In summary, if achieving the prosperity and freedoms predicted by the Austrian model is to be achieved -- the US Constitution may be the best vehicle to achieve this beneficial change.
Otherwise, be prepared to take up arms against the established order.
If people came under the mass impression that everyone else needs to be killed at once, then I would question Austrian economics. Or if malinvestments actually produced useful goods and services.
Edit:
As for the Constitution and it being a lesser evil or whatever, may I remind people that the lesser of two evils is still evil, and everything we will try to do will be met with obstinate refusal—because it's not now nor will it ever be in the State's best interest (which is to maximise profit and minimise work, as with everyone).
We'll be coming right back to this point again after a slow and steady decline if we content ourselves with the platitude that it isn't as bad as it could be (or more often, not as bad as those people over there I mean good heavens how could they). Personally, I'd rather not miss out on the achievments that could have been made which were stifled by the ravening maw of the State when we weren't looking hard enough.
I apologise for ranting, but it really grinds my gears, this stuff.
Capital theory is an absolutely useless exercise
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Please refer me to material that explains business cycles and general macro-economics better than the capital theory. Thanks.
As Leland Yeager points out in his article in "Austrian Economics in Debate", Austrians have chosen to focus on capital. Whether or not this focus has been productive is up for debate, certainly there is insight to be gained from disaggregating capital to some extent and clearly the excessive focus on things like "orders of goods" have been counter-productive. But the fact remains that whatever your opinion on capital theory, it's only one part of the story and there are others that Austrians haven't paid much attention to that are also important, like money (to which monetarists have paid attention) and expectations (to which most economics have paid attention, but more relevantly Tyler Cowen I suppose).
And this is the general problem with a lot of the talk about the ABC theory, people seem to focus exclusively on the capital structure, as if it's the sole cause of every business cycle, as opposed to other macro-economic phenomena like money, labour markets and the like.
"You don't need a weatherman to know which way the wind blows"
Bob Dylan
like money
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Have you read "The Theory of Money and Credit"? enoug talk about money...
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as if it's the sole cause of every business cycle, as opposed to other macro-economic phenomena like money, labour markets and the like.
explain to me how money causes business cycles, withouth using the capital structure?
Capital theory is an absolutely useless exercise, and a detailed exposition of it isn't necessary to Austrian business cycle theory either. Neither Hayek nor Lachmann could resolve its problems, so there's slim chance that anybody on these forums will be the one to do so.
Hayek and Lachmann's work on capital was a major step forward for economics as a science. The fact that this monumental breakthrough has not been fully appreciated/grasped is entirely immaterial; the mainstream still doesn't understand subjective value theory. Either way, you don't know enough about capital theory to actually critique it.
Various schools of thought (Behavioral, New Institutional, ect) have only recently discovered insights which were introduced by the Austrian's over a century ago.
but the fact remains that whatever your opinion on capital theory, it's only one part of the story and there are others that Austrians haven't paid much attention to that are also important, like money (to which monetarists have paid attention) and expectations (to which most economics have paid attention, but more relevantly Tyler Cowen I suppose).
Have you ever read any of Lachmann's work? You simply don't know what you're talking about.
Of course, if you want to concern yourself with a non-issue that nobody within the economics profession concerns themselves with, go ahead. I've got more interesting things to read and more interesting subjects to think about.
Argumentum ad populum for the 10,458th time. I understand that you're not a stickler for logic, but your belligerent rants are not intellectually stimulating nor can they ever refute the Austrian framework.
"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."
It is entirely possible that there are some deductive errors somewhere along the way.
To me Austrian Economics is not independent of empirical evidence, if I saw that these theories were not congruent with reality I would not subscribe to them anymore
it is just that we don't use the data to come up with theory, it is qualitative
Esuric is right. Lachmann's work on expectations is some of the best work on the subject. To get the whole picture on expectations, combine Kirzner and Lachmann, then compare that to what's used in today's DSGE work. The problem is that this picture of expectations is not easily formalizable.
What Austrians need is someone capable of mathematically formalizing Austrian views on expectations and uncertainty. After all, if Shackle was able to formalize his own form of radical uncertainty, why can't we do so as well?
I'd like to add one more thing: No one is saying that to be an Austrian economist one must ignore the works of all other schools of thought. All we're saying (at least, all I'm saying) is that the Austrian framework, in its entirety, is the most logically consistent and well developed framework (again, relatively speaking). An Austrian would do well to read Shackle, Winter, Coase, Williamson, Stigler, Keynes and others.
Rettoper: "- the US Constitution may be the best vehicle to achieve this beneficial change."
Listen, a dose of reality. The US is not going to scale itself back to any constitution. It may eventually scale back, but not because the US Constitution will have anything to do with it. It will do so in the same way that other governments have scaled back in the past - By economic turmoil and collapse!
You cannot establish a social system based on voluntary and peaceful cooperation by institionalizing a system of legalized theft and murder at its heart. Government is an anti-social system. It's wide public support is based on myths and fallacies. It's no different then the myths surrounding regulations, welfare helping the poor, and government must supply our money. You should learn about this topic more in depth before you reject it. You cannot achieve freedom by just repeating all of the same classical liberal mistakes.
Listen, a dose of reality. The US is not going to scale itself back to any constitution. It may eventually scale back, but not because the US Constitution will have anything to do with it. It will do so in the same way that other governments have scaled back in the past - By economic turmoil and collapse!--DD5
Wrong, throughout US history are examples of steady and inexerable increases in freedoms. Moreover, over the last 30 years our dynamic political system has demonstrated the ability to make 180 degree shifts in direction without violence
I havent been following Austrian theory for long, but I found a reasonable rebut to your opinion in short order on this site:
http://mises.org/media/4824
The Constitution within our Federal framework can be attenuated to increase freedoms and reduce government over time. 200 years of increased freedoms, security, prosperity, and incredible innovation and improved living standards should not be discarded so readily for a fanatical adherence to a doctrine whose outlook is "turmoil and collapse"
Moreover, I challeged the Austrian system to provide for national defense in a world of expansionist despotic regimes and the link you offered was lacking at best.
according to Murphy, the free anacharist society would depend on private insurance companies to hire private armies to defend "paying customers". Like many Austrian tenets, in theory acceptable, in practice dangerous at best.
the efficacy of mercenary armies is best debunked by Machiavelli. History is full of their betrayal, incompetence, and cowardice relative the the experience of the US and UK military. Moreover, their allegiance is based on the highest bidder. To overthrow a free anarchist society no matter how wealthy only requires an predatory alliance with a bigger bankroll.
Lastly, Murphy's free anarchist's answer to nuclear weaponry was to place its trust in despotic warlike societies because "they wont attack a prosperous neighbor that they can trade with" --- this is absurd. It is preferable to put our trust in the USMC versus Hitler, Stalin, Tojo, Mao, et al. Note that the US military to date has not even remotely interfered with the civilian government. IN summary, the system is not perfect, but it has worked splendidly over the last 250 years to improve living standards, security, freedoms, and peace.
It is far preferable to your "turmoil and collapse"
Nonetheless, thanks for the links -- they are informative and thought provoking. Note that I agree with 99% of the arguments offered by Austrian theory. However, it is beneficial to challenge the more extreme and rigid these tenets (private defense in this case) whenever possible.
I will respond to private law when I review more material on this matter.
DD5- "Listen, a dose of reality. The US is not going to scale itself back to any constitution. It may eventually scale back, but not because the US Constitution will have anything to do with it. It will do so in the same way that other governments have scaled back in the past - By economic turmoil and collapse!"
Rettoper: "I haven't been following Austrian theory for long, but I found a reasonable rebut to your opinion in short order on this site:
http://mises.org/media/4824"
This doesn't refute anything DD5 said. Riggenbach takes a big tube of lipstick and smears it on the face of a pig.
His first example of how things are getting better is to point out that slavery was abolished. But, it was government that enabled slavery to exist, it was government that caused the war that killed 600,000 people, it was government that enforced Jim Crow laws for 100 years. Gee, it sure was nice of government to finally relent on these things. Point: All of these ills were the creatures of government. He goes on to mention women receiving the right to vote. But, then he goes on to talk about the entitlement mentality. But "voting" enables this mentality. Therefore, what difference does it make if women have the right to vote. What do they, or anyone, ever vote for? Fewer benefits? Who do they vote for? Republicans or Democrats. Case closed.
I see Riggenbach's list on Media, I'm sure he has tremendous credibility while I have none. But, his comments about "the long run" don't hold water. Our liberties are vanishing before our eyes, the government has steered the economy into a black hole, the debt load and future entitlements are not sustainable, the central bank possesses the power to destroy the monetary system.
DD5 is right. Liberties will increase, but this will due to the conditions he describes, not the Pollyanna notions described by Riggenbach.
(this thread has wondered from the original post, but it was difficult to remain silent on the Riggenbach issue)
"The market is a process." - Ludwig von Mises, as related by Israel Kirzner. "Capital formation is a beautiful thing" - Chloe732.
Any theory or variation of a theory that better explains economics. That is a value judgment, of course. What turned me on to AE was the video "Peter Schiff Was Right"
Now if Austrians are wrong about something, where someone else is right, and has been at least as correct as the Austrians, then I'd take a look.
I'm quite happy with the empirical approach when it's applicable and works well. But I've found in the case of economics that the Austrians have got it more correct than anyone else with the deductive approach.