I fear there isn't.
Even a free market economist never has to put his money where his mouth is. Like any other economist, the only people to evaluate the results of his work are other economists.
Unlike a marketer or salesperson, he does not have to worry about meeting sales targets.
Unlike a soldier defending from invasion, he does not have to worry about being alive.
Unlike an executive, he does not have to worry about showing a good financial position for his business.
Unlike a day trader or a hedge fund manager, he does not worry about his own money being burned away in huge losses.
Unlike an engineer, he does not have to worry about the bridge collapsing and him never being contracted again.
If we were still in days where kings used to chop off the heads of thinkers for being wrong, it would be okay.
Economists pay no price for being wrong. Ever.
Their job is to obtain endowments for their institutions or think tanks, and once they achieve this objective, their job is over. And they get billions in funding, just by telling George Soros what he wants to hear, by telling the Koch brothers what they want to hear, and so on.
From hereon, all economists should make a living off a long-term betting pool on what may or may nore happen, and those too afraid to bet shall be known as such
YAY/NAY?
Economists would be unemployed in a free economy.
Eh-
Might just be me, but isn't there something of a conflict with 'should' and market solution? Lets suppose some economists make their livelihoods out of telling X person what they want to hear. As long as X person legitimately earned his wealth and truly designates a value to the economist, be he lying or not, signifies the economist has provided a service. Mind you, a service kin to the Department Store Santa Claus who reassures children that they'll get that gift under the tree, but a service all the same.
There are of course good economists who can make a decent living selling their ideas on the market. Be it through books, lectures, consulting, or stand up comedy.
So nay. Although I wouldn't mind betting on future market conditions with the average Krugman.
For that matter, there probably isn't much use for historians and many other social scientists on the free market. Typically people are employed for their "transferrable skills", so I imagine these disciplines would still remain in a narrow academic form, though much downsized.
"When the King is far the people are happy." Chinese proverb
For Alexander Zinoviev and the free market there is a shared delight:
"Where there are problems there is life."
Prateek Sanjay:Even a free market economist never has to put his money where his mouth is. Like any other economist, the only people to evaluate the results of his work are other economists.
Aren't the sales of books through LvMI, the attendance at events, the Mises Academy, and the interest and interaction of laymen in the community proof enough that economists are in demand by the market?
Vandal is to glazier as government is to economist.
Nonfederal Nonreserve:Vandal is to glazier as government is to economist.
Would you say that about Mises and Rothbard?
Yes. If there was no government, there would be no need for an ancap movement.
Nonfederal Nonreserve:Yes. If there was no government, there would be no need for an ancap movement.
Mises was not an ancap.
Do you guys really think there is no place in free markets for an understanding of the consequences of intervention, and the role of money (incl. market money), trade etc? I have to admit, I came to Austrianism late, but I don't think I could have been born with the understanding I have about economics that I have today.
"Do you guys really think there is no place in free markets for an understanding of the consequences of intervention, and the role of money (incl. market money), trade etc?"
If a free market was the "default" state, then there is just as much a place for that as understanding the consequences of an invasion of extra-dimensional purple alien. So a free society has to defend itself against an invasion of extra-dimensional purple aliens. People can write books about how to keep them out.
You do understand that a free market is not a utopia, right?
Nobody said it was a utopia. But government would be as nonexistent as extra-dimensional purple aliens.
Don't businesses normally employ people with degrees in economics for predictions and econometrics?
Sure, because what they're really doing is seeking rents. Which companies have the best government subsidies, and how will that change over time. How will advance knowledge of the Federal Reserve's actions give you an advantage over everyone else.
How will not having knowledge of using and making demand curves help a business when it wants to invest in a new product. I know business and marketing students can do these things just as well, but knowledge in economics is critical when it comes to doing these things.
I think the issue is that some people are confusing value free economics (which AE strives to be) with libertarian social theory.
Even a free market economist never has to put his money where his mouth is. Like any other economist, the only people to evaluate the results of his work are other economists. Unlike a marketer or salesperson, he does not have to worry about meeting sales targets. Unlike a soldier defending from invasion, he does not have to worry about being alive. Unlike an executive, he does not have to worry about showing a good financial position for his business. Unlike a day trader or a hedge fund manager, he does not worry about his own money being burned away in huge losses. Unlike an engineer, he does not have to worry about the bridge collapsing and him never being contracted again. If we were still in days where kings used to chop off the heads of thinkers for being wrong, it would be okay. Economists pay no price for being wrong. Ever.
If Soros or Koch are willing to pay for economists then they must be providing a valuable service. Just because your value judgment is different doesn't mean they are wrong.
"How will not having knowledge of using and making demand curves help a business when it wants to invest in a new product."
Because you can prove anything with statistics, and you can't use the past to predict the future.
"If Soros or Koch are willing to pay for economists then they must be providing a valuable service."
Wow. So if they're willing to pay for lobbyists then they must be providing a valuable service.
Are you being sarcastic? What does that have to do with a economic student not having marketable skills?
It has everything to do with it. If they can't predict the future, then that only leaves rent seeking. Let's get the government to give us a lower tax rate than our competitors (i.e., let's make our competitors pay more than we do). Our company should figure out how to get a monopoly granted by the government; we can use GDP and unemployment charts to show that it would be good for the economy. Etc.
Again what does that have to do with an economist in a business setting? I don't disagree with you on them using their skills to make predictions about the economy and relate to where the business is stands, but their skills also come in useful when it comes to tracking sales,growth, how much they plan to make, their competitors,etc...
Like Liberty Student said, you're probably confusing it with political philosophy.
That would be as useful as tax preparation. Hey since people pay for tax preparers, does that mean tax preparers are providing a valuable service? Or are all tax preparers rent seekers?
@Nonfederal Nonreserve
Well, lobbyists DO provide a valueble service for those who hire them. Its not the lobbyists we should concern ourselves with though, but the government workers who accept the bribes. -And even then, a good number of times one wishes that the government was more corrupt. I for one would certainly prefer to pay the 'security' personnel at airports to leave me alone than go through their rituals.
You're missing the point. There wouldn't be any lobbyists without the government. There would be nothing to lobby and no rent seeking would be possible.
That would be as useful as tax preparation.
For a small business maybe, but for a larger business I would disagree.
So the bigger it gets, the more accurately in can calculate? I don't think so. If that were true, it would be best for one company to own everything and centrally plan everything. It's not true, because the bigger it gets, the bigger the effect it has on what it is calculating in the first place. So the future doesn't match its calculations, because its very ability to make the calculations changes the future.
For some reason I get the feeling your grasping at straws with these responses :(
Using what you are arguing, every marketing division in a company shouldn't be be profitable since they would fall victim to socialists calculation despite the fact that there is an economy, private property, and competition.
@Nonfederal
I don't care for the state, but I do not see its replacement occuring within our lifetimes. As long as the state does exist I stick with my proposal that we are better off with an openly corrupt government that steals from us, but refrains from glorifying itself as legitimate.
Edit: On the matter of tax preparers, I would say that they were doing a valueble service. Again, I would prefer to pay someone else to go through the agony of filing out the papers for the overlords than spending said time myself. Similarly I find the tax lawyer's services valueble; in so far as they allow individuals to avoid taxation wherever possible.
pentahedron:Like Liberty Student said, you're probably confusing it with political philosophy.
He's definitely confusing it with political philosophy. It's ok to be pissed off with the state and its apologists, but that doesn't have a lot to do with economics one way or the other. Unfortunately, Rothbard's political advocacy has become somewhat synonymous with AE, which is why some people might think there is no purpose for von Mises in a stateless world.
I'll bet $5 people who feel this way cannot explain the difference between subjective value and labor value (while arguing that there is no need for economics).
Azure, you must understand the context in which we speak.
It's not the services of economists that I discuss, but only ideas. Were we not living in a statist world, ideas would not matter by themselves, because in real life, practical realities and the need to make decisions on the margin influence all undertakings and ventures, not ideology.
Unfortunately, in our statist world, here's how it is with things. Heads of state suffer from limitations of knowledge and inability to collect information. Even though they are elected by some kind of democratic process, they can not really know what millions of people exactly want, or if he did, whether intentions would be same as results.
Thus, in most capital cities of the world, giant armies of think tanks and institutes exist to generate ideas, because it's only through these narrow groups that heads of state can get any reports or suggestions at all. Huge money is poured into these think tanks and institutes. Large number of financial newspapers and financial journalists also conduct a similar function.
They all provide their various benefactors and customers exactly what they want. But their ideas are allocated across decision-makers in the state, who are capable of ruining the lives of millions because of one simplistic suggestion. We know this, because there is a law of unintended consequences.
Even when bad results come, these think tanks and institutes can hide behind unfalsifiability and claim they were still correct. "You didn't do enough of a stimulus", for example. Did these generators of ideas, partly responsible for policies implemented, pay any price for being wrong? No, others did. And when recessions come, all think tank industries boom, and their members get even higher speaking fees.
Of course, it was the heads of state who were responsible, and not these people who do idle chatter. But in the lucky situation that a head of state were an altruistic man (fat chance), maybe having him understand limitations of knowledge and unintended consequences could stop these problems. But how? Maybe if there were a price to be paid for being wrong, in some way? It's not about incentives and constraints either, since we know the huge speaking fees and institute salaries could make up for it. But there is information. When we know economists lost a huge amount of money in their predictions, we'd have some information?
In a way, it does actually happen. If John Maynard Keynes had not wiped out all his huge gains in the stock market, while his friend Hayek did not, would all those universities, especially MIT, have held back Keynesians in the 1950s and 1960s? That is indeed what was often said to be discussed in the back rooms of their departments: "This Keynes lost all his money in a recession he betted against, and yet this Samuelson still idolizes him. I don't care how logical he thinks he is, we can't risk putting this man in higher responsibility", as Subramaniam Swamy seemed to indicate from his days in MIT.
The state does not intervene in mathematics, yet there are mathematicians. The state does not intervene in physics, yet there are physicists. It seems that many here believe that the only purpose of economists is either to argue for or against the state. Why not see economics as a legitimate area of human endeavor where we'd like to know how things work more completely than we do? Advancing the frontiers of human knowledge has value too, you know.
Bingo. I made a topic a while asking about this little anomaly, nobody seemed to have an answer that I found to be up to scratch. Firms spend lots of money on the work of PhD economics, econometricians and the like.
OP, I actually think this is one area that the market fails. Look, I think that there is a lot of science out there that is uncertain and doubtful that will one day come to fruition and possibly yield more practical insights that will make us better off in our day to day lives. And a lot of this is science that may be too speculative and too doubtful to ever command resources on a market economy. I don't know much about physics but from reading and speaking to physicist friends of mine I'm under the impression that a lot of the very abstract, very theoretical insights out there actually have some very useful practical applications.
Certainly, as far as economic goes there's a lot of theoretical statistics and abstract mathematics that may once have appeared to be idle theorizing that now yield important practical results (financial econometrics used by firms, macroeconomic insights now used in CB policy, mechanism design and so on). Would the market have ever financed research in these areas? Quite possibly not.